Stepping into
our opportunity
Alfa Financial Software Holdings PLC
Annual Report and Accounts 2021

Find out more online at
alfasystems.com
We are all
about software
& delivery
Alfa is a leading provider of software and
services to the global auto and equipment
finance industries. We deliver our leading-
edge technology with smart, diverse people,
makingourcustomers future-ready.

Strategic report
1 Financial highlights
4 Software
6 Subscription
8 Services
10 At a glance
12 Chief Executive’s review
16 Market overview
18 Business model
20 Investment case
22 Company strategy
24 Strategy in action
25 People
26 Partnering
28 Strategic Investment
30 Alfa iQ
32 Cloud Hosting
34 Alfa Start
36 Key performance indicators
38 Financial review
44 Risk management
46 Principal risks and uncertainties
52 Viability statement
54 Section 172 statement
58 Environmental, Social & Governance
Governance
71 Chairman’sintroductiontogovernance
74 Board of Directors
76 Company Leadership Team
77 Board leadership & company purpose
81 Division of responsibilities
86 Composition, succession & evaluation
90 NominationCommitteeReport
94 Audit&RiskCommitteeReport
100 Directors’ Remuneration Report
103 Directors’RemunerationPolicy
112 Annual Report on Remuneration
122 Directors’ report
127 Statement of Directors’ responsibilities
Financial statements
129 Independent auditor’s report
137 Consolidatedstatementofprotorlossand
comprehensive income
138 Consolidatedstatementofnancialposition
139 Consolidatedstatementofchangesinequity
140 Consolidatedstatementofcashows
141 Notes to the consolidated
nancialstatements
173 Companystatementofnancialposition
174 Companystatementofchangesinequity
175 Notestothecompanynancialstatements
Other information
179 Glossary of terms
180 Shareholder information
Group revenue (£m)
2021
£83.2m
£78.9m
£64.5m
£71.0m
2020
2019
2018
Operating profit (£m)
2021
£24.7m
£23.9m
£13.7m
£22.4m
2020
2019
2018
Cash (£m)
2021
£23.1m
£37.0m
£
58.8m
£44.9m
2020
2019
2018
Operating profit margin
2021
29.7%
30.3%
21.3%
31.5%
2020
2019
2018
Dividends paid (£m)
2021
£32.7m
£
44.2m
2020
Number of subscription
customers
2021
31
28
25
28
2020
2019
2018
Employee retention
2021
87%
93%
83%
88%
2020
2019
2018
Employee engagement*
2021
78%
74%
55%
68%
2020
2019
2018
Customer concentration (top 5)
2021
38%
48%
61%
59%
2020
2019
2018
* Calculation revised, 2020, 2019 and 2018
restated, see KPI page 37.
Contents Financial highlights
Non-financial highlights
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 1STRATEGIC REPORT

Alfa is an
2 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

IP company
The IP that exists in AlfaSystems
has been built up over 30 years
of working and specialising in
the auto and equipment finance
industry. It is the core of our
business and the heart and lungs
of our customers’ operations.
Key to the success of Alfa today is the
launch, in 2010, of Alfa Systems v5. This
was built with the future in mind: 100%
web-based and 100% Java – making it
fully digitally enabled and cloud native.
Itis constantly evolving to meet the needs
oftoday’s customers.
ReadmoreaboutourinvestmentinIP
onpages28-29
Big company impact.

Vision
To grow our company size naturally,
but grow our impact rapidly – always
retaining our underlying culture. Key to
this is delivering more concurrent Alfa
implementations, more efficiently, with
a world-class product. We will have a big
company impact, but a small company feel.
 Forourpurposeandidentity,turnto
page 10
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 3STRATEGIC REPORT

Market-leading
software
Dec 2020

Dec 2021


SOFTWARE
Our Alfa Systems software is at the
heartofsome of the world’s largest
andmostinnovative auto and equipment
finance companies.
4 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
REVENUESTREAMS











What is included in the software revenue stream?
Software revenues include revenues fromrecognition of customised licence
revenue, one-off licence fees and any development fees charged to customers
on a day rate basis.
What happened in 2021?
Every four weeks we release a new version ofthe software, and so there were
13newreleases in 2021. We also rolled out Mercury, our new User Interface, to
11customers, whose users are now benefiting from its built-in accessibility and
cleanand modern environment. We had 27 go-lives during the year including 5 new
implementations of v5. Of the new v5 implementations, 2 were upgrades from v4, as
a consequence new licence revenues were relatively low in the year. Offsetting this
was an increase in the number of development days charged to clients.
Software revenue (£m)
2021
13.6
20.0
2020
Software revenue (%)

56%
28%
16%
Front office
is used to refer
totheauto and
equipment finance
point of sale.
Middle office
represents everything
that happens
between the creation
of a quote and having
a live finance schedule
for a delivered asset.
Back office
includes all in-life
contract-management
transactions such as
billing and collection,
and all customer
services transactions
such as address
changes and payment
reschedules and
wherethe complex
accounting takes place.
“After very careful evaluation
and consideration, we selected
Alfa because we felt it’s a great
innovative platform for us, and
so far we have been pleased with
their product capability. I feel like
the overall match between our two
companies and culture, particularly
around innovation and ESG, really
helped us make this decision.”
Shamim Mohammad
EVP, Chief Information & Technology
Officer, CarMax
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 5STRATEGIC REPORT

Reliable cloud
hosting
Dec 2020

Dec 2021


SUBSCRIPTION
Our cloud hosting services have grown rapidly
and the robustness of the built in services
and the ability to simplify and accelerate
implementations make them an attractive
choice for customers.
6 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
REVENUESTREAMS

Subscription revenue (£m)
2021
23.5
18.1 2020
Subscription revenue (%)

56%
28%
16%
Alfa cloud hosting services
• Customised automated task scheduling with monitoring and alerting
• Automated patching and deployments of Alfa Systems
• Agility to create, destroy and resize environments
• Disaster recovery leveraging managed services with annual test
• Automated database backup and on-request copying of data
betweenenvironments
• 24/7 threat monitoring and annual penetration testing
• ISO 27001 and SOC2 audited processes
• Environment and performance monitoring with automated alerting









What is included in the subscription revenue stream?
Subscription revenues include recurring revenues paid on a monthly or annual
basis, including subscription licence revenues, maintenance and cloud hosting.
What happened in 2021?
2021 built on the significant progress we made in 2020 in developing our cloud
hosting services. There were nine go-live events for the hosting team in 2021, three
of these were for new implementations, with the remainder being upgrade events.
We continue to focus on increasing subscription licence sales both when
customers are looking to take our hosting services, but even where they
wishtodeploy in their own cloud.
“We needed a system that was fit
for purpose and fit for the future:
Alfa v5 met those criteria. Alfa
v5 will give Close Brothers Asset
Finance scalability, but also
nimbleness that’s a prerequisite
in a changing environment. We
operate in a number of jurisdictions
and changes are constant, whether
that’s regulatory, accounting, or
justinternal reporting, we’re going
to be in a much stronger position
todeal with change quickly and
more economically.”
Neil Davies
CEO, Commercial, Close Brothers
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 7STRATEGIC REPORT

Quality delivery
with quality
people
Dec 2020

Dec 2021


SERVICES
The quality of our people, the knowledge
sharing embedded in the organisation and
the inherent IP within our software, means
that our delivery record is second to none.
8 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
REVENUESTREAMS

Services revenue (£m)
2021
46.1
40.8 2020
Services revenue (%)

56%
28%
16%







What is included in the services revenue stream?
Services revenues are revenues from any work done for customers including
pre-implementation, implementation work, and ongoing services, but
excludesany revenue from development work.
What happened in 2021?
2021 saw a continuation of our strong delivery record underpinned by the
growth in our pool of client-facing people and placement of partner resources on
customer projects. Working 100% remotely we successfully completed five new
implementations of Alfa v5, continued ongoing implementation and v5 upgrade
projects, and provided ongoing services across the majority of our existing
customer base.
We continue to invest in the development of our people and in the quality and
efficiency of our delivery model, as well as building and leveraging our partner
ecosystem to enable more concurrent implementation projects.
Implementation milestones
1995
Alfa v3
launched
2003
Alfa v4
launched
2021
35% of
customers
using hosting
2017
Alfa hosting
launched
2010
Alfa v5
launched
2020
Alfa Start
launched
“We’re very pleased with the product,
we’ve got a very strong team at
Alfa supporting us. We’ve got
multiple suppliers, but Alfa are by
far and away the best performing
partner that we have, in terms
of the behaviours they operate
with asanorganisation – they’re
extremely professional.”
Russ Fitzgerald
Chief Information Officer,
Hampshire Trust Bank
2019
4.6m contract
portfolio
go-live
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 9STRATEGIC REPORT

Our purpose and identity
To deliver our leading-edge technology with smart, diverse people, making our
customers future-ready. We are a software and delivery company.
10 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
ATAGLANCE

7%
58%
35%
56%
28%
16%
24%
17%
59%
What we do
Where we do it
Who we do it for
Services
We performed implementation or ongoing
services for 28 customers during the year.
All of our revenues are for the sale of software
and related services. This split is to help
understanding of changes in business activity.
EMEA
We had 21 customers based in Europe
andAfrica, as at 31 December 2021.
Alfa Systems has been implemented
andislivein 16 EMEA countries, with a
furtherexpansion underway into additional
countries over the next few years.
Original equipment manufacturers
OEMs include both equipment and automotive
manufacturers, whose main purpose is the sale of
theasset rather than the provision of financing.
Software
We had 21 customers during the year
wherewe provided development services.
In addition, we had 7 customers where we
recognised a portion of the customised
licence in the period, and 6 customers where
there was point-in-time licence recognition
inthe year.
America
We primarily served customers across the
US out of offices in Michigan and Texas,
although US customers are also supported
from the UK. We have deep experience of
the USA automotive finance sector and a
growing presence in equipment finance.
Banks
Customers classified as banking institutions
are financeentities associated with
regulated banking groups.
Subscriptions
At 31 December 2021, we had 31
subscription customers, up from 28 last
year. Of these, 12 were taking hosting
services at the end of the year.
Rest of the World
We have operations inAustralia and New
Zealand specialising in both automotive and
equipment finance. As at 31 December 2021
we had 26 team members in this region.
Independents
Independent customers are customers who are
neither part of a regulated banking group nor
manufacturers of the asset being financed.
Independent customers tend to be smaller,
both in portfolio volumes and personnel using
Alfa Systems.
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 11STRATEGIC REPORT

Strong performance
We saw a strong performance throughout
2021 with good progress across all parts
ofour business. We have continued to deliver
successful implementations with increased
usage of our scalable and reliable cloud
hosting solution, at the same time as
releasing significant enhancements to
oursoftware.
We have seen excellent sales growth
reflected in our contracted orders with
TotalContract Value (TCV) of £133m up
4%since 30 September 2021 and 18% in
the twelve months since 31 December 2020.
The pipeline has continued to strengthen
underpinning our confidence in the future
growth of the business.
In another difficult year for our people, with
the disruption and uncertainty from the
ongoing impact from COVID-19, we have
continued to focus on our culture and we are
pleased to see that translate into high
employee engagement scores. The resulting
high retention rates and our ability to
continue to attract high-calibre people
intoAlfa, supports our ability to grow our
headcount in a tight labour market. The
strong conversion of our pipeline and
continued investment in our product and
processes have enabled our growing
workforce to remain fully utilised.
Financial performance has also been strong.
Revenue of £83.2m (2020: £78.9m) was up
5% on last year, or 14% compared with
2020revenues of £73.3m, after excluding
one-off licence revenue from a five year
contract extension.
To support the growth in the business
average headcount in the period was 383
(2020: 341), a 12% increase which increased
salary costs. Hosting costs also increased as
that business grew over last year. Both of
these were partially offset by a full twelve
months of reduced travel and office costs
compared with 2020.
Overall operating profit up £0.8m to £24.7m
(2020: £23.9m) with the revenue increase of
£4.3m partially offset by increased costs of
£3.5m, whilst maintaining operating profit
margin at 30% (2020: 30%).
Cash conversion was strong at 114%
(2020: 114%) and we finished the period
with net cash of £23.1m (31 Dec
2020: £37.0m) after payment of £32.7m
ofdividends in the calendar year.
We have continued to diversify our revenue
base with our top five customers now
representing 37% of our revenues in 2021
compared to 48% in 2020 and 61% in
2019.We have continued to deepen our
relationships across our customer base,
leading to more customers making a
material revenue contribution to our
business. We had 14 customers contributing
revenues of more than £2m in the year, up
from 10 in 2020 and 7 in 2019.
“ We started 2021 with a strong financial and delivery
performance and maintained this through the whole of the
year. With the improving quality of our revenue mix, the
strategic improvements made across the business, the quality
of our people and strength of the intellectual property in our
software, we have great confidence in Alfa’s prospects.”
Andrew Denton
Chief Executive Officer
12 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
CEO’SREVIEW

Alfa’s culture has meant that from the early
days of forming the business we have
focused on creating a positive, sustainable
impact on society. It is pleasing that our
underlying strength in ESG is now being
reflected in improved ESG scores, including
the Carbon Disclosure Project and by
achieving an ISS ESG ‘Prime’ rating. ISS ESG
takes an absolute best-in-class approach
byindustry, so companies are categorised
as‘Prime’ if they achieve/ exceed the
sustainability performance requirements
(the ‘Prime threshold’) defined by ISS ESG
for each specific industry in the ESG
Corporate Rating.
Subscription
Subscription revenues have grown rapidly
over the last couple of years and comprise
any revenues that are recurring including
monthly or annual maintenance billing, cloud
hosting services and bundled licence,
maintenance and hosting contracts.
We have transitioned to a ‘cloud first’
approach to sales because we see real
benefits in the speed of implementation
forcustomers and they see benefits in the
reliability of the service and built-in tools,
including automated monitoring, patching
and scheduling. We anticipate that the
majority of new customers will take a hosted
service and all of the current v4 to v5
upgrades are moving into a hosted v5
environment. In addition we expect that
new customers will increasingly take
bundled licence, hosting and maintenance
contracts, further improving the stickiness
of the customer base. We now have seven
customers taking cloud hosting services for
live production environments and have five
customers taking hosting services during
design and implementation, most of which
will become live production customers, to
give a total of twelve customers taking
hosting services, up from ten at the end
of2020.
The number of customers with ongoing
maintenance contracts has increased to
29from 27 at the end of 2020.
Software
Our strategy is to continue to develop
oursoftware, to ensure that we meet
industry and customer needs as they evolve
and asthe regulatory environment changes.
We release a new update of Alfa every
fourweeks, each one of which makes
enhancements available to customers that
add to their ability to serve their own
customers. This maintains our edge as a
leading provider of auto and equipment
finance software.
During 2021 we invested in improving the
efficiency of our software development; all
part of our continuing drive for simplification.
We see the focus of development in
2022 move towards customer facing
functionality improvements, as customers
continue to innovate and react to the
changing demands of the market. We are also
looking to expand our capacity to deliver new
developments, and consequently we are in
detailed planning for creating a new virtual
development hub in Portugal to augment our
London development teams.
Our differentiators



Delivery track record
Our best practice methodologies and
specialised knowledge of auto and
equipment finance enable us to deliver
large system implementations and highly
complex business change projects.
With an excellent delivery record over
three decades in the industry, Alfa’s track
record is unrivalled.
Unify systems
Alfa Systems helps customers reduce
complexity by consolidating disparate
legacy systems, integrations and
workarounds. Alfa Systems removes
these inefficiencies byusing a single
platform with a single database.
Innovate and challenge

Multi-entity, multi-regulatory,
multi-currency and multilingual.
We react quickly in a complex and
changing market and adapt to match
business requirements andcustomer
needs as they evolve.
Create an omnichannel
experience
We empower customers, dealers
andvendors through enhanced
self-service and omnichannel
technology.
Perform through

Alfa Systems is designed ground-up
with the latest technology to allow
easy integration into other systems and
to work in a web environment with
scalable performance, proven for a
10 million contract portfolio.
Achieve operational agility
Streamline operations through process
automation, across differentfunctions
andgeographies. Achieve greater
control, connected processes and
aseamless flow ofinformation.
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 13STRATEGIC REPORT

Despite more of an internal focus on
development in 2021 we did significantly
advance our ability to service Wholesale
customers which is a new and significant
vertical market for Alfa. These enhancements
allow support for all asset types, speedier
access to funds for Wholesale customers
while tracking and managing contracts
through the early stages and allowing for bulk
changes to Wholesale contract curtailment
schedules. We now have two customers using
our Wholesale functionality and one of our
major contract wins in the first half was for a
Wholesale-only customer.
We have also delivered improvements in the
areas of configuration management, credit
decisioning, business rule creation and
regulatory support for European markets.
The new user interface (UI) that we
launched last year is now in production
witheight customers and these new UI
approaches have been used to develop
collections and curtailments functionality.
As expected overall software revenue
reduced compared with last year due to the
reduction in brand new Alfa implementations
and consequently there was a reduction in
licence income, although this was partially
offset by increased development days for
existing customers, including those upgrading
from Alfa Systems v4 to v5.
Services
Services revenues are derived from all of the
work on implementations and other services
but exclude development days on new and
existing customers (which is shown in
software). We have continued to deliver
avery high level of service to customers,
whilst operating remotely during the period.
In 2021 in the UK we saw go-lives on an
AlfaStart project, implementing for new
business following the acquisition by another
customer and, two v4 to v5 upgrades.
In Europe we saw the continuation of a
multi-country implementation across a
further four European countries, and in the
US a brand new implementation for an
automotive client and the launch of three
new modules for an existing customer.
We have grown our customer-serving team,
however a greater proportion of their time
was spent on software development which
shows in software. Within services there was a
reduction in new implementation work, offset
by the implementation of v4 to v5 upgrades.
We have also grown our access to partner
resources and during the year we had
partners operating with us for seven
customers, which is up from four customers
for the last year. In 2020 there was some
large systems integration work done by a
partner which normally would not be within
the scope of our work, and if this was
excluded total partner days were up 54%.
Our partner programme is a key enabler of
our growth and we will expand this further.
We will create plans to develop partner-led
delivery which would be a significant step
forward from partners simply augmenting
our existing resources.
Alfa iQ – putting theory

Alfa iQ spent 2021 engaged in prototyping
work with Alfa customers which successfully
validated the business benefit of artificial
intelligence and machine learning
applications within the asset finance industry.
Alfa iQ has now been engaged by two leading
organisations, one providing automotive
finance and the other business finance, to
implement artificial intelligence and machine
learning solutions within their businesses,
which will generate revenue in 2022.
The projects build on two different
applications of artificial intelligence and
machine learning in asset finance:
improvements to originations and
workflowoptimisation.
Up until now Alfa iQ has relied on using
resources from Alfa and Bitfount, the joint
venture partners, however we are now
actively recruiting into the joint venture.
In the period Alfa iQ achieved ISO
27001certification.
Strong engagement with

We have balanced the issues of safety along
with recognising the mental health impacts of
lockdowns. We have not required anyone to
come to the offices during the pandemic who
did not want to, but when allowed, we have
opened up the office for those who want to
be there. Each department or team has
created its own charter for the way it wishes
to work and we are implementing these now.
We have continued to arrange remote events
to keep engagement high, ranging from short
presentations on work and life topics through
to Company-wide hackathons, innovation
days and conferences.
Engagement and retention have remained
high, and we continue to be able to attract
high-quality diverse people to Alfa, however
we recognise that the market remains tight
for quality software engineers and so we
work hard to ensure that we are the
employer of choice. With this in mind, we
have a very full agenda in our global HR
function, where activity has included
updating our approach to on-boarding and
to learning and development as well as an
ongoing review of rewards and benefits.
Employee share ownership has always been
important to Alfa and we introduced a Save
as You Earn (SAYE) share scheme in the UK
and an Employee Stock Purchase Plan
(ESPP) share scheme in the USA.
Capital return
We remain a strongly cash generative
business. We continuously review our
strategy and assess the funds needed
topursue that strategy and then review
theoptions for any excess funds. When
presenting our 2020 results we committed
to starting a programme of regular
dividends, and we remain committed to
doing this through the declaration of a single
ordinary dividend each year alongside our
“ Engagement and retention has remained high,
and we continue to be able to attract high-quality
diverse people to Alfa, however we recognise that
the market remains tight for quality software
engineers and so we work hard to ensure that
weare the employer of choice.”
14 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
CEO’SREVIEWCONTINUED

full-year results. Despite the payment of a
regular dividend, we expect to continue to
generate excess cash and so from time to
time we will also look whether to return it.
Having made an assessment of our potential
investment needs and reviewing our internal
forecasts for the next 12-18 months we
declared a special dividend of 10 pence per
share, for a total payment of £30m, which
means that we will have generated total
dividends for shareholders over the last
12 months of 26 pence per share or £77m.
Looking forwards it remains our intention to
continue to pay a regular dividend, and to
grow this progressively, but in addition we
announced a share buyback programme in
January 2022 to spend up to £18m over the
next 18 months to buy back our shares,
partly to satisfy share option vestings, but
with the majority to be held in Treasury and/
or cancelled.
Robust market conditions
While the underlying auto and equipment
finance market did initially see a dip in
activity following widespread COVID-19
lockdowns, it has broadly been recovering
since H2 2020. This continued through 2021
and we now see generally favourable market
conditions, recognising that whilst we have
no direct exposure to events in Ukraine and
Russia, it is too early to say what the medium
term impacts on the macroeconomic
outlook may be.
Regarding the asset finance software
market, since the initial disruption of the
uncertainty caused by COVID-19 in H1
2020, we have seen no adverse impact on
our market. Indeed, the remote working
practices that companies have been forced
to adopt, and are increasingly looking to be
standard practice going forwards, has
accelerated moves towards a digital
strategy, alongside increased focus on
system flexibility and reliability, and
increasing regulatory and legacy push
factors, both of which Alfa is well positioned
to benefit from.
Good conversion of late

When we announced our 2020 results
wehad a strong late-stage pipeline, but
highlighted the importance of converting
this into signed contracts and that
converting prospects into signed contracts
was taking longer than normal. During the
year we have converted seven prospects
into wins and added an additional five
prospects, without losing any, so finishing
the year with eight prospects. This success
in converting the late-stage pipeline
demonstrates that we have a compelling
proposition. Since the end of 2021 we have
added one additional prospect and
converted one into a win so that we
currently have eight prospects in our
late-stage pipeline.
It is not only the quality of our software that
gives us such a strong conversion of
prospects, but our strong delivery record.
An increasing trend has been the move
towards customers looking to implement
Minimum Viable Product (MVP) solutions
supported by Alfa Start. This has the
advantage of getting us on the ground
faster, demonstrating the quality of our
software and people.
Outlook
The market opportunity for Alfa is very
exciting and we have good visibility of work
for 2022. We know there is a tight talent
market at the moment, but assuming we
continue our excellent recent record of
attracting and retaining talent, we will see
good revenue growth in 2022, albeit with
some additional margin pressure due to
salary inflation and return to normal costs.
With the strategic improvements made
across the business, the quality of our
people and strength of the intellectual
property in our software, we have great
confidence in Alfa’s prospects.
Andrew Denton
Chief Executive Officer
8 March 2022
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 15STRATEGIC REPORT





MARKETOVERVIEW
Global trends
Global economic recovery continues, with
the focus shifting to the after-effects of a
relatively short-lived recession. Supply chain
disruption and surging demand have
contributed to global inflation; and used
assets have soared in value whilst new
inventory remains low.
The climate emergency is forcing consumers
and businesses to look at ways to improve
their carbon footprint. Auto and equipment
finance companies play a critical role in this
change, providing the world with ever
improving green technologies.
What this means for Alfa today
The ability to refinance assets or onboard
used assets provides our customers with
theability to thrive in times of low inventory,
but also provide tools for supporting the
circular economy. Usage-based billing is
fullyconfigurable, allowing clients to build
flexible financing solutions. Our customers
are also configuring green financing
products, including local government
subsidies and recording key emissions
dataagainst their assets.
Alfa Systems is a highly configurable
platform which often results in our
customers being well positioned to
facesuch challenges. Demand is strong
worldwide as finance companies continue
to look to implement resilient, flexible and
modern technology landscapes.
What this means for Alfa tomorrow
Alfa continues to keep a close eye on trends
and shifts within the geographies and
industries in which we operate. Recent years
have highlighted that, often, these shifts are
unforeseen. This highlights the importance
of flexibility and configurability within our
solution, providing customers with features
that not only satisfy the requirements of
today but that can be applied to the
challenges of tomorrow.
USA
It was expected that delinquencies in the
USA automotive finance market would
spike as forbearance programmes came to
an end, but this has yet to materialise to the
anticipated extent.
Supply chain issues and inflation continue
todisrupt originations, but low rates and
atrend towards longer terms are keeping
payments affordable and demand high.
Equipment demand remains high
withfuture prospects looking strong
dueto continued industry confidence
andincreased government
infrastructurespending.
What this means for Alfa today
Alfa supports the largest providers inboth
the equipment and automotiveindustries,
supporting their businessthrough periods
of challenge andopportunity.
The ability for clients to report in real time
on their portfolio allows them to track
industry trends as well as portfolio and
process performance. This allows our
clientsto identify areas of concern and
opportunity, such as the ability to introduce
new products or streamline keyprocesses
ahead of a forecasted spikein volume.
What this means for Alfa tomorrow
Alfa’s continued focus on automation,
configurability and connectivity keeps our
customers prepared for any future
after-effects of the pandemic. Our internal
investment process continues to introduce
key product features required by a number
of our clients, such as expanding our
collections and credit offerings.
Europe
More aggressive sustainability targets
amongst European captives have presented
a challenge to provide green assets to the
mass market.
Usage-based products continue to be an
area of development as providers react to
higher demand for more flexible, cost-
efficient and sustainable ways of utilising
assets while retaining profitability and
managing residual risk.
Large multinational providers are looking to
reduce technology overheads by selecting a
single provider that can support multiple
countries and an evolving product landscape.
What this means for Alfa today
Alfa Systems provides configurable support
for usage-based products, allowing clients
to configure bespoke offerings.
Reporting and configuration management
capabilities allow clients to accurately
monitor the performance of their new
products and iteratively improve upon
them. Configurable subsidy management
allows customers to manage an ever-
changing landscape of green incentives
across multiple jurisdictions.
Alfa’s product flexibility and delivery
experience across Europe means it is well
placed to implement multi-country projects
successfully. Furthermore, a wealth of
experience in our home market along with
our UK Alfa Start offering allows us to
deliver high-quality solutions at a lower cost.
What this means for Alfa tomorrow
Alfa’s product investment allows our
customers to stay up to date with product
and regulatory developments. Furthermore,
Alfa continues to invest in and innovate its
delivery methodology, building on an
already proven delivery track record.
This places us in the best position to meet
the needs of our customers as they juggle
large-scale change in a number of areas,
such as meeting their sustainability targets.
16 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Australia and New Zealand
Covid-19 has continued to dominate the
agenda for many organisations, with the
auto and equipment finance sector being
noexception. It’s increasingly clear that
organisations with modern technology and
processes have been better able to adapt to
new ways of working. Throughout 2021 Alfa
has worked with our clients in Australia and
New Zealand to support both them and
their end customers.
While smaller, the market in Australia and
New Zealand is remarkably diverse.
Australia in particular has a large equipment
finance market led by the mining and raw
materials sector, and automotive finance
leasing has continued to show strength in
both countries.
What this means for Alfa today
Strong and long-lasting relationships remain
key to our success, with our ability to
support the growing operations of our
existing clients being a key measure of that
success. Alfa’s ability to support a broad
range of agreement types on a single
platform is an advantage in smaller markets
with a high level of product diversification,
and we continue to see strong demand.
What this means for Alfa tomorrow
First and foremost our key objective for
2022 is the execution of our existing
projects, alongside the support of our
existing customers. We expect to see
business practices driving towards more and
more automation and process support,
both areas in which Alfa is very well placed.
Technology trends
Artificial intelligence and machine learning
remain points of interest, with more possible
applications being uncovered as new market
trends and challenges emerge. One example
is residual value modelling, both as supply
chain issues continue and customers look for
more flexible usage models.
Delivery requirements often drive
technology requirements too, with agile
delivery models demanding scalable cloud
solutions. Our customers are looking to
decrease the technology footprint
managedby their internal teams, reducing
the ongoing overheads that come with
on-premise deployment.
The emphasis on data only grows stronger
with more customers realising the value that
big data provides. Robust API connectivity
isof paramount importance as auto and
equipment finance providers look to
coalesce asset, contract, telematics and
other data to provide clearer views of
profitability and efficiency.
What this means for Alfa today
Alfa has been at the forefront of the digital
revolution in auto and equipment finance,
and Alfa Systems has a rich application
programming interface (API) allowing
seamless connectivity. We’ve continued to
increase the breadth of services available
and also expanded the integration patterns
supported by Alfa Systems, such as Amazon
SQS and HTTP transport types for
outbound messaging.
Investment into our cloud hosted offering
continues. We recognise the importance of
secure and resilient cloud architectures and
these are key considerations in the design of
our service, which we continually monitor
through client engagement and internal
procedures, such as disaster recovery tests.
Alfa’s joint venture, Alfa iQ, continues to
explore the use of machine learning in auto
and equipment finance. The industry
presence of Alfa iQ has increased through
thought leadership and conference activity,
driving the adoption of AI in the auto and
equipment finance market.
What this means for Alfa tomorrow
The industry continues to focus on utilising
new technologies in innovative ways and
Alfa’s investment mirrors this appetite,
ensuring we are designing solutions that can
place our customers at the forefront of
technology trends.
 MoreinformationonAlfaiQcanbe
found on page 30.
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 17STRATEGIC REPORT

BUSINESSMODEL
Markets
See market overview
page 16
Culture and values
Seemoreaboutour
culture and values
page62
Inputs Value creation
Leadingcompaniesrequire
innovation and customer-specific
enhancements to stay ahead
Autoandequipmentfinance
isheavilyregulated–
regulatorychangerequires
software changes
New markets and geographies
requiresoftwaredevelopment
Growing Company provides
career development and
rewards for our people
Software
Leading-edgetechnologyand
innovationattractssmart,
diverse people
People
Smart,diversepeople
improve our software
18 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Revenue
Subscriptions ServicesSoftware
Financial returns
for shareholders
See Financial review
page38
Positive impact

SeeESGsection
page58
Outputs
Delivery
Retain for potential
future needs
Cash
Solutions for leading auto
andequipmentfinance
companies

Newmarketentry
Expanding our
addressable market
Our delivery
track record and
market-leading
software drive
recommendations
and additional sales
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 19STRATEGIC REPORT

1

3
INVESTMENTCASE
Purpose-built for auto and equipment enterprises
globally, developed to meet the current and future
needs of the industry.
Alfa Systems is a leading auto and
equipment financesoftware platform
Strongly positioned
ina large resilient
addressable market
with clear structural
growth drivers
We have an established position of
leadership in the auto and equipment
finance software market, underpinned
byour experience, ourtrack record of
delivery, and our in-depth understanding
of the industry.
Changing regulations (for instance
risk-freerates), the need for digital
capabilities (accelerating as a result
ofchanges in customer processes due
tothe globalpandemic) and theneed to
replace ageing infrastructure andoutdated
systems are driving underlying demand for
Alfa Systems.
We are committed to growing our market
share by recruiting the smartest people,
maintaining and developing our leading-
edgetechnology, and surpassing customer
expectations through delivery excellence.
20 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021



3
Constant innovation
delivers leading-edge
technology embedding
strong long-term
customer relationships
Alfa has invested significantly in the
development of its technology platform to
ensure it is secure, reliable, resilient andscalable
to grow with our customers’ business ambitions.
Our suite of integrated modules
canbedeployed and configured as afullend-
to-end solution covering theentireauto and
equipment finance lifecycle or alternatively to
provide stand-alone support for functional or
product areas.
Our hosted solution adds further value byreducing
implementation timescales andprovides a single,
resilient, actively monitoredinfrastructure.
Our strong, long-term customer relationships
drive recurring revenues aswell as providing
references for newprospects.
Strong cash generation
delivering a strong
balancesheet supporting
growth plans
We have a clear
strategy anda cash
generative modelthat
enables us to fund our
growth internally
A robust


of cash (2020: £37m)
andno bank debt
(2020: £nil)
An impressive cash
conversion rate

(2020: 114%)
We have multi-year
relationships with our
customers, built on
our consistent delivery.
Our dierentiated
businessmodel is
dicultto replicate
30 years and growing
With an excellent delivery history over
three decades in the industry, Alfa’s
track record is unrivalled.
Our business model typically involves the
sale and deployment of our auto and
equipment finance software platform
into large enterprises, that have highly
complex andvarying requirements.
We are able to leverage
our understanding of
these complexities to
enhance Alfa Systems –
asignificant selling point
for new prospects.
Our Alfa Start
methodology
enablesusto deliver
asubscription-based
service rapidly to smaller,
less complex customers.
We have established a partner network that
extendsour sales channel and enables us to
increaseour capacity to implement more Alfa
Systems, hence leveraging our IP.
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 21STRATEGIC REPORT

Our strategy for creating long-term sustainable
business value
A
Group revenue
B
Operating profit
C
Operating profit margin
D
Cash
E
Operating free cash
flowconversion
F
Total contract value (TCV)
G
Headcount
H
Retention rate
I
Employee engagement
J
Greenhouse gas
emissions (tCO
2
e)
Key
COMPANYSTRATEGY
Strategic priorities Description Our objectives Link to KPIs
1
Strengthen
Grow our differentiation of market-

We will continue to offer a supportive,
diverse and collaborative working
environment and be considered to
bean employer of choice.
We will maintain our leading-edge
technology and ensure its secure,
effective delivery to make our people,
and customers, future-ready. Our
target markets inform and direct our
product development.
We will maintain our unrivalled track
record for delivering large system
implementations and highly complex
business change projects.
• Retain and attract the best people
• Support our people through flexible working
• Encourage inclusivity and diversity
• Provide career development and learning opportunities
• Make a positive impact to contribute to a more sustainable future
• Foster innovation throughout the company
• Reinvest in the product to increase value for customers and prospects
• Seize market opportunities for new products
• Continue to direct product roadmap by target markets
• Integrate Alfa Systems with best-of-breed solutions
• Successful delivery of all Alfa implementation projects
andongoingservices
• Maintain strong customer engagement and loyalty
A B C D
E F G H
I J
2
Sell
Focus on cloud-hosted, subscription

We will retain our market-leading
position and grow our share of the
enterprise auto and equipment finance
sector. Our target markets inform and
direct our sales and marketing effort.
• Grow target market share
• Grow cloud-hosted, subscription sales
• Grow incremental sales to existing customers
• Improve prospect engagement and sales process
A B C D
E F G H
I J
3
Scale
Increase our capacity for developing

We will increase product engineering
and delivery capacity, enabling
revenuegrowth.
• Improve product engineering scalability
• Increase development capacity
• Increase delivery capacity
A B C D
E F G H
I J
4
Simplify
Simplifying our product,
implementations and processes


We will continue to invest in
simplification to achieve our vision
ofdelivering more concurrent Alfa
implementations, more efficiently
witha world-class product.
• Simplify our supported codesets and platforms
• Simplify our product development
• Simplify our implementation and upgrade delivery approach
• Improve operational efficiency
• Improve management information and control
A B C D
E F
5
Synergise
Develop our partner ecosystem,



We will work with a select group of
partners to create additional sales
channel opportunities and increase
ourdelivery capabilities whilst
maintaining quality.
• Leverage our partner ecosystem for sales
• Scale and leverage our partner ecosystem for delivery
• Add to our partner ecosystem
• Continuous improvement of Alfa Partner programme
A B C D
E F
6
Start
Improve our offering for smaller auto
and equipment finance providers as


We will become a market leader
inthevolume market of the auto and
equipment financeindustry.
• Continuous improvement of Alfa Start delivery
• Continuous improvement of Alfa Start product
• Win customers in the volume market, based on Alfa Start proposition
• Continue investment model for volume market
A B C D
E F
22 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Strategic priorities Description Our objectives Link to KPIs
1
Strengthen
Grow our differentiation of market-

We will continue to offer a supportive,
diverse and collaborative working
environment and be considered to
bean employer of choice.
We will maintain our leading-edge
technology and ensure its secure,
effective delivery to make our people,
and customers, future-ready. Our
target markets inform and direct our
product development.
We will maintain our unrivalled track
record for delivering large system
implementations and highly complex
business change projects.
• Retain and attract the best people
• Support our people through flexible working
• Encourage inclusivity and diversity
• Provide career development and learning opportunities
• Make a positive impact to contribute to a more sustainable future
• Foster innovation throughout the company
• Reinvest in the product to increase value for customers and prospects
• Seize market opportunities for new products
• Continue to direct product roadmap by target markets
• Integrate Alfa Systems with best-of-breed solutions
• Successful delivery of all Alfa implementation projects
andongoingservices
• Maintain strong customer engagement and loyalty
A B C D
E F G H
I J
2
Sell
Focus on cloud-hosted, subscription

We will retain our market-leading
position and grow our share of the
enterprise auto and equipment finance
sector. Our target markets inform and
direct our sales and marketing effort.
• Grow target market share
• Grow cloud-hosted, subscription sales
• Grow incremental sales to existing customers
• Improve prospect engagement and sales process
A B C D
E F G H
I J
3
Scale
Increase our capacity for developing

We will increase product engineering
and delivery capacity, enabling
revenuegrowth.
• Improve product engineering scalability
• Increase development capacity
• Increase delivery capacity
A B C D
E F G H
I J
4
Simplify
Simplifying our product,
implementations and processes


We will continue to invest in
simplification to achieve our vision
ofdelivering more concurrent Alfa
implementations, more efficiently
witha world-class product.
• Simplify our supported codesets and platforms
• Simplify our product development
• Simplify our implementation and upgrade delivery approach
• Improve operational efficiency
• Improve management information and control
A B C D
E F
5
Synergise
Develop our partner ecosystem,



We will work with a select group of
partners to create additional sales
channel opportunities and increase
ourdelivery capabilities whilst
maintaining quality.
• Leverage our partner ecosystem for sales
• Scale and leverage our partner ecosystem for delivery
• Add to our partner ecosystem
• Continuous improvement of Alfa Partner programme
A B C D
E F
6
Start
Improve our offering for smaller auto
and equipment finance providers as


We will become a market leader
inthevolume market of the auto and
equipment financeindustry.
• Continuous improvement of Alfa Start delivery
• Continuous improvement of Alfa Start product
• Win customers in the volume market, based on Alfa Start proposition
• Continue investment model for volume market
A B C D
E F
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 23STRATEGIC REPORT

Initiatives
SERVICES SOFTWARE SUBSCRIPTION
Strategic priorities
People
Partnering
Strategic
Investment
Alfa iQ
Cloud
Hosting
Alfa Start
1
Strengthen
2
Sell
3
Scale
4
Simplify
5
Synergise
6
Start
Find out
more on
page25
Find out
more on
page26
Find out
more on
page28
Find out
more on
page 30
Find out
more on
page32
Find out
more on
page 34
STRATEGYINACTION
Initiatives underpinning
our strategy
24 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

We are Alfa
Our talent is our best asset – successful
project delivery depends on passionate
people who are engaged and care about
what they do. We take great pride in the
strong culture at Alfa, and we work hard to
look after our colleagues, retaining and
attracting the best in the business.
Inclusion & Diversity:
A key strategic priority is to attract, develop
and retain a truly diverse team. Our strong
Inclusion & Diversity policy helps us recruit
the best and smartest people.
Diverse cultural perspectives really do
inspire innovation and creativity at Alfa.
We make things better and solve problems
together, so we’re always striving towards
being as inclusive as we can.
• Our new Transitioning at Work policy,
launch of Cultural Days and the events
and initiatives run by our Communities are
2021 successes we are really proud of.
Delivering the best

Our smart people deliver great
implementations to our customers and
develop class-leading software. We support
teams with flexibility, invest in wellbeing and
make sure everyone feels connected. There are
always Learning & Development opportunities
for growth and career progression available.
• This year we’ve been preparing for the
launch of our new Learning Management
System as well as sharing a suite of tools,
resources and workshops to support new
ways of working and to help reach our full
potential. Wellbeing has been a core focus,
rolling out new rewards and benefits,
training up Mental Health First Aiders and
enhancing paid carer leave allowance.
Culture:
Recruiting and retaining the best people is
fundamental to our growth. We attract and
hold on to talent by reinforcing the Alfa
Culture and ensuring a positive learning
environment. Underpinned by our Values, the
Alfa Culture is something often described as
‘special’. We foster a setting in which everyone
feels listened to and valued. We also enjoy
each other’s company and make efforts to
have fun alongside working hard.
• 2021 saw us maintain connections and
team rapport with a variety of virtual
andreal-world events. We seek regular
feedback from all areas of the business
and have kicked off projects which focus
on our Employer Brand, sharing more on
life at Alfa and getting to know each
other better.
Findoutmoreonpage62
Communities –
inside & outside Alfa:
Our internal Communities are employee-led
groups – safe spaces for those involved to
discuss and promote issues, support each
other and work towards improving policies.
They focus on: Racial Equity, Inclusion &
Diversity, LGBTQ+, Parents and Women.
Our Environmental Impact, Social Impact
and Alfa Communities look after the wider
communities in which we work (as well as
internal operations), raising money for
charities, focusing on sustainability and
giving back in the form of volunteering, work
experience schemes and sharing expertise.
• Our Communities continue to do fantastic
work in all their respective areas. We have
enjoyed a huge variety of events and
learned from each group this year. We’ve
raised great sums for charity partners and
are proud to confirm we reached carbon
positivity in 2021.
Find out more on page 65
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 25STRATEGIC REPORT
SERVICES
People

Partnering
SERVICES
STRATEGYINACTION

Partner relationships

Partner-assisted project
go-lives in2021

Ongoing partner-
assistedprojects
Approach
Partnerships are an important growth
accelerator, bringing a number of benefits
toAlfa and our customers. These include:
• Increased operational capacity through
partner staff augmentation of our teams,
allowing us to deliver more Alfa Systems
implementations concurrently;
• Greater flexibility to change resourcing
rapidly by leveraging our partners’ size and
bench strength;
• Increased sales opportunities through
joint business development and access to
a wider range of customers through our
partner network;
• Faster/less risky implementation projects
through smoother systems integration by
skilled Systems Integrator (SI) partner
resources with Alfa Systems experience;
• Extended local market expertise,
language skills and presence enabling
more effective sales and implementation;
• Client-side resourcing capability through
our partner network, allowing us to provide
an additional service to customers; and
• Extended product offering and simplified
implementations through integrating Alfa
with complementary solutions from
technology partners.
“We’ve been collaborating with
Alfafor more than 20 years now.
The Accenture and Alfa leadership,
consulting and technology teams
have an excellent track record of
working well and delivering business
benefit together.”
Cameron Krueger
Managing Director, Accenture
“Deloitte and Alfa have been working together
to modernise systems and processes and
deliver compelling digital experiences for
ourclients. Together, our organisations
complement one another extremely well
tobring the best solutions and deliver great
business outcomes for our clients.”
Andrew Denton
CEO, Alfa Financial Software
26 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Partnering
Our partner programme is a key part
of Alfa’s long-term growth strategy
Highlights
This year we have successfully scaled our
partner relationships, remotely onboarding
three partner intakes and embedding more
partners in our project teams, sales activities
as well as in client-side/SI roles. On the
delivery side, partner resources have been
utilised across 7 customer projects in three
different geographies and we have seen two
partner-assisted projects go live. This year we
have benefited from increased sales channel
opportunities via our partner relationships
and the extended global reach and credibility
they provide. We have also continued to
explore new partnerships invarious
geographies that can help us in
salesopportunities.
We have grown our partner ecosystem,
agreeing engagement terms with a notable
global professional services organisation for
the combined marketing and delivery of the
Alfa Systems platform.
We have continued to invest in partner
training, further developing our training
programme including course material
improvements and new Alfa Systems training
environments automatically synchronised
with the latest versions of Alfa Start.
Updates to our partner portal and access to
additional resources mean that our partners
have better access to supporting information
and tooling, bringing increased efficiencies.
We work with a small, carefully selected
partner ecosystem of like-minded
organisations with geographical spread
andcomplementary delivery capabilities.
We utilise three types of partnering – the
first is staff augmentation, where industry
expert partner staff augment our teams and
assist with our standard implementation
consultancy work with Alfa, priming the
delivery. Typical roles include configuration,
training and testing support.
The second type is working with SI partners to
perform activities outside of Alfa’s standard
implementation scope and which are key to the
successful delivery of the project. Typical roles
include programme management, integration
development, test management, document
production and report creation.
The third type is working with technology
partners for out-of-the-box integrations
with best-of-breed solutions.
Plans – for 2022
In 2022, we will continue to scale our
existing partnerships and evaluate
other potential partners to strengthen
further our partner ecosystem and
core market coverage. This will include
expanding our partner-assisted delivery
capability in North America to increase
operational capacity.
As staff augmentation partnerships
mature and partner resources gain
expert Alfa Systems implementation
knowledge and experience, we plan
toadvance themtowards a joint
delivery model, starting with Teamwill.
In preparation for this, in 2022 we will
continue to make significant investment
in our partner programme including:
• Extending our partner support team;
• Improving partner onboarding,
including introducing certification /
accreditation;
• Improving partner collaboration
tooling; and
• Opening up more roles for partners
We will continue sales collaboration
activities with our partners. This is an
important aspect of our partnerships,
with new sales acting as a growth
accelerator, both for Alfa and for scaling
our partner relationships further.
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 27STRATEGIC REPORT

Continued investment in our
leading-edge software to make

As customers drive their businesses harder
and expect more access to information, Alfa
Systems’ performance has been improved,
continuing our journey to an always-
available system. Simple deployment
models, such as cloud hosting and Docker
containers, enable us to deliver Alfa Systems
more efficiently and earlier, allowing our
customers to focus on their business
differentiators rather than infrastructure.
Investing in our whole engineering process,
including our people, ensures that our
onboarding, tools and infrastructure enable
us to scale teams efficiently, whilst
benefiting more from external expertise and
leading-edge technology.
Continued system modularisation effort has
separated further components allowing us
to use them more easily in more contexts.
We are also establishing architectural
guidelines and automated tooling to assist
Product Engineering teams adopt these
principles as part of business as usual
development in their areas.
Product Engineering now benefits from a
completely new build process and system,
delivered by the Software Development
Lifecycle (SDLC) initiative, which keeps an
always green mainline for Alfa Systems,
using scalable computing resources.
This removes significant friction from the
development experience, providing better
isolation between parallel enhancements
and improving the opportunity for
collaboration. This now opens the
opportunity to efficiently further scale our
STRATEGYINACTION
Mercury is a modern UI (User Interface) which is accessible to all, which helps users of Alfa Systems
complete their daily tasks with ease in a modern, clean and uncluttered environment.

Clients live with Mercury UI
Strategic
Investment
SOFTWARE
28 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

engineering team and improve release
flexibility, which should benefit our
customers. We are already finding
improvements from the new approach as
engineers experiment and leverage this to
automate other processes.
Business rules, now even better
Powerful Business Rules functionality has
long been a key differentiator for the Alfa
Systems product, allowing our clients to
configure their own business decision logic
within the system. This can include, for
example, data validation, company policy
rules and automation of workflow
progressions and actions. Because this is
configuration-based, it allows for rules to be
added or updated without requiring Alfa
Systems development effort and a new
release of the software.
This year as part of our ongoing product
investment, we have used functional groups
tomake significant improvements to the
business rule editor to guide authors when
creating rules, and to prevent creation of rules
which would have no effect. These useability
changes will enable our customers to define
more rules, more efficiently, shortening the
time to business benefit realisation.
Improved credit decisioning
In 2021 we extended our credit and middle
office functionality in Alfa Systems, focusing
initially on the UK equipment market. This
investment included: consolidated support for
credit applications; integration with Experian
for consumer and commercial searches; more
efficient decision making by gathering credit
data only when required; and alignment
between external and Alfa decision engines.
This exciting improvement to the product
willbenefit both existing and prospective
customers and is very timely given the current
economic outlook with Credit Decisioning
being a primary focus for the industry in 2022.
Class-leading user interface
Last year we introduced a new user interface
to Alfa Systems, code-named Mercury, the
first to be entirely driven by direct end-user
feedback. This year has seen Mercury rolled
out to many of our v5 clients and feedback
has been hugely positive.
Mercury and our future UIs continue to evolve
via our engagement in regular end-user
research sessions, watching people use Alfa
Systems in their day jobs. This year our
approach to user research has also developed
significantly. For example, we now have a
demo application where we can make
prototype screens available to clients allowing
them to trial new layouts and components
before actual development starts.
We have also been working on a new
framework for user interface development
at Alfa (code-named Render), building on
the success of Mercury. Render will both
revolutionise and simplify UI development
at Alfa, as well as providing a host of other
benefits to areas such as testing and
application performance. We genuinely
believe this will be a game-changer for the
Alfa product and for our users.
Plans – for 2022
Our future investments will continue
to focus on shortening the cycle from
requirements to delivery ensuring that
our customers receive the best service
and are kept future-ready. We will
progress our modularisation initiative,
further focusing on simplification and
bottlenecks. In parallel, we will
continue to review and update our
structure and processes to improve
team autonomy and individual
mastery within our engineering teams
as well as to balance the different
types of work we do.
2022 will also see an increased
focuson investment in functional
improvements to Alfa Systems,
delivering more strategic roadmap
items to continue to strengthen our
market-leading product.
Alfa’s dedicated UI/UX Design team have accessibility
aspart of their core remit. This team recently carried
out an accessibility audit of our Alfa Systems software,
part ofamajor internal investment initiative which
fundamentallyimproves the overall UI and UX of Alfa
Systems. A strand of this work (codenamed Mercury)
wasinformed by the Web Content Accessibility
Guidelines(WCAG)and has gone live at many of
ourclients,with hugelypositive feedback from users.
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 29STRATEGIC REPORT

STRATEGYINACTION
Alfa iQ
SOFTWARE
30 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Alfa iQ was established to deliver
intelligence to the world’s auto and
equipment finance providers.
Artificial intelligence
and machine learning
2020 saw the formation of our joint venture
with Bitfount. Alfa iQ was established with a
mission to employ artificial intelligence (AI)
and machine learning (ML) techniques to
deliver the highest quality insights to the
world’s asset finance providers. AI and ML
do however require careful implementation
to yield valuable results. This is why we
partnered with Bitfount, a team of carefully
selected experts in AI and ML who are
pushing the capabilities of such technology,
not just in terms of the quality of the insights
gained from their algorithms, but also in the
way these are designed with data privacy at
the forefront.
One challenge of these technologies is
getting enough quality, well-structured data,
to create robust algorithms, and so this
collaboration, pairing Alfa’s experts in asset
finance and data structures, with Bitfount’s
deep understanding of this emerging
technology, is uniquely well placed to provide
consistent and unparalleled benefits to our
customers. The advantages for our
customers are as varied as improved
auto-decisioning with a reduced need for
manual intervention, improved delinquency
prediction, exposure and concentration risk
identification and ultimately more accurate
lending, leading to a greater return on capital.
Highlights
We have been steadily introducing Alfa iQ to
selected, leading industry players, including
but not limited to existing Alfa customers.
So far testing of our machine learning
methods is continuing with two customers,
and we have signed a paid contract with our
first customer.
In 2021 Alfa iQ achieved ISO 27001
andCyber essentials certifications for
information security, demonstrating our
ability to leverage contacts and experience
to setup strong infrastructure around this
new venture.
Alfa iQ also welcomed its first full-time staff
member this year to augment the existing
members from Bitfount and Alfa and this
expansion of the team will continue in 2022.
Hiring is being managed meticulously to
recruit only individuals with the expertise
and high standards we require.
Plans – for 2022
2022 will see iQ grow its customer base
with both increases in work for existing
customers, and the onboarding of new
ones. After finishing testing and
development with the initial onboarding
customers, iQ intends to expand their
products with both ‘software as a
service’ options and bespoke analysis.
In order to achieve these goals, we will
carefully manage the teams expansion,
utilising the existing wealth of
experience from the two parent
companies, as well as new employees.
Whilst this is ongoing, we anticipate that
demonstrating the advantages of iQ’s
products will be increasingly easy as iQ’s
reputation and portfolio of work grows.
iQ’s core strategy group consisting
ofsenior leadership from Alfa and
Bitfount worked hard throughout
thisyear to get the structures and
processes in place to begin work for
their first customers and now the focus
will move toward expanding capacity,
to facilitate new workloads whilst
retaining the highest quality.
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 31STRATEGIC REPORT

STRATEGYINACTION
Delivery
• We are now live for eight customers across
EMEA, Americas and now Asia Pacific.
• Managed infrastructure for six customers
currently in the project implementation
phase and as project accelerators for
future on-premises customers.
• Seamlessly deployed significant Alfa
Systems upgrades to our live customers
allowing our customers to benefit from
the latest versions of Alfa Systems.
• Provided our customers with timely
information after the recent Log4Shell
vulnerability was reported. Our layered
architecture and software vulnerability
monitoring process ensured that our
customers were not impacted. We then
rolled out the latest patches from AWS
and our other vendors as soon as they
were available.
Comparing these numbers to the 2020
report, many of those customers are now
live, illustrating how Alfa Hosting can speed
up implementation projects especially when
used in tandem with Alfa Start.
Cloud Hosting
SUBSCRIPTION
Up to

faster for initial deployments
32 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Scalability
• Increased the size and geographical
distribution of the team by onboarding
additional capacity based in the USA.
This allowed us to cover more out-of-hours
requests for our EMEA customers and to
provide more in-working hours support for
our US and Asia Pacific customers.
• Towards the end of the year we launched
a closed-beta for our customer portal.
Customers will be able to self-serve
important audit documents and view
up-to-date status information for their
environments. We will invest in additional
portal functionality in 2022 with the aim
of allowing our customers to manage
features of their deployments whilst
reducing the load on our team for simple
and frequently executed tasks. In Q1
2022 we expect to open the portal as
generally available to all customers.
• 2022 will see opportunities to automate
more of our processes and to continue to
improve the customer experience
wherever we can.
Technology
• Delivered comprehensive support for
running Alfa Systems in Docker containers
from within the Alfa Hosting service to
leverage alignment between all Alfa
Systems. This included support for
deploying upgrades of the Alfa Digital
Gateway micro-service with zero
downtime or service interruption.
• Migrated, with zero downtime, to the
nextgeneration of our security partner’s
machine-learning based threat monitoring.
Alert Logic Managed Detection and
Response provides best-of-breed
AI-based intrusion detection, backed by
a24x7 team of security experts. This has
significantly cut the time to deliver new
infrastructure for our customers whilst
ensuring that every server is monitored
24/7 for potential threats.
• Delivered a secure and scalable solution
formoving obfuscated data between
customer environments as required for issue
reproduction or business verification testing.
No more infrastructure delays with
fully-managed environments from
AlfaHosting. Open to users from
thefirst day of a project.
Plans – for 2022
We will continue to onboard new clients
and to provide secure and performant
infrastructure to our existing clients
allowing them to focus on delivering
value to their business throughout every
stage of a project.
We also plan to further increase
thesize of our team with additional
members in both the EMEA and USA
regions to provide expert round-the-
clock support wherever our customers
are located.
2022 will see increased investment in
our deployment, monitoring and
portal platforms to ensure that we
continue to offer market-leading
tooling to both our internal teams
andcustomers.
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 33STRATEGIC REPORT

Alfa Start
SUBSCRIPTION
STRATEGYINACTION

Alfa Start implementations can
reachlive production inaslittle
as20weeks.
34 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Approach
Alfa Start offers a preconfigured, hosted
software solution for the quick and cost-
effective delivery of Alfa Systems. Using a
predefined, best-practice configuration and
process catalogue, Alfa Start allows operations
of all sizes to take full advantage of the
multi-featured, market-leading Alfa Systems
platform. The Alfa Start approach is designed
to accelerate systems change programmes,
maximising value and minimising risk.
Lean operations taking on Alfa Start’s best-
practice parameters and processes can
quickly leverage the proven functionality
and performance for which Alfa Systems has
become renowned. For those organisations
requiring more customisation, Alfa Start
canact as a project accelerator, enabling
fasterimplementations.
Alfa Start’s rapid implementation model
benefits both Alfa and our customers.
Alfa Start is a key enabler of agile delivery,
allowing clients to confidently and quickly
establish a first phase go-live, recognising the
benefits of Alfa Systems earlier and providing
production experience for future phases.
Implementations of this nature enable Alfa to
scale effectively, delivering more concurrent
projects, providing the same high-quality
service, but without a corresponding increase
in the number of implementation consultants.
Through Alfa Start we are increasing the
number of available customers in key target
markets, presenting Alfa as a more competitive
package, especially amongst smaller auto and
equipment finance providers. This not only
protects our position as a market leader, but
also allows us to support growth and
disruption. Alfa Start is complemented by
AlfaHosting, which allows clients to use Alfa
without having to establish and maintain
environments. Together, both allow the client
to go live quicker with an Alfa platform that
meets both the functional and technical
requirements, whilst increasing Alfa’s
subscription revenue stream.
Highlights
2021 has seen successful go-lives for both
Alfa Start out-of-the-box and accelerator
projects, plus the kick-off of numerous other
projects utilising Alfa Start as an accelerator.
Alfa Start has been fully operationalised
andembedded in two key target markets.
All implementations across UK Equipment
and US Automotive markets now utilise Alfa
Start either as an accelerator or through the
out-of-the-box approach. As the number
ofprojects has increased, we are realising
compounding benefits as we gather more
feedback, build more expertise and increase
our Alfa Start user group.
In parallel to project feedback, the ongoing
internal investment initiatives throughout 2021
have ensured the continuous development of
Alfa Start. This includes incorporating new
product features, expanding functional and
integration capabilities, establishing more
client-facing documentation and improving
internal testing. This has ensured that Alfa
Start remains the class-leading product and
implementation approach.
Plans – for 2022
In 2020 we launched Alfa Start
products covering both the US
Automotive and UK Equipment
markets. Alfa Start has proved very
successful in both markets, and 2022
will also see a number of existing
implementations progress and new
projects begin, ensuring the momentum
created by Alfa Start continues to build.
Alfa Start has also proven to be
successful in adjacent markets, with
clients using parts of our existing
offerings. As such, we are looking
towards implementing new Alfa Start
offerings for other target markets, in
particular US Equipment.
Through broadening the market
coverage of Alfa Start we will further
compound the benefits this model offers
through more rapid implementations.
A number of key initiatives during 2022
will ensure that Alfa Start remains
leading edge. A programme to simplify
migration will look to enable rapid
migration of portfolios and facilitate
low-friction portfolio acquisition,
supporting our customers’ growth.
In addition, we are building software
partnerships to expedite the
implementation of key integrations
withcommon vendors, enabling our
customers to rapidly incorporate Alfa
into wider system landscapes. Finally,
we are broadening the functional
coverage of existing AlfaStart offerings,
incorporating key differentiators such as
automated creditdecisioning.
“Alfa Start makes a world-leading product –
AlfaSystems – available to more companies.
Ourcustomers can use Alfa Start to simplify and
expedite complex change programmes, reducing
riskand enabling them to see benefits earlier. We can
deliver more projects, in fewer days, but crucially
without impacting any of the quality forwhich
we’reknown.”
Sarah Taylor
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021 35STRATEGIC REPORT

KEYPERFORMANCEINDICATORS
Measuring our performance



Our strategic priorities
1



3





6

Financial
Group revenue 
2021
£83.2m
£78.9m
£64.5m
2020
2019
2021 performance
Group revenue grew by 5% from last
yearwith strong growth in Services and
Subscription streams, and a decline in
Software stream driven primarily by a
largeone-o licence fee in 2020 which
didnot recur.
Why do we measurethis?
Growing revenue is a measure of customer
and business success. It is central to our
objective of growing by maintaining our
leading competitive position through
dierentiation of market-leading People,
Product and Delivery.
Linked to
remuneration:Yes
Links to strategic
priorities:
1 
3 

6
Operating profit 
2021
£24.7m
£23.9m
£13.7m
2020
2019
2021 performance
Operating prot increased from last
yearas a result of growth in revenues,
partially oset by increased salary costs,
aswell as higher hosting and internal
computer costs.
Why do we measurethis?
Operating prot is an indicator of the
Group’s protability. It can be used to
analyse the Group’s core operational
performance without the costs of capital
structure and tax expenses impacting prot.
Linked to
remuneration:Yes
Links to strategic
priorities:
1 
3 

6
Operating profit margin 
2021
30%
30%
21%
2020
2019
2021 performance
Operating prot margin has remained in line
with last year with revenue growth partially
oset by increased costs of our growing
workforce (see comments under Group
revenue and operating prot above).
Why do we measurethis?
Operating prot margin is a measure of
how eectively we sell Alfa Systems and
manage our cost base. It also allows
comparison across dierent companies
and sectors.
Linked to
remuneration:Yes
Links to strategic
priorities:
1 
3 

6
Cash 
2021
£23.1m
£37.0m
£
58.8m
2020
2019
2021 performance
During 2021 a second special dividend of
£29.7m was paid, reducing the Group’s
cash balance. Excluding the impact of the
dividend payment, cash has further
improved due to a favourable operating
free cash ow performance.
Why do we measurethis?
Cash is critical to allow the Group to cover
its expenses, provide funds for investment,
growth and to meet its long-term needs.
Cash generation is a good indicator of the
underlying health of the business.
Linked to
remuneration:Yes
Links to strategic
priorities:
1 
3 

6
Operating free cash flow conversion 114
2021
114%
114%
138%
2020
2019
2021 performance
Operating free cash ow conversion
performed in line with last year with
continued focus on cash management.
Why do we measurethis?
A strong unencumbered balance sheet
position is key to growing the business in
the future. Our business has always been
cash generative and this KPI allows us to
monitor cash ows before investment in
capital projects.
Linked to
remuneration:Yes
Links to strategic
priorities:
1 
3 

6
Total contract value (TCV) 
2021
£133.1m
£ 112.9m
£80.5m
2020
2019
2021 performance
Year-on-year total TCV has seen signicant
growth from 31 December 2020 with
improvements across all revenue streams
particularly subscription and software.
See p39 for further detail.
Why do we measurethis?
Helps to predict revenue and the value
ofacontract over its lifetime, which will
generally extend beyond the current
nancial year. See p37 for a detailed
explanation of the calculation.
Linked to
remuneration:No
Links to strategic
priorities:
1 
3 

6
36 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Operational
Headcount 
2021
382
360
316
2020
2019
2021 performance
Headcount has increased due to planned
recruitment and investment continuing
across the business together with an
improved employee retention rate.
Why do we measurethis?
Our revenue growth and ability to win
newbusiness is heavily dependent on the
number and deep expertise of our people
and therefore growing our team for the
future is key to this goal.
Linked to
remuneration:No
Links to strategic
priorities:
1
3
Retention rate 
2021
87%
93%
83%
2020
2019
2021 performance
The retention rate has declined during
theyear largely due to the impact that
thepandemic has had on the recruitment
market and people’s evaluation of
futureaspirations.
Why do we measurethis?
Our deep expertise in the industry and our
ability to service our customer relationships
is driven by the quality of our people.
A higher retention rate demonstrates
sustained engagement and maintenance
ofkey skills and knowledge.
Linked to
remuneration:No
Links to strategic
priorities:
1
3
Employee engagement* 
2021
78%
74%
55%
2020
2019
2021 performance
Employee engagement has improved
during the year, due to the an increased
focus on this area by senior management,
as well as the deliberate actions that were
taken in response to the pandemic.
Why do we measurethis?
Measures levels of employee satisfaction
and connection to the business. There is a
positive correlation between employee
engagement and business performance
and the metric should be a lead indicator
for retention rate performance.
Linked to
remuneration:No
Links to strategic
priorities:
1
3

Greenhouse gas emissions (tCO
2
e) 142
2021
142
212
821
2020
2021 performance
Our emissions have fallen signicantly due
to much reduced travel driven primarily as
a result of the pandemic combined with a
review of travel needs generally.
Why do we measurethis?
Responsible operations and a commitment
to a positive Environmental, Social &
Governance (ESG) agenda. We are
committed to a position of carbon
positivity through assessing our carbon
footprint and emissions.
Linked to
remuneration:No
Links to strategic
priorities:
1
3
Definition and KPI

In considering the nancial performance of the
business, the Directors and management use key
performance indicators (KPIs), some of which are
dened by IFRS and some of which are not specically
dened by IFRS.
We believe that operating free cash ow conversion
isa key measure required to assess our nancial
performance. It is used by management to measure
liquidity. This measure is not dened by IFRS.
The most directly comparable IFRS measure for
operating free cash ow conversion is cash ows from
operations. The measure is not necessarily comparable
to similarly referenced measures used by other
companies. As a result, investors should not consider
this performance measure in isolation from, or as a
substitute analysis for, our results of operations as
determined in accordance with IFRS.
The calculation method for each metric is as follows:

Represents the number of Alfa employees under
contracts of employment as at 31 December of
eachyear.

Represents the retention of Alfa employees over the
previous 12-month period, excluding any managed
sta attrition.

TCV is calculated by analysing future contract revenue
based on the following components:
(i) an assumption of three years of subscription
payments (including maintenance, cloud hosting
and subscription licence) assuming these services
continued as planned (actual contract length
varies by customer);
(ii) the estimated remaining time to complete
services and software deliverables within
contracted software implementations, and
recognise deferred licence amounts (which may
not all be under a signed statement of work); and
(iii) Pre-implementation and ongoing services and
software work which is contracted under a
statement of work.
The denition of TCV has been aligned with the new
revenue streams reported, however the underlying
calculations are consistent with previous periods, and
accordingly no restatement is required.
Given this KPI is forward looking, in calculating the
TCV we have used the budget 2022 exchange rates.
These budget rates are; USD: 1.38, EUR: 1.17, AUD:
1.88, and NZD: 1.95.

The overall Employee engagement score is derived
from bi-monthly employee Pulse survey ratings based
on the questions “I am happy in my role” and “I would
recommend Alfa to a friend as an employer”.
The calculation of this score has been revised during
the year to include only these two broad questions,
which provides a clearer result than the previous
method which included additional questions relating
to specic aspects of working at Alfa which meant the
impact of any specic issues could be duplicated
within the overall score. Comparative period scores
have been restated accordingly.


Operating free cash ow is calculated as cash
generated from operations, less capital expenditures,
less the principal element of lease payments in respect
of IFRS16. Operating free cash ow conversion
represents operating free cash ow generated as a
proportion of operating prot.
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 37

FINANCIALREVIEW
“ 2021 saw us make further financial progress,
paying our second special dividend, along with
our first ordinary dividend, and the launch of a
share buyback programme in early 2022.”
Duncan Magrath
Chief Financial Officer
Financial results
£m 2021 2020
Movement
%
Revenue
83.2 78.9 5%
Operating
profit
24.7 23.9 3%
Profit before
tax
23.8 23.2 3%
Taxation (4.6) (2.9) 159%
Profit for the
period
19.2 20.3 (5)%
Basic earnings
per share
6.5p 6.9p (6)%
Revenues increased by 5% or £4.3m to
£83.2m in the twelve months ended
31 December 2021 (2020: £78.9m).
Growth at constant currency was 9%.
Operating profit increased by £0.8m to
£24.7m (2020: £23.9m), due to the £4.3m
increase in revenues, partially offset by £3.5m
increase in expenses, principally due to a
£1.8m increase in salary costs from pay rises
and increased headcount, as well as higher
hosting costs up by £0.8m and other
computer costs up by £0.8m.
Net finance costs which relate to lease
expenses of £0.8m (2020: £0.7m) resulted in
profit before tax of £23.8m (2020: £23.2m).
The Effective Tax Rate (ETR) for 2021 is
19.3% ( 2020: 12.5%), the increase reflects
that the prior year benefited from R&D tax
relief for the two years 2018 and 2019,
whereas the current year reflects the R&D
tax relief for 2020 only. The resulting profit
for the period was £19.2m (2020: £20.3m).
Revenue
Revenue –
by type
£m 2021
2020
(*restated)
Movement
%
Subscription* 23.5
18.1
30%
Software* 13.6
20.0
(32%)
Services* 46.1
40.8
13%
Totalrevenue 83.2
78.9
5%
* To better reflect the nature and type of
revenue, changes have been made to the
classification and allocation of revenue line
items. The comparative disclosures for the
2020 reporting period have also been amended
to reflect a fair base for comparability. These
changes have had no impact on the total
revenue or the profit before tax that were
disclosed for 2020. Software revenues include
revenues from recognition of customised
licence revenue, one-off licence fees and any
development revenues. Subscription revenues
include recurring revenues paid on a monthly
orannual basis, including subscription licence
revenues, maintenance and cloud hosting.
Services revenues are revenues from any work
done for customers including pre-implementation
work, implementation work, and ongoing
services, but excludes any revenue from
development work.
38
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Subscription revenues
Overall subscription revenues increased 30%
to £23.5m (2020: £18.1m). The increase was
driven by a 24% increase in maintenance
revenues with customers increasing to 29 at
the end of the year, up from 27 at the start of
the year. Hosting customers increased from
10 at the end of last year to 12 at the end of
2021. Revenues from pure hosting alone
grew strongly, alongside good growth from
revenues from bundled subscriptions, which
included not just hosting but also
maintenance and licence payments.
Software revenues
Software revenues of £13.6m were down
£6.4m or 32% on last year (2020: £20.0m).
Of this reduction, £5.6m was due to a
five-year contract extension agreed and
recognised in 2020 with a customer who had
previously terminated its licence. In 2021 we
did recognise £2.1m of revenue across six
existing customers for additional licence
payments as a result of going through a
contractual band or for new modules.
As previously discussed more of our
implementation work this year has been for
v4 to v5 upgrades, which generally do not
attract additional licence payments, except
where customers take on additional
modules and so the income from
customised licences was down on last year.
This was partially offset by income from
increased development work for existing
customers, including those going through v4
to v5 upgrades.
Services revenues
Total services revenue increased by 13% to
£46.1m (2020: £40.8m) at actual exchange
rates, driven by higher chargeable days from
our increased headcount. There was a
reduction in pre-implementation revenues,
where last year we had two large customers
requiring detailed pre-implementation
work. Revenues from new implementations
were up, although stronger growth was seen
with ongoing services work, largely on the
back of v4 to v5 upgrades.
Total contract value (TCV)
TCV – by stream
£m 2021 2020
Movement
%
Subscription 85.8 69.1 24%
Software 14.9 12.8 16%
Services 32.4 31.0 5%
TotalTCV 133.1 112.9 18%
Total contract value (TCV) – as defined
inthe definition section on page 37 –
increased over last year by 18% to £133.1m.
As expected the subscription TCV has
increased 24% driven by an increase in the
number of customers and the significant
growth in our hosting business. There was
also a 16% increase in software, from
secured development work and licences
from the contracts, and from the strong
conversion of the last-stage pipeline in the
year. Growth in services TCV, at 5%, was
somewhat lower with a number of v4 to v5
implementations coming to an end.
TCV – by stream
for next 12
months
£m 2021 2020
Movement
%
Subscription 26.9 22.4 20%
Software 6.7 6.1 10%
Services 26.2 23.8 10%
TotalTCV 59.8 52.3 14%
Of the TCV at 31 December 2021, £59.8m
(31 Dec 2020: £52.3m) is anticipated to
convert into revenue within the next
12 months, assuming contracts continue as
expected and are not cancelled or delayed.
This includes £6.7m (2020: £6.1m) of
software revenues, £26.9m (2020: £22.4m)
of subscription revenues and £26.2m
(2020: £23.8m) of services revenues.
Operating profit
The Group’s operating profit increased
by£0.8m, or 3%, to £24.7m in 2021
(2020: £23.9m). This reflected the £4.3m
increase in revenues, partially offset by an
increase in the Group’s cost base as we
continued to invest in the business.
Increased headcount drove higher costs
although this was partially offset by reduced
partner costs, which were high in 2020 due
toone large pre-implementation project.
The Group’s operating profit on a constant
currency basis increased by 10% as sterling
was stronger against the USD than last year.
Headcount numbers were up 6% at
31 December 2021 at 382 (31 December
2020: 360), with average headcount
increasing more significantly to 383
(2020: 341) up 12%. Our staff retention rate
has been strong at 87% over the 12 months
up to that date, as expected down from the
unusually high 93% experienced in 2020.
Expenses – net
£m 2021
2020
(restated)
Movement
%
Costofsales* 29.0 27.0 7%
Sales,generaland
administrative
expenses*
30.0 28.5 5%
Other income (0.5) (0.5) –
Totalexpenses
–net
58.5 55.0 6%
* To better reflect the nature and function of
certain expenses, changes have been made to
the classification and allocation of expense line
items. The comparative disclosures for the
December 2020 reporting period have also
been amended to reflect a fair base for
comparability. Costs previously classified as
implementation and support expenses and
research and product development expenses
of £11.9m and £15.1m, respectively, have been
presented as cost of sales. In addition, £3.4m
of implementation and support expenses and
£3.8m of research and product development
expenses have been reclassified to sales,
general and admin expenses. The main items
affected are administrative salary costs,
computer costs and property related expenses.
These changes have had no impact on the total
expenses or the profit before tax that were
disclosed at the end of December 2020.
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 39

FINANCIALREVIEWCONTINUED
Costofsales increased by £2.0m to £29.0m
(2020: £27.0m) due to higher salary costs
from the increase in customer-facing
headcount along with increased hosting
costs, partially offset by a reduction in
partner costs.
Sales,generalandadministrative(SG&A)
expenses increased by £1.5m to £30.0m in
the year (2020: £28.5m). This included
increased salary costs through higher
headcount although this was somewhat
offset by the reduction in contractor costs.
In addition Profit Share Pay increased to
£3.1m (2020: £2.7m). There has also been
an unfavourable increase in foreign currency
differences of £0.7m, which moved from a
gain of £0.5m in 2020 to a loss of £(0.2)m in
2021. The above factors were offset by a
further reduction in travel and conference
costs, as there was almost no travel for the
whole of the twelve month period.
Finance costs
Net finance costs which relate to leases of
£0.8m (2020: £0.7m) remained relatively
unchanged with a small reduction in finance
income from reduced cash balances and
interest rates.
Profit for the period
Profit after taxation decreased by £1.1m,
or5%, to £19.2m in 2021 (2020: £20.3m).
The Effective Tax Rate (ETR) for 2021 is
19.3% (2020: 12.5%) with this increase
reflecting, in part, that the prior year
benefited from R&D tax relief for the two
years 2018 and 2019, whereas the current
year will reflect the R&D tax relief for
2020only.
Earnings per share
Basic earnings per share decreased by 6%
to6.49 pence in 2021 (2020: 6.93 pence).
Diluted earnings per share decreased by 6%
to 6.39 pence (2020: 6.79 pence).
Cash flow
Net cash (including the effect of exchange
rate changes) decreased by £13.9m to
£23.1m at 31 December 2021, from £37.0m
at 31 December 2020. This decrease has
been driven by strong cash generated from
operations, offset by the payment of special
and regular dividends of £32.7m.
Operating free
cash flow
conversion
£m
2021 2020 Movement
%
Cashgenerated
from operations 31.3 30.1 4%
Adjustedfor:
Capitalexpenditure (1.3) (1.0) 30%
Principalelement
of the lease
payments in
respectofIFRS16 (1.9) (1.7) 12%
Operating free
cash flow 28.1 27.4 3%
Operating profit 24.7 23.9 3%
Operating free cash
flow conversion 114% 114% –
40 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Cash generated from operations benefited
from a continuing strong focus on cash
performance. The Group’s operating free
cash flow conversion (FCF) of 114%
(2020: 114%) was in line with last year due
to continued focus on cash management.
This is a very strong result and higher than
our ongoing trend which will be closer to
100% conversion.
In addition to the cash generated from
operations of £31.3m, the Group incurred
£1.3m on capital expenditure (2020: £1.0m)
and made net tax payments of £3.8m
(2020: £3.8m). This included the research and
development tax credit claim received during
the period of £1.6m, which was claimed and
recognised in 2020, resulting in the unusually
low effective tax rate for FY 2020. The Group
has no external bank borrowings.
In the year, net cash outflows of £39.2m
(2020: £45.9m) from financing activities were
largely driven by £32.7m (2020: £44.2m) of
dividends paid, with ordinary dividends of
£3.0m (2020: nil) along with Special
Dividends of £29.7m (2020: £44.2m).
In addition there were principal element
oflease payments of £1.9m (2020: £1.7m)
and £4.6m (2020: nil) for funding the
Employment Benefit Trust for the purchase
of shares to satisfy current and future LTIPs
thereby avoiding potential dilution from the
issue of shares to satisfy vestings.
Balance sheet
The most significant movement in the
balance sheet was the change in cash noted
above. Other balance sheet movements were
as follows:
Non-current assets of £44.4m were largely
unchanged from last year (2020: £44.8m).
Current assets, excluding cash, increased
by£2.8m to £16.5m (2020: £13.7m). Trade
receivables remain well controlled with
debtor days at 26 days (2020: 27 days) with
only £0.1m (2020: £0.1m) more than 90
days overdue. Provision for impairment
remains £nil (2020: £nil). Accrued income
increased in the year by £1.3m to £6.3m due
to increased revenue, partially offset by the
unwinding of the accrued income related to
the one-off licence fee booked in 2020.
Prepayments increased by £1.1m to £3.2m
(2020: £2.1m) due to the inclusion of deferred
costs (offset by a related increase in deferred
licence contract liabilities).
Current liabilities of £24.0m (2020: £18.1m)
were up £5.9m. There was a £1.1m increase
in trade payables and other payables to
£9.3m (2020: £8.1m) principally due to
higher bonus and profit share payments.
Lease liabilities increased from £1.7m to
£1.9m due to new leases for the Michigan
and Sydney offices. Contract liabilities
increased by £4.0m to £11.0m (2020: £7.0m)
with deferred licence liabilities increasing
£3.4m to £5.3m (2020: £1.9m) due to an
increase in the material right related to
customised licence implementations, along
with an increase in deferred maintenance
liabilities up £0.6m to £5.7m (2020: £5.1m)
due to growth in the business.
Non-current liabilities reduced slightly, down
£0.6m to £16.6m (2020: £17.2m) due to a
reduction in lease liabilities to £15.2m
(2020: £15.8m) with provisions remaining
unchanged at £1.4m (2020:£1.4m).
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 41

FINANCIALREVIEWCONTINUED
Key financial metrics
The Group uses Operating cash flow
conversion as a financial metric which
isnot specifically defined by IFRS but
which management uses as a key
measure to assess financial performance.
Operating cash flow conversion is
calculated as cash generated from
operations as a percentage of
operatingprofit.
This measure is not directly comparable
to similarly referenced measures used
by other companies and, as a result,
investors should not consider this
performance measure in isolation from,
or as a substitute analysis for, our results
of operations as determined in
accordance with IFRS.
Constant currency
We provide percentage increases or
decreases in revenue and operating
profit to eliminate the effect of changes
in currency values as we believe it is
helpful to the understanding of
underlying trends in the business.
When trend information is expressed
herein ‘in constant currencies’, the
comparative results are derived by
re-calculating non-pound sterling-
denominated revenue and/or expenses
using the average monthly exchange
rates of this year and applying them
tothe comparative year’s results,
excluding gains or losses on derivative
financial instruments. The average
ratesare as shown in note 1.4 to the
financial statements.
Capital allocation and
distributions
The Group’s capital allocation policy takes
into consideration the need to continue to
invest in our people and technology whilst
maintaining strong liquidity and is shown in
more detail on the opposite page.
Since November 2020 we have paid £74m
of special dividends and paid the first regular
dividend of 1.0 pence per share in July 2021,
amounting to £3m.
In January 2022 we announced a share
buyback programme of up to £18m over the
next 18 months.
The Board intends to progressively increase
the dividend as the Group grows, whilst
ensuring that we retain a strong balance sheet.
For 2021 we are proposing a dividend of
1.1pence per share, amounting to £3.3m.
If approved by shareholders in the Annual
General Meeting, this will be paid on
24 June 2022 to shareholders on the register
as at 27 May 2022. The ex-dividend date
willbe 24 May 2022.
Related parties
Details about related party transactions are
disclosed in note 32.
Going concern
The financial statements are prepared
onthe going concern basis. The Group
continues to be cash generative and the
Directors believe that the Group has a
resilient business model. The Group meets
its day-to-day working capital requirements
through its cash reserves generated from
operating activities. The Group’s forecasts
and projections, taking account of
reasonably possible changes in trading
performance, show that the Group has
sufficient cash reserves to continue to
operate for a period of not less than
12 months from the date of approval of
these financial statements. The going
concern assessment also includes downside
stress testing in line with FRC guidance
which demonstrates that even in the most
extreme downside conditions considered
reasonably possible, given the existing level
of cash held, the Group would continue to
be able to meet its obligations as they fall
due, without the need for substantive
mitigating actions. On this basis, whilst it
isacknowledged that there is continued
uncertainty over future economic
conditions, the Directors consider it
appropriate to continue to adopt the going
concern basis of accounting in preparing the
financial statements.
Viability statement
The Viability statement containing a broader
assessment by the Board of the Company’s
ongoing viability is set out in the Strategic
report on pages 52 to 53.
Subsequent events
On 18 January 2022 the Group announced
the launch of a share buyback programme.
Refer to the Company website for more
details. There have been no other reportable
subsequent events.
Duncan Magrath
Chief Financial Officer
8 March 2022
42 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Cash
generated
Use of Cash Reason Impacts Stakeholder
2021
Programme
CAPITALALLOCATIONFRAMEWORK
Strategic
Investment
Expands
functionality of
product and
increases
opportunities for
sales
Profit Company
Employees
Customers
Partners
For further details
of Strategic
Investment made
in the year, see
pages 28-29
Product
Maintenance
Ensures product
remains up to
date with latest
technology
Profit Company
Employees
Customers
Significant
investment in
2021 in providing
a faster and more
reliable way of
releasing new
product updates
CSR Days
Each employee is
allowed to spend
three days on CSR
activities
Profit Company
Employees
On average one
CSR day taken
per employee
– we will
encourage
greater take-up
in2022
Climate
Positive
Payments to
offset remaining
emissions to
ensure we are
climate positive
Profit Environment We signed up
with Ecologi in
2021 to make
monthly
payments to be
climate positive
Profit Share
10% of profits
generated paid
out to employees
Profit Employees Total cost in 2021
of £3.1m.
Regular
Dividend
Gives a steady
cash return to
shareholders;
allows income
funds to invest
– Shareholders 1.1 pence per
share proposed
amounting
to£3.3m
(2020:£3.0m)
Additional
Capital
Return
Returns excess
cash to
shareholders if
not needed for
company growth
EPS Shareholders Payment of
second special
dividend of £30m
and launch of
£18m buyback
programme
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 43

RISKMANAGEMENT
How we monitor risk
Introduction
A theme of 2021, like 2020, has been the continuing
COVID-19 pandemic, with it’s wide-reaching social
and macroeconomic impacts across all Alfa regions.
We have built upon our experience of 2020, and
have continued to adapt well to the situation,
shielding our delivery and performance from the
uncertainty. Our risk management framework has
played an important role in this, providing us with a
solid basis for assessing, preparing for and reacting
to these types of challenges.
As the COVID-19 situation developed in 2021,
ourCOVID-19 Incident Response Team
workedclosely with the Company Leadership
Team (CLT)to identify, control and mitigate risks
astheydeveloped. This allowed us to take
proactive action throughout the year, doing our
part to ensure the safety and wellbeing of our
employees and customers, and to minimise the
riskto our operations.
Risk management is integral

The events of 2021 have again demonstrated
theinterconnectedness of many of the risks and
opportunities that our business faces. In order
todeliver our strategy and achieve excellence
through our business model, both operationally
and financially, we must make sure that we maintain
theright balance between safeguarding against
potential risks, and taking advantage of potential
opportunities as they arise. Our aim is to foster a
culture of effective risk management by
encouraging appropriate and monitored risk-taking
and innovation, in order to achieve the Group’s
strategic priorities.
Our strategic priorities as set out on pages
22and23,areto:
• Strengthen – Grow our differentiation of
market-leading People, Product and Delivery.
• Sell – Focus on cloud-hosted, subscription sales
to our target markets.
• Scale – Increase our capacity for developing and
delivering Alfa Systems.
• Simplify – Simplifying our product,
implementations and processes to enable more
concurrent Alfa Systems implementations.
• Synergise – Develop our partner ecosystem, to
improve our sales opportunities and to enable
more concurrent Alfa Systems implementations.
• Start – Improve our offering for smaller auto and
equipment finance providers as a platform for
innovation and to increase our reach.
Whilst overall responsibility for risk lies at the Board level,
the Directors have delegated authority for risk
identification to the CLT.
A bottom-up approach has primarily been undertaken to
provide a detailed review of risks by relevant business
owners and this is led by the Risk Officer, twice a year.
The output is then reassessed by the CLT to provide
assurance over completeness of the risk register.
Our systems and processes are designed to manage our
exposure to risk rather than eliminate the risk completely.
Therefore the Audit & Risk Committee, with the CLT, will
reassess the Group’s risk appetite each year with this in
mind. The Audit and Risk Committee will consider the risks
associated with the conduct of our business and the
delivery of our strategy, assessing the risks we are exposed
to and evaluating whether this exposure is acceptable
given the likelihood and severity of the risk.
Risks are assessed to understand the likelihood and
theimpact of the risk crystallising. We assess risk across
our business areas, and we analyse their impact across
these categories:
• Financial
• Operational
• Reputational
• Legal and regulatory
• Climate
Each risk is reviewed, twice a year. At each review date,
theexisting controls are reviewed for adequacy and
effectiveness. Due to the ever-changing business
landscape and the industry we work in, it is quite possible
for the control requirements to change and for processes
and policies to require updating. If this is the case, then a
business owner is identified and they are responsible for
implementing changes.
Management monitors progress against the principal risks.
This is shared with our internal auditor, BDO, to assist
withforming the internal audit plan for 2022. The Board
reviews the summary risk register and assesses the
adequacy of the principal risks identified, as well as the
mitigating controls and procedures which are in place
andare operational.
1
Identify risks
2
Define risk
appetite
3
Assess and
quantify
4
Respond, manage
and mitigate
5
Monitor
and review
Our aim is to foster a culture of effective risk
management by encouraging appropriate and

44 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Responsibilities
• Defines the risk governance
framework, risk culture
andprinciples
• Sets the tone for risk
management including
riskappetite
• Responsible for an effective
system of internal controls
• Approves risk decisions that
are beyond delegated
authorities

• Be alert to risks associated with the activities that they perform • Report inefficient, unnecessary or unworkable controls

• Reviews the risk
management framework
and the effectiveness of
internal controls, risk
management systems
and major risk initiatives
• Reviews and challenges
the principal risks in the
risk register, and risk
scores
• Reviews the internal
audit programme and
reports



• Review the risk
management framework
and the effectiveness of
internal controls, risk
management systems
and major risk initiatives
across the Group
• Review the risk profile
against risk appetite and
make recommendations
to Board in relation to
risk profile, strategy and
key controls
• Review and challenge
therisk register, and
riskscores
• Review the sustainability
of risk methodologies,
metrics and policies
• Assess major risk-related
projects
• Assess new commercial
arrangements through
participation in the Deal
Committee

CLT
• Assesses for new risks, updates on current risks
assessment and implements mitigation strategies
and actions




• Responsible for collating
updates, managing the
risk register and
presenting principal risks
and uncertainties to the
Company Leadership
Meeting and Audit and
Risk Committee
• The Risk Officer acts as
an advocate for risk
management across all
levels of the business
• The Risk Officer reports
to the CFO in relation to
risk management
matters
• The CFO has
responsibility for
governance and risk
management review
Our risk management
framework
Our risk management framework is
designed to be flexible and proactive,
andlinks tightly into our operations and
decision making, allowing us to react with
speed and agility to new and evolving risks
as they arise across all of our business
areas. This has helped us in 2021 to
continue to progress our strategic
objectives, and to identify and pursue
opportunities as they arose.
We recognise that managing risk effectively
is integral to executing our strategy.
We have therefore implemented a
five-step process for monitoring and
managing risk throughout our business,
allowing the Directors to conduct a robust
assessment of the principal risks facing the
Group. Risk is not something that should be
eliminated but, instead, identified,
assessed and managed in a timely manner.
Creating the right corporate culture
for effective risk management
Our organisation has an open and accountable
culture, led by our experienced CLT, whose
members have many years of experience in
their areas. The Board and the CLT set the tone
for our risk management activities, embedding
risk consideration and assessment into the
culture within the organisation. Ownership and
accountability for risks is an integral part of our
risk management framework.
The Board has overall responsibility for
thegovernance of risks, ensuring we have
adequate and effective systems in place and
setting the tone for our risk culture. It does
this in various ways:
• Risks are considered by the Board as an
intrinsic part of our strategic planning, and in
the consideration of new opportunities, risk
is recognised as an inherent part of each
opportunity, and is assessed together with
the opportunity.
• There is a twice-yearly review by the Audit &
Risk Committee of principal risks,
theirevolution, and consideration of
emerging risks.
• The CLT members are the owners for each
risk in the Corporate risk register, and they,
and their teams, are responsible for the
identification, assessment and treatment of
the risks in their own areas. Risk management
is thus embedded into each area of the
business, which is best placed to progress
the actions and mitigations.
• The Risk Officer coordinates risk
management activities and collates the risks
into the Corporate Risk Register. The Risk
Officer is an advocate for best practice
across the organisation.
• Risk assurance is achieved through our
external and internal audits as well as
through our attainment of ISO27001 and
ISO27018 certifications, and through our
SOC2 Type 2 audit.
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 45

Risks
Socio-economic and
geo-political risk
IT security and
cyberrisks
Pandemic outbreak in
Alfaand/or customer
geographies
Business interruption
orcontinuity
Acceptable risk appetite
Risk to people, skills,
location and working
environment
High customer
concentrationrisk
A
B
C
D
E
F
Impact
Probability
B
C
F
ED
A
PRINCIPALRISKSANDUNCERTAINTIES
Our risk appetite
Our risk appetite provides us with guidance
on the levels of risk we are prepared to take
inpursuit of our objectives, and is considered
a fundamental part of the planning and
execution of our strategy. In March 2021,
theBoard, assisted by the Audit & Risk
Committee and the CLT, assessed and
updated our risk appetite in light of the
developing in-year and emerging risks.
We take a cautious approach to risk, aiming
to operate in a manner that would not put
the business at risk of significant financial,
operational or reputational damage.
This risk appetite has shaped our response
to the COVID-19 pandemic as it has
continued to evolve through 2021, forming
the basis of our approach to protecting our
employees, our customers and our
deliverables to ourcustomers.
Focus for 2022
Continuous improvement of risk
management procedures, including
training and awareness within the
Company of our risk management
bestpractices.
Risk identification and assessment –
bi-annual risk reviews including assessing
actions and control reviews.
Cyber security and data protection –
maintain SOC2 Type 2 and ISO
programme compliance, and continue
toassess and strengthen our cyber
security defences.
Business continuity and disaster recovery
– scenario testing exercises.
Internal audits – reviews of the strength
and effectiveness of our financial and
ITcontrols.
Continuing focus and development of
understanding of climate-related risks.
Principal risks and uncertainties

The Group faces a number of risks that may
adversely affect our strategic and business
objectives, operations, liquidity, financial
position, reputation or future performance,
notall of which are wholly within our control or
known to us. Some such risks may currently be
regarded as immaterial and could turn out to
be material. We accept that risk is an inherent
part of doing business.
The Board considers the following matters
tobe the principal risks and uncertainties
(innospecific order) affecting our business
atthis time.
Principal risk analysis (including mitigating activities)
46 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Our strategic priorities
Risk A – Socio-economic and geo-political risk
Links to strategic priorities:
1

3
6
Movement:
Same level of risk
Impact:
Major
Probability:
Likely
How does it impact us?
We continue to face uncertainty in the global
economic outlook, which may impact demand
forour services, or our customer’s revenues, and
therefore their budgets to pay for our services.
Thecurrent major components of this risk are:
• At the time of writing, Russian forces are invading
Ukraine. Alfa does not have customers nor staff
in Ukraine or Russia, and so our business is not
directly impacted. However, there will be
knock-on social and economic impacts of this
concerning crisis throughout 2022, which may
impact us. As the situation develops, we will
assess risks to our business, and determine
appropriate mitigation.
• The COVID-19 pandemic may have short or
long-term economic impacts on our customers,
potentially leading to a reduction in our
addressable market. These economic impacts
are included under this principal risk, whereas
the health and wellbeing, and business continuity
aspects are included in Risk B – Pandemic
outbreak in Alfa and/or customer geographies.
• Inflation has increased in each of our regions,
leading to increased costs to our business.
These increases may outpace our revenue
increases, if we are unable to increase our
feesinline with costs.
• Changes to the trading relationships between
the EU and the UK following Brexit may impact
our ability to service customers in the EU,
although we have not experienced significant
impacts to date.
The uncertainty in global economic outlook
introduced by the Ukrainian war leads us to retain this
risk at the same level as before. The following elements
of this risk have receded, however:
• The COVID-19 pandemic’s economic impacts
onour industry has not been damaging to Alfa to
date, as we and our clients have adapted well as
the situation has developed.
• Uncertainty around US economic, immigration
and trade policy has receded in 2021.

This risk goes hand-in-hand with opportunity,
asour customers may seek to adapt to the
changing economic environment, seeking
operational efficiency, introducing new products
or reacting to regulatory changes. Alfa is well
placed to help with the system and process
changes needed for such adaptation, either
where Alfa Systems is the incumbent system or
where a new system is needed.
We have formed a Markets and Products team,
to further focus our attention on alignment of
our product roadmap with the needs of our
target markets. This helps us to be in the best
position to take on opportunities as they arise.
Despite the uncertain outlook, we have
attracted continued interest for new work
from sales prospects and existing customers
throughout 2021, from diverse geographies
and sectors within the auto and equipment
finance industry.
Our strategy includes continuing to build a
diverse customer base, both geographically and
by asset type (i.e. automotive, equipment) but
also by type of customer (i.e. banking, OEM or
independent) which therefore have different
andoften contrasting risk characteristics.
This mitigates some of this risk as there is often
adegree of cyclicality in trends affecting the
autoand equipment finance industry.
We ensure that the Group is financially robust
and resilient to economic downturns, or project
pauses, by retaining cash reserves and collecting
maintenance and licence revenues in advance.
Our fees for services are generally increased
annually, taking consideration of the increases
experienced in our cost base.
We have an established presence and customer
base in the EU, and are committed to this as a
target market.
Strengthen – Grow our dierentiation of
market-leading People, Product and Delivery.
1
Simplify – Simplifying our product,
implementations and processes
toenablemore concurrent Alfa
Systemsimplementations.

Start – Improve our oering for smaller auto
and equipment nance nance providers as
a platform for innovation and to increase our
reach.
6
Sell – Focus on cloud-hosted, subscription
sales to our target markets.
Synergise – Develop our partner
ecosystem, to improve our sales
opportunities and to enable more
concurrent Alfa Systems implementations.

Scale – Increase our capacity for developing
and delivering Alfa Systems.
3

STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 47

PRINCIPALRISKSANDUNCERTAINTIESCONTINUED
Risk B – Pandemic outbreak in Alfa and/or customer geographies
Links to strategic priorities:
1

3
6
Movement:
Decreased level of risk
Impact:
Moderate
Probability:
Possible
How does it impact us?
The COVID-19 pandemic has continued to
develop throughout 2021, with new variants
emerging, and Government responses to control
the spread varying from region to region.
Whilst the pandemic appears to be nearing its
end, there is continuing uncertainty around how
itwill develop in 2022. The risks relating to the
current pandemic are intertwined with other
principal risks, notably Risk A – Socio economic
and geo-political risk, and Risk C – Risk to people,
skills, location and working environment.
We have actively monitored and reacted to this
situation throughout 2021 and early 2022, and we
have concluded that the level of this risk to our
business is reduced from its 2020 position.
Whilst this pandemic continues to develop, we
face a number of possible impacts:
• The health and wellbeing of our employees,
their families and other stakeholders may be
impacted. Mitigating this is of critical
importance in shaping our response to this risk.
• We may experience significant infection
levels, for example as new variants emerge
and become dominant. This could
temporarily reduce the resource capacity of
our business and our professional services
fee earning capacity, potentially resulting in
deferred or lost revenue.
• Similarly, customers and potential customers
may become temporarily resource-
constrained, limiting their capacity to
manage large-scale IT projects and run sales
processes, respectively.
• Travel restrictions may be reintroduced,
through our own policy, customer policy and
government policy, and this may temporarily
reduce, or be perceived to reduce, our ability
to operate for some of our geographically
diverse customer sites.
• Remote working relies on third party
cloud-based services such as video calling
and chat software. Such services may
experience problems during peak remote
working times, impacting the efficiency of
our employees.
• We may experience a slowdown in supply for
our IT equipment needs.
• The pandemic may have short or long- term
economic impacts on our customers,
potentially leading to a reduction in our
addressable market. This is discussed in
moredetail in Risk A – Socio-economic
andgeo-political risk.

We have continued to adapt our pandemic
response throughout 2021, and our business
hasbecome very accustomed to operating in
thisenvironment.
Our Incident Response Team (IRT) manages and
coordinates our actions relating to the pandemic.
This team is chaired by our Chief People Officer,
and contains representatives from across our
business units and geographies.
The IRT monitors expert and Government advice
in each of our operating regions, and takes timely
action on that advice.
We made an early move to remote working,
during March 2020, as part of the activation of
our pandemic plan, and remote working has
remained in place ever since. We have re-opened
offices when possible for those who are better
able to work in an office environment, and have
plans in place for transitioning to a Smart Working
policy once the pandemic dies down. All of our
consultants and engineers use laptops, remote
connections and remote working tools. Our
systems which support remote working have
functioned well throughout the pandemic.
The IRT and other internal teams communicate
regular guidance and advice to our employees,
including on their working location, working
environment and wellbeing. We have an active
programme of employee wellbeing events, and
we recognise the importance of supporting and
engaging with our employees whilst they are
working remotely.
We regularly liaise with our customer
organisations to ensure that we abide by their
policies – for example, with respect to business
travel, and to ensure that they are satisfied
withthe service they are receiving from our
remote teams.
Our essential customer services – Alfa support,
Alfa Hosting and Technical Operations – are run
by globally-distributed teams, using cloud
infrastructure, providing resilience against
business continuity risks.
The providers of our key remote working tools
have confirmed and demonstrated that they have
suitable business continuity and capacity planning
in place.
We ensure that our sourcing activities for essential
IT equipment remain ahead of supply chain
delays, for example by carefully managing the
stock levels held with our IT supplier, and actively
monitoring lead times.
48 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Risk C – Risk to people, skills, location and working environment
Links to strategic priorities:
1
3 
Movement:
Same level of risk
Impact:
Moderate
Probability:
Likely
How does it impact us?
Our business is heavily dependent on our people
because they are integral to the development and
delivery of Alfa Systems.
A failure to attract, train and retain high quality
individuals in our key operating regions may limit
our ability to deliver implementations, maintain
product quality and leading-edge functionality,
manage customer relations and deliver on our
strategic plan. This element of the risk has
increased in 2021 and early 2022 (although this
has not changed the overall Principal Risk level),
as we are seeing higher competition in
recruitment markets.
As our global reach expands and opportunities
arise in new regions, we may find it difficult to
provide employees across geographically diverse
customer sites. This has the potential to have an
impact on our ability to deliver implementation
services to our customers.
The health, wellbeing and security of our
employees is of utmost importance to our
organisation. We work in geographically diverse
locations, and our employees may be at risk
fromexternal factors, such as the impacts of the
COVID-19 pandemic, and the safety and security
in each region. This impact is intertwined with
RiskB – Pandemic outbreak in Alfa and/or
customer geographies.

We have implemented a Smart Working
approach in order to adapt to the ‘new normal’
which will follow the COVID-19 remote working
model. Teams decide their most effective
working model, and capture this in a team
charter. Central to this approach is continuing
tobuild our culture, whilst retaining our excellent
delivery, and enabling employee flexibility.
Our HR team are very proactive in the area of
employee wellbeing, with an active programme of
wellbeing events to support and engage with our
employees while they are remote working.
Employee engagement surveys are carried
outevery two months, and allow areas for
improvement to be identified and acted upon.
Our employee surveys indicate that our proactive
response from leadership to the COVID-19
epidemic has been a significant contributing
factor in employee satisfaction.
We have continued to have high employee
retention figures in 2021.
We benchmark our remuneration levels
againstrelevant roles in the industry and aim
tobe competitive.
Recruitment of graduates and experienced
hires is continuing, using a diverse number of
sources, searching for candidates from varied
backgrounds and ethnicity and with varied
core skills.
Alfa Partnering provides a strong and growing
network of professional services partner
organisations, with extensive established
geographical presence. This provides us with
resourcing flexibility, and wider geographical
coverage, and is key to our strategy to decouple
our growth from our own headcount.
Many of our teams are globally-distributed,
allowing us to cover more regions and time zones
effectively, and remote working is now common
and efficient practice. This is an effective
mitigation against the risk of not being able to
provide employees in geographically diverse
customer sites.
We have an established presence in our key
strategic markets in Europe and the USA.
We have actively recruited on both continents
in2021, and this continues in 2022.
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 49

PRINCIPALRISKSANDUNCERTAINTIESCONTINUED
Risk D – High customer concentration risk
Links to strategic priorities:

3  
6
Movement:
Same level of risk
Impact:
Major
Probability:
Possible
How does it impact us?
• Alfa specialises in providing software and
services to the auto and equipment finance
sector. At the core of our customer base are
large corporate players in this industry.
• We have significant customer concentration
risk due to the size and duration of the
software implementation projects for these
large corporates. If one, or more, of our key
customers pauses, or terminates their
implementation activities, there is a risk of a
material impact on revenue targets.
• Such a pause or termination is a possible
impact of other principal risks, such as Risk A
– Socio-economic and geo-political risk, or
Risk B – Pandemic outbreak in Alfa and/or
customer geographies.

Reliance on our biggest customers has
considerably decreased in 2021, with our Top 5
customers representing 37% of our revenues
in2021, compared with 48% in 2020 and 61%
in2019. We had twenty five customers
contributing revenues of more than £1m in
2021,up from twenty one in 2020 and sixteen
in2019. This reduces this risk, but not sufficiently
to move it down a rating.
We have continued to progress our strategy
forbuilding a diverse customer base, both
geographically and by asset type (i.e.
automotive, equipment) but also by type of
customer (i.e. banking, OEM or independent).
This has reduced our reliance on any one of these
areas, which have contrasting risk characteristics.
Initiatives such as Alfa Partnering, and Alfa
Startfor smaller organisations allow us to take
onmoreconcurrent implementations, thus
reducing this risk.
Nevertheless, we accept that a significant focus
on large corporates in our industry is inherent in
our strategy, and so there is an element of this
risk which is accepted.
Risk E – IT security and cyber risks
Links to strategic priorities:
1

3
Movement:
Same level of risk
Impact:
Major
Probability:
Possible
How does it impact us?
• Our systems, networks and products may be
subject to cyber attacks, specifically
designed to disrupt our business, obtain our
intellectual property or data, or harm our
reputation. Such a security breach could
impinge upon our ability to operate our
business, including our ability to continue
providing support to our customers.
• Our Alfa Hosting offering stores our customers’
data on third party cloud hosting platforms.
A security breach in our Alfa Hosting offering
could result in compliance violations, identify
theft, malware infections, diminished customer
trust and loss of revenue.
• The global trend we saw in 2020 of high
number of incidents of cyber attacks against
IT companies has continued in 2021.

Our internal IT and cyber security team monitors
key security and cyber risks, assesses and
monitors the control framework of our key
technology suppliers and undertakes day-to-day
monitoring of IT security incidents.
We implement continual improvements in our IT
security environment and maintain an annual
education and training programme for all staff.
We have maintained our SOC2 Type 2, ISO27001
and ISO27018 compliance in 2021.
We have continuity plans for our Alfa Hosting
services, where we use third party cloud hosting
suppliers, including transferring our customers’
data to a similar supported environment should
the services be unavailable.
Our customers perform thorough assessments
ofthe security of the Alfa Hosting platform
duringtheir system selection and implementation
process, measuring our IT security and data
protection processes and controls against
theirown, typically stringent, internal policies.
These compliance checks sit alongside our
ownpolicies and procedures, and provide
independent assurance for our customers that
appropriate security controls are in place.
50 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Risk F – Business interruption or continuity
Links to strategic priorities:
1

3
Movement:
Same level of risk
Impact:
Major
Probability:
Unlikely
How does it impact us?
We are at risk of disruption to our day-to-day
operations if there is a disaster incident which
causes our internal IT systems to fail or we do not
have access to our office space.
A failure to be able to use key IT systems or access
our infrastructure could lead to a failure to deliver
maintenance services to our customers and
therefore have a negative reputational impact.
Note that the risk that COVID-19 poses to us,
and our readiness for this, is given specific focus
as Risk B – Pandemic outbreak in Alfa and/or
customer geographies.

We have an established, detailed and tested
incident management procedure and
escalationprocess.
We have a disaster recovery and business
continuity plan which is reviewed and
testedannually.
Our SOC2 Type 2 reporting and complete failover
testing has identified no significant required
remedial actions.
Where we provide Alfa Hosting services, using third
party cloud hosting suppliers, we have a continuity
plan in place to transfer our customers’ data to a
similar supported environment should the services
not be available
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 51

VIABILITYSTATEMENT
Assessment of prospects
Alfa is one of the leading providers of
software to the auto and equipment finance
industry and it is the Group’s clear focus to
increase its relatively small market share in
this space by:
• Grow differentiation of market leading
People, Product, Delivery;
• Focus on cloud-hosted subscription sales
to our target markets;
• Increase our capacity for developing and
delivering Alfa Systems;
• Simplifying our product, implementations
and processes to enable more concurrent
Alfa implementations, more efficiently,
with a higher margin;
• Develop partner ecosystem, to improve
sales opportunities and enable more
concurrent Alfa implementations; and
• Improve our offering for smaller auto and
equipment finance providers as a platform
for innovation and to increase reach.
During the year ended 31 December 2021,
the Group generated profit before tax of
£23.8 million and, excluding the payment of
a £29.7m Special Dividend in the year, was
cash-generative with net cash generated
from operating activities amounting to
£26.7 million.
Taking into account the Group’s current
position and its principal risks and
uncertainties as described on pages 46 to 51
of this Annual Report, the Directors have
assessed the Group’s prospects and viability.
Assessment period and process
The strategy and business model as set out on
pages 22 to 35 and 18 to 19 are central toan
understanding of its prospects. These inputs
provide a framework for assessing the Group’s
prospects and viability.
The three-year timeframe for assessing both
prospects and viability is considered to be
appropriate because:
• It reflects reasonable expectations in
terms of the reliability and accuracy of
operational forecasting models; and
• Projections looking out beyond three years
become significantly less meaningful in the
context of the fast-moving nature of the
auto and equipment finance industry and
the software and technology landscape.
The Group’s prospects are assessed
primarily through its annual planning
process, led by the CEO with the CLT.
All relevant functions are involved, including
finance, sales, recruitment and resourcing,
and commercial.
The Board participates fully in the annual
process and has the task of considering
whether the plan appropriately takes into
account the external environment, including
technological, social and macroeconomic
changes, as well as the risks and
uncertainties of the business.
The output of the annual review process
includes the annual financial budget and an
analysis of the risks which could prevent the
plan being delivered.
Detailed financial forecasts which include
profit, cash flow and key financial ratios have
been prepared for the three-year period to
December 2024.
The first year of the financial forecasts forms
the Group’s 2022 budget and is subject to a
reforecast process each quarter. The second
and third years are prepared in detail based
on the Group’s three year strategic planning
process and are flexed based on the actual
results in the first year.
Assessment of viability
The Board’s assessment of the Group’s
prospects, as described on this page, has
been made with reference to current market
conditions and known risk factors, as
described in principal risks and uncertainties
on page 46.
The Board has considered the Group’s
financial performance in 2021, particularly
inthe context of the COVID-19 pandemic,
and the risk factors noted above and
consider that the key risks which could have
a major impact the delivery of the Group’s
financial objectives are as follows:
In accordance with the UK
Corporate Governance Code, the
Board has assessed the prospects
and viability of Alfa.
52 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

• Socio-economic or geopolitical risks
impacting conversion of the sales pipeline
and/or spending by existing customers;
• Loss of significant customers.
Conclusion
It was determined that none of the
individual risks would, in isolation,
compromise the Group’s viability.
The Directors therefore reviewed the
outputs of the alternative forecasts which
were produced to model the effect on the
Group’s liquidity and solvency of severe but
plausible combinations of the principal risks
and uncertainties affecting the business.
Scenario 2 reflects the combination of all
risk factors identified and is considered a
‘worst case scenario’. The Directors consider
that this scenario addresses the key risk
factors outlined above.
Based on the current commercial outlook,
Scenario 2 is considered extremely severe
and has been prepared for the purpose of
creating outcomes that have the ability to
threaten the viability of the Group.
In the case of such a scenario crystallising
the Group would be required to take some
mitigating actions largely related to the level
of headcount in the business, the level of
partner usage and discretionary spending.
In addition there are many other different
levers that could be pulled to further
minimise the financial impact and maintain
liquidity to continue in operation.
Scenario 1:
This scenario assumes a 20% reduction
inongoing services spend by existing
customers, no conversion of sales pipeline
and no growth in partner utilisation during
the forecast period, resulting in a 40%
reduction from base case revenues by 2024.
Employee retention rates reduced by 10%
resulting in a reduction in headcount of 26%
from base case by the end of 2024.
Direct costs relating to partner usage and
Cloud hosting services are significantly
reduced in line with customer activity, and
the level of salary inflation, bonuses and
profit share are also reduced.
No other mitigating actions are required in
this scenario with other costs remaining in
line with the base case and continued
payment of dividends and share-buy backs
as planned.
Scenario 2:
This scenario assumes a significant loss of
customers in addition to no conversion of
the sales pipeline. Includes two major
implementation projects pausing during
2022 and significant loss of customers
resulting in termination of existing
maintenance agreements and reduced
ongoing spending by remaining customers.
This scenario results in a 55% reduction
from base case revenues by 2024. Employee
retention declines by 20% in this scenario
but recruitment continues and no
redundancies would be required; this results
in a 46% reduction in headcount from base
cae by the end of 2024.
Direct costs are reduced further than in
Scenario 1 and additional operating cost
reductions in line with reduced headcount.
Discretionary share buy-backs would be
paused in this scenario, however no other
mitigating actions are required.
Revenue and profitability are clearly
affected in this alternative scenario, however
based on the Group’s existing cash reserves,
combined with incremental cost reduction
measures, the business would retain
sufficient cash reserves to continue in
operation throughout the three-year
forecast period, with the lowest cash
balance modelled in this period of £8.2m.
Whilst it is acknowledged that there is
continued uncertainty over future economic
conditions, based on the assessment of
prospects and viability, the Directors
confirm that they have a reasonable
expectation that the Group will be able to
continue in operation and meet its liabilities
as they fall due over the three-year period
ending 31 December 2024.
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 53

S172STATEMENT
Setting the right
tonefrom the top
The Board of Directors of Alfa
hasalways taken decisions for
thelong term, and collectively
andindividually our aim is always
to uphold the highest standards
ofconduct.
A broad range of stakeholders are important
to the Group at local, regional and functional
levels. Day-to-day engagement with our key
stakeholders, and other local stakeholder
groups, is conducted at the business level
and in a format best suited to the context.
This may be locally, regionally or functionally,
by the Board or senior management,
depending on the stakeholder. Where the
Board does not engage directly with our
stakeholders, it is kept updated so Directors
maintain an effective understanding of what
matters to our stakeholders and can draw
on these perspectives in Board decision-
making and strategy development. As the
Board receives presentations and makes
decisions, we ensure that the long-term
impact on any of these groups is considered.
We periodically review which are our key
stakeholder relationships and examine how
we engage with them. We also consider ways
to ensure that we maintain open lines of
communication with those stakeholder
groups and whether there are ways that the
Board’s engagement can be improved to
help us operate more effectively.
Example of s172 considerations in a Board decision
During 2021 the Board was asked to consider and approve taking out a new lease for the
Michigan Office for seven years with a total cost over that time of $2m. Through the pandemic
we have demonstrated how we can work remotely and so we needed to decidewhether we
needed an office at all, and if yes how many people should it be able to accommodate.
S172 consideration Considerations for the Michigan Office
Likelyconsequencesoflong
term impact
Initially the office will be configured for 35 desks, but
this can be expanded to up to 50 desks, allowing for the
future growth for the Company.
Interests of the Company’s
employees
Benefits of an office included maintaining Alfa’s culture,
facilitating training with a dedicated training space
andthe potential beneficial impact on employee’s
mental health.
Foster business relationships
with suppliers, customer
andothers
Having a physical presence makes it possible to invite
customers and suppliers to get a feel for Alfa’s culture
and meet employees.
Impact of the company’s
operations on the community
and environment
We decided to stay within the Michigan area although
we did move a short distance away from the existing
office to a slightly less expensive area. By having our own
office, we can chose our energy supplier and we have
selected a supplier that provides 100% renewable
energy and we have set aside space in the kitchen
forrecycling.
Desirability of maintaining a
reputation for high standards
of business conduct
We believe that a smart, well designed office will project
the standards that we as a company wish to abide by.
When the office opens we will source sustainable, ethical
local suppliers wherever we can.
Need to act fairly as between
members of the company
We believe the cost of maintaining an office in Michigan
is outweighed by the benefits of improved retention and
improved employee welfare.
54 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Maintaining
high standards
of business
conduct
Likely
consequences
of long term
decisions
Interests
of Alfa
employees
Board information &
Stakeholder engagement
Board decision
Board strategic
discussion & Review
Review & Monitor
The need to
foster business
relationships with
suppliers,
customers and
others
Impact of Alfa
operations on the
community and
environment
The need to act
fairly as between
members of Alfa
Identify priorities
Establishing goals
and objectives
Finding resources
Allocating funds to
support the decision
to be made
Updates and
information on
outcomes of decisions
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 55

S172STATEMENTCONTINUED
The Board is responsible for
leading stakeholder engagement,
ensuring that we fulfil our
obligations to those impacted
bythe business.
Engagement with our shareholders
and wider stakeholder groups
plays a vital role in Alfa’s business.
Alfa’s key stakeholders are set
out below:
We believe that considering our stakeholders in
key business decisions is not only the right thing
to do, but is fundamental to our ability to drive
value creation over the longer term.
In this section we identify our five key
stakeholder groups and have provided an
overview of their interests, their concerns and
the ways in which the Board acted with regard
to these groups when taking its key strategic
decisions throughout the year, and what the
Board has learned from these interactions,
having regard (among other matters) to the
factors set out in section 172(1)(a) to (f)
oftheCompanies Act 2006. The Board
willsometimes engage directly with certain
stakeholders on particular issues, but the size
and distribution of our stakeholders and of Alfa
means that stakeholder engagement often
takes place at an operational level, within the
context of the Board’s agreed strategy. In this
section we show how the Board engaged with
each of our key stakeholder groups, summarise
the specific actions we took for stakeholder
groups in response to the COVID-19 pandemic
and set out some case studies which give more
detail of how our stakeholders are considered
when making specific decisions.
Customers
Our customers are central to our
businessandwithoutthemwewouldnot
exist.Weaimtodeliverourleading-edge
technology making our customers
future-ready.
How the Board engaged
The Board receives an update on existing and
potential customers throughout the year.
As part of the two Board strategy sessions
that were held in the year, the Board looked
at customer needs and the extension of Alfa
Systems into adjacent markets that could
provide a broader offering to our existing
and future customers.
Identifying our customers’ needs, alongside
changing market dynamics and regulations,
allows us to identify opportunities for
Company growth and to focus our product
research and development such that it
willproduce innovative and functional
solutions for the auto and equipment
finance industry.
Outcome of engagement
Our customers have direct channels to
engage with all levels of the organisation,
including providing feedback via user groups
in both EMEA and the USA, chaired by a
customer representative. During the
pandemic, customers have realized the
importance of a truly digital environment
and the flexibility that this provides for
remote working. This has driven increased
enquiries for new Alfa Systems and also for
further development and hosting services
from existing customers. This has led to
discussions in the Board as to how use of
partners can help provide a more flexible
quicker response to customer needs.
We continued to build on our long-term
relationships with our customers. This
is key to developing our leading-edge
technology and hosting services, increasing
customer loyalty, which in turn enables us
to win new business.
Engagement in 2022
Looking ahead, the Board is keen to get
back to in-person engagement with
customers as pandemic considerations
allow, including attendance at trade shows.
We will continue to explore new business
methods and how we can innovate new
technologies to improve the customer
journey and develop our ongoing
relationships with customers.
Employees
Listeningtoourtalentedemployees,
beingflexible,supportiveandinclusive,
are our routes to growing and retaining
Alfa’stalentpool,enablingustodeliver
against our strategic priorities and
develop our people.
How the Board engaged
Employee engagement remains a key
priority for the Board. Vicky Edwards, the
Chief People Officer, attended Board
meetings twice in 2021 to provide an
update on all HR initiatives. Matthew White,
the COO, updates the Board with a HR
dashboard, highlighting key statistics and
reviewing employee survey results at each
Board meeting.
In 2021 we continued to hold online events
for employees to provide feedback, hear
plans and make suggestions to the
Company Leadership Team (CLT) and
theBoard, as well as an in-depth ‘In
Conversation With…’ with two members
ofthe CLT. Some in-person events were
possible in locations where restrictions
allowed. Outside these forums, feedback is
always encouraged and communication is
welcomed by all.
Outcome of engagement
We have a strong culture at Alfa and we are
proud that our people are highly engaged,
supportive of each other and of the
organisation’s aims. We have focused on
keeping colleagues connected with events
and communications, enhanced some of
our family-friendly policies and rolled out
various wellbeing and career development
initiatives in response to need and the
world around us, balancing changing rules
and periods of working from home with
offices re-opening. We continued to
support all employees through 2021, again
without furlough, and have been able to
successfully on-board new employees
remotely, supporting them with funds for
their home set-up.
Engagement in 2022
We will maintain our commitment to
diversity and inclusion, keeping this front
ofmind when making decisions. Internal
communications will be enhanced to
consistently align with Alfa’s strategy and
core themes, providing clarity and focus.
We will continue to listen, learn and
respond as we move to Smart Working.
56 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Communities
Wehavearesponsibilitytouseour
expertise and resources to add value to
the communities in which we operate.
Our intention is to reduce our impact
ontheenvironmentwhereverpossible.
Wealsohaveactiveinternalcommunities
–employee-ledgroupsthataresafe
spacesforcolleaguestopromoteissues,
supporteachotherandcontributeto
organisational change.
How the Board engaged
The Board supports employees and
endorses contributions to wider
communities with time and expertise.
Fundraising is matched by the company,
paidvolunteering days are encouraged and
internal communities are supported and
given platforms and resources. Events and
initiatives run by our communities are
promoted company-wide and attended by
senior individuals.
Outcome of engagement
Environmental, Social & Governance (ESG)
is becoming a greater focus with the
establishment of a Steering Group in 2021.
Both the CFO and CPO sit on the Steering
Group and brief the CEO and wider CLT
onthe status and progress of projects.
The CEO has ultimate responsibility to the
Board for all ESG matters. Support has
been given to carbon-offsetting projects
and investment has been made into
external consultancy for ESG measurement
and guidance. We continue to fundraise for
charities and support causes close to our
colleagues’ hearts.
Engagement in 2022
Looking ahead, the Board is committed
to driving ESG initiatives further forward.
We will review goals and a formal strategy
will be developed in 2022. Roles and
responsibilities for the ESG Steering
Group and ESG work will be defined
andcommunicated. Action will be taken
to accurately measure Alfa’s carbon
footprint and strengthen reporting in this
area. We will continue to support our
internal and external communities and
use our corporate voice responsibly
wherever we can.
Partners
Building trusted partnerships through
ongoingdialoguehelpsustobetter
understand the needs of our partners
and to develop and improve our offering.
How the Board engaged
The Board receives reports on how we have
worked with our partners throughout the
year, with a focus on key commercial events,
which have been mainly virtual events
dueto strict worldwide restrictions on
largegatherings.
The Board considered how we can build
andimprove on our existing commercial
partnerships when discussing strategic
opportunities during the Board Strategy
sessions in June and October 2021.
Outcome of engagement
Executive Directors are involved directly
with partner senior management and
provide regular updates to the Board
onkey partner developments and issues.
The Board supports the continuing
development of our partner training and
learning programme, which aims to deliver
a comprehensive training schedule
including Alfa Systems training, our
delivery methodology and simulation
based implementation workshops.
The Board supports continued scaling
ofour existing partnerships as well as
extending our partner ecosystem to
strengthen our coverage in core markets.
Engagement in 2022
We will continue our engagement with
ourcommercial partners, ensuring we
areadapting to their needs in this
changingenvironment.
Our partnership programme is an important
part of Alfa’s long-term growth strategy.
We aim to develop our partner ecosystem
to increase Alfa’s operational capacity and
sales opportunities.
Investors
TheBoardplacesgreatimportanceon
having positive relationships with all
shareholders and seeks to ensure there is
an appropriate and constructive dialogue
with investors.
How the Board engaged
We conduct extensive engagement with
ourinstitutional investors throughout
theyear. Due to on-going COVID-19
restrictions, the AGM was held as a hybrid
meeting in 2021 with shareholders invited
to attend remotely. An invitation was
included in the Notice of Meeting for
shareholders to ask questions in advance
of the meeting.
On 14 October 2021, shareholders
wereinvited to view an online investor
presentation on Alfa’s technology, hosted
bythe CEO and members of the senior
management team. The event gave an
in-depth view of the product, the
technology that underpins it and how
itisdeveloped to ensure it remains
theleading software for auto and
equipment finance.
The Board receives regular updates on
investor communication activity, changes
tothe shareholder register, analysis of
shareprice performance and particular
investment themes such as environmental,
social and corporate governance.
In addition, the feedback from shareholder/
analyst interactions is shared with the Board
on a regular basis, via our corporate brokers.
Outcome of engagement
The Board considers information from
across the Company to help it understand
the impact of its decisions, and to consider
the interests and views of our key investors.
Our Investors understand the strategy that
underpins our future growth plans and are
keen to engage with regard to financial and
operating performance of the business.
Engagement in 2022
We will continue to engage with our
shareholders throughout 2022. We are
provisionally planning to hold another
investor day in 2022. Due to the ongoing
uncertainty around COVID-19 restrictions,
the Board will keep the 2022 AGM
arrangements under review until there is
more clarity around the future guidance to
the ongoing pandemic
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 57

ENVIRONMENTAL,SOCIALANDGOVERNANCE
United Nations Sustainable
Development Goals
The United Nations Sustainable
Development Goals are the blueprint to
achieve a better and more sustainable future
for all. They address the global challenges
we face, including those related to
inequality, climate change, environmental
degradation and poverty.
We continue to align with the UN Sustainable
Development Goals and focus particularly on
four which fit well with ongoing projects and
plans for future initiatives. These also tie in
nicely with the Alfa Values.
From CSR to ESG:
CSR (Corporate Social Responsibility)
was the precursor to ESG
(Environmental, Social and Governance),
ensuring a company’s actions have a
positive impact on the environment,
consumers, employees, communities,
and the public sphere.
ESG builds on CSR, measuring
performance with metrics which can
beused by investors, customers and
employees to have an understanding
ofthe company’s ESG performance.
At Alfa we have adopted the current
terminology of ESG, which is now in
common use by organisations. This year
we formed an ESG Steering Group.
4.QualityEducation
5.GenderEquality
13.ClimateAction
17.PartnershipsfortheGoals
We’ve been doing a lot of good things in this
space for many years – it’s a key reason one
of our formal Company values is ‘Create a
Positive Impact’.
We know there are many business benefits to
driving ESG initiatives, but we do this because
it’s important to us and always has been.
ESG is a core part of the Alfa culture.
We are Alfa






58 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

• Our Communities
• Focus on Learning
& Development
• Culture &
Engagement
• Inclusion &
Diversity
• Onboarding &
Induction
processes
• Launch Learning
Management System
• Talent Development
programme
• Mentoring, Coaching
&Buddies programmes
• Environmental
Policy
• Commitment
toeducate
stakeholders
• Supplier approval
process
• Partner with more
clients& suppliers
• Volunteering
scheme
• Dedicated
volunteering
month
• Charity partners
in each region
• Volunteering
uptake
• Formal partnership with
Code Your Future
• Environmental
Policy
• Reaching carbon
positivity
• Working with The
Climate Coalition
• Partnership with
KO Cycle,
recycling IT
hardware
• Measurement • Partnership with The
Climate Coalition
• Calculate detailed
carbon footprint data
• Formalise ESG Strategy
…people
…community
…environment
…customers
and suppliers
Link to SDG Strong Improve Next year
IMAGES
TO
COME
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 59

ENVIRONMENTALSOCIALANDGOVERNANCECONTINUED
Our people
Our focus on people throughout 2021
remained a high priority and will always
be key to Alfa’s commitment to provide
the best possible service to our clients.







Our Communities are:
• Alfa for Racial Equity
• Environmental Impact
• Inclusion & Diversity
• LGBTQ+
• Parents’
• Social Impact
• Women’s
All of these employee-led groups are
safe spaces for those involved to discuss
and promote issues, support each other
and work towards improving policies.
Their wonderful work includes cookery
classes, showcasing an array of cultural
delicacies, running work experience
programmes aimed at school leavers
from disadvantaged backgrounds,
promoting causes with blog posts and
networks of Champions, involvement in
external round tables and events, and a
huge variety of other activities.
60 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Gender equality
We were proud to have been in a position to
welcome 69 new joiners across our offices in
2021, of which 25 (36%) were women.
In the UK alone, we welcomed 51 new joiners
in the year, of which 19 (37%) were women,
which represents a similar level to female
hires in the UK in 2020.
Looking at graduate recruitment, we hired
20newhiresintotheUKgraduatescheme,
ofwhich45%ofpositionswerefilledby
female candidates.
Throughout the year, we sponsored
recruitment events such as Bright Network’s
Women in Tech and Women in STEM events.
Through our recruitment partners we
proactively target diverse groups through
email marketing and campaigning. Of our
graduate applications in the UK, around 30%
of the applications we received were from
female candidates. This ratio is a general
representation of the gender make-up in the
early careers STEM and technology sectors
as a whole.
We continue to maintain a strong level of
retention* across the business. As of
December 2021, retention across the
business was 87%.
Breaking this down by gender, retention of
females stood at 86% and retention of males
stood at 88%. Of leavers across the business
in 2021, 34% were women.
* Retention calculation is as follows: Starting
Headcount (from 12 months ago) minus
Leavers over the 12-month period divided by
Starting Headcount (from 12 months ago).
“ Alfa is hiring people that are
really clever, deep thinkers and
problem-solvers. They’re looking
for what you’re going to bring
to the organisation and how
you’re going to help it grow and
get to the next level. Every single
person is an important part of
the process. Alfa is big enough to
have great software and clients,
but not so big that you’re lost.
People get heard.”
Caroline Chopra
“ What I love is the ability to
work on different things with
different people, and the
diversity and variety of people
is also very good. You get a lot
of varied perspectives, from a
lot of different people all around
the world, and from diverse
backgrounds. That never really
gets dry.”
Ricky Christian
“ At Alfa you get listened to. You
get nurtured. People here care
about you. Every company will
say the same stuff but at Alfa the
employees say it themselves –
and it’s real, you can feel it. It is
great to work here. The people,
the culture, how receptive we are
to change… Alfa is special.”
Jack Matthewson
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 61

ENVIRONMENTALSOCIALGOVERNANCECONTINUED
OUR PEOPLE CONTINUED
Inclusion & diversity
Diverse cultural perspectives really do inspire
innovation and creativity at Alfa. We make
things better and solve problems together, so
we’re always striving towards being as inclusive
as we can.
In addition to our vibrant Communities, we
adopt measures to improve things for people
across the board. We were proud to launch our
Inclusion & Diversity charter and our
Transitioning at Work policy this year.
We developed and ran Inclusive Recruitment
training for everyone involved in our
recruitment process and there was a diverse
series of talks, events and activities run by our
Communities to promote and increase
awareness on key issues.
In celebration of diversity, we’re launching
Cultural Days in 2022. Flexible Culture Days will
allow our people to swap in and out of national
public holidays that might not match their
particular values, beliefs or heritage.
Wellbeing
Wellbeing remains a really important focus
forAlfa. We haven’t made use of the furlough
scheme throughout the pandemic, and this
year we continued to invest in wellbeing.
Along with enhanced paid carer leave
allowance, access to physical, mental and
financial advice and assistance via our
employee benefits platform, and working from
home contributions, we have grown an internal
network of trained Mental Health First Aiders.
17 individuals in different regions are now
available to colleagues for judgement-free
listening and support.
We launched Gympass and Peppy health
(inthe UK) which provides support for
menopause, fertility and new parents.
2022 will see us launching Peppy’s new
PeppyMen service.
We will continue to actively support our
Communities internally and externally,
challenge ourselves continually to be more
inclusive and use our corporate voice for good,
wherever we can.
“ 2021 has been another challenging
year for everyone, in many ways,
but we have managed to maintain
our inimitable positivity and Alfa’s
special culture remains strong.
Wehave lots of ‘People Projects’ on
the go, but I am particularly focused
on Culture and Inclusion – making
Alfa a place where people have a
voice, where we are all safeto be
ourselves – being an employer that
attracts and retains great people.”
Vicky Edwards
Chief People Officer, Alfa Financial Software
Culture
The Culture at Alfa is something we’re
extremely proud of. It is one of our greatest
strengths and remains highly valued by
ourpeople.
This year we’ve continued to keep our
culture alive, despite the ongoing challenges
of working remotely much of the time.
Our Events team has maintained a
programme of lively and well-attended
events, ranging from virtual Company
conferences through to real-world social
events such as ice skating and boat trips.
Giveaways across the year helped to spread
smiles and cement our culture, and included
branded beanies, hampers, and terrariums
for home workspaces.
Adapting to restrictions, one of the UK
Company meetings included sending out
bamboo picnic utensils to everyone and
using the intranet to drop pins on maps so
that colleagues could meet up afterwards in
smaller, safer groups for the social element
of the day.
Our US colleagues held their conference in
person in Miami in November, and Australia
and New Zealand teams met in December,
which were important reminders of the
benefits of face-to-face meetings, albeit
following rules and safety protocols as required.
We take feedback seriously at Alfa.
Our culture encourages positive
conversation and transparency. There’s
always an opportunity to provide ideas and
ask questions at all levels. We also seek
anonymous feedback with regular employee
surveys – and £5 for each completed survey
also goes to charity. This year we launched a
new platform to better measure employee
engagement, providing more in-depth
insight to drive action.
In addition to our Pulse surveys, we ensure
we provide opportunities for two-way
communication with regular townhall Q&As,
and this year launched a series of ‘In
Conversation With...’ where we deep dive
into a host of subjects.
Alfa’s frequent innovation days and annual
Hackathon events are a highlight for
colleagues to get creative, inspire change
and get to know each other better.
Teamwork and problem-solving are the
focus, and the 2021 Hackathon winning
team featured new joiners from the latest
graduate scheme intake.
Next year we look forward to more
opportunities to get together regularly and
continue to develop effective two-way
communication channels where everyone
feels involved, informed and heard.
62 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Statutory gender pay gap (GPG) reporting
Data from April 2021
Gender pay gap
Salary (£k) 2021 2020
Overall mean 38.2 39.1
Overall median 35.9 37.0
Mean – female 33.9 34.5
Mean – male 40.0 40.7
Gender pay gap 15.1% 15.3%
Median – female 32.5 32.7
Median – male 38.4 38.3
Gender pay gap 15.3% 14.7%
We have seen a slight improvement in the year for the mean gender pay gap, however a slight
deterioration in the median gender pay gap. Like many in the industry our balance towards men
over women at all levels is reflective of the overall industry. Our female talent pipeline continues
to improve with 36% of 2021 joiners being female, and 45% of UK graduates, however as these
are generally into more junior roles in the organisation, it will take some time for this to be
reflected in improved gender pay gap figures (see page 61 for further details).
Learning & development
This year we invested in a new Learning
Management System which has been built over
many months and launches in 2022. This will
support individual learning and development in
a way never seen before at Alfa.
A whole new suite of tools and resources
supporting all facets of life at Alfa has been
created as part of our new learning and
development offering.
New Company policies (such as Smart
Working) have been supported with a
programme of workshops and training, for
managers of virtual teams, in a way that has
really helped smooth transitions.
Our key priorities for 2022 include:
• Launch new Learning Management
System
• Focus on our Management Development
resources and approaches
• Mentoring, Coaching & Buddies – we’ll
define and train people to develop this
valuable support tool
• Following extensive evaluation in 2021,
we’ll be revamping our Onboarding &
Induction processes, making us more agile
and responsive
• New Talent Development programme
across the business will provide more
opportunities for progression and
personal ownership of careers
Recruitment & retention
The pandemic fast-tracked Flexible Working
at Alfa. We took this one step further in
2021 and introduced Smart Working across
the organisation. We know employees have
commitments and lives outside work, which
is why everyone can now choose, as part of
their team, where they’re based on work
days. Be it in the office or at home, we keep
everyone connected and make sure we’re all
pulling together. This supports retention
and also widens the pool of talent we can
attract. Smart Working will come into full
operation in 2022, as local COVID-19
restrictions allow in all our locations.
We have continued to benchmark our total
packages with strong pay and promotions
activity and added new benefits, particularly
in the Wellbeing space. The launch of our
new employee ShareSave scheme enables
employees to invest in Alfa and share in
oursuccess.
This year we have laid the foundations for a
variety of Employer Brand projects which
kick off in 2022. We are using employee
stories in various mediums to give insight
into life at Alfa both internally and externally
– we have fascinating, diverse and hugely
talented people at Alfa and we’ll be shining a
spotlight on them in order to attract and
retain the best in the business.
In 2022 we are looking at creating remote
hubs to further widen our talent pool, we
will continue to enhance and promote our
packages to remain competitive and will
continue to invest in our social and wellbeing
calendar to support our culture.
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 63

ENVIRONMENTALSOCIALGOVERNANCECONTINUED
OUR CUSTOMERS & SUPPLIERS
Alfa’s Environmental Policy includes
a commitment to engage and educate
employees and other stakeholders on
theimportance of sustainability.
Our customers
& suppliers
User groups
We are committed to adopting and applying
the latest technology, including server
virtualisation technology, to ensure that our
customers’ energy consumption is kept to
aminimum.
Our product, Alfa Systems, provides
functionality to enable our customers to charge
their customers on a usage basis, therefore
making utilisation of assets more efficient.
In owned data centres, our provider has
noted that 94% of our energy utilisation
wasfrom renewable energy sources.
Alfa also uses data centres operated by a
third party, AWS Cloud Computing.
AWS iscommitted to powering operations
with 100% renewable energy by 2025.
Partnering in ESG
Next year we intend to partner withmore
clients and suppliers on ESG initiatives.
We will also review our supplier approval
process and see how we can embed
more ESG factors into selection.
64 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Our
community
We have a passion for using our expertise and
resources to add value to the communities in
which we work.
Volunteering
Alfa offers three days’ paid volunteering
per year and we have a framework in
place to help employees choose a
suitable volunteering opportunity.
This isa really popular scheme at Alfa
and one our people are rightly proud of.
Everyone is encouraged to take an
activepart in the schemes offered and
volunteers range in seniority from junior
consultant all the way to CEO. It’s
mutually beneficial and we have
developed strong partnerships over
theyears.
In June 2021 we had our first dedicated
Volunteering Month.
Fundraising
We have charity partners in each of
ourregions. In 2021 they were: The
ClimateCoalition in EMEA, Feeding
America in the USA and Share the
DignityandKidsCan in Asia Pacific.
These charities are nominated and
voted for by employees. The company
also matches any funds raised for
these brilliant causes.
Weraisedover£26,000forour
charity partners and others
during2021.
Employees as individuals also hold
events and raise funds for many other
local and national charities throughout
the year.
A number of Alfa employees have
volunteered with Code Your Future – which
utilises our specific technical skills and
abilities as an organisation.
Code Your Future is a charity which teaches
code to refugees, asylum seekers and
otherwise disadvantaged people. This helps
increase diversity in software development
as well as improving confidence and
employment prospects. We’re exploring a
formal partnership with Code Your Future
in2022.
Something else we support each year is ‘The
Wonderful Xmas Post’, a campaign to send
crafty and uplifting Christmas cards to
isolated older people in care homes across
the world. Matched recipients are always
delighted to receive cards from us and we
love to send them!
Our plans for next year include working
toincrease the uptake of volunteering
allowances across Alfa.
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 65

ENVIRONMENTALSOCIALGOVERNANCECONTINUED
ENVIRONMENT
Environmental impact
Our Environmental Impact teams in all regions
help us to drive change and reduce our impact
on the planet in lots of ways.
Our Cycle to Work scheme introduced in
2020 has seen good uptake and this will
undoubtedly increase as travel and office
timeresumes.
In our energy-efficient offices we ensure
sustainable, ethical and environmentally
conscious purchasing for café products, event
giveaways and other items.
We also recycle waste and coffee grounds,
compost food waste, have eliminated
single-use plastics and use eco-friendly
cleaning products.
Alfa sources electricity in the UK from
renewable energy provider, Opus.
Alfa’s Data and Equipment Disposal Policy
covers off securely and sustainably
disposing of IT equipment, including
laptops. We also recycle technical hardware
and donate to schools.
The Climate Coalition is the UK’s largest
group of people dedicated to action against
climate change; a group of over 120
organisations – including the National Trust,
Women’s Institute, Oxfam, and RSPB – that is
22 million voices strong. The Climate
Coalition’s aim is to bring people from all walks
of life and organisations with different goals
together to collectively call for climate action
and we’ve partnered with them.
We have been raising money for The Climate
Coalition and, in return, they’ve joined us to
deliver a variety of social talks on the theme of
Climate Action. In November they delivered a
talk on ‘What Happens After COP26?’.
One of the main aims of our Environmental
Policy is to carry out our business in a
manner that minimises our impact on
theenvironment.
Our
environment
66 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Carbon emissions and energy consumption reporting
2021 2020***
Global
(inc.UK) UK
Global
(inc. UK) UK
Total electricity use (kWh) 112,333 93,954 114,639 102,748
Total gas use (kWh) 97 – – –
Total transport fuel (kWh) 131,651 130,993 111,600 109,370
Total energy from other sources (heating & cooling) (kWh) 53,079 53,079 41,166 41,166
Totalenergyuse(allsources)(kWh) 297,160 278,026 267,405 253,284
Total carbon emissions (electricity) (tCO
2
e) 33 28 33 30
Total carbon emissions (gas) (tCO
2
e) 0 0 0 0
Total carbon emissions (transport fuel) (tCO
2
e) 49 49 39 38
Total carbon emissions (other sources – heating & cooling, flights and taxis) (tCO
2
e) 60 14 140 46
Totalcarbonemissions(tCO
2
e) 142 91 212 114
Scope 1 (tCO
2
e) – gas, heating and company cars 49 * 43 *
Scope 2 (tCO
2
e) – electricity and electric cars 44 * 38 *
Scope 3 (tCO
2
e) – flights, taxis, water taxis 49 * 131 *
Totalcarbonemissions(tCO
2
e) 142 * 212 *
Total revenue (£m) 83.2 – 78.9 –
Carbonintensityratio(tCO
2
e per £million) 1.7 * 2.7 *
TotalcarbonoffsetspurchasedfromEcologi(tCO
2
e)** 1,231 – – –
* This information has been calculated at a global level only.
** We compensate for unavoidable emissions by purchasing certified carbon emissions from Ecologi.
*** 2020 data has been updated as part of improvements to calculation methodology.
Carbon emissions
One of our Company objectives for 2021 was
to become a ‘climate positive’ workforce.
This year we have been looking at options for
our interim carbon offsetting solution in order
to reach this target and have worked with
Ecologi for credible and impactful offsetting
projects to support. Carbon offsetting is only
acredible tool when used alongside emissions
reduction strategies, which we are beginning
toimplement where possible.
The next goal is to work with a sustainability
consultancy to help us calculate more detailed
carbon footprint data and develop strategies
to reduce it, before ultimately offsetting what
cannot be avoided.
Alfa’s London office has achieved an ‘excellent’
rating under the BREEAM In-Use certification
for 2021/22.
“ Our global Environmental
Impact team is really looking
forward to 2022; we have
lots of ideas and motivation
to improve Alfa’s carbon
impact and help to develop a
formal emissions reduction
strategy. We’ve had so
much internal support
from colleagues andsenior
management and feel we can
break new ground for Alfa’s
ESGgoals.”
Hannah Coral
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 67

ENVIRONMENTALSOCIALGOVERNANCECONTINUED
ENVIRONMENT
Carbon & energy efficiency actions
We are committed to responsible carbon
management and will practise energy
efficiency throughout our organisation,
wherever it’s cost effective. We recognise
that climate change is one of the most
serious environmental challenges currently
threatening the global community and we
understand we have a role to play in
reducing greenhouse gas emissions. We have
implemented the policies below for the
purpose of increasing the business’s energy
efficiency in the relevant financial year:
• Moved to remote home working
duetoCOVID-19. Will review when
situation permits.
• Implemented and encouraged use of
video conferencing.
• Travel reduced due to COVID-19.
In 2021, we became carbon positive as our
offsets purchased from Ecologi exceed our
emissions (i.e. Scope 1 and Scope 2
emissions, as well as those Scope 3
emissions that have been disclosed).
Methodology used in the calculation
of disclosures
ESOS methodology (as specified in
Complying with the Energy Savings
Opportunity Scheme version 6, published
bythe Environment Agency, 21.01.21)
usedin conjunction with Government GHG
reporting conversion factors. The calculations
have been approved by a PAS51215
compliant body.
For carbon only related matters, the SECR
methodology as specified in ‘Environmental
reporting guidelines: including Streamlined
Energy and Carbon Reporting and
greenhouse gas reporting’ was used in
conjunction with Government GHG
reporting conversion factors.
Estimates made with respect to the
dateinclude:
• Company car annual mileage provided
and apportioned into months;
• Emissions in line with a medium-sized
engine assumed for one car; and
• Assumed all taxi rides are 5 miles.
Note: Emissions data includes WTT
(well-to-tank) and T&D (transmission and
distribution). kWh data excludes flights,
taxis and water taxis.
68 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Taskforce on Climate-Related Financial Disclosures:
Area Recommended disclosure Alfa Disclosure
Governance Describe the Board’s oversight ofclimate-
related risks and opportunities
Overall responsibility for all ESG matters sits with the Group CEO and
progress is reported to the Board. Reporting and risk management issues
are discussed and debated as part of the Audit & Risk Committee.
Describe management’s role in assessing
and managing climate-related risks and
opportunities.
As part of the twice a year detailed risk management process the Company
Leadership Team reviews and discusses the latest view of all opportunities
and risks including climate-related and in particular corporate level risks are
discussed by the Executive Board members.
Strategy Describe the climate-related risks and
opportunities the organization has
identified over the short, medium,
andlong term.
In the short-term we see little impact of climate-related risks and
opportunities on our business, however we are acutely aware of our
responsibility to contribute towards the global efforts to mitigate against
climate change, and therefore we are actively looking to reduce our carbon
footprint, including reducing travel to client sites, assessing renewable
energy options for new offices, and considering travel distances for the
location of conferences. In the medium to longer-term we see more
positives for Alfa than negatives. A move towards lower carbon new
technologies is likely to result in increasing requirements for asset backed
finance solutions, which will drive growth in our underlying markets. In
addition increasing reporting requirements through the supply chain will
require agile systems that can respond to the new reporting requirements
which will increasingly demonstrate the greater flexibility of Alfa Systems
over competitor products.
Describe the impact of climate-related
risks and opportunities on the
organization’s businesses, strategy,
andfinancial planning.
To enable our systems to respond to increasing demands for mobile
solutions and emissions reporting, it may require more investment in
theproduct to make the most of these opportunities. The increased
functionality however is likely to lead to increased licence revenues as
customers want to access the new modules providing this.
Describe the resilience of the organization’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C
orlower scenario.
As we do not believe there are significant risks to our organisation, other
than the overall risk to the world economy, we believe our existing strategy
has a high degree of resilience to different climate-related scenarios.
Risk
management
Describe the organization’s processes
foridentifying and assessing climate-
related risks.
We have a comprehensive process of risk management which includes a
detailed assessment of risks twice a year. Included within this process is
explicit consideration of climate-related risks.
Describe the organisation’s processes
formanaging climate-related risks.
In the short-term we do not see significant climate-related risks for the
organisation and as a consequence we keep the risks under review, but are
not actively managing any at this point in time.
Describe how processes for identifying,
assessing, and managing climate-related
risks are integrated into the organization’s
overall risk management.
It is an integral part of our overall risk management, and in particular it is
discussed when considering the corporate level risks.
Metrics
andtargets
Disclose the metrics used by the
organization to assess climate-related
risks and opportunities in line with its
strategy and risk management process.
We do not currently use any metrics for assessing climate-related risks
other than being aware of the growth projections in the underlying auto
and equipment finance market. We are however intending during 2022 to
set targets for reduction in emissions to ensure that we play our part in the
overall journey to a net zero economy. See page 67 for further details.
Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
See page 67.
Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets.
We have no specific targets for the management of the risks and
opportunities because as noted above we do not see any short-term risks
or opportunities. If and when any risks and opportunities become more
apparent we will seek to see what targets we could set.
The Strategic Report and the Financial Review are approved by the Board of Directors and signed on its behalf by:
Andrew Denton
Chief Executive Officer
STRATEGIC REPORTAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 69

Corporate
governance
Section 5:
Remuneration
See
page
P Linking remuneration with
purpose and strategy
101 to
102
Q Remuneration Policyreview
104
R Performance outcomes
in2021 Strategic targets
114
ReadmoreintheRemuneration
CommitteeReportonpages
100to121
Section 4:
Audit, risk and
internal controls
See
page
MFinancial reporting,external
auditor & internal audit
98to99
N Review of 2021
AnnualReport
96
O Internal financial controls
Risk management
98
ReadmoreintheAudit&Risk
CommitteeReportonpages94to99
Section 1:


purpose
See
page
A Effective Board
77
B Purpose, strategy,
valuesand culture
77
C Governance framework
77
D Stakeholder engagement
77
E Workforce policies
andpractices
79
Section 2:
Division of
responsibilities
See
page
F Board roles
83
G Independence
89
H External commitments
andconflicts of interest
84
I Board efficiency: key
activities of the Board
85
Section 3:
Composition,
succession and
evaluation
See
page
J Appointments totheBoard
86
K Board composition
86
L Board evaluation
86
ReadmoreintheNomination
CommitteeReportonpages90to93
70 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

Dear shareholders,
On behalf of the Board, I am pleased to present
the Group’s corporate governance report for
the financial year ended 31 December 2021.
This report outlines how the Board continues
to make sure that robust and appropriate
governance procedures are in place to ensure
effective and prudent management of the
Company that will deliver long-term
sustainable success for the benefit of our
shareholders and broader stakeholders.
In this report, we set out our approach to
corporate governance and provide detail on
the role of the Board of Directors, followed by
more detailed sections on the work of each of
the three key Board Committees: Audit & Risk
Committee, Nomination Committee and
Remuneration Committee. Together, these
give a clear insight into how we manage
corporate governance principles and processes
within the Group.
Board focus areas in 2021
• Special dividend of 10 pence per
ordinary share.
• Performance of the business,
financially and operationally.
• 2022 budget and long-term
strategicplan.
• Sales pipeline and business
development.
The UK Corporate
Governance Code 2018: Our
compliance
Effective corporate governance provides
an essential foundation for the long-term
sustainable success of the Company.
This report sets out the key elements of
Alfa’s corporate governance arrangements,
including how we have sought to apply the
principles and provisions of the 2018 UK
Corporate Governance Code (the ‘2018
Code’) during the year.
A copy of the 2018 Code, issued by the
Financial Reporting Council can be found
at www.frc.org.uk. This governance
statement, including the Nomination
Committee, Audit & Risk Committee,
and Remuneration Committee Reports,
explains how we have applied the
principles and complied with the
provisions of the 2018 Code.
Non-compliance with

The Group has complied with the Code
provisions during the financial year with
the exception of Code provision 9:
TheChairman of the Board was not
independent on appointment as he
previously held the position of Chief
Executive Officer and is the controlling
shareholder of the Company. On listing,
the Board unanimously supported, and
continues to support, the appointment
of the Chairman to retain his skills and
experience, and ensure continuity of
service for Alfa’s customers and
commercial partners.
“ Following the Director appointments made in
2020, this has been the first full year with the
new Board and I can say it has been a pleasure
to be the Chairman of such a progressive and
knowledgeable team that continues to make
excellent progress in developing the business.”
Andrew Page
Executive Chairman
CHAIRMAN’SINTRODUCTION
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 71

Continued strong performance
during 2021
The upheaval of the global COVID-19
pandemic continued to provide an
unprecedented challenge to all companies.
The governance environment that Alfa had in
place when the COVID-19 crisis unfolded in
early 2020, supported high-quality decision
making which ensured that we maintained the
strong business momentum we had prior to the
pandemic, whilst at the same time, looking
after the interests of all our stakeholders,
particularly our employees. Further detail of
how the Company continues to respond to
these unprecedented times is set out
throughout this report.
During 2021, the Company kept in line with
forecast, as highlighted in the scheduled
market announcements, throughout the
year.As a result of Alfa’s continued strong
performance despite the pandemic, we were
delighted to announce a special dividend in the
amount of 10 pence per share, which was paid
to shareholders on 5 November 2021.
Additionally and as a result of the continued
strong performance, CEO Andrew Denton
andI have elected to forego any future
remuneration, subject to minimum statutory
requirements. We feel that as significant
shareholders of the Company, we wanted to
fully align our future remuneration with those
of other shareholders through future dividend
payments and the growth in the share price.
Since IPO in 2017 Andrew Denton has elected
each year to forego participating in Company
LTIP and bonus schemes for which he would be
ordinarily be included in, for the same reason.
Environment, Social & Governance
I’m pleased to report that during the year we
have focused on enhancing the ESG actions
that we are taking to enable improvement in
our ESG reporting and ratings with a number
ofagencies.
Details of our ESG commitments and work
during 2021 can be found on pages 58 to 69.
Our approach to corporate
governance
Corporate governance at Alfa takes a
thoughtful and considered approach involving
the Board as well as other key personnel to
identify and apply the principles of good
corporate governance.
This means balancing the interests of the
Company’s many stakeholders, such as
shareholders, employees, customers,
suppliers, partners and the communities
wework in. Strong governance helps to
cultivate a company culture of integrity and
stakeholder alignment, alongside corporate
structures that improve leadership,
accountability and effectiveness.
This brings a sharper focus to strategic
objectives and translates into better decision
making which, in turn, drives competitive
advantage and growth and results in stronger
corporate performance and a sustainable
business model. The Board has maintained a
strong focus during the year on the Company’s
strategic goals whilst ensuring that the
Company has the right people in place to
deliver on its strategy. During this period of
continued growth, it is vital to ensure that the
Company’s governance processes are robust in
order to ensure that the business is protected
and that all stakeholders’ interests are taken
into account.
Culture, values and people
Alfa has fostered a strong Company culture
which is underpinned by a set of values
whichensure that everyone stays focused
ondelivering our strategy whilst staying true
towho we are. The Board recognises the
importance of setting this culture and
ensuring that the necessary resources are
inplace to allow our people to deliver the
Company’s strategy.
The Board is kept up to date on employee
engagement through the inclusion and
discussion of the Pulse survey results which are
collected on a bi-monthly basis and presented
to the Board by the Chief Operating Officer.
A focus of the Company Leadership Team
during the year has been to continue to
ensurethe overall welfare of our employees
throughout the COVID-19 pandemic.
The Board is satisfied that the approach
towards engagement with colleagues
described on pages 77 to 79 is robust.
72 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
CHAIRMAN’SINTRODUCTIONCONTINUED

External Board evaluation
Following the Director appointments made in
2020, this has been the first full year with the
new Board and I can say that it has been a
pleasure to be the Chairman of such a
progressive and knowledgeable team that
continues to make excellent progress in
developing the business.
An external Board evaluation process was
conducted by Board Effectiveness and
Governance Services (BE-GS) during the
summer/autumn following the 2021 AGM.
The evaluation acknowledged the great
progress that has been made since the
appointments in early 2020 with
recommendations made by BE-GS made upon
solid best practice. Details of the evaluation
can be found on pages 86 to 88.
Finally, I would like to take this opportunity
tothank all of our stakeholders for
theircontinuing support in these
unprecedented times.
Andrew Page
Chairman of the Board and Founder
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 73
CHAIRMAN’SINTRODUCTIONCONTINUED

Andrew Page
Executive Chairman


Andrew is one of the founding
Directors of Alfa. Andrew became
the Chief Executive Officer in 2010
and the Executive Chairman in
September 2016. Andrew provides
commercial oversight and with the
Board sets the strategic direction
and goals of the Company.
Key strengths
Andrew has considerable senior
management experience and a
deep understanding of the auto
and equipment finance industry.
Other appointments
Director of CHP Software and
Consulting Ltd
Andrew Denton
Chief Executive Officer


Andrew joined Alfa in 1995 and
became a member of the Board of
Directors in 2003 as Sales and
Marketing Director. He was made
Chief Operating Officer in 2010
and became CEO in September
2016. Andrew is also Director
andjoint founder of the Leasing
Foundation, an organisation that
supports the leasing and auto and
equipment finance industry
through charitable activities,
research and development.
Key strengths
Computer scientist by training,
considerable senior management
experience and significant
experience in the auto and
equipment finance industry.
Other appointments
Director of CHP Software and
Consulting Ltd
Duncan Magrath
Chief Financial Officer


Duncan started his career at Price
Waterhouse, and qualified as a
Chartered Accountant in 1989.
He joined Ocean Group in 1992,
and spent 13 years in the UK and
USA in various finance roles as the
group transformed into Exel
Logistics. He joined Balfour Beatty,
the infrastructure company, in 2006
and was Group CFO from 2008 to
2015. In 2016 he joined Rubix, an
Industrial Parts Distributor, as
Group CFO and was in that role
through to 2019.
Key strengths
Extensive experience in senior
financial positions both in the UK
and internationally, including a deep
understanding of investor relations
and financial strategy
Other appointments
n/a
Matthew White
Chief Operating Officer


Matthew joined Alfa as a graduate
in 1999, starting in a software
development role. In his 20-year
career delivering software for the
auto and equipment finance
industry, Matthew hasdirect
experience of everything involved
in systems implementation, from
configuration and testing support
to project management fora
number of UK and European
projects. From 2010 to 2016,
Matthew’s role grew to include
responsibility for most of the
operations of the Company,
before he led Alfa’s IPO in 2017.
As Chief Operating Officer, a role
which he assumed in February
2019, Matthew is accountable
forthe international operations
ofthe business, including Alfa’s
technology platform and
projectdelivery.
Key strengths
Considerable senior management
experience in software
development and all aspects
ofsystems implementation
anddelivery
Other appointments
n/a
N
74 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
BOARDOFDIRECTORS

Steve Breach
Independent
Non-Executive Director


Steve is a member of the Institute
of Chartered Accountants in
England and Wales, having qualified
with EY in 1993 where he focused
on providing corporate finance
advice to technology businesses
inthe UK and internationally.
Steve has 17 years’ experience as
Chief Financial Officer of a number
of businesses. Between 2010 and
2016, Steve was CFO of Tribal
Group PLC, a leading international
provider of student management
software to the education market.
Steve has subsequently pursued a
portfolio career, acting as adviser to
a number of privately owned
companies.
Key strengths
Steve has held a number of CFO
roles and has extensive experience
in corporate finance.
Other appointments
Advisor to a number of private
companies
Adrian Chamberlain
Independent
Non-Executive Director


Adrian is a Non-Executive Director
of Cambridge University Health
Trust, one of the country’s largest
NHS Trusts, where he chairs the
Performance Committee.
During 2021, Adrian was appointed
as the Senior Independent Director
of the Trust. He is also Executive
Chairman of eConsult Ltd, a leading
cloud-based medical triage
company. He previously has held
senior executive positions in a
number of private and public
hi-tech and telecommunications
companies including Chief
Executive Officer of Messagelabs
and Achilles Ltd, a member of the
Board of Cable & Wireless and
Bovis Lend Lease, and a member
ofthe Operations Board at
Symantec. He holds an MA in
History from Trinity College,
Cambridge and an MBA from the
London Business School.
Key strengths
Extensive experience
internationally in both the private
and public sectors, particularly in
strategy formulation and execution,
technology and Software as
aService.
Other appointments
Chairman of eConsult Health Ltd
Senior Independent Director of
Cambridge University Health Trust
and Chair of the Performance
Committee
Charlotte de Metz
Independent
Non-Executive Director


Currently Chief People Officer at
Keyloop which focuses on software
for the automotive industry where
she joined in early 2021, after
serving as Chief People Officer
atSynamedia where she led a
large-scale global transformation.
Prior to that, Charlotte was Global
Head of Human Resources and
more recently as Executive Vice
President at Finastra, a global
fintech where she was responsible
for Executive Talent, corporate
social responsibility, culture and
values, and inclusion and diversity.
Prior to joining Finastra in 2012 as
Global Head of Human Resources,
Charlotte spent over 11 years at
Ventyx, a global provider of
software solutions for the energy,
utility and other asset-intensive
businesses. During her tenure at
Ventyx she held various HR roles,
latterly as Human Resource
Manager for Rest of World.
Key strengths
Strong track record in delivering
innovative employee development,
engagement, and retention
practices. Charlotte has extensive
experience in managing high-
impact, enterprise-wide
transformations in challenging,
fast-paced environments.
Other appointments
CPO, Keyloop Limited
Chris Sullivan
Senior Independent
Non-Executive Director


Chris was Chief Executive of the
Corporate & Investment Bank at
Santander UK during the years
2015-2018, and prior to this held
various CEO roles during a 40-year
career at The Royal Bank of
Scotland and NatWest. His 11
years on the Group Executive
Committee included leading
Corporate Banking, Retail Banking,
Direct Line and Retail Direct and
culminated in appointment to the
post of Deputy Group Chief
Executive in March 2014.
A recipient of the Leasing Life
European Lifetime Achievement
Award, Chris brings expertise in the
auto and equipment finance
industry, having spent nearly 30
years with the Lombard Group
inanumber of directorate roles
including as CEO.
Key strengths
Extensive experience of corporate,
investment and retail banking and
asset financing together with
general management and listed
company experience.
Other appointments
Chairman of the Westminster
Abbey Investment Committee,
Non-Executive Director of Guild
Esports PLC, Senior Independent
Director for DWF Group PLC,
Non-Executive Director of
Cannaray Ltd
A N R A N R A N RA N R
Committee membership
A
Audit Committee chairNomination
N
Remuneration
R
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 75

Richard Raistrick
Chief International
Officer


Relevant experience/
previous roles
Richard is responsible for project
delivery for some of Alfa’s largest
customers. He has carried out
consultancy and project
management engagements around
the globe, and has worked in the
auto and equipment finance sector
since 1995.
James Paul
Chief Delivery Officer


Relevant experience/
previous roles
James is accountable for all EMEA
implementations and takes global
responsibility for support,
resourcing and partnering.
James has over 20 years’ experience
implementing in auto and
equipment finance for
organisations of all sizes.
Vicky Edwards
Chief People Officer


Relevant experience/
previous roles
Vicky joined Alfa in March 2020,
bringing 26 years of experience
inconsultancy businesses. A
commercially focused HR leader,
Vicky has held leadership roles
across HR, commercial and
operations functions, as well as
C-suite level positions in the
professional services, technology
and energy sectors.
Richard Dewire
Chief Revenue Officer


Relevant experience/
previous roles
Richard has over 20 years in the
auto and equipment finance
industry and an in-depth
knowledge of Alfa Systems through
many years of implementation, with
extensive knowledge of Alfa’s sales
and commercial process. He was
previously Director of Strategy and
Investment.
Andrew Flegg
Chief Technology
Officer


Relevant experience/
previous roles
Andrew brings over 35 years of
programming experience, over
25 years in commercial software
development and over 15 years in
the auto and equipment finance
industry. He was previously Alfa’s
Global Director of Platforms,
covering internal IT systems, cloud,
information security and solution
architecture.
Andrew Denton
Chief Executive Officer


Duncan Magrath
Chief Financial Officer


Matthew White
Chief Operating Officer


76 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
COMPANYLEADERSHIPTEAM

BOARDLEADERSHIPANDCOMPANYPURPOSE
Maintaining good governance is essential
tosupport the delivery of Alfa’s strategic
objectives, and to ensure that the business is
run well for the benefit of all stakeholders and
for sustainable long-term value. The Board
continues to monitor the framework so it
remains appropriate to the business.
The governance framework embeds our
values into the policies and processes of
Alfaand therefore helps to strengthen the
corporate culture.
ReadmoreaboutourCompany
LeadershipTeamonpage76.
During this year and as part of the annual
review cycle, the Board reviewed, updated
and approved the Schedule of Matters
Reserved for the Board and the Terms
ofReference for each Board Committee.
The Audit & Risk Committee also reviewed,
updated and approved other relevant
Company policies. There is an internal controls
system in place which allows the Board to
assess and manage risks to the business.
ReadmoreaboutourRiskManagement
onpages44to51andtheAudit&Risk
CommitteeReportonpages94to99.
The Board provides support in
implementing strategic priorities as well as
oversight and constructive challenge on the
running of the business. Through reporting,
including the use of both financial and
non-financial metrics, the Board is able
toevaluate and guide the progress and
performance of the Company. Reports from
across the business are provided at Board
meetings to update the Board and enable
effective discussion.
Defining purpose

During the year, the Company has continued
to embed across the business the purpose
and values as set out in the Strategic report
on pages 1 to 69 of this report.
The Board continues to monitor the
strategic direction of the Company and the
key investments we need to make to remain
in a leading position in an ever-changing
market, and ensures we have the resources
and the right people, in the right place
operationally, to ensure we remain relevant
to the markets in which we operate.
The Board and Company Leadership Team
(CLT) embed the Company’s values across
the business. In order to monitor whether
our culture is and remains aligned with our
values, the Company seeks feedback from
customers and potential customers on how
the values have been received. Additionally,
to understand what they experienced during
the sales process and through the various
stages of software implementations and
provision of services.
Governance framework
The Board is made up of a majority of
independent Directors whose diverse
experience enables appropriate debate
andchallenge at Board and Committee
discussions. The Board has an approved
governance framework of systems and
controls which enables the effective
discharge of the Board’s responsibilities.
Directors have a duty to promote the
success of the Company under section 172
of the Companies Act 2006. The Company’s
section 172 statement can be found on
pages 54 to 55 and this framework supports
our Directors’ compliance with their duties.
Board engagement
The Board recognises its responsibilities to
engage with and incorporate the views of
key stakeholders in strategic planning and
decision making, and the importance of
stakeholder trust in building resilience and
long-term sustainability. Although the Board
retains overall responsibility for stakeholder
engagement there is interaction at various
levels of the business so that it is carried out
by those most relevant to a particular
stakeholder group or particular issue.
Our section 172 statement and ‘How we
engage with our stakeholders’ section on
pages 54 to 57 sets out the main interests
ofkey stakeholders and the ways in which
Alfa engages with them.
The Board recognises the importance of
considering all stakeholders in its decision-
making, although the weight given to each
stakeholder group may vary depending on
the subject in question.
Through engagement and greater
understanding of the interests of
stakeholders, the Board is able to assess
thelong-term consequences of decisions on
stakeholders and the business. We continue
to work on embedding practices across
Alfaso that consideration of stakeholder
interests in decisions is second nature at
alllevels of the business.
Workforce engagement
The Board monitors and assesses engagement
with all stakeholders, withparticular attention
on workforce engagement.
Employee Pulse surveys provide regular
understanding of wider views and an
‘opendoor’ approach to feedback and
communication also allows for frequent
two-way conversation and insight.
The challenges presented by the COVID-19
pandemic remained throughout 2021, but
effort was made to maintain culture and
connections with online events as well as
in-person social elements to these events
wherever restrictions allowed.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 77

All Board meetings feature updates on
People matters and engagement levels.
The Chief People Officer presented at two
Board meetings in 2021, demonstrating the
increased importance placed on our people.
Attendance of Company meetings, social
and online Town Hall events (including Q&A)
with the Board as well as Company updates
and frequent co-ordinated internal
communications all support engagement
across the organisation.
Given the Board’s visibility of the
engagement channels and efforts, as well as
its accessibility to the workforce through the
initiatives and events as mentioned, it is
confident at this time that appropriate
measures are in place as an alternative to
Provision 5 of the 2018 UK Corporate
Governance Code.
The Company actively encourages the
involvement of employees in the Company’s
performance and the principal decision in
2021 with regard to employee interests was
to launch UK/USA all-employee share plans.
The Save As You Earn (SAYE) scheme known
as the ‘Sharesave’ plan in the UK and
Employee Stock Purchase Plan (ESPP) in the
USA were launched in November 2021
allowing employees to become greater
stakeholders in the business.
Engagement with shareholders
Alfa is committed to engaging with
shareholders and prospective investors to
inform and aid understanding of its strategy
and progress. The focus of all communications
is ensuring transparent, and detailed and
meaningful information.
The Chairman has overall responsibility for
ensuring that the Company has appropriate
channels of communication with its
shareholders and is supported in this by
theSenior Independent Director and the
Executive Directors.
Shareholders are consulted on a variety of
issues, as appropriate, such as the medium-
to long-term strategy of the Company,
current trading and market conditions and
Directors’ remuneration. The Board regularly
receives feedback from the Group’s brokers,
advisors and the Executive Directors on the
views of major shareholders and the investor
relations programme, and also receives
reports on significant changes to the
composition of the Group’s share register.
Due to the ongoing pandemic the usual
direct engagement mechanisms with
shareholders have been curtailed but the
Directors have continued communications
virtually through one-to-one meetings and
responding to specific shareholder queries
and provided digital presentations, including
for the half-year results announcement.
Given the restrictions on travel and large
gatherings, and the guidance available to us
at the time, we took the decision to hold the
2021 AGM behind closed doors again. As we
approach our 2022 AGM, we will continue to
monitor the situation, and will prioritise the
health and safety of the Board, our
colleagues and of course our shareholders.
Further details will be provided when our
Notice of AGM is published on 11 April 2022.
The Group’s investor relations microsite
www.investors.alfasystems.com is updated
throughout the year, providing the annual
and interim reports, presentations given to
analysts and investors, trading updates and
other regulatory announcements, and
up-to-date information on the Group’s
activities. Shareholders are able to contact
the Company through the Company
Secretary, at the Company’s registered
office, which is shown on the Directors’
report on page 122.
Shareholder agreement
The relationship between the Board and the
controlling shareholder of the Company (the
‘Controlling Shareholder’), CHP Software
and Consulting Limited, is governed by the
Relationship Agreement (which was
executed on 26 May 2017). This agreement
is a framework under which the Controlling
Shareholder, and the shareholders of the
Controlling Shareholder will operate to
protect the rights of the non-controlling
shareholders. There have been no changes
to the Relationship Agreement during 2021,
or up to the date of this report. Under the
Relationship Agreement, two Non-
Executive Directors can be appointed to the
Board for as long as the Controlling
Shareholder holds 20% or more of the
voting rights over the Company’s shares:
• One Non-Executive Director can be
appointed to the Board for so long as the
Controlling Shareholder holds 10% or
more but less than 20% of the voting
rights in respect of the Company’s shares;
and
• If none of the Controlling Shareholders
are members of the Nomination
Committee, the Controlling Shareholder
can appoint an observer to the
Nomination Committee.
Andrew Page is designated as the first
appointed Director of the Controlling
Shareholder. Andrew Denton has not been
appointed as a designated Director by the
Controlling Shareholder. It has been agreed
that for as long as the Controlling
Shareholder has the right to appoint two
Directors to the Board, and whilst Andrew
Denton is a Director of the Company, the
Controlling Shareholder will not exercise its
right to appoint a second Director to the
Board. There have been no Board observers
appointed either under the Relationship
Agreement, or otherwise.
For further details of the Relationship
Agreement, see page 124 of the
Directors’Report.
78 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
BOARDLEADERSHIPANDCOMPANYPURPOSECONTINUED

Workforce policies

Our people bring a diverse range of
experience, expertise and perspectives that
contribute to the values and culture of Alfa
and are essential for the delivery of our
strategic objectives. A positive environment
where our people feel valued, motivated and
able to thrive is essential to Alfa’s continued
success. The Board recognises the value of,
and supports, significant investment of time
and resources in our colleagues to allow Alfa
to attract and retain talent and develop the
skills of our employees.
One central policy in creating this
environment and culture is Alfa’s Ethics and
Code of Conduct (the ‘Code of Conduct’)
which clearly sets out a zero-tolerance
policy for dishonest and corrupt behaviour
among our employees and seeks to educate
team members on unlawful and unethical
conduct. Compliance with the policy
maintains Alfa’s reputation in the
marketplace as well as our relationship with
our colleagues, investors, customers and
other stakeholders.
The Code of Conduct provides clear
guidance to employees in respect of legal
and ethical issues which they may come
across while conducting Alfa business,
andwhat Alfa expects in respect of our
employees’ behaviour, and provides
important information on working at Alfa
tohelp embed the behaviours and values
alongside more practical information to
enable our employees to work effectively
and efficiently.
The Board is responsible for overseeing the
Company’s arrangements for the workforce
to be able to raise matters of concern and
seeks to foster an environment where
individuals can be confident about speaking
up about concerns without fear of retaliation.
The Board monitors this area through reports
on the number and types of concerns raised
through the whistleblowing process and the
outcomes of the concerns raised.
Employee engagement
The Board monitors and assesses engagement with all stakeholders, with particular
attention on employee engagement. Employee Pulse surveys provide regular
understanding of wider views and an ‘open door’ approach to feedback and
communication also allows for frequent two-way conversation and insight. The challenges
presented by the COVID-19 pandemic remained throughout 2021, but effort was made
to maintain culture and connections with online events as well as in-person social elements
to these events wherever restrictions allowed.
All Board meetings feature updates on People matters and engagement levels. The Chief
People Officer presented at two Board meetings in 2021, demonstrating the increased
importance placed on our people. Online Town Hall events with senior team members as
well as Company updates and frequent co-ordinated internal communications all support
engagement across the organisation.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 79
BOARDLEADERSHIPANDCOMPANYPURPOSECONTINUED

Throughout the year, regular town halls
andelectronic updates to all employees
from CEO Andrew Denton have proven
tobe a very successful engagement
mechanism. Andrew Denton and the CLT
update the workforce on all aspects of the
business and take direct questions in real
time from employees.
Alfa is focused on the importance of the
wellbeing of our workforce and this
remained heightened during the pandemic
with additional challenges for our remote
working employees. We continue to invest in
wellbeing. In addition to enhanced paid
carer leave allowance, access to physical,
mental and financial advice/assistance and
working from home contributions, we have
grown an internal network of trained Mental
Health First Aiders, available to employees
for judgement-free listening and support.
In 2021, we have delivered diversity training
across a number of key groups – Inclusive
Leadership, Inclusive Recruitment and
Unconscious Bias training. We continue
tosupport our communities to raise
awareness across the company on issues
around diversity and expanded our network
of external bodies and partners that we
work with and support. As a result of this
work, 47% of new grads were female and
47% from a diverse background.
Alfa is fully committed to maintaining
highstandards of ethical and professional
conduct for the Company and its
employees. We have a number of policies
ineffect which are designed to create an
environment and culture where:
• Employees’ health, safety, rights and
wellbeing are placed at the heart of
theway the Group does business;
• Employee diversity and inclusion
iscelebrated;
• Employees must act ethically, honestly
and stand up for what is right; and
• Communication across the business
should be open, honest and responsible.
To support the Code of Conduct and our
values, Alfa has a number of other workforce
policies and practices covering:
• Business expenses;
• Confidentiality;
• Health and safety;
• Diversity and inclusion;
• Harassment;
• Share dealing; and
• Whistleblowing.
We seek to embed our Code of Conduct
through continuing communications,
training and appropriate controls.
The Code of Conduct and all other
workforce policies and procedures can be
found and easily accessed by our employees
through our intranet site.
An Equality, Diversity and Inclusion Policy
was published in February 2022 which aims
for our colleagues to be truly representative
of all sections of society and our customers,
and for everyone to feel respected and able
to give their best.
Whistleblowing
We recognise that our people are our
strongest assets for detecting and avoiding
legal and ethical failure within our business.
Our whistleblowing policy and team
provides a safe environment to report
concerns regarding illegal, unethical or
improper behaviour.
The Group’s Whistleblowing Policy clearly
explains to employees how they can raise
concerns directly to the Group’s
Whistleblowing Officer.
All whistleblowing cases are formally
investigated by the Whistleblowing Officer
and reported regularly to the Audit & Risk
Committee and the Board, and the Board is
responsible for reviewing the effectiveness of
actions taken in response to concerns raised.
Where necessary, external specialist third
parties, or other members of staff, with
appropriate experience, may be appointed to
help investigate issues that have been raised.
Share dealing code
Alfa has revised and reissued a share dealing
code during the year. This applies to all
employees and Directors. It restricts
dealings by all employees during closed
periods, dealings by a particular sub-set of
employees outside of closed periods, and
provides additional restrictions on the
Company’s Directors, its other PDMRs and
certain persons deemed insiders.
In accordance with the Market Abuse
Regulation, the Directors and PDMRs have
confirmed to the Company they are
responsible for procuring the compliance of
their respective connected persons with the
Alfa share dealing code. The share dealing
code has been published on the Alfa
intranet and guidance and communication is
provided to all new starters and the Alfa
team on an ad hoc basis.
Suppliers and modern slavery
We do not support any form of slavery,
human trafficking or child labour and we only
work with suppliers that have been assessed
through our internal processes to be ethical
providers. We have an ethical procurement
policy and our key procurement personnel
have been trained in relation to the relevant
requirements and regulations.
80 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
BOARDLEADERSHIPANDCOMPANYPURPOSECONTINUED

Division of responsibilities
Alfa is led and controlled by the Board which is
collectively responsible for the long-term and
sustainable success of the Group. The structure
of the Board, and management, roles and
Committees ensures controls and oversight
with a balanced approach to risk aligned with
Alfa’s culture. The structure assists the Board
with carrying out its responsibilities and is
designed to ensure that the Board focuses on
strategy, monitoring the performance of the
Group and governance, risk and control issues.
Responsibility of the Board
The Board is collectively responsible for the
long-term success of the Group and for ensuring
leadership within a framework of effective
controls. The key roles of the Board are:
• Setting the strategic direction of the
Group;
• Overseeing implementation of the strategy
by ensuring that the Group is suitably
resourced to achieve its strategic aspirations;
• Providing entrepreneurial leadership within
aframework of prudent and effective
controls which enables risk to be assessed
and managed;
• Ensuring that the necessary financial
andhuman resources are in place for the
Group to meet its objectives; and
• Reviewing the Group’s culture supported
by its values.
Board and Committee

Board
Audit&Risk
Committee
Nomination
Committee
Remuneration
Committee
Andrew Page 6/6 2/2
Andrew Denton 6/6
Duncan Magrath 6/6
Matthew White 6/6
Steve Breach 6/6 4/4 2/2 4/4
Adrian Chamberlain 6/6 4/4 2/2 4/4
Charlotte de Metz 6/6 4/4 2/2 4/4
Chris Sullivan 6/6 4/4 2/2 4/4
How the Board operates
During the year, the Board considers a
comprehensive programme of regular matters
covering operational and financial performance
reporting, strategic reviews and updates, and
various governance reports and approvals.
Board meetings
The Board held six scheduled meetings in 2021
and two ad hoc meetings, for specific approvals
and discussions. If Directors are unable to
attend a meeting, they have the opportunity
beforehand to discuss any agenda items with
the Chairman.
During the year, the Board and its Committees
conducted most meetings in person but also
remotely through video calls when necessary,
enabling the Board to continue to function and
maintain the integrity of our governance
structure despite the ongoing pandemic.
Although not necessary in 2021, if in the event
that a Director is unable to attend a meeting
they would receive all the papers for the
meeting andbe updated on matters discussed
at thenext meeting. Non-Executives meet
without the Chairman at least annually to
appraise the Chairman’s performance and
Chairman also holds meetings with the
Non-Executive Directors without the
ExecutiveDirectors being present.
The table below records the number of
meetings held by the Board and each
Committee during 2021 and the number
ofmeetings attended by each member.
There was 100% attendance at each meeting.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 81
DIVISIONOFRESPONSIBILITIES

The following diagram shows the role of the Board and its Committees and Company Leadership Team:
Board of Directors
The Board is collectively responsible for the long-term success of the Company. The business of the Company is managed by the Board who may
exercise all of the powers of the Company. The Board has a formal Schedule of Matters Reserved for the Board which is available on the Company
website. Although the Board retains overall responsibility, it delegates certain matters to the Board Committees, and the detailed implementation
of matters approved by the Board and the day-to-day operational aspects of the business to the Company Leadership Team.
Audit & Risk Committee Nomination Committee Remuneration Committee
Reviews and reports to the Board on the
Group’s financial reporting, internal control
and risk management systems. Monitors the
independence and effectiveness of the
external auditor and the effectiveness of the
internal audit function.
Provides succession planning for the Board and
leads the process for all Board appointments.
Keeps under review the membership and
composition of the Board, including the
combination of skills, experience and diversity,
and ensures it remains appropriate.
Determines the remuneration, bonuses,
long-term incentive arrangements, contract
terms and other benefits in respect of the
Executive Directors, the Chairman, the
Company Secretary and senior management.
Oversees the remuneration and workforce
policies and takes these into account when
setting the policy for Directors’ remuneration.
Company Leadership Team
The Company Leadership Team is responsible for the day-to-day running of the business, carrying out and overseeing operational management,
and implementing the strategies the Board has set.
Executive Committees
These governance committees are chaired by an Executive Director and report to the Executive Group, and the Board or Board Committees
asappropriate.
Investment Committee Disclosure Committee Deal Committee
The Investment Committee determines the
Strategic Investment initiatives that should
be undertaken. The Committee provides a
structure through which effective decisions
can be made on the priority and scheduling
of Strategic Investment initiatives.
The Committee ensures that Strategic
Investment initiatives align with Alfa’s
business strategy.
The Disclosure Committee determines
whether information that is submitted to it
requires disclosure and determines any other
issue relating to the application of the
Disclosure Procedures that are required.
The Deal Committee determines standard
guidelines for an acceptable deal in terms of
financial position and key contractual terms.
The Board responsibilities
We have clear and documented roles and separation of duties between the Chairman and the CEO. The Alfa CEO, Andrew Denton, is responsible for
determining the Alfa strategy and day-to-day operations, and leading the CLT, which assists in the day-to-day delivery of this strategy and general
operations. Andrew Page, as Chairman, provides oversight and guidance to Andrew Denton on the strategic direction, key commercial and contracting
decisions in addition to his responsibilities for running an effective Board. All Directors have access to the advice of the Company Secretary.
82 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021

The division of responsibilities between our board members is set out below:
Role Principal responsibilities
ExecutiveChairman
Andrew Page
Manages and provides leadership totheBoard.
Acts as a direct liaison between the Boardand management, working with theCEO to assist the flowof information.
Ensures that the Directors have sufficient information to enable them to form appropriate judgements.
Develops and sets the agendas for Board meetings, working with the CEO and Company Secretary.
Recommends an annual schedule of Board and Committee meetings.
Ensures effective communications with shareholders and other stakeholders.
ChiefExecutive
Officer
Andrew Denton
Responsible for the day-to-day management of Alfa.
Responsible for defining the strategy and guiding theCLT on its strategy execution, once this has beenagreed by
theBoard.
Creates a framework that optimises resource allocation to deliver strategic objectives over varyingtimeframes.
Ensures the successful delivery against the strategic plan and other key business objectives, allocating decision making
and responsibilities accordingly.
Identifies and executes new business opportunities and assesses potential acquisitions and disposals.
Manages the Group with reference to its risk profile in the context of the Board’s risk appetite.
Responsible for Environmental, Social and Governance (ESG).
ChiefFinancial
Officer
Duncan Magrath
Overall management of the financial risks of the Group.
Responsible for financial planning and record-keeping, as well as financial reporting to the Board and shareholders.
Ensures effective financial compliance and control, while responding to regulatory developments, including financial
reporting, effective allocation of capital, management of liquid resources, investor relations and corporate responsibility.
Responsible for the reporting of ESG.
ChiefOperating
Officer
Matthew White
Responsible for day-to-day operationalactivities.
Responsible for software development.
Responsible for systems implementationdelivery.
Responsible for delivery of HR resourcingand planning.
Develops key business operational models, monitoring performance against KPIs and ensuring adequate staffing
recruitment to deliver development and systems implementation.
SeniorIndependent
Director
Chris Sullivan
An Independent Non-Executive Director.
Provides a sounding board for the Chairman and CEO.
Serves as an intermediary for the otherDirectors and shareholders whennecessary.
Is available to shareholders if they haveconcerns.
Non-Executive
Directors
Steve Breach
Adrian Chamberlain
Charlotte de Metz
Provide constructive challenge to the Executive Directors. Help develop proposals on strategy.
Scrutinise management’s performance in meeting agreed goals and objectives.
Monitor performance reports.
Satisfy themselves regarding the integrity of financial information, and that controls and risk management systems are
robust and defensible.
Determine appropriate levels of remuneration for Executive Directors.
Appoint and remove Executive Directors as required and review succession planning.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 83

Matters Reserved for the Board
The Board has a formal Schedule of Matters
specifically reserved for its decision making
and approval. The matters that the Board
considers suitable for delegation are
contained in the Terms of Reference of
eachBoard Committee.
There are certain key responsibilities that the
Board does not delegate and which are
reserved for its consideration. The full
Schedule of Matters Reserved for the Board
is available under the Corporate Governance
section on our website.

of interest
The Company is mindful of the time
commitment required from Non-Executive
Directors in order to effectively fulfil their
responsibilities on the Board, particularly
providing constructive challenge and holding
management to account and utilising their
diverse skills and experience to benefit the
Company and provide strategic guidance.
Board
Risk management
and internal
controls
Major capital
commitments
Approval of
Annual Report and
Accounts
Company’s
purpose, values,
vision and culture
Corporate
governance
including Board
and Committee
evaluation
Material
acquisitions
and disposals
Engagement with
key stakeholders
Business
strategy and
approval of
long-term
aims and
objectives
Group
financial
reporting
and results
announcements
Prior to their appointment, prospective
Directors are asked to provide details of any
other roles or significant obligations that may
affect the time available for them to commit
to the Company. The Chairman and the Board
are then kept informed by each Director of
any proposed external appointments or other
significant commitments as they arise.
These are monitored to ensure that each
Director has sufficient time to fulfil their
obligations and Chairman approval is required
prior to a Director taking on any additional
external appointment.
Each Director’s biographical details and
significant time commitments outside of the
Company are set out in the Board biographies
on pages 74 to 75.
Whenever a Director takes on additional
external responsibilities, the Director will
discuss the potential position with the
Chairman and confirm that, as far as they
areaware, there are no conflicts of interest.
Each Director is required to disclose conflicts
and potential conflicts to the Chairman and the
Company Secretary asand when they arise.
As part of the induction process, a newly
appointed Director is asked to disclose any
conflicts ofinterest to the Company. Thereafter,
each Director has an opportunity to disclose
conflicts at the beginning of each Board and
Committee meeting and as part of an annual
review. None of the Directors declared to the
Company any actual or potential conflicts of
interest between anyof their duties to the
Company and their private interests and/or
other duties.
The Companies Act 2006 provides that
Directors must avoid a situation where they
have, or can have, a direct or indirect interest
that conflicts, or possibly may conflict, with the
Company’s interests.
Boards of public companies may authorise
conflicts and potential conflicts, where
appropriate, if their company’s articles of
association permit.
84 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
DIVISIONOFRESPONSIBILITIESCONTINUED

Key activities of the Board in 2021
Focus area Key stakeholders Activities
Link to
strategic
priorities
Strategy and
operations
see pages 1to69
Customers
Employees
Partners
Investors
• Applying the Board’s strategic understanding of
principal risks to key challenges and opportunities.
• Monitoring the performance of theCompany
againstagreed strategic objectives, including key
financialtargets.
1 
3
 
6
Leadership,people
andculture
see pages 12to15
and25
Employees
Investors
• Receiving updates on employee views and
engagement levels.
• Maintaining and enhancing Alfa’s culture and values.
• Continuing to monitor senior executive talent
management anddevelopment plans to provide
succession for all key positions.
1 
3
6
Finance
see pages 36 to 43
Customers
Employees
Community and
Environment
Partners
Investors
• Reviewing and approving thebudget.
• Reviewing financial key performance indicators (KPIs).
• Approving full-year results, half-year results, trading
updates and the Annual Report.
• Approving a special dividend.
• Reviewing the key risks to Alfa and the controls in
place for mitigation.
• Considering and monitoring the Group’s risk appetite
and principal risks and uncertainties.
• Approving the viability and going concern statements.
• Developing and monitoring ESG reporting framework.
1 
3
 
6
Governance
see pages 70to127
Employees
Customers
Investors
• Monitoring and reviewing theCompany’s approach to
corporate governance, its keypractices and its
ongoing compliance with the 2018 Code.
• Reviewing the results fromtheexternal Board
effectivenessevaluation and setting actions.
• Approving updated Committees’ Terms of Reference.
• Receiving and considering feedback from
shareholderengagement.
• Reviewing and approving the modern
slaverystatement.
1

6
Our strategic priorities
Strengthen – Grow our dierentiation of
market leading People, Product and Delivery.
1
Simplify – Simplifying our product,
implementations and processes
toenablemore concurrent Alfa
Systemsimplementations.

Start – Improve our oering for smaller
autoand equipment nance providers as
aplatform for innovation and to increase
ourreach.
6
Sell – Focus on cloud-hosted, subscription
sales to our target markets.

Synergise – Develop our partner
ecosystem, to improve our sales
opportunities and to enable more
concurrent Alfa Systems implementations.

Scale – Increase our capacity for developing
and delivering Alfa Systems.
3
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 85

Appointments to the Board
The Nomination Committee leads the
processfor Board appointments and makes
recommendations to the Board and also
ensures that succession plans are in place
forthe Board and senior management.
The formal procedure for Board
appointments and succession planning is
detailed in the Nomination Committee
Report on pages 90 to 93.
Director re-election
Each Director is required under the Articles of
Association to retire at every Annual General
Meeting and submit themselves for re-election
by shareholders.
At the 2021 Annual General Meeting (AGM) of
the Company, all of the current Directors stood
for reappointment, and were duly elected with
majorities ranging from 99.15% to 100% of the
votes cast.
All the Directors will retire and seek re-election
at the 2022 AGM of the Company. This report
and in particular the Board biographies on
pages 74 to 75 sets forth the contribution of
each Director on the Board to the Company
and on this basis the Board, and specifically the
Chairman, believes each Director proposed for
re-election at the AGM should be reappointed.
The Board has based its recommendations for
re-election, in part, on its review of the results
from the Board evaluation process outlined
from this page, and the Chairman’s review of
individual evaluations, and whether a Director
has demonstrated substantial commitment to
the role (including time for Board and
Committee meetings noted in this report) and
other responsibilities, taking into account a
number of considerations including outside
commitments and any changes thereof during
the period.
Board composition
The composition of the Board and Board
Committees is continually assessed to ensure
an appropriate balance of skills and experience
is maintained. The Board takes into account
various considerations in assessing the
composition of the Board including length of
Director tenure, Board diversity, independence
and the combination of skills and experience of
the Directors.
Board evaluation
The Board recognises the benefit of a thorough
evaluation process to reflect on its strengths
and the challenges it faces, and to identify
opportunities to continuously improve its
effectiveness.
Our Board evaluation process was conducted
during the summer of 2021:
1. The Board agreed that an externally
facilitated Board effectiveness review
should be conducted in 2021.
2. Discussions were initiated with three
reputed external agencies shortlisted for
conducting the Board effectiveness
evaluation, and Derek Woodward and
Mark Peters of Board Effectiveness and
Governance Services (BE-GS) were
selected on the basis of their proposed
approach and Board experience. BE-GS
does not have any other connections with
the Company or with individual Directors.
3. The CFO and Company Secretary, having
liaised with the Chairman, discussed and
agreed the scope of the evaluation with
BE-GS.
4. BE-GS conducted individual private
interviews with each of the Directors,
some members of the Company
Leadership Team (CLT) and the
Company’s Brokers to gain insights as
tohow the Board sees itself and how it
isperceived by others. The interviews
with the Directors covered composition
and the diversity of the Board; the
breadth and depth of work programmes
for the Board and Committees; and
Boardroom culture. BE-GS also
conducted a thorough desk- top review
of Board and Committee agendas,
papers, and minutes.
5. BE-GS also conducted a separate
evaluation of the Chairman against the
measures identified by the Financial
Reporting Council (FRC). This included
interviews with each of the Directors and
a detailed review with the SID.
6. BE-GS prepared a report of its findings
from the review and identified
constructive forward-looking
recommendations to enhance the
effectiveness of the Board and
itsCommittees.
7. The BE-GS report was first shared with
the Chairman and the SID and was then
presented to, and discussed by, the
Board which agreed an action plan for
theyear ahead.
8. Progress against the Board’s action plan
will be monitored by the Chairman with
the support of the Company Secretary
and periodic reports will be shared with
the Board.
9. The Board evaluation to be conducted in
2022 will be conducted internally but will
reflect on the actions from the 2021
external review.
Recognising the positive

The Board has made huge progress since
itwas refreshed and strengthened in
2019/20, despite the challenges of the
pandemic restrictions.
The Board and Committees have established
a good rhythm of work, with the new Directors
bringing a diverse blend of solid experience
and skills.
The regular information flows to the Board
from the CEO, the CFO and the COO are high
quality, comprehensive and consistent and are
supplemented with quality communication
between the Chairman and the NEDs.
Meetings are well prepared and the cycle of
CLT updates and separate strategy sessions
are valued by the NEDs and provide an ongoing
opportunity for experienced-based debate.
There is mutual respect and trust amongst the
Board members, with the Executive Directors
welcoming the rigour and contributions made
by each of the NEDs. Each Director continued
to contribute positively and effectively both
within and outside of Board meetings.
86 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
COMPOSITION,SUCCESSIONANDEVALUATION

There is a positive culture amongst all the
Directors and the Board is visible to the wider
organisation and leads by example. There is
clarity in the communication cascade, which
supports understanding by staff of the strategy
and performance, and sets expectations.
Despite being a very new Board, it worked well
throughout the restrictions of the pandemic.
There is a high degree of confidence in the
Chairman and the Committee Chairs.
The review did not identify any concerns and
allrecommendations made in the BE-GS
report build upon a solid base of best
practice. Based on BE-GS extensive “in the
Boardroom” experience, all indicators
suggest that the Board and its Committees
are operating effectively.
On the Chairman’s evaluation against the FRC
measures, the conclusion reached was that he
was effective. The Directors and investors
agree that the Chairman is seen by all (including
himself) as being in a stewardship role, not
exercising any undue control, and allowing the
Board as a whole and the Executive to run
thebusiness.
A summary of the key assessment highlights contained in the BE-GS 2021 Board effectiveness review is set out below.
Key assessment highlights Commentary
Board composition and attributes
Unanimous view that this is a high-quality Board; the size, composition and Executive/NED
mix of the Board is optimum and comprises a solid and diverse range of skills, experience and
knowledge. The NEDs bring a tremendous range of experience. Good Chair skills on the
Board and Committees – high standard of technical ability.
Culture-Board and organisation
The Boardroom culture is exemplary – the Directors lead by example. There is a very open
and equal approach, with everyone sufficiently knowledgeable, experienced and confident to
challenge; and having the maturity to be challenged and learn.
The positive culture of the organisation shines through everything. There is clarity in the
communication cascade, which supports understanding by staff of the strategy and
performance, and sets expectations. The employee communication is two-way and
encourages open engagement on performance and major decisions. The regular Pulse survey
is one of many ways the Board keeps in touch with the culture as perceived by employees.
Stakeholder perceptions
CLT members see the Board as value-adding and welcome the challenge and support
provided by the external dimensions that the NEDs bring. Investors appreciate the solid
Executive team under the stewardship of the Executive Chairman.
Board meetings
The Directors felt there to be a good rhythm and cycle of Board meetings with well-
structured agendas and papers. There was a general feeling that the meetings were run
efficiently due to comprehensive papers, Chair briefings and good pre-meeting preparations.
Board information
Information flows to the Board, including a good range of metrics, are of high quality and
consistent. Stakeholder KPIs are good, but feedback and oversight of feedback mechanisms
could be improved.
People strategy
Progress has been made in the Board’s oversight of the Group’s people strategy and
succession. These are recognised as essential elements of the Board’s responsibility and
should be kept under regular review, along with diversity and the pipeline of talent below
Board and CLT level.
Individual Directors
Each Director spoke highly of their colleagues, confirming that they brought different
attributes to the Board’s deliberations.
Committees
The Committees perform well and, following a detailed review of their activities compared
with their duties within their terms of reference, cover most of what are required of them.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 87

Summary of outputs and Board agreed actions
The following table presents a high-level summary of the outputs from the 2021 Board effectiveness review and the actions agreed by the Board.
A summary of the key assessment highlights contained in the BE-GS 2021 Board effectiveness review is set out below.
Outputs from the 2021 Board Effectiveness review Board agreed actions
Increase the focus on below Board level people strategy, talent pipeline, diversity, succession,
and remuneration to keep pace with the execution of the strategy and organisational evolution.
Deeper dives into our people strategy will
feature on the 2022 Board agendas.
Continue with and increase the NEDs exposure to the CLT and the wider organisation to
exchange ideas and reinforce the Board’s presence, explain the matters reserved for decision
bythe Board and the value that it brings; such interaction will support the Board’s role in talent
management and succession planning.
Increased engagement as opportunities
tomeet up physically open up will
bescheduled.
The pairing between NEDs and senior managers to be further developed. More informal interaction between NEDs
and senior management to be arranged.
Oversight and reporting mechanisms for stakeholder feedback to the Board to be formalised. This will be addressed as part of a more
structured ESG reporting framework.
The Board and the Committees should develop a forward programme of work to ensure broad
coverage, support planning and to make effective use of precious Board/Committee time.
A forward programme of work to be
developed and agreed.
An annual review of the Committees’ activities gauged against their terms of reference to be
conducted to ensure they have fully discharged their responsibilities.
Board’s forward programme to reflect this
recommendation.
The cycle of CLT presentations at Board meetings and the separate programme of strategy
development meetings to be maintained.
Board’s forward programme to reflect this
recommendation.
Board papers (where appropriate) to build on the organisation’s culture by more clearly
referencing the stakeholder factors which had been taken into consideration.
Where a decision is being taken the papers
will reflect s172 factors.
The Group’s performance management system applies to management at all levels. The individual performance of the Executive Directors is
reviewed separately by the Remuneration Committee. Further details of the Executive Directors’ performance measures and objectives and
their achievement against them are disclosed in the Remuneration Report on pages 100 to 121. As a result of the Board Effectiveness review,
we do not believe there is a need to change the composition of the Board at this time.
BE-GS reviewed the accuracy of the content of this disclosure in relation to their work.
88 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
COMPOSITION,SUCCESSIONANDEVALUATIONCONTINUED

Board composition

As required by the Code, at least 50% of
theBoard, excluding the Chairman, are
Independent Non-Executive Directors.
As at 31 December 2021, the Board
comprised the Executive Chairman, three
Executive Directors and four Independent
Non-Executive Directors. The Board
considers that all the Non-Executive
Directors, on appointment,
areindependent.
It is the Board’s policy that appointments
tothe Board will always be based solely
onmerit without any discrimination relating
to age, gender or any other matter that has
no bearing on an individual’s ability to fulfil
the role of Director.
The Board is mindful of the aims of
theHampton-Alexander Review, an
independent review body which aims to
improve women’s representation at Board
level and in leadership roles. This principle
ofBoard diversity is strongly supported by
the Board, recognising that diversity of
thought, approach and experience is an
important consideration as part of the
selection criteria used to assess candidates
to achieve a balanced Board.
The Board is also mindful of the aims of the
Parker Review, an independent review body
dedicated to improving the ethnic and
cultural diversity of UK boards to better
reflect their employee base and the
communities they serve. The business
currently has no Director from an ethnic
minority background either on the Board
orthe Executive Committee.
The Board considers that each Director is able
to allocate sufficient time to the Company to
discharge their responsibilities effectively.
Diversity overview
Gender diversity Board
Board composition
Gender diversity
Companywide
Board tenure
Gender diversity
Senior manager
Average age of the Board
Male
70%
Female
30%
0-1 year 0%
1-2 years 38%
2-3 years 38%
3-4 years 0%
4-5 years 24%
Male
87%
Female
13%
40-49
38%
50-59
38%
60-69
24%
Executive Chair 13%
Executive 37%
Independent 50%
Male
83%
Female
17%
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 89
COMPOSITION,SUCCESSIONANDEVALUATIONCONTINUED

“ During 2021, the Committee continued to
focus on the depth and breadth of the Board,
the Company Leadership Team and senior
management succession as a key priority.”
Chris Sullivan
Chair of the Nomination
Committee
Attendance at meetings
Name
Meetings
attended
2021
ChrisSullivan(Chair) 2/2
Steve Breach 2/2
AdrianChamberlain 2/2
CharlottedeMetz 2/2
AndrewPage 2/2
Principal activities in 2021
• Considered the results of the 2020
Nomination Committee evaluation.
• Reviewed the structure, size and
composition of the Board and
itsCommittees.
• Considered wider elements of
succession planning for the Board and
the levels below, including how to
increase diversity.
• Evaluation of Directors (all of whom are
proposed for re-election at the AGM).
Areas of focus for 2022
• Monitor Board composition for
alignment of relevant skills, experience
and diversity to Company strategy.
• Oversight of the CLT’s development and
succession planning.
Dear shareholders,
I am pleased to introduce the Nomination
Committee (the ‘Committee’) Report for
2021 which summarises our key activities
during the year.
During 2021, the Committee continued to
focus on the depth and breadth of the Board,
the Company Leadership Team and senior
management succession as a key priority.
The Committee maintains a well-defined
specification for each appointment, with a
clear understanding of the values required to
help the effective functioning of the whole
Board. When considering the composition of
the Board, we keep under review the skills and
experience required to fulfil the Board’s
strategy, to make suitable recommendations
based on those key attributes.
The Nomination Committee monitored the
membership of all of the Board’s Committees
following the appointments in 2020 of Adrian
Chamberlain and Charlotte de Metz and
remain satisfied with their composition.
Succession planning
Succession planning for the Executive
Directors and Company Leadership Team
(CLT) remains a particular focus of the
Committee. In addition, the Committee has
continued to monitor the CLT and senior
management talent pool to ensure that
succession planning for business-critical
rolesis proactively reviewed.
The Board considered the implications of the
requirements relating to the development of a
diverse pipeline for succession for the Board
and the CLT contained within the 2018 Code.
Discussions were held about initiatives taken to
increase the diversity in the hiring process,
including drawing on NEDs experience in other
organisations of attracting diverse talent.
Chris Sullivan
Chair of the Nomination Committee
90 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
NOMINATIONCOMMITTEEREPORT

Role of the Committee
The Nomination Committee is responsible for
ensuring that the Board and its Committees
have the appropriate balance of skills,
knowledge and experience to effectively lead
the Company both now and in the future.
This is achieved through effective succession
planning, the identification and development
of internal talent and a clear understanding of
the competencies and capabilities required to
support the delivery of Alfa’s strategy.
The Committee undertakes comprehensive
reviews of the leadership needs of the
Company, from both Executives and Non-
Executives, to ensure the continued ability of
the organisation to compete effectively in the
marketplace, and keeps informed of the
strategic issues and commercial challenges
affecting the Company and the market in
which it operates.
The Committee regularly undertakes a review
of its Terms of Reference to ensure that it
reflects the actual role carried out by the
Committee and that it is operating effectively.
The Board reviewed and approved minor
revisions to the Terms of Reference in
December 2021.
Appointment of Directors
There is a formal, rigorous and transparent
procedure for the appointment of new
Directors under which the Committee is
responsible for leading this process and making
recommendations to the Board. The search
process for new Non-Executive Directors is to
appoint an external search firm to secure a
strong and diverse list of candidates. A shortlist
of candidates is shared with the Committee,
meetings are scheduled and then, once the
candidates have been identified, confirmation
is provided of the time commitment required
and disclosure of any other business interests.
If discussions relate to the appointment of a
Chairman then Chris Sullivan, as Senior
Independent Director, will lead the recruitment
process. When the Committee has found a
suitable candidate, the Chair of the Committee
makes a proposal to the whole Board, which
retains responsibility for all such appointments.
The Committee, on behalf of the Board,
regularly assesses the balance of Executive and
Non-Executive Directors, and the composition
of the Board in terms of skills, experience,
diversity and capacity.
Diversity
Alfa seeks to have a workforce which reflects
the world we and our customers live in, whilst
facilitating the delivery of our strategic goals.
The Board and the Committee believe that
diversity is a wider topic than simply gender
and, in order to achieve the Group’s future
growth aspirations, Alfa should remain
committed to building a pipeline of diverse
talent and regularly reviewing HR processes,
including recruitment and performance
management frameworks.
The Committee will take into account a variety
of factors before recommending any new
appointments to the Board, including relevant
skills to perform the role, experience,
knowledge and diversity. Alfa endeavours to
achieve appropriate diversity, including gender
diversity, throughout the Company.
The Committee embraces the importance
ofinclusion and diversity and supports the
recommendations of the Hampton-Alexander
Review on gender and the Parker Review on
ethnic diversity. However, we acknowledge that
currently our Board does not comply with the
recommendations and recognise that there is
always more we can do, and will continue to
work to build a more inclusive workplace at
alllevels of the Company. It is part of the
Committee’s remit when making new Board
appointments to consider the importance of
diversity on the Board, including gender and
ethnicity. This is considered in conjunction with
experience and qualifications in relation to the
balance of the Board and its Committees.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 91

Board succession
The Committee keeps under review the
leadership needs of the organisation, both the
Executive and Non-Executive Directors, with a
view to ensuring the continued ability of the
organisation to compete effectively in the
marketplace. In addition, the Committee
reviews the succession plans for the Company
Leadership Team and the senior management
structure, and employees identified by
management as having the potential to develop
in the longer term into future leaders of the
business, taking into account future challenges
and opportunities.
Independence
During 2021, the Committee reviewed the
balance of skills, experience and independence
of the Board. For Non-Executive Directors
independence in thought and judgement is vital
to facilitating constructive and challenging
debate in the boardroom and is essential to the
operational effectiveness of the Alfa Board and
its Committees.
The Committee is satisfied that the external
commitments of the Board’s Chairman and
members do not conflict with their duties as
Directors of the Company. After the year end,
the Committee also considered the Directors
proposed for re-election by shareholders at the
AGM. Following discussion of the skills and
contribution of each Director, and in
conjunction with the Board performance
evaluation, the Committee supports the
proposed re-election of all Directors standing
for re-election at the AGM in 2022.
Induction and ongoing
professional development
To ensure that each Director receives
appropriate support on joining the Board,
there is a comprehensive and tailored induction
programme, including the provision of
background material on the Company and
briefings with relevant CLT members. The
induction programme will continue to be
reviewed and updated on a regular basis.
For professional ongoing development, the
Board receives presentations relevant to the
Company’s business and updates on any
changes to markets, or regulations, which may
affect the Company’s operations.
The Company Secretary supplies all Directors
with information on relevant corporate
governance and best practice. As part of their
annual performance evaluation, Directors are
given the opportunity to discuss training and
development needs. The Committee is
confident that Board members have the
knowledge, ability and experience to perform
the functions required of a Director of a
listedcompany.
External directorships
The Board believes, in principle, in the benefit
of Executive Directors accepting non-executive
directorships of other companies in order to
widen their skills and knowledge for the benefit
of the Company. All such appointments require
the prior approval of the Board and the number
of public company appointments is limited to
one. There were no external appointments in
relation to the Executive Directors during 2021.
Conflicts of interest
The Board operates a policy to identify and,
where appropriate, manage any potential
conflicts of interest that Directors may have.
It is the role of the Committee to monitor and
determine actions to address any potential, or
actual, conflicts that may arise. The Committee
reviews all potential conflicts of interest on an
annual basis and when new Directors are
formally appointed. No conflicts of interest
were noted in the year and to the date of this
Annual Report.
Reappointment of Directors
The reappointment of Directors is subject to
their continuing commitment to Board
activities and satisfactory performance.
All Directors will stand for re-election annually
in accordance with the provision of the 2018
Code. The Committee has confirmed to the
Board that the contributions made by the
Directors offering themselves for re-election
atthe 2022 AGM continue to benefit the
Board and the members are invited to support
their re-election.
Non-Executive Directors are appointed initially
for three years and Non-Executive Directors
may, subject to Board approval, remain in office
for a period of up to six years, or two terms in
office, with discretion for the Board to extend
the term for one further three-year term, to a
maximum of nine years.
92 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
NOMINATIONCOMMITTEEREPORTCONTINUED

Annual evaluation
The performance of the Committee has
beenassessed as part of the external Board
evaluation conducted during summer/autumn
2021 by Board Effectiveness and Governance
Services (BE-GS). The results of the evaluation
of the Board and its Committees were
subsequently discussed in entirety and areas
identified to develop the effectiveness of the
Committee further. Information on the process
can be found on pages 86 to 88.
Focus for 2022
Board membership and succession will
continue to be high on the agenda moving into
2022. The Committee will continue to take an
active interest in the succession planning and
future leader identification processes for those
immediately below Board level sitting on the
CLT, as well as monitoring progress on diversity
to ensure that any succession plans incorporate
an appropriate balance of diversity, skills
andexperience.
Chris Sullivan
Chair, Nomination Committee
8 March 2022
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 93

“ Alfa’s financial control environment and
governance framework has seen progressive
enhancements during the year, in particular
around the timeliness and accuracy of reporting
and forecasts.”
Steve Breach
Chair of the Audit and
RiskCommittee
Attendance at meetings
Name
Meetings
attended
2021
SteveBreach(Chair) 4/4
AdrianChamberlain 4/4
CharlottedeMetz 4/4
ChrisSullivan 4/4
The Committee’s members are all Independent
Non-Executive Directors.
Principal activities in 2021
• Reviewed the 2020 year-end financial
statements and Annual Report.
• Reviewed the half-year financial results
and trading updates.
• Approved the Company’s risk
management framework, risk appetite
and risk register.
• Reviewed key findings from 2021
internal audits and approval of the 2022
internal audit plan.
• Review of Information and Cyber
Security governance and organisation.
• Tax compliance status review.
• Reviewed Internal & External
Auditeffectiveness.
• Considered key accounting matters.
Areas of focus for 2022
• Continued to monitor legislative and
regulatory changes that may impact the
work of the Committee.
• Considered the impact of proposed
audit industry changes.
• Continued with oversight of internal
audit activities and findings.
• Monitored the continued progressive
enhancements to Alfa’s systems and
internal controls.
Dear shareholders,
I am pleased to present our Audit and Risk
Committee Report for the year ended
31 December 2021. The Report explains the
work of the Committee during the year, as well
as setting out expected key areas of focus
for2022.
The Committee has an annual work plan linked
to the Company’s financial reporting cycle,
which ensures that it considers all matters
delegated to it by the Board.
We have continued to review and challenge the
assumptions and judgements made by
management in the preparation of published
financial information and to oversee the
internal control environment, including
oversight of the external and internal audit
processes. Throughout the year, the
Committee’s primary focus has been to
maintain the integrity and transparency of the
Company’s internal and external financial
reporting. We have continued to spend time
assessing the application of IFRS 15 ‘Revenue
from Contracts with Customers’, alongside
careful consideration of the Company’s risk
management framework, internal controls and
management information systems.
It has been pleasing to see that the Company
has continued to make progress during the year
improving the timeliness and accuracy of
reporting and forecasts. Importantly, these
improvements have continued during an
extended period of remote working which has
existed since the date of the last report.
Committee members’ skills and experience
areset out on pages 74 to 75 . The Board is
satisfied that the Committee meets the
requirement to have recent and relevant
financial experience and that, as a whole, its
members have experience of the auto and
equipment finance and enterprise software
sector and corporate governance.
This year the Board undertook an external
evaluation of the effectiveness of the Board
and Board Committees, including this
Committee, in accordance with the
requirements under the 2018 Code and you
can read more about this on pages 86 to 88.
As a result of its work during the year, the
Committee has concluded that it has acted in
accordance with its Terms of Reference.
Steve Breach
Chair of the Audit and
RiskCommittee
94 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
AUDITANDRISKCOMMITTEEREPORT

Key responsibilities

The Board has delegated to the Committee
responsibility for overseeing financial reporting,
the review and assessment of the effectiveness
of the internal control and risk management
systems and maintaining an appropriate
relationship with the external auditor.
The Committee has adopted Terms of
Reference, which are available to view at
investors.alfasystems.com. The Terms of
Reference provided the framework for the
Committee’s work in the year and key
responsibilities of the Committee are
summarised as follows:
• Overseeing the relationship with the
Company’s external auditor, monitoring
its effectiveness and independence and
making recommendations to the Board in
respect of its remuneration, appointment
and removal. The Committee also reviews
the findings from the external auditor,
including discussion of significant
accounting and audit judgements,
levelsof errors identified and overall
effectiveness of the audit process.
• Reviewing the financial statements of
theCompany, including its annual and
half-yearly reports and, if applicable, any
other formal announcements relating to
its financial performance. The Committee
will also consider significant financial
reporting issues, accounting policies and
key areas of judgement or estimation.
This review also includes consideration
ofthe clarity and completeness of
disclosures on the information presented
in the financial statements.
• Overseeing the accounting principles,
policies and practices adopted by
theCompany.
• Monitoring and reviewing internal audit
activities, reports and findings.
• Reviewing the effectiveness of the
Company’s system of internal financial
controls and internal control systems.
• Advising the Board on the Company’s risk
strategy, risk policies and current and
emerging risk exposures, including the
oversight of the overall risk management
framework and systems.
• Assessing the adequacy and security
ofthe Company’s arrangements for its
employees and contractors to raise
concerns, in confidence, about possible
wrongdoing in financial reporting or other
matters and to ensure proportionate and
independent investigation of such matters.
• Making recommendations to the Board
asit deems appropriate on any area within
its remit where action or improvement
isrequired.
Meetings
During the year, the Committee met four times
and met privately with the external auditor
once. The Committee operates to a forward
agenda linked to the financial calendar which
ensures that the responsibilities and duties of
the Committee are discharged in accordance
with the Terms of Reference and the
requirements of the UK Corporate
Governance Code.
In addition to the Committee members, by
invitation, the meetings of the Committee may
be attended by the CFO. The Chairman of the
Board, CEO and COO may also attend
meetings. The Company’s external auditor and
the internal audit services provider are also
present at all Committee meetings, to ensure
full communication of matters as they relate to
their respective responsibilities. At the end of
each Committee meeting, Committee
members have the opportunity to meet with
the external auditor (and, where appropriate,
the internal auditor) for a private discussion
regarding the audit process and relationship
with management.
The Chair of the Committee holds regular
meetings with the external auditor, which has
an opportunity to discuss matters with the
Committee without management being
present and also with the CFO (who has
responsibility and custody of the internal
auditfunction).
Meetings of the Committee are scheduled
close to the end of the half and full year, as well
as before the publication of the associated
half-year and full-year financial reports, so as to
ensure the Committee is informed fully, on a
timely basis, on areas of significant risks and
judgement. The Board has confirmed that it is
satisfied that Committee members possess an
appropriate level of independence and depth
of financial and commercial expertise. For the
year ended 31 December 2021, Steve Breach,
the Chair of the Committee, was determined
by the Board as having recent and relevant
financial experience.
The Committee is satisfied that it receives
sufficient information and has access to
relevant and timely management personnel to
allow the Committee members to engage in an
informed debate during Committee meetings
and to fulfil its responsibilities.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 95

Significant financial

As part of its monitoring of the
integrity of the financial
statements, the Committee
reviews whether suitable
accounting policies have been
adopted and whether
management has made
appropriate estimates and
judgements and seeks support
from the external auditor to
assess them. The Committee
considered the following
significant judgements and
other areas of audit focus in
respect of the financial
statements for the six months
ended 30 June 2021 and year
ended 31 December 2021.
These areas have been
identified as being significant
by virtue of their materiality or
being accounting items which
are new for the current
financial year or the level of
judgement and/or estimation
involved. In order to ensure the
approaches taken were
appropriate, the Committee
considered reports from both
management and the external
auditor. The Committee
challenged judgements and
sought clarification where
necessary. The Committee
received a report from the
external auditor on the work it
had performed to arrive at its
conclusions and discussed in
detail all material findings
contained within the report.
Area of focus Assessment Review of the Committee Conclusion/Action taken
Revenuerecognition The Group’s operations include complex software implementation
programmes and service activities.
The delivery of these contracts typically extends over more than one
reporting period, and often the original project plans are amended as the
implementation programme progresses. In addition, from time to time,
the Company isentitled to one-off licence income uplifts or changes to
maintenance income entitlements. Contract modifications also occur
from time to time.
In recognising revenue, management must apply a number of
judgements to allocate the overall transaction price across the multiple
performance obligations that have been identified within these projects.
Estimates are applied in this assessment for example when assessing the
stand alone selling price.
In advance of the half year and full year the Committee received reports
from management that outlined the key judgements that were likely to
be required to be included in the results. These reports were reviewed
and the key points within them, including key sources of estimation
uncertainty, were discussed, with the external auditor commenting
where relevant.
As part of the process of approving the issuing of the half-year and
full-year results these reports were updated and issued by management
to the Committee with management’s final positions documented.
These were considered carefully by the Committee in conjunction with
input from the external auditor.
The Committee agreed with the revenue judgements adopted by
management in preparing the results.
Developmentcosts The Group continues to invest in the development of the Alfa Systems
product. The majority of development effort isundertaken in
partnership with customers and therefore isspecific to that
implementation or customer’s process.
Judgement is required to assess whether any development is
substantially new in either design or functionality, and whether it would
be commercially viable in the open market.Therefore, management
assesses the likelihood ofcapitalisation of such costs prior to initiation of
the investment project and also performs bi-annual assessments of the
development work that has been undertaken to determine if it meets the
criteria set out inIAS 38 for capitalisation.
The Committee reviewed reports from management detailing the costs
that had been identified as appropriate for capitalisation.
The Committee noted that the amounts being capitalised remained
relatively modest compared with the total expenditure on the product
during the period. The Committee concurred with management’s
approach on the amounts to be capitalised.
Goodwill and carrying value
ofinvestments
The Group has goodwill on its balance sheet and the Company holds
investment in subsidiaries. These need to be reviewed annually to
ensure that the recoverable amount exceeds the book value , and in the
case of investment in subsidiaries also to see if a previous impairment
should be reversed.
The Committee reviewed and challenged management’s
impairmentassessment.
The Committee agreed that no impairment was required in the current
year for both goodwill and the carrying value of the investment in
subsidiaries. In light of the investment’s good performance in the year,
the Committee agreed that the impairment recognised in 2018 should
be reversed in the company only financial statements of Alfa Financial
Software Holdings PLC.
Going concern and
viabilitystatement
The Directors must satisfy themselves regarding the Group’s long-
term viability and confirm that they have areasonable expectation
that the Group will continue tooperate and meet its liabilities as they
fall due for the foreseeable future.
The Committee reviewed management’s budget and forecasts, including
an overview of the assumptions made in the preparation of the base case
supporting the going concern and viability statement. This included the
Group’s 2022 budget and also plans for 2023 and 2024.
The Committee discussed and challenged the budget and forecasts
before agreeing with the reasonableness of the three-year period.
The Committee assessed this in light of the principal risks and
uncertainties, including the impact of COVID-19, as disclosed on pages
46 to 51 in the Strategic report.
The Committee discussed and challenged the downside scenarios
modelled as part ofthe Viability statement as disclosed on pages 52 to
53 in the Strategic report, the funding headroom available, the feasibility
of mitigating actions, the dividend policy and share-buy back
programme, and the speed of implementation of any cost-saving
measures following future management decision-making.
The Committee noted the 2018 Code requirement for the Directors to
state whether they consider it appropriate to adopt the going concern
basis of accounting for aperiod of at least 12 months from the date of
approval of the 2021 financial statements.
Following this evaluation and analysis, the Committee was satisfied
withthe judgements made and that the continued use of the going
concern basis was appropriate, and the viability statement was
prepared appropriately.
96 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
AUDITANDRISKCOMMITTEEREPORTCONTINUED

Area of focus Assessment Review of the Committee Conclusion/Action taken
Revenuerecognition The Group’s operations include complex software implementation
programmes and service activities.
The delivery of these contracts typically extends over more than one
reporting period, and often the original project plans are amended as the
implementation programme progresses. In addition, from time to time,
the Company isentitled to one-off licence income uplifts or changes to
maintenance income entitlements. Contract modifications also occur
from time to time.
In recognising revenue, management must apply a number of
judgements to allocate the overall transaction price across the multiple
performance obligations that have been identified within these projects.
Estimates are applied in this assessment for example when assessing the
stand alone selling price.
In advance of the half year and full year the Committee received reports
from management that outlined the key judgements that were likely to
be required to be included in the results. These reports were reviewed
and the key points within them, including key sources of estimation
uncertainty, were discussed, with the external auditor commenting
where relevant.
As part of the process of approving the issuing of the half-year and
full-year results these reports were updated and issued by management
to the Committee with management’s final positions documented.
These were considered carefully by the Committee in conjunction with
input from the external auditor.
The Committee agreed with the revenue judgements adopted by
management in preparing the results.
Developmentcosts The Group continues to invest in the development of the Alfa Systems
product. The majority of development effort isundertaken in
partnership with customers and therefore isspecific to that
implementation or customer’s process.
Judgement is required to assess whether any development is
substantially new in either design or functionality, and whether it would
be commercially viable in the open market.Therefore, management
assesses the likelihood ofcapitalisation of such costs prior to initiation of
the investment project and also performs bi-annual assessments of the
development work that has been undertaken to determine if it meets the
criteria set out inIAS 38 for capitalisation.
The Committee reviewed reports from management detailing the costs
that had been identified as appropriate for capitalisation.
The Committee noted that the amounts being capitalised remained
relatively modest compared with the total expenditure on the product
during the period. The Committee concurred with management’s
approach on the amounts to be capitalised.
Goodwill and carrying value
ofinvestments
The Group has goodwill on its balance sheet and the Company holds
investment in subsidiaries. These need to be reviewed annually to
ensure that the recoverable amount exceeds the book value , and in the
case of investment in subsidiaries also to see if a previous impairment
should be reversed.
The Committee reviewed and challenged management’s
impairmentassessment.
The Committee agreed that no impairment was required in the current
year for both goodwill and the carrying value of the investment in
subsidiaries. In light of the investment’s good performance in the year,
the Committee agreed that the impairment recognised in 2018 should
be reversed in the company only financial statements of Alfa Financial
Software Holdings PLC.
Going concern and
viabilitystatement
The Directors must satisfy themselves regarding the Group’s long-
term viability and confirm that they have areasonable expectation
that the Group will continue tooperate and meet its liabilities as they
fall due for the foreseeable future.
The Committee reviewed management’s budget and forecasts, including
an overview of the assumptions made in the preparation of the base case
supporting the going concern and viability statement. This included the
Group’s 2022 budget and also plans for 2023 and 2024.
The Committee discussed and challenged the budget and forecasts
before agreeing with the reasonableness of the three-year period.
The Committee assessed this in light of the principal risks and
uncertainties, including the impact of COVID-19, as disclosed on pages
46 to 51 in the Strategic report.
The Committee discussed and challenged the downside scenarios
modelled as part ofthe Viability statement as disclosed on pages 52 to
53 in the Strategic report, the funding headroom available, the feasibility
of mitigating actions, the dividend policy and share-buy back
programme, and the speed of implementation of any cost-saving
measures following future management decision-making.
The Committee noted the 2018 Code requirement for the Directors to
state whether they consider it appropriate to adopt the going concern
basis of accounting for aperiod of at least 12 months from the date of
approval of the 2021 financial statements.
Following this evaluation and analysis, the Committee was satisfied
withthe judgements made and that the continued use of the going
concern basis was appropriate, and the viability statement was
prepared appropriately.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 97

Fair, balanced and
understandable
The Committee has undertaken a careful
review to ensure that the Annual Report is
‘fair, balanced and understandable’ and
provides the necessary information for
shareholders to assess the Company’s
consolidated position, performance,
business model and strategy, in line with
therequirements of the 2018 Code.
The Committee members were consulted
atvarious stages during the drafting process
and provided input at the planning stage, as
well as having the opportunity to review the
Annual Report as a whole and discuss, prior
to the March 2022 Committee meeting, any
areas requiring additional clarity or better
balance in the messaging. In forming its
opinion and recommendation to the Board
in respect of the above matters, the
Committee assessed the following:
• A qualitative review of disclosures and
areview of internal consistency throughout
the Annual Report and Accounts;
• A review by the Committee of all material
matters, as reported elsewhere in this
Annual Report and Accounts;
• A risk-comparison review, which assesses
the consistency of the presentation
ofrisks, and significant judgements
throughout the main areas of risk
disclosure in this Annual Report
andAccounts;
• A review of the balance of good and bad
news; and
• Ensuring it correctly reflects:
• the Company’s position and
performance as described on pages 137
to 172;
• the Company’s business model, as
described on pages 18 to 19; and
• the Company’s strategy, as described
on pages 22 to 35.
On the basis of this work, together with the
views expressed by the external auditor, the
Committee recommended, and in turn the
Board confirmed, that it could make the
required statement that the Annual Report
is ‘fair, balanced and understandable’.
Risk management
The Board has overall responsibility for
determining the nature and extent of its
principal and emerging risks and the extent
ofAlfa’s risk appetite, and for monitoring
andreviewing the effectiveness of the
Company’s systems of risk management and
internal control. Further details of the risk
management objectives and process are
onpages 44 to 45. The principal risks and
uncertainties facing the Company are
addressed in the Strategic report in the table
on pages 46 to 51. The Board has delegated
tothe Committee the responsibility for
monitoring the effectiveness of the systems
ofrisk management.
Internal control
The Board determines the objectives and
broad policies of the Company and meets
regularly, when a set schedule of matters which
are required to be brought to it for decision is
discussed. Overall management ofthe
Company’s risk appetite, its tolerance to risk
and discussion of key aspects of execution of
the Company’s strategy remain the
responsibility of the Board. The Board has
delegated to the Audit and Risk Committee
the responsibility for overseeing the system
ofinternal controls to ensure these are
appropriate to the business environments
inwhich the Company operates.
Key elements of this system include
thefollowing:
• A clearly defined organisation structure for
monitoring the conduct and operations of
the business.
• Clear delegation of authority throughout the
Company, starting with the matters reserved
for the Board.
• A formal process for ensuring that key risks
affecting operations across the Company are
identified and assessed on aregular basis,
together with the controls in place to mitigate
those risks. Risk consideration is embedded in
decision-making processes at all levels and the
most significant risks are periodically reviewed
by the Board. The risk process is reviewed by
the Audit and Risk Committee.
• The preparation and review of the
annualbudget.
• The monthly reporting of actual results
and their review against the budget,
forecasts and the previous year, with
explanations obtained for all
significantvariances.
• Controls in respect of financial reporting
and the production of the consolidated
financial statements are well established.
Group accounting policies are consistently
applied and review and reconciliation
controls operate effectively.
• The Finance Manual which outlines key
control procedures and policies to apply
throughout the Company. This includes
clearly defined policies and escalating
authorisation levels for all procurement
activity including capital expenditure
andinvestment.
During 2021 the Board, through the
Committee, has continued to monitor the
company’s risk management and internal
control and it has also reviewed their
effectiveness. Throughout 2021 Alfa’s financial,
operational and compliance controls continued
to operate as intended.
Internal audit
The Audit and Risk Committee supports the
Board in fulfilling its responsibilities to review
the activities, resources, organisational
structure and operational effectiveness of the
internal audit activities. Following discussion
with the Committee Chair and the CFO, BDO
LLP presents its internal audit plan for approval
to the Committee before the start of each new
financial year and will provide an update and
further plans at the mid-year stage.
The Committee monitored and reviewed the
scope, extent and effectiveness of the internal
audit plan in line with the Company’s key risks
and strategy. Internal audit is a standing agenda
item at each Committee meeting and BDO
LLP presents an update on audit activities, the
progress of the audit plans and the outcomes
of all audits with action plans to address any
issues. Activities of internal audit during 2021
included the following areas of focus:
• Post implementation review for US financials
system change
• IT Procurement review
• Payroll review
• ESG review
• Follow up on prior recommendations.
98 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
AUDITANDRISKCOMMITTEEREPORTCONTINUED

The Committee performed an effectiveness
review of internal audit during the year.
As partof this review referenced above, and
considering management’s opinion, the
Committee was satisfied that the internal audit
function remains effective and fit for purpose.
External Audit
The Committee oversees the Company’s
relationship with, and the performance
of,the external auditor. This includes
responsibility for monitoring its
independence, objectivity and compliance
with ethical and regulatory requirements.
The Committee is the primary contact with
the external auditor. The Committee also has
responsibility for approving the nature of
non-audit services which the external auditor
may or may not be allowed to provide to the
Company and the fees paid for these services
(subject to de minimis levels).
Independence and performance
of the external auditor
The Committee is responsible for reviewing
theindependence of the Company’s external
auditor, RSM, agreeing the terms of
engagement and the scope of its audit.
RSM has a policy of partner rotation,
whichcomplies with regulatory standards,
and RSM operates a peer review process
forits engagements, to ensure that its
independence is maintained. The Committee
reviewed a report from the external auditor
describing its arrangements to identify,
report and manage any conflicts of interest.
Maintaining an independent relationship with
the Company’s external auditor is acritical
part of assessing the effectiveness of the
audit process. The Board has approved a
policy which is intended to maintain the
independence and objectivity of the external
auditor. The policy, which was updated in the
year, governs the provision of audit, audit-
related services and non-audit services
provided by the auditor. Committee approval
is required for any service with an expected
cost in excess of £10,000. During 2021, the
external auditor confirmed to the Committee
that it did not provide any non-audit or
additional services other than for the
half-year review that could lead to its
objectivity and independence being
compromised on behalf of the Company.
Details of audit, audit-related fees and
non-audit fees are included in note 9 to
theconsolidated financial statements.
The Committee notes that audit partner
rotation every five years facilitates
independence and objectivity within the
external audit team. The current External
Audit Engagement Partner is Graham
Ricketts, who was appointed to lead the
audit in July 2020. The Committee is satisfied
with the performance and effectiveness of
RSM as external auditor, taking into account
the Committee’s own assessment and
feedback. The Committee has concluded
that RSM displays the necessary attributes
ofindependence andobjectivity.
Assessment of the audit
process
The scope of the external audit is formally
documented by the auditor. It discusses the
draft plan with management before it is
referred to the Committee, which reviews its
suitability and holds further discussions with
management and the auditor before final
approval. The Committee has reviewed the
quality of the audit plan and related reports for
the 2021 audit and is satisfied with the quality
of these documents.
The Committee discussed the quality of the
half-year review and audit work since RSM’s
appointment and considered the performance
of the external auditor, taking into account
feedback from various stakeholders across the
business and the Committee’s own assessment.
The evaluation focused on: robustness of the
audit process; quality of delivery; reporting;
and people and services. The Committee
reviewed the independence of the external
auditor and concluded that it complies with UK
regulatory and professional requirements and
that its objectivity is not compromised.
The Committee does not intend to put
theexternal audit out to tender in the coming
financial year as the appointment
ofRSMoccurred in 2020 and therefore
theCompany has complied with the
Competitions and Markets Authority
requirement in relation to audit tenders every
10 years. The Committee will continue to keep
this under review as part of itsreview of
effectiveness of the externalauditor.
Going concern and

The Committee reviewed the updated
wording of the Company’s longer-term
viability statement, set out on pages 52
to53. To do this, the Committee ensured
that the financial model used was consistent
with the approved three-year plan and that
scenario and sensitivity testing aligned
clearly with the principal risks of the
Company. Committee members challenged
the underlying assumptions used and
reviewed the results of the detailed work
performed. The Committee was satisfied
that the analysis supporting the viability
statement had been prepared on an
appropriate basis. The Committee also
reviewed the going concern statement,
setout on page 126 and confirmed its
satisfaction with the testing methodology.
Assessment of the
effectiveness of the
Committee
The Committee’s effectiveness in respect
of2021 was evaluated as part of the
external review described on pages 86 to 88.
The key issues that were identified in the
Committee evaluation were discussed by
the Committee to ensure these were
adequately addressed and the Chair
provided an update where appropriate.
Focus for 2022
In 2022, as well as the regular cycle of
matters that the Committee schedules for
consideration each year, the Committee
willcontinue to monitor legislation and
regulatory changes, including those that
affect the audit market that may impact the
work of the Committee. The Committee will
also continue with oversight of internal audit
activities and findings as well as monitoring
the continued progressive enhancements to
Alfa’s systems and internal controls.
Steve Breach
Chair, Audit and Risk Committee
8 March 2022
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 99

“We want to ensure the overall remuneration
structure remains fit for purpose in light of
evolving circumstances, but also aligned with
theinterests of other stakeholder groups, notably
ouremployees.”
Adrian Chamberlain
Chair of the Remuneration
Committee
Attendance at meetings
Name
Meetings
attended
2021
AdrianChamberlain(Chair) 4/4
ChrisSullivan 4/4
Steve Breach 4/4
CharlottedeMetz 4/4
The Committee’s members are all Independent
Non-Executive Directors.
Principal activities in 2021
• Working with COO and CPO on developing
a new structure for Executive Director and
Leadership personal objectives.
• Setting the annual bonus targets for the
Executive Directors for the financial year
2021 and measuring performance against
them (following the year end).
• Approving LTIP awards to employees, and
the targets attached to these.
• Reviewing and recommending for
approval the revised Terms of Reference
of the Committee.
• Launch of all-employee share plans in
the UK (SAYE) and USA (ESPP).
Areas of focus for 2022
• Approval of bonus performance measures
and targets for 2022.
• Approval of performance conditions and
awards under the Company’s LTIP for 2022.
• Review of any issues raised by shareholders
in relation to remuneration and the
Remuneration Policy.
• Assessment of the ongoing
appropriateness of the remuneration
arrangements in light of remuneration
trends and market best practice.
Dear shareholders,
I am pleased to present our Directors’
Remuneration Report for the year ended
31 December 2021. I would like to thank
Chris Sullivan, Steve Breach and Charlotte
de Metz for their contribution to the
Committee’s work during 2021.
During 2021 COVID-19 continued to have
an impact on the operating environment.
The Remuneration Committee took a
decision to ignore its potential effects in
2020 when setting short and long-term
targets; reflecting our belief in the business’s
robustness and prospects.
In 2021 we continued to believe this approach
was appropriate. The 2021 bonus and 2021
LTIP targets were set against this background.
During the course of 2021 the Committee
decided not to scale back rewards or adjust
targets as a result of the pandemic.
Like many Remuneration Committees we
relied on internal and external guidance in
light of the effects the pandemic had in every
area of our lives. As is our duty to all Alfa
stakeholders, we want to ensure that the
overall remuneration structure remains fit for
purpose in light of evolving circumstances,
but also aligned with the interests of other
key stakeholder groups, notably our
employees. This included the launch of new
all-employee share plans in the UK (SAYE)
and USA (ESPP), designed to encourage and
widen employee share ownership.
The Committee has spent time ensuring
that our approach to remuneration
continues to remain in line with market
changes and corporate governance
developments. The Committee continued
to carry out its usual role in ensuring
remuneration outcomes and decisions are
appropriate in the wider business context.
100 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
DIRECTORS’REMUNERATIONREPORT

Company performance in 2021
The Company saw a strong financial and
operational performance in 2021.
Revenues were up 5% on the prior year at
£83.2m (2020: £78.9m) and operating
profitincreased by £0.8m to £24.7m
(2020: £23.9m). At constant currency
revenue grew 9% with operating profit up
10%. For a comprehensive overview, I would
direct readers to the Strategic report on
pages 1 to69.
During 2021 the Company did not furlough any
employees or access any Government support.
We also redirected time and resources to
develop a programme of wellbeing resources,
activities and events to support our employees
through a difficult period.
In November 2021, following Board
approval, we were once again delighted
toannounce the declaration of a special
dividend. This returned £29.7m to
shareholders and was positively received.
Performance outturns for 2021
The Committee approved the 2021 bonus
outcomes for the Executive Directors,
reflecting the company’s strong operational
and financial performance. Operating profit
and revenue performance both significantly
exceeded the ranges set, and the free cash
flow modifier was achieved, warranting 100%
pay-out of the bonus’s financial elements.
The Committee also assessed the
performance of each of the Executive
Directors against their personal objectives,
It concluded that pay-outs of between
target and maximum were warranted for
theCFO and COO.
The CFO was awarded 70% of maximum,
the COO 73% of maximum. More
information on how the annual bonus
for2021 was determined is provided
onpage 113.
The Executive Chairman and the CEO have
separately advised the Committee that, due
to their significant shareholding in the
Company, they wish to waive their eligibility
for a bonus in respect of the performance
year 2021 and for any Long Term Incentive
Plan (LTIP) award for the performance
period beginning January 2022.
Shareholders will be aware that the
Executive Chairman and CEO also waived
any entitlement for all performance years
since the IPO in 2017. The Committee
places on record its thanks to the Executive
Chairman and the CEO for waiving their
bonus and LTIP entitlements, which helps
the Committee broaden share ownership
toselected Company employees.
More broadly, the Committee is satisfied
with Alfa’s response to the COVID-19
pandemic and the impact this had on the
experience of all key Alfa stakeholders
during the year – including shareholders,
employees and customers. The Committee
has therefore not exercised any discretion in
relation to the outcome of the variable pay
schemes, or to overall remuneration levels.
The second LTIP awards for Executive
Directors and members of the Company
Leadership Team were awarded in April
2021 and the performance against the
targets for both relative total shareholder
return (TSR) and earnings per share (EPS)
growth over the three years to December
2023 will be reviewed regularly.
2021 Policy and
implementation
As required by the reporting regulations,
theRemuneration Policy was submitted to
abinding vote at the 2021 AGM, this being
the third anniversary of its adoption.
During 2021, the Committee debated
theexisting remuneration arrangements.
On balance we decided that the current
approach remained well suited to Alfa’s
strategic intentions. The Policy that was put
to shareholders at the 2021 AGM remained
largely unchanged.
Further details on our Remuneration Policy
are described on pages 103 to 111.
At the end of 2021, the Chairman and CEO
requested that the Committee approve
their proposal to reduce their salaries, bonus
and shares to the legal minimum level.
Both the Chairman and CEO are significant
shareholders in the Company and expressed
a desire to align their future remuneration
with those of the other shareholders.
The Committee members were supportive
of the proposal and approved it effective
1December 2021.
Therefore, for the upcoming year, salaries
for the Chairman and CEO will reflect the
National Living Wage. Salaries for the CFO
and COO will remain unchanged.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 101

The opportunities available under the
annual bonus will be 0% of salary for the
CEO and remain at 125% of salary for the
CFO and 100% of salary for the COO.
The Committee has taken the opportunity
to review the performance measures for the
2022 annual bonus and is of the view that
our existing measures of revenue, operating
profit and personal objectives, with cash as a
modifier, continue to be appropriate for
2022. Further information is provided on
pages 120 and 121.
We understand from our engagement with
shareholders that quantifiable non-financial
objectives are of real importance and, as
such, the Committee will continue to strive
to meet these expectations. As in previous
years, precise financial and non-financial
targets are commercially sensitive and will
be disclosed at the end of the performance
year, per our current practice.
The opportunities available under the LTIP
have been set at 150% for the CFO and
100% of salary for the COO. Over the year
the Committee gave careful thought to the
measures in the LTIP. We believe that, for
now, EPS and TSR continue to provide the
most appropriate means of testing long-
term performance and therefore no changes
have been made for the 2022 awards,
though we will continue to review the
suitability of the measures prior to making
new awards, as we do currently.
UK Corporate

To ensure the Committee continues to
bemindful of wider workforce conditions,
we have worked to improve the flow of
feedback and workforce information which
is provided to the Committee and the Board
on a regular basis.
Committee evaluation
The Committee’s performance was
evaluated externally by Board Effectiveness
and Governance Services (BE-GS).
Further information on the process
issummarised on pages 86 to 88.
The evaluation concluded that the
Committee was operating effectively.
All Committee members were found to
robustly challenge data, proposals, and
remuneration and variable incentives. It was
agreed that, given the evolving regulatory
framework, there would be additional focus
on training for the Committee in 2022.
Adrian Chamberlain
Chair of the Remuneration
Committee
102 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
DIRECTORS’REMUNERATIONREPORTCONTINUED

Post
employment Y1
Post
employment Y2
Y1 Y2 Y3 Y4 Y5 Policy change



CEO salary waived from 1
December 2021 (Minimum
statutory salary only)

Unchanged


Unchanged
LTIP

Unchanged


Unchanged



Unchanged



Unchanged
Directors’ Remuneration Policy and implementation for 2021
CEO
CFO
COO
£310
£288
£230
CEO
CFO
COO
Waived
6%
6%
CEO
CFO
COO
Waived
125%
100%
CEO
CFO
COO
2021grant150%
2021grant100%
CEO
CFO
COO
CEO
CFO
COO
2-year
holding period
50% deferred in shares
forthreeyears
CEO
CFO
COO
100%
100%
100%
200%
200%
200%
200%
200%
200%
Waived
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 103
EXECUTIVEREMUNERATIONPOLICYOVERVIEW

Fixed elements of remuneration for Executive Directors
Element of
remuneration
Purpose and
link to strategy Operation Maximum opportunity Performance
Salary To attract, retain and
motivate Executive
Directors of the
calibre required to
deliver the Company’s
strategy and drive
business
performance.
Base salaries will be reviewed at least
annually, and assessed, taking into account
the scope and requirements of the role,
experience of the incumbent and the total
remuneration package. Any increases will
typically be effective from 1 January.
Account will also be taken of the
performance of the business, the salary
increases awarded to the wider employee
population, and remuneration arrangements
in other listed companies of comparable
scale and sector.
There is no overall maximum for, or
increase to, salary levels. In awarding
any increase, the Committee will be
mindful of the general increase for
the broader employee population.
In appropriate circumstances the
Committee may award increases
outside this range.
These may include:
• A change in role and/or
responsibilities;
• Performance and/or development
in the role of the Executive
Director; and
• A significant change in the
Company’s size, composition and/
or complexity.
In addition, where an Executive
Director has been appointed to the
Board at a starting salary which is
lower than typical market rate,
larger increases may be awarded as
their experience develops, if the
Committee considers such
increases to be appropriate.
Personal performance
will be taken into
consideration when
determining any
salaryincreases.
Benefits To provide market-
competitive benefits
which drive Executive
Directors to deliver
the Company’s
strategy.
The Committee’s policy is to provide
Executive Directors with competitive levels
of benefits, taking into consideration the
benefits provided to Alfa’s employees and
those offered by its peers. Benefits are in
linewith those for the broader workforce
andcurrently include (but are not limited to)
a car or cash allowance; private medical
insurance (individual and family, if
applicable); and death-in-service life
assurance. The Company may award
additional benefits where the Committee
considers it appropriate (e.g. travel,
accommodation and subsistence
allowances). These may include national
andinternational relocation benefits such
as(but not limited to) accommodation,
family relocation support and travel in line
with our policy for other employees in
similarsituations.
Given that the cost of benefits
depends on the Executive Director’s
individual circumstances, there
isnoprescribed maximum
monetary value.
The cost of the benefits provision
will be reviewed by the Committee
on a periodic basis to ensure it
remains appropriate.
Other payments such as legal fees
or outplacement costs may be paid
if it is considered appropriate.
There are no
performance
conditions.
Pension To encourage
andassist with
responsible, secure
retirement provisions,
thereby facilitating
the recruitment of
high-calibre Executive
Directors to deliver
the Company’s
strategy.
May be provided by way of contribution into
a Company pension scheme or receive a cash
supplement in lieu of pension contributions
into this scheme (or such other arrangement
the Committee determines has the same
economic effect).
The maximum Company
contribution for Executive
Directors will not exceed the
contribution (as a percentage of
salary) available to the broader
employee population. The current
contribution level for Executive
Directors is 6% of salary, which is
aligned to the contribution for the
broader employee population.
There are no
performance
conditions.
Shareholders approved the new
Remuneration Policy at the AGM on 10 May
2021 and it will apply for a period of up to
three years. The Committee reviewed the
remuneration framework during the year to
ensure that it remains fit for purpose and
isdesigned to support and drive the
businessstrategy.
The Policy is designed to attract, retain and
motivate our leadership within a framework
designed to promote the long-term success
ofAlfa and align with our shareholders‘
interests. The Policy remained largely
unchanged from the Remuneration Policy
approved by shareholders in 2018.
104 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
ALFAFINANCIALSOFTWAREHOLDINGSPLC
2021DIRECTORS’REMUNERATIONPOLICY

Variable elements of remuneration for Executive Directors
Element of
remuneration
Purpose and
link to strategy Operation Maximum opportunity Performance
Annualbonusand
DeferredBonus
SharePlan(DBSP)
Incentivises and
rewards the
achievement of annual
financial and
non-financial
objectives integral
tothe Company’s
strategy.
The part-deferral of
earned bonus into
shares provides
alignment with
shareholders’
long-term interests.
The Committee will set the performance
measures and their weighting, and targets
annually to reflect the key financial, strategic
and personal priorities for the business in the
relevant year.
Annual bonus outcomes will be determined by
the Committee, and the Committee may use
its discretion at the end of the performance
period to adjust the final bonus outcome if it
considers that the outcome does not reflect
the underlying performance of the business
during the year, or if it considers the payment is
not appropriate in the context of unforeseen,
unexpected or exceptional circumstances.
Where exercised, the rationale for this
discretion will be fully disclosed to shareholders
in the relevant Annual Report.
Not less than 50% of any bonus will normally
be deferred into an award of shares under the
DBSP. Deferred shares will be subject to a
three-year holding period from the date of the
award, but no further performance conditions
will apply. Directors may sell sufficient shares to
satisfy the respective tax liability but must
retain the net number of shares until the end of
this three-year period.
Malus and clawback provisions will apply (see
explanatory notes).
The maximum bonus opportunity
may be up to 150% of salary for the
Executive Directors for each
financial year.
Annual awards made each year
toExecutive Directors will be set
out in the Annual Report on
Remuneration in respect of the
relevant year.
Performance measures
will comprise a
combination of financial
and non-financial
objectives and the
measures may vary
from year to year.
At least half of the
annual bonus will be
based on financial
measures. The
non-financial
performance measures
may include a
combination of
strategic and/or
personal objectives.
Further details on, and
the rationale for, the
measures used in the
annual bonus will be
disclosed in the relevant
Annual Report (and the
targets set will normally
be disclosed
retrospectively, subject
to these being
considered not to be
commercially sensitive).
LongTerm
IncentivePlan
(LTIP)
Incentivises and
rewards the
achievement of the
Company’s long-term
strategic objectives
for the business,
through the use of
share-based awards.
To encourage
long-term
shareholding to retain
Executive Directors
and provide greater
alignment with
shareholders’
interests.
Awards granted under the LTIP vest subject to
the achievement of applicable performance
conditions measured over at least a three-year
period. LTIPs may be made as conditional share
awards or in other forms (e.g. nil cost options) if
it is considered appropriate.
The Committee may use its discretion at the
end of the performance period to adjust the
final vesting outcomes if it considers that the
outcome does not reflect the underlying
performance of the business or participants
during the performance period, or if it
considers the payment is not appropriate in
thecontext of unforeseen, unexpected or
exceptional circumstances. Where exercised,
the rationale for this discretion will be fully
disclosed to shareholders in the relevant
Annual Report.
Awards that vest are subject to a further
two-year holding period after the vesting date.
Directors may sell sufficient shares to satisfy
the respective tax liability but must retain the
net number of shares until the end of this
two-year period.
The Committee retains the discretion to allow
dividends to accrue over the vesting period in
respect of the awards that vest (see
explanatory notes).
The maximum value of shares (at
grant) which can be made under an
award to an individual in respect of
a financial year is 150% of salary.
Any awards made in the same year
under the Company Share Option
Plan will be taken into account
when applying these limits.
In exceptional circumstances
awards totalling 200% of salary
may be made in a year.
Performance measures
will be determined by
the Committee at the
time of making each
award to ensure
alignment with the
long-term success
ofthe business.
The performance
conditions may
include, but are not
limited to, market
measures, financial
measures, and
strategic long-term
objectives.
For performance
between threshold and
maximum, awards vest
on a straight-line basis.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 105

Element of
remuneration
Purpose and
link to strategy Operation Maximum opportunity Performance
CompanyShare
OptionPlan
(CSOP)
Incentivises and
rewards the
achievement of
long-term targets
aligned to encourage
long-term
shareholding to retain
Directors, and provide
greater alignment
with shareholders’
interests. The CSOP
also provides flexibility
in the retention and
recruitment of
Executive Directors.
Awards granted under the CSOP become
exercisable subject to such timings and
performance conditions as may be set by
theCommittee.
Options are granted at market value or the
nominal share price if higher.
The Committee may use its discretion at
theend of the performance period to adjust
the final vesting outcomes if it considers that
the outcome does not reflect the underlying
performance of the business or participants
during the relevant period, or if it considers
the payment is not appropriate in the
context of unforeseen, unexpected or
exceptional circumstances. Where exercised,
the rationale for this discretion will be fully
disclosed to shareholders in the subsequent
Annual Report.
Maximum value of £30,000 at the
time of grant, including any existing
awards under the CSOP.
Awards vest subject
topredetermined
performance
conditions assessed
over a minimum period
of three years.
All-employeeshare
plans
All-employee plans
are designed to
encourage share
ownership within the
wider workforce.
Executive Directors are eligible to participate
in any all-employee share plan in place, on
identical terms to other participants. In the
case of UK tax qualifying plans, these will be
operated in line with HMRC guidance.
Participation in any approved
all-employee share plans will be
subject to the same limits as for
other eligible employees and, in the
case of any UK tax qualifying plan,
will be subject to the maximum
limits permitted by the relevant
taxlegislation.
The Committee may
apply conditions to
participation in
all-employee share
schemes, which will
apply to all employees.
Shareholding
requirement
To drive long-term,
sustainable decision
making for the benefit
of the Company and
our shareholders.
The Executive Directors are required to build
up a shareholding equivalent to align with the
long-term interests of shareholders. Until the
requirement is met, 50% of any share awards
vesting (after any sales to cover tax liabilities)
should be retained.
Executive Directors are required to
hold shares equivalent to 200% of
their salary in value. Directors are
required to continue to hold their
shareholding requirement, or, if
their level of shareholding is below
the requirement, their actual
holdings, for a period of two years
after leaving the Company.
There are no
performance
conditions.
Non-Executive Director Remuneration
Element of
remuneration
Purpose and
link to strategy Operation Maximum opportunity Performance
Fees paid to the
Non-Executive
Directors
Fees are set at a level
to reflect the amount
of time and level of
involvement required
in order to carry out
their duties as
members of the
Board and its
committees, and to
attract and retain
Non-Executive
Directors of the
highest calibre with
relevant commercial
and other experience.
Fees for Non-Executive Directors will be
determined by the Chairman and the
Executive Directors.
Additional fees are payable for acting as
Senior Independent Director, Committee
Chairs, or for undertaking other duties.
Fee levels will be reviewed (though not
necessarily increased) annually and set with
reference to the time commitment and
responsibility of the position as well as
taking into consideration market data for
roles in other companies of a similar size
andcomplexity.
Details of the current fee levels for
the Non-Executive Directors are set
out in the Annual Report on
Remuneration.
There is no prescribed maximum
annual increase. Total fees will not
exceed the maximum amount
provided in the Company’s Articles
of Association.
Benefits appropriate
to the role may be
provided. The
Non-Executive
Directors will have the
benefit of a qualifying
third party indemnity
from the Company and
appropriate Directors’
and Officers’ liability
insurance. Travel and
reasonable expenses
incurred (including any
tax gross-up) in the
course of performing
their duties may be
paid by the Company
or reimbursed.
106
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
ALFAFINANCIALSOFTWAREHOLDINGSPLC
2021DIRECTORS’REMUNERATIONPOLICYCONTINUED

Prior arrangements
The Committee reserves the right to
makeany remuneration payments and/or
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 where the
terms of the payment were agreed:
i. Before the Policy set out above came into
effect (provided, in the case of any
payment agreed on or after 24 April 2018,
it is in line with the Policy approved by
shareholders on that date); or
ii. At a time when the relevant individual (or
other person to whom this Policy applies)
was not a Director of the Company and,
in the opinion of the Committee, the
payment was not in consideration for the
individual becoming a Director of the
Company. For these purposes ‘payments’
includes the Committee satisfying awards
of variable remuneration and, in relation
to an award over shares, the terms of the
payment are ‘agreed’ at the time the
award is granted.
Selection of performance
conditions
For the annual bonus, the Committee believes
that a mix of financial and non-financial
targets is most appropriate for the Company.
Strategic and personal objectives may be
included where appropriate to ensure delivery
of key business milestones. The Committee
will determine the measures and weightings
each year, based on the key financial and
strategic priorities for the Company.
Performance under the LTIP will typically
bebased on a combination of market and
non-market measures. This is so that the
Committee can assess the Company’s
performance with reference to a mix of
underlying financial and stock market
performance and encourages a focus on
long-term financial growth as well as returns
toshareholders. The Committee will keep the
measures and weightings under review prior
tothe start of each cycle to ensure that these
remain effective in driving the Executive
Directors to deliver long-term success.
Explanatory notes
Awards under any of the Company’s share
plans referred to in this report may:
a. Be granted as conditional share awards or
nil cost options or in such other form that
the Committee determines has the same
economic effect;
b. Have any performance conditions
applicable to them amended or
substituted by the Committee if an event
occurs which causes the Committee to
determine an amended or substituted
performance condition would be more
appropriate and not materially less
difficult to satisfy;
c. Incorporate the right to receive an amount
(in cash or additional shares) equal to the
value of dividends which would have been
paid on the shares under an award that
vests up to the time of vesting (or where
the award is subject to a holding period,
time of release). This amount may be
calculated assuming that the dividends
have been reinvested in the Company’s
shares on a cumulative basis;
d. Be settled in cash at the Committee’s
discretion – although the Committee has
no intention to cash settle any Executive
Directors’ awards and would do so only in
exceptional circumstances (such as where
there was a regulatory restriction on the
delivery of shares) or to settle tax
liabilities arising in connection with the
acquisition of shares; and
e. Be adjusted in the event of any variation
of the Company’s share capital or any
demerger, delisting, special dividend or
other event that may affect the Company’s
share price.
Discretion, malus and clawback
Variable pay awards may be made subject to
adjustment events. At the discretion of the
Committee, an award may be adjusted before
delivery (malus) or reclaimed after delivery
(clawback) if an adjustment event occurs.
Our long-term incentive plans provide the
Committee with discretion in respect of
vesting outcomes that affect the actual level
of reward payable to individuals.
Such discretion would only be used in
exceptional circumstances and, if exercised,
the rationale for this discretion will be fully
disclosed to shareholders in the relevant
Annual Report.
Malus will apply to awards under the DBSP
and LTIP. Clawback will apply to all vested
awards under the DBSP and LTIP and the
part of the annual bonus which is paid in
cash. These provisions may be invoked at
the Committee’s discretion at any time
within three years of the payment of cash
bonuses and six years of the grant of DBSP
and LTIP awards.
The Committee has the discretion to invoke
these provisions in the following circumstances:
• Where there is a material misstatement
ofany Company financial results;
• Where an error in assessing performance
conditions is discovered;
• Where there is misconduct on the part
ofthe individual; and
• Where a material failure of risk
management by the Company is
identified, or in the event of serious
reputational damage to the Company.
Shareholding requirement
The Executive Directors are required to
build up a shareholding equal to at least
200% of salary, to align with the long-term
interests of shareholders. Until the
requirement is met, 50% of any share awards
vesting (after any sales to cover tax
liabilities) should be retained. In order to
generate alignment with shareholders
beyond departure and to drive risk-
conscious stewardship, a post-cessation
shareholding requirement will be placed on
Executive Directors. The post-cessation
requirement relates to those awards
awarded through incentive schemes by the
Company. Executive Directors will typically
be required to maintain a shareholding equal
to the lower of their in-post guideline and
their actual holding, for one year, and 50%
ofthat level for the second year.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 107
NOTESTOTHEPOLICYTABLE

Illustrations of potential remuneration outcomes
The following charts illustrate the remuneration that could be received by each of the
Executive Directors for varying levels of performance in 2022. The charts are based on the
following assumptions:
Approach to recruitment
remuneration
The Committee will seek to align a new
Executive Director’s remuneration package
with the Policy as set out in the Policy Table.
When determining a remuneration package
for a new appointment, the Committee will
take into consideration the size and scope of
the role, the skills and expertise of the
candidate, the external market rate for a
candidate of that experience, as well as the
importance of securing the preferred
candidate. Benefits will be limited to those
outlined in the Policy, with relocation
assistance provided where appropriate.
Awards under the LTIP and/or CSOP that
may be awarded to a new Executive Director
will not exceed 200% of salary and the bonus
opportunity will not exceed 150% of salary.
Special consideration may be given in the
event that incentives accrued at a previous
employer are due to be forfeited on the
candidate’s leaving that company, in which
case the Committee retains the discretion to
grant awards with vesting on a comparable
basis to the likely vesting of the previous
employer’s award; any such award is excluded
from the maximum value of incentives
referred to above. For internal candidates,
long-term incentive awards granted in
respect of the prior role would be allowed to
vest according to their original terms.
For the appointment of a new Chairman or
Non-Executive Director, the fee would be
set in accordance with the approved Policy
in force at that time. The length of service
and notice periods would be set at the
discretion of the Board, taking into account
market practice, corporate governance
considerations and the skills and experience
of the particular candidate at that time.
Service contracts and
appointment letters
The service contracts of the Chairman and
the Executive Directors do not have a
specific duration but can be terminated by
not less than six months’ notice in the case
of the Chairman and the COO and by not
less than 12 months’ notice for the CEO and
CFO by either party.
Pay
scenario Purpose and link to strategy
Maximum+50%
share price
growth
Assumes 100% payout under the annual bonus
Assumes 100% payout under the LTIP plus 50% share price growth
Maximum Assumes 100% payout under the annual bonus
Assumes 100% payout under the LTIP
On-target Assumes 50% payout under the annual bonus
Assumes 25% payout under the LTIP (aligned with threshold performance)
Minimum Fixed elements of remuneration only – base salary, benefits and pension
Andrew Denton, CEO (£000)
Maximum +
50% share
price growth
100%
100%
100%
100%
Maximum
On-target
Minimum
£23
£23
£23
£23
Duncan Magrath, CFO (£000)
100%
32%
27% 49%
39%
52%
29%
24%
30% 18%
£1,267
£1,061
£580
£305
Maximum +
50% share
price growth
Maximum
On-target
Minimum
Matthew White, COO (£000)
100%
31% 28% 41%
32%36% 32%
60% 27% 13%
£797
£687
£412
£247
Maximum +
50% share
price growth
Maximum
On-target
Minimum
Fixed Bonus LTIP
108 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
NOTESTOTHEPOLICYTABLECONTINUED

Category A
Voluntary resignation
and termination
forcause
Category B
Agreed terms
Category C
Death or cessation by reason of
ill-health,disability, injury, redundancy
orchange of control
Fixed pay Paid only until employment
ceases.
Paid for the notice period. Paid only until employment ceases or for notice period
depending on the reason for cessation.
Annualbonus There is no contractual
entitlement to payments under
the annual bonus.
Bonuses delivered in shares
represent the bonus the
Executive Director has already
earned and carry no further
performance conditions.
Awards will normally be released
in accordance to the usual
schedule, unless the Committee
determines that awards should
be released at the time the
individual ceases employment.
Awards will normally be released
in full unless the Committee
determines otherwise.
Treatment will normally fall
between A and C, subject to
thediscretion of the Committee,
the terms of any termination
agreement and the reasons for
the Executive Director’s
departure.
Cessation during the financial year or after the financial year
end, but before payment date, may result in bonus being
payable (pro-rated for the proportion of the financial year
worked unless the Committee determines otherwise).
Such bonuses may be settled wholly in cash.
Bonuses delivered in shares represent the bonus the Executive
Director has already earned and carry no further performance
conditions. Awards will normally be released in accordance to
the usual schedule, unless the Committee determines that
awards should be released at the time the individual ceases
employment. Awards will normally be released in full unless
the Committee determines otherwise. If the participant dies,
awards will normally be released at the time of their death on
the same basis as for other good leavers.
LTIPawards Unvested awards will lapse on
cessation of employment.
Vested awards subject to a
holding period will also lapse if the
Executive Director’s employment
is terminated for cause.
Treatment will normally fall
between A and C, subject to the
discretion of the Committee,
theterms of any termination
agreement and the reasons for
the Executive Director’s
departure.
Awards will normally vest and be released at the usual time.
However, the Committee may determine that awards should
vest at the time the individual ceases employment and be
released at that time or should be released at some other time
after cessation and before the ordinary release date – such as
following the end of the performance period in the case of an
award to which a holding period would otherwise apply.
The extent of vesting will take into account the extent to
which the relevant performance conditions have been met.
Awards are usually scaled back pro-rata to take account of the
proportion of the original performance period that has
elapsed when the individual leaves (but with the Committee
having discretion not to scale back or to reduce the scaleback).
If the participant dies, awards will normally vest at the time of
their death on the same basis as for other good leavers.
Vested awards subject to a holding period will be released
from that holding period at the usual time, unless the
Committee determines the holding period should end when
the individual leaves employment.
Under the service contracts the Executive
Directors are entitled to a salary (reviewed
annually), pension contribution and benefits,
in addition to reimbursement of reasonable
expenses incurred by them in the
performance of their duties.
The service contracts for Executive Directors
make no provision for termination payments,
other than for payment in lieu of salary.
The Non-Executive Directors’ appointments
are for a fixed term of three years and
aresubject to annual re-election by
shareholders. Under their letters of
appointment, their appointment is
terminable by either party on three months’
written notice except where the Non-
Executive Director is not reappointed by
shareholders, in which case termination is
with immediate effect. The Non-Executive
Directors are entitled to the reimbursement
of reasonable business expenses.
Termination of office
If the employment of an Executive Director
isterminated, any compensation payable
willbe determined by reference to the terms
ofthe service contract in force at the time.
As variable pay awards are not contractual,
treatment of these awards are determined
bythe relevant rules. The Committee may
structure any compensation payments beyond
the contractual notice provisions inthe
contract in such a way as it deems appropriate.
The Company may at its discretion make
termination payments in lieu of notice and
contractual benefits. The service agreements
for the CEO, CFO and COO allow for garden
leave during their notice period.
The appointment letters for the Non-
Executive Directors provide that no
compensation is payable on termination.
The Committee has a policy framework for
payments for loss of office by an Executive
Director, both in relation to the service
contract and incentive pay, which is
summarised below.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 109

Change of control policy
In the event of a change of control of the
Company, LTIP and CSOP awards will vest to
the extent determined by the Committee
taking into account the extent that the
Committee determines that the performance
conditions have been satisfied, and, unless the
Committee determines otherwise, the
proportion of the performance period that has
elapsed. DBSP awards will normally be released
in full, unless the Committee determines
otherwise. Alternatively, the Committee may
permit an Executive Director to exchange their
awards for equivalent awards over shares in a
different Company. If the change of control is
an internal reorganisation of the Company,
Executive Directors will ordinarily be required
to exchange their awards (rather than awards
vesting), and the Committee may also require
the exchange of awards in other circumstances,
as it considers appropriate. If other corporate
events occur such as a winding-up of the
Company, demerger, delisting, special dividend
or other event which, in the opinion of the
Committee, may materially affect the current
or future value of the Company’s shares, the
Committee may determine that awards will
vest on the same basis as set out above for a
change of control.
Consideration of

The Committee consulted and met with the
Company’s largest shareholders prior to
finalising this proposed Policy. The Committee
will continue to monitor shareholder views
when setting future executive remuneration
strategy and will consult with shareholders prior
to any significant changes to the Policy.
The Committee takes full account of
theguidelines of investor bodies and
shareholder views in determining the
remuneration arrangements in operation
within the Company.
Consideration of employment
conditions elsewhere in

The Committee takes into account the pay and
employment conditions of the wider employee
population across the Company when setting
Executive Director remuneration, and
considered this as context when reviewing the
Policy. While the Committee has not consulted
employees directly on the Remuneration Policy
for Executive Directors, the Committee is
made aware of information such as workforce
demographics, diversity initiatives, training
programmes, engagement levels and cultural
initiatives, as well as the remuneration
principles and policies that apply to the wider
workforce. It is expected that future salary
increases for Executive Directors will be in line
with the general employee population, except
in exceptional circumstances.
Members of the Company Leadership Team
are invited to participate in the LTIP, in order for
there to be alignment between the objectives
of the Executive Directors and senior
management. We also continue to encourage
employees to become investors in the
Company by retaining legacy share awards and
through its all-employee share schemes.
External appointments
Executive Directors may hold external
directorships if the Board determines that such
appointments do not cause any conflict of
interest. Where such appointments are
approved and held, it is a matter for the Board
to agree whether fees paid in respect of the
appointment are retained by the individual or
paid to the Company.
Category A
Voluntary resignation
and termination
forcause
Category B
Agreed terms
Category C
Death or cessation by reason of ill-health,
disability, injury, redundancy or change
ofcontrol
Sharesave(SAYE)
Scheme
Unvested options will lapse and
savings will be returned on
cessation of employment.
Vested options not exercised will
also lapse if the Executive
Director’s employment is
terminated for cause.
Treatment will normally fall
between A and C, subject to the
discretion of the Committee,
theterms of any termination
agreement and the reasons for
the Executive Director’s
departure.
Options can be exercised immediately, or up to six months
ofsavings can be made before exercising options.
The Committee may determine that the options should be
exercised at the time the individual ceases employment and
be released at that time or should be released at some other
time after cessation and before the original release date. If the
participant dies, options will normally vest at the time of their
death on the same basis as for other good leavers.
Vested options may be exercised at any time in the six months
after the date of cessation, after which they will lapse.
Other payment None. Possible disbursements
suchaslegal costs and
outplacement services.
Possible disbursements such as legal costs and
outplacementservices.
110
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
NOTESTOTHEPOLICYTABLECONTINUED

Alignment of Remuneration Policy with the 2018 UK Corporate Governance Code
Governance in practice
The Remuneration Committee is committed to good corporate governance and as such takes into account a broad range of factors when determining its Directors’
Remuneration Policy. The Committee considered both legal and regulatory requirements, associated guidance and the views of shareholders and their representative
bodies. Below is an outline of how the Committee works to ensure the principles of Provision 40 of the 2018 UK Corporate Governance Code are met.
Clarity
Remuneration arrangements should be
transparent and promote effective engagement
with shareholders and the workforce.
Alfa is committed to clear and transparent reporting and communication with its stakeholders. The Committee
actively engages with our shareholders on key decisions and Policy matters, when required.
The Alfa Remuneration Policy is aligned with longer-term shareholder interests and structured to promote the
Group’s financial and strategic priorities.
Simplicity
Remuneration structures should avoid complexity
and their rationale and operation should be easy
to understand.
Alfa’s approach to its remuneration framework focuses on simplicity. The framework comprises three core
elements to remuneration:
Fixed pay. This element comprises base pay, taxable benefits and pension.
Short-termincentives. This element relates to an annual performance-related bonus which incentivises
delivery against both financial and non-financial measures. In total, 50% of any bonus earned is paid in cash with
50% deferred into shares.
Long-termincentives. This element relates to longer-term value creation through the LTIP.
Risk
Remuneration arrangements should ensure
thatreputational and other risks from excessive
rewards, and behavioural risks that can arise
fromtarget-based incentives plans are identified
and mitigated.
The remuneration arrangements are split between short-term and long-term rewards coupled with holding
periods, deferred elements and malus and clawback provisions to drive the right behaviours to incentivise the
Executive Directors to deliver long-term sustainability of the business and shareholder returns.
As a wider control, malus and clawback provisions apply to all participants of our long-term incentive plans.
The Remuneration Committee retains discretion to override formulaic outcomes where these are not
considered reflective of underlying performance.
Predictability
The range of possible values of rewards to
individual Directors and any other limits or
discretions should be identified and explained
atthe time of approving the Policy.
The Remuneration Policy sets out scenario charts illustrating base pay, short-term incentives and longer-term
incentive outcomes under threshold, target and maximum performance scenarios.
Proportionality
The link between individual awards, the delivery
ofstrategy and the long-term performance of the
Company should be clear. Outcomes should not
reward poor performance.
The Committee assesses performance against a range of financial and non-financial measures linked to our
business strategy.
The Committee has the ability to override formulaic calculations and apply discretion.
The Committee regularly reviews pay policies for the wider workforce and is mindful of this when setting
remuneration for Executive Directors.
Alignment to culture
Incentive schemes should drive behaviours
consistent with Company purpose, values
andstrategy.
These should include consideration of performance metrics, governance requirements and engagement
withstakeholders.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 111

This section of the Directors’ Remuneration Report sets out the remuneration paid in 2021 and the proposed remuneration for 2022.
During theyear, the Remuneration Policy operated as intended. The following sections on pages 112 to 115 have been audited by RSM:
Singlefigure remuneration, Long-Term Incentive Plan – awards vesting in the year, Pension entitlements, External Appointments, Payments
forlossof Office, Payments to past Directors.
Context to remuneration decisions
The Committee’s decision making this year has taken into account a range of internal and external factors including Alfa’s ongoing response to
COVID-19 and the external market performance. The business acted in line with the s172 governance guidelines while continuing to deliver
exceptional results for shareholders. In particular, the Committee was mindful that:
• Alfa requested no Government support from the Job Retention Scheme and no employee received a pay cut and bonus payments
weremaintained
• Shareholder guidance was maintained throughout the period and a special dividend in the amount of £29.7m was paid to shareholders
Single total figure of remuneration
The following tables set out the total remuneration received by Executive Directors and Non-Executive Directors who served during 2021 and 2020.
£’000s
Salary
andfees Benefits
1
Pension
2
Total fixed
remuneration
Annual
bonus
3
Long-term
incentives
4
Total variable
pay
Total figure
remuneration
ExecutiveDirectors
Andrew Page 2021 345 12 – 357 – – – 357
2020 374 13 – 387 – – – 387
Andrew Denton 2021 297 13 – 310 – – – 310
2020 322 15 – 337 – – – 337
Duncan Magrath
5
2021 275 13 16 304 316 – 316 620
(appointed 24 April 2020) 2020 214 7 12 233 217 – 217 450
Matthew White 2021 220 14 13 247 205 – 205 452
2020 220 10 13 243 176 – 176 419
Non-ExecutiveDirectors
Chris Sullivan 2021 65 – – 65 – – – 65
2020 65 – – 65 – – – 65
Steve Breach
6
2021 65 – – 65 – – – 65
2020 70 – – 70 – – – 70
Adrian Chamberlain 2021 65 – – 65 – – – 65
(appointed 24 April 2020) 2020 45 – – 45 – – – 45
Charlotte de Metz 2021 55 – – 55 – – – 55
(appointed 24 April 2020) 2020 38 – – 38 – – – 38
1. Benefits – corresponds to the taxable value of benefits receivable during the relevant financial year and principally include company car (or cash equivalent),
life assurance, travel insurance and private medical insurance.
2. Pension – Andrew Page and Andrew Denton have opted out of the pension scheme. Duncan Magrath and Matthew White receive a cash payment in lieu of a
pension contribution.
3. Annual bonus – corresponds to the amount earned in respect of the relevant financial year. Details of 2021 targets are set out on page 113. The Executive
Chairman and the CEO waived any eligibility for a bonus in 2020 and 2021.
4. Long-term incentives – corresponds to the amount vesting to the Executive Directors in respect of a performance period ending at the conclusion of the
relevant financial year. The first awards under the LTIP were granted in 2020, and vest subject to performance to 31 December 2022 (and will accordingly be
captured, to the extent these vest, in the 2022 Annual Report).
5. 2020 remuneration for Duncan Magrath was pro-rated from the commencement of his employment.
6. A payment of £5,085 was paid in January 2020 to cover work completed on the finance remediation plan in 2019.
112
Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
ANNUALREPORTONREMUNERATION2021

Base salary
Executive Directors’ salaries were reviewed in 2021. Andrew Page and Andrew Denton proposed to the Board an adjustment to their base salary to
minimum legal requirements, effective 1 December 2021. The Board approved this proposal.
The Board also determined that there would be no increase awarded to Duncan Magrath and Matthew White for the period from 1 January 2022 to
31 December 2022.
2021 annual bonus
The 2021 annual bonus performance measures were selected to reflect the Company’s annual and long-term objectives and its financial and strategic
priorities, as appropriate. Performance targets are set to be stretching, taking into account a range of reference points, including the Company’s
budget and third party analyst forecasts, as well as the Group’s strategic priorities.
In respect of the annual bonus, the following measures were approved by the Committee for 2021:
• Revenue for the year;
• Operating profit;
• Operating free cash flow conversion being cash flow generated from operations after deducting the settlement of derivative financial
instruments and margin calls and capital expenditures as a percentage of EBIT, as defined above; and
• Personal performance based on the qualitative assessment of the individual’s performance. Further details on performance outcomes for
the non-financial measures are shown in the second table.
The Executive Chairman and CEO have waived their entitlement to a bonus for the 2021 performance year.
The table below shows the bonus outturn relating to each measure:
Measure Weighting Target Threshold Maximum Actual
2021 bonus
pay-out
Revenue 37.5% £74.6m 95% 110% £83.2m 100%
Operating profit 37.5% £13.6m 75% 146% £24.7m 100%
Cash flow conversion Modifier Above 100% 114% 0%
Personal performance 25% 0% 25% CFO:17.50%
COO:18.25%
CFO:70%
COO:73%
Total (as a percentage of opportunity)
CFO:92.50%
COO:93.25%
Straight-line vesting occurs between threshold and maximum.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 113

Further commentary on non-financial measures
The personal measures described above are assessed with reference to the following objectives
Objective Commentary on performance achieved Achievement
Duncan Magrath Finance Structure
Created a high performing finance team, delivering timely,
accurate key data to drive business performance.
70%
ESG Reporting Improved reporting of ESG to key stakeholders.
Investor Relations
Emphasised strength of IP in Alfa to investors, including focused
technology day.
Management Information Improved forecasting accuracy and medium to long term
strategic modelling, including implementation of a new tool.
Matthew White People Built, developed and retained a smart, diverse team. Measured
by headcount, engagement scores and retention.
73%
Technology Delivered high quality software to our customers and secure
technical infrastructure for Alfa. Measured through various
quality and delivery metrics.
Implementation Delivered successful Alfa Systems implementation projects.
Measured by project delivery and profitability.
Maintenance & Hosting Delivered high quality and highly profitable maintenance and
hosting services. Measured through issue count, availability and
profitability.
Strategic Change Delivery of initiatives to:
• Increase systems implementation capacity.
• Increase software development capacity.
• Simplify the implementation of our software.
• Improve our strategic process.
Based on the achievements listed above, the Committee agreed that the final vesting under the 2021 bonus would be 92.50% of the maximum for
Duncan Magrath and 93.25% of maximum for Matthew White. In confirming this outcome, the Committee took into consideration the broader
financial and operational performance of Alfa during the year, and the strong and effective leadership demonstrated by the Executive Directors it
wasdetermined that no adjustments were required to the formulaic outcome.
In accordance with the Remuneration Policy, 50% of these bonus amounts will be paid in cash, with the remaining 50%, after deduction of tax, to be
deferred into an award of Alfa shares with a minimum holding period of three years.
Executive Base salary
Maximum
opportunity
(% salary)
Performance
outcome (% of
maximum
Bonus outcome
£
of which cash
£
of which
shares
£
Duncan Magrath £275,000 125% 92.50% 317,969 158,984 158,984
Matthew White £220,000 100% 93.25% 205,150 102,575 102,575
114 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
REMUNERATIONCOMMITTEEREPORTCONTINUED

Long Term Incentive Plan – awards granted in the year
Share awards were made to the Executive Directors under the LTIP on 30 April 2021 equivalent to 150% of salary for the CFO and 100% of salary for the COO.
The Executive Chairman and CEO have waived their entitlement to participate in the 2021 LTIP.
Executive Date of award
Face value (%
of salary)
Number of
shares granted
Average share
price at grant
(£)
Award
value
(£)
Threshold
vesting (% of
face value)
Performance
period
Duncan Magrath 30 April 2021 150% 300,218 1.374 £412,500 25% 1 January
2021 to 31
December
2023
Matthew White 30 April 2021 100% 160,116 1.374 £220,000 25% 1 January
2021 to 31
December
2023
1. The share price used to calculate the number of performance shares was £1.374, the average 5-day share price preceding the date of the award
(30 April2021). This represents the face value of the share awards.
The LTIP awards are subject to two equally weighted performance metrics: relative total shareholder return and earnings per share:
Measure Description Weighting
Threshold/
target
Maximum
target
2021
Total shareholder return (TSR) Measured with reference to the FTSE Small Cap
index excluding investment trusts and the Company
50% Median Upper
quartile
Earnings per share (EPS) Measured with reference to EPS performance in the
year ending 31 December 2023
50% 5.4p 7.6p
2020
Total shareholder return (TSR) Measured with reference to the FTSE Small Cap
index excluding investment trusts and the Company
50% Median Upper
quartile
Earnings per share (EPS) Measured with reference to EPS performance in the
year ending 31 December 2022
50% 2.3p 2.8p
Straight-line vesting occurs between threshold and maximum for both TSR and EPS elements of the award.
The three-year period over which performance will be measured begin on 1 January of the year the awards are granted and will end on 31 December
of the third year. Any awards vesting for performance will be subject to an additional two-year holding period, during which malus and clawback
provisions will continue to apply.
Long-Term Incentive Plan – awards vesting in the year
No LTIP awards vested in 2021.
Pension entitlements
The only element of remuneration that is pensionable is basic annual salary. A cash payment in lieu of pension contributions are payable to the CFO and
COO, at a rate of 6% of salary as aligned with the broader workforce, and defined in the 2021 Remuneration Policy.
External appointments
Executive Directors are allowed to accept one appointment outside the Company, with the prior approval of the Board. Any fees may be retained by
the Director, although this is at the discretion of the Board. During 2021 and up to the date of this report, none of the Executive Directors who held
office during the year under review held external appointments for which they received a fee.
Payments for loss of office
There were no payments for loss of office during the year or prior year.
Payments to past Directors
There were no payments to past Directors for loss of office during the year or prior year.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 115

Statement of Directors’ shareholdings and scheme interests
Executive Directors are expected to build and hold Alfa shares of at least 200% of their annual salary to align with the long-term interests of
shareholders, with a requirement to retain 50% of any share awards vesting until the 200% requirement is met. Under the Policy, a post-employment
shareholding requirement will apply whereby 100% of the shareholding requirement must be held for the first year following departure from Alfa and
50% for the second year. Shareholding requirements and the number of shares held by Directors during the year and as at 31 December 2021 are set
out in the table below:
Measure
Shares owned
outright at 31
December 2021
SAYE without
conditions
Interests in share
incentive
schemes without
performance
conditions
Interests in share
incentive
schemes with
performance
conditions
Shares owned
outright at 31
December 2020
Shareholding
requirement
(% of
requirement
achieved)
1
Andrew Page 182,334,041 – – – 181,764,821 achieved
Andrew Denton 15,322,107 – – – 15,891,327 achieved
Matthew White
2
861,866 11,718 – 456,213 552,368 achieved
Duncan Magrath
2
182,165 11,718 – 1,040,460 100,000 63%
Chris Sullivan – – – – – n/a
Steve Breach 43,983 – – – 43,983 n/a
Adrian Chamberlain 14,380 – – – – n/a
Charlotte de Metz – – – – – n/a
1. Calculated using the share price of £1.895 (as at 31 December 2021).
2. Duncan Magrath and Matthew White elected to join the Company SAYE share scheme for which an option to acquire 11,718 ordinary shares at an option
exercise price of £1.536 per ordinary share was granted on 30 November 2021. Subject to certain conditions being satisfied, the entitlement to exercise the
SAYE option arises during the period 1 January 2025 to 30 June 2025.
No LTIPs were exercised during the year and there were no unexercised vested shares held at 31 December 2021. The Executive Chairman and Chief
Executive Officer have significant direct or indirect shareholdings in the Company.
Dilution
Awards under Alfa incentive plans may be satisfied by treasury shares or the issue of new shares or the purchase of shares in the market.
Under Investment Association guidelines, the issue of new shares or reissue of treasury shares under a plan, when aggregated with awards under
all of a company’s other schemes, must not exceed 10% of the issued ordinary share capital (adjusted for share issuance and cancellation) in any
rolling 10-year period. As at 31 December 2021 no new shares or reissue of treasury shares had been used to satisfy awards, and so this limit had
not been exceeded.
Fees for the Non-Executive Directors
The fees were agreed on appointment and have remained unchanged since that time. A summary of current fees is shown below:
£’000s Basic fees
Audit and
Risk Chair
Remuneration
Chair
Senior
Independent
Director
Chris Sullivan – – – 65
Steve Breach 55 10 – –
Adrian Chamberlain 55 – 10 –
Charlotte de Metz 55 – – –
There is no additional fee payable to the Chair of the Nomination Committee.
All the Non-Executive Directors have letters of appointment, with the Company, for an initial three-year term, subject to annual reappointment at the
AGM. The appointment letters for the Non-Executive Directors provide that no compensation is payable upon termination. Letters of appointment
are available for inspection at the Company’s registered office. Details of the appointment terms of the Non-Executive Directors are as follows:
Start of current term Expiry of initial term
Chris Sullivan 18 July 2019 17 July 2022
Steve Breach 9 August 2019 8 August 2022
Adrian Chamberlain 24 March 2020 23 March 2023
Charlotte de Metz 24 March 2020 23 March 2023
116 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
REMUNERATIONCOMMITTEEREPORTCONTINUED

Total shareholder return performance
The graph below shows Alfa’s TSR performance from Admission in May 2017 to 31 December 2021 against the TSR performance of the FTSE
smallcap index (excluding investment trusts). The graph shows the total shareholder return generated by both the movement in share value and the
reinvestment over the same period of dividend income. As Alfa is a constituent member of the FTSE Small Cap index, the Committee considers that
itis the appropriate index for comparative purposes. This graph has been calculated in accordance with the Directors’ Remuneration Reporting
Regulations and shows total shareholder return from the date of listing to 31 December 2021.
Total shareholder return (for the period from 25 May 2017 to 31 December 2021)
Value (£) (rebased)
May-17
Alfa Financial Software Holdings PLC
Dec-17 Dec-18 Dec-19 Dec-20 Dec-21
FTSE Small Capitalisation Index Ex Investment Trusts
£0
£35
£70
£105
£140
£175
CEO single figure of remuneration and variable pay outcome
£’000s
CEO single
figure of
remuneration
Annual bonus
pay-out (as a %
of maximum
opportunity
1
LTIP vesting (as
a % of
maximum
opportunity)
2
2021 £310,236 n/a n/a
2020 £337,174 n/a n/a
2019 £338,129 n/a n/a
2018 £337,944 n/a n/a
2017 £349,478 n/a n/a
1. The CEO waived any eligibility for a bonus in 2021, 2020, 2019, 2018 and 2017.
2. The CEO waived any eligibility to participate in the long-term incentive awards in respect of the 2021, 2020, 2019, 2018 and 2017 performance years.
3. The CEO agreed to a reduction in salary effective 1 Dec 2021.
Percentage change in CEO remuneration compared with employees
The table below shows the average increase in each component between the CEO and average employee in the Company from Admission to 2021:
% change in base salary % change in bonus earned % change in benefits
CEO 2021:(8)% 2021:0% 2021:(13)%
2020: 0% 2020: 0% 2020: (6%)
2019: 0% 2019: 0% 2019: 0%
2018: 0% 2018: 0% 2018: (42%)
2017: 0% 2017: 0% 2017: 87%
Alfa UK employees 2021:5% 2021:39% 2021:7%
2020: 9% 2020: (1%) 2020: 13%
2019: (3%) 2019: (13%) 2019: (42%)
2018: 1% 2018: (37%) 2018: 22%
2017: 2% 2017: (33%) 2017: (11%)
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 117

Percentage change in Executive and Non-Executive Director remuneration
The table below shows the percentage increase/decrease in each Director’s salary/fees, taxable benefits and annual incentive plan between 2019 &
2020 and 2020 & 2021 compared with the average percentage increase in each of those components of pay for the UK-based employees of the Group
as a whole.
Disclosure for all Directors in addition to the CEO has been added in 2020 in line with the requirements under the EU Shareholder Rights Directive II
and over time a five-year comparison will be built up. Alfa Financial Software Holdings PLC employs only the Non-Executive Directors and therefore a
subset of the Group’s employees has been used.
% change for the end of the comparative period
to the end of the reporting period
2021
% change in
salary/fees
2021
% change in
benefits
2021
% change in
annual bonus
2020
% change in
salary/fees
2020
% change in
benefits
2020
% change in
annual bonus
Andrew Page (Chairman) (8)% (8)% n/a 0% 7% n/a
Andrew Denton (CEO) (8)% (12)% n/a 0% (6)% n/a
Duncan Magrath (CFO) 0% 46% 100% n/a n/a n/a
Matthew White (COO) 0% 29% 100% 0% n/a n/a
Steve Breach (NED) 0% n/a n/a 0% n/a n/a
Adrian Chamberlain (NED) 0% n/a n/a n/a n/a n/a
Charlotte de Metz (NED) 0% n/a n/a n/a n/a n/a
Chris Sullivan (NED) 0% n/a n/a 0% n/a n/a
Employees 5% 7% n/a 9% 13% (1)%
1. D Magrath did not receive a bonus in 2020. The first year he received a bonus was in April 2021, in relation to the 2020 financial year.
2. M White joined the Board in October 2019 and did not receive any bonus as a Director in 2020. The first year he received a bonus was in April 2021, in relation
to the 2020 financial year.
3. D Magrath, A Chamberlain and C de Metz joined Alfa part way through 2020. In calculating the increase in salaries, the figures for 2020 have been adjusted as
though they started on the 1 January of that year.
CEO pay ratio
The table below sets out the pay ratios for the CEO in relation to the equivalent pay for the lower quartile, median and upper quartile employees
(calculated on a full-time equivalent basis). The ratios have been calculated in accordance with the Companies (Miscellaneous Reporting)
Requirements 2018. The CEO pay ratio data will be built upon annually until a rolling 10-year dataset is produced. Bonuses and the value of any LTIPs
that have been granted, which are both zero in the case of the CEO, have been excluded from the remuneration figures used.
The methodology adopted for calculating the ratio was ‘Option A’ which entailed calculating the total full-time equivalent (FTE) pay and benefits for
allUK employees on the 2021 payroll. Employees were then ranked based on their FTE remuneration from low to high in order to identify those whose
remuneration placed them at the 25th, 50th (median) and 75th percentile points. The CEO’s single total figure of remuneration (STFR) was then
measured against these percentiles, to produce the three pay ratios.
Option A was chosen because it was deemed to be the most statistically accurate method for this reporting purpose. Having reviewed the analysis,
theCompany believes the median pay ratio to be consistent with the Company’s general employee pay, reward and progression policies. The Company
carries out annual salary reviews and annual reviews of benefits packages. Salary awards are made with reference to the outputs of annual industry
benchmarking exercises. As per guidance, data relating to employees who left part way through the year and/or employees on secondment were
excluded from the data set and analysis. Information calculated as at 31 December 2021.
Yea r Method
25th percentile
(lower quartile)
Pay ratio 50th
percentile
(median)
75th percentile
(upper quartile)
2021 A 6.1:1 4.0:1 3.2:1
2020 A 5.7:1 4.3:1 3.2:1
2019 A 5.7:1 4.4:1 3.2:1
118 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
REMUNERATIONCOMMITTEEREPORTCONTINUED

Yea r £’000s 25th percentile 50th percentile 75th percentile
2021 Total remuneration 50.9 77.1 96.7
Salary only 46.8 72.2 86.2
2020 Total remuneration 59.5 78.5 106.7
Salary only 55.1 73.2 98.1
2019 Total remuneration 59.0 76.2 106.3
Salary 57.1 71.2 95.7
This is the third financial year in which the Company reported information on ratios between CEO and average staff pay under the amendments to the
Companies (Miscellaneous Reporting) Regulations in 2018.
There has been a slight increase to the ratio at the 25th percentile (lower quartile). Meanwhile, the ratio at the 50th percentile (median) has decreased
slightly and at the 75th percentile (upper quartile)has remained the same. There have been decreases to the median remuneration figures at all
quartiles, most notably at the 25th percentile. The movement observed in the ratios and total remuneration figures in 2021 compared to the previous
year(s) can be explained by a number of factors, including:
1. A number of new joiners to the company in 2021 fell into the lower quartile bracket, thus lowering the lower quartile median figure;
2. A number of senior members of staff (who would typically fall into the upper quartile bracket) left part way through the year and were
therefore excluded from the data set and analysis. This is reflected in the decrease to the upper quartile (median) remuneration figure; and
3. The CEO advised the Committee that due to his holding in CHP Software and Consulting Ltd, the main significant shareholder in the
Company, he elected to reduce his salary to the minimum statutory level of remuneration with effect from 1 December 2021.
Thisresulted in the CEO’s SFTR being lower than in previous years.
Rewarding our people and wider workforce engagement
Alfa’s approach to all-employee reward is focused on providing a competitive package to attract, retain and incentivise our employees to deliver for
ourcustomers, business and shareholders. The Committee regularly reviews details of the arrangements for the broader workforce and this informs
decisions on remuneration for the Executive Directors and senior management. Alfa continues to review salaries group-wide to ensure that we remain
a competitive employer within the local market. Salaries for Executive Directors, senior managers and the rest of the workforce are all determined with
reference to the same factors such as technical expertise, experience and performance, and increases across these populations are reviewed to ensure
they are broadly aligned. The Committee also took an active role in determining rewards for the Company Leadership Team. Further information on
key initiatives for our people and what makes Alfa unique can be found on page 25. In addition to a competitive salary, all employees receive the
opportunity to earn a performance-related bonus, private medical care, matched contribution pension and death-in-service life assurance.
The Company Leadership Team and certain employees are eligible to participate in long-term incentive schemes.
During the review of the Directors’ Remuneration Policy, the Committee sought input from the Executive Directors, ensuring that any conflict of
interest was suitably mitigated. It was concluded that the existing model of base salary; annual bonus; and a three-year LTIP with a two-year holding
period was well understood by the business, supported Alfa’s culture and continued to be appropriate to drive business performance going forward.
Relative importance of spend on pay
The following table illustrates Alfa’s revenue and operating profit in relation to spend on pay for all employees for the period and last financial year.
2021 2020 Change
Total personnel costs (£m) (note 7 to the consolidated financial statements) 42.4 39.6 7%
Average number of employees (note 7 to the consolidated financial statements) 383 341 12%
Revenue (£m) (consolidated income statement) 83.2 78.9 5%
Operating profit (£m) (see note 4.2 to the consolidated financial statements) 24.7 23.9 3%
During FY2021, the Company paid dividends to shareholders amounting to £32.7m (FY20: £44.2m). For more information on dividends and
expenditure on remuneration of all employees, see pages 171 and 158 respectively.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 119

Implementation of the Remuneration Policy in 2022
2022 Executive Directors’ base salaries
At the end of 2021, the Chairman and CEO requested the Committee approve their proposal to reduce their salaries, bonus and shares to the legal
minimum level. Both the Chairman and CEO are significant shareholders in the Company and expressed a desire to align their future remuneration with
those of the other shareholders. The Committee members were supportive of the proposal and approved it effective 1 December 2021.
The Committee carried out a review of the CFO‘s and COO’s remuneration packages in late 2021 and determined that there would be no salary
increase and that the bonus and LTIP opportunities remained appropriate.
The table below shows the salaries for the Executive Directors as at 1 January 2022 in comparison to base salary at 1 January 2021:
£’000s 1 January 2022 1 January 2021 % change
Andrew Page 23 374 (94)%
Andrew Denton 23 322 (93)%
Duncan Magrath 275 275 0%
Matthew White 220 220 0%
Pension and benefits
For 2022 the CFO and COO, in lieu of a pension contribution, will receive a cash allowance of 6% of salary in line with the pension contribution available
to the wider workforce. No changes are proposed to the benefits provided.
2022 annual bonus
The Chairman and CEO have waived their bonus opportunity going forward. The COO will be entitled to a maximum annual bonus equal to 100% of
salary for 2022 with the CFO entitled to a maximum annual bonus of 125% of salary. The following measures have been selected for the 2022 annual
bonus performance year:
Measure Weighting
Operating profit 37.5%
Revenue 37.5%
Operating free cash flow conversion Modifier
Personal performance 25%
The Committee is of the view that our existing measures of revenue, operating profit and personal objectives continue to be appropriate for the business.
Each bonus measure has a target, failure to meet a minimum percentage of the revenue and operating profit target will result in no bonus being
awarded for that element. Achieving a maximum percentage of operating profit and revenue target will result in the maximum bonus being awarded
under the formula (subject to the minimum operating profit target being achieved). The operating profit and revenue bonus elements can be increased
or decreased by the operating free cash flow conversion modifier depending on cash performance, although the modifier cannot increase them
beyond their maximum opportunity. As described earlier, the final determination is made by the Committee taking all available factors into account.
The detailed bonus targets for the coming year are considered to be commercially sensitive. However, the Committee will provide an appropriate
explanation of the bonus outcomes in the 2022 Directors’ Remuneration Report.
In accordance with the Policy, 50% of any bonus earned will be deferred into shares for a three-year holding period.
120 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
REMUNERATIONCOMMITTEEREPORTCONTINUED

2022 Long-Term Incentive Plan
The normal maximum LTIP opportunity under the Policy is 150% of salary. For 2022, the CEO has waived their LTIP opportunity. The award
opportunity will remain at 100% of salary for the COO, and 150% of salary for the CFO. Following vesting, awards will be subject to a subsequent
holding period of two years, with the entirety of any award vesting released after two years.
The Committee has agreed TSR and EPS measures for the LTIP, with an equal weighting applied to each measure.
The comparator group for the TSR is the constituents of the FTSE Small Cap index, excluding investment trusts. Median performance over the
three-year performance period will result in 25% vesting, with 100% vesting if upper quartile performance is achieved. The EPS performance
conditions are being finalised and details will be included in the RNS announcing the awards.
2022 Non-Executive Director remuneration
Non-Executive Directors do not participate in any of the Company’s share incentive arrangements, nor do they receive any benefits. Fees for Non-
Executive Directors are reviewed annually, and are set by the Chairman and the Executive Directors. Following the annual review of Non-Executive
Director fees, no changes are proposed for the 2022 fees. It was determined that the fees will remain at the following level:
Base fee £55,000
Additional fee for chairing Audit & Risk Committee or Remuneration Committee (subject to maximum fees of £65,000) £10,000
Fee for the Senior Independent Director (including chairing Committees) £65,000
Appointment of external advisors
During the year, the Remuneration Committee and the Company retained independent external advisors to assist on various aspects of the Company’s
remuneration and share schemes. The Company have continued to retain the services of Ellason LLP as external advisers to the Committee for the
Executive remuneration incentives and provided updates on market trends and also Tapestry Global Compliance LLP (Tapestry) who continue to act
as external advisors to the Committee, to provide support and information on our all-employee share schemes, both selected on their expertise and
quality of their previous advice and originally appointed by the Committee. None of the advisers has any other connection with the Company or its
Executive Directors. Ellason LLP’s fees for 2021 amounted to £14,688; Tapestry fees were £37,906. The Committee is satisfied that Ellason LLP
(whois a member of the Remuneration Consultants Group and abides by its Code of Conduct) and Tapestry continued to maintain independence
andobjectivity.
Statement of shareholding voting
The Directors’ Remuneration Policy and FY2020 Director’s Remuneration Report were approved by shareholders at the 2021 AGM which was held on
10 May 2021. The votes cast were as follows:
£’000s For Against Votes withheld
Directors’ Remuneration Report (FY2020) 99.97% 0.03% 0
Directors’ Remuneration Policy 98.50% 1.50% 0
Director service contracts
Director service contracts are avaialble for inspection at the Company’s registered office.
Signed on 8 March 2022 on behalf of the Board
Adrian Chamberlain
Chair, Remuneration Committee
8 March 2022
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 121

Statutory information
The Directors of Alfa present their report and the audited financial statements for theyear ended
31 December 2021. This Report includes information required by theCompanies Act 2006 and
the Listing Rules 9.8.4R of the UK Financial Conduct Authority’s Listing Rules and forms part of the
management report as required by theDisclosure and Transparency (DTR) Rule 4.
Additional information which is incorporated by reference into this Directors’ Report
canbelocated by reference the tables below.
As permitted by the Companies Act 2006, the Directors’ Report includes the disclosures inthe
Strategic Report on:
Location in annual
report (page)
Performance and future development in the business 1 to 69
Important events affecting the Group since the financial year 171
Climate change emission reporting 66 to 69
Key Financial Performance indicators 36 to 37
Principal risks and uncertainties 46 to 51
Long-term Viability statement 52 to 53
Employee involvement 25
The Group is required to disclose certain information under Listing Rule 9.8.4R in the Directors’
Report or advise where such relevant information is contained. This information can be found
in the following sections of the Annual Report and Accounts:
Listing rule requirement Location in annual report (page)
Details of any long-term incentive schemes 169 to 170
Details of waiver of Director emoluments and
future emoluments
100 to 121
Shareholder waiver of dividends and future
dividends
125
Details of any contract of significance in which
aDirector is or was materially interested
See section below headed ‘Relationship
Agreement with Controlling Shareholder’
Board statement in respect of Relationship
Agreement with the controlling shareholder
See section below headed ‘Relationship
Agreement with Controlling Shareholder’
Principal activities
The principal activity of the Alfa Group is the
provision of software and software-related
services to the auto and equipment finance
industry. Alfa is a public company limited by
shares and is incorporated and domiciled in
England. Its shares are listed on the London
Stock Exchange. The registered office is Moor
Place, 1 Fore Street Avenue, London, EC2Y
9DT, United Kingdom. Alfa’s registration no.
is 10713517. The principal activity of the
Company is that of a holding company.
The Company’s registrar is Equiniti Limited
situated at Aspect House, Spencer Road,
Lancing, West Sussex, BN99 6DA.
Financial risk management
The financial risk management objectives and
policies of the company and the exposure of
the company to price risk, credit risk, liquidity
risk and cash flow risk are disclosed in note 3 to
the financial statements.
Subsidiaries and branches

The Group has subsidiaries in the United
States of America, Germany, Australia and
New Zealand and a subsidiary of the
Company is registered as a branch of
anoverseas company in South Africa.
Further details of these can be found in
note32.2 to the accounts on page 171.
Contracts of significance
We have no contracts deemed significant other
than the Relationship Agreement between the
Company and the Controlling Shareholder, as
detailed on page 124.
In addition, amounts are capitalised as Other
intangible assets which are shown in note 15 to
the consolidated financial statements.
122 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
DIRECTORS’REPORT

Research and development
The Group continued to invest in product
research and development throughout the
year. The product is enhanced by both specific
customer driven requirements, some of which
are paid for by customers, but also by internal
development using the skills and knowledge
from the development teams but also using
feedback from the implementation teams.
The amount expensed in the profit and loss
account for research and development is
shown in note 6 to the consolidated
financialstatements.
In addition, amounts are capitalised as Other
intangible assets which are shown in note 15 to
the consolidated financial statements.
Employee involvement
We place considerable value on the involvement
of our employees, viewing and treating them as
valued team members and an integral part of
our business and our success. We continue to
keep them informed on matters affecting them
through both formal and informal meetings and
the Group intranet, including CEO updates.
Teams are consulted regularly on a wide range of
matters affecting their current and future
interests. We have established share ownership
schemes for use throughout the Company and
intend to use them to broaden share ownership
across the Company. Information on employee
engagement is available on pages 79 and 80.
Further information on team engagement, as
monitored by our internal employee surveys, is
included in the ESG report on pages 58 to 69.
Employee diversity

Our policy for the Alfa team and all
applicants for employment is to match the
capabilities and talents of each individual to
the appropriate job. We are committed to
ensuring equality of opportunity in all
employee relations. We aim to ensure that no
employee, potential employee, customer,
visitor or supplier will receive less favourable
treatment on the grounds of sex, pregnancy,
disability, religious beliefs, marital status,
race, ethnic origin, nationality, age, sexual
orientation or colour.
Disability
With regard to existing team members and
those who may become disabled, Alfa’s policy
is to examine ways and means to provide
continuing employment under the existing
terms and conditions and to provide training
and career development, including promotion,
where appropriate.
We endeavour to meet our responsibilities to
train and employ disabled people.
Employment applications by people with any
disability are given full and fair consideration for
all vacancies and are assessed in accordance
with their skills and abilities.
Directors
The names of the persons who, at any time
during the financial year and up to the date of
this report, were Directors of the Company are:
Date of appointment
Steve Breach 9 August 2019
Adrian Chamberlain 24 April 2020
Charlotte de Metz 24 April 2020
Andrew Denton 6 April 2017
Duncan Magrath 24 April 2020
Andrew Page 4 May 2017
Chris Sullivan 18 July 2019
Matthew White 9 October 2019
Appointment and removal

The rules governing the appointment and
removal of a Director are set out in the Articles
of Association of the Company. The Articles of
Association may be amended by a special
resolution of the shareholders. Specific details
relating to the Principal Shareholder, CHP
Software and Consulting Limited, and its right
to appoint Directors are set out in this report
on page 124.
All Directors will stand for re-election at the
AGM on an annual basis, in line with the
recommendations of the 2018 Code.
The Articles of Association are available
onthecorporate governance page of our
investor relations website
www.investors.alfasystems.com.
Powers of the Directors
Specific powers relating to the allotment and
issuance of ordinary shares and the ability of
the Company to purchase its own securities
arealso included within the Articles and such
authorities are submitted for approval by the
shareholders at the AGM each year.
Since listing and as at 31 December 2021,
theDirectors have not exercised any of their
powers to issue, or purchase, ordinary shares
inthe share capital of the Company.
However post year end, a share repurchase
program commenced on 18 January 2022.
Further details can be found on p124.
Directors’ interests
The Directors’ interests in and options over
ordinary shares in the Company are shown in the
Directors’ Remuneration Report on page 116.
Since the end of the financial year and to the
date of this report, there have been no changes
to such interests.
In line with the requirements of the Companies
Act, each Director has notified the Company of
any situation in which they have, or could have,
a direct or indirect interest that conflicts, or
possibly may conflict, with the interests of the
Company (a situational conflict).
These were considered and approved by the
Board in accordance with the Articles and each
Director informed of the authorisation and any
terms on which it was given. All Directors are
aware of the need to consult with the Company
Secretary should any possible situational
conflict arise, so that prior consideration can be
given by the Board as to whether or not such
conflict will be approved.
Directors’ indemnities
Each Director of the Company has the benefit
of a qualifying indemnity, as defined by section
236 of the Companies Act, and as permitted
by the Articles, as well as Directors’ and
Officers’ liability insurance.
No amount was paid under any of these
indemnities or insurances during the year other
than the applicable insurance premiums.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 123

Share capital
The Company’s ordinary shares are listed on
the London Stock Exchange. The authorised
share capital of the Company as at
31 December 2021 and 8 March 2022, being
the latest practicable date prior to the date of
this Annual Report, comprises 300,000,000
ordinary shares of 0.1 pence each. Further
information regarding the Company’s issued
share capital can be found in note 26 of the
Company financial statements.
There have been no movements in the
Company’s issued share capital since
31 December 2021 through to the date of this
Report. However, on 18 January 2022, the
Company announced it had entered into a
share repurchase programme. More detail can
be found on this page under ‘Authority to
purchase own shares’.
Shareholders’ voting rights
All members who hold ordinary shares are
entitled to attend and vote at the AGM.
On ashow of hands at a general meeting, every
member present in person shall have one vote
and on a poll, every member present in person
or by proxy shall have one vote for every
ordinary share held. No shareholder holds
ordinary shares carrying special rights relating
to the control of the Company and the
Directors are not aware of any agreements
between holders of the Company’s shares that
may result in restrictions on voting rights.
Restrictions on transfer

The Articles do not contain any restrictions on
the transfer of ordinary shares in the Company
other than the usual restrictions applicable
where any amount is unpaid on a share. All
issued share capital of the Company at the
date of this Annual Report is fully paid.
Certain restrictions are also imposed by laws
and regulations (such as insider trading and
market abuse requirements relating to close
periods) and requirements of the Listing Rules
whereby Directors and certain employees of
the Company require Board approval to deal in
the Company’s securities.
Each of the Executive Directors, and the senior
executives (each, a ‘Restricted Shareholder’) at
the time of listing agreed, for a period of one
year following Admission on the terms and
subject to the conditions of the Underwriting
Agreement, were not to dispose of any of the
ordinary shares they held in the Company (the
‘Initial Lock-Up Period’). This Initial Lock-Up
Period expired on 1 June 2018 and, for most of
the Restricted Shareholders, was followed by
three further lock-up periods of 365 days, 720
and 1,095 days. Each of these further lock-up
periods commenced on the termination of the
Initial Lock-Up Period and covered on each
occasion a further 25% of the relevant
Restricted Shareholder’s holding of ordinary
shares. The final lock-up period expired on
1 June 2021.
Authority to purchase

Subject to authorisation by shareholder
resolution, the Company may purchase its own
shares in accordance with the Companies Act
2006. Any shares bought back may be held as
treasury shares or cancelled immediately on
completion of the purchase.
At the 2021 AGM, the Company was generally
and unconditionally authorised by its
shareholders to purchase in the market up to
10% of the ordinary shares of the Company
(30,000,000 ordinary shares). As at
31 December 2021 the full extent of this
authority remained in force and unused.
This authority is renewable annually, and a
special resolution will be proposed at the 2022
AGM to request shareholders to renew it.
The Directors will only purchase the Company’s
shares in the market if they believe it is in the
best interests of shareholders in general.
On 18 January 2022, the Company announced
that it had entered into an arrangement with
Barclays Bank PLC, acting through its
investment bank to purchase ordinary shares
inthe Company up to an aggregate purchase
price of £18m over an 18-month period.
The purchase of the ordinary shares is made
independently and uninfluenced by the
Company and held as treasury shares.
The purpose of the share purchases is to
reduce the Company’s share capital and to
enable the Company to meet obligations
arising from share option programmes and
notto issue any new shares to satisfy future
option exercises.
As at 7 March 2022, being the last practicable
date prior to the production of this Annual
Report, the number of ordinary shares held in
treasury was 388,605. Accordingly, total voting
rights amounted to 299,611,395 ordinary
shares as at the same date.
During 2021, the Employee Benefit Trust (EBT)
purchased 3,415,650 ordinary shares with the
nominal value of £3,415.65 for a total
consideration of £4,607,677.18 and to be held
in the EBT for the purpose of providing shares
to cover future share option awards.
Transactions with

The only subsisting material transactions which
the Company has entered into with related
parties are:
Relationship agreement and the
controlling shareholder
The Relationship Agreement was entered into
on 26 May 2017 and regulates the relationship
between CHP Software and Consulting
Limited (the ‘Controlling Shareholder’) and the
Company following listing. Subject to a certain
minimum shareholding, the Relationship
Agreement details the rights the Controlling
Shareholder has to representation on the
Board and Nomination Committee and to
appoint observers to the Nomination
Committee (if not represented on the
Committee). The Controlling Shareholder also
undertakes not to operate, establish, own or
acquire a competing business during the terms
of the agreement. Any transactions between
Alfa and the Controlling Shareholder will be at
arm’s length and on normal commercial terms.
The Relationship Agreement complies with the
requirements of the LRs, including Listing Rule
9.2.2AR(2)(a), and Listing Rules 6.1.4DR.
124 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
DIRECTORS’REPORTCONTINUED

In accordance with the requirements of Listing
Rules 9.8.4(14), the Board confirms that the
Company has complied with its obligations
under the Relationship Agreement, including in
respect of the independence provisions and, so
far as the Company is aware, the Controlling
Shareholder has complied with the provisions
of the Relationship Agreement (including the
independence and non-compete provisions set
out therein), at all times since the Agreement
was entered into.
Other related party transactions are
detailedinnote 32 to the consolidated
financialstatements.
Profits and dividends
The consolidated profit after tax for the year
ended 31 December 2021 was £19.2m
(FY20: £20.3m). The results are discussed in
greater detail in the Financial review on pages
38 to 42. Information on dividends is shown in
note 31 of the Financial Statements and is
incorporated into this report by reference.
During the year, the trustee of the employee
benefit trust which operates in connection with
the Company’s share plans waived its rights to
receive dividends on any shares held by it.
Details of the trust can be found in note 12
ofthis report.
Subject to approval at the Annual General
Meeting on 12 May 2022, a 2021 final dividend
of 1.1 pence per share will be paid on 24 June
2022 to holders on the register on 27 May
2022. The ordinary shares will be quoted
ex-dividend on 26 May 2022.
Significant Shareholdings at 31 December 2021 and 25 February 2022 (being the latest
practicable date of this report)
At the relevant dates, the Company had been notified, in accordance with chapter 5 of the Disclosure Guidance and Transparency Rules, of the
following voting rights as a shareholder of the Company:
Name of shareholder
No. of ordinary
shares at
31 December
2021
% of total voting
rights at 31
December 2021
No. of ordinary
shares at 25
February 2022
% of total voting
rights at 25
February 2022
Nature of
holding
CHP Software and Consulting Limited 197,645,649 65.88 197,645,649 65.96 Direct
Aberdeen Investments (Standard Life) 11,642,054 3.88 11,377,726 3.80 Indirect
Blackrock Investment Mgt 9,110,936 3.04 11,423,020 3.81 Indirect
During the period between 25 February 2022 and 8 March 2022 the Company did not receive any notifications under chapter 5 of the Disclosure
Guidance and Transparency Rules.
The trustees of the Company’s employee share
scheme (EBT) have a rolling dividend waiver in
place in respect of shares held in trust.
Amendment of the Articles
The Articles may only be amended by a special
resolution of the Company’s shareholders in a
general meeting, in accordance with the
Companies Act.
Compensation for loss of
office and change of control
There are no agreements between the
Company and its Directors or Alfa team
members providing for additional compensation
for loss of office or employment (whether
through resignation, redundancy or otherwise)
that occurs because of a takeover bid.
The only significant agreement, to which the
Company is a party to that takes effect, alters
or terminates upon a change of control of the
Company following a takeover bid, and the
effect thereof, is the Relationship Agreement.
The Relationship Agreement with the
Controlling Shareholder contains a provision
under which it will terminate upon the earlier
of: (i) the Controlling Shareholder and its
associates ceasing to have the entitlement to
exercise or control the exercise of 10% or more
of the voting rights in the Company; or (ii) the
Company’s ordinary shares ceasing to be
admitted to the listing on the Official List of
theFCA.
Political donations
The Group made no political donations and
incurred no political expenditure during the
year (FY20: £nil). It remains the Company’s
policy not to make political donations or to
incur political expenditure.
At the 2021 AGM, the Directors were generally
and unconditionally authorised by the
Company’s shareholders to make limited
political donations of up to £50,000, in order to
protect against any inadvertent breaches of the
relevant provisions of the Companies Act 2006
which are very broad in nature. The Board has
no intention of using this authority.
Interest capitalised in

No interest has been capitalised by Alfa in
theyear ended 31 December 2021 or at
31 December 2020.
Stakeholder engagement
Details of how the Group has engaged with its
employees, suppliers, customers and other
principal stakeholders together with details of
the key decisions taken by the Group during
the year are disclosed on pages 54 to 57.
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 125

Going concern
The financial statements are prepared on the
going concern basis. The Group continues to
be cash-generative and the Directors believe
that the Group has a resilient business model.
The Group meets its day-to-day working
capital requirements through its cash reserves
generated from operating activities.
The Group’s forecasts and projections, taking
account of reasonably possible changes in
trading performance, show that the Group
has sufficient cash reserves to continue to
operate for a period of not less than
12 months from the date of approval of these
financial statements.
The going concern assessment also includes
downside stress testing in line with FRC
guidance which demonstrates that even in the
most extreme downside conditions considered
reasonably possible, given the existing level of
cash held, the Group would continue to be able
to meet its obligations as they fall due, without
the need for substantive mitigating actions.
On this basis, whilst it is acknowledged that
there is continued uncertainty over future
economic conditions, the Directors consider it
appropriate to continue to adopt the going
concern basis of accounting in preparing the
financial statements.
Viability statement
The Viability statement containing a broader
assessment by the Board of the Company’s
ongoing viability is set out in the Strategic
report on pages 52 to 53.
Corporate governance
statement
The Company’s statement on corporate
governance can be found on page 71 of the
Corporate governance report. The report
forms part of this Directors’ Report and is
incorporated by cross reference.
Climate risk reporting
For the first time this year the Company
hasmade disclosures consistent with the
recommendations from the Task Force on
Climate-related Financial Disclosures (TCFD).
These disclosures are shown on page 69.
Annual General Meeting
The Company’s Annual General Meeting
willbeheld at 3pm on Thursday, 12 May 2022
at Alfa’s head office at Moor Place, 1 Fore
Street, London, EC2Y 9DT. The Notice of
Meeting setting out the resolutions to be
proposed atthe 2022 AGM, together with
explanatory notes, will be sent to shareholders
as a separatedocument and made available
ontheCompany’s website
www.investors.alfasystems.com.
Disclosure of information to
the auditor
Each of the Directors of the Company at the
date the Directors’ Report is approved
confirms that:
• So far as the Director is aware, there is no
relevant audit information of which the
Company’s auditor is unaware; and
• He or she has taken all the steps that he or
she ought to have taken as a Director in
order to make himself or herself aware of
any relevant audit information and to
establish that the Group and Company’s
auditors are aware of that information.
This confirmation is given and should be
interpreted in accordance with the provisions
of s.418 of the Companies Act 2006.
RSM UK Audit LLP, the Group’s auditor, has
indicated its willingness to continue in office
and, on the recommendation of the Audit &
Risk Committee and in accordance with section
489 of the Companies Act of 2006, a resolution
to reappoint it will be put to the 2022 AGM.
Board approval of the
Directors’ Report
The Directors’ Report was approved by the
Board on 8 March 2022 and signed on its
behalf by:
Andrew Denton
Chief Executive Officer
8 March 2022
126 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
DIRECTORS’REPORTCONTINUED

The Directors are responsible for preparing the
Strategic Report and the Directors’ Report, the
Directors’ Remuneration Report, the separate
Corporate Governance Statement and the
financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to
prepare Group and Company financial
statements for each financial year.
The Directors have elected under company
law to prepare group financial statements in
accordance with UK-adopted International
Accounting Standards. The Directors have
elected under company law to prepare the
company financial statements in accordance
with United Kingdom Generally Accepted
Accounting Practice (United Kingdom
Accounting Standards and applicable law).
The group financial statements are required by
law and UK-adopted International Accounting
Standards to present fairly the financial
position and performance of the group; the
Companies Act 2006 provides in relation to
such financial statements that references in the
relevant part of that Act to financial
statements giving a true and fair view are
references to their achieving a fair presentation.
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 the
Company and of the profit or loss of the Group
for that period.
In preparing each of the Group and Company
financial statements, the Directors are
requiredto:
a. select suitable accounting policies and then
apply them consistently;
b. make judgements and accounting estimates
that are reasonable and prudent;
c. for the Group financial statements, state
whether they have been prepared in
accordance with UK-adopted International
Accounting Standards;
d. for the Company financial statements, state
whether applicable UK accounting
standards have been followed, subject to
any material departures disclosed and
explained in the Company financial
statements; and
e. prepare the financial statements on the
going concern basis unless it is inappropriate
to presume that the Group and the
Company will continue in business.
The Directors are responsible for keeping
adequate accounting records that are sufficient
to show and explain the Group’s and the
Company’s transactions and disclose with
reasonable accuracy at any time the financial
position of the Group and the Company and
enable them to ensure that thefinancial
statements and the Directors’ Remuneration
Report comply with the Companies Act 2006.
They are also responsible for safeguarding the
assets of theGroup and the Company and
hence for taking reasonable steps for the
prevention and detection of fraud and
otherirregularities.
Directors’ statement pursuant
to the Disclosure and
Transparency Rules
Each of the Directors, whose names and
functions are listed on pages 74 to 75 confirm
that, to the best of each person’s knowledge:
a. the financial statements, prepared in
accordance with the applicable set of
accounting standards, give a true and fair
view of the assets, liabilities, financial
position and profit of the Company and the
undertakings included in the consolidation
taken as a whole; and
b. the Strategic Report contained in the
Annual Report includes a fair review of the
development and performance of the
business and the position of the Company
and the undertakings included in the
consolidation taken as a whole, together
with a description of the principal risks and
uncertainties that they face.
The Directors are responsible for the
maintenance and integrity of the corporate and
financial information included on the Alfa
Financial Software Holdings PLC website.
Legislation in the United Kingdom governing
the preparation and dissemination of financial
statements may differ from legislation in
otherjurisdictions.
This responsibility statement was approved by
the Board of Directors on 8 March 2022 and is
signed on its behalf by:
Andrew Denton
Chief Executive Officer
8 March 2022
CORPORATE GOVERNANCEAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 127
STATEMENTOFDIRECTORS’RESPONSIBILITIES

128 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
Financial
statements
Financial statements
129 Independent auditor’s report
137 Consolidatedstatementofprotorlossand
comprehensiveincome
138 Consolidatedstatementofnancialposition
139 Consolidatedstatementofchangesinequity
140 Consolidatedstatementofcashows
141 Notestotheconsolidatednancialstatements
173 Companystatementofnancialposition
174 Companystatementofchangesinequity
175 Companynotestothenancialstatements

Other information
179 Glossary of terms
180 Shareholder information


FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 129
Opinion
We have audited the financial statements of
Alfa Financial Software Holdings PLC (the
‘parent company’) and its subsidiaries (the
‘group’) for the year ended 31 December
2021, which comprise the Consolidated
statement of profit or loss and comprehensive
income, Consolidated statement of financial
position, Consolidated statement of changes
in equity, Consolidated statement of cash
flows, Company statement of financial
position, Company statement of changes in
equity and notes to the financial statements,
including significant accounting policies.
The financial reporting framework that has
been applied in the preparation of the group
financial statements is applicable law and
UK-adopted International Accounting
Standards. The financial reporting framework
that has been applied in the preparation of
the parent company financial statements is
applicable law and United Kingdom
Accounting Standards including Financial
Reporting Standard 102 “The Financial
Reporting Standard applicable in the UK and
Republic of Ireland” (United Kingdom
Generally Accepted Accounting Practice).
In our opinion:
•
the financial statements give a true and
fair view of the state of the group’s and of
the parent company’s affairs as at
31 December 2021 and of the group’s
profit for the year then ended;
•
the group financial statements have been
properly prepared in accordance with
UK-adopted International Accounting
Standards;
•
the parent company financial statements
have been properly prepared in
accordance with United Kingdom
Generally Accepted Accounting Practice;
and
•
the financial statements have been
prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance
withInternational Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards
arefurther described in the Auditor’s
responsibilities for the audit of the financial
statements section of our report. We are
independent of the group and parent
company in accordance with the ethical
requirements that are relevant to our audit
ofthe financial statements in the UK,
including the FRC’s Ethical Standard as
applied to listed public interest entities
andwe have fulfilled our other ethical
responsibilities in accordance with these
requirements. We believe that the audit
evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
INDEPENDENTAUDITOR’SREPORTTOTHEMEMBERS
OFALFAFINANCIALSOFTWAREHOLDINGSPLC
Summary of our

Commentary
Key audit matters
Group
•
Revenue recognition – software and services revenue from implementation projects
ParentCompany
•
None
Materiality
Group
•
Overall materiality: £1,140,000 (2020: £893,000)
•
Performance materiality: £859,000 (2020: £670,000)
ParentCompany
•
Overall materiality: £1,120,000 (2020: £882,000)
•
Performance materiality: £846,000 (2020: £662,000)
Scope
Our audit procedures (excluding analytical procedures at group level) covered 100% of revenue,
98% of total assets and 99% of profit before tax.

130 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the group and parent
company 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 group and parent
company financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Revenue recognition – software and services revenue from implementation projects
Key audit
matter
description
The 2021 group financial statements disclose the following types of revenue:
•
Software £13.6m (2020: £20.0m)
•
Services £46.1m (2020: £40.8m)
•
Subscription £23.5m (2020: £18.1m)
The Group’s operations include complex software implementation programmes and service activities. The delivery of these
contracts typically extends over more than one reporting period, and often the original project plans are amended, as the
implementation progresses. As such, in recognising revenue, management has to apply a number of judgements to allocate
the overall transaction price across the multiple performance obligations that have been identified within these projects.
In addition, due to the structure of the Group’s licence and maintenance contractual arrangements, the Group also receives
one-off licence uplifts or maintenance and right to use termination payments which need to be accounted for in accordance
with IFRS 15 “Revenue from contracts with customers”.
We consider revenue recognition for software and services revenue for implementation projects to be a key audit matter due to:
•
The level of judgement involved in the identification of distinct performance obligations and subsequent
measurement of revenue and timing of recognition.
•
The degree of estimation involved in determining some inputs for inclusion in software/services implementation
revenue calculations.
•
The potential risk of fraud in revenue recognition.
•
The allocation of audit resources and effort.
Further details on revenue recognition are included in note 1.5 “Accounting policies – Revenue recognition”, note 2 “Critical
accounting judgements, estimates and assumptions” and note 5 “Revenue from contracts with customers”.
INDEPENDENTAUDITOR’SREPORTTOTHEMEMBERS
OFALFAFINANCIALSOFTWAREHOLDINGSPLCCONTINUED

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 131
How the matter
was addressed
inthe audit
In response to this key audit matter, the audit procedures we performed included:
•
Obtaining an understanding of the processes and controls around revenue recognition.
•
Reviewing the group’s revenue recognition policy, including supporting accounting papers, to assess whether
performance obligations have been appropriately identified and revenue recognised in line with IFRS 15.
•
For software implementation revenue (software and services) we:
•
Assessed management’s analysis of the performance obligations within individual contracts and of how the 5
steps in IFRS 15 should be applied.
•
Audited the revenue recognition calculations for a sample of the most significant contracts to assess whether the
methodology applied was consistent with the group’s revenue recognition policy and across projects.
This included testing inputs in the calculations to supporting evidence.
•
Verified the explanations and data provided by management by holding discussions with project managers
regarding the key assumptions and judgements made, in particular around the estimates of the projected costs
to complete and the completeness of any contract arrangements, including any unusual terms and contract
modifications.
•
Tested the completeness and accuracy of timesheet data as some performance obligations are recognised
based on days worked.
•
Challenged management on the appropriateness of estimates made in the IFRS 15 calculations. This included
assessing the results of management’s analysis of the sensitivity of the calculations to these estimates.
•
Assessed key judgements made on specific contracts including management’s treatment of any contract
modifications and whether these were recognised appropriately in line with IFRS 15.
•
Auditing the disclosures in the financial statements and evaluated whether the policy for revenue recognition is
appropriately explained and critical judgements and key sources of estimation uncertainty are appropriately disclosed.
Key
observations
Disclosure of the impact of the key judgements and estimates applied in respect of revenue recognition are disclosed
innote2 to the financial statements. Based on the results of the audit procedures outlined above, we have no
observationsto report.
No key audit matters were identified in respect of the Parent Company.

132 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing and extent of our audit
procedures. When evaluating whether the effects of misstatements, both individually and on the financial statements as a whole, could
reasonably influence the economic decisions of the users we take into account the qualitative nature and the size of the misstatements.
Based on our professional judgement, we determined materiality as follows:
Group Parent company
Overall materiality
£1,140,000 (2020: £893,000) £1,120,000 (2020: £882,000)
Basis for determining
overallmateriality
5% of profit before tax (2020: 5% of profit
before tax adjusted to exclude one off
licencerevenue associated with a five-year
contract extension)
1% of net assets, capped at 99% of group
overall materiality (2020: 1% of net assets,
capped at 99% of group overall materiality)
Rationale for
benchmark applied
As a listed entity, profit before taxation is
considered the most appropriate benchmark
forusers of the financial statements.
Net assets is considered to be the most
appropriate benchmark for the parent
companyas it is primarily a holding company.
Performance materiality
£859,000 (2020: £670,000) £846,000 (2020: £662,000)
Basis for determining
performancemateriality
75% of overall materiality 75% of overall materiality
Reporting of misstatements
totheAudit Committee
Misstatements in excess of £57,000 and
misstatements below that threshold that, in our
view, warranted reporting on qualitative grounds.
Misstatements in excess of £56,000 and
misstatements below that threshold that, in our
view, warranted reporting on qualitative grounds.
An overview of the scope of our audit
The group consists of 8 components, located in the following countries;
•
United Kingdom
•
United States of America
•
Germany
•
Australia
•
New Zealand
Full scope audits were performed for 4 components, targeted audit procedures for 2 components and analytical procedures at group level
for the remaining 2 components. The coverage achieved by our audit procedures was:
Number of
components Revenue Total assets Profit before tax
Full scope audit 4 74% 90% 93%
Targeted audit procedures 2 26% 8% 6%
Analytical procedures at group level 2 0% 2% 1%
Total 8 100% 100% 100%
Targeted audit procedures were performed on components which are not financially significant by size but include a significant risk.
The targeted audit procedures included testing of revenue and the associated balance sheet amounts as described in the key audit matter
section above.
All audit work was completed by the group audit team and no component auditors were used in our audit.
INDEPENDENTAUDITOR’SREPORTTOTHEMEMBERS
OFALFAFINANCIALSOFTWAREHOLDINGSPLCCONTINUED

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 133
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors’ assessment of the group’s and parent company’s ability to continue to adopt
the going concern basis of accounting included:
•
Checking the arithmetic accuracy of the forecasts that form the basis of the directors’ going concern assessment and Viability statement
•
Corroborating the cash balance that is used as the starting point for the forecasts by confirming to bank confirmations
•
Challenging management’s forecasts and comparing the 2022 budget to YTD results and order book
•
Assessing the assumptions made in management’s stress-testing
•
Completing further sensitivity analysis and stress-testing
•
Auditing the disclosures in the financial statements in respect of going concern and viability
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group’s or the parent company’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
In relation to the entity reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt
the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor’s report
thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement
in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies
Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements
areprepared is consistent with the financial statements and those reports have been prepared in accordance with applicable
legalrequirements;
•
the information about internal control and risk management systems in relation to financial reporting processes and about share capital
structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Rules and Transparency Rules sourcebook made by the Financial
Conduct Authority (the FCA Rules), is consistent with the financial statements and has been prepared in accordance with applicable legal
requirements; and
•
information about the company’s corporate governance code and practices and about its administrative, management and supervisory
bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.

134 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the
audit, we have not identified material misstatements in:
•
the Strategic Report or the Directors’ Report; or
•
the information about internal control and risk management systems in relation to financial reporting processes and about share capital
structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in
our opinion:
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from
branches not visited by us; or
•
the parent company financial statements and the part of the directors’ remuneration report to be audited are not in agreement with the
accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
we have not received all the information and explanations we require for our audit; or
•
a corporate governance statement has not been prepared by the parent company.
Corporate governance statement
We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance
Statement relating to the parent company’s compliance with the provisions of the UK Corporate Governance Code specified for our review by the
Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements and 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 pages 52 to 53;
•
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 pages 52 to 53;
•
Director’s statement on whether it has a reasonable expectation that the group will be able to continue in operation and meets its liabilities
set out on page 53;
•
Directors’ statement on fair, balanced and understandable set out on page 98;
•
Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 46 to 51;
•
Section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 98;
and,
•
Section describing the work of the audit committee set out on pages 94 to 99.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 127, the directors are responsible for the preparation of
the 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 financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors
either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
INDEPENDENTAUDITOR’SREPORTTOTHEMEMBERS
OFALFAFINANCIALSOFTWAREHOLDINGSPLCCONTINUED

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 135
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
butis not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit
evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures
in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that
may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws
and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to
fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing
and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity’s
operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the group audit engagement team:
•
obtained an understanding of the nature of the industry and sector, including the legal and regulatory frameworks that the group and
parent company operate in and how the group and parent company are complying with the legal and regulatory frameworks;
•
inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities,
including any known actual, suspected or alleged instances of fraud;
•
discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the
financial statements may be susceptible to fraud.
The most significant laws and regulations were determined as follows:
Legislation/Regulation Additional audit procedures performed by the audit engagement team included:
UK-adoptedIAS,FRS102and
CompaniesAct2006
•
Review of the financial statement disclosures and testing to supporting documentation;
•
Completion of disclosure checklists to identify areas of non-compliance.
Taxcomplianceregulations
•
Inspection of advice received from internal / external tax advisors;
•
Involvement of a tax specialist in the audit of tax;
•
Consideration of whether any matter identified during the audit required reporting to an appropriate
authority outside the entity.

136 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
The areas that we identified as being susceptible to material misstatement due to fraud were:
Risk Audit procedures performed by the audit engagement team:
Revenuerecognition The audit procedures performed in relation to revenue recognition are documented in the key audit
matter section of our audit report.
Capitalisationof
developmentcosts
•
Reviewing the Investment Committee meeting minutes for any projects which may indicate the
understatement of amounts capitalised during the period;
•
Interviewing relevant personnel to understand the projects capitalised in the period and the nature of
projects not capitalised;
•
Verifying the amounts capitalised during the year by reference to underlying payroll records and
timesheet data.
Managementoverride
ofcontrols
•
Testing the appropriateness of journal entries and other adjustments;
•
Assessing whether the judgements made in making accounting estimates are indicative of a potential
bias;
•
Evaluating the business rationale of any significant transactions that are unusual or outside the normal
course of business.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at:
http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters which we are required to address
Following the recommendation of the audit committee, we were appointed by management in July 2020 to audit the financial statements for
the year ending 31 December 2020 and subsequent financial periods.
The period of total uninterrupted consecutive appointments is 2 years, covering the years ending 31 December 2020 and 31 December 2021.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company and we remain
independent of the group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee in accordance with ISAs (UK).
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.
Graham Ricketts
(Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
25 Farringdon Street London, United Kingdom, EC4A 4AB
8 March 2022
INDEPENDENTAUDITOR’SREPORTTOTHEMEMBERSOFALFA
FINANCIALSOFTWAREHOLDINGSPLCCONTINUED

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 137
CONSOLIDATEDSTATEMENTOFPROFITORLOSS
ANDCOMPREHENSIVEINCOME
£m Note
2021
2020
(restated)
Continuingoperations
Revenue 5 83.2 78.9
Cost of sales* (29.0) (27.0)
Gross profit 54.2 51.9
Sales, general and administrative expenses* (30.0) (28.5)
Other income 0.5 0.5
Operating profit 6 24.7 23.9
Share of net loss of joint venture 19 (0.1) –
Profitbeforenetfinancecostsandtax 24.6 23.9
Finance income 10 – 0.1
Finance expense 10 (0.8) (0.8)
Profitbeforetaxation 23.8 23.2
Taxation 11 (4.6) (2.9)
Profitforthefinancialyear 19.2 20.3
Other comprehensive income:
Exchange differences on translation of foreign operations 27 (0.1) 0.1
Other comprehensive (loss)/income net of tax (0.1) 0.1
Totalcomprehensiveincomefortheyear 19.1 20.4
Earningspershare(inpence)forprofitattributable
totheordinaryequityholdersoftheCompany
Basic 12 6.49 6.93
Diluted 12 6.39 6.79
Weighted average no. of shares (m) – basic 12 296.7 293.8
Weighted average no. of shares (m) – diluted 12 301.5 300.1
* To better reflect the nature and function of certain expenses, changes have been made to the classification and allocation of expense line items. The comparative disclosures
for the December 2020 reporting period have also been amended to reflect a fair base for comparability. Costs previously classified as implementation and support expenses
and research and product development expenses of £11.9m and £15.1m, respectively, have been presented as cost of sales. In addition, £3.4m of implementation and
support expenses and £3.8m of research and product development expenses have been reclassified to sales, general and administrative expenses. The main items affected
are administrative salary costs, computer costs and property related expenses. These changes have had no impact on the total expenses or the profit before tax that were
disclosed at the end of December 2020.
The above consolidated statement of profit or loss and comprehensive income should be read in conjunction with the accompanyingnotes.

138 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
CONSOLIDATEDSTATEMENTOFFINANCIALPOSITION
£m Note
2021
2020
Assets
Non-currentassets
Goodwill 14 24.7 24.7
Other intangible assets 15 2.4 2.2
Property, plant and equipment 16 0.8 0.9
Right-of-use assets 17 14.4 14.8
Deferred tax assets 18 1.8 1.8
Interests in joint venture 19 0.3 0.4
Totalnon-currentassets 44.4 44.8
Currentassets
Trade receivables 20 6.0 5.8
Accrued income 21 6.3 5.0
Prepayments 21 3.2 2.1
Other receivables 21 1.0 0.8
Cash and cash equivalents 22 23.1 37.0
Totalcurrentassets 39.6 50.7
Totalassets 84.0 95.5
Liabilitiesandequity
Currentliabilities
Trade and other payables 23 9.3 8.1
Corporation tax 23 1.8 1.3
Lease liabilities 24 1.9 1.7
Contract liabilities 23 11.0 7.0
Totalcurrentliabilities 24.0 18.1
Non-currentliabilities
Lease liabilities 24 15.2 15.8
Provisions for other liabilities 25 1.4 1.4
Totalnon-currentliabilities 16.6 17.2
Totalliabilities 40.6 35.3
Capitalandreserves
Share capital 26 0.3 0.3
Translation reserve 27 – 0.1
Own shares 28 (3.4) –
Retained earnings 46.5 59.8
Totalequity 43.4 60.2
Totalliabilitiesandequity 84.0 95.5
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
The consolidated financial statements on pages 137 to 172 were approved and authorised for issue by the Board of Directors on 8 March 2022
and signed on its behalf.
Andrew Denton
Chief Executive Officer
Duncan Magrath
Chief Financial Officer
Alfa Financial Software Holdings PLC – Registered number 10713517

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 139
CONSOLIDATEDSTATEMENTOFCHANGESINEQUITY
£m Note Share capital
Own
shares
Translation
reserve
Retained
earnings
Equity
attributable to
owners of the
parent
Balance as at 1 January 2020 0.3 – – 82.0 82.3
Profit for the financial year – – – 20.3 20.3
Other comprehensive income – – 0.1 – 0.1
Total comprehensive income for the year – – 0.1 20.3 20.4
Transactions with owners in their capacity as owners:
Equity-settled share-based payment schemes 29 – – – 1.3 1.3
Equity-settled share-based payment schemes –
deferred tax impact 18 – – – 0.4 0.4
Dividends 31 – – – (44.2) (44.2)
Balance as at 31 December 2020 0.3 – 0.1 59.8 60.2
Profit for the financial year – – 19.2 19.2
Other comprehensive loss – – (0.1) – (0.1)
Total comprehensive income for the year – – (0.1) 19.2 19.1
Transactions with owners in their capacity as owners:
Equity-settled share-based payment schemes 29 – – – 1.1 1.1
Equity-settled share-based payment schemes –
deferredtaximpact 18 – – – 0.3 0.3
Dividends 31 – – – (32.7) (32.7)
Own shares issued 28 – 1.2 – (1.2) –
Own shares acquired 28 – (4.6) – – (4.6)
Balanceasat31December2021 0.3 (3.4) – 46.5 43.4
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

140 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
CONSOLIDATEDSTATEMENTOFCASHFLOWS
£m Note 2021 2020
Cashflowsfromoperatingactivities
Profit before tax 23.8 23.2
Net finance costs 0.8 0.7
Share of net loss from joint venture 0.1 –
Operating profit 24.7 23.9
Adjustments:
Depreciation 6/16/17 2.3 2.2
Amortisation 6/15 0.8 0.8
Share-based payment charge 29 1.5 1.5
Loss on disposal of assets – 0.1
Movement in provisions 25 – 0.5
Movement in working capital:
Movement in contract liabilities 23 4.1 (1.9)
Movement in trade and other receivables 20/21 (2.8) 0.6
Movement in trade and other payables (excluding contract liabilities) 23 0.7 2.4
Cashgeneratedfromoperations 31.3 30.1
Interest element on lease payments 10/24 (0.8) (0.8)
Income taxes paid 11 (3.8) (3.8)
Netcashgeneratedfromoperatingactivities 26.7 25.5
Cashflowsfrominvestingactivities
Purchases of property, plant and equipment 16 (0.3) (0.2)
Purchases of computer software 15 (0.1) (0.1)
Payments for internally developed software 15 (0.9) (0.7)
Investment in joint venture 19 – (0.3)
Loan to joint venture 19 – (0.1)
Interest received 10 – 0.1
Netcashusedininvestingactivities (1.3) (1.3)
Cashflowsfromfinancingactivities
Dividends paid to Company shareholders (32.7) (44.2)
Principal element on lease payments 24 (1.9) (1.7)
Purchase of own shares (4.6) –
Cashusedinfinancingactivities (39.2) (45.9)
Netdecreaseincash (13.8) (21.7)
Cash and cash equivalents at the beginning of the year 22 37.0 58.8
Effect of foreign exchange rate changes on cash and cash equivalents (0.1) (0.1)
Cashandcashequivalentsattheendoftheyear 22 23.1 37.0
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 141
NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED 31 DECEMBER 2021
 
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial statements.
These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for theGroup,
consisting of Alfa Financial Software Holdings PLC (Alfa or the Company), its subsidiaries and joint venture, and are presented to the nearest
million unless otherwise stated. The change in presentation from thousands to millions has been done to make the financial statements
clearer for the users.
The principal activity of the Group is to provide software solutions and consultancy services to the auto and equipment finance industry in the
UnitedKingdom, United States of America, Europe and Australasia.
 
Compliance with IFRS
The consolidated financial statements of the Group have been prepared in accordance with UK-adopted international accounting standards
and Company Law. The change in the basis of preparation from 2020 is required by UK Company Law as a result of the UK’s exit from the EU
on 31 January 2020 and the cessation of the transition period on 31 December 2020. This change does not constitute a change in accounting
policy, rather a change in the framework which is required to group the use of IFRS in company law. There is no impact on the recognition,
measurement or disclosure between the two frameworks in the period reported.
Historical cost convention
The consolidated financial statements have been prepared under the historical cost convention, other than the revaluation of financial assets
and financial liabilities recorded at fair value through profit or loss.
Going concern
The financial statements are prepared on the going concern basis. The Group continues to be cash-generative and the Directors believe that
the Group has a resilient business model. The Group meets its day-to-day working capital requirements through its cash reserves generated
from operating activities. The Group’s forecasts and projections, taking account of reasonably possible changes in trading performance,
showthat the Group has sufficient cash reserves to continue to operate for a period of not less than 12 months from the date of these
financial statements.
The going concern assessment also includes downside stress testing in line with FRC guidance which demonstrates that even in the most
extreme downside conditions considered reasonably possible, given the existing level of cash held, the Group would continue to be able to
meet its obligations as they fall due, without the need for substantive mitigating actions.
On this basis, whilst it is acknowledged that there is continued uncertainty over future economic conditions, the Directors consider it
appropriate to continue to adopt the going concern basis of accounting in preparing the financial statements.
New and amended standards adopted by the Group
The Group applies for the first time the following new standard:
•
Amendments to IFRS 16 Leases: COVID 19-Related Rent Concessions (issued on 28 May 2020).
By adopting the above, there has been no material impact on the financial statements.
New standards, amendments and interpretations not yet adopted
At the date of authorisation of these financial statements, the Group has not applied the following new and revised IFRS Standards that have
been issued but are not yet effective:
•
Amendments to IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions, Contingent Liabilities and
Contingent Assets; and Annual Improvements 2018-2020 (All issued 14 May 2020, effective from 1 January 2022).
The directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements
oftheGroup.

142 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
 
Basis of consolidation
Subsidiaries are all entities over which the Group has control. 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.
Unless otherwise stated, subsidiaries 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 each subsidiary’s principal place ofbusiness.
All intra-Group transactions, balances, income and expenses are eliminated on consolidation. All subsidiaries have a 31 December year end.
In the current period it was concluded that the Group exercises control over the employee benefit trust because it is exposed to, and has a right
to,variable returns from this trust and is able to use its power over the trust to affect those returns. Therefore the trust has been consolidated by
theGroup in the current period. The impact of consolidation of the trust in the prior period was immaterial.
Joint arrangements
A joint arrangement is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control;
that is, when the relevant activities that significantly affect the investee’s returns require the unanimous consent of the parties sharing control.
Joint control is the contractually agreed sharing of control of an arrangement, and exists only when decisions about the activities thatsignificantly
affect the arrangement’s returns require the unanimous consent of the parties sharing control. Judgement isrequiredindetermining this
classification through an evaluation of the facts and circumstances arising from each individual arrangement. Joint arrangements are classified as
either joint operations or joint ventures based on the rights and obligations oftheparties to the arrangement. In joint operations, the parties have
rights to the assets and obligations for the liabilities relatingtothe arrangement, whereas injoint ventures, the parties have rights to the net assets
of the arrangement.
Alfa only has one joint venture, namely Alfa iQ, which was formed in May 2020. The investment in the joint venture is accounted for using the
equity method. The Group’s share of the joint venture’s net profit/ (loss) is based on its most recent financial statement drawn up to the Group’s
balance sheet date. The total carrying value of investment in joint venture represents the cost of the investment, including loans which form part
of the net investment in the joint venture, plus the share of post-acquisition retained earnings and any other movements inreserves less any
impairment in the value of the investment.
The carrying values of joint ventures are reviewed on a regular basis and if there is objective evidence that an impairment in value has occurred
as a result of one or more events during the period, the investment is impaired. The Group’s share of the joint venture’s losses in excess of its
interest in that joint venture is not recognised to the extent that the Group has incurred legal or constructive obligations or made payments
on behalf of the joint venture. Unrealised gains arising from transactions with joint venturesare eliminated against the investment to the
extent of the Group’s interest in the investee. Unrealised losses are eliminated inthe same way, but only to the extent that there is no
evidence of impairment.
Loans to the joint venture are measured at fair value on initial recognition, and subsequently carried at amortised cost. Any surplus between
the nominal and fair value of the loan is recognised as an investment in the joint venture.
 
Operating and reporting segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision
Maker (CODM). The Group’s Chief Executive Officer (CEO), who is responsible for allocating resources and assessing performance, has been
identified as the CODM.
The CODM regularly reviews the Group’s operating results in order to assess performance and to allocate resources. The CODM considers
the business from a product perspective and, therefore, recognises one operating and reporting segment, being the sale ofsoftware and
related services. The Group splits revenue by type of project but reports operating results on a consolidated basis, as presented to the
CODM, along with the required entity wide disclosure.
The Group discloses revenue split by type of project being Subscription, Software and Services.
a. Subscription revenues include recurring revenues paid on a monthly or annual basis, including subscription licence revenues, maintenance
and cloud hosting.
b. Software revenues include revenues from recognition of customised licence revenue, one-off licence fees and any development revenues.
c. Services revenues are revenues from any work done for customers including pre-implementation, implementation work, and ongoing
services, but excludes any revenue from development work which is disclosed in Software.
NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 143
To better reflect the nature and type of revenue, changes have been made in 2021 to the classification and allocation of revenue line items.
The comparative disclosures for the December 2020 reporting period have also been amended to reflect a fair base for comparability.
These changes have had no impact on the total revenue or the profit before tax that were disclosed at the end of December 2020.
See note 1.5 for details of our revenue recognition accounting policy and note 2 for the critical accounting judgements and estimates
inrelation to revenue recognition.
 
Functional currency
Items included in the consolidated financial statements of each of the Group’s subsidiaries are measured using their functional currency.
The functional currency of the parent and each subsidiary is the currency of the primary economic environment in which the entity operates.
See applicable exchange rates used in 2021 and 2020 below:
2021 2020
Closing Average Closing Average
USD 1.35 1.38 1.37 1.28
EUR 1.19 1.16 1.11 1.13
NZD 1.98 1.95 1.89 1.98
AUD 1.86 1.83 1.77 1.86
Presentation currency
The consolidated financial statements are presented in pounds sterling. Alfa’s functional and presentation currency is pounds sterling.
Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have afunctional
currency different from the presentation currency are translated into the presentation currency as follows:
•
Assets and liabilities for each consolidated statement of financial position presented are translated at the closing rate at the date ofthat
consolidated statement of financial position;
•
Income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates
(unless this 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 dates of the transactions); and
•
All resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities are recognised in other
comprehensive income. When a foreign operation is sold the associated exchange differences are reclassified to profit or loss, as part ofthe
gain or loss on sale.
Foreign currency transactions
Transactions in foreign currencies are translated into the respective functional currencies using the exchange rates prevailing at the dates of
the transactions. Foreign exchange differences arising from the settlement of such transactions and from the translation at thereporting date
of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. See applicable exchange rates used by the
Group above.
 
The Group derives revenue by type of project being Subscription, Software and Services (as disclosed in note 1.3).
i Subscription revenue which includes the periodic rights to use Alfa Systems, periodic maintenance, subscription (including cloud hosting) and
one-off revenue relating to catch-up periodic maintenance;
ii Software revenue which includes development revenue (part of the customised licence revenue), options over the right to use Alfa Systems,
and one-off licence fees; and
iii Services revenue which includes software implementation services.
The Group provides the right to use, software development services, core implementation services and ongoing support of its product,
AlfaSystems. The Group’s contractual arrangements contain multiple deliverables or services, such as the development orcustomisation
ofthe software to the customer’s requirements, implementation services such as migration of data and testing andcertain project
management services.

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
144 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
Alfa assesses whether there are distinct performance obligations at the start of each contract and throughout the performance of
theimplementation, development and services projects and maintenance period. These performance obligations are laid out below.
Any one contract may include a single performance obligation or a combination of those listed below:
a. Software implementation services
Where implementation services are considered to be distinct, i.e. when relatively straightforward, do not require additional development
services and could be performed by an external third party, the implementation services are accounted for as a separate performance obligation
from any development services.
When a customer is in the process of implementing the software, the transaction price is allocated to this based on the stand-alone selling prices
(derived from standard day rates) and is recognised over time based on the effort incurred, limited to the amount to which Alfa has a right to payment.
For customers under the Group’s subscription based contracts that are undergoing implementation, revenue for software implementation services is
deemed to be distinct from any other performance obligation and is recognised based on a percentage of completion basis.
When the type of services provided are ongoing services, the transaction price is deemed to be the actual day rate, and revenue is recognised at
a point in time as the service is provided.
b. Development services and licence services (the customised licence)
The second performance obligation is the granting of a right to use Alfa Systems, which includes the delivery of the related software licence
and any development efforts which change the underlying code.
During the initial phase of implementing the software, the total revenue attributable to this performance obligation is estimated at the
outsetof the relevant software implementation project and recognised as the effort is expended, on a percentage-of-completion basis,
limited to the amount of revenue to which Alfa has the right to payment. A percentage-of-completion basis has been used because
customers obtain the ability to benefit from the product from the start of the implementation project, the development or customisation
ofthe asset is tailored to the customer’s specific requirements; and the customer is entitled to the benefits of the efforts as at the date the
efforts are delivered, so recognition over time is appropriate.
Revenue attributable to development services is valued using the residual value method as there are no stand-alone selling prices which are
observable as each project is customised. For customers under the Group’s subscription based contracts that are undergoing implementation,
revenue for development services is deemed to be distinct from any other performance obligation and is recognised based on a percentage
of completion basis.
Once the customer is already using the software and the services provided are ongoing development, the transaction price is deemed to be
the actual day rate and revenue is recognised at a point in time as the development service is provided.
c. Option over the right to use Alfa Systems
In the event that customers have to pay periodic maintenance fees in order to keep using Alfa Systems, a component of these future
maintenance fees is attributable to the right to use the software. In these circumstances the licence granted by Alfa is considered to renew in
future periods. There may be a material right in respect of discounts in future periods. In order to ascribe a value to this option, management
annualise the value of the customised licence performance obligation and compare it to the annual right to use software performance
obligation post go live.
The value of this option is built up from the start of the implementation project in line with the percentage-of-completion of development
revenue described in 1.5(b) above. Following the completion of the implementation project, the value of this option isrecognised evenly over
the expected remaining customer life.
d. Periodic right to use Alfa Systems
When a customer pays its maintenance fee annually, this performance obligation represents the proportion of this fee which relates to the periodic
option to renew the right to use Alfa Systems. If there is the right of clawback of the annual right to use, such amounts are recognised throughout
the annual period. If there is no right of clawback, then the annual right to use amount is recognised in full when there is a right of collection.
When a customer pays for its maintenance fee as part of a subscription contract (see section 1.5f below), it will not be treated as a separate
performance obligation (and will instead be part of the subscription amount).
e. Periodic maintenance amounts
This represents the stand-alone selling price of the ongoing support or maintenance of Alfa Systems which is recognised throughout
theperiod over which the services are delivered.

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 145
f. Subscription amounts
Certain of the Group’s implementation and service contracts include a subscription payment mechanism. This represents a monthly
feecharged to the customer covering one or more of the following performance obligations; the provision of monthly hosting services; the
monthly periodic right to use Alfa Systems and the provision of monthly maintenance services (when this becomes applicable to the
customer). The monthly payments are recognised as revenue in the period to which they relate. This reflects the underlying performance
obligations of the Group and termination rights of the customer.
g. One-off revenue amounts
From time to time, the Group is entitled to receive one-off licence revenue from its customers as they increase the number of contracts ontheir
version of Alfa Systems. Additionally, there are times when catch-up periodic maintenance amounts are entitled to be received bythe Group,
also as a result of the increased number of contracts. Generally this revenue is recognised at the point in time it is invoiced, or becomes
contractually payable, reflecting the fact that the Group has no remaining performance obligations to satisfy.
Capitalised sales incentive costs
The Group incentivises its sales force for securing sales. In line with IFRS 15, these costs are capitalised and are amortised in line with the
percentage of completion of the software implementation project.
Costs to fulfil contracts
The Group has recognised an asset of £1.1m in relation to employee costs to fulfil its long-term development contracts. These costs relate
directly to the contracts, generate or enhance resources to be used to satisfy performance obligations in the future and are expected to be
recovered. This asset is presented within prepayments in the Statement of Financial Position. These costs are amortised within cost of sales in
line with the percentage of completion of the development project.
 
Operating expenses include items such as personnel costs (including training and recruitment), cost of software not capitalised, research and
development costs and other infrastructure expenses. These items have been grouped into the following categories fordisclosure purposes:
•
Cost of sales – This includes salaries and other direct costs associated with satisfying customer contracts and for developing software.
•
Sales, general and administrative expenses – This includes all the residual operating costs.
 
Taxation expense for the year comprises current and deferred tax recognised in the reporting period. Tax is recognised in profit and loss,
except to the extent that it relates to items recognised in other comprehensive income or directly in equity. Current or deferred taxation
assets and liabilities are not discounted.
Current tax
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date in the
countries where the Group and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken
intax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets andliabilities
and their carrying amounts in the Group’s consolidated financial statements. However, the deferred income tax is not accounted for if it arises
from initial recognition of an asset or liability in a transaction other than a business combination that at the timeof the transaction affects
neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the
temporary differences can be utilised. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred income taxes, assets and liabilities relate to income taxes levied by the
same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
146 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
 
Alfa enters into lease contracts in respect of various properties and motor vehicles. These rental contracts are typically made for fixed
periods of two to ten years, and sometimes have extension options. Lease terms are negotiated on an individual basis and contain a wide
range of different terms and conditions. In accordance with IFRS 16, leases are recognised as a right-of-use asset with a corresponding
liability, at the date at which the leased asset is available for use by Alfa. These assets and liabilities are initially measured on a present value
basis (as set out in more detail below), with each subsequent lease payment allocated between the liability and finance cost. The finance cost
is charged to profit or loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for
each period. The right-of-use asset is depreciated over the shorter of the asset’s useful life andthe lease term ona straight-line basis.
Alfa assesses whether a contract is, or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and
acorresponding lease liability, withrespect to all lease arrangements in which it is the lessee, except for short-term leases (defined asleases
with a lease term of 12 months, or fewer) and leases of low-value assets. For these leases, the Group recognises the lease payments as an
expense on a straight-line basis over the term of the lease, unless another systematic basis is more representative ofthetime pattern in which
economic benefits from the leased assets are consumed.
Lease liabilities
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by
using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
•
Fixed lease payments (including in substance fixed payments), less any lease incentives;
•
Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
•
The amount expected to be payable by the lessee under residual value guarantees;
•
The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
•
Penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is presented in separate lines, split between current and non-current liabilities, in the consolidated statement of financial
position. It is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest
method) and by reducing the carrying amount to reflect the lease payments made.
The Group re-measures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
•
The lease term has changed, or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is
re-measured by discounting the revised lease payments using a revised discount rate;
•
The lease payments change due to changes in an index, or rate, or a change in expected payment under a guaranteed residual value.
In these cases, the lease liability is re-measured by discounting the revised lease payments, using the initial discount rate (unless the lease
payments change is due to a change in a floating interest rate, in which case a revised discount rate is used); and
•
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is re-
measured by discounting the revised lease payments using a revised discount rate.
Right-of-use assets
The right-of-use assets comprise:
•
The initial measurement of the corresponding lease liability;
•
Lease payments made at, or before, the commencement day;
•
Any initial direct costs; and
•
Restoration cost.

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 147
The right-of-use assets are presented as a separate line in the consolidated statement of financial position.
The right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses (if applicable). They are
depreciated from the commencement date of the lease and over the shorter period of the lease term and useful life of the underlying asset.
If a lease transfers ownership of the underlying asset, or the cost of the right-of-use asset reflects an expectation thatthe Group will exercise
a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. Currently, the Group does not have
any leases that include a purchase option, or transfer ownership of the underlying asset.
Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located, orrestore
the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37.
Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended
(or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this
assessment and that is within the control of the lessee. During the current financial period, there have been no changes insuch assessments.
Variable rents that do not depend on an index, or rate, are not included in the measurement of the lease liability and the right-of-use asset.
The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and are
included as an expense in the consolidated statement of profit or loss and comprehensive income.
 
Goodwill is tested annually for impairment. The carrying amount is allocated to the cash-generating unit (CGU) that is expected to benefit
from investment and which represents the lowest level at which the goodwill is monitored for internal management purposes. The carrying
value of the CGU is then compared to the higher of its fair value less costs of disposal and its value in use. Any impairment attributed to the
goodwill is recognised immediately as an expense and is not subsequently reversed.
Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount might
notberecoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount.The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largelyindependent of
the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other thangoodwillthat suffered an
impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
 
Cash and cash equivalents include cash at bank and in hand as well as short-term deposits with original maturities of three months orless.
 
Recognition and de-recognition
Financial assets are recognised in the statement of financial position when the Group becomes party to the contractual provision of
theinstrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and
substantially all the risks and rewards are transferred.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price
inaccordance with IFRS 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).
Financial assets, other than those designated and effective as hedging instruments, are classified into the following categories:
•
Amortised cost;
•
Fair value through profit or loss (FVTPL); and
•
Fair value through other comprehensive income (FVOCI).
In the periods presented, the Group does not have any financial assets categorised as FVTPL or FVOCI. The classification is determined by both:
•
The entity’s business model for managing the financial asset; and
•
The contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance income or
other financial items, except for impairment of trade receivables which is presented within sales, general and administrative expenses.

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
148 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL):
•
They are held within a business model whose objective is to hold the financial assets and collect their contractual cash flows; and
•
The contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the
principalamount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of
discounting is immaterial. The Group’s trade and most other receivables (notes 20 and 21) and cash and cash equivalents (note22) fall into
this category of financial instruments.
Impairment of financial assets
Under IFRS 9 the requirements are to use forward-looking information to recognise expected credit losses – the ‘expected credit loss (ECL) model’.
The Group considers a broad range of information when assessing credit risk and measuring expected credit losses, including past events, current
conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
•
Financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk (‘Stage 1’); and
•
Financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low (‘Stage 2’).
•
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the second
and third categories.
 
Trade receivables are amounts due from customers for licences sold or services performed in the ordinary course of business. They are generally
due for settlement within 30 days of the invoice date and are therefore all classified as current. Trade receivables are recognised initially at fair
value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. An impairment loss is
recognised when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the
receivable. The Group considers information developed internally or obtained from external sources that indicates that a debtor is unlikely to
pay its creditors, including the Group, in full (without taking into account any collateral held by the Group) as an indication that a financial
asset is not recoverable.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance.
To measure the expected credit losses, trade receivables have been grouped based on days overdue. The expected impairment loss is
recognised in the consolidated statement of profit or loss and comprehensive income within sales, general and administrative expenses, and
subsequent recoveries are credited to the same account previously used to recognise the impairment charge. During the current and prior
period the result of the above was immaterial and no impairment loss has been recognised.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The credit
qualities of these receivables are periodically assessed by reference to external credit ratings (if available) or to historical information about
their default rates. The Group does not hold any collateral as security.
As the total carrying amount of the current portion of the trade and other receivables is due within the next 12 months after the reporting
date, the impact of applying the effective interest method is not significant and, therefore, the carrying amount equals thecontractual
amount or the fair value initially recognised.
 
Property, plant and equipment is stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the item. Depreciation on assets is calculated using the straight-line method to allocate their cost over their
estimated useful lives, as follows:
Fixtures and fittings: 3-10 years
IT equipment: 2-5 years
Motor vehicles: 10 years

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 149
The assets’ residual values and useful lives are reviewed and adjusted if necessary at each reporting date. An asset’s carrying amount iswritten
down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Repairs and
maintenance are charged to the consolidated statement of profit or loss and comprehensive income as incurred. Any gains or losses on
disposals are recognised within sales, general and administrative expenses in the consolidated statement of profit or loss and comprehensive
income unless otherwise specified.
Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount, which is the higher of an asset’s fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash flows.
 
Goodwill
Goodwill arose on the acquisition of subsidiaries in 2012 as part of a group reorganisation and represents the excess of the consideration
transferred and the amount of any non-controlling interest in the investment over the fair value of the identifiable assets acquired
andliabilities and contingent liabilities assumed.
The Group assesses whether goodwill has suffered any impairment on an annual basis in accordance with the accounting policy statedinnote
1.9 above. There is one CGU, being the Group, as its geographical operations do not have separate or distinct cash inflows. The recoverable
amount of goodwill has been determined based on value-in-use calculations using cash flow projections fromfinancial budgets and forecasts.
Budgeted cash flow projections are based on the expectation of signing new customers in the Group’s sales pipeline as well as ongoing projects
with existing customers. Budgeted gross margin is based on historical evidence and the expectations of market development and efficiency
leverage. Management believes that any reasonable change in any of the key assumptions on whichthe recoverable amount is based would not
cause the reported carrying amount to exceed the recoverable amountof the CGU. The discount rate used reflects the Group’s pre-tax
weighted average cost of capital (WACC), as adjusted forregion-specific risks andother factors as required by IFRS.
Intangible assets
Internally generated product development costs only qualify for capitalisation if the Group can demonstrate all of thefollowing:
•
The technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete the intangible
asset and use or sell it;
•
Its ability to use or sell the intangible asset; including how the intangible asset will generate probable future economic benefits;
•
The existence of a market or, if it is to be used internally, the usefulness of the intangible asset;
•
The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
•
Its ability to measure reliably the expenditure attributable to the intangible asset during development.
Generally, commercial viability of new products, modules or capabilities is not proven until all high-risk development issues have beenresolved
through testing of the specific development. Development expenditure incurred on minor or major upgrades, or other changes in software
functionality, does not satisfy the criteria, where it is considered that the product is not substantially new in its design or functional characteristics.
Such expenditure is therefore recognised as an expense. See note 15 for disclosure of development costs which have met the criteria of IAS 38 for
recognition. The Group continues to assess the eligibility of development costs for capitalisation on a project-by-project basis.
Externally acquired intangible assets are initially recorded at historical cost. Historical cost includes expenditure that is directly attributable
to the acquisition of the item.
The Group amortises intangible assets with a limited useful life, using the straight-line method over the following periods:
Computer software: licence period or 10 years as applicable
Internally generated software: 3-5 years
Amortisation is presented within sales, general and administrative expenses.
Research and development which does not meet the criteria set out above is recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset in subsequent periods.

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
150 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
 
Trade payables are obligations to pay for goods or services which have been acquired in the ordinary course of business from suppliers.
Trade payables are recognised initially at fair value and subsequently measured at amortised costs using the effective interest rate method.
As the total carrying amount is due within the next 12 months from the reporting date, the impact of applying the effective interest method is
not significant and, therefore, the carrying amount equals the contractual amount orthe fair value initially recognised.
The Group’s financial liabilities include trade and other payables and lease liabilities. Financial liabilities are initially measured at fair value, and,where
applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through profit or loss. Subsequently,
financial liabilities are measured at amortised cost using the effective interest method. All interest-related charges and, ifapplicable, changes in
aninstrument’s fair value that are reported in profit or loss are included within finance costs or finance income. The Group derecognises financial
liabilities when, and only when, the Group’s obligations are discharged, cancelled or expired.
Trade and other payables and lease liabilities are classified as current liabilities if payment is due within one year or less. If not, they are
presented as non-current liabilities.
 
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an
outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. When the effect of the discounting
is material, provisions are measured at the present value of the expenditures expected to be required to settle the obligation.
 
The Group provides a range of benefits to employees, including paid holiday arrangements and defined contribution pension plans.
Short-term benefits
Short-term benefits, including health cover and other similar non-monetary benefits, are recognised as an expense in the period in which the
service is received.
Post-employment benefits
The Group operates various defined contribution plans for its employees. A defined contribution plan is a pension plan where the Group pays fixed
contributions into a separate independent entity. The Group has no legal or constructive obligation to pay further contributions if the fund does not
hold sufficient assets to pay all employees the benefits relating to the employee’s service in the current and prior periods.
Employee share scheme expense
The Group makes equity-settled share-based payments to certain employees, which are measured at fair value at the date of grant and expensed on
astraight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest. For those share schemes with market-
related vesting conditions, the fair value is determined using the Monte Carlo model at the grant date. For share options issued with EPS (non-market)
performance vesting conditions, the fair value of the underlying vehicle is equal to the grant date shareprice discounted by the expected dividend yield
to reflect the lack of dividend accrual over the vesting period. For all other share awards, those with pure employment conditions attached, the fair
value is determined by reference to the market value of the shares atthegrant date or (where they have an exercise price) by using the Black Scholes
model. For all share schemes with non-market vesting conditions, the likelihood of vesting has been taken into account when determining the relevant
charge. Vesting assumptions are reviewed during each reporting period to ensure they reflect current expectations.
 
Ordinary shares
Ordinary shares are classified as equity. There are no restrictions on the distribution of capital and the repayment of capital.
Cumulative translation reserve
Exchange differences arising on translation of the foreign-controlled entities are recognised in Other Comprehensive Income and accumulated
ina separate reserve within equity. The cumulative amount would be reclassified to profit or loss if the entity was disposed of.
Own shares
Own shares represent the shares of the parent company Alfa Financial Software Holdings PLC that are held by the employee benefit trust.
Own shares are recorded at cost and deducted from equity.
 
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of Alfa by the weighted average number of ordinary
shares outstanding during the year (excluding own shares held).

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 151
Diluted earnings per share
Diluted earnings per share is calculated in line with the basic earnings per share calculation above except that the weighted average number
ofshares includes all potentially dilutive options granted by the reporting date as if those options had been exercised on the first day of the
accounting period or the date of the grant, if later. The shares have no right to voting or to dividends while held intrust.
 
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results.
Management also needs to exercise judgement in applying the Group’s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likelyto be
materially adjusted in future periods due to estimates and assumptions turning out to be wrong. Detailed information abouteach of these
estimates and judgements is included in other notes, together with information about the basis of calculation foreach affected line item in
the financial statements.
 
Revenue recognition – Assessing performance obligations
The Group is required to make an assessment as to whether the implementation process, which includes customised licence, implementation
revenue streams as well as any maintenance fees during this phase, forms one or a number of performance obligations. Since the residual
value method is used for the customised licence revenue (as explained in note 1.5), the estimation of fair value of implementation revenue
willimpact the contract consideration assigned to the customised licence.
In addition, the Group is also required to make an assessment as to whether each contract contains an expectation to deliver multiple
separate instances of the customised licence which may form separate groups of distinct performance obligations. In doing the above,
theGroup assesses each software implementation contract as to whether the underlying software requires significant modification
orcustomisation by the Group in order to meet the customer’s requirements before Alfa Systems can be utilised by the customer.
Therefore judgement is required in determining which efforts relate to the implementation process and which efforts could be determined
tobe development services which change or enhance the underlying code. In making this judgement, the Group assesses the contractual
terms and the original project plan for the implementation but also uses historical evidence of what constitutes core implementation work.
Internally generated software development – Assessing whether a project meets criteria of IAS 38
The Group is required to make an assessment of each ongoing project in order to determine at what stage a project meets the criteriaoutlined in
the Group’s accounting policies. Such assessment may, in certain circumstances, require significant judgement. In making this judgement, the Group
evaluates, amongst other factors, the stage at which technical feasibility has been achieved, management’s intention to complete and use or sell the
product, the likelihood of success, the availability of technical and financial resources to complete the development phase and management’s ability
to measure reliably the expenditure attributable to the project. Research and product development expenditure incurred on minor or major
upgrades, or other changes in software functionality, does not satisfy the criteria where it is considered that the product is not substantially new
inits design or functional characteristics. Such expenditure is therefore recognised as an expense.
 
Revenue recognition – Estimates feeding through to the customised licence
The customised licence and its associated material right are both impacted by the following estimates:
•
Assigning a stand-alone selling price for implementation services day rates: the Group assesses the value of the implementation services
delivered by assessing the effective day rate for an implementation contract, taking into account all revenue streams from implementation
contracts against day rates of similar projects in the same geographies;
•
Estimating the appropriate life of customer relationship: the Group calculates the material right deferral of the customised licence based
on the total customer relationship life. This is also the time over which the material right will be spread; and
•
Determining the split of maintenance amount between support efforts and right to use: the Group must estimate what percentage of the
total maintenance fee relates to the customised licence.
Management reassesses estimates and applies them to new projects prospectively. A variation of 5% to 10%, or an increase in expected customer
life by a year, in the above, results in an impact on revenue for the year ranging between an increase / decrease of £0.4m.
 
Revenue recognition –Number of forecast implementation and development days
The Group estimates the number of days required to complete the relevant software customisation effort at the outset of each projectand on an
ongoing basis including at each consolidated statement of financial position date. Estimates of total project daysrequired for a relevant project are
based on historical evidence of past implementations, knowledge of the customer’s systemsbeing replaced and scope of customisation being
requested. The Group applies the percentage-of-completion method whencalculating implementation and development services revenue and
updates estimates at each quarter end accordingly. Therefore, a significant movement in total planned days would result in volatility in implementation
and customised licence revenue.

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
152 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the
Group’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information
in respect of these risks is presented throughout these financial statements.
Area Exposure arising from Measurement Management
Market risk – foreign exchange Contracted revenue and costs
denominated in a currency
otherthan the entity’s
functionalcurrency; and
Monetary assets and
liabilitiesdenominated in
acurrency other than the
entity’s functional currency.
Cash flow forecasting and
foreign exchange sensitivity
Natural hedging from
localisedcost base and
promptconversion of
foreigncurrency cash
balancesinto pound sterling
Credit risk – cash balances Cash and cash equivalents Credit ratings Diversification of
bankdeposits
Credit risk – customer receivables Trade receivables and
accruedincome
Ageing analysis
Credit ratings
Credit checks and
contractualpayment terms
Liquidity Cash and cash equivalents Cash flow forecasting Collection of upfront licence
fees, ageing analysis of
customer receivables
The Group’s overall risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse
effects on the Group’s financial performance. The Group has used financial instruments to hedge certain risk exposures in the past.
Risk management is carried out by the finance function under policies approved by the Chief Financial Officer. The finance function identifies,
evaluates and mitigates financial risks when deemed necessary.
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so that it can provide
returns for shareholders and benefits for other stakeholders and maintain an optimal capital structure.
 
The Group operates internationally and is exposed to foreign exchange risks arising from various currencies, primarily with respect tothose
described below. Revenue is predominantly denominated in pounds sterling and US dollars. Operating costs are influenced bythe currencies
of the countries where the Group’s subsidiaries are based and pounds sterling and the US dollars are the currencies inwhich most operating
costs are denominated.
The split by currency in relation to trade receivables is set out in note 20.
The Group’s exposure to foreign currency risk in relation to revenue is set out in note 5.4.
The Group has not entered into or utilised any form of hedging against foreign currency exposure during the current or prior period, nordoes
the Group have any outstanding commercial foreign exchange contracts at 31 December 2021 or 31 December 2020.
A 10% increase in the USD:GBP exchange rate in the year ended 31 December 2021 would have increased revenue and profit by 4% and
8%respectively.

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 153
 
a. Credit risk related to transactions with financial institutions
Credit risk with financial institutions is managed by the Group’s finance function in accordance with a Board approved policy. Management is
not aware of any significant risks associated with financial institutions as a result of cash and cash equivalents deposits(including short-term
investments) and financial derivative transactions.
b. Credit risks related to customer trade receivables
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, change ofstrategy
and default or delinquency in payments are considered indicators that a trade receivable could be impaired. Given the complexity, the size
and the length of certain software implementation of related projects, a delay in the settlement of an open tradereceivable does not
necessarily constitute objective evidence that the trade receivable is impaired.
The Group’s customer base predominantly consists of large financial institutions that are financially sound. The responsibility for customer
credit risk management rests with management of the Group. Payment terms are set in accordance with practices in the different
geographies and end-markets served, typically being 30 days from the date of the invoice. Trade receivables are actively monitored and
managed. Collection risk is mitigated through the use of upfront payments of licences and maintenance. Historically, there has been a de
minimis level of customer default as a result of the long history of dealing with the Group’s customer base and anactive credit monitoring
function. Where applicable, credit limits may be established based on internal or external rating criteria, whichtake into account such factors
as the financial condition of the customers, their credit history and the risk associated with their industry segment.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance forall
trade receivables and accrued income. To measure the expected credit losses, trade receivables and accrued income have been grouped
based on shared credit risk characteristics and the days past due. The accrued income relates to unbilled work in progress and has
substantially the same risk characteristics as the trade receivables for the same types of contracts, other than where the Group has collected
upfront payments in the form of licence fees at the start of a software implementation contract. The Group has concluded that the expected
loss rates for trade receivables are less than the loss rates for the accrued income.
The expected loss rates of trade receivables are based on the payment profiles of customer invoices over a period of 36 months before
31 December 2021 or 31 December 2020 respectively and the corresponding historical credit losses experienced within this period.
The historical loss rates would then be adjusted to reflect current or forward-looking information in relation to any macroeconomic factors
affecting the ability of the customers to settle the receivables.
The Group has not identified any current factors or forward-looking information which would be relevant to the historical loss rates
asalltrade receivables have been collected in the past 24 months. Therefore on this basis, the loss allowance as at 31 December 2021
and31 December 2020 was immaterial for both trade receivables and accrued income.
See note 20 – Trade receivables for the ageing of trade receivables and significant customer credit risk exposure.

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
154 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
 
The Group’s principal objective when managing capital is to safeguard the Group’s ability to continue as a going concern, so that it can
continue to provide returns for shareholders and benefits for other stakeholders.
The capital structure of the Group consists of cash and cash equivalents (note 22) and equity attributable to equity holders of theparent.
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group manages its exposure to liquidity risk through short and long-term forecasts and by seeking to align the maturity profiles ofits
financial assets with its financial liabilities. The Group’s policy is to maintain an adequate level of liquidity to meet its liabilities expected to be
settled in the short or near term, under both normal and stressed conditions.
The following table details the remaining contractual maturity of the Group’s financial liabilities. The amounts disclosed in the table are the
contractual undiscounted cash flows.
31December2021
£m Carryingvalue
Lessthan6
months
Between 6 to
12months
Between1to2
years
Between2to5
years
Morethan5
years
Trade and other payables 6.9 6.9 – – – –
Lease liabilities – future lease payments 20.3 1.3 1.4 2.7 7.4 7.5
31 December 2020
£m Carrying value
Less than 6
months
Between 6 to
12 months
Between 1 to 2
years
Between 2 to 5
years
More than 5
years
Trade and other payables 5.6 5.6 – – – –
Lease liabilities – future lease payments 21.1 1.2 1.2 2.4 6.9 9.4
 
 
The Group assesses revenue by type of activity, being Subscription, Software and Services, as summarised below:
£m 2021
2020
(restated*)
Software 13.6 20.0
Subscription 23.5 18.1
Services 46.1 40.8
Totalrevenue 83.2 78.9
* To better reflect the nature and type of revenue, changes have been made to the classification and allocation of revenue line items. The comparative disclosures for the
December 2020 reporting period have also been amended to reflect a fair base for comparability. These changes have had no impact on the total revenue or the profit
before tax that were disclosed at the end of December 2020.
 
The following tables reconciles profit for the period attributable to equity holders to Operating Profit for the periods presented:
£m 2021 2020
Profit for the year 19.2 20.3
Adjusted for:
Net income from joint venture 0.1 –
Taxation 4.6 2.9
Finance income – (0.1)
Finance expense 0.8 0.8
Operating profit 24.7 23.9

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 155
 
Non-current assets attributable to each geographical market:
£m 2021 2020
UK 42.6 44.0
USA 1.2 0.7
Rest of World 0.6 0.1
Totalnon-currentassets 44.4 44.8
Revenue by geographical market is contained within note 5.3.
 
 
Customers with revenue accounting for more than 10% of total revenue in the current year are as follows:
£m 2021 2020
Customer A 10% 12%
See note 20 for outstanding trade receivables from those customers with revenue accounting for more than 10% of total revenue.
 
The Group derives revenue from the transfer of goods and services as follows over time and at a point in time in the following revenue
segments:
2021
£m Services Software Subscription
Total
revenue
At a point in time – time and materials 25.2 5.6 – 30.8
At a point in time – fixed price – 2.1 – 2.1
Over time – time and materials 19.8 4.1 – 23.9
Over time – fixed price 1.1 1.8 23.5 26.4
Totalrevenue 46.1 13.6 23.5 83.2
2020
£m (restated)* Services Software Subscription
Total
revenue
At a point in time – time and materials 19.4 5.1 – 24.5
At a point in time – fixed price 0.2 5.7 0.8 6.7
Over time – time and materials 18.8 8.0 – 26.8
Over time – fixed price 2.4 1.2 17.3 20.9
Total revenue 40.8 20.0 18.1 78.9
All goods and services are sold directly to customers.
* To better reflect the nature and type of revenue, changes have been made to the classification and allocation of revenue line items. The comparative disclosures for the
December 2020 reporting period have also been amended to reflect a fair base for comparability. These changes have had no impact on the total revenue or the profit
before tax that were disclosed at the end of December 2020.

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
156 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
 
Revenue attributable to each geographical market based on where the customer mainly utilises its instance of Alfa, or where the service is
rendered, is as follows:
£m 2021 2020
UK 30.0 25.8
USA 28.9 29.2
Rest of EMEA (excl UK) 18.7 21.3
Rest of World 5.6 2.6
Totalrevenue 83.2 78.9
 
Revenue by contractual currency is as follows:
£m
2021
2020
GBP 35.9
33.3
USD 30.0
30.4
Euro 11.6
12.6
Other 5.7
2.6
Totalrevenue 83.2
78.9
 
£m
2021
2020
Contract liabilities – deferred licence 5.3
1.9
Contract liabilities – deferred maintenance 5.7
5.1
Totalcontractliabilities 11.0
7.0
Contract liabilities – deferred licence
Where a customer purchases a perpetual software licence this is generally invoiced upfront at the commencement of the implementation
project. Customers generally require additional development efforts over the life of the implementation project inorder to customise the
underlying code within Alfa Systems. Together these two elements form the Group’s customised licence performance obligation. The fair
valueof this performance obligation is determined using the residual method as set out in note1.5b andthis fair value is recognised as the
development effort is expended, on a percentage of completion basis.
As such the deferred licence contract liability balance as at 31 December 2021 represents any amounts received in advance for the
customised licence performance obligation being satisfied (including any unrecognised software licence amounts that were received upfront).
Additionally, where an option over the right to use Alfa Systems in the future exists, the value of this is also included within the deferred
licence contract liability. The contract liability relating to the material right value is increased over the life of the implementation project
inlinewith the percentage of completion of the development efforts and then released on a straight-line basis over the expected remaining
customer life post completion of the implementation project.
The deferred licence contract liability balance will increase during the year as a result of:
•
any new upfront software licence payments;
•
any write back in previously recognised revenue as a result of project extensions or re-plans; and
•
any additional material right balances that are added during the year.
The deferred licence contract liability balance will decrease during the year as a result of:
•
increasing percentage of completion of development efforts; and
•
any release of material right balances following the completion of the implementation project.

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 157
Contract liabilities – deferred maintenance
The majority of the Group’s customers are invoiced annually in advance for the maintenance and support service provided by the Group.
As such, the deferred maintenance contract liability balance will increase during the year as a result of billing and invoices becoming due,
andwill decrease as the Group satisfies its associated performance obligations. The deferred maintenance contract liability balance as at
31 December 2021 therefore represents the Group’s unsatisfied period maintenance performance obligation forwhich the revenue has
beeninvoiced in advance.
 
During 2020, the Group entered into a new one-off five-year contract with a customer to renew its software licence and maintenance
agreements. The total amount of the contract price from this non-cancellable contract that relates to the performance obligations that are
unsatisfied at 31 December 2021 is £8.4m (2020: £10.6m). We expect to recognise £2.2m in each of the next three financial years and then
the remaining £1.8m in the final financial year of the contract, being 2025.
In addition, the Group has unsatisfied or partially satisfied performance obligations at 31 December 2021 that relate to the licence
customisation for those customers that have ongoing implementation projects, or implementation projects that commenced in early2022
and for which contracts were agreed prior to 31 December 2021. This performance obligation includes the delivery of therelated software
licence and any development efforts which will change the underlying code. Linked to certain of these ongoing andfuture projects, and also
to certain implementation projects completed during 2021, the Group also has unsatisfied or partially satisfied performance obligations at
31 December 2021 that relate to the option over the right to use Alfa Systems, and in particular any material right in respect of discounts to
be received by customer in future periods.
The above includes certain amounts recognised as contract liabilities. The transaction price allocated to these unsatisfied or partially satisfied
performance obligations as at 31 December 2021 is £11.1m (2020: £9.0m). This amount is expected to be recognised over the remaining life of the
implementation projects, in respect of the licence and development efforts, and over the expected customer life (following the completion of the
implementation project) in respect of the option over the right to use Alfa Systems.
These unsatisfied or partially satisfied performance obligations are based on management’s best judgement and may be impacted
inthefuture by a number of factors including:
•
any possible contract modifications,
•
currency fluctuations;
•
external market factors; and
•
changes to the overall forecast project plan including the overall life of the implementation project and any required development efforts.
The Group applies the practical expedient in paragraph 121 of IFRS 15 and does not disclose information about the unsatisfied performance
obligations that have original expected durations of one year or less. This includes those performance obligations linked toongoing services
for all project types (i.e. subscription, software and services).
The Group also applies the practical expedient in paragraph B16 of IFRS 15 and does not disclose the amount of the transaction
priceallocated to the unsatisfied contract performance obligations where consideration will be received directly corresponding to thevalue
of the performance obligation in the future and this consideration aligns to the value received to date for the corresponding performance
obligation. This includes those performance obligations linked to our software implementation services.
The Group has variable consideration in the form of contract banding for its licence and maintenance volumes. It is included it in the
transaction price only to the extent that it is highly probable that a significant reversal of revenue will not occur when the uncertainty
associated with the variable consideration is subsequently resolved.
 
The following items have been included in arriving at operating profit in the table below:
£m
2021
2020
(restated)
Research and development costs* 1.6 1.5
Depreciation of property, plant and equipment 0.4 0.5
Depreciation of right-of-use lease assets 1.9 1.7
Amortisation of intangible assets 0.8 0.8
Share-based payments (inc. social security contributions) 1.5 1.5
* To better reflect the nature of research and development expenditure and align with capitalised development costs, changes have been made to the classification of expense line
items. Research and development costs are now primarily made up of costs incurred as part of the Group’s internal research and development activities, where as previously this
line item included broader costs. The comparative disclosures for the December 2020 reporting period have also been amended to reflect a fair base for comparability.

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
158 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
£m
2021
2020
Wages and salaries 31.8 30.0
Social security contributions (on wages and salaries) 3.9 3.4
Pension costs 2.1 2.0
Profit share pay * 3.1 2.7
Share-based payments ** 1.5 1.5
Totalemploymentcosts 42.4 39.6
* Profit share pay refers to a pool of money (that equates to approximately 10% of the Group’s pre-tax profits) which is shared amongst the employees, excluding Directors and
some other senior managers, as a percentage of basic salary. The amount disclosed includes the related social security contributions.
** This includes the related social security contributions.
Average monthly number of people employed based on location of home office
(including Executive Directors)
2021
2020
UK 282 255
USA 71 66
Rest of World 30 20
Totalaveragemonthlynumberofpeopleemployed 383 341
 
Key management compensation (including Executive Directors):
£m
2021
2020
Wages, salaries and short-term benefits 3.1 2.6
Social security contributions 0.4 0.3
Post-employment benefits 0.1 0.1
Share-based payments * 0.9 0.2
Totalkeymanagementcompensation 4.5 3.2
* This includes the related social security contributions.
Key management personnel consists of the Company Leadership Team and the Executive Directors. Directors’ remuneration is detailed in the
Remuneration Report.

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 159
 
The Group obtained the following services from the Group’s auditor as detailed below:
£m
2021
2020
Auditfees
DeloitteLLP
Audit fees relating to prior year – 0.1
RSMUKAuditLLP
Audit of the consolidated financial statements 0.2 0.2
Audit of subsidiaries 0.2 0.2
Totalauditfees 0.4 0.5
Audit-relatedassurancefees
RSM UK Audit LLP 0.1 0.1
Totalaudit-relatedassurancefees 0.1 0.1
Non-auditservices – –
Totalauditandnon-audit-relatedservices 0.5 0.6
 
£m
2021
2020
Finance income
Interestincomeoncashorshort-termbankdeposits – 0.1
£m Note
2021
2020
Finance expense
Interest on lease liability 24 (0.8) (0.8)
Totalfinanceexpense (0.8) (0.8)

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
160 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
Analysis of charge for the year
£m
2021
2020
Current tax
Current tax on profit for the year 4.5 4.5
Adjustment in respect of prior years (0.5) (1.4)
Foreign tax on profit of subsidiaries for the current year 0.3 0.6
Currenttax 4.3 3.7
Deferred tax
Origination and reversal of temporary differences (0.1) (0.3)
Adjustment in respect of prior years 0.6 (0.5)
Effect of changes in tax rates (0.2) –
Deferredtax 0.3 (0.8)
Totaltaxchargeintheyear 4.6 2.9
The effective tax rate for the year is higher (2020: lower) than the standard rate of corporation tax in the UK. The effective tax rate for the
year ended 31 December 2021 was 19.3% (2020: 12.5%). The effective tax rate for the year is impacted by adjustments in respect to prior
years totalling £0.1m (2020: favourable adjustment of £1.9m), due to increased tax costs for the prior year of £0.2m, an adjustment in
respect to deferred tax on share awards of £0.5m, less the benefit of the UK R&D tax claim for 2020 of £0.6m (2020: predominately due to
the benefit of UK R&D tax claims for 2018 and 2019). Excluding the impact of adjustments in respect to prior years, the effective tax rate for
the year was 18.9% (2020: 20.7%). The overall tax charge for the year is reconciled as follows:
Analysis of charge for the year
£m 2021 2020
Profit on ordinary activities before taxation 23.8
23.2
Profit on ordinary activities at the standard rate of corporation tax – 19% 4.5
4.4
Tax effects of:
Effect of different tax rates of subsidiaries operating in other jurisdictions 0.1
0.2
Expenses not deductible for tax purposes –
0.1
Adjustment in respect of prior years 0.1
(1.9)
Impact of tax rate changes (0.2)
–
Other 0.1
0.1
Totaltaxchargefortheyear 4.6
2.9

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 161
 
2021
2020
Profit attributable to equity holders of Alfa (£m) 19.2
20.3
Weighted average number of shares outstanding during the year 296,709,610
293,824,145
Basic earnings per share (pence per share) 6.49
6.93
Weighted average number of shares outstanding including potentially dilutive shares 301,505,177
300,069,048
Diluted earnings per share (pence per share) 6.39
6.79
The weighted average number of ordinary shares in issue excludes 3,290,390 (2020: 6,175,855) shares held by employee benefit trust.
The diluted number of ordinary shares outstanding, including share awards, is calculated on the assumption of conversion of all 5,470,741
(2020: 6,139,161) potentially dilutive ordinary shares.
 
£m Note
2021
2020
Finance assets
Financial assets at amortised cost:
Trade receivables 20 6.0
5.8
Other financial assets at amortised cost 21 7.3
5.8
Cash and cash equivalents 22 23.1
37.0
Totalfinancialassets 36.4
48.6
Financeliabilities
Financial liabilities at amortised cost:
Trade and other payables 23 6.9
5.6
Lease liabilities 24 17.1
17.5
Totalfinanceliabilities 24.0
23.1
 
£m
2021
2020
Cost
At 1 January 24.7
24.7
At31December 24.7
24.7
The recoverable amount of goodwill has been determined based on value-in-use calculations using cash flow projections from financial
budgets and forecasts for a five-year period using a pre-tax discount rate of 11% (2020: 11%). Cash flows beyond these periods have been
extrapolated using a steady 2% (2020: 2%) average growth rate. This growth rate does not exceed the long-term average growth rate for the
markets in which the Group operates. Management believes that any reasonable change in any of the key assumptions on whichthe
recoverable amount is based would not cause the reported carrying amount to exceed the recoverable amount of the CGU.

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
162 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
£m
Computer
software
Internally
generated
software Total
Cost
At 1 January 2020 1.4 1.5 2.9
Additions 0.1 0.7 0.8
At 31 December 2020 1.5 2.2 3.7
Amortisation
At 1 January 2020 0.5 0.2 0.7
Charge for the year 0.3 0.5 0.8
At 31 December 2020 0.8 0.7 1.5
Netbookvalue
At 31 December 2020 0.7 1.5 2.2
Cost
At 1 January 2021 1.5 2.2 3.7
Additions 0.1 0.9 1.0
At31December2021 1.6 3.1 4.7
Amortisation
At 1 January 2021 0.8 0.7 1.5
Charge for the period 0.1 0.7 0.8
At31December2021 0.9 1.4 2.3
Netbookvalue
At31December2021 0.7 1.7 2.4
Significant movement in other intangible assets
During 2021, Alfa developed new internally generated software at a cost of £0.9m (2020: £0.7m). This software will be amortised over three to
five years.
The total research and product development expense for the period was £1.6m (2020: £1.5m restated – see note 6).

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 163
 
£m
Fixtures and
fittings IT equipment Total
Cost
At 1 January 2020 1.2 3.2 4.4
Additions 0.1 0.2 0.3
Disposals (0.1) (0.1) (0.2)
At 31 December 2020 1.2 3.3 4.5
Depreciation
At 1 January 2020 0.7 2.6 3.3
Charge for the year 0.1 0.4 0.5
Disposals (0.1) (0.1) (0.2)
At 31 December 2020 0.7 2.9 3.6
Netbookvalue
At 31 December 2020 0.5 0.4 0.9
Cost
At 1 January 2021 1.2 3.3 4.5
Additions – 0.3 0.3
Disposals – (0.1) (0.1)
At31December2021 1.2 3.5 4.7
Depreciation
At 1 January 2021 0.7 2.9 3.6
Charge for the year 0.1 0.3 0.4
Disposals – (0.1) (0.1)
At31December2021 0.8 3.1 3.9
Netbookvalue
At31December2021 0.4 0.4 0.8

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
164 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
£m Motor vehicles Property Total
Cost
At 1 January 2020 0.2 17.9 18.1
Additions 0.1 0.1 0.2
Disposals (0.1) (0.1) (0.2)
At 31 December 2020 0.2 17.9 18.1
Depreciation
At 1 January 2020 0.1 1.6 1.7
Charge for the year 0.1 1.6 1.7
Disposals (0.1) – (0.1)
At 31 December 2020 0.1 3.2 3.3
Netbookvalue
At 31 December 2020 0.1 14.7 14.8
Cost
At 1 January 2021 0.2 17.9 18.1
Additions 0.2 1.3 1.5
At31December2021 0.4 19.2 19.6
Depreciation
At 1 January 2021 0.1 3.2 3.3
Charge for the year 0.1 1.8 1.9
At31December2021 0.2 5.0 5.2
Netbookvalue
At31December2021 0.2 14.2 14.4
The Group recognised the following amounts in the consolidated statement of profit or loss and comprehensive income in relation to leases
under IFRS 16:
£m
2021
2020
Depreciation (1.9) (1.7)
Interest expense (0.8) (0.8)
Short-term lease expense (0.2) (0.2)
Sub-lease rentals
One of the leased properties is sub-leased to tenants under operating leases, with rentals payable quarterly. Minimum lease payments
receivable on these sub-leases of property are as follows:
£m
2021
2020
Within one year – 0.4
Later than one year but not later than 5 years – –
Later than 5 years – –
Totalsub-leasepaymentsreceivable – 0.4
Income from sub-lease in the year 0.5 0.5

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 165
 
The provision for deferred tax consists of the following deferred tax assets/(liabilities) relating to accelerated capital allowances and short-
term timing differences in relation to accruals and share-based payments.
£m
2021
2020
Balance as at 1 January 1.8 0.6
Effect of changes in tax rates 0.2 –
Adjustments in respect of prior period (0.6) 0.5
Deferred income taxes recognised in the consolidated statement of profit or loss and comprehensive income 0.1 0.3
Deferred tax on share-based payments recognised in reserves 0.3 0.4
Foreign exchange movements – –
Balanceasat31December 1.8 1.8
Consisting of:
Depreciation in excess of capital allowances – (0.1)
Other timing differences 1.8 1.9
Balanceasat31December 1.8 1.8
Deferred income tax liabilities have not been recognised for the withholding tax and other taxes that would be payable on the unremitted
earnings of certain subsidiaries as the Group is able to control the timing of these temporary differences and it is probable that they will not
reverse in the foreseeable future. Unremitted earnings totalled £3.4m at 31 December 2021 (2020: £3.1m).
 
At the beginning of May 2020, the Group formed Alfa iQ, a joint venture established to greatly enhance Alfa’s ability to develop artificial
intelligence solutions for the auto and equipment finance industry. The joint venture was set up 51:49 between Alfa and Bitfount, acompany founded
by Blaise Thomson. The financial and operating activities of the Group’s joint venture are jointly controlled by the participating shareholders.
The participating shareholders have rights to the net assets of the joint venture through their equity shareholdings.
The interest in the joint venture consists of part investment and part loan to joint venture accounted for as set out in note 1.2.
Investment
£m 2021 2020
Carrying amount as at 1 January 0.3 –
Carrying amount as at 6 May 2020 (i.e. on establishment of the joint venture) – 0.3
Share of net loss from the joint venture (0.1) –
Carryingamountasat31December 0.2 0.3
Loan to joint venture
£m 2021 2020
Carrying amount as at 1 January 0.1 –
Carrying amount as at 6 May 2020 (i.e. on establishment of the joint venture) – 0.1
Interest – –
Carryingamountasat31December 0.1 0.1
The total loss from interest in joint venture is £0.1m (2020: £0.0m) and the total interest in the joint venture is £0.3m (2020: £ 0.4m).

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
166 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
£m
2021
2020
Trade receivables 6.0 5.8
Provision for impairment – –
Tradereceivables–net 6.0 5.8
Ageing of trade receivables
Ageing of net trade receivables £m
2021
2020
Within agreed terms 4.1 5.6
Past due 1-30 days 1.2 0.1
Past due 31-90 days 0.6 –
Past due 91+ days 0.1 0.1
Tradereceivables–net 6.0 5.8
The Group believes that the unimpaired amounts that are past due are fully recoverable as there are no indicators of future delinquency or
potential litigation.
Currency of trade receivables
£m
2021
2020
GBP 4.9 1.8
USD 0.9 3.1
Other 0.2 0.9
Tradereceivables–net 6.0 5.8
Tradereceivablesduefromsignificantcustomers
Customers with revenue accounting for more than 10% of total revenue in the current year have outstanding trade receivables as follows:
£m
2021
2020
Customer A 0.8 0.6
As at issuance of these financial statements, all amounts relating to customers accounting for more than 10% of total revenue had
beencollected.
Impairmentandriskexposure
Information about the impairment of trade receivables and the Group’s exposure to market risk (specifically foreign currency risk) andcredit
risk can be found in note 3.
 
£m
2021
2020
Accrued income 6.3 5.0
Prepayments 3.2 2.1
Other receivables 1.0 0.8
Totalotherreceivablesheldatamortisedcost 10.5 7.9
Accrued income represents fees earned but not yet invoiced at the reporting date which has no right of offset with contract liabilities –
deferred licence amounts.
Accrued income increased by £1.3m. The current year balance represents unbilled professional fees work in progress, as well as £0.5m in
relation to subscription and £0.5m of one-off licence revenue items where there is contractual agreement to invoice in subsequent periods.
Prepayments include £1.1m of deferred costs in relation to costs to fulfil contracts – see note 1.5.

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 167
 
£m
2021
2020
Cash at bank and in hand 23.1 37.0
Cashandcashequivalents 23.1 37.0
Currency of cash and cash equivalents
£m
2021
2020
GBP 14.9 28.5
USD 4.4 4.8
AUD 1.3 1.1
Euro 2.0 2.1
Other 0.5 0.5
Cashandcashequivalents 23.1 37.0
 
£m
2021
2020
Trade payables 0.8 0.9
Other payables 8.5 7.2
Corporation tax 1.8 1.3
Contract liabilities – deferred licence 5.3 1.9
Contract liabilities – deferred maintenance 5.7 5.1
Lease liabilities (note 24) 17.1 17.5
Provisions for other liabilities 1.4 1.4
Totalcurrentandnon-currentliabilities 40.6 35.3
Less non-current portion (16.6) (17.2)
Totalcurrentliabilities 24.0 18.1
Other payables includes amounts relating to other tax and social security of £2.4m (2020: £2.5m).
 
The following table sets out the reconciliation of the lease liabilities from 1 January to the amount disclosed at 31 December:
£m
2021
2020
Lease liabilities recognised at 1 January 17.5 19.0
Additions 1.5 0.2
Interest charge 0.8 0.8
Payments made on lease liabilities (2.7) (2.5)
At31December 17.1 17.5
Additions to lease liabilities include extensions to existing lease agreements.

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
168 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
Below is the maturity analysis of the lease liabilities:
£m
2021
2020
Non-current 15.2 15.8
Current 1.9 1.7
Totalleaseliabilities 17.1 17.5
No later than one year 2.7 2.4
Between one year and 5 years 10.1 9.3
Later than 5 years 7.5 9.4
Total future lease payments 20.3 21.1
Total future interest payments (3.2) (3.6)
Totalleaseliabilities 17.1 17.5
The group’s net debt is made up of cash and cash equivalents and lease liabilities. The movement during the year in lease liabilities is set out
above. Movements in cash and cash equivalents are set out in the Cash flow statement. These are the only changes in liabilities arising from
financing activities in the year.
 
£m
At 1 January 2020 0.7
Provided in the period 0.7
At 31 December 2020 1.4
Provided in the period 0.7
Utilised in the period (0.1)
Released in the period (0.6)
At31December2021 1.4
Provisions for other liabilities comprise amounts for office dilapidations, employer taxes on share-based payments and legal matters. It is
expected that these will be utilised by as follows: £0.5m in 2022, £0.2m in 2030 and £0.7m over various years.
 
2021 2020
Issued and fully paid Shares £m Shares £m
Ordinary shares – 0.1 pence 300,000,000 0.3 300,000,000 0.3
Balance as at 31 December 300,000,000 0.3 300,000,000 0.3
No additional shares have been issued or cancelled in the year ended 31 December 2021.
 
£m
2021
2020
At 1 January 0.1 –
Currency translation of subsidiaries (0.1) 0.1
At31December – 0.1
 
£m
2021 2020
Balance at 1 January – –
Acquired in the year 4.6 –
Issued on exercise of options (1.2) –
Balanceat31December 3.4 –

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 169
The own shares reserve represents the cost of shares in Alfa Financial Software Holdings PLC purchased in the market and held by the Group’s
employee benefit trust to satisfy options under the Group’s share options plans (see Note 1.2). The number of ordinary shares held by the
employee benefit trust at 31 December 2021 was 2,590,260 (2020: 552,783). As at 31 December 2021, the Group held 0.86% (2020: 0.18%)
of its own called up share capital.
 
The Group recognised total expenses relating to share-based payment of £1.5m (2020: £1.5m) in the current year. Of this, £1.5m
(2020: £1.5m) relates to equity-settled LTIP schemes and £0.0m (2020: £nil) relates to Employee Share Save schemes. See further detail
below.
The outstanding share schemes are made up of the following:
Grant date Plan Expiry date
Exercise
price
Share options
31December
2021
Share options
31 December
2020
June 2014/2015 LTIP 4 annual tranches from 1 June 2018 0p – 1,197,503
June 2018 LTIP June 2021 0p – 1,378,178
November 2019 LTIP November 2022 0p 1,113,909 1,205,036
June 2020 LTIP June 2023 0p 2,322,473 2,358,444
April 2021 LTIP April 2024 0p 1,121,104 –
November 2021 LTIP October 2024 0p 60,872 –
November 2021 UK Employee ShareSave January 2025 1.536p 774,659 –
November 2021 US Employee ShareSave January 2024 1.670p 77,724 –
The weighted average share price at the date of exercise for share options exercised during the period was 130.4p (2020: 74.3p). The options
outstanding at 31 December 2021 had a weighted average exercise price of 24.1p (at 31 December 2020: nil), and a weighted average
remaining contractual life of 1.7 years (2020: 2.3 years). The opening weighted average exercise price at 1 January 2021 was nil (1 January
2020: nil). The weighted average exercise price of options forfeited and exercised during the year was nil (31 December 2020: nil).

The 2019 LTIP awards granted are conditional on employment only; the fair value of these awards has been calculated using the grant date
share price as a proxy for fair value of the option adjusted for any dividends over the period. There are no market or non-market performance
conditions attached to the option scheme and, as such, no performance conditions are included in the fair value calculation.
The 2020 LTIP awards granted are conditional on performance conditions, 50% based on EPS performance (non-market condition) and 50%
on TSR (market condition) as well as a three-year employment fulfilment. The fair value of these awards has been determined using the
Monte Carlo model at the grant date.
On 30 April 2021 the Group awarded an LTIP conditional on performance conditions, 50% based on EPS performance (non-market
condition) and 50% on TSR (market condition) as well as a three-year employment fulfilment. For those share schemes with market-related
vesting conditions, the fair value is determined using the Monte Carlo model at the grant date. For share options issued with EPS (non-
market) performance vesting conditions, the fair value of the underlying option is equal to the grant date share price. The following table lists
the inputs to the model used for the awards granted in the year ended 31 December 2021 based on information at the date of grant:
LTIP awards (granted in April)
TSRelement EPSelement
Share price at date of grant 136p 136p
Award price 0p 0p
Volatility 60.3% –
Embedded TSR 6.9% –
Average correlation 41.1% –
Life of award 3 years 3 years
Risk-free rate 0.12% –
Fair value per award 73.6p 136.0p

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
170 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
On 30 November 2021, the Group awarded to certain employees an LTIP conditional on employment only. The fair value of these awards is
equal to the closing share price on the date of grant (192 pence), discounted by the expected 12-month dividend yield to reflect the lack of
dividend accrual over the vesting period (three years). The expected price volatility is based on the historic volatility (based on the remaining
life of the scheme), adjusted for any expected changes to future volatility due to publicly available information.
All of these Company schemes, as well as any non-cyclical awards, are equity-settled by award of ordinary shares.
The total share-based payment charge relating to Alfa Financial Software Holdings PLC shares for the year is split as follows:
£m
2021
2020
Employee share schemes – value of services 1.1 1.3
Expense in relation to fair value of social security liability on employee share schemes 0.4 0.2
Totalcostofemployeeshareschemes 1.5 1.5
Details of the share options outstanding during the year are as follows:
2021
2020
Outstanding at 1 January 6,139,161 6,482,950
Conditionally awarded in year 2,034,359 2,358,444
Exercised (2,575,681) (2,592,919)
Forfeited or expired in year (127,098) (109,314)
Outstandingat31December 5,470,741 6,139,161
Exercisableattheendoftheyear – –

On 30 November 2021, the Group launched an Employee ShareSave Scheme – the Save As You Earn (SAYE) scheme in the UK and Employee
Stock Purchase Plan (ESPP) scheme in the US. Under these schemes, eligible employees can save up to a set limit each month. At the end of
the savings period (three years for SAYE and two years for ESPP), employees can choose whether or not they wish to buy the shares at the
option price or take back their savings as cash. The option price is the share price at the start of the plan with a 20% discount for the UK
scheme and 15% discount for the US scheme. The fair value of these awards have been determined using the Monte Carlo model at the grant
date. The expected price volatility is based on the historic volatility (based on the remaining life of the scheme), adjusted for any expected
changes to future volatility due to publicly available information.
31December2021
SAYE ESPP
Numberof
share options
Exercise
price
Numberof
share options
Exercise
price
Outstanding at beginning of year – – – –
Granted during the year 774,659 153.6p 77,724 167.0p
Outstanding at the end of the year 774,659 153.6p 77,724 167.0p
Exercisable at the end of the year – – – –
SAYE
31December
2021
ESPP
31December
2021
Share price 205.0p 205.0p
Exercise price 153.6p 167.0p
Expected volatility 57.5% 57.2%
Expected life 36 months 24 months
Risk-free rate 0.51% 0.45%
Expected dividend yields 2.45% 2.33%

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 171
 
 
The Group has no capital commitments, no material contingent liabilities and no contingent assets.

On 18 January 2022 the Group announced the launch of a share buyback programme. Refer to the Company website for more details.
There have been no other reportable subsequent events.
 
A 2020 ordinary dividend of 1 pence per share was paid on 2 July 2021 amounting to £3.0m (2020: £nil).
A special dividend of 10 pence per share was paid on 5 November 2021 amounting to £29.7m (2020: £44.2m).
Subject to approval at the Annual General Meeting on 12 May 2022, a 2021 dividend of 1.1 pence per share will be paid on 24 June 2022 to
holders on the register on 27 May 2022. The ordinary shares will be quoted ex-dividend on 26 May 2022.
 
 
The ultimate parent undertaking is CHP Software and Consulting Limited (the ‘Parent’), which is the parent undertaking of the smallestand
largest group in relation to these consolidated financial statements. The ultimate controlling party is Andrew Page.
 
The principal subsidiaries and joint ventures of the Group and the Group percentage of equity capital are set out below. All these are
consolidated within the Group’s financial statements.
Registered address and country of
incorporation
Principal
activity
Held by
Company
2021
Held by
Group
2021
Held by
Company
2020
Held by
Group
2020
Alfa Financial Software
GroupLimited
Moor Place, 1 Fore Street Avenue,
London, EC2Y 9DT, UK
Holding
company
100% 100% 100% 100%
Alfa Financial
Software Limited
Moor Place, 1 Fore Street Avenue,
London, EC2Y 9DT, UK
Software
and services
– 100% – 100%
Alfa Financial Software Inc 350N Old Woodward Avenue,
Birmingham, MI 48009, USA
Software
and services
– 100% – 100%
Alfa Financial Software
AustraliaPty Limited
Lisgar House, Level 3, 32
Carrington Street,
Sydney, NSW, 2000, Australia
Services – 100% – 100%
Alfa Financial Software
NZLimited
Level 1 Building B, 600 Great
South Road, Greenlane, Auckland
1051, New Zealand
Services – 100% – 100%
Alfa Financial Software GmbH Bockenheimer Landstraße 20,
60323 Frankfurt am Main,
Germany
Software
and services
– 100% – 100%
Alfa iQ Moor Place, 1 Fore Street Avenue,
London, EC2Y 9DT, UK
Software
and services
– 51% – 51%
Alfa iQ was established in May 2020 – see note 19 for more detail.

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
172 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
32.3 Transactions with related parties
Full details of the Directors’ compensation and interests are set out in the Directors’ Remuneration Report on pages 100 to 121.
See note 8 for further detail on monies paid to key management (including Directors).
Dividends to the amount of £21.7m were paid to the Parent (2020: £29.6m).
Dividends of 1 pence and 10 pence per share were paid to all shareholders in 2021 (2020: 15 pence per share). Directors and other key
management received dividends based on their beneficial interest in the shares of the Company. Directors’ beneficial interests in the shares
of the Company are disclosed in the Remuneration Report on page 116.
The balances outstanding from the Parent at 31 December 2021 and 2020 were £nil and £nil respectively.
In the prior period the Group invested £0.4m in Alfa iQ consisting of: a capital contribution of £0.3m; and an interest-free loan fair valued at
£0.1m. At 31 December 2021 the value of the investment is carried at £0.2m (2020: £0.3m) and the loan fair valued at £0.1m (2020: £0.1m).
In the current period, the Group entered into a rental agreement with CHP Software and Consulting Limited for rental of a meeting room on
the 9th floor of Moor Place for £0.03m per annum (2020: £nil) and at 31 December 2021 there was £nil balance outstanding from, or to, the
Parent (2020: £nil).
There were no other outstanding receivable balances from related parties at the end of the reporting period.
 
Assets and liabilities are offset and the net amount is reported in the consolidated statement of financial position where Alfa currentlyhas a
legally enforceable right to offset the recognised amounts, and there is an intention to realise the asset and settle theliability simultaneously.
The following table presents the recognised assets and liabilities that are offset as at 31 December 2021 and 31 December 2020
intheconsolidated statement of financial position.
31 December 2021
£m
Gross
amounts
Amounts
offset
Netamounts
presented
Accrued income 14.0 (7.7) 6.3
Contract liabilities – deferred licence (13.0) 7.7 (5.3)
31 December 2020
£m
Gross
amounts
Amounts
offset
Net amounts
presented
Accrued income 12.6 (7.6) 5.0
Contract liabilities – deferred licence (9.5) 7.6 (1.9)

COMPANYSTATEMENTOFFINANCIALPOSITION
FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 173
£m Note 2021 2020
Assets
Non-currentassets
Investment in subsidiary companies 4 427.6 348.7
Totalnon-currentassets 427.6 348.7
Currentassets
Other receivables 5 0.1 0.2
Cash and cash equivalents 6 0.1 0.1
Totalcurrentassets 0.2 0.3
Totalassets 427.8 349.0
Liabilitiesandequity
Currentliabilities
Amounts owed to subsidiaries 7 39.9 0.2
Other payables 8 0.7 0.4
Accruals 0.4 0.4
Totalcurrentliabilities 41.0 1.0
Non-currentliabilities
Amounts owed to subsidiaries 7 – –
Provision 8 0.2 –
Totalnon-currentliabilities 0.2 –
Totalliabilities 41.2 1.0
Capitalandreserves
Ordinary shares 9 0.3 0.3
Own shares 10 (3.4) –
Retained earnings 389.7 347.7
Totalequity 386.6 348.0
Totalliabilitiesandequity 427.8 349.0
Retained earnings includes a profit of £74.8m for the 2021 financial year (31 December 2020: £79.8m). See the statement ofchanges
inequity on the next page for further detail.
The Company has taken advantage of the exemption under Section 408 of the Companies Act 2006 from presenting its own profitandloss account.
The above Company statement of financial position should be read in conjunction with the accompanying notes.
The Company financial statements on pages 173 to 178 were approved and authorised for issue by the Board of Directors on 8 March2022
and signed on its behalf.
Andrew Denton Duncan Magrath
Chief Executive Officer Chief Financial Officer
Alfa Financial Software Holdings PLC
Registered number 10713517

COMPANYSTATEMENTOFCHANGESINEQUITY
174 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
£m Note
Called-up share
capital
Own
shares
Retained
earnings Total equity
Balance as at 1 January 2020 0.3 – 310.7 311.0
Total comprehensive profit for the period – – 79.8 79.8
Employee share schemes – value of employee services 11 – – 1.4 1.4
Dividends 12 – – (44.2) (44.2)
Balance as at 31 December 2020 0.3 – 347.7 348.0
Total comprehensive profit for the period – – 74.8 74.8
Employee share schemes – value of employee services 11 – – 1.1 1.1
Dividends 12 – – (32.7) (32.7)
Own shares acquired 10 – (4.6) – (4.6)
Own shares issued 10 – 1.2 (1.2) –
Balanceasat31December2021 0.3 (3.4) 389.7 386.6
As at 31 December 2021 £3.4m (2020: £2.3m) of the retained earnings balance relates to reserves held to settle the Alfa employee share
schemes, and does not qualify as distributable reserves.
The above Company statement of changes in equity should be read in conjunction with the accompanying notes.

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 175
NOTESTOTHECOMPANYFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021
 
Alfa Financial Software Holdings PLC is a public company limited by shares and is incorporated and domiciled in England. These financial
statements are the separate financial statements for the Company.
The registered office is Moor Place, 1 Fore Street Avenue, London, EC2Y 9DT, United Kingdom. The registered no. of Alfa is10713517.
The principal activity of the Company is as a holding company.
 
The financial statements of Alfa Financial Software Holdings PLC have been prepared in compliance with Financial Reporting Standard 102, the
Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland (‘FRS 102’) and the Companies Act 2006.
The principal accounting policies applied in the preparation of these financial statements are set out above. These policies have been consistently
applied to the years presented, unless otherwise stated.
These financial statements have been prepared on a going concern basis, under the historical cost convention. The Directors have used the going
concern principle on the basis that the current profitable financial projections of the Company and its subsidiaries indicate they will continue in
operation for the foreseeable future. As described in note 1.1 to the Consolidated financial statements, this assessment includes downside stress
testing in line with FRC guidance.
The Company financial statements have been prepared in pounds sterling which is the functional and presentational currency of the Company and
have been presented in £m.
As permitted by FRS 102 the Company has taken advantage of the disclosure exemptions available under that standard in relation to financial
instruments, presentation of a Cash Flow Statement, share-based payments, the aggregate remuneration of key management personnel and
related party transactions with other wholly-owned members of the Group.
The parent company meets the definition of a qualifying entity under FRS 102. Where required, equivalent disclosures are given in the Group
accounts of Alfa Financial Software Holdings PLC.
In the current period it was concluded that the Company exercises control over the employee benefit trust because it is exposed to, and has a right
to, variable returns from this trust and is able to use its power over the trust to affect those returns. Therefore the trust has been consolidated by
the Company. The impact of consolidation of the trust in the prior period was immaterial.
 
Subsidiaries are all entities over which the Company has control. The Company controls an entity when the Company 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.
Unless otherwise stated, subsidiaries have share capital consisting solely of ordinary shares, and the proportion of ownership interests held
equals the voting rights held by the Company. The country of incorporation or registration is also each subsidiary’s principal place of business.
Investments in subsidiary undertakings are stated at cost, including those costs associated with the acquisitions, less provision for
anyimpairment in value. Where events or changes in circumstances, including an adverse movement in the share price, indicate that
thecarrying amount of an investment may not be recoverable, an impairment review is performed. An impairment write-down is recognised
to the extent that the carrying amount of the asset exceeds the higher of the fair value less cost to sell and value in use.
Any subsidiary undertakings sold or acquired during the year are included up to, or from, the dates of change of control. Where control of a
subsidiary is lost it is recognised in the profit or loss.
Amounts subsidiaries are unsecured, interest-free and repayable on demand. The carrying amounts of such payables are considered tobe
the same as their fair values due to their short-term nature.
 
Basic financial assets, including trade and other receivables, cash and bank balances and other receivables, are initially recognised
attransaction price, unless the arrangement constitutes a financing transaction.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset
is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cashflows discounted
at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

176 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
NOTESTOTHECOMPANYFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED
 
Basic financial liabilities, including trade and other payables and trading balances and loans from subsidiaries are initially recognised
attransaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value
of the future receipts discounted at a market rate of interest. The Company derecognises financial liabilities when, and only when, the
Company’s obligations are discharged, cancelled or expired.
Other payables are initially recorded at fair value and subsequently measured at amortised cost. As the total carrying amount is due within
the next 12 months from the balance sheet date, the impact of applying the effective interest method is not significant and therefore the
carrying amount equals to the contractual amount or the fair value initially recognised.
Payables are classified as current liabilities if receipt or payment is due within one year or less.
 
Ordinary shares
Ordinary shares are classified as equity. There are no restrictions on the distribution of capital and the repayment of capital.
Own shares
Own shares represent the shares of Alfa Financial Software Holdings PLC that are held by the employee benefit trust. Own shares are
recorded at cost and deducted from equity.
 
Grants made to subsidiary employees will not result in a charge recognised in the income statement, any charges for share-based payments
are recognised as an increase in the cost of investment in subsidiaries (as a capital contribution). For full details of the Group’s share-based
payments, refer to note 29 to the consolidated financial statements.
 
Dividends are recognised through equity when approved by Alfa’s shareholders or on payment, whichever is earlier.
 
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 resulting accounting estimates will, by definition, seldom
equal the related actual results. There were no critical accounting judgements that would have a significant effect on the amounts recognised
in the parent company financial statements or key sources of estimation uncertainty at the reporting date thatwould have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
 
The Company’s exposure to financial risks is managed as part of the Group’s financial risk management. Full details about the
Group’sexposure to financial risks and how these risks could affect the Group’s future financial performance are given in note 3
totheconsolidated financial statements.
 
£’000s 2021 2020
Cost
As at 1 January 348.7 347.4
Capital contributions to subsidiaries 0.9 1.3
Reversal of impairment 78.0 –
Asat31December 427.6 348.7
The carrying amount of the investment is £427.6m at 31 December 2021 (2020: £348.7m). The recoverable amount of the investment was
determined based on value-in-use calculations using cash flow projections of the Company and its subsidiaries from financial budgets and
forecasts for a five-year period using a pre-tax discount rate of 11% (2020: 11%). Cash flows beyond these periods have been extrapolated
using a steady 2% (2020: 2%) average growth rate. This growth rate does not exceed the long-term average growth ratefor the markets in
which the Company and its subsidiaries operate. In addition, the market capitalisation of the Company as at31 December 2021 was
£569.0m. As the recoverable amount, and the market capitalisation of the Company, are in excess of thecarrying amount of the investment,
no impairment charge has been recognised during the current financial year.
As the circumstances that resulted in an impairment charge in 2018 of £78.0m no longer apply, it has been reversed in the current year.

FINANCIAL STATEMENTSAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 177
 
At 31 December 2021, other receivables relate to prepayments of £0.0m (2020: £0.2m) and VAT receivables of £0.1m (2020: £0.0m).
 
£m 2021 2020
Cash and cash equivalents 0.1 0.1
 
£m 2021 2020
Amounts owed to subsidiaries – current 39.9 0.2
Amounts owed to subsidiaries – non-current – –
Totalamountsowedtosubsidiaries 39.9 0.2
Current amounts owed to subsidiaries of £39.9m relate primarily to cash advanced by Alfa Financial Software Limited to the Company for
dividend payments (2020: £0.2m).
 
Other payables relate to accruals of social security and other taxes of £0.0m (2020: £0.1m), trade creditors of £0.1m (2020: £0.1m)
andsalary costs of £0.6m (2020: £0.2m).
Long-term provision relates to the employer national insurance contribution of £0.2m of the 2021 and 2020 share grant expense that relates
totheemployees of the Company (2020: £0.0m).
 
Each ordinary share has a par value of 0.1 pence. All shares are fully paid and have equal voting rights.
Issuedandfullpaid
Shares –
ordinary £m
At 31 December 2021 300,000,000 0.3
At 31 December 2020 300,000,000 0.3
 
2021
£m
2020
£m
Balance at 1 January – –
Acquired in the year 4.6 –
Issued on exercise of options (1.2) –
Balanceat31December 3.4 –
The own shares reserve represents the cost of shares in Alfa Financial Software Holdings PLC purchased in the market and held by the
Company’s employee benefit trust to satisfy options under the Group’s share options plans (see Note 1.2 of the Group accounts). The number
ofordinary shares held by the employee benefit trust at 31 December 2021 was 2,590,260 (2020: 552,783). As at 31 December 2021, the
Company held 0.86% (2020: 0.18%) of its own called up share capital.
 
Under the rules of the Company’s LTIP plans, on 1 June 2018, 1 November 2019, 2 June 2020, 30 April 2021 and 30 November 2021
selected employees of theCompany’s subsidiary were granted awards in the form of nil cost options over ordinary shares in Alfa.
On 30 November 2021, employees of theCompany’s subsidiary that met the set criteria were invited to join a ShareSave Scheme – the SAYE
scheme for the UK employees and the ESPP scheme for the US employees. Under these schemes, eligible employees can save up to a set limit
eachmonth and at the end of the vesting period can use these savings to buy ordinary shares in Alfa (at a discount) or take these back as cash.
Refer to note 29 of the consolidated accounts for more detail on these schemes. The cost of the share-based remuneration is passed to the
relevant subsidiary.

178 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
 
A 2020 ordinary dividend of 1 pence per share was paid on 2 July 2021 amounting to £3.0m (2020: £nil).
A special dividend of 10 pence per share was paid on 5 November 2021 amounting to £29.7m (2020: £44.2m).
Subject to approval at the Annual General Meeting on 12 May 2022, a 2021 dividend of 1.1 pence per share will be paid on 24 June 2022 to
holders on the register on 27 May 2022. The ordinary shares will be quoted ex-dividend on 26 May 2022.
Refer to note 31 of the consolidated accounts for more detail.
 
The Company has no employees other than the Directors. Full details of the Directors’ compensation and interests are set out in the
Directors’ Remuneration Report on pages 100 to 121.
 
On 18 January 2022 the Group announced the launch of a share buyback programme. Refer to the Company website for more details.
There have been no other reportable subsequent events.
 
The Company has taken advantage of the exemption under FRS 102:33.1A from disclosing transactions with other members of the Group.
The immediate and ultimate parent undertaking is CHP Software and Consulting Limited, which is the parent undertaking of the smallest
andlargest group to consolidate these financial statements. The registered office of the immediate and ultimate parent undertaking is
MoorPlace, 1 Fore Street Avenue, London EC2Y 9DT and copies of the financial statements of CHP Software and Consulting Limited can
beobtained from this address. The ultimate controlling party is Andrew Page.
See a full listing of Company’s subsidiaries and joint venture in note 32.2 of the Group accounts.
NOTESTOTHECOMPANYFINANCIALSTATEMENTS
FORTHEYEARENDED31DECEMBER2021CONTINUED

OTHER INFORMATIONAlfa Financial Software Holdings PLC Annual Report and Accounts 2021 179
API:Application Programming Interface.
AGM:Annual General Meeting.
Alfa:The Group or Alfa Financial
SoftwareHoldings PLC and its
subsidiaryundertakings (as defined
bytheCompanies Act 2006).
APM:Alternative Performance Measure.
Articles:The Articles of Association
oftheCompany.
Banks:Customers classified as banking
institutions are finance entities associated
with regulated banking groups.
Basicearningspershare:Calculated by
dividing the profit attributable to equity
holders of Alfa by the weighted average
number of ordinary shares outstanding
during the year.
Board:The Board of Directors of Alfa
Financial Software Holdings PLC.
CompaniesAct: The Companies Act 2006
(as amended).
CEO: Chief Executive Officer.
CFO: Chief Financial Officer.
CGU: Cash-generating unit.
Company: Alfa Financial Software Holdings
PLC, a company incorporated in England and
Wales with registered number 10713517
whose registered office is at Moor Place,
1Fore Street Avenue, London, EC2Y 9DT,
United Kingdom.
CLT:Company Leadership Team.
CODM:Chief Operating Decision Maker.
COO:Chief Operating Officer.
CSR:Corporate Social Responsibility.
Customerconcentration: The proportion
ofgroup revenues made up by the top 5 or
top 10 customers, in each relevant period
asstated
DBSP:Deferred Bonus Share Plan.
Directors:The Directors of the Company
whose names are set out on pages 74 to 75.
DisclosureandTransparencyRules:The
Disclosure and Transparency Rules made
under Part VI of the Financial Services
andMarkets Act 2000 (as amended).
EMEA: Europe, the Middle East and Africa.
ESG:Environmental, Social and Governance.
EPS: Earnings per share.
EU:European Union.
EURIBOR:the Euro Interbank Offer Rate.
FCA:Financial Conduct Authority
FCF:Free cash flow.
FRC: The Financial Reporting Council.
FTE: Full time equivalent.
FVOCI:Fair value through other
comprehensive income.
FVTPL: Fair value through profit or loss.
GHG: Greenhouse gases.
Group: Alfa Financial Software Holdings PLC
and its subsidiaries.
HMRC:Her Majesty’s Revenue & Customs.
KPI:Key performance indicator.
IP:Intellectual property.
IRT:Incident Response Team.
I&S: Implementation and Support
(“I&S”)expense.
LIBOR: London Inter-bank Offered Rate.
LTIP:Long-Term Incentive Plan.
ML:Machine Learning.
OEMs: Original equipment and automotive
manufacturers.
Operatingfreecashflowconversion:
Operating free cash flow is calculated ascash
from operations, less capital expenditures,
less the principal element oflease payments
in respect of IFRS 16. Operating free cash
flow conversion represents Operating free
cash flow generated as a proportion of
Operating profit.
PDMR:Person Discharging Managerial
Responsibilities.
PDP:Performance Development Plan.
RFI: Request for information.
R&PD:Research and product development.
SG&A: Sales, general and administrative
expenses.
SI:Systems integrator.
SONIA:Sterling Overnight Index Average.
The effective overnight interest rate paid by
banks for unsecured transactions in the
British sterling market.
STFR:Single total figure of remuneration.
TCV:Total contract value.
TheCode:The UK Corporate Governance
Code published by the FRC in July 2018.
TSR:Total shareholder return.
UAT: User acceptance testing
UI: Userinterface.
VAT: UK value added taxation.
XaaS: Everything as a service.
GLOSSARYOFTERMS

180 Alfa Financial Software Holdings PLC Annual Report and Accounts 2021
SHAREHOLDERINFORMATION
Alfa Financial Software Holdings PLC
Registered Office
Moor Place
1 Fore Street Avenue
London
EC2Y 9DT
www.alfasystems.com
T+44 (0)20 7588 1800
Registered Number: 10713517
Stock code: ALFA
ISIN: GB00BDHXPG30
LEI: 213800C5UOZHUTNUGA28
Investor relations
ir@alfasystems.com
Media relations
Tulchan Communications LLP
Auditor
RSM UK Audit LLP
Brokers
Barclays Bank plc
Investec Bank plc
Corporate lawyer
White & Case LLP
Remuneration advisors
Ellason LLP
Tapestry Global Compliance LLP
Registrar/shareholder queries
Equiniti Limited
Aspect House,
Spencer Road,
Lancing, West Sussex
BN99 6DA
Telephone 0371 384 2030 and outside the UK +44 (0)121 415 7047
Online: help.shareview.co.uk (from here, you will be able to securely
email Equiniti with your enquiry.)

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© Alfa Financial Software Holdings PLC, 2021
Moor Place
1 Fore Street Avenue
London EC2Y 9DT
UK
+44 (0)20 7588 1800