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Pires Investments plc
(Incorporated in England and Wales with registered number 02929801)
Annual Report and
Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
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PIRES INVESTMENTS PLC
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
Contents
Page
Company Information 1
Chairman’s Statement 2
Strategic Report 3
Directors’ Report 6
Report on Remuneration 8
Statement of Directors’ Responsibilities 9
Corporate Governance Report 10
Report of the Independent Auditor 17
Statement of Comprehensive Income 20
Statement of Changes in Equity 21
Statement of Financial Position 22
Statement of Cash Flows 23
Notes to the Financial Statements 24
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PIRES INVESTMENTS PLC
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
Company Information
Directors Peter Redmond (Chairman)
John May (Non‐Executive Director)
Nicholas Lee (Non‐Executive Director)
Secretary Robert Porter
Registered office c/o Cooley Services Limited
Dashwood House
69 Old Broad Street
London
EC2M 1QS
Independent Auditors PKF Littlejohn LLP
15 Westferry Circus
London E14 4HD
Nominated adviser Cairn Financial Advisers LLP
Cheyne House
Crown Court
62‐63 Cheapside
London
EC2V 6AX
Broker Peterhouse Capital Limited
3rd Floor
80 Cheapside
London
EC2V 6EE
Registrars Computershare Investor Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
Company Registration number 02929801
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PIRES INVESTMENTS PLC
Chairman’s Statement
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
I am pleased to report significant further progress in the year to 31 October 2019. The Company achieved a pre‐tax profit of £865,510
(2018: £322,069) with the value of our investment portfolio rising to £1,165,409 (2018: £1,029,526) after investment realisations
during the period of £1,016,114 (2018: £264,882). Net asset value at the year‐end was £2,564,582 (2018: £949,617), equivalent to
3.56p per share, and earnings were 1.64p per share (2018: 0.95p).
In February 2019, we raised just over £780,000 in new equity capital. In October 2019, we obtained shareholder approval for an
extension of our investing policy to include technology and invested £1.1 million for a 13% stake in Sure Valley Ventures (“SVV”), a
venture capital fund which invests in the software technology sector with a specific focus on artificial intelligence (“AI”), the internet
of things (“IoT”) and augmented and virtual reality (“AR/VR”). To date, we have made further investments in SVV in line with our
funding commitment totalling approximately £370,000. Our technology investments now represent much the larger part of our
portfolio, reflecting our change of investment emphasis.
Shareholders will also be aware that on 24 April 2020, the Company completed a placing to raise further funds amounting to
£1.06 million of which £454,286 has been firmly placed and £605,714 placed conditional upon approval at the forthcoming Annual
General Meeting. As part of the placing, we are pleased to welcome the well‐known technology investor, Chris Akers, as a significant
shareholder in the Company.
The Company is now seeing a growing number of new investment opportunities and the Board believes that the Company now has
the resources to enable it to take advantage of them as they arise.
Our results in the last financial year were largely the result of the increased value and partial realisation of our holding in Eco (Atlantic)
Oil & Gas Limited (“Eco Atlantic”) which has proved a very successful investment for the Company. The Company has now disposed
of the majority of its holding in Eco Atlantic, prior to the share price fall triggered by recent market conditions and the sharp fall in
oil prices. Overall, we have generated total net cash proceeds of £1.6 million and realised a total net profit on disposal of almost
£1 million from this investment.
Our recent focus on technology has proved successful to date. In December 2019, very soon after our initial investment in SVV, one
of it’s portfolio companies, Artomatix Limited, was acquired at a price 500% the valuation at which the investment was made. As
realisations when achieved are paid out to investors, Pires received a cash distribution of over €720,000 with a balance of €82,000
due eighteen months after the sale.
A number of the other portfolio companies have also made significant progress since our investment. For example, the share price
of VR Education Holdings plc which is quoted on AIM has increased by almost 30% since the beginning of the year. In March 2020,
VividQ Limited raised a further £2.4 million from two strategic venture capital funds. VividQ has leading edge software providing
holography to consumer electronics. In April 2020, Admix (the trading name for WAM Group Limited), which has developed a
programmatic monetization platform for gaming and other entertainment developers, raised US$6.1 million from existing and new
investors at a 450% premium to the valuation at which SVV’s initial investment was made. Also, in April 2020, environmental
technology specialist, Ambisense Limited, announced its involvement in ground surveys for a very large UK infrastructure project –
the Lower Thames Essex‐Kent Crossing. More recently, SVV has invested in Buymie Technologies Limited, a company that has created
a platform that uses artificial intelligence to provide consumers with access to multiple large retailers – a particular pertinent
investment given the Covid‐19 crisis.
In March 2020, Pires announced a direct investment of €250,000 in Getvisibility (the trading name for Visibility Blockchain Limited),
an artificial intelligence security company, addressing the substantial and increasing problem which corporations face in storing,
sorting, accessing and protecting data. It has developed and launched a software platform using artificial intelligence that delivers
visibility over a wide range of data.
In view of the current Covid‐19 pandemic, it is appropriate to make some comment on the position of the Company. Pires, unlike
very many other companies, remains able to carry on its activities effectively. Furthermore, we believe that the Company’s technology
investments are well positioned against the background of Covid‐19. We are, however, keeping all such matters under close review.
In summary, the Company has made good progress during the financial year and beyond. The Board’s intention is to build a broadly
based technology investment company with interests in a range of companies with exciting growth potential. We believe that the
fundraisings that we completed, the successful realisation of a key part of our existing portfolio and the investments that we have
made represent valuable first steps in this direction. We look forward to further progress in the current financial year.
Peter Redmond
Chairman
29 April 2020
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Strategic Report
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
Business review and future developments
PIRES INVESTMENTS PLC
Investment portfolio
During the year, the Company disposed of some of its holdings in Eco (Atlantic) Oil and Gas Limited. On 8 January 2019, the
shareholders of the SalvaRX plc approved the sale of the Company’s 94.2 per cent in SalvaRx Limited to Portage Biotech Inc. (“Portage”)
in exchange for shares in Portage, a company quoted on the Canadian Stock Exchange Through the acquisition of SalvaRx Limited,
Portage acquired the operating businesss’ of SalvaRx plc. Shares thus acquired by SalvaRx plc have subsequently been distributed to
its shareholders. As a result, the Company now holds shares directly in Portage. As at 31 October 2019, the Company’s investment
portfolio comprised:
Investment portfolio Value (£)*
Equities
Portage Biotech; Kazera Global; ECO (Atlantic) 1,165,409
Cash 1,426,799
Total 2,592,208
* based on the market valuation of the respective companies’ shares at 31 October 2019.
Going concern
The Company’s activities resulted in a profit of £865,510 (2018: profit of £322,069) and, as at 31 October 2019, the Company’s cash
balance was £1,426,799 (2018: £48,028).
The Company’s administrative expenses in the 12 month period from the signing of these financial statements are more than
supported by the cash balance as at 31 October 2019, and at the date of signing these accounts. Furthermore, the Company also
retains a portfolio of listed and unlisted investments some of which could be readily realised on the open market to meet a possible
shortfall if it were to arise.
The Directors therefore consider that, based upon their financial projections, the Company will be a going concern for the next twelve
months. For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.
Investing Policy
The Company’s revised investing policy was approved by shareholders on 3 October 2019 and implemented in accordance with the
requirements of Rule 15 of the AIM Rules (as in force at that time) on that date. A copy of the investing policy is available on the
website (www.piresinvestments.com).
Financial risk management objectives and policies
Details of the Company’s financial instruments and financial risk management policies can be found in notes 12 and 13 to the financial
statements.
Key performance indicators
The key performance indicators are set out below:
31 October 31 October
2019 2018
£ £ Change %
Net asset value 2,564,582 949,617 170%
Net asset value – fully diluted per share 0.0386 0.0280 38%
Cash and cash equivalents 1,426,799 48,028 2,870%
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PIRES INVESTMENTS PLC
Strategic Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
Principal business risks and uncertainties
Dependence on key executives and personnel
The Company’s future development and prospects are substantially dependent on the continuing services and performance of the
Directors. The Directors cannot give assurances that they will remain with the Company, although the Directors believe that the
Company’s culture and remuneration packages are attractive. If key members of the Company’s management team depart, or are
affected by illness, such as COVID‐19, and the Company is not be able to find effective replacements in a timely manner or at all, its
business may be disrupted or damaged.
Impact of COVID-19
Impact of COVID‐19 or any other severe communicable disease, if uncontrolled, on the general economic climate could have an
adverse effect on the Company. The recent outbreak of COVID‐19 may have an adverse effect on the Company’s business, financial
situation, growth and prospects and has already had a material adverse effect on overall business sentiment and the global economy.
There is no assurance there will not be similar outbreaks of other diseases in the future. The impact of the imposition by governments
across the world of stringent measures to prevent the spread of COVID‐19 or other diseases, and the effect of COVID‐19, or any
other severe communicable diseases outbreak in the future, on the employees of the Company, could adversely affect the
performance of the business activities of the Company and those of the customers, which could lead to a decrease in the demand
for their services. It is too early to tell what the long‐term impact of COVID‐19 will be on the Company’s current and future prospects
and to what extent it may have a material and adverse effect on the Company’s business, results of operations and financial
performance.
Identifying suitable targets
The Company is dependent upon the ability of the Directors to identify suitable investment opportunities in accordance with its
Investing Policy. There is no guarantee that the Company will be able to source further opportunities, or complete investments, at
an appropriate price, or at all, as a consequence of which resources may be expended on investigative work and due diligence without
achieving a return.
Market conditions
Market conditions may have a negative impact on the Company’s ability to make investments in suitable entities which generate
acceptable returns. There is no guarantee that the Company will be successful in sourcing suitable investments.
Costs associated with potential investments
The Company may incur certain third party costs associated with the sourcing of suitable investments. The Company can give no
assurance as to the level of such costs, and given that there can be no guarantee that negotiations to acquire any given investment
will be successful, the greater the number of deals that do not reach completion, the greater the likely impact of such costs on the
Company’s performance, financial condition and business prospects.
Valuation error
The Company may miscalculate the realisable value of an investment in a project. A lack of reliable information, errors in assumptions
or forecasts and/or inability to successfully implement an investment, among other factors, could all result in the project having a
lower realisable value than anticipated. If the Company is not able to realise an investment at its anticipated levels of profitability,
projected investment returns could be adversely affected.
Funding
It is likely that, if the Company identifies and wishes to pursue an investment opportunity, it is likely to need to raise further funds
for further working or development capital. There is no guarantee that the then prevailing market conditions will allow for such a
fundraising or that new investors will be prepared to invest on a basis which is acceptable to shareholders.
Political and Country Risk – BREXIT
The Company is quoted in the United Kingdom (UK) and operates in the UK and European Union (EU). As a result of the UK leaving
the EU, the Company may be subject to ongoing uncertainty surrounding this situation. The Company is monitoring matters and
seeking advice as to how to mitigate the risks arising if and when they may occur.
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PIRES INVESTMENTS PLC
Assessment of Business Risk
The Board regularly reviews operating and strategic risks and considers in such reviews financial and non‐financial information
including:
• a review of the business at each Board meeting, focusing on any new decisions/risks arising;
• the performance of investments; and
• selection criteria of new investments; and
• reports prepared by third parties.
Peter Redmond
Director
29 April 2020
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PIRES INVESTMENTS PLC
Directors’ Report
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
The Directors present their annual report and the audited Company financial statements of Pires Investments plc for the year ended
31 October 2019.
The Company’s Ordinary Shares are traded on the AIM market of the London Stock Exchange under the ticker PIRI.
Results and dividends
The Company’s profit from continuing activities for the year was £865,510 (2018 profit: £322,069). The Directors are not
recommending the payment of a dividend (2018: nil).
Principal activities and review of business
The principal activity of the Company throughout the year under review and since has been as an investment company involved in
the seeking, investigation, making of and sale of investments.
The review of the business is contained within the Strategic Report on page 4.
Events after the Reporting Period
On 21 November 2019, the Company completed its initial investment of £1.1 million into Sure Valley Ventures (“SVV”). SVV is a
venture capital fund focused on investing in the software technology sector with a specific focus on augmented and virtual reality
(“AR/VR”), artificial intelligence (“AI”) and the internet of things (“IoT”).
On 23 December 2019, the Company announced that an agreement had been signed to sell one of the companies within the SVV
portfolio, Artomatix, for cash to a leading technology company. Artomatix provides an artificial intelligence platform that is able to
automate the creation of 3D content. The amount accruing to Pires from this sale was €803,274, of which €721,274 has been received,
with the balance expected in 18 months. The sale of Artomatix represented a cash multiple of around 5x the initial investment made
by SVV and was achieved relatively recently after the Company had completed its investment in SVV.
Since 31 October 2019, the Company has disposed of the majority of its holding in Eco (Atlantic) Oil and Gas Limited prior to the
recent market turmoil and the setback in oil prices, generating total net cash proceeds of £1.57 million and realising a total net profit
on disposal of almost £1 million from this investment.
On 10 March 2020, the Company announced that it had invested €250,000 in Visibility Blockchain Limited, a private company which
trades under the name Getvisibility. Getvisibility is an artificial intelligence security company, addressing the substantial and increasing
problem which corporations face in storing, sorting, accessing and protecting data.
On 24 April 2020, the Company announced that it had conditionally placed new ordinary shares to raise just over £1 million from
both existing and new investors.
Covid‐19 is a developing situation and, as at the date of these financial statements, the assessment of this situation will need continued
attention and will evolve over time. In our view Covid‐19 is considered to be a non‐adjusting post balance sheet event and no
adjustment is made to the financial statements as a result. The rapid development and fluidity of the Covid‐19 virus makes it difficult
to predict the ultimate impact at this stage. Management has assessed the impact and believes there are no effects on the Company.
Directors
The following Directors have held office since 1 November 2018:
Peter Redmond
John May
Nicholas Lee
Charitable and political donations
No charitable or political donations were made during the year (2018: nil).
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PIRES INVESTMENTS PLC
Substantial shareholders
As at 28 April 2020, this shareholder information is based on the Pires Investments plc share register and disclosures made by
shareholders:
Ordinary
shares % of
of 0.25p the issued
each ordinary
Number share capital
Riverfort Global Opportunities plc 16,149,993 24.30%
Nicholas Clark 4,400,00 6.62%
Brightgrow SSAS 2,500,000 3.76%
Barry Reynolds 3,334,393 5.00%
Nicholas Lee, a director of the Company, is also the Investment Director of Riverfort Global Opportunities plc.
Siobhan Robinson is the sole beneficiary of BrightGrow SSAS and fiancée of Nicholas Clark.
The Directors had no beneficial interests in the share capital of the Company as at 31 October 2019 and 31 October 2018, or
throughout these respective periods.
Auditor
PKF Littlejohn LLP has expressed its willingness to continue in office as auditor and a resolution to re‐appoint them will be proposed
at the forthcoming Annual General Meeting.
By order of the Board
Peter Redmond
Director
29 April 2020
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PIRES INVESTMENTS PLC
Report on Remuneration
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
Policy on Directors’ remuneration
The policy of the Board is to provide remuneration packages designed to attract, motivate and retain Directors of the calibre necessary
to maintain the Company’s position. The remuneration will reflect the Directors’ responsibilities and time commitment.
Remuneration of the Directors
During the period, the following remuneration and other benefits were charged to the Company:
Salary Fees Total Total
2019 2019 2019 2018
£ £ £ £
Peter Redmond 27,000 20,000 47,000 21,977
John May 27,000 20,000 47,000 25,000
Nicholas Lee 27,000 20,000 47,000 25,000
81,000 60,000 141,000 71,977
As at 31 October 2019, £nil Directors fees (2018: £nil) have been deferred for payment. All remuneration is considered to relate to
short term benefits.
Directors’ interests
The Directors’ had no beneficial interests in the share capital of the Company as at 31 October 2019 and 31 October 2018.
Peter Redmond
Director
29 April 2020
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PIRES INVESTMENTS PLC
Statement of Directors’ Responsibilities
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
Statement of Directors’ responsibilities
The Directors are responsible for preparing the financial statements in accordance with applicable law and regulations. Company
law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare
the Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European
Union and Article 4 of the IAS Regulation and have also chosen to prepare the Company financial statements under IFRSs as adopted
by the EU. 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 Company and Parent Company and of the profit or loss of the Company for that period.
In preparing those financial statements, International Accounting Standard 1 requires the Directors to:
• properly select and apply accounting policies;
• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and
understandable information;
• make judgements and accounting estimates that are reasonable and prudent
• provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to
understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial
performance; and
• make an assessment of the Company’s ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure
that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Disclosure of information
In the case of each of the persons who are acting as Directors of the Company at the date when this report was approved:‐
• so far as each of the Directors is aware, there is no relevant audit information (as defined in the Companies Act 2006) of the
which the Company’s auditor is not aware; and
• each of the Directors has taken all the steps that he ought to have taken as a Director to make himself aware of any relevant
audit information (as defined) and to establish that the Company’s auditor is aware of that information.
The Directors are also responsible for the maintenance and integrity of the investor information contained on the website. Legislation
in the UK concerning the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Publication of Accounts on the Company Website
Financial statements are published on the Company’s website: www.piresinvestments.com. The maintenance and integrity of the
website is the responsibility of the Directors. The Directors responsibility also extends to the financial statements contained therein.
By order of the Board
Peter Redmond
Director
29 April 2020
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PIRES INVESTMENTS PLC
Corporate Governance Report
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
The Company’s shares are traded on AIM and on 28 August 2018, the Company formally adopted the QCA Corporate Governance
Code and this is reproduced below. The Board is accountable to the Company’s shareholders for good corporate governance. This
report and the Remuneration Report describe how the Company applies the provisions of good corporate governance.
Directors
The Board currently consists of the Chairman and two other Directors whilst it is seeking investment opportunities. It is responsible
for approving Company policy and strategy and for implementing it with support from consultants. The Directors will review the
composition of the Board on a regular basis. All Directors have access to advice from the Company Secretary and independent
professional advice at the Company’s expense.
Relations with shareholders
The Company values the views of its shareholders and recognises their interest in the Company’s strategy and performance. The
Annual General Meeting is used to communicate with investors and they are encouraged to participate and the Directors are available
to answer questions. Separate resolutions are proposed on each issue so that they can be given proper consideration.
Audit Committee
During the year the Audit Committee comprised John May and Peter Redmond. The Committee has met with the auditor’s and
considered the results and the audit process, and has satisfied itself as to the auditor’s independence during the year.
Remuneration Committee
During the year the Remuneration Committee comprised John May and Nicholas Lee. The policy of the Company on remuneration
is to reward individual performance so as to promote the best interests of the Company and enhance shareholder value. The
remuneration of Directors is approved by the Board. Individual Directors do not participate in decisions concerning their own
remuneration.
Internal control
The Board is committed to the maintenance of effective internal controls. The Board recognises its responsibility for maintaining a
strong system of internal control to safeguard shareholders’ investment and the Company’s assets and for reviewing its effectiveness.
The system of internal financial control is designed to provide reasonable, but not absolute, assurance against material misstatement
or loss.
The Board has determined that there is currently no requirement for an internal audit function whilst it is undertaking its current
activities. However, the Directors will continue to review the requirement for an internal audit function on a regular basis.
Compliance with Governance Code
Following a consultation by the London Stock Exchange, new AIM Rules were published in March 2018. One of the key amendments
is in respect of AIM Rule 26 (as set out in AIM Notice 50), which now requires AIM companies to state on their website which
recognised corporate governance code they apply and how they have applied that code.
The Board of Directors of Pires Investments PLC (“Pires” or “the Company”) is committed to developing and applying high standards
of corporate governance. The Board of Directors has applied the QCA Code, revised in April 2018 as devised by the Quoted Companies
Alliance.
The Quoted Companies Alliance is the independent membership organisation that champions the interests of small to mid‐size
quoted companies. The QCA Code takes key elements of good governance and applies them in a manner which is workable for the
different needs of growing companies.
A revised version of the QCA Code (the “Revised Code”) was published in April 2018, based on the ‘comply or explain’ principle.
The QCA Code is constructed around ten broad principles (accompanied by an explanation of what these principles entail, under
‘application’) and a set of disclosures. The Code states what is considered to be appropriate arrangements for growing companies,
and asks companies to provide an explanation about how they are meeting the principles through the prescribed disclosures.
The table below sets out the principles, the application recommended by the QCA code. It then sets out how the Company complies
with these requirements and departures from code, and provides links to appropriate disclosures. These are based upon the
recommended disclosures provided in the QCA code.
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PIRES INVESTMENTS PLC
These disclosures were last reviewed on the 24 April 2020.
Principles: Application:
1. Establish a strategy and
business model which
promote long‐term value for
shareholders
The Company is an Investing Company and the Board has adopted a strategy appropriate
for its status.
The Company’s Investing Policy is to invest principally, but not exclusively, in the natural
resources, and technology sectors. The Company will consider investments in the United
Kingdom, Ireland and mainland Europe more generally but will also consider investments in
wider geographical regions. The Company may be either an active investor and acquire control
of a single company or it may acquire non‐controlling shareholdings. Once a target has been
identified, additional funds may need to be raised by the Company to complete a transaction.
The proposed investments to be made by the Company may be in either quoted or
unquoted securities made by direct acquisition and may be in companies, partnerships or
joint ventures; or direct interests in projects and can be at any stage of development. The
Company’s equity interest in a proposed investment may range from a minority position
to 100 per cent. ownership.
The Company will identify and assess potential investment targets and where it believes
further specialist investigation is required, it intends to appoint appropriately qualified
advisers to assist.
The Company proposes to carry out a comprehensive and thorough project review process
in which all material aspects of any potential investment will be subject to rigorous due
diligences, as appropriate. It is likely that the Company’s financial resources will be invested
in a small number of projects or investments or potentially in an investment which may be
deemed to be a reverse takeover under the AIM Rules. Where this is the case, it is intended
to mitigate risk by undertaking an appropriate due diligence process. Any transaction
constituting a reverse takeover under the AIM Rules will require shareholder approval. The
possibility of building a broader portfolio of investment assets will also be considered.
The Company intends to deliver shareholder returns principally through capital growth
rather than capital distribution via dividends. Given the nature of the Company’s Investing
Policy, the Company does not intend to make regular periodic disclosures or calculations
of net asset value.
The Directors believe that their broad collective experience together with their extensive
network of contacts will assist them in the identification, evaluation and funding of
suitable investment opportunities. When necessary, other external professionals will be
engaged to assist in the due diligence of prospective opportunities. The Directors will also
consider appointing additional directors with relevant experience if the need arises.
The objective of the Directors is to generate capital appreciation and any income
generated by the Company will in the first instance be applied to cover costs or will be
added to the funds available to further implement the Investment Policy. However, they
may recommend or declare dividends at some future date depending on the financial
position of the Company.
2. Seek to understand and meet
The Board is committed to maintaining good communication and having constructive
shareholder needs and
expectations
dialogue with its shareholders. Institutional shareholders and analysts have the
opportunity to discuss issues and provide feedback at meetings with the Company.
In addition, all shareholders are encouraged to attend the Company’s Annual General
Meeting.
Investors also have access to current information on the Company through its website,
www.piresinvestments.com.
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PIRES INVESTMENTS PLC
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
3. Take into account wider
stakeholder and social
responsibilities and their
implications for long‐term
success
The Board recognises that the long‐term success of the Group is reliant upon the efforts
of its directors. The Company does not currently have any other employees, and upon its
contractors, suppliers and regulators.
The Board has put in place a range of processes and systems to ensure that there is close
Board oversight and contact with its key resources and relationships.
For example, the Board ensures that all key relationships with, for example, customers and
suppliers are the responsibility of, or are closely supervised by, one of the directors or the
Company’s accountant.
4. Embed effective risk
In addition to its other roles and responsibilities the Audit and Compliance Committee
management, considering
both opportunities and
threats, throughout the
organisation
(see composition details in Corporate Governance section of website) is responsible to the
Board for ensuring that procedures are in place, and are being effectively implemented to
identify, evaluate and manage the significant risks faced by the Company.
The risk assessment matrix below sets out those risks, and identifies their ownership and
the controls that are in place.
This matrix is updated as changes arise in the nature of risks or the controls that are
implemented to mitigate them. The Audit Committee reviews the risk matrix and the
effectiveness of scenario testing on a regular basis.
The following principal risks, and controls to mitigate them, have been identified:‐
Activity Risk Impact Control(s)
Management
Recruitment and
retention of key staff
Reduction in operating
capability
Stimulating and safe
working environment.
Balancing salary with
longer term incentive
plans.
Regulatory
adherence
Breach of rules or
product requirements
Censure or withdrawal
of authorization
Strong compliance
regime
Strategic
Damage to reputation
Inadequate disaster
recovery procedures
Inability to secure new
customers.
Loss of key operational
and financial data.
Financial
Liquidity, market and
credit risk.
Inability to continue as
going concern.
Effective
communications with
shareholders.
Secure off‐site storage
of data.
Robust financial
controls and
procedures in place.
The directors have established procedures, as represented by this statement, for the
purpose of providing a system of internal control. In addition there are a range of
Company policies that are reviewed at least annually by the Board. These policies cover
matters such as share dealing and insider legislation. The Board currently takes the view
that an internal audit function is not considered necessary or practical due to the size of
the Company and due to the close day to day executive control exercised by the
Chairman, with the oversight / review of the other directors. However, the Board will
continue to monitor the need for an internal audit function.
The annual review of internal control and financial reporting procedures did not highlight
any issues warranting the introduction of an internal audit function. It was concluded,
given the current size and transparency of the operations of the Company, that an internal
audit function was not required.
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PIRES INVESTMENTS PLC
As noted in the Strategic Report in the Annual Report, the Board regularly reviews
operating and strategic risks and considers in such reviews financial and non‐financial
information including:
•
a review of the business at each Board meeting, focusing on any new decisions/risks
arising;
the performance of investments;
selection criteria of new investments; and
reports prepared by third parties.
•
•
•
5. Maintain the board as a
well‐functioning, balanced
team led by the chair
The Board comprised, the Chairman Peter Redmond, who has key responsibility for the
day to day management and two non‐ executive directors, John May and Nicholas Lee.
The Board is assisted by Robert Porter with respect to financial accounting and as
Company Secretary.
The time commitment formally required by the Company is an overriding principal that
each director will devote as much time as is required to carry out the roles and
responsibilities that the director has agreed to take on. Biographical details of the current
directors are set out within Principle Six below.
Executive and non‐executive directors are subject to re‐election intervals as prescribed in
the Company’s Articles of Association.
At each Annual General Meeting one‐third of the Directors, who are subject to retirement
by rotation shall retire from office. They can then offer themselves for re‐election. The
letters of appointment of all directors are available for inspection at the Company’s
registered office during normal business hours.
The Directors are responsible for keeping adequate accounting records that are sufficient
to show and explain the Company’s transactions and disclose with reasonable accuracy at
any time the financial position of the Company and enable them to ensure that the
financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Board meets as regularly as necessary given its AIM status. It has established an Audit
Committee and a Remuneration Committee, particulars of which appear hereafter. The
Board agreed that appointments to the Board are made by the Board as a whole and so
has not created a Nominations Committee.
Board Meetings
The Board retains full control of the Company with day‐to‐day operational control
delegated to the Chairman and the Non‐Executive Directors. The full Board meets on
occasions it considers necessary.
The Directors believe that their broad collective experience together with their extensive
network of contacts will assist them in the identification, evaluation and funding of
suitable investment opportunities. When necessary, other external professionals will be
engaged to assist in the due diligence of prospective opportunities. The Directors will also
consider appointing additional directors with relevant experience if the need arises.
In the past 12 months there have been 14 board meetings and the Audit and
Remuneration Committee has met on 2 occasions respectively.
Attendance at the board meetings is set out below:
Peter Redmond 14/14
John May 14/14
Nicholas Lee 14/14
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PIRES INVESTMENTS PLC
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
6. Ensure that between them
the directors have the
necessary up‐to‐date
experience, skills and
capabilities
The Board currently consists of three directors and, in addition, the Company uses the
services of Robert Porter for ad hoc financial accounting and advisory services and also to
act as Company Secretary.
Nicholas Lee, although a non‐executive director, is not considered independent as he is a
director of Riverfort Global Opportunities plc that has a Substantial Shareholding (24.3%)
in Pires.
John May is currently the Company’s only independent non‐executive director.
The Company notes the guidance in the QCA Code is for a company to have at least two
independent non‐executive directors. However, the Directors are satisfied that the
Company’s board composition is currently appropriate but is committed to reviewing the
situation in the forthcoming financial year with the objective of appointing a further
independent non‐executive director.
Peter Redmond, Chairman
Peter is a corporate financier with over 30 years of experience in corporate finance and
venture capital. He has acted on and assisted a wide range of companies to attain a listing
over many years on the Unlisted Securities Market, the Main Market of the London Stock
Exchange and AIM, whether by IPO or in many cases via reverse takeovers, across a wide
range of sectors, ranging from technology through financial services to natural resources
and, in recent years has done so as a director of the companies concerned. He was a
founder director of Cleeve Capital plc (now Satellite Solutions Worldwide Group plc) and
Mithril Capital plc (now Be Heard Group plc), both listed on the Standard List, and took a
leading role in the reconstruction and refinancing of AIM‐quoted Kennedy Ventures plc
and 3Legs Resources plc (now SalvaRx Group plc). He is a director of Hemogenyx plc and
URA Holdings plc.
John May ‐ Director
John is a Fellow of the Institute of Chartered Accountants in England and Wales. He is the
Managing Partner of City & Westminster Corporate Finance LLP, an FCA registered
partnership. He is chairman of the Small Business Bureau Limited and The Genesis Initiative
Limited, lobbying groups for small business to the UK Parliament. Mr May has been the
principal of his own chartered accountancy practice since 1994. From 1977 to 1994, Mr
May was a senior partner with what is now Crowe UK, where he served for eight years on
the managing board and for nine years as chairman of its Thames Valley offices. In his
capacity as UK national marketing partner and head of its property consultancy division, he
was a director of its UK and international associations. Mr May was finance director of AIM
listed Security Research Group plc, until December 2005 and Tomco Energy Plc until July
2011 and a non‐executive director of AIM listed Petrolatina Energy plc until March 2012.
He is the executive chairman of Red Leopard Holdings plc and was non‐executive chairman
of Hayward Tyler Group Plc until August 2017 which were both listed on AIM.
Nicholas Lee ‐ Director
Nicholas has more than 25 years of experience in international investment banking and
working as a company director. Nicholas was with Dresdner Kleinwort and its antecedent
firms from 1988 to 2009, starting at Kleinwort Benson Group plc and rising to Managing
Director, Head of Banking, Hedge Fund Solutions Group. Previously as a Managing Director
in mergers and acquisitions at Dresdner Kleinwort Wasserstein, Nicholas advised leading
companies from a number of different industries, including the natural resources, financial
services, consumer and retail sectors. Nicholas is currently Investment Director of AIM‐
listed Riverfort Global Opportunities plc and a director of Immotion Group plc. Nicholas
qualified as a chartered accountant with Coopers & Lybrand and has an MA in engineering
from St John’s College, Cambridge.
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PIRES INVESTMENTS PLC
7. Evaluate board performance
based on clear and relevant
objectives, seeking
continuous improvement
Evaluation of Board Performance:
Internal evaluation of the Board, the Committees and individual directors is important and
will develop as the status of the Company changes in the future. The expectation is that
board reviews will be undertaken on annual basis in the form of peer appraisal,
questionnaires and discussions to determine the effectiveness and performance in various
areas. The Company currently has the Chairman (Peter Redmond) in an executive capacity.
The Chairman is the person responsible for guiding the business of the Board and
ensuring long‐term strategic focus and investments. The QCA Code recommends that this
role should be undertaken as a non‐executive role.
As the Company develops and grows, it is committed to strengthen and reorganise the
Board with the appointment of further experienced non‐executive directors in order to
maintain appropriate balance.
The Company undertakes to review the appropriateness of the role of an executive Chair
in the following year in the context of its overall strategy.
8. Promote a corporate culture
that is based on ethical values
and behaviours
Corporate Culture:
The Board recognises that their decisions regarding strategy and risk will impact the
corporate culture of the Company as a whole and that this will impact the performance of
the Company.
The Board is very aware that the tone and culture set by the Board will greatly impact all
aspects of the Company as a whole. The Company does not currently have any other
employees.
Therefore, the importance of sound ethical values and behaviour is crucial to the ability of
the Company to successfully achieve its corporate objectives.
The Board places great importance on this aspect of corporate life and seeks to ensure,
through regular discussions between all directors, that this flows through all that the
Company does.
The Board assessment of the culture within the Company at the present time is one
where there is respect for all individuals, there is open dialogue within the Company and
there is a commitment to best practice operations.
The Board is able to ensure ethical behaviour and values are recognised and respected
through its due diligence process when directing the investing strategies of the Company.
All investment decisions are made in furtherance of the Company’s strategy and business
model.
9. Maintain governance
structures and processes that
are fit for purpose and
support good decision‐making
by the board
Maintain Appropriate Governance Structures and Processes:
The Board schedule provides for quarterly meetings and, in addition, meets ad‐hoc as
required. Similarly for the Audit and Remuneration Committees.
Notwithstanding the above the Board and its Committees receive appropriate and timely
information prior to each meeting; a formal agenda is produced for each meeting, and
Board and Committee papers are distributed several days before meetings take place.
Any Director may challenge Company proposals and decisions are taken democratically
after discussion.
Any Director who feels that any concern remains unresolved after discussion may ask for
that concern to be noted in the minutes of the meeting, which are then circulated to all
Directors. Any specific actions arising from such meetings are agreed by the Board or
relevant Committee and then followed up by the Company’s management.
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PIRES INVESTMENTS PLC
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
10. Communicate how the
Company is governed and is
performing by maintaining a
dialogue with shareholders
and other relevant
stakeholders
The Company communicates with shareholders through the Annual Report and Accounts,
full‐year and half‐year announcements, the Annual General Meeting (AGM) and one‐to‐
one meetings with large existing or potential new shareholders.
A range of corporate information (including all Company announcements and
presentations) is also available to shareholders, investors and the public on the Company’s
corporate website, www.piresinvestments.com.
Peter Redmond
Director
29 April 2020
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PIRES INVESTMENTS PLC
Independent auditor’s report to the members of Pires Investments Plc
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
Opinion
We have audited the financial statements of Pires Investments Plc (the ‘Company’) for the year ended 31 October 2019 which
comprise the statement of comprehensive income, the statement of changes in equity, the statement of financial position, the
statement of cash flows, and notes to the financial statements, including a summary of significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
In our opinion, the financial statements:
• give a true and fair view of the state of the Company’s affairs as at 31 October 2019 and of its profit for the year then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• 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 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 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.
Emphasis of matter
We draw attention to Note 1 of the financial statements, which describes the Company’s assessment of the Covid‐19 impact on its
ability to continue as a going concern. The Company has explained that the events arising from the Covid‐19 outbreak do not impact
on its use of the going concern basis of preparation nor do they cast significant doubt over the company’s ability to continue as a
going concern for the period of at least twelve months from the date when the financial statements are authorised for issue. Our
opinion is not modified in this respect.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
• the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
• the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant
doubt about the Company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve
months from the date when the financial statements are authorised for issue.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How we addressed it
Investments
The Company holds assets at fair value through profit • We confirmed ownership of each investment held;
and loss of £1,165,409 as at 31 October 2019 (see note 11). • We compared the year end share price from external sources to
There is a risk that these investments are not valued those used by management;
correctly in accordance with IFRS 9 “Financial Instruments” • We tested the disclosures made within the financial statement to
and IFRS 13 ‘Fair Value Measurement’. This is a key audit ensure compliance with IFRS.; and
matter due to the material nature of the balance as well • We assessed whether management’s assumptions were
as being the key source of the revenue of the Company. reasonable in light of the measurement objectives under IFRS 13.
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PIRES INVESTMENTS PLC
Independent auditor’s report to the members of Pires Investments Plc (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
Our application of materiality
Materiality for the Company financial statements as a whole was set at £43,300 (2018: £48,265).
This has been calculated as 5% of the benchmark of Net Assets (2018: 5% of the benchmark of Net Assets), which we have determined,
in our professional judgment, to be one of the principal benchmarks within the financial statements relevant to members of the
Company in assessing financial performance.
We report to the directors all corrected and uncorrected misstatements we identified through our audit with a value in excess
of £2,165 (2018: 2,413), in addition to other audit misstatements below that threshold that we believe warranted reporting on
qualitative grounds.
An overview of the scope of our audit
As part of designing our audit, we determined materiality, as above, and assessed the risk of material misstatement in the financial
statements. In particular, we looked at areas involving significant accounting estimates and judgement by the directors and considered
future events that are inherently uncertain. We also addressed the risk of management override of internal controls, including
evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. We
addressed the risk that the investments are not correctly valued by confirming ownership, external share prices, reviewing disclosures
and whether management’s assumptions were reasonable.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual
report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we
are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the
other information. 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, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have
not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches
not visited by us; or
• the financial statements 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.
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PIRES INVESTMENTS PLC
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 8, 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 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 Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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 Auditors' 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.
Joseph Archer (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
London, United Kingdom
29 April 2020
15 Westferry Circus
Canary Wharf
London E14 4HD
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PIRES INVESTMENTS PLC
Statement of Comprehensive Income
FOR THE YEAR ENDED 31 OCTOBER 2019
2019 2018
Notes £ £
CONTINUING ACTIVITIES
Income
Other Income 6 1,368 11
Total income 1,368 11
Gain on investments held at fair value through profit or loss 11 1,151,997 574,987
Operating expenses (287,855) (252,929)
Operating profit from continuing activities 4 865,510 322,069
Profit before taxation from continuing activities 865,510 322,069
Tax 8 ‐ ‐
Profit for the year from continuing activities 865,510 322,069
Other Comprehensive Income ‐ ‐
Total Comprehensive Income attributable to equity holders of the Company 865,510 322,069
Basic profit per share
Equity holders
Basic and diluted 9 1.64p 0.95p
The accounting policies and notes are an integral part of these financial statements.
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PIRES INVESTMENTS PLC
Statement of Changes in Equity
FOR THE YEAR ENDED 31 OCTOBER 2019
Capital
Share Share Redemption Retained
Capital Premium Reserve Earnings Total
£ £ £ £ £
Balance at 1 November 2017 11,914,727 3,581,055 164,667 (15,032,901) 627,548
Profit and total comprehensive
profit for the year ‐ ‐ ‐ 322,069 322,069
As at 31 October 2018 11,914,727 3,581,055 164,667 (14,710,832) 949,617
Profit and total comprehensive profit
for the year ‐ ‐ ‐ 865,510 865,510
Issue of shares (net of costs) 81,429 668,026 ‐ ‐ 749,455
As at 31 October 2019 11,996,156 4,249,081 164,667 (13,845,322) 2,564,582
Share Capital – amount subscribed for share capital at the nominal amount
Share Premium – amount subscribed for share capital above the nominal amount
Capital Redemption Reserve – own shares purchased by the Company
Retained earnings – cumulative gains and losses recognised
The accounting policies and notes are an integral part of these financial statements.
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PIRES INVESTMENTS PLC
(Incorporated in England and Wales with registered number 02929801)
Statement of Financial Position
AT 31 OCTOBER 2019
2019 2018
Notes £ £
Non‐current assets
Investment in subsidiaries 14 1 1
Total non‐current assets 1 1
Current assets
Investments 11 1,165,409 1,029,526
Trade and other receivables 15 11,307 11,357
Cash and cash equivalents 1,426,799 48,028
Total current assets 2,603,515 1,088,911
Total assets 2,603,516 1,088,912
Equity
Issued share capital 16 11,996,156 11,914,727
Share premium 16 4,249,081 3,581,055
Retained earnings (13,845,322) (14,710,832)
Capital redemption reserve 164,667 164,667
Total equity 2,564,582 949,617
Liabilities
Current liabilities
Trade and other payables 17 38,934 139,295
Total liabilities and current liabilities 38,934 139,295
Total equity and liabilities 2,603,516 1,088,912
These financial statements were approved and authorised for issue by the Board of Directors on 29 April 2020 and were signed on
its behalf by:
Peter Redmond
Director
John May
Director
The accounting policies and notes are an integral part of these financial statements.
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PIRES INVESTMENTS PLC
Statement of Cash Flows
FOR THE YEAR ENDED 31 OCTOBER 2019
2019 2018
£ £
Cash flows from operating activities
Profit 865,510 322,069
Depreciation ‐ ‐
Realised (gain) on disposal of investments (419,198) (82,192)
Fair value movements in investments (732,799) (492,795)
Finance income (1,368) (11)
(Increase) / decrease in receivables 50 (1,482)
(Decrease) in payables (100,361) (27,596)
Net cash used in operating activities (388,166) (282,007)
Cash flows from investing activities
Payments to acquire tangible fixed assets ‐ ‐
Payments to acquire investments ‐ (176,000)
Proceeds of disposal of investments 1,016,114 264,882
Finance income received net 1,368 11
Net cash generated in investing activities 1,017,482 88,893
Cash flows from financing activities
Net proceeds from share issues 749,455 ‐
Net cash from financing activities 749,455 ‐
Net (decrease) / increase in cash and cash equivalents during the year 1,378.771 (193,114)
Cash and cash equivalents at beginning of year 48,028 241,142
Cash and cash equivalents at end of year 1,426,799 48,028
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PIRES INVESTMENTS PLC
Notes to the Financial Statements
FOR THE YEAR ENDED 31 OCTOBER 2019
1. ACCOUNTING POLICIES
General Information
Pires Investments plc (“the Company”) was throughout the year an investing Company with an investing policy adopted on
16 April 2012 and revised on 3 October 2019.
The Company is a limited liability company incorporated and domiciled in England.
The address of the registered office is c/o Cooley Services Limited, Dashwood House, 69 Old Broad Street, London, EC2M 1QS.
These financial statements are prepared in Pounds Sterling, because that is the currency of the primary economic environment
in which the Company operates.
Principal accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have
been consistently applied to all periods presented, unless otherwise stated.
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and IFRIC
interpretations as adopted by the European Union applicable to companies reporting under IFRSs. The financial statements have
also been prepared under the historical cost convention.
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements
are disclosed later in these accounting policies.
Going Concern
The financial statements have been prepared on the going concern basis.
The Company has assessed the Covid‐19 impact on its ability to continue as a going concern. The Company considers that the
events arising from the Covid‐19 outbreak do not impact on its use of the going concern basis of preparation nor do they cast
significant doubt over the company’s ability to continue as a going concern for the period of at least twelve months from the
date when the financial statements are authorised for issue.
Any consideration of the foreseeable future involves making a judgement, at a particular point in time, about future events which
are inherently uncertain. The ability of the Company to carry out its planned business objectives is dependent on its continuing
ability to raise adequate capital from equity investors and/or the realisation of quoted investments.
At the time of approving these financial statements and after making due enquiries, the Directors have a reasonable expectation
that the Company has adequate resources to continue operating for the foreseeable future. For this reason they continue to
adopt the going concern basis in preparing the Company’s financial statements.
Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated. Provisions are
not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation, using a pre‐
tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase
in the provision due to the passage of time is recognised as interest expense.
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PIRES INVESTMENTS PLC
1. ACCOUNTING POLICIES (continued)
Statement of compliance
(a) New standards, amendments and interpretations adopted by the Company
During the year the Company adopted IFRS 9 and IFRS 15.
IFRS 15 requires an expected quantitative impact of the application of IFRS 15 to be included within the financial statements.
Dividend income recognition is not considered to change as a result of the transition to IFRS 15 as it is not contractual and therefore
does not fall within the scope of this standard. The Company currently has no other revenue sources and therefore the Directors
do not consider that there was any impact on the Company on adoption of this standard.
IFRS 9 became effective for all periods beginning on or after 1 January 2018 and as such is relevant for the year ended 31 October
2019. IFRS 9 impacts the recognition, classification, measurement and disclosures of financial instruments. The Company reviewed
the financial assets and liabilities reported on its Statement of Financial Position and completed an assessment between IAS 39
and IFRS 9 to identify any accounting changes. The significant financial instruments held in the Company are Financial assets at
fair value through profit or loss (non‐current and current) and trade and other payables.
Financial assets at fair value through profit or loss
The Company holds a number of investments at the year ended 31 October 2019, which are classified as current. Under IFRS 9
current financial assets are held at fair value through profit or loss which is unchanged from the previous standard.
Under IFRS 9 financial assets measured at fair value through profit or loss are initially measured at fair value. Transaction costs
that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and
financial liabilities at fair value through the profit or loss) are added to or deducted from the fair value of the financial assets or
financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets
or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Trade and other payables
Under IFRS 9 trade payables continue to be measured at amortised cost using the effective interest rate method.
There are no other IFRS’s or IFRIC interpretations that are not yet effective that would be expected to have a material impact on
the Company.
(b) New standards, amendments and interpretations not yet adopted by the Company
New and amended standards and interpretations issued but not yet effective or not yet endorsed for the financial year beginning
1 November 2018 and not yet early adopted.
At the date of authorisation of these financial statements, the Group and Company have not applied the following new and
revised IFRSs that have been issued but are not yet effective and (in some cases) have not yet been endorsed by the EU. The
Group and Company intend to the adopt these standards, if applicable, when they become effective.
Effective date for annual periods
Standard Description beginning on or after
1 January 2019
IFRS 16
Leases – new standard. The standard requires lessees to account for leases
under a single on‐balance sheet model in a similar way to finance leases
under IAS 17.
IAS 12
Amendments to IAS 12, “Income Taxes” resulting from Annual
improvements 2015‐2017 Cycle (income tax consequences of dividends)
IFRIC 23
Uncertainty over Income Tax Treatments
IFRS 3
Amendments to IFRS 3 “Business Combinations” to clarify the definition of
a business
1 January 2019
1 January 2019
1 January 2020
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PIRES INVESTMENTS PLC
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 31 OCTOBER 2019
1. ACCOUNTING POLICIES (continued)
Effective date for annual periods
Standard Description beginning on or after
1 January 2020
IAS 12
Amendments to IAS 12, “Income Taxes” resulting from Annual
improvements 2015‐2017 Cycle (income tax consequences of dividends)
IAS 1
IAS 8
Amendments to IAS 1, “Presentation of Financial Statements” regarding the
definition of “material”
Amendments to IAS 8, “Accounting Policies, Changes in Accounting
Estimates and errors” regarding the definition of “material”
1 January 2020
1 January 2020
The Company has not early adopted any of the above standards. The Directors have assessed the impact of IFRS 16 (as disclosed
in the table above) and continue to assess the impact of the remaining amendments on future financial statements.
Revenue recognition
Revenue is measured at the fair value of consideration received or receivable and represents amounts receivable for goods or
services provided in the normal course of business, net of discounts, VAT and other sales‐related taxes, and provisions for returns.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that
asset’s net carrying amount. Dividend income is recognised at the time any market share price is adjusted to exclude the right to
receive such dividend or, if there is no such adjustment, when received.
Income tax
Income tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively. Current income tax is calculated on the results shown in the Financial Statements and according
to local tax rules, using tax rates enacted or substantially enacted by the Statement of Financial Position date.
Deferred taxation
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using
the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the
initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities
in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is
realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly
to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by
the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Investments in subsidiaries
Investments in subsidiaries are stated in the Company's statement of financial position at cost less any attributable impairment
losses.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and current and deposit balances at banks, together with other short‐term,
highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of
changes in value.
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PIRES INVESTMENTS PLC
1. ACCOUNTING POLICIES (continued)
Financial assets
(a) Classification
The Company classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables.
The classification depends on the purpose for which the financial assets were acquired. Management determines the classification
of its financial assets at initial recognition.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. Details of these assets and their fair value
is included in note 11.
Loans and receivables
Loans and receivables are non‐derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period.
These are classified as non‐current assets. The Company’s loans and receivables comprise ‘ other receivables and prepayments’
and ‘cash and cash equivalents’ in the Statement of Financial Position.
(b) Recognition and measurement
Regular purchases and sales of financial assets are recognised on the trade‐date, being the date on which the Company commits
to purchase or sell the asset. Investments are initially recognised at fair value with transaction costs expensed for all financial
assets. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are
expensed in the Income Statement. Financial assets are derecognised when the rights to receive cash flows from the investments
have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Financial
assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried
at amortised cost using the effective interest method. Gains or losses arising from changes in the fair value of the ‘financial assets
at fair value through profit or loss’ category are presented in the Statement of Comprehensive Income within Gain on investments
held at fair value through profit or loss in the period in which they arise.
(c) Impairment of financial assets
The Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group
of financial assets is impaired. A significant or prolonged decline in the fair value of equity investments and securities below its
cost is also evidence that the assets are impaired. If any such evidence exists the cumulative loss – measured as the difference
between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in
profit or loss – is removed from equity and recognised in profit or loss. Cash and cash equivalents Cash and cash equivalents
comprise cash in hand and bank balances.
Financial liabilities
Financial liabilities are recognised in the Company’s balance sheet when the Company becomes a party to the contractual
provisions of the instrument. All interest related charges are recognised as an expense in finance cost in the income statement
using the effective interest rate method.
The Company's financial liabilities comprise trade and other payables.
Trade payables are recognised initially at their fair value and subsequently measured at amortised cost less settlement payments.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its
liabilities. Equity instruments issued by the Company are recorded at the proceeds received net of direct issue costs.
The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs
associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.
Share capital account represents the nominal value of the shares issued.
Retained earnings include all current and prior period results as disclosed in the Statement of Comprehensive Income.
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PIRES INVESTMENTS PLC
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 31 OCTOBER 2019
2.
CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS
The preparation of the financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Although these estimates are based on management’s best knowledge of the amounts,
events or actions, actual results ultimately may differ from these estimates.
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.
In certain circumstances, where fair value cannot be readily established, the Company is required to make judgements over
carrying value impairment, and evaluate the size of any impairment required.
The estimates and underlying assumptions are reviewed on an on‐going basis. Revisions to accounting estimates are recognised
in the period. Judgements and estimates that may affect future periods are as follows:
As a result of an HMRC investigation in the year, the VAT status of the Company changed. Following consultation, the Directors
have made a judgement in respect of the amount including penalties that may be owed (see note 17). This estimate is based on
all available information and the actual amount payable to HMRC may differ from the estimate made.
3. BUSINESS AND GEOGRAPHICAL REPORTING
An operating segment is a component of the Company that engages in business from which it may earn revenues and incur
expenses. The Company has only one operating segment, being the investment in companies or assets. Therefore, the financial
information of the single segment is the same as that set out in the statement of comprehensive income, the statement of financial
position, the statement of changes in equity and the statement of cash flows.
4. OPERATING PROFIT
2019 2018
£ £
Operating profit from continuing activities is stated after charging:
Depreciation of property, plant and equipment ‐ ‐
5. AUDITORS REMUNERATION
During the year the Company obtained the following services from the Company’s auditor (in respect of continuing and
discontinuing activities):
2019 2018
£ £
Fees payable to auditors for the audit of the Company’s financial statements 18,000 18,000
Fees payable to the Company’s auditor and its associates for other services:
Other services relating to taxation 21,849 3,200
All other services ‐ ‐
39,849 21,200
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PIRES INVESTMENTS PLC
6. OTHER INCOME
The Company’s other income was:
2019 2018
£ £
Interest receivable 1,368 11
1,368 11
7. REMUNERATION
The Company’s employee emoluments expense was:
2019 2018
£ £
Emoluments 42,000 21,977
Social security costs ‐ 871
42,000 22,848
The average monthly number of persons employed by the Company, including Directors, during the year was as follows:
2019 2018
No No
3 3
Details of Directors’ emoluments, are given in the Report on Remuneration. These disclosures form part of the audited financial
statements of the Company. The Directors of the Company are considered to represent key management of the Company as
defined by IFRS. The Directors are the only employees of the Company and are considered to be the key management personnel.
8. TAX EXPENSE
Both current and deferred tax are nil in the period and therefore there is nil tax payable.
2019 2018
£ £
Factors affecting the tax charge for the year
Profit on ordinary activities before taxation 865,510 322,069
Profit on ordinary activities before taxation multiplied by the standard rate of
UK corporation tax of 19.0% (2018: 19.0%) 164,447 61,193
Effects of:
Expenses not deductible for tax purposes net of income not subject to corporation tax ‐ 9,500
Income not taxable for tax purposes (228,379) (109,248)
Deferred tax not recognised 63,932 38,555
Tax charge ‐ ‐
The Company has tax losses available to carry forward against relevant future taxable income and profits of approximately
£6.3 million (2018: £6.6 million) in respect of which no deferred tax asset has been recognised due to the uncertainty as to when
profits will be generated against which to relieve said asset.
Where it is anticipated that future taxable profits will be available against which these losses will be utilised a deferred tax asset
is recognised.
No deferred tax has been recognised in the year (2018: nil) and the tax charge for the year was nil (2018: nil).
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PIRES INVESTMENTS PLC
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 31 OCTOBER 2019
9. EARNINGS PER SHARE
2019 2018
£ £
Profit attributable to the owners of the Company
Continuing Operations 865,510 322,069
2019 2018
No. of No. of
Shares shares
Weighted average number of shares for calculating basic profit per share 52,900,940 33,900,805
2019 2018
Pence Pence
Basic and diluted profit per share
Continuing Operations – basic and diluted 1.64 0.95
There is no diluted earnings per share in 2019 due to the fact that all warrants had lapsed during the prior period. There were no
diluted earnings per share in 2018 as all warrants lapsed during the period.
10. FAIR VALUE MEASUREMENT
The table below sets out the fair value measurements using the fair value hierarchy. Categorisation within the hierarchy has been
determined on the basis of the lowest level of input that is significant to the fair value measurement of the relevant asset as
follows:
Level 1 – valued using quoted prices in active markets for identical assets.
Level 2 – valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1.
Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data.
There were no transfers between categories during the period.
11. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
2019 2018
£ £
Investments at fair value brought forward 1,029,526 543,421
Purchase of investments ‐ 176,000
Investment disposals (596,916) (182,690)
Movement in investment holding 732,799 492,795
Balance 1,165,409 1,029,526
Categorised as
Level 1 – quoted prices 1,165,409 1,029,526
Level 3 – Unquoted investments ‐ ‐
Gains on investments held at fair value through profit or loss
Movement in investment holding gains 732,799 492,795
Realised gain on disposal of investments 419,198 82,192
Net gain on investments held at fair value through profit or loss 1,151,997 574,987
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PIRES INVESTMENTS PLC
11. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS (continued)
Quoted Investments level 1
The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. A market
is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing
service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length
basis. The quoted market price used for financial assets held by the Company is the current bid price. These instruments are
included in Level 1. Instruments included in Level 1 comprise primarily LSE/AIM equity investments.
Unquoted investments (Level 3)
The value of the unquoted investments as at 31 October 2019 was £nil and comprised a holding in Evolution Energy E&P plc
(previously named Shale Energy plc). Evolution Energy E&P plc is an unquoted public company whose focus is the acquisition or
development of oil, gas or shale gas assets principally in the UK and USA. The Company impaired the carrying value to £nil at
31 October 2017.
12. RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company is exposed to a variety of financial risks which result from both its operating and investing activities. The Company’s
risk management is coordinated by the Board of Directors, and focuses on actively securing the Company’s short to medium term
cash flows by minimising the exposure to financial markets.
The main risks the Company is exposed to through its financial instruments are credit risk, foreign currency risk, liquidity risk and
market price risk.
Capital risk management
The Company’s objectives when managing capital are:
• to safeguard the Company’s ability to continue as a going concern, so that it continues to provide returns and benefits for
shareholders;
• to support the Company’s growth; and
• to provide capital for the purpose of strengthening the Company’s risk management capability.
The Company actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity
holder returns, taking into consideration the future capital requirements of the Company and capital efficiency, prevailing and
projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment
opportunities. Management regards total equity as capital and reserves, for capital management purposes.
Credit risk
The Company’s financial instruments, which are subject to credit risk, are cash and cash equivalents and loans and receivables.
The credit risk for cash and cash equivalents is considered negligible since the counterparties are reputable financial institutions.
The Company’s maximum exposure to credit risk is £1,426,799 (2018: £48,028) comprising cash and cash equivalents and loans
and receivables.
Liquidity risk
Liquidity risk arises from the possibility that the Company might encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. The Company manages this risk through maintaining a positive cash balance and
controlling expenses and commitments. The Directors are confident that adequate resources exist to finance current operations.
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PIRES INVESTMENTS PLC
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 31 OCTOBER 2019
12. RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Market price risk
The Company’s exposure to market price risk mainly arises from potential movements in the fair value of its investments.
The Company’s exposure to price risk on quoted investments is as follows:
Change in equity
2019 2018
£ £
Increase in quoted investments by 10% 116,541 102,953
Decrease in quoted investments by 10% (116,541) (102,953)
13. FINANCIAL INSTRUMENTS
Financial assets by category:
2019 2018
£ £
Financial assets:
Fair value through profit or loss investments 1,165,409 1,029,526
Cash and cash equivalents 1,426,799 48,028
Total 2,592,208 1,077,554
Financial liabilities by category:
2019 2018
£ £
Trade and other payables 38,934 139,295
14. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
Cost £
At 1 November 2017 1
Disposals during the year ‐
At 1 November 2018 1
Disposals during the year ‐
Additions during the year ‐
At 31 October 2019 1
Provision for diminution in value
At 1 November 2017 and 1 November 2018 ‐
Disposals during the year ‐
At 31 October 2019 ‐
Net book value
At 31 October 2019 1
At 31 October 2018 1
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PIRES INVESTMENTS PLC
14. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS (continued)
At 31 October 2019 the subsidiary was as follows:
Country of Principal Percentage
Subsidiary undertaking registration activity holding
Renewable Energies (Investments) Limited UK Dormant 100%
Consolidated financial statements have not been prepared as they are exempt in accordance with section 402 of the Companies
Act 2006.
15. TRADE AND OTHER RECEIVABLES
2019 2018
£ £
Prepayments 11,307 11,357
11,307 11,357
As described in note 12, the Directors do not consider credit risk to be material to the Company's operations.
The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
16. ISSUED SHARE CAPITAL
Ordinary shares Deferred shares
Number of Nominal Number of Nominal Share
shares value shares value Premium
£ £ £
Issued and fully paid:
At 1 November 2017 and 2018 33,900,805 84,752 11,829,975 3,581,055
Ordinary shares issued in the year:
Ordinary shares of 0.25p each 32,571,660 81,429 ‐ 700,291
Share issue costs ‐ ‐ ‐ (32,265)
At 31 October 2019 66,472,465 166,181 11,829,975 4,249,081
Share issues during the year:
On 27 February 2019, the Company issued 32,571,660 ordinary shares of 0.25p each for cash at 2.4p per share, raising funds of
£781,720 before expenses.
Rights of ordinary shareholders
The holders of the ordinary shares are entitled to one vote for each share held on a poll. They are also entitled to receive dividends
declared in proportion to the number of shares held (subject to any right of another class, and none currently exists, to receive
a preferred dividend) and, on a return of capital and subject to the limited participation rights of the holders of the two classes
of deferred shares detailed below and any subsequently created class of shares with preferential rights, to participate in such
return in proportion to the number of shares held.
Rights of deferred shareholders
None of the classes of deferred shares have any voting or dividend rights and only have rights to a repayment of the nominal
value of the shares and then only after a £100,000 per ordinary share has been returned to each holder of ordinary shares. The
Company has the right to acquire for cancellation each entire class of deferred share for an aggregate consideration of 1p and
the Company intends to exercise such right in due course.
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PIRES INVESTMENTS PLC
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 31 OCTOBER 2019
16. ISSUED SHARE CAPITAL (continued)
Options and Warrants
There were no outstanding options. The warrants over the ordinary share capital of the Company that were issued during the
year ended 31 October 2017 lapsed and nil are outstanding as at 31 October 2019 as detailed below. (2018: nil):
Number of Number of
shares to be shares to be
Exercise issued upon Exercise issued upon
price for the exercise for the price for the exercise for the
year ended year ended year ended year ended
31 October 31 October 31 October 31 October
2019 2019 2018 2018
£ £
Outstanding at beginning of period ‐ ‐ ‐ ‐
Lapsed during the period ‐ ‐ ‐ ‐
Outstanding at end of period ‐ ‐ ‐ ‐
Exercisable at end of period ‐ ‐ ‐ ‐
The warrants on 8,750,000 shares had an exercise price of 4.25 pence each, and were exercisable for a period of 18 months from
the date of issue, the last exercise date being 2 May 2018.
The warrants on 2,500,000 shares had an exercise price of 4.25 pence each, and were exercisable for a period of 18 months from
the date of issue, the last exercise date being 25 May 2018.
Both tranches of warrants lapsed unexercised in May 2018.
17. TRADE AND OTHER PAYABLES
2019 2018
£ £
Trade payables 6,570 50,387
Other payables ‐ 1,600
Accruals and deferred income 31,200 32,630
Provisions ‐ 50,000
Taxation and social security 1,164 4,678
38,934 139,295
The directors consider the carrying amounts of trade payables to be a reasonable approximation of their fair value.
The provision in 2018 relates to amounts that may be payable to HMRC in connection with the investigation of the Companies
VAT status. This review was concluded in May 2019 with all outstanding amounts settled. The Company also de‐registered from
VAT in March 2019.
18. CONTINGENT LIABILITES
At 31 October 2019 and 2018, the Company had no material contingent liabilities.
19. CAPITAL COMMITMENTS
The Company may invest in collective investment vehicles or funds, subscriptions to which are usually made on a commitment
basis. In these circumstances, the Company may be expected to make a commitment to invest that may be drawn down, or called,
from time to time, at the discretion of the manager of the fund or collective investment vehicle. The Company will usually be
contractually obliged to make such capital call payments and failure to do so would usually result in the Company being treated
as a defaulting investor by the fund or collective investment vehicle.
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PIRES INVESTMENTS PLC
19. CAPITAL COMMITMENTS (continued)
The Company expects to satisfy the cash calls on any such commitments through a combination of reserves and, where applicable,
the use of its cash balances, realisation of its other investments, anticipated future cash calls to the Company, the use of borrowings
or, potentially, through the further issue of shares in the Company.
On 2 September 2019, the Company entered into a commitment, which was approved by the shareholders on 3 October 2019,
to invest up to €3.5 million in Sure Valley Ventures. Sure Valley Ventures is a venture capital fund focused on investing in the
software technology sector with a specific focus on augmented and virtual reality (“AR/VR”), artificial intelligence (“AI”) and the
internet of things (“IoT”). Sure Valley Ventures has a portfolio of ten investee companies at different stages of development and
the €3.5 million investment by the Company would be expected to be made over the life of the fund.
20. RELATED PARTY TRANSACTIONS
Ultimate controlling party
The Directors do not consider there to be a single ultimate controlling party.
Remuneration of key management personnel
The remuneration of the directors can be found in the Directors report on page 8 and in Note 7. The related party disclosures in
respect of this remuneration represent the only related party disclosures requires and are disclosed below:
Fees:
2019 2018
£ £
Fees for consultancy services supplied by Catalyst Corporate Consultants Limited, a company
beneficially controlled by Peter Redmond and of which he is a director 35,000 13,000
Fees for consultancy services supplied by City and Westminster Corporate Finance LLP, an
LLP controlled by John May as Managing Partner. 47,000 25,000
Fees for consultancy services supplied by ACL Capital Limited, a company of which
Nicholas Lee is a director 17,000 13,000
Share placing
In February 2019 the Company carried out a share placing of which Riverfort Global Opportunities plc, a company in which
Nicholas Lee is Investment Director, participated acquiring 7,816,660 new shares.
21. POST BALANCE SHEET EVENTS
On 21 November 2019, the Company completed its initial investment of £1.1 million into Sure Valley Ventures (“SVV”). SVV is a
venture capital fund focused on investing in the software technology sector with a specific focus on augmented and virtual reality
(“AR/VR”), artificial intelligence (“AI”) and the internet of things (“IoT”).
On 23 December 2019, the Company announced that an agreement had been signed to sell one of the companies within the
SVV portfolio, Artomatix, for cash to a leading technology company. Artomatix provides an artificial intelligence platform that is
able to automate the creation of 3D content. The amount accruing to Pires from this sale was €803,274, of which €721,274 has
been received, with the balance expected in 18 months. The sale of Artomatix represented a cash multiple of around 5x the initial
investment made by SVV and was achieved relatively recently after the Company had completed its investment in SVV.
Since 31 October 2019, the Company has disposed of the majority of its holding in Eco (Atlantic) Oil and Gas Limited prior to the
recent market turmoil and the setback in oil prices, generating total net cash proceeds of £1.57 million and realising a total net
profit on disposal of almost £1 million from this investment.
On 10 March 2020, the Company announced that it had invested €250,000 in Visibility Blockchain Limited, a private company
which trades under the name Getvisibility. Getvisibility is an artificial intelligence security company, addressing the substantial
and increasing problem which corporations face in storing, sorting, accessing and protecting data.
On 24 April 2020, the Company announced that it had conditionally placed new ordinary shares to raise just over £1 million from
both existing and new investors.
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PIRES INVESTMENTS PLC
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 31 OCTOBER 2019
21. POST BALANCE SHEET EVENTS (continued)
Covid‐19 is a developing situation and, as at the date of these financial statements, the assessment of this situation will need
continued attention and will evolve over time. In our view Covid‐19 is considered to be a non‐adjusting post balance sheet event
and no adjustment is made to the financial statements as a result. The rapid development and fluidity of the Covid‐19 virus makes
it difficult to predict the ultimate impact at this stage. Management has assessed the impact and believes there are no effects on
the Company.
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