Pires Investments plc
(Incorporated in England and Wales with registered number 02929801)
Annual Report and
Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
Perivan 263446
PIRES INVESTMENTS PLC
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
Contents
Page
Company Information 1
Review of Activities 2
Strategic Report 9
Directors’ Report 12
Report on Remuneration 14
Statement of Directors’ Responsibilities 15
Corporate Governance Report 16
Report of the Independent Auditor 23
Statement of Comprehensive Income 27
Statement of Changes in Equity 28
Statement of Financial Position 29
Statement of Cash Flows 30
Notes to the Financial Statements 31
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
Company Information
Directors John May (Non‐ Executive Director)
Nicholas Lee (Non‐Executive Director)
David Palumbo (Non ‐Executive Director)
Secretary Robert Porter
Registered office 9th Floor, 107 Cheapside
London
EC2V 6DN
Independent Auditors PKF Littlejohn LLP
15 Westferry Circus
London E14 4HD
Nominated adviser Cairn Financial Advisers LLP
9th Floor, 107 Cheapside
London
EC2V 6DN
Joint Brokers Peterhouse Capital Limited
3rd Floor
80 Cheapside
London
EC2V 6EE
Tennyson Securities Limited
65 Petty France
London
SW1H 9EU
Registrars Computershare Investor Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
Company Registration number 02929801
PIRES INVESTMENTS PLC
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PIRES INVESTMENTS PLC
Review of Activities
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
Review of Activities
Highlights
Financial highlights
• Profit achieved of £1.49 million during the period (14 months ended 31 December 2020: loss before taxation of £687,000)
• Net asset value (“NAV”) of £7,223,000 as at the period end (31 December 2020: £2,926,000), an increase of 147% compared
to the prior year figure, equating to an increase of circa 100% NAV per share to 4.57 pence since 31 December 2020
• NAV at the end of the period does not include the impact of the recent significant increase in valuation of Getvisibility which
took place in 2022 and from which the Company benefits through both its direct and indirect holdings in this company
Portfolio highlights
• Effective interest in Sure Valley Ventures (“SVV”) increased to circa 20% through the purchase of a shareholding in Sure
Ventures plc (“SV plc”)
• New investments made by SVV include Virtex, PreCog and Smarttech247
• Further successful funding rounds for portfolio companies include:
o Getvisibility raised €1.1 million during 2021 and a further €10 million post period end
o VividQ – raised £11 million
o Ambisense – raised €3 million
o Admix – raised US$25 million
o Cameramatics raised €4 million and then a further €3.9 million
• Significant increase in the valuation of a number of portfolio companies based on new funding rounds involving third party
investors
• Portfolio companies, both direct or via SVV, continue to attract international investors such as EQT, University of Tokyo,
Foresight Williams Technology (a joint collaboration between Foresight Group and Williams Advanced Engineering), Business
Growth Fund, Puma Investments, Japanese Miyako Capital, Austrian APEX Ventures, Silicon Valley’s R42 Group, Northwell
Holdings & Ventures and Alpha Intelligence Capital
• Balance of proceeds received from the sale of Artomatix
• Smarttech247, a recent portfolio investment, is actively pursuing an IPO
• New direct investment made in PreCog and followon investments in Getvisibility, combined with a significant increase in the
valuation of Getvisibility
• Investment made in the digital assets technology sector and ultimately Pluto Digital plc
Post‐period end highlights
• Commitment to invest £5 million in the New SVV Fund alongside £50 million from the British Business Bank with scope to
achieve enhanced returns compared to industry standard
• Further significant €10 million fund raise and revaluation for Getvisibility
Review of activities
The Company has had a very busy and successful 2021 with multiple new investments being made and excellent results from a
number of the Company’s investments resulting in a significant profit for the year and an uplift in the Company’s NAV which, as
previously discussed, always lags the value of the Company’s investment portfolio.
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PIRES INVESTMENTS PLC
Review of Activities (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
Investment overview
The Company’s principal investment portfolio categories are summarised below:
Cost or Cost or
valuation at valuation at
31 December 31 December
2021 2020
£000’s £000’s
Category
Sure Valley Ventures/SV plc 4,146 1,507
Direct investments 884 419
Digital assets sector 1,951
Cash/other listed securities 409 1,122
Total 7,390 3,048
Investment in SVV and SV plc
In February 2021, the Company increased its exposure to SVV through the purchase of 1.5 million shares in SV plc, a listed specialist
fund, from existing SV plc shareholders using new Pires shares priced at 13.6 pence as consideration. SV plc’s principal investments
include a 25.9% interest in SVV and a direct investment in VividQ, one of the SVV portfolio companies. As a result of this transaction,
Pires achieved an aggregate (direct and indirect) interest in SVV of around 20%, which comprises its original direct 13% interest in
SVV and an indirect interest of 6.5%, through its 25% shareholding in SV plc.
Within the SVV portfolio, new investments have been made in:
• Virtex, a company building a platform for the nextgeneration of live, immersive entertainment within the virtual reality gaming
and e sports industries;
• PreCog, a security solution platform company that provides data intelligence to combat crime, terrorism and protect vulnerable
people; and
• Smarttech247, a global artificial intelligence based cyber security cloud business that protects enterprises as they migrate to
cloudbased IT operations. Smarttech247 is profitable with high forecast revenue growth and has over 100 technology partners,
including Tanium and CrowdStrike, and 50 clients based in Europe and the US. Smarttech247 is currently pursuing a stock
market listing by way of a reverse takeover transaction which is expected to complete later in the year.
Additionally, during the period, a number of the portfolio companies have been revalued upwards based on new funding rounds
which have taken place at higher valuations compared to the valuation at the time of the initial investment. These companies include:
• CameraMatics raised €4 million in January 2021 in additional funding at a valuation that represents over 300% of the
CameraMatics’ valuation as at the time of SVV’s initial investment in November 2017. The round was led by Puma Investments,
a leading provider of growth capital. CameraMatics also announced a major partnership with UK transport and logistics
operator Maritime Transport Ltd. The company then raised a further €3.9 million in December 2021, again on the basis of an
increased valuation thereby demonstrating this company’s rapid growth in value.
• Getvisibility completed a €1.1 million funding round in June 2021 at a significant premium to its previous round. This was led
by Herb Hribar who was formerly CEO of Eircom, the largest telecoms group in Ireland and is currently a director of
ScienceLogic, Inc, a leading provider of AIbased operations technology. Then post period end in March 2022, the company
raised €10 million from new investors including Alpha Intelligence Capital, a global venture capital firm which invests in deep
artificial intelligence/machine learning technologybased companies and Fortino Capital Partners, a leading B2B software
venture capital and growth equity firm.
• VividQ raised new funds of £11 million in July 2021 at a significant premium to previous valuations. This funding was led by a
consortium of new international investors including the University of Tokyo, Foresight Williams Technology (a joint collaboration
between Foresight Group and Williams Advanced Engineering), Japanese Miyako Capital, Austrian APEX Ventures and Silicon
Valley’s R42 Group, with followon investments from SVV, University of Tokyo Edge Capital (UTEC) and Essex Innovation. SV
plc has a significant direct investment in VividQ thereby providing Pires with an increased interest in VividQ through its
shareholding in SV plc.
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PIRES INVESTMENTS PLC
Review of Activities (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
• Engage XR (previously VR Education Holdings before its name change in October 2021), one of the portfolio companies which
is already listed on AIM, and from which funds have already been returned to Pires, has also made significant progress during
the period with increasing revenues. In addition, it raised £7.7 million before expenses at a price of £0.16 per share by way
of an oversubscribed placing, announced in June 2021.
• Ambisense successfully raised €3 million in August 2021 from the Business Growth Fund and existing investors, including SVV.
• In October 2021, Admix raised US$25 million in a series B round to scale up its InPlay solution worldwide and establish it as
the content monetisation layer for gaming worlds and the formative metaverse. SVV participated in the Series B round
alongside renowned VCs Elefund, Force Over Mass, DIP Capital, Notion Capital, Speedinvest, Rocket Capital, Colopl Next and
Sidedoor Ventures, as well as growth investor Kuvi Capital and angels from the gaming industry. This new funding was raised
at a valuation that represents around 1,500% of the company’s valuation at which SVV initially invested in the business in
2018. This clearly reflects the significant progress that Admix has made.
• In December 2021, Nova Leah announced the closing of its seed investment round led by Northwell Holdings & Ventures, the
forprofit venture investment arm of Northwell Health, New York State’s largest healthcare provider. The investment includes
additional funding from existing investors Kernel Capital and SVV. Nova Leah plans to use the funds to significantly expand its
market opportunity and global reach.
As at the period end, SVV had a portfolio of 14 investee companies at different stages of development spanning a range of sectors.
The portfolio provides Pires with exposure to a number of key, cuttingedge and rapidly growing technology sectors. Further details
of the portfolio companies and recent developments are set out below:
Artificial intelligence
Ambisense Provides an Artificial Intelligence platform to deliver environmental risk assessment to allow
(Ambisense Limited) realtime gas and environmental monitoring using both IoT and sensor solutions. The
company has already been awarded a number of major contracts and has a substantial
pipeline of opportunities.
Buymie An artificial intelligencebased same day grocery delivery company operating in both the UK
(Buymie Technologies) and Ireland working with companies such as Tesco, Lidl, Asda and the Coop. Also recently
announced a partnership with Asda in Leeds and Bristol.
Security
Nova Leah An artificial intelligence cybersecurity assessment and protection platform for connected
(Nova Leah Limited) medical devices.
Getvisibility An artificial intelligence security company addressing the substantial problem faced by
(Visibility Blockchain Limited) corporations in storing, sorting, accessing and protecting data. Recently raised additional
funds at a significant premium and has been voted as one of Ireland’s top 18 startups.
PreCog A security solution platform company that provides data intelligence to combat crime,
(Polience Limited) terrorism and protect vulnerable people. The company completed a £1 million fundraising
round in March 2021. Customers include leading law enforcement and security agencies,
and transport infrastructure groups.
Smarttech247 A global artificial intelligence based cyber security cloud business that protects enterprises
(Zefone Limited) as they migrate to cloudbased IT operations. The company has recently won a major new
contract with a Fortune Global1000 company employing over 100,000 staff and already
has a purchase order under this contract for €6 million. It is also currently pursuing a listing
via an RTO process.
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PIRES INVESTMENTS PLC
Review of Activities (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
Immersive Technologies
Engage XR A developer of virtual reality and immersive experiences with a specific focus on education
(Engage XR Holdings plc) and enterprise learning and development. The company is listed on AIM, has over 100
commercial customers and is rapidly growing revenue and margins. It recently raised €9
million in new funds.
Admix A platform enabling the monetisation of interactive programmatic brand placements in, for
(WAM Group Limited) example, video games and other AR/VR applications. The company is rapidly growing
revenues and numbers of active users.
Warducks A game development studio known for the production of leading games and is soon to
(Warducks Limited) launch an AR game that could be the next Pokémon Go.
VividQ A deep tech software company which has developed a framework for realtime 3D
(VividQ Limited) holographic displays for use in headsup displays and AR headsets and glasses. The company
recently completed an £11 million funding round at a significant premium.
Volograms A deep learning company that uses AI to create 3D Augmented Reality from 2D photos and
(Volograms Limited) videos. The company has launched a consumer AR Camera app called Volu and has prouser
and enterprise versions in development.
Virtex A company building a platform for the nextgeneration of live, immersive entertainment
(Virtex Limited) within the virtual reality (“VR”) gaming and esports industries. It is actively developing its
Internet of things
new Stadium app.
CameraMatics Platform enabling transport fleet managers to reduce risk, increase driver safety and comply
(MySafe Drive Limited) with growing industry governance and compliance. It recently raised €4 million at a 300%
uplift in valuation. The company is growing revenues considerably and building its presence
in the very significant US market where it has already won a number of new contracts.
Wia Provides a platform solution for smart buildings. Its platform provides full device and
(WIA Technologies Limited) application management, security, data capture and storage, analysis and control.
The investment in SVV has already proven successful for Pires with a realisation and a cash distribution being achieved soon after
the investment, as a result of the sale of one of the portfolio companies, Artomatix. In 2019, Artomatix was sold at a valuation some
500% of the price of the original investment in the company. Following the progress made by Engage XR, which is listed on AIM, in
2020, SVV also realised the value of its original investment through the partial disposal of its holding. This was the second cash
realisation to be made from the Company’s investment in SVV.
The success of the direct SVV investment provided the rationale to increase the Company’s exposure to this portfolio by acquiring a
shareholding in SV plc in February 2021, particularly when it was possible to do so on attractive terms.
The first SVV fund has now substantially completed its deployment phase and is moving more towards a realisation phase which
should lead to further returns to the Company and its shareholders.
Furthermore, post the period end, the Company invested in a second SVV fund, the Sure Valley Ventures UK Software Technology
Fund (the “New SVV Fund”). The principal investor in the New SVV Fund is the British Business Bank (“BBB”), an investment arm of
the UK Government. The first close of this fund amounted to £85 million, with the BBB investing up to £50 million and other investors
(“Private Investors”), including Pires, investing up to £35 million over the 10year life of the fund.
Pires has initially invested circa £90,000, in the New SVV Fund and expects to invest up to £5 million in total over the life of the New
SVV Fund which would provide it with a circa 5.9% interest. The New SVV Fund will invest in a range of private UK software companies
with a focus on companies in the Metaverse, Artificial Intelligence and Cybersecurity sectors.
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PIRES INVESTMENTS PLC
Review of Activities (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
The New SVV Fund will be managed by the same SVV team which, to date, has been highly successful in achieving a number of cash
realisations from, and upward revaluations of, companies in the SVV portfolio. The profit share arrangements within the New SVV
Fund are designed to encourage the involvement of the Private Investors alongside the BBB, meaning that Pires and the other Private
Investors would expect to receive a significantly enhanced share of the total return generated by the fund compared to industry
standard.
Direct investments
During the period, Low6 has continued to grow and develop its business raising additional funding both during the period and post
the period end. Low6 is a leader in sports gaming technology that powers franchises with their own branded gaming experiences to
engage and monetise their digital fanbases. In February 2022, the company announced that is planning to achieve a list by way of a
reverse takeover of a company listed on the TSX Venture Exchange.
The Company made a new investment of £250,000 in PreCog, a security solution platform company that provides data intelligence
to combat crime, terrorism and protect vulnerable people, as part of its £1 million fundraising round. Its customers include leading
law enforcement and security agencies, and transport infrastructure groups.
Getvisibility, is a leader in data visibility and control, using state‐of‐the‐art artificial intelligence (“AI”) to classify and secure unstructured
information. Getvisibility also provides risk and compliance assessments as well as enforcing protection on sensitive data. The company
operates across the US, Europe, the Middle East and North Africa with a presence in several industry sectors including banking,
healthcare and the public sector. Getvisibility’s clients include a leading global producer of energy and chemicals, a major airport
group, one of the largest financial institutions in the Middle East as well as US government entities in the pharmaceutical and
manufacturing sectors.
Pires made a follow‐on investment in Getvisibility in June 2021, as part of a €1.1 million funding round led by a new lead investor
Herb Hribar, who has also become Chairman of the company. This new funding took place at a significant premium to the valuation
at which Pires made its original investment in March 2020.
In March 2022, Getvisibility then raised a further €10 million. Pires made its original investment of €250,000 in March 2020, with a
follow‐on investment of €62,000 in June 2021. Since then, Getvisibility has made significant progress such that, based on the post
funding round valuation, Pires’ direct stake in Getvisibility (including its additional investment) is now valued at circa €1,500,000 or
over 4 times its total investment cost to date since it made its first investment two years ago. In addition, Pires has a further interest
in Getvisibility via its 13% interest in SVV and an indirect interest through its holding in Sure Ventures plc, which together are now
valued at circa €1,330,000. Pires’ effective interest in Getvisibility, in aggregate, is therefore now valued at circa €2,830,000.
Digital assets sector
The Company completed its first investment in the digital assets sector through an investment in De Tech Studio Limited, which was
developing a decentralised finance technology platform (“YOP”), and YOP tokens. Certain YOP tokens were sold to realise a cash
profit and the balance of the investment was used to subscribe for shares in Pluto Digital plc (“Pluto”).
Pluto is a crypto technology and operations company with a focus on Decentralised Finance (DeFi) and the Metaverse (blockchain
gaming and NFTs).
During the period, Pluto has invested in Maze Theory Limited (“Maze Theory”), a London‐based digital entertainment studio, with a
view to developing high quality games that incorporate token economics. As part of this arrangement, Pluto and Maze Theory formed
a new gaming blockchain and metaverse studio joint venture called Emergent Games. Given the experience of the team at Maze
Theory and the work that they have done, Pluto is planning to extend its relationship with Maze Theory as it believes that this is a
sector that provides an exciting growth opportunity. Also, during 2021 Pluto fully acquired the YOP platform and has been actively
developing this platform to help enable users to operate in and navigate the DeFi space, which has been growing rapidly.
As at 31 December 2021, the Company’s equity holding in Pluto was valued at almost £2 million based on a price of 6 pence per
share, which is the price at which the company’s most recent funding raising took place. This represents a very significant uplift on
the Company’s initial investment in this sector.
Pires currently holds 32,518,876 shares in Pluto and warrants over 24 million new ordinary shares in Pluto, subject to certain vesting
conditions, 6 million of which have already vested.
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PIRES INVESTMENTS PLC
Review of Activities (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
Financial
For the year under review, the Company reported a profit before taxation of £1,491,000 (for the 14month period ended 31 December
2020: loss of £687,000). The profit or loss for the Company includes unrealised gains/losses in the portfolio of quoted equity
investments which are marked to market, plus any return from and adjustment to the carrying value of our unlisted investments in
the technology sector.
NAV as at the end of the period amounted to £7,223,000 (31 December 2020: £2,926,000). Whilst the Company’s net assets have
increased by 147% over the period and NAV per share is up circa 100%, we continue to believe that absolute NAV does not fairly represent
the Company’s financial potential, given the scope for significant valuation uplift of the companies within the portfolio. This is clearly
demonstrated by the gains, both realised and unrealised, that are regularly being achieved to date from the investment portfolio.
Furthermore, it is worth reiterating that realisations that are achieved within the SVV portfolio result in cash distributions to the Company
and are not retained within the fund. Furthermore, the period end NAV figures do not take into account the significant increase in value
of the Company’s holding in Getvisibility which occurred post period end.
During the period, the holders of warrants over 21,656,579 ordinary shares in the Company exercised their warrants at 4 pence per
share with total net proceeds to the Company of £866,000. As at the period end there were unexercised warrants over 28,618,403
new ordinary shares in the Company, although this figure has now reduced to 25,468,421. These warrants will expire at the end of
June 2022.
Other
In February 2021, the Company was delighted to welcome a new director, David Palumbo, to the Board. David is currently CEO of
EQTEC plc and brings a wealth of experience in the venture capital and technology sectors. Also, at the AGM, Peter Redmond retired
from the Board. We would therefore like to thank Peter for his time at Pires and his valuable contribution to the progress that the
Company has made over recent years. We all wish Peter the very best in his future endeavours.
Post the period end
In March 2022, the Company agreed to invest in a second SVV fund, the New SVV Fund, alongside the British Business Bank which
is investing up to £50 million. This fund has already made its first investment in RETìni ́ZE Limited (“RETìni ́ZE”), a technology company
based in Belfast, Northern Ireland which is developing an innovative software product called Animotive that is harnessing the latest
VR technologies to transform the 3D animation production process.
As previously mentioned, Getvisibility, which the Company holds directly, and through SVV and its holding in SV plc completed a
€10 million fund raise in March 2022, generating a significant uplift in the value of Getvisibility and therefore the Company’s
investment portfolio both from its direct shareholdings and indirect interests from its holdings in SVV and SV plc.
Since 1 January 2022, the holders of 3,149,982 warrants over ordinary shares in the Company have exercised their warrants at 4 pence
per share for a total consideration of £126,000. The total number of ordinary shares of the Company in issue are following recent
allotments will be 161,395,191. Unexercised warrants currently total 25,468,421 and these warrants expire at the end of June 2022.
On 1 June 2022, Tern plc (“Tern”) announced a recommended share offer for the issued and to be issued share capital of the Company
on the basis of 0.51613 Tern shares for each share in the Company. This valued each share in the Company at 8 pence based on the
closing price of Tern shares on 31 May 2022 and represented a premium of 53.8% to the closing price of the Company’s shares on
31 May 2022.
Outlook
As set out at the beginning of this statement, 2021 has been extremely busy for Pires and this has continued into 2022. A number of
exciting new investments have been made, both directly and through the Company’s investment in SVV, and the investment portfolio
has achieved significant growth in value. In particular, this has continued into 2022 with Getvisibility.
Our investment strategy is focused on next generation technology businesses with significant potential for accelerated growth across
sectors such as AI, IoT and Immersive Technologies, as well as the digital assets sector. We remain encouraged by the progress made
to date by our investments and the outlook for the respective sectors in which they operate.
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PIRES INVESTMENTS PLC
Review of Activities (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
We expect that in the coming months we will see some additional realisations or liquidity events from the investment portfolio.
Furthermore, it is important to note that, as previously mentioned, the first SVV fund has now substantially completed its deployment
phase with potentially one more new investment and some small followon investments to come and so is moving towards a
realisation phase which is expected to generate further cash inflows for the Company.
In summary, we believe that our investment strategy in the technology sector has already proven to have been successful. Going
forward, the Company is very well positioned to become a leading next generation technology investment company with an exciting
portfolio of technology companies held either directly or indirectly through its interests in SVV that have the potential for significant
growth and the ability to deliver real returns for shareholders.
Nicholas Lee
Director
14 June 2022
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PIRES INVESTMENTS PLC
Strategic Report
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
Business review and future developments
The Company is an investment company listed on AIM focused on investment in next generation technology.
Investment portfolio
During the year ended 31 December 2021, the Company made a number of new and followon investments both in SVV and directly.
Further details regarding these investments and the year’s activities are set out in the Review of Activities statement on page 2.
As at 31 December 2021, the Company’s investment portfolio comprised:
Investment portfolio Value (£000’s)
Investment in Sure Valley Ventures/SV plc 4,146
Direct investments 884
Investment in digital assets sector 1,951
Cash and other listed securities 409
Total 7,390
The portfolio valuations are based on the market valuation where the investments are listed or at cost or fund valuation where they
are unlisted.
Going concern
During the period under review, the Company achieved a profit of £1.49 million (14 months ended 31 December 2020: loss of
£687,000).
At the time of approving the financial statements, the Directors have a reasonable expectation that the Company have adequate
resources to continue in operational existence for the foreseeable future. The going concern basis of accounting has therefore been
adopted in preparing the financial statements.
In reaching this conclusion, the Directors have considered the financial position of the Group, together with its forecasts and
projections for the 12month period from the signing of these financial statements, taking into account reasonably possible changes
in trading performance and the environment for investment. Furthermore, the Company has several sources available to provide
funding over the coming years. These would include, inter alia, realisations from the SVV fund, the exercise of outstanding inthe
money warrants and previously announced upcoming liquidity events for a number of its other investments, as well as access to
debt and equity capital markets.
Investing policy
The Company’s revised investing policy was approved by shareholders on 3 October 2019 and has been 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 11 and 12 to the financial
statements.
Key performance indicators
As an investment company at this stage of its development, the key performance indicators principally comprise growth in net asset
value and share price appreciation. It is also important to have sufficient cash or liquid assets in order to be able to take advantage
of investment opportunities as they arise.
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PIRES INVESTMENTS PLC
Strategic Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
The key performance indicators are set out below:
31 December 31 December
2021 2020
£ £ Change %
Share price – pence 0.0750 0.0625 20%
Net asset value 7,223,000 2,926,000 147%
Net asset value – pence per share 0.0457 0.027 100%
Cash and cash equivalents 409,000 1,122,000 (64%)
The Company’s net asset value whilst being used as a performance indicator is not a true measure of the Company’s underlying value
due to the conservative nature of the Company’s basis of valuation of its investment portfolio and the lagging nature of this indicator.
This can clearly be demonstrated by the regular upward revaluations of the companies within the Company’s investment portfolio
from the previous carrying values as a result of subsequent rounds of investment by third party investors into those companies.
In terms of availability of cash, the Company has several sources available to fund its operations and investments over the coming
years. These would include, inter alia, realisations from the SVV fund, the exercise of outstanding inthemoney warrants and
previously announced upcoming liquidity events for a number of its other investments, as well as access to debt and equity capital
markets.
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 COVID19, and the Company is not able to find effective replacements in a timely manner or at all, its
business may be disrupted or damaged.
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 thirdparty 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.
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PIRES INVESTMENTS PLC
Strategic Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
Funding
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.
Assessment of Business Risk
The Board regularly reviews operating and strategic risks and considers in such reviews financial and nonfinancial 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.
Section s172 Statement – Promotion of the Company for the benefit of members as a whole:
The Directors believe they have acted in the way most likely to promote the success of the Company for the benefit of its members
as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
• Consider the likely consequences of any decision in the long term;
• Act fairly between members of the Company;
• Maintain a reputation for high standards of business conduct;
• Consider the interest of the Company’s employees;
• Foster the Company’s relationships with suppliers, customers and others; and
The application of s172 requirements can be demonstrated in relation to some of the following:
• The Directors are 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;
• Raising of additional funds, as required, for the Company for investment purposes; and
• The making of investments that have generated significant returns for the Company and its shareholders.
Nicholas Lee
Director
14 June 2022
Page | 11
PIRES INVESTMENTS PLC
Directors’ Report
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
The Directors present their annual report and the audited Company financial statements of Pires Investments plc for the year ended
31 December 2021. The Company extended the accounting reference date to 31 December during 2020 and therefore the prior
year annual report covered a 14month period and therefore certain amounts presented in the profit and loss account are not entirely
comparable to the prior year ended 31 December 2020 which covered a 14month period.
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 £1,491,000 (2020 loss for the period: £687,000). The Directors are
not recommending the payment of a dividend (2020: nil).
Principal activities and review of business
The principal activity of the Company throughout the period 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 Review of activities on page 2.
Events after the Reporting Period
In March 2022, the Company agreed to invest in a second SVV fund, the New SVV Fund, alongside the British Business Bank who is
investing up to £50 million. This fund has already made its first investment in RETìni ́ZE Limited (“RETìni ́ZE”), a technology company
based in Belfast, Northern Ireland which is developing an innovative software product called Animotive that is harnessing the latest
VR technologies to transform the 3D animation production process.
Getvisibility, which the Company holds directly, and through SVV and its holding in SV plc completed a €10 million fund raise in March
2022, generating a significant uplift in the value of Getvisibility and therefore the Company’s investment portfolio both from its direct
shareholding and indirect interests from its holdings in SVV and SV plc.
Since 1 January 2022, the holders of 3,149,982 warrants over ordinary shares in the Company have exercised their warrants at 4 pence
per share for a total consideration of £126,000. Unexercised warrants currently total 25,468,421 and the total number of ordinary
shares of the Company in issue is currently 161,395,191.
On 1 June 2022, Tern plc (“Tern”) announced a recommended share offer for the issued and to be issued share capital of the Company
on the basis of 0.51613 Tern shares for each share in the Company. This valued each share in the Company at 8 pence based on the
closing price of Tern shares on 31 May 2022 and represented a premium of 53.8% to the closing price of the Company’s shares on
31 May 2022.
Directors
The following Directors have held office since 1 January 2021:
John May
Nicholas Lee
David Palumbo (appointed 1 February 2021)
Peter Redmond (resigned 27 August 2021)
Charitable and political donations
No charitable or political donations were made during the period (2020: nil).
Page | 12
PIRES INVESTMENTS PLC
Directors’ Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
Substantial shareholders
As at 13 June 2022, 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 30,914,193 19.15%
Christopher Akers 25,150,000 15.58%
Nicholas Lee, a director of the Company, is also the Investment Director of RiverFort Global Opportunities plc.
The Directors had no beneficial interests in the share capital of the Company as at 31 December 2021 and 31 December 2020, or
throughout these respective periods.
Auditor
PKF Littlejohn LLP has expressed its willingness to continue in office as auditor and a resolution to reappoint them will be proposed
at the forthcoming Annual General Meeting.
By order of the Board
Nicholas Lee
Director
14 June 2022
Page | 13
PIRES INVESTMENTS PLC
Report on Remuneration
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
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; the amounts noted for 2020 are
for a period of 14 months in comparison to the 12 months for 2021:
Salary Bonus Fees Total Total
2021 2021 2021 2021 2020
£ £ £ £ £
Peter Redmond (resigned 27 Aug 2021) 42,000 ‐ ‐ 42,000 64,000
John May 36,000 12,500 ‐ 48,500 64,000
Nicholas Lee 54,000 25,000 79,000 83,000
David Palumbo 11,000 12,500 22,000 45,500
143,000 50,000 22,000 215,000 211,000
As at 31 December 2021, £nil Directors fees (2020: £nil) have been deferred for payment. All remuneration is considered to relate
to short term benefits.
The salary paid to Peter Redmond during 2021 incorporates a payment for his 6 month contractual termination notice period.
Directors’ interests
The Directors’ had no beneficial interests in the share capital of the Company as at 31 December 2021 and 31 December 2020.
John May
Director
14 June 2022
Page | 14
PIRES INVESTMENTS PLC
Statement of Directors’ Responsibilities
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
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.
Company Law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected
to prepare the financial statements in accordance with UK adopted international accounting standards in conformity with the
requirements of the Companies Act 2006 (IFRS (UK)). Under Company Law the Directors must not approve the financial statements
unless they give a true and fair view of the state of affairs and 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
John May
Director
14 June 2022
Page | 15
PIRES INVESTMENTS PLC
Corporate Governance Report
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
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 three nonexecutive 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 David Palumbo. The Committee has met with the auditor 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 David Palumbo. 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 midsize
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.
Page | 16
PIRES INVESTMENTS PLC
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
These disclosures were last reviewed on the 24 April 2022.
Principles: Application:
1. Establish a strategy and
business model which
promote longterm 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 noncontrolling 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.
Page | 17
PIRES INVESTMENTS PLC
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
3. Take into account wider
stakeholder and social
responsibilities and their
implications for longterm
success
The Board recognises that the longterm 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 offsite 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 monitoring control exercised by the
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,
Page | 18
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
PIRES INVESTMENTS PLC
given the current size and transparency of the operations of the Company, that an internal
audit function was not required.
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 nonfinancial
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
The Board comprises, Nicholas Lee, who has key responsibility for the day to day
wellfunctioning, balanced
team led by the chair
management of the Company and two other Directors, John May and David Palumbo.
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.
Directors are subject to reelection intervals as prescribed in the Company’s Articles of
Association.
At each Annual General Meeting onethird of the Directors, who are subject to retirement
by rotation shall retire from office. They can then offer themselves for reelection. 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 daytoday operational control
delegated to 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.
During 2021 there have been 14 board meetings and the Audit and Remuneration
Committee has met on 2 occasions respectively.
Page | 19
PIRES INVESTMENTS PLC
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
Attendance at the board meetings is set out below:
David Palumbo 10/14
John May 14/14
Nicholas Lee 14/14
6. Ensure that between them
the directors have the
necessary uptodate
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 nonexecutive director, is not considered independent as he is a
director of Riverfort Global Opportunities plc that has a Substantial Shareholding (19.15%)
in Pires.
John May and David Palumbo are currently the Company’s independent nonexecutive
directors.
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 nonexecutive 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 a director of a
number of listed companies. Nicholas qualified as a chartered accountant with Coopers &
Lybrand and has an MA in engineering from St John’s College, Cambridge.
David Palumbo – Director
David is currently the Chief Executive Officer of AIMlisted EQTEC plc (“EQTEC”), a leading
gasification technology solutions company for sustainable wastetoenergy projects,
having joined EQTEC’s board in August 2019. Since becoming Chief Executive Officer,
EQTEC’s valuation has increased significantly, and the company now has a market
capitalisation of over £160 million. David is an experienced entrepreneur with over 20
years of experience in private equity, venture capital and asset management. Since 2006,
he has founded and cofounded a number of companies in various industries such as
cleantech, digital technology, and real estate. David is also the Founding and Managing
Partner of Origen Capital LLP, a private investment firm representing family offices and
private consortia in Europe, CIS and Latin America. He holds a BSc and an MSc in electrical
engineering.
Page | 20
PIRES INVESTMENTS PLC
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
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 Nicholas Lee in an executive capacity.
Nicholas Lee is currently the person responsible for guiding the business of the Board and
ensuring longterm strategic focus and investments. The QCA Code recommends that this
role should be undertaken as a nonexecutive role.
As the Company develops and grows, it is committed to strengthen and reorganise the
Board with the appointment of further experienced directors in order to maintain
appropriate balance.
8. Promote a corporate culture
Corporate Culture:
that is based on ethical values
and behaviours
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
Maintain Appropriate Governance Structures and Processes:
structures and processes that
are fit for purpose and
support good decisionmaking
by the board
The Board schedule provides for quarterly meetings and, in addition, meets adhoc 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.
Page | 21
PIRES INVESTMENTS PLC
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
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,
fullyear and halfyear announcements, the Annual General Meeting (AGM) and oneto
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.
John May
Director
14 June 2022
Page | 22
PIRES INVESTMENTS PLC
Independent auditor’s report to the members of Pires Investments Plc
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
Opinion
We have audited the financial statements of Pires Investments Plc (the ‘company’) for the year ended 31 December 2021 which
comprise the Statement of Comprehensive Income, 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 accounting standards in conformity with the requirements of the
Companies Act 2006.
In our opinion, the financial statements:
• give a true and fair view of the state of the company’s affairs as at 31 December 2021 and of its loss for the year then ended;
• have been properly prepared in accordance with international accounting standards in conformity with the requirements of
the Companies Act; 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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director’s use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the company’s ability to continue
to adopt the going concern basis of accounting included:
• Obtaining management’s forecast cash flows covering the period for the twelve month period through until June 2023
• We assessed the assumptions within the forecast with regards to income generation, capital funding and cash flows based on
our knowledge gained during the audit
• A comparison of actual results for the year to past budgets to assess the forecasting ability/accuracy of management.
• Assessing the adequacy of going concern disclosures within the Annual Report and Accounts.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the company’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of
this report.
Our application of materiality
Materiality for the company financial statements as a whole was set at £360,000 (2020: £154,000).
This has been calculated at 5% of the benchmark of Net Assets (2020: 5% of the benchmark of the Net Assets), which we have
determined in our professional judgement, to be one of the principal benchmarks within the financial statements relevant to members
of the company in assessing financial performance. We consider the Net Assets of the company to be the performance measure
used by the shareholders as Pires Investments Plc is an investment company in the early stages of its development and therefore the
key performance indicators are principally comprised of growth in net asset value and share price appreciation.
We set performance materiality at 75% (2020: 75%) of overall financial statements materiality to reflect the risk associated with the
judgemental and key areas of management estimation within the financial statements. No significant changes have come to light
through the fieldwork which has caused us to revise our materiality figure.
Page | 23
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 DECEMBER 2021
We report to the directors all corrected and uncorrected misstatements we identified through our audit with a value in excess of
£18,000 (2020: £7,700), 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 the 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 judgements by the directors and considered
future events that are inherently uncertain. We also addressed the risk of management override of 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, considering both listed and unlisted investments.
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 the scope of our audit responded to the key audit matter
Investments
The company holds assets at fair value through the profit
and loss of £7,016,474 2020: £2,028,786 (see note 10).
Unquoted investments now account for a significant
portion of the total assets of the company. There is a risk
that investments are not valued correctly in accordance
with International Financial Standard (IFRS) 9 “Financial
Instruments” and IFRS 13 “Fair Value Measurement.” This is
a key audit matter due to the material nature of the
balance, as well as being the key source of the revenue of
the company.
• Obtaining an understanding of management’s processes for
determining the fair value of unquoted investments. This
included discussing methodology with management and
enquiring as to their oversight of the valuation process.
• Comparing period end prices of investments from external
sources to those used by management where applicable.
Our procedures included, but were not limited to the following:
• Comparing management’s valuation methodology to recognised
valuation standards and guidelines, and the appropriateness of
valuation methods used.
• Carrying out an assessment of the appropriateness of
management’s assumptions and obtaining explanations from
management where there were significant judgements applied
in determining the investment valuations.
• Ensuring that the company has full title to the investments held.
• Reviewing the adequacy of the disclosures in the financial
statements, including in respect of the valuation methodology,
assumptions and fair value hierarchy used.
The fair value of the Level 2 investments, being the
investments within a fund, in accordance with the fair
value hierarchy is based on the fund valuation which
references valuation techniques using observable inputs
other than quoted prices, and therefore involves some
management estimation and judgement. The fair value of
the unquoted investments is determined based on Level 3
of the fair value hierarchy which involves significant
management judgement. The risk of material error in
valuations is greater for those investments which do not
have readily available quoted prices.
Page | 24
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 DECEMBER 2021
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other information. 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.
Responsibilities of directors
As explained more fully in the Statement of Directors’ Responsibilities, 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.
Page | 25
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 DECEMBER 2021
Irregularities, including fraud, are instances of noncompliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below:
• We obtained an understanding of the company and the sector in which they operate to identify laws and regulations that
could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard
through discussions with management, industry research and application of cumulative audit knowledge and experience of
the sector.
• We determined the principal laws and regulations relevant to the company in this regard to be those arising from: AIM Rules,
Companies Act and employment laws.
• We designed our audit procedures to ensure the audit team considered whether there were any indications of noncompliance
by the company with those laws and regulations. These procedures included, but were not limited to:
o Enquiries of management
o Review of board minutes
o Review of RNS announcements
• We identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to the
nonrebuttable presumption of a risk of fraud arising from management override of controls, that the potential for
management identified in relation to the valuation of unlisted investments and as noted above, we addressed this by
challenging the assumptions and judgements made by management when auditing that significant accounting estimate.
• As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit
procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence of
bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of
business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a
material misstatement in the financial statements or noncompliance with regulation. This risk increases the more that compliance
with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to
become aware of instances of noncompliance. The risk is also greater regarding irregularities occurring due to fraud rather than
error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to
them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone, other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions
we have formed.
Timothy Herbert (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
London, United Kingdom
14 June 2022
Page | 26
PIRES INVESTMENTS PLC
Statement of Comprehensive Income
FOR THE PERIOD ENDED 31 DECEMBER 2021
14 month
Year Ended period ended
December 31 December
2021 2020
Notes £000’s £000’s
CONTINUING ACTIVITIES
Income
Other Income 5 ‐ 1
Total income ‐ 1
Gain/(loss) on investments held at fair value through profit or loss 10 2,081 (149)
Operating expenses (590) (539)
Operating profit/(loss) from continuing activities 1,491 (687)
Profit/(loss) before taxation from continuing activities 1,491 (687)
Taxation 7 ‐
Profit/(loss) for the year from continuing activities 1,491 (687)
Other Comprehensive Income ‐
Total Comprehensive Income attributable to equity holders of the Company 1,491 (687)
Basic profit/(loss) per share
Equity holders
Basic 8 1.00p (0.64p)
Fully diluted 0.8p (0.64p)
The accounting policies and notes are an integral part of these financial statements.
Page | 27
PIRES INVESTMENTS PLC
Statement of Changes in Equity
FOR THE PERIOD ENDED 31 DECEMBER 2021
Capital
Share Share Redemption Retained
Capital Premium Reserve Earnings Total
£000’s £000’s £000’s £000’s £000’s
Balance at 1 November 2019 11,996 4,249 165 (13,845) 2,565
Profit and total comprehensive
profit for the period (687) (687)
Issue of shares (net of costs) 139 909 1,048
As at 31 December 2020 12,135 5,158 165 (14,533) 2,926
Profit and total comprehensive profit for the period 1,491 1,491
Issue of shares (net of costs) 90 2,716 2,806
Cancellation of deferred shares (11,830) 11,830
As at 31 December 2021 396 7,874 11,995 (13,042) 7,223
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
Page | 28
(Incorporated in England and Wales with registered number 02929801)
Statement of Financial Position
AT 31 DECEMBER 2021
Current assets
Investments
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity
Issued share capital
Share premium
Retained earnings
Capital redemption reserve
Total equity
Liabilities
Current liabilities
Trade and other payables
Total liabilities and current liabilities
Total equity and liabilities
PIRES INVESTMENTS PLC
31 December 31 December
2020
£000’s
2021
£000’s
Notes
10
14
7,016
8
374
7,398
7,398
15
15
15
396
7,874
(13,042)
11,995
7,223
175
175
16
2,029
15
1,019
3,063
3,063
12,135
5,158
(14,532)
165
2,926
137
137
7,398
3,063
These financial statements were approved and authorised for issue by the Board of Directors on 14 June 2022 and were signed on
its behalf by:
Nicholas Lee
Director
John May
Director
The accounting policies and notes are an integral part of these financial statements.
Page | 29
PIRES INVESTMENTS PLC
Statement of Cash Flows
FOR THE PERIOD ENDED 31 DECEMBER 2021
2021 2020
£000’s £000’s
Cash flows from operating activities
Profit/(loss) 1,491 (687)
Realised (gain) on disposal of investments (61) (128)
Fair value movements in investments (2,020) 277
Finance income ‐ (1)
Decrease/(increase) in receivables 7 (4)
Increase in payables 38 98
Net cash used in operating activities (545) (445)
Cash flows from investing activities
Payments to acquire investments (1,066) (2,217)
Proceeds of disposal of investments 111 1,205
Finance income received net ‐ 1
Net cash (used)in investing activities (955) (1,011)
Cash flows from financing activities
Net proceeds from share issues 855 1,048
Net cash from financing activities 855 1,048
Net (decrease) in cash and cash equivalents during the period (645) (408)
Cash and cash equivalents at beginning of period 1,019 1,427
Cash and cash equivalents at end of period 374 1,019
The accounting polices and notes are integral to these financial statements.
Page | 30
PIRES INVESTMENTS PLC
Notes to the Financial Statements
FOR THE PERIOD ENDED 31 DECEMBER 2021
1. ACCOUNTING POLICIES
General Information
Pires Investments plc (“the Company”) was throughout the period an investing Company with an investing policy adopted on 16
April 2012 and revised on 3 October 2019.
The Company changed its accounting period end to 31 December in 2020 and therefore the comparable period within these
Financial Statements cover a 14 month period to 31 December 2020.
The Company is a limited liability company incorporated and domiciled in England.
The address of the registered office is 9th Floor, 107 Cheapside, London, EC2V 6DN.
These financial statements are prepared in round £000’s, 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 applicable law and UK adopted international accounting
standards in conformity with the requirements of the Companies Act 2006. The financial statements have also been prepared
under the historical cost convention.
The preparation of financial statements in conformity with applicable law 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.
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.
Statement of compliance
(a) New standards, amendments and interpretations adopted by the Company
No new standards were adopted during the year.
(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 January 2020 and not yet early adopted.
Page | 31
PIRES INVESTMENTS PLC
Notes to the Financial Statements (continued)
FOR THE PERIOD ENDED 31 DECEMBER 2021
1. ACCOUNTING POLICIES (continued)
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. 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 2023
IAS 1
Amendments – Presentation of Financial Statements and IFRS Practice
Statement 2: Disclosure of Accounting Policies.
IAS 8
IFRS 16
IAS 12
IFRS 17
Amendments – Accounting policies, Changes in Accounting Estimates and
Errors Definition of Accounting Estimates
Amendments Leases – COVID19 Related Rent Concessions beyond
30 June 2021
Amendments – Income Taxes – Deferred Tax related to Assets and
Liabilities arising from a Single Transaction
Amendments – Insurance contracts: Initial Application of IFRS 17 and IFRS 9
– Competitive Information
The Company has not early adopted any of the above standards.
1 January 2023
1 April 2021
1 January 2023
1 January 2023
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 salesrelated 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.
Page | 32
PIRES INVESTMENTS PLC
1. ACCOUNTING POLICIES (continued)
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 shortterm,
highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk
of changes in value.
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 nonderivative 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 noncurrent assets. The Company’s loans and receivables comprise ‘ other receivables and prepayments’
and ‘cash and cash equivalents’ in the Statement of Financial Position.
Recognition and measurement
(b)
Regular purchases and sales of financial assets are recognised on the tradedate, 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.
Impairment of financial assets
(c)
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.
Page | 33
PIRES INVESTMENTS PLC
Notes to the Financial Statements (continued)
FOR THE PERIOD ENDED 31 DECEMBER 2021
1. ACCOUNTING POLICIES (continued)
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.
The Capital Redemption Reserve includes the nominal value of the Deferred Shares cancelled in 2021.
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 of investments cannot be readily established, the Company is required to make
judgements over carrying value impairment, and evaluate the size of any impairment required.
Any estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period.
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. AUDITORS REMUNERATION
During the period the Company obtained the following services from the Company’s auditor (in respect of continuing and
discontinuing activities):
2021 2020
£000’s £000’s
Fees payable to auditors for the audit of the Company’s financial statements 21 19
Fees payable to the Company’s auditor and its associates for other services:
Other services relating to taxation ‐ 3
All other services ‐
21 22
Page | 34
PIRES INVESTMENTS PLC
5. OTHER INCOME
The Company’s other income was:
2021 2020
£000’s £000’s
Interest receivable ‐ 1
‐ 1
6. REMUNERATION
The Company’s employee emoluments expense was:
2021 2020
£000’s £000’s
Emoluments 215 194
215 194
The average monthly number of persons employed by the Company, including Directors, during the period was as follows:
2021 2020
No No
4 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.
7. TAX EXPENSE
Both current and deferred tax are nil in the period and therefore there is nil tax recoverable/payable.
2021 2020
£000’s £000’s
Factors affecting the tax charge for the period
Profit/(loss) on ordinary activities before taxation 1,491 (687)
Profit (loss) on ordinary activities before taxation multiplied by the standard rate of
UK corporation tax of 19.0% (2020: 19.0%) 283 (131)
Effects of:
Expenses not deductible for tax purposes net of income not subject to corporation tax 1 1
Income not taxable for tax purposes (395)
Chargeable gains/(losses) 3
Remeasurement in deferred tax for changes in tax rates (484) (140)
Movement in deferred tax not recognised 592 268
Tax charge ‐
The Company has tax losses available to carry forward against relevant future taxable income and profits of approximately £6.4
million (2020: £6.4 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 period (2020: nil) and the tax charge for the period was nil (2020: nil).
Page | 35
PIRES INVESTMENTS PLC
Notes to the Financial Statements (continued)
FOR THE PERIOD ENDED 31 DECEMBER 2021
8. EARNINGS PER SHARE
2021 2020
£000’s £000’s
Profit/(loss) attributable to the owners of the Company
Continuing Operations 1,491 (687)
2021 2020
No. of No. of
Shares shares
Weighted average number of shares for calculating basic profit per share 149,021,386 107,298,817
Weighted average number of shares for calculating the fully diluted profit per share 177,639,789 107,298,817
2021 2020
Pence Pence
Basic and diluted profit/(loss)per share
Continuing Operations – basic 1.00 (0.64)
– diluted 0.80 (0.64)
9. 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.
Page | 36
PIRES INVESTMENTS PLC
10. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
2021 2020
£000’s £000’s
Investments at fair value brought forward 2,029 1,165
Purchase of investments 3,016 2,217
Investment disposals (49) (1,076)
Movement in investment holding 2,020 (277)
Balance 7,016 2,029
Categorised as
Level 1 – quoted prices 1,482 103
Level 2 – SVV (based on fund valuation) 2,699 1,507
Level 3 – Unquoted investments 2,835 419
7,016 2,029
Gains/(losses) on investments held at fair value through profit or loss
Movement in investment holding gains / (losses) 2,020 (277)
Realised gain on disposal of investments 61 129
Net profit/(loss) on investments held at fair value through profit or loss 2,081 (149)
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, however, in 2021 includes
Sure Ventures plc which is a listed specialist fund.
Unquoted investments (Level 2)
The value of Level 2 unquoted investments as at 31 December was £2,699,000 (2020 – £1,507,000) and comprised the holding
in Sure Valley Ventures (“SVV”), an Irish collective assetmanagement vehicle with variable capital and limited liability which has
been authorised by the Central Bank as a Qualifying Investor Alternative Investment Fund (“QIAIF”). The fair value of the holding
in SVV is the value indicated in the capital summary provided by the SVV as at 31 December 2021 and 2020.
Unquoted investments (Level 3)
The value of the Level 3 unquoted investments as at 31 December was £2,835,000 (2020 – £419,000) and comprised holdings in
Pluto, Getvisibility, PreCog and Low6 which are unquoted public companies. All holdings are valued at cost or directors’ valuation
based on recent funding rounds involving independent third party investors or other clear metrics.
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PIRES INVESTMENTS PLC
Notes to the Financial Statements (continued)
FOR THE PERIOD ENDED 31 DECEMBER 2021
11. 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. 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 £374,000 (2020: £1,019,000) comprising cash and cash equivalents.
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.
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 investments is as follows:
Change in equity
2021 2020
£000’s £000’s
Increase in investments by 10% 702 203
Decrease in investments by 10% (702) (203)
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PIRES INVESTMENTS PLC
12. FINANCIAL INSTRUMENTS
Financial assets by category:
2021 2020
£000’s £000’s
Financial assets:
Fair value through profit or loss investments 7,016 2,029
Cash and cash equivalents 374 1,019
Total 7,390 3,048
Financial liabilities by category:
2021 2020
£000’s £000’s
Trade and other payables 175 130
13. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
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.
14. TRADE AND OTHER RECEIVABLES
2021 2020
£000’s £000’s
Prepayments 8 15
Total 8 15
As described in note 11, 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.
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PIRES INVESTMENTS PLC
Notes to the Financial Statements (continued)
FOR THE PERIOD ENDED 31 DECEMBER 2021
15. ISSUED SHARE CAPITAL
Ordinary shares Deferred shares
Number of Nominal Number of Nominal Share
shares value shares value Premium
£000’s £000’s £000’s
Issued and fully paid:
At 1 November 2019 66,472,465 166 11,830 4,249
Ordinary shares of 0.25p each 53,000,000 133 927
Share issue costs (121)
As a result of warrants exercised
during the period 2,725,018 6 102
At 31 December 2020 122,197,483 305 11,830 5,158
Ordinary shares issued in the period:
Ordinary shares of 0.25p each 14,391,147 36 1,914
Share issue costs (10)
Cancellation of deferred shares (11,830)
As a result of warrants exercised
during the period 21,656,579 54 812
At 31 December 2021 158,245,209 396 ‐ 7,874
Share issues during the year:
Between 15 May and 30 June 2020, the Company placed 53,000,000 ordinary shares of 0.25p each at 2.0p per shares raising
funds of £1,060,000 before expenses.
On 12 February 2021 the Company issued 14,391,144 ordinary shares of 0.25p each at 13.55p per share to acquire 1.5 million
shares in SV PLC.
With respect to the issue of 53,000,000 ordinary shares in 2020 each placee also received one warrant for each ordinary share
acquired with an exercise price of 4.0p per share. 2,725,018 warrants were exercised prior to 31 December 2020 and a further
21,656,579 were exercised during the year ended 31 December 2021. 28,618,403 warrants over shares remain unexercised as
at 31 December 2021.
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
The Company had the right to acquire for cancellation each entire class of deferred share for an aggregate consideration of 1p
and the Company exercised it’s right to cancel following approval at the AGM held on 30 July 2021. The nominal value of the
Deferred Shares approved for cancellation has been credited to the Capital Redemption Reserve.
None of the classes of deferred shares had 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.
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PIRES INVESTMENTS PLC
15. ISSUED SHARE CAPITAL (continued)
Options and Warrants
There were no outstanding options.
Warrants over 53,000,000 ordinary shares of the Company with an exercise price of 4 pence per share were issued during the
period ended 31 December 2020, in conjunction with the share issues set out in this note. 28,618,403 are outstanding as at
31 December 2021 as detailed below.
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 period ended year ended year ended
31 December 31 December 31 December 31 December
2021 2021 2020 2020
£ £
Outstanding at beginning of period 0.04 50,274,982
Issued during the period ‐ ‐ 53,000,000
Exercised during the period 0.04 (21,656,579) (2,725,018)
Exercisable at end of period 0.04 28,618,403 50,274,982
16. TRADE AND OTHER PAYABLES
2021 2020
£000’s £000’s
Trade payables 65 7
Accruals and deferred income 107 126
Taxation and social security 3 4
175 137
The directors consider the carrying amounts of trade payables to be a reasonable approximation of their fair value.
At 31 December 2021 and 31 December 2020, the Company had no material contingent liabilities.
17. 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.
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, 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 Immersive Technologies, artificial intelligence (“AI”) and the
internet of things (“IoT”). Sure Valley Ventures has a portfolio of 14 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. As at 31 December2021
the Company’s remaining commitment was circa €890,000.
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PIRES INVESTMENTS PLC
Notes to the Financial Statements (continued)
FOR THE PERIOD ENDED 31 DECEMBER 2021
18. 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:
2021 2020
£ £
Fees for consultancy services supplied by Catalyst Corporate Consultants Limited,
a company beneficially controlled by Peter Redmond and of which he is a director ‐ 4,500
Fees for consultancy services supplied by City and Westminster Corporate Finance LLP,
an LLP controlled by John May as Managing Partner. ‐ 22,500
Fees for consultancy services supplied by Origen Capital Limited, a company of which
David Palumbo is a director 32,500
Share placing
Between April – June 2020 the Company carried out share placings of which Riverfort Global Opportunities plc, a company in
which Nicholas Lee is Investment Director, participated acquiring 10,364,200 new shares. The same number of warrants over
shares were also acquired. 5,550,000 of these warrants were exercised during 2021 and 4,814,200 remain exercisable at the end
of the period.
19. POST BALANCE SHEET EVENTS
In March 2022, the Company agreed to invest in a second SVV fund, the New SVV Fund, alongside the British Business Bank who
is investing up to £50 million. This fund has already made its first investment in RETìni ́ZE Limited (“RETìni ́ZE”), a technology
company based in Belfast, Northern Ireland which is developing an innovative software product called Animotive that is harnessing
the latest VR technologies to transform the 3D animation production process.
Getvisibility, which the Company holds directly, and through SVV and its holding in SV plc completed a €10 million fund raise in
March 2022, generating a significant uplift in the value of Getvisibility and therefore the Company’s investment portfolio both
from its direct shareholding and indirect interests from its holdings in SVV and SV plc.
Since 1 January 2022, the holders of 3,149,982 warrants over ordinary shares in the Company have exercised their warrants at
4 pence per share for a total consideration of £126,000. Unexercised warrants currently total 25,468,421 and the total number
of ordinary shares of the Company in issue is 161,395,191.
On 1 June 2022, Tern plc (“Tern”) announced a recommended share offer for the issued and to be issued share capital of the
Company on the basis of 0.51613 Tern shares for each share in the Company. This valued each share in the Company at 8 pence
based on the closing price of Tern shares on 31 May 2022 and represented a premium of 53.8% to the closing price of the
Company’s shares on 31 May 2022.
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PIRES INVESTMENTS PLC
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
Contents
Page
Company Information 1
Review of Activities 2
Strategic Report 9
Directors’ Report 12
Report on Remuneration 14
Statement of Directors’ Responsibilities 15
Corporate Governance Report 16
Report of the Independent Auditor 23
Statement of Comprehensive Income 27
Statement of Changes in Equity 28
Statement of Financial Position 29
Statement of Cash Flows 30
Notes to the Financial Statements 31
Pires Investments plc
(Incorporated in England and Wales with registered number 02929801)
Annual Report and
Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2021
Perivan 263446