Pires Investments plc
(Incorporated in England and Wales with registered number 02929801)
Annual Report and
Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Contents
Page
Company Information 1
Review of Activities 2
Strategic Report 8
Directors Report 11
Report on Remuneration 13
Statements of Directors’ Responsibilities 14
Corporate Governance Report 15
Independent auditor’s report to the members of Pires Investment plc 22
Statement of Comprehensive Income 26
Statement of Changes in Equity 27
Statement of Financial Position 28
Statement of Cash flows 29
Notes to the Financial Statements 30
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
PIRES INVESTMENTS PLC
Page | 1
Company Information
Directors Nicholas Lee (Director)
John May (Director)
David Palumbo (Director)
Secretary Robert Porter
Registered office 9th Floor, 107 Cheapside
London
EC2V 6DN
Independent Auditors PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
London E14 4HD
Nominated adviser Cairn Financial Advisers LLP
9th Floor, 107 Cheapside
London
EC2V 6DN
Broker Peterhouse Capital Limited
3rd Floor
80 Cheapside
London
EC2V 6DZ
Registrars Computershare Investor Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
Company Registration number 02929801
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
PIRES INVESTMENTS PLC
Highlights
Financial highlights
• Net asset value (“NAV”) of £7,822,000 as at the year‐end (31 December 2021: £7,223,000), an increase of 8.3% compared to
the prior year figure
• NAV per share of 4.28 pence per share (2021: 4.56 pence) a decrease of 6.0% compared to the previous year
• Loss of £0.37 million for the year (year ended 31 December 2021: profit before taxation of £1.49 million)
• Placing to raise £500,000 before expenses in August 2022
• Two‐year debt funding facility amounting to £1.235 million announced on 22 December 2022
• The Pires share price is currently at a 57% discount to its NAV per share of 4.28 pence
Portfolio highlights
• Getvisibility – raised €10 million from two new venture capital investors at a significantly increased valuation
• Investment in a second Sure Valley Ventures (“SVV2”) fund, alongside the British Business Bank (“BBB”), an investment arm
of the UK Government SVV managed funds made new investments in Everyangle, Jaid and Retinize
• Portfolio companies continue to attract international investors such as Alpha Intelligence Capital, Fortino Capital Partners, Act
Venture Capital and Furthr VC.
• Smarttech247 successfully achieved a listing on AIM, at a significantly higher valuation compared to the original investment
cost.
• Sure Valley Ventures Fund (“SVV1”) enters realisation phase of its investment cycle
Review of activities
Pires Investments plc is an investment company focused on next generation technology with a focus on AI. Pires invests in its portfolio
companies directly, or indirectly through (i) its investment in two funds managed by SVV and (ii) its investment in Sure Ventures plc.
2022 was a testing year for small‐cap listed companies and for those companies with a technology focus. However, a significant uplift
in value was achieved both from the Company’s investment in Getvisibility, and Smarttech247 achieved a listing on AIM,
notwithstanding difficult market conditions. More generally, the Company has taken a prudent view on the value of its investment
portfolio and adjusted the value of certain of its investments downwards to reflect the current weak economic background.
Consequently, the net effect of these non‐cash adjustments has, unfortunately, led to an overall loss for the year.
The Company’s principal investment portfolio categories are summarised below:
Cost or Cost or
valuation at valuation at
31 December 31 December
2022 2021
£000’s £000’s
Categories
SVV funds 5,219 4,146
Direct investments 2,901 2,835
Cash/other listed securities 856 409
Total 8,976 7,390
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Review of Activities
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
PIRES INVESTMENTS PLC
A.
Investments in SVV funds
1.
Sure Valley Ventures Fund (“SVV1”)
SVV1 is SVV’s first fund which has completed its new investment phase and has now entered its realisation phase. It has already
achieved three realisations/liquidity events to date, including the recent listing of Smarttech247, with more expected in the
short term.
Within the SVV1 portfolio, highlights during 2022 include:
• Getvisibility raised €10 million from new investors including Alpha Intelligence Capital, a global venture capital firm which
invests in deep artificial intelligence/machine learning technology based companies and Fortino Capital Partners, a leading
B2B software venture capital and growth equity firm.
• Admix, the leading In‐Play monetisation company that bridges the gap between gaming content and brands, merged with
LandVault Inc (“LandVault”) (https://landvault.io/), a builder of virtual experiences in metaverse worlds aimed at attracting
people into blockchain and metaverse ecosystems, in order to enter into the Web3 space.
• A new investment was made in Everyangle. Everyangle is a Dublin‐based computer‐vision company that helps physical retailers,
hospitality venues and convenience service stations optimise operations. Everyangle raised €2.7 million in a seed fundraise in
October 2022. This fundraise marked the final new company investment within SVV1, and the funds will be used to accelerate
sales, invest in ongoing product development, and drive further expansion in the US and UK. The funding round was led by
SVV, Act Venture Capital and Furthr VC (formerly DBIC Ventures), with participation from Enterprise Ireland.
• Smarttech247 Group plc (“Smarttech247”) (AIM: S247) is an established global artificial intelligence‐based cybersecurity
business, specialising in automated managed detection and response. It has a successful track record of revenue growth and
profitability and is positioned at the intersection of three major cyber security growth markets: security threat incidents,
growth of cloud adoption and proliferation of cyber security data generation that needs to be integrated.
On 15 December 2022, the company’s shares were admitted to trading on the London Stock Exchange’s AIM market raising
gross proceeds of £3.7 million through a placing at a price of 29.66 pence per new ordinary share. Smarttech247’s share price
as at 19 June 2023 was 34.5 pence per share, representing an increase of approximately 16% since listing and a significant
uplift compared to the level at which the investment was initially made. The recent full year and interim results of
Smarttech247 support the company’s growth trajectory.
As at the year end, SVV1 had a portfolio of 15 investee companies at different stages of development spanning a range of sectors.
This portfolio provides Pires with exposure to a number of key, cutting ‐edge 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) real time 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 intelligence based same day grocery delivery company operating in both the UK
(Buymie Technologies) and Ireland working with companies such as Tesco, Lidl, Asda and the Co‐op.
EveryAngle An artificial intelligence platform that uses machine learning to provide enterprises, such
as large retailers, with line of business solutions to reduce fraud, churn and waste using
machine vision.
Security
Nova Leah An artificial intelligence cyber‐security risk assessment and protection platform for
(Nova Leah Limited) connected 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 start‐ups
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Review of Activities (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
PIRES INVESTMENTS PLC
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Security
PreCog An artificial intelligence security solution platform company that provides data intelligence
(Polience Limited) to combat crime, terrorism and protect vulnerable people. Customers include leading law
enforcement and security agencies, and transport infrastructure groups.
Smarttech247 An established global artificial intelligence‐based cybersecurity business, specialising in
(Smarttech247 Group plc) automated managed detection and response. The company is listed on AIM.
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.
LandVault (Formerly 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 and merged with Landvault in June.
Warducks An AR/VR game development studio which has produced leading VR games and will soon
(Warducks Limited) launch a new AR game, Edge of Earth.
VividQ A deep tech software company which has developed a framework for real‐time 3D
(VividQ Limited) holographic displays for use in heads‐up displays and AR headsets and glasses.
Volograms An artificial intelligence deep learning company that uses AI to create 3D augmented reality
(Volograms Limited) from 2D photos and videos. The company has launched a consumer AR Camera app called
Volu and has pro user and enterprise versions in development.
Virtex A company building a platform for the next ‐generation of live, immersive entertainment
(Virtex Limited) within the virtual reality gaming and e sports industries. It is actively developing its new
stadium app.
Internet of things
CameraMatics An artificial intelligence platform enabling transport fleet managers to reduce risk, increase
(MySafe Drive Limited) driver safety and comply with growing industry governance and compliance. The company
recently raised £3 million from existing investors to assist with funding growth. The company
is expanding into new geographies, with good traction being gained in the US and new clients
being won including customers such as Maritime Transport, one of the UK’s largest privately
owned transport companies.
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.
2.
Sure Valley Ventures UK Software Technology Fund (“SVV2”)
In March 2022, the Company invested in a second SVV fund, the Sure Valley Ventures UK Software Technology Fund. The principal
investor in SVV2 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 10 year life of the fund.
Pires expects to invest up to £5 million in total over the life of the fund which would provide it with a circa 5.9% interest. SVV2 will
invest in a range of private UK software companies with a focus on companies in the artificial intelligence sector and within the
subsectors of enterprise, Immersive Technologies (such as AR/VR) and cybersecurity sectors.
SVV2 is 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 SVV1 portfolio. The profit share arrangements within SVV2 are designed to encourage
the involvement of 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.
Review of Activities (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
PIRES INVESTMENTS PLC
Page | 5
During 2022, SVV2 has made two investments which are outlined below:
RetÌnÍZE Limited
RETìníZE Limited, the award‐winning creative‐tech company based in Belfast, Northern Ireland, successfully raised £2 million in a
seed round led by SVV. The company is developing an innovative software product called Animotive that is harnessing the latest VR
and Generative AI technologies to transform the 3D animation production process. The proceeds of the seed round will drive the
next two‐year plan for growth and the global rollout of Animotive.
Jaid
Jaid is a rapidly growing platform that uses AI as a Service (AIaaS) solution to help businesses reduce costs, improve efficiency and
make data‐driven decisions, including client service automation, sales automation, payment exception processing and claims
administration processing. On 14 December 2022, the company raised £3 million in seed funding to enable it to make additional
hires within the machine learning team, increase its presence within the US and Europe and to launch in the Asian market. In addition,
the company is set to expand into various other sectors, such as healthcare, after previously focusing solely on the finance industry.
Whilst further investments for this fund are being reviewed, the funding requirement is expected to be relatively limited in the
short‐term and will be met from existing cash resources and/or realisations from SVV1.
3.
Sure Ventures plc (“SV plc”)
SV plc (LSE: SURE) is a London‐listed venture capital fund which invests in early‐stage software companies in the rapidly growing
technology areas of Augmented Reality, Virtual Reality, Internet of Things and artificial intelligence. Pires has a 22.6% shareholding
in SV plc whose principal investment is a 25.9% interest in SVV1 and a commitment to SVV2. Pires therefore has an aggregate (direct
and indirect) interest in SVV1 of around 19%, which comprises its original direct 13% interest in SVV1 and an indirect interest of
5.9%, through its 22.6% shareholding in SV plc. SV plc also has direct shareholdings in VividQ and Let’s Explore Group.
B.
Direct investments
Getvisibility
Getvisibility is a cybersecurity company focusing on data visibility and control. It uses state‐of‐the‐art artificial intelligence to classify
and secure unstructured information. Its methods allow organisations to quickly visualise their data footprint where new and changing
data risks have become evident, thus allowing for proactive data management and security. Its dual approach provides flexibility to
employees to manually classify data whilst also being created with suggestions and automated checking. Getvisibility also provides
risk and compliance assessments as well as enforcing protection on sensitive data.
In March 2022, Getvisibility raised €10 million in new funds from Alpha Intelligence Capital, a global venture capital firm which invests
in deep artificial intelligence/machine learning technology based companies and Fortino Capital Partners, a leading B2B software
venture capital and growth equity firm. Based on the post‐funding round valuation, Pires’ direct stake in Getvisibility is now valued
at circa €1,500,000 or over 4 times its total investment cost to date since it made its first investment in March 2020. In addition,
Pires has a further interest in Getvisibility via its 13% interest in SVV1 and an indirect interest through its holding in Sure Ventures
plc, which together are valued at circa €1,280,000. Pires’ effective interest in Getvisibility, in aggregate, is therefore now valued at
circa €2,780,000.
The company is growing rapidly, with a significant number of new channel partners being onboarded in the last quarter of 2022,
leading to a substantial increase in its number of enterprise customers.
Low6
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 October 2022, the company restructured its capital base which included the conversion of the
outstanding convertible notes and the raising of £2.4 million in new funds. The new funding was cornerstoned by a leading Australian
wagering operator, with operations in Australia and the US, for approximately £0.5 million, with major shareholders also supporting
the transaction.
Low6 is now focused on free‐to‐play and affiliate markets in North America with the ambition to be the global leader in fan
engagement. A number of new partnerships have been established, including the appointment as the National Hockey League (“NHL”)
free to play provider for a period of 3 years, who have also invested in Low6. Trading is in line with expectations for the year to
30 June 2023, having achieved circa US$5 million in contracted revenue for the first six months, with the company focused on
achieving a breakeven EBITDA.
Review of Activities (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
PIRES INVESTMENTS PLC
Page | 6
PIRES INVESTMENTS PLC
Precog
PreCog is a security solution platform company that provides data intelligence to combat crime, terrorism and protect vulnerable
people. Its customers include leading law enforcement and security agencies, and transport infrastructure groups. The company has
continued to develop its product offering and, in particular, it has developed an “off the shelf product” which is expected to minimise
manufacturing risk. The company operates in an exciting security sector with significant potential demand for its products expected
going forward.
Emergent
Pluto Digital was a crypto technology and operations company with a focus on decentralised finance and the metaverse (blockchain
gaming and NFTs). In October 2022, Pluto Digital announced a merger with Maze Theory, a London‐based digital entertainment
studio, to create Emergent Entertainment (“Emergent”). Emergent is focused on becoming a next‐generation entertainment company,
bringing audiences and storytellers together by harnessing emerging technologies. Since then, the company has launched a VR game,
Peaky Blinders, and is making good progress on the development of its Web3 game, Resurgence. In addition to this, the company is
actively discussing the co‐development of a new game with a global games publishing group and has been in ongoing conversations
with numerous leading organisations regarding upcoming projects. The management team is also working on reducing the company’s
cost base and has revised its 2023 revenue forecasts upwards.
Other
In June 2022, Pires was the subject of a share for share offer from Tern plc, on terms that equated to 8 pence per Pires share,
representing a 53.6% premium to the Pires share price prior to announcement, based on the respective companies share prices just
prior to announcement. Whilst this offer was accepted by the majority of the Pires shareholders, the requisite percentage to effect
a scheme of arrangement was not achieved and so the offer lapsed.
Financial
For the year under review, the Company reported a loss before taxation of £0.37 million (for the year ended 31 December 2021:
profit of £1,491,000). 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 its unlisted investments.
Net asset value as at the end of the year amounted to £7,822,000 (31 December 2021: £7,223,000). 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 achieved within the SVV portfolio
result in cash distributions to the Company and are not retained within the fund.
Administration costs for the period were significantly higher than the previous period as they include the costs associated with the
offer by Tern plc for Pires that did not ultimately proceed.
Since 1 January 2022, the holders of 12,211,433 warrants over ordinary shares in the Company have exercised their warrants at
4 pence per share for a total consideration of £488,000. Unexercised warrants currently comprise 6,250,000 in relation to the August
2022 placing and 47,839,284 in relation to the loan facility put in place in December 2022. These outstanding warrants expire in
August 2023 and December 2025 respectively.
On 1 August 2022, the Company placed shares at a price of 4 pence per share, raising gross proceeds of £500,000, The shares were
placed at a 4 per cent. premium to the closing mid‐price of the ordinary shares on 29 July 2022. Placees also received one warrant
for every two ordinary shares subscribed for, exercisable at 8 pence from the date of admission and expiring on the one‐year
anniversary of the date of Admission. In aggregate, 6,250,000 placing warrants were issued.
On 22 December 2022, the Company entered into a two‐year £1.235 million unsecured loan facility accruing interest at 7.5% per
annum with a bullet repayment of principal and interest at the end of the term. Warrants over 47,839,284 new ordinary shares were
issued to the investors which will vest if the average of the Company’s volume‐weighted average price over five consecutive trading
days exceeds 5.163 pence within the three‐year exercise period of the warrants. The warrant exercise price is 4 pence, which
represented a 60% premium to the closing mid‐market price of 2.5 pence per Pires ordinary share on 21 December 2022.
Review of Activities (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 7
PIRES INVESTMENTS PLC
Post year end
On 23 February 2023, Pires announced that it had agreed to invest in SVV’s new venture capital fund, Sure Valley Ventures III Limited
Partnership(“SVV3”), alongside Enterprise Ireland, the fund’s cornerstone investor that committed 50% or €15 million to the fund.
SVV3 plans to invest in circa 15 high‐growth AI software companies in sectors such as Enterprise, Immersive Technologies and
Cybersecurity across the Republic of Ireland.
Whilst new investments for this fund are being reviewed, the funding requirement is expected to be relatively limited in the short‐term
and will be met from existing cash resources and/or realisations from SVV1.
Outlook
Whilst 2022 has been a difficult year, the Company believes that it has managed to safely navigate its way through the period relatively
unscathed. It has also achieved some excellent results such as the valuation uplifts from Getvisibility and Smarttech247.
Our investment strategy is focused on next generation technology businesses with an emphasis on AI focused businesses. We remain
encouraged by the progress made to date by our investments and the outlook for the respective sectors in which they operate.
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, SVV1 has now completed its deployment phase and has moved
to its 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 well positioned as a leading next generation technology investment company with an exciting portfolio of
technology companies that have the potential for significant growth and the delivery of real returns for shareholders.
Nicholas Lee
Director
27 June 2023
Review of Activities (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 8
Business review and future developments
The Company is an investment company listed on AIM focused on investment in next generation technology with an emphasis on AI.
Investment portfolio
During the year ended 31 December 2022, the Company made a number of new and follow on investments both in SVV1 and SVV2.
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 2022, the Company’s investment portfolio comprised:
Investment portfolio Value (£000’s)
Investment in SVV 5,219
Direct investments 2,901
Cash and other listed securities 856
Total 8,976
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 year under review, the Company made a loss of £0.37 million (year ended 31 December 2021: profit of £1.49 million).
At the time of approving the financial statements, the Directors have a reasonable expectation that the Company has 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 12 months 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 funds, the exercise of outstanding warrants and
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.
PIRES INVESTMENTS PLC
Strategic Report
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 9
The key performance indicators are set out below:
31 December 31 December
2022 2021
£ £ Change %
Share price – pence 0.0245 0.0750 (67)%
Net asset value 7,822,000 7,223,000 8%
Net asset value – pence per share 0.0428 0.0457 (6)%
Cash and cash equivalents 856,000 409,000 52%
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.
Historically, this can clearly be demonstrated by the regular 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 SVV1, the exercise of outstanding warrants and 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, 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 third ‐party costs associated with the sourcing of suitable investments. The Company can give no
assurance as to the level of such costs,and given that there can be no guarantee that negotiations to acquire any given investment
will be successful, the greater the number of deals that do not reach completion, the greater the likely impact of such costs on the
Company’s performance, financial condition and business prospects.
Valuation error
The Company may miscalculate the fair 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
fair 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.
PIRES INVESTMENTS PLC
Strategic Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 10
Funding
If the Company identifies and wishes to pursue an investment opportunity, it may 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 non¬financial information
including:
• a review of the business at each Board meeting, focusing on any new decisions/risks arising;
• the performance of investments; and
• selection criteria of new investments; and
• reports prepared by third parties.
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; and
• Foster the Company’s relationships with suppliers, customers and others;.
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 during the year, as required, for the Company for investment purposes; and
• The making of investments, as described in the Review of Activities, that have generated returns for the Company and its
shareholders.
Nicholas Lee
Director
27 June 2023
PIRES INVESTMENTS PLC
Strategic Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 11
The Directors present their annual report to the audited Company financial statements of Pires investment plc for the year ended
31 December 2022
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 made a loss from continuing activities for the year of £366,000 (2021 profit for the year: £1,491,000). The Directors
are not recommending the payment of a dividend (2021: nil).
Principal activities and review of business
The principal activity of the Company throughout the year under review and since has been as an investment company involved in
the seeking, investigation, making of and sale of investments.
The review of the business is contained within the Review of activities on page 4.
Events after the Reporting Year
In February 2023, the Company agreed to invest in a third SVV fund, SVV3, alongside Enterprise Ireland which is investing up to
€15 million.
Directors
The following Directors have held office since 1 January 2022:
John May
Nicholas Lee
David Palumbo
Charitable and political donations
No charitable or political donations were made during the year (2021:nil).
Substantial shareholders
As at 23 June 2023, this shareholder information, for shareholders holding more than 3% of the shares in the Company, 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 38,228,393 20.89%
Christopher Akers 26,400,000 14.43%
Mark Horrocks & Family interests 5,750,000 3.14%
Nicholas Lee, a director of the Company, is also the Investment Director of RiverFort Global Opportunities plc.
PIRES INVESTMENTS PLC
Directors’ Report
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 12
PIRES INVESTMENTS PLC
The Directors beneficial interests in the share capital of the Company as at 31 December 2022 (there were no beneficial interests as
at 31 December 2021) were as follows:
Ordinary
shares % of
of 0.25p the issued
each ordinary
Number share capital
Nicholas Lee 350,000 0.19%
John May 200,000 0.11%
David Palumbo 200,000 0.11%
Auditor
PKF Littlejohn LLP has expressed its willingness to continue in office as auditor and a resolution to re¬appoint them will be proposed
at the forthcoming Annual General Meeting.
By order of the Board
Nicholas Lee
Director
27 June 2023
Directors’ Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 13
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
Salary Bonus Fees Total Total
2022 2022 2022 2022 2021
£ £ £ £ £
Peter Redmond (resigned 27 Aug 2021) ‐ ‐ ‐ ‐ 42,000
John May 36,000 ‐ ‐ 36,000 48,500
Nicholas Lee 54,000 ‐ ‐ 54,000 79,000
David Palumbo 12,000 ‐ 24,000 36,000 45,500
102,000 ‐ 24,000 126,000 215,000
As at 31 December 2022, £nil Directors fees (2021: £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.
Directors’ interests
The Directors had the following beneficial interests in the share capital of the Company as at 31 December 2022:
Ordinary % of
shares of the issued
0.25p each ordinary
Number share capital
Nicholas Lee 350,000 0.19%
John May 200,000 0.11%
David Palumbo 200,000 0.11%
John May
Director
27 June 2023
PIRES INVESTMENTS PLC
Report on Remuneration
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 14
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 (“UK IAS”). 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 year.
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 UK IAS 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 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
27 June 2023
PIRES INVESTMENTS PLC
Statement of Directors’ Responsibilities
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 15
PIRES INVESTMENTS PLC
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 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 mid¬size
quoted companies. The QCA Code takes key elements of good governance and applies them in a manner which is workable for the
different needs of growing companies.
A revised version of the QCA Code (the “Revised Code”) was published in April 2018, based on the ‘comply or explain’ principle.
The QCA Code is constructed around ten broad principles (accompanied by an explanation of what these principles entail, under
‘application’) and a set of disclosures. The Code states what is considered to be appropriate arrangements for growing companies,
and asks companies to provide an explanation about how they are meeting the principles through the prescribed disclosures.
The table below sets out the principles and 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.
Corporate Governance Report
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 16
PIRES INVESTMENTS PLC
These disclosures were last reviewed on the 12 June 2023.
Principles: Application:
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
technology sectors. The Company will consider investments in the United Kingdom,
Ireland and mainland Europe more generally but will also consider investments in wider
geographical regions. The Company may be either an active investor and acquire control
of a single company or it may acquire non controlling shareholdings. Once a target has
been identified, additional funds may need to be raised by the Company to complete a
transaction.
The proposed investments to be made by the Company may be in either quoted or
unquoted securities made by direct acquisition and may be in companies, partnerships or
joint ventures; or direct interests in projects and can be at any stage of development. The
Company’s equity interest in a proposed investment may range from a minority position
to 100 per cent. ownership.
The Company will identify and assess potential investment targets and where it believes
further specialist investigation is required, it intends to appoint appropriately qualified
advisers to assist.
The Company proposes to carry out a comprehensive and thorough project review
process in which all material aspects of any potential investment will be subject to
rigorous due diligences, as appropriate. It is likely that the Company’s financial resources
will be invested in a small number of projects or investments or potentially in an
investment which may be deemed to be a reverse takeover under the AIM Rules. Where
this is the case, it is intended to mitigate risk by undertaking an appropriate due diligence
process. Any transaction constituting a reverse takeover under the AIM Rules will require
shareholder approval. The possibility of building a broader portfolio of investment assets
will also be considered.
The Company intends to deliver shareholder returns principally through capital growth
rather than capital distribution via dividends. Given the nature of the Company’s Investing
Policy, the Company does not intend to make regular 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.
The Board is committed to maintaining good communication and having constructive
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.
1. Establish a strategy and
business model which
promote long‐term value for
shareholders
2. Seek to understand and meet
shareholder needs and
expectations
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 17
PIRES INVESTMENTS PLC
The Board recognises that the long‐term success of the Group is reliant upon the efforts
of its directors. The Company does not currently have any other employees, and it is also
reliant 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.
In addition to its other roles and responsibilities the Audit Committee (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:
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.
3. Take into account wider
stakeholder and social
responsibilities and their
implications for long ¬term
success
4. Embed effective risk
management, considering
both opportunities and
threats, throughout the
organisation
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
Loss of key operational
and financial data
Effective
communications with
shareholders.
Secure off‐site storage
of data
Financial
Liquidity, market and
credit risk.
Inability to continue as
going concern.
Robust financial
controls and
procedures in place.
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 18
The annual review of internal control and financial reporting procedures did not highlight
any issues warranting the introduction of an internal audit function. It was concluded,
given the current size and transparency of the operations of the Company, that an internal
audit function was not required.
As noted in the Strategic Report in the Annual Report, the Board regularly reviews
operating and strategic risks and considers in such reviews financial and non¬financial
information including:
•
a review of the business at each Board meeting, focusing on any new decisions/risks
arising;
•
the performance of investments;
•
selection criteria of new investments; and
•
reports prepared by third parties.
The Board comprises, Nicholas Lee, who has key responsibility for the day‐to‐day
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 re‐election intervals as prescribed in the Company’s Articles of
Association.
At each Annual General Meeting one‐third of the Directors, who are subject to retirement
by rotation shall retire from office. They can then offer themselves for re‐election. The
letters of appointment of all directors are available for inspection at the Company’s
registered office during normal business hours.
The Directors are responsible for keeping adequate accounting records that are sufficient
to show and explain the Company’s transactions and disclose with reasonable accuracy at
any time the financial position of the Company and enable them to ensure that the
financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Board meets as regularly as necessary given its AIM status. It has established an Audit
Committee and a Remuneration Committee, particulars of which appear hereafter. The
Board agreed that appointments to the Board are made by the Board as a whole and so
has not created a Nominations Committee.
Board Meetings
The Board retains full control of the Company with day‐to day operational control
delegated to 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 2022 there have been 14 board meetings and the Audit and Remuneration
Committee has met on 2 occasions respectively.
5. Maintain the board as a well‐
functioning balanced team led
by the chair
PIRES INVESTMENTS PLC
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 19
Attendance of the board meeting is set out below:
David Palumbo 10/14
John May 14/14
Nicholas Lee 14/14
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, is not considered to be independent as he is a director of Riverfort Global
Opportunities plc that has a Substantial Shareholding (20.89%) in Pires.
John May and David Palumbo are currently the Company’s independent non executive
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 non executive director of AIM listed Petrolatina Energy plc
until March 2012. He is the executive chairman of Red Leopard Holdings plc and was non
executive chairman of Hayward Tyler Group Plc until August 2017 which were both listed
on AIM.
Nicholas Lee – Director
Nicholas has more than 30 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 AIM listed EQTEC plc (“EQTEC”), a leading
gasification technology solutions company for sustainable waste‐to‐ energy 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 £19 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 co‐founded 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.
6. Ensure that between them
the directors have the
necessary up‐to‐date
experience, skills and
capabilities
PIRES INVESTMENTS PLC
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 20
PIRES INVESTMENTS PLC
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 long¬ term strategic focus and investments. The QCA Code recommends that
this role should be undertaken as a non‐ executive role.
As the Company develops and grows, it is committed to strengthen and reorganise the
Board with the appointment of further experienced directors in order to maintain
appropriate balance.
Corporate Culture:
The Board recognises that their decisions regarding strategy and risk will impact the
corporate culture of the Company as a whole and that this will impact the performance of
the Company.
The Board is very aware that the tone and culture set by the Board will greatly impact all
aspects of the Company as a whole. The Company does not currently have any other
employees.
Therefore, the importance of sound ethical values and behaviour is crucial to the ability of
the Company to successfully achieve its corporate objectives.
The Board places great importance on this aspect of corporate life and seeks to ensure,
through regular discussions between all directors, that this flows through all that the
Company does.
The Board assessment of the culture within the Company at the present time is one
where there is respect for all individuals, there is open dialogue within the Company and
there is a commitment to best practice operations.
The Board is able to ensure ethical behaviour and values are recognised and respected
through its due diligence process when directing the investing strategies of the Company.
All investment decisions are made in furtherance of the Company’s strategy and business
model.
Maintain Appropriate Governance Structures and Processes:
The Board schedule provides for quarterly meetings and, in addition, meets ad hoc as
required. Similarly for the Audit and Remuneration Committees.
Notwithstanding the above the Board and its Committees receive appropriate and timely
information prior to each meeting; a formal agenda is produced for each meeting, and
Board and Committee papers are distributed several days before meetings take place. Any
Director may challenge Company proposals and decisions are taken democratically after
discussion.
Any Director who feels that any concern remains unresolved after discussion may ask for
that concern to be noted in the minutes of the meeting, which are then circulated to all
Directors. Any specific actions arising from such meetings are agreed by the Board or
relevant Committee and then followed up by the Company’s management.
7. Evaluate board performance
based on clear and relevant
objectives, seeking
continuous improvement
8. Promote a corporate culture
that is based on ethical values
and behaviours
9. Maintain governance
structures and processes that
are fit for purpose and
support good decision making
by the board
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 21
PIRES INVESTMENTS PLC
The company communicates with shareholders through the Annual Report and Accounts,
full year and half year announcements, the Annual General Meeting (AGM) and one‐to‐ one
meetings with large existing or potential new shareholders.
A range of corporate information (including all Company announcements and
presentations) is also available to shareholders, investors and the public on the Company’s
corporate website, www.piresinvestments.com
John May
Director
27 June 2023
10. Communicate how the
Company is governed and is
performing by maintaining a
dialogue with shareholders
and other relevant
stakeholders
Corporate Governance Report (continued)
Annual Report and Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 22
Opinion
We have audited the financial statements of Pires Investments Plc (the ‘company’) for the year ended 31 December 2022 which
comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the
Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable law and UK‐adopted international accounting standards.
In our opinion, the financial statements:
• give a true and fair view of the state of the company’s affairs as at 31 December 2022 and of its loss for the year then ended;
• have been properly prepared in accordance with UK‐adopted international accounting standards; 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 from the date of signing to the end of June 2024. We assessed
the assumptions within the forecast with regards to income generation, capital funding and cash flows.
• Carrying out 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.
• Performing a stress test and reviewing the mathematical accuracy of the forecast model.
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 £391,000 (2021: £360,000).
This has been calculated at 5% of the benchmark of Net Assets (2021: 5% of the benchmark of 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 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% (2021: 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.
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 2022
Page | 23
We report to the directors all corrected and uncorrected misstatements we identified through our audit with a value in excess of
£19,550 (2021: £18,000), in addition to other audit misstatements below that threshold that we believe warranted reporting on
qualitative grounds.
Our approach to the 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 our scope addressed this matter
Investments (note 9)
The Company holds assets at fair value through the profit
and loss of £8,129,292 (2021: £7,016,474) (see note 9).
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 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
Performance indicator for the company.
The fair value of the Level 2 investments 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.
Our procedures included, but were not limited to the following:
•
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 year end prices of investments from external
sources to those used by management where applicable
•
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.
•
Carrying out an assessment of the appropriateness of
assumptions used by the fund where significant judgements
were 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.
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 2022
Page | 24
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the
financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of
the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, 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 directors’ responsibilities statement, 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.
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 2022
Page | 25
Irregularities, including fraud, are instances of non‐compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below:
• We obtained an understanding of the company and the sector in which it operates 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: the AIM
Rules, Companies Act 2006, UK tax legislation and UK employment laws.
• We designed our audit procedures to ensure the audit team considered whether there were any indications of non‐compliance
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 also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to
the non‐rebuttable presumption of a risk of fraud arising from management override of controls, that there is the potential
for management biased 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 non‐compliance with regulation. This risk increases the more that compliance
with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to
become aware of instances of non‐compliance. The risk is also greater regarding irregularities occurring due to fraud 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
27 June 2023
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 2022
Page | 26
PIRES INVESTMENTS PLC
Year Ended Year ended
31 December 31 December
2022 2021
Notes £000’s £000’s
CONTINUING ACTIVITIES
Income
Other Income ‐ ‐
Total income ‐ ‐
Gain on investments held at fair value through profit or loss 9 420 2,081
Operating expenses (786) (590)
Operating (loss)/profit from continuing activities (366) 1,491
(Loss)/profit before taxation from continuing activities (366) 1,491
Taxation 6 ‐ ‐
(Loss)/profit for the year from continuing activities (366) 1,491
Other Comprehensive Income ‐ ‐
Total Comprehensive Income attributable to equity holders of the Company (366) 1,491
Basic (loss)/profit per share
Equity holders
Basic 7 (0.20p) 1.00p
Fully diluted (0.20p) 0.8p
The accounting policies and notes are an integral part of these financial statements.
Statement of Comprehensive Income
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 27
PIRES INVESTMENTS PLC
Statement of Changes in Equity
FOR THE YEAR END 31 DECEMBER 2022
Capital
Share Share Redemption Retained
Capital Premium Reserve Earnings Total
£000’s £000’s £000’s £000’s £000’s
Balance at 1 January 2021 12,135 5,158 165 (14,533) 2,926
Profit and total comprehensive
profit for the year ‐ ‐ ‐ 1,491 1,491
Issues 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
Loss and total comprehensive loss for the year ‐ ‐ ‐ (366) (366)
Issue of shares (net of costs) 61 904 ‐ ‐ 965
As at 31 December 2022 457 8,778 11,995 (13,408) 7,822
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
PIRES INVESTMENTS PLC
31 December 31 December
2022 2021
Notes £000’s £000’s
Current assets
Investments 9 8,129 7,016
Trade and other receivables 13 373 8
Cash and cash equivalents 847 374
Total current assets 9,349 7,398
Total assets 9,349 7,398
Equity
Issued share capital 14 457 396
Share premium 14 8,778 7,874
Retained earnings (13,408) (13,042)
Capital redemption reserve 14 11,995 11,995
Total equity 7,822 7,223
Non‐current liabilities
Loan Notes 16 1,235 ‐
Current liabilities
Trade and other payables 15 292 175
Total liabilities 1,527 175
Total equity and liabilities 9,349 7,398
These financial statements were approved and authorised for issue by the Board of Directors on 27 June 2023 and were signed on
its behalf by:
Nicholas Lee
John May
Director
Director
The accounting policies and notes are an integral part of these financial statements.
(Incorporated in England and Wales with registered number 02929801)
Statement of Financial Position
AT 31 DECEMBER 2022
Page | 29
PIRES INVESTMENTS PLC
2022 2021
£000’s £000’s
Cash flows from operating activities
(Loss)/Profit (366) 1,491
Realised (gain) on disposal of investments (14) (61)
Fair value movements in investments (406) (2,020)
(Increase)/decrease in receivables (365) 7
Increase in payables 117 38
Net cash used in operating activities (1,034) (545)
Cash flows from investing activities
Payments to acquire investments (760) (1,066)
Proceeds of disposal of investments 66 111
Net cash (used) in investing activities (694) (955)
Cash flows from financing activities
Net proceeds from share issues 966 855
Issue of Loan Notes 1,235 ‐
Net cash from financing activities 2,201 855
Net Increase/(decrease) in cash and cash equivalents during the year 473 (645)
Cash and cash equivalents at beginning of year 374 1,019
Cash and cash equivalents at end of year 847 374
The accounting polices and notes are integral to these financial statements.
Statement of Cash Flows
FOR THE YEAR ENDED 31 DECEMBER 2022
Page | 30
ACCOUNTING POLICIES
General Information
Pires Investments plc (“the Company”) was throughout the year an investing Company with an investing policy adopted on 16 April
2012 and revised on 3 October 2019.
The Company is a limited liability company incorporated and domiciled in England.
The address of the registered office is 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 years 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.
During the year under review, the Company made a loss of £0.37 million (year ended 31 December 2021: profit of £1.49 million).
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.
In reaching this conclusion, the Directors have considered the financial position of the Group, together with its forecasts and
projections for the 12 month year 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 funds, the exercise of outstanding
warrants and upcoming liquidity events for a number of its other investments, as well as access to debt and equity capital markets.
Statement of compliance
(a) New standards, amendments and interpretations adopted by the Company
No new standards were adopted during the year.
Notes to the Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2022
PIRES INVESTMENTS PLC
Page | 31
ACCOUNTING POLICIES (continued)
(b) New and amended standards and interpretations issued but not yet effective or not yet endorsed for the financial year
At the date of authorisation of these financial statements, the Company has not applied the following new and revised IFRSs that
have been issued but are not yet effective. The Company intends to the adopt these standards, if applicable, when they become
effective.
Effective date for annual periods
Standard Description beginning on or after
The Company has not early adopted any of the above standards.
Revenue recognition
Revenue is measured at the fair value of consideration received or receivable and represents amounts receivable for goods or
services provided in the normal course of business, net of discounts, VAT and other sales related taxes, and provisions for returns.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that
asset’s net carrying amount. Dividend income is recognised at the time any market share price is adjusted to exclude the right to
receive such dividend or, if there is no such adjustment, when received.
Income tax
Income tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively. Current income tax is calculated on the results shown in the Financial Statements and according
to local tax rules, using tax rates enacted or substantially enacted by the Statement of Financial Position date.
Deferred taxation
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using
the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the
initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities
in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the year 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 (was primary detectable need to redemption)
liabilities on a net basis.
Investments in subsidiary
Investments in subsidiaries are stated in the Company’s statement of financial position at cost less any attributable impairment
losses.
IAS 1
Amendments – Presentation of Financial Statements: Non‐current
Liabilities with Covenants
Statement 2: Disclosure of Accounting Policies.
1 January 2024
IFRS 16
Amendments – Leases – Lease liability in a Sale and Leaseback
1 April 2024
PIRES INVESTMENTS PLC
Page | 32
ACCOUNTING POLICIES (continued)
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and current and deposit balances at banks, together with other short ‐term,
highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk
of changes in value.
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 9.
Loans and receivables
Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting year.
These are classified as non‐current assets. The Company’s loans and receivables comprise ‘ other receivables and prepayments’
and ‘cash and cash equivalents’ in the Statement of Financial Position.
(b)
Recognition and measurement
Regular purchases and sales of financial assets are recognised on the trade date, being the date on which the Company commits
to purchase or sell the asset. Investments are initially recognised at fair value with transaction costs expensed for all financial
assets. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are
expensed in the Income Statement. Financial assets are derecognised when the rights to receive cash flows from the investments
have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Financial
assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried
at amortised cost using the effective interest method. Gains or losses arising from changes in the fair value of the ‘financial assets
at fair value through profit or loss’ category are presented in the Statement of Comprehensive Income within Gain on investments
held at fair value through profit or loss in the year in which they arise.
(c)
Impairment of financial assets
The Company assesses at the end of each reporting year 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.
1. 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 and Loan Notes.
Trade payables are recognised initially at their fair value and subsequently measured at amortised cost less settlement payments.
Loan Notes are initially recognised at their fair value and subsequently measured at their amortised cost.
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
PIRES INVESTMENTS PLC
Page | 33
1. FINANCIAL LIABILITIES (continued)
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 year 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 year. 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.
The basis of the fair value measurement of Unquoted Investments (level 2) and Unquoted Investments (level 3) were as follows:
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.
Any estimates and underlying assumptions are reviewed on an on‐going basis. Revisions to accounting estimates are recognised
in the year.
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. AUDITOR’S REMUNERATION
During the year the Company obtained the following services from the Company’s auditor (in respect of continuing and
discontinuing activities):
2022 2021
£000’s £000’s
Fees payable to auditors for the audit of the Company’s financial statements 20 21
Fees payable to the Company’s auditor and its associates for other services:
20 21
PIRES INVESTMENTS PLC
Page | 34
5. REMUNERATION
The company’s employee emoluments expenses was:
2022 2021
£000’s £000’s
Emoluments 126 215
126 215
The average monthly number of persons employed by the Company, who are all Directors, during the year was as follows:
2022 2021
No No
3 4
Details of Directors emoluments, are given in the Report of 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.
6. TAX EXPENSES
Both current and deferred tax are nil in the year and therefore there is nil tax recoverable/payable.
2022 2021
£000’s £000’s
Factors affecting the tax charge for the year
(Loss)/profit on ordinary activities before taxation (366) 1,491
(Loss)/profit on ordinary activities before taxation multiplied by the standard rate of
UK corporation tax of 19.0% (2021: 19.0%) (70) 283
Effects of:
Expenses not deductible for tax purposes net of income not subject to corporation tax 28 1
Income not taxable for tax purposes (79) (395)
Chargeable gains 3 3
Remeasurement in deferred tax for changes in tax rates (37) (484)
Movement in deferred tax not recognised 155 592
Tax charge ‐
The Company has tax losses available to carry forward against relevant future taxable income and profits of approximately
£8.6 million (2021 £8.0 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.
No deferred tax has been recognised in the year (2021: nil) and the tax charge for the year was nil (2021: nil).
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
PIRES INVESTMENTS PLC
Page | 35
7. EARNINGS PER SHARE
2022 2021
£000’s £000’s
(Loss)/profit attributable to the owners of the Company
Continuing operations (366) 1,491
2022 2021
No. of No. of
Shares shares
Weighted average number of shares for calculating basic (loss)/profit per share 171,274,697 149,021,386
Weighted average number of shares for calculating the fully diluted (loss)/profit per share 171,274,697 177,639,789
2022 2021
Pence Pence
Basic and diluted (loss)/profit per share
Continuing Operations
– Basic (0.20) 1.00
– Diluted (0.20) 0.80
8. 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 year.
PIRES INVESTMENTS PLC
Page | 36
9. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
2022 2021
£000’s £000’s
Investments at fair value brought forward 7,016 2,029
Purchase of investments 760 3,016
Investment disposals (53) (49)
Movement in investment holding 406 2,020
Balance 8,129 7,016
Categorised as
Level 1 – quoted prices 1,578 1,482
Level 2 – SVV funds (based on fund valuation) 3,651 2,699
Level 3 – Unquoted investments 2,900 2,835
8,129 7,016
Gains/(losses) on investments held at fair value through profit or loss
Movement in investment holding gains 406 2,020
Realised gain on disposal of investments 14 61
Net profit on investments held at fair value through profit or loss 420 2,081
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 2022 and 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 2022 was £3,651,000 (2021 – £2,699,000) and comprised;
A holding of £3,528,000 in Sure Valley Ventures (“SVV”), an Irish collective asset management 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 SVV as at 31 December 2022
and 2021.
A holding of £123,000 in Sure Valley Ventures Enterprise Capital LP, an Irish collective asset management 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 2022.
Unquoted investments (Level 3)
The value of the Level 3 unquoted investments as at 31 December 2022 was £2,900,000 (2021 – £2,835,000) and comprised
holdings in Emergent (formerly Pluto Digital Assets), Getvisibility, PreCog and Low6 which are unquoted companies. All holdings
are valued at cost or directors’ valuation based on recent funding involving independent third‐party investors or other clear
metrics.
In arriving at valuations in this category of investments, the Company has taken a prudent view based on conditions existing at
the period end.
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
PIRES INVESTMENTS PLC
Page | 37
10.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 £847,000 (2021: £374,000) 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:
2022 2021
£000’s £000’s
Increase in investments by 10% 813 702
Decrease in investments by 10% (813) (702)
PIRES INVESTMENTS PLC
Page | 38
11.FINANCIAL INSTRUMENTS
Financial asset by category
2022 2021
£000’s £000’s
Financial assets:
Fair value through profit or loss
Investments 8,129 7,016
Cash and cash equivalents 847 374
Total 8,976 7,390
Financial liabilities by category
2022 2021
£000’s £000’s
At amortised cost
Trade and other payables 292 175
Loan Notes 1,235 ‐
12.INVESTMENTS IN SUBSIDARY UNDERTAKINGS
Country of Principal Percentage
Subsidiary undertaking registration activity holding
Renewable Energies (Investments) Limited UK Dormant 100%
13.TRADE AND OTHER RECEIVABLES
2022 2021
£000’s £000’s
Prepayments 7 8
Total 7 8
As described in note 10, 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.
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
PIRES INVESTMENTS PLC
Page | 39
14.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 January 2021 122,197,483 305 11,830 5,158
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 year 21,656,579 54 ‐ 812
At 31 December 2021 158,245,209 396 ‐ 7,874
Ordinary shares issued in the year:
Ordinary shares of 0.25p each 12,500,000 31 ‐ 469
As a result of warrants exercised
during the year 12,211,433 30 ‐ 458
At 31 December 2022 182,956,642 457 ‐ 8,778
Share issues during the year:
On 26 August 2022 the Company issued 12,500,000 ordinary shares of 0.25p each at 4.00p per share raising gross proceeds of
£500,000.
Placees also received one warrant for every two shares subscribed for exercisable at 8p per share and expiring on the one‐year
anniversary of the date of admission.
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 its 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 shares and then only after a £100,000 per ordinary share has been returned to each holder in ordinary shares.
PIRES INVESTMENTS PLC
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14.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
year ended 31 December 2020, in conjunction with the share issues set out in this note. These warrants expired on 30 June 2022.
A further 6,250,000 warrants with an exercise price of 8p were issued in conjunction with the share issue in August 2022 detailed
in Note 19. A further 47,389,284 warrants were issued were issued to the investors in the Loan notes issued on 22 December
2022 with an exercise price of 4p which will vest if the average of the Company’s volume weighted average price exceeds 5.163
pence within the 3 year exercise period of the warrants. Details of movements in warrants and those outstanding as at 31
December 2022 are 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 year ended year ended year ended
31 December 31 December 31 December 31 December
2022 2022 2021 2021
£ £
Outstanding at beginning of year 0.04 28,618,403 0.04 50,274,982
Exercised during the year 0.04 (12,211,433) 0.04 (21,656,579)
Expired unexercised during the year (16,406,970) ‐
New warrants issued in August 2022 0.08 6,250,000 ‐
New warrants issued in December 2022 0.04 47,389,284
Exercisable at end of year 0.08/0.04 53,639,284 0.04 28,618,403
15.TRADE AND OTHER PAYABLES
2022 2021
£000’s £000’s
Trade payables 192 65
Accruals and deferred income 97 107
Taxation and social security 3 3
292 175
The directors consider the carrying amounts of trade payables to be a reasonable approximation of their fair value. At 31 December
2022 and 31 December 2021, the Company had no material contingent liabilities.
16.LOAN NOTES
On 22 December 2022, the Company issued two‐year £1.235 million unsecured loan notes accruing interest at 7.5% per annum
with bullet repayment of principal and interest at the end of the term. At 31 December 2022 £870,000 had been received by the
Company and the committed balance of £365,000 was received by 19 January 2023.
Notes to the Financial Statements (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
PIRES INVESTMENTS PLC
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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.
On 3 March 2022, the Company entered into a commitment, to invest up to £5 million in the Sure Valley Ventures UK Software
Technology Fund (“SVV2”). SVV2 will invest in a range of private UK software companies with a focus on companies in the
Metaverse, AI and Cybersecurity sectors. The outstanding commitment at the period end is to invest up to a further £4.8 million.
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:
2022 2021
£000’s £000’s
Fees for consultancy services supplied by Origen Capital Limited, a company of which
David Palumbo is a director 24,000 32,500
Share placing and warrant exercise
In June 2022, Riverfort Global Opportunities plc, a company in which Nicholas Lee is Investment Director, exercised warrants and
acquired 4,814,200 shares.
In August 2022, the Company carried out a share placing amounting to 12,500,000 shares. Riverfort Global Opportunities plc
participated and acquired 2.5 million new shares and 1.25 million warrants over shares which remain exercisable as at 31
December 2022. In the same share placing, Nicholas Lee, John May and David Palumbo also participated acquiring
350,000,200,000 and 200,000 shares and 175,000, 100,000 and 100,000 warrants respectively were issued to them and their
warrants remain exercisable at the end of the year.
19.POST BALANCE SHEET EVENTS
On 23 February 2023, Pires announced that it had agreed to invest in SVV’s new venture capital fund, SVV3, alongside Enterprise
Ireland, the fund’s cornerstone investor that committed 50% or €15 million to the fund. SVV3 plans to invest in circa 15 high growth
AI software companies in sectors such as Enterprise, Immersive Technologies and Cybersecurity across the Republic of Ireland.
PIRES INVESTMENTS PLC
Perivan.com
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