Risk warning: The value of investments and derived income can fall. Investors may get back less than they invested.

Artomatix Escrow Monies

RNS Number : 5665H | Sure Ventures PLC | 04 August 2021

Artomatix Escrow Monies

Sure Ventures is a London listed venture capital fund which invests in early stage software companies in the rapidly growing technology areas of Augmented reality (‘AR’), Virtual reality (‘VR’), Internet of Things (‘IoT’) and Artificial Intelligence (AI). We are pleased to announce an update in relation to funds held in escrow arising from the sale of Artomatix.

Artomatix was a portfolio company of Sure Valley Ventures (ICAV) and was sold at a circa 5x valuation uplift in a 14-month investment period in December 2019. Sure Ventures PLC owns 25.93% of the fund and received 1.447m euros in December 2019 as an initial payment, but as is customary with a trade sale of this nature some cash was held in escrow until all terms of the transaction were met.

The board are pleased to announce that the final payment of 223,336.93 EUR has been paid and received. This is a welcomed cash injection and completes what was a very successful 14 month investment period.

Gareth Burchell

“The sale of Artomatix was our first cash realisation and was unexpected in such a short investment time horizon. It did highlight the pace at which technology companies can grow and we are pleased to receive the final escrow payment”

For further information, please visit www.sureventuresplc.com or contact:

Gareth Burchell Sure Ventures plc +44 (0) 20 7186 9918

Final Results – 31 March 2021

RNS Number : 0565H | Sure Ventures PLC | 30 July 2021

Annual Report and Audited Financial Statements – For the year ended 31 March 2021

Company Number: 10829500

 

Table of Contents

 

  1. Investment Objective, Policy and Performance Summary 1
  2. Chairman’s Statement……………………………………………………………….. 3
  3. Investment Manager’s Report…………………………………………………….. 7
  4. Strategic Report……………………………………………………………………… 10
    1. Business Review11
    2. Principal Risks and Uncertainties13
    3. Key Performance Indicators5
    4. Promoting the Success of the Company
  5. Directors’ Report 7
    1. Board of Directors 8
    2. Statutory Information 19
    3. Corporate Governance Statement 4
    4. Report of the Audit Committee 31
    5. Statement of Directors’ Responsibilities
    6. Directors’ Remuneration Report 5
  6. Independent Auditors’ Report…………………………………………………… 39
  7. Financial Statements 6
    1. Income Statement 7
    2. Statement of Financial Position 8
    3. Statement of Changes in Equity 9
    4. Statement of Cash Flows 0
    5. Notes to the Financial Statements
  8. Alternative Performance Measures (APMs)
  9. Glossary
  10. Shareholders’ Information
    1. Directors, Portfolio Manager and Advisers68
  11. Investment Policy

1    Investment Objective, Policy and Performance Summary

Investment Objective

The investment objective of the Company is to achieve capital growth for investors.

 

Investment Policy 

The Company’s Investment Policy can be found at page 68 of this Annual Report.

 

Performance Summary  

 31 March 2021

 31 March 2020

Number of ordinary shares in issue

5,350,725

4,869,956

Market capitalisation

– Ordinary shares (in sterling)

5,618,000

5,120,000

Net asset value (“NAV”) attributable to ordinary shareholders

– Ordinary shares

£4,925,764

£4,509,919

NAV per share attributable to ordinary shareholders

– Ordinary shares (in sterling)

92.06p

92.61p

Ordinary share price (bid price)

in sterling

105.00p

105.13p

Ordinary share price premium to NAV

in sterling

14.06%

13.52%

Investments held at fair value through profit and loss

£3,724,611

£3,078,560

Cash and cash equivalents

£1,255,199

£1,700,601

 

Dividend History 

There were no dividends paid during the period (2020 – None).

 

Listing Information 

The Company’s shares are admitted to trading on the Specialist Fund Segment (SFS) of the London Stock Exchange.

The ISIN number for the GBP shares is GB00BYWYZ460, Ticker: SURE.

 

Website  

The Company’s website address is https://www.sureventuresplc.com.

2    Chairman’s Statement

Chairman’s Statement

Dear Shareholders.

On behalf of my fellow directors, I am delighted to present the annual results of Sure Ventures plc (the ‘Company’) for the year ended 31 March 2021.

FINANCIAL PERFORMANCE

The Company’s performance for the year to 31 March 2021 was broadly in line with expectations, returning a net asset value (‘NAV’) total return per share of -0.58% (31 March 2020 +11.54%). In a year that witnessed a strong recovery in public markets from the March 2020 COVID-19 crisis sell-off, global private equity and venture capital activity dropped dramatically in the Spring and Summer of 2020, to then follow the public markets’ positive recovery into the second half of 2020. Given that the overall private market deal count remained low in most sectors last year, it is anticipated that 2021 will be a strong year of pent-up demand as capital is put to work in the private markets, and particularly in high-growth technology sectors. Against this backdrop it has been a year of consolidation for the Company in which the portfolio has seen some exciting new additions to its seasoned mix of investee companies, many of which are preparing for their next funding rounds that are anticipated to generate significant valuation uplifts into the remainder of the current financial year.

In the period to 31 March 2021 the Company’s NAV attributable to shareholders grew steadily by £425k to £4.92m with only a limited marketing activity being employed by the Investment Manager.

The Company’s share price continues to trade at a healthy premium to its last published NAV, which the Company believes supports the continued growth potential of its investments and demonstrates an understanding among shareholders of the investment rationale and investment horizon.

 

PORTFOLIO UPDATE

The Company’s holdings comprise its 25.9% investment in Sure Valley Ventures. This is a Sub-Fund of Suir Valley Fund ICAV (the ‘Fund’) to which the Company has made a total commitment of €7m (increasing its initial commitment from €4.5m in September 2019). As well as these investments the Company directly holds –  Immotion Group plc (‘Immotion’), which is a listed immersive virtual reality (‘VR”) entertainment group and VividQ Limited, a privately owned deep technology company pioneering the application of holography in augmented reality (‘AR’) and VR. The Fund portfolio includes one listed entity, VR Education Holdings plc (‘VR Education’) a developer of VR software and immersive experiences with a specific focus on education, and as at the year end, a further twelve privately held companies in the AR, VR, internet of things (‘IoT’) and artificial intelligence (‘AI’) space, having concluded its first successful portfolio company exit in the previous financial year for x5 return of the original investment.

During the year the Fund announced the following additional investments:

  • Buymie (April 2020), an AI app-based on-demand home grocery delivery service available in Dublin and Bristol allowing customers to order groceries from Tesco, Co-op and Asda, and have them delivered by a personal shopper within as little as an hour
  • Volograms (July 2020), an AR capture and volumetric video company enabling users to capture volumetric holograms of real people for use in apps, social media and VR headsets
  • Virtex (January 2021), a VR application that enables eSports organisers to host their exisiting formats on a 3D entertainment platform
  • Polience, t/a PreCog (March 2021), an InfoSec company that has developed a proprietary system to counter terrorism, by supporting border control agencies to prevent people trafficking

Each of these investments brings its own unique qualities and adds to the diverse and well-balanced composition of the Fund’s portfolio of investee companies.

The year also featured a Series A follow-on investment for Buymie led by a new investor, Wheatcroft Group, the food and agricultural arm of the Grosvenor Estate. The funding round closed in June 2020 and provided the Company with a 200% uplift from its original investment in only three months.

In January 2021 the Company announced a Series A follow-on round for CameraMatics, the IoT fleet and vehicle safety technology specialist. Led by Puma Investments, an investment consortium of original investors including the Fund raised in excess of €4m, representing a fourfold uplift from the original investment made in November 2017.

 

Both of the Company’s listed investment holdings, Immotion and VRE Education (held by the Fund), suffered bouts of volatility throughout the year with Immotion’s share price trading in the 2p to 6p range, closing at 5p at the year end and VRE trading in the 5p to 23p range, closing at 10p at the year end. Shortly after 31 March 2021, the Company reduced its holding of Immotion shares whilst retaining a level of exposure equivalent to its initial investment, thus benefitting from any potential upside from Immotion’s concerted efforts to diversify its revenue streams. During the financial year the Fund decided to sell sufficient VRE shares to recoup its initial investment and the strategy for now is to maintain the current level of holdings given the further possible momentum from the investment by HTC in VRE.

Further information on the investment portfolio is provided in the report of the Investment Manager which follows this statement.

 

COMMITMENTS AND FUNDING

As previously mentioned, in 2019 the Company announced an increase in subscription to the Fund of €2.5m taking its total commitment to €7m, thereby increasing its share in the Fund from 21.6% to 25.9%. This commitment was made shortly before the Fund closed to new subscribers validating the Company’s belief that the Fund portfolio is at a mature stage and, with a number of investee companies preparing for further funding rounds, there is demonstrable potential for further uplifts to occur from initial valuations. Several of these funding rounds are currently in the negotiation stage and the Company expects to announce further updates in the next one-two quarters.

The Company believes that it will have sufficient access to funding to meet its commitments to the Fund over the term of the Fund’s investment cycle, through a combination of available cash, anticipated subscriptions and access to undrawn facilities.    

 

INVESTMENT ENVIRONMENT

The Company is impressed by how the Investment Manager has navigated through a challenging investment environment as it has steadily grown the investment portfolio with other complimentary businesses in diverse sectors. Its experienced team has been on hand to provide advice and guidance to its investee companies and it is a testament to the Investment Manager’s comprehensive investment filter processes that the performance of the portfolio has largely been unaffected to the downside by COVID-19, and certain companies such as Buymie, Admix and Ambisense have benefitted from accelerated growth as a consequence of the COVID-19 environment. The post-pandemic world will change enormously with businesses increasingly improving efficiencies with AI and IoT technology as consumer behaviour experiences a significant change towards online consumption and the global commercial environment embraces technological changes at a faster pace than ever previously envisaged. However, whilst the portfolio has largely been insulated by the effects of COVID-19, the Company and the Investment Manger continue to remain vigilant of the risks associated with the pandemic.

 

DIVIDEND

During the year to 31 March 2021, the Company has not declared a dividend (31 March 2020: £nil). Pursuant to the Company’s dividend policy the directors intend to manage the Company’s affairs to achieve shareholder returns through capital growth rather than income. The Company does not expect to receive a material amount of dividends or other income from its direct or indirect investments. It should not be expected that the Company will pay a significant annual dividend, if any.

GEARING

The Company may deploy gearing of up to 20% of net asset value (calculated at the time of borrowing) to seek to enhance returns and for the purposes of capital flexibility and efficient portfolio management. The Company’s gearing is expected to primarily comprise bank borrowings but may include the use of derivative instruments and such other methods as the Board may determine. During the period to 31 March 2021 the Company did not employ any borrowing (31 March 2020: £nil).

The Board will continue to review the Company’s borrowing, in conjunction with the Investment Manager on a regular basis pursuant with the Company’s overall cash management and investment strategy.

CAPITAL RAISING

On 1 April 2020 and 3 July 2020, the Company announced placings of 250,000 and 230,769 ordinary shares respectively, which were admitted to trading on the Specialist Fund Segment of the London Stock Exchange, under the existing ISIN: GB00BYWYZ460, taking the total shares in admission as at 31 March 2021 to 5,350,725.

Post year end, on 8 June 2021, the Company announced a placing of 662,500 ordinary shares that were admitted to trading on the Specialist Fund Segment of the London Stock Exchange on 14 June 2021, under the existing ISIN: GB00BYWYZ460, taking the total shares in admission as at 14 June 2021 to 6,013,225

The Investment Manager’s Report following this Statement gives further detail on the affairs of the Company. The Board is confident of the long-term prospects for the Company in pursuit of its investment objectives.  

 

OUTLOOK

Several portfolio companies are at different stages of further fundraising rounds and upon completion the Company anticipates further positive announcements to this effect within the next one-two quarters.

The portfolio construction of the Fund is expected to be completed and reach the optimum number of companies within the current financial year with other potential investment targets currently undergoing the rigorous due diligence process. Additionally, the Company continues to explore its robust pipeline of potential direct investments. 

With a now well established, diverse portfolio of exciting, early-stage, high-growth technology companies, the Company believes that this next year to eighteen months will be a transformational period as the efforts of the Investment Manager in assembling this high-quality portfolio translate into shareholder rewards from valuation uplifts and, ultimately, future exits at significant premiums to current valuations.

 

Perry Wilson

Chairman
29 July 2021

 

3    Investment Manager’s Report

Investment Manager’s Report

THE COMPANY

Sure Ventures plc (the “Company”) was established to enable investors to gain access to early stage technology companies in the three exciting and expansive market verticals of augmented reality and virtual reality (AR/VR), artificial intelligence (AI) and the internet of things (IoT).

The Company gains access to deal flow ordinarily reserved for venture capital funds and ultra-high net worth angel investors, establishing a diversified software-centric portfolio with a clear strategy. Listing the fund on the London Stock Exchange offers investors:

  • Relative liquidity
  • A quoted share price
  • A high level of corporate governance.

It is often too expensive, too risky and too labour intensive for investors to build a portfolio of this nature themselves. We are leveraging the diverse skillsets of an experienced management team who have the industry network to gain access to quality deal flow, the expertise to complete extensive due diligence in target markets and the entrepreneurial skills to help these companies to mature successfully. Those investing in the Company will get exposure to Sure Valley Ventures which in turn makes direct investments in the above sectors in the UK & Ireland.

 

Augmented Reality & Virtual Reality

The AR/VR market is evolving at a rapid pace. The market is expected to grow into a US$298 billion industry by 2023 , growing at a CAGR of over 60% during the forecast time frame [1]. Significant investment in hardware capability and headset development has been made by major industry players such as Facebook (through its Oculus division), Microsoft, Sony (through its PlayStation division), HTC, Samsung and others. This investment has ignited a new and exciting industry within the technology sector. Hardware manufacturers and AR/VR users are now searching for software capabilities/support and content, and we believe that exposure to this industry via the Fund and direct investment into software companies in the space will offer significant upside potential for investors. Through our network of technology accelerators, angel investor partners and industry contacts in the AR/VR space, we expect to have a strong chance of discovering the industry leaders of tomorrow.

 

Internet of Things

The Internet of Things (IoT) as a segment of the market is a broad investment area; it is defined as the interconnection, via the internet, of computing devices embedded in everyday objects, enabling them to send and receive data. The market was estimated to be worth US$212 billion dollars by the end of 2019 and is predicted to reach a size of US$1.6 trillion by 2025[2]. The global growth and advancement of internet coverage, the increased speed and capability of connectivity and the mass market penetration of smartphones/tablet sales has created significant opportunities for software companies. Businesses from many industries are embracing the efficiencies, cost savings and the “direct to consumer” penetration this technological advancement has offered. We see continued growth in this area and believe that investor returns will benefit from exposure to the space.

 

Artificial Intelligence

According to the market research firm Tractica, the global artificial intelligence software market is expected to experience massive growth in the coming years, with revenues increasing from around US$9.5 billion in 2018 to an expected US$118.6 billion by 2025[3]. The overall AI market includes a wide array of applications such as natural language processing, robotic process automation, and machine learning. McKinsey did an analysis comparing the value created by advanced analytics versus AI and machine learning across common enterprise use cases. McKinsey found that 82% of enterprises adopting machine learning and AI have gained a financial return from their investments. For companies across all industries, the median return on investment from cognitive technologies is 17%. AI and machine learning have the potential to create an additional US$2.6T in value by 2020 in Marketing and Sales, and up to US$2.0T in manufacturing and supply chain planning.

 

[[1]  ARC market research Sep 2019

[2]  Statista 2019

[3]  Tractica 2019

 

 

PORTFOLIO BREAKDOWN

On 6 February 2018 the Company entered into a €4.5m commitment to Sure Valley Ventures (the “Fund”), the sole sub-fund of Suir Valley Funds ICAV and its investment was equalised into the  Fund at that date. On 31 August 2019 a further €2.5m was committed to the Fund, taking the total investment in Sure Valley Ventures to €7m. The first drawdown was made on 5 March 2018 and as at 31 March 2021, a total of €3,717,320 had been drawn down against this commitment.

 

On 26 April 2019 the Company made a direct investment of £500,000 into VividQ Limited, a deep tech start up with world leading expertise in 3D holography. This investment represents the second direct investment of the Company, alongside Immotion Group PLC, which was announced on 24th April 2018. As detailed in the Statement of Position included in the following financial statements, these two investments alongside the Fund investment represent the entire portfolio of Sure Ventures plc as at 31 March 2021.

On 3 July 2020, the Company announced a placing of 230,769 ordinary shares. The ordinary shares were admitted to trading on the Specialist Fund Segment of the London Stock Exchange on 9 July 2020, under the existing ISIN: GB00BYWYZ460, taking the total shares in admission as at 31 March 2021 to 5,350,725.

 

SUIR VALLEY FUNDS ICAV

Suir Valley Funds ICAV (the ”ICAV”) is a close-ended Irish collective asset-management vehicle with segregated liability between sub-funds incorporated in Ireland pursuant to the Irish Collective Asset-management Vehicles Act 2015 and constituted as an umbrella fund insofar as the share capital of the ICAV is divided into different series with each series representing a portfolio of assets comprising a separate sub-fund.

 

The ICAV was registered on 18 October 2016 and authorised by the Central Bank of Ireland as a qualifying investor alternative investment fund (“QIAIF”) on 10 January 2017. The initial sub-fund of the ICAV is Sure Valley Ventures, or the Fund, which had an initial closing date of 1 March 2017. The Fund invests in a broad range of software companies with a focus on companies in the AR/VR, AI and IoT sectors.

 

As at 31 March 2021 the Fund had commitments totaling €27m and had made fifteen direct investments into companies spanning the AR/VR, AI and IoT sectors. One of these investments was sold in the prior year, giving the Fund its first realised gain on exit of around 5X return on investment. On 12 March 2018, Immersive VR Education Limited, the Fund’s first investment, completed a flotation on the London Stock Exchange (AIM) and the Dublin Stock Exchange (ESM). The public company is now called VR Education Holdings PLC – ticker VRE. VRE was the first software company to list on the ESM since that market’s inception. In July 2020, following an improvement in share price, the sub-Fund decided to sell sufficient shares to recover its initial investment. This resulted in a realised gain of €73k being payable to Sure Ventures PLC, along with its share of the initial investment, and some Escrow Funds from the aforementioned exit. Total capital distributions from the sub-Fund to the PLC for the year ended March 2021 was €166k.

 

PERFORMANCE

In the year to 31 March 2021 the Company’s performance was broadly in line with expectations, returning a net asset value of £0.92 per unit, which is materially unchanged from the 31 March 2020 audited year end figure. The NAV has been helped by the share price improvement of Immotion Group PLC, closing the year at 5.05p (2020: 1.85p) which has recovered from the initial impact of the Covid-19 pandemic. The share price has continued to improve since year end and is now trading around 6p. Given the lack of revenue to support the ongoing operational costs of the PLC, these unrealised gains are key to maintaining a steady NAV, until the point that we see more exits and realised gains.

 

FUTURE INVESTMENT OUTLOOK

The Fund has achieved one very positive realised gain, recovered its full investment in its listed portfolio company, as well as seeing a number of unrealised gains across the portfolio. The Fund continues to have access to quality deals in our chosen high growth sectors. The portfolio of current investments is continuing to mature and approaching series A funding rounds, which if successful, will begin to provide the NAV growth that was set out to achieve from inception. 

 

We remain confident in the future outlook of the Company in the forthcoming financial year and in line with the prospectus, reserve the right to make further direct investments provided there is sufficient working capital to do so.

Shard Capital AIFM LLP

Investment Manager

2 June 2021

4    Strategic Report

Business Review

The strategic report on pages 10 to 16 has been prepared to help shareholders assess how the Company operates and how it has performed.  The strategic report has been prepared in accordance with the requirements of Section 414 A-D of the Companies Act 2006 (the “Act”) and best practice.  The business review section of the strategic report discloses the Company’s risks and uncertainties as identified by the board, the key performance indicators used by the board to measure the Company’s performance, the strategies used to implement the Company’s objectives, the Company’s environmental, social and ethical policy and the Company’s future developments.

 

PRINCIPAL ACTIVITY

The Company carries on business as an investment trust and its principal activity is to invest in companies in accordance with the Company’s investment policy with a view to achieving its investment objective. 

 

STRATEGIC AND INVESTMENT POLICY

Investment Policy 

The Company’s Investment Policy can be found at page 68 of this Annual Report.

 

FUTURE DEVELOPMENTS

While the future performance of the Company is dependent, to a large degree, on the performance of the Fund which, in turn, is subject to many external factors, the board’s intention is that the Company will continue to pursue its stated investment objective as outlined on page 2. The Company’s future developments and outlook are discussed in more detail in the Chairman’s Statement on page 4 and the Investment Manager’s Report on page 7 – 9.

 

PREMIUM/DISCOUNT MANAGEMENT

The board closely monitors the premium or discount at which the Company’s ordinary shares trade in relation to the Company’s underlying net asset value and takes action accordingly. Throughout the period under review the Company’s ordinary shares traded at a premium or discount to its underlying net asset value.  The board is of the view that an increase of the Company’s ordinary shares in issue provides benefits to shareholders, including a reduction in the Company’s administrative expenses on a per share basis and increased liquidity in the Company’s shares.

The board believes that it is in shareholders’ best interests to prevent the Company’s shares trading at a discount to net asset value because shareholders will be unable to realise the full value of their investments.

 

CORPORATE AND OPERATIONAL STRUCTURE

Operational and portfolio management

The Company has outsourced its operations and portfolio management to various service providers as detailed below:

  • Shard Capital AIFM LLP is appointed as the Company’s manager (the “Manager”) and Alternative Investment Fund Manager (“AIFM”) for the purposes of the Alternative Investment Fund Managers Directive (“AIFMD”);
  • Apex Fund Services (Ireland) Limited is appointed to act as the Company’s administrator;
  • Effective from 1 January 2021, Throgmorton Secretaries LLP is appointed as the Company’s secretary. Up to 31 December 2020, Apex Fund Services (Ireland) Limited was Company secretary of the Company;
  • Indos Financial Limited is appointed as the Company’s depositary;
  • Computershare Investor Services plc is appointed as the Company’s share registrar;
  • Shard Capital Partners LLP is appointed to act as the Company’s placing agent; and
  • PKF Littlejohn LLP is appointed to act as the Company’s auditors.

Alternative Investment Fund Managers Directive

In accordance with the AIFMD, the Company has appointed Shard Capital AIFM LLP to act as the Company’s AIFM for the purposes of the AIFMD.  The AIFM ensures that the Company’s assets are valued appropriately in accordance with the relevant regulations and guidance.  In addition, the Company has appointed Indos Financial Limited as depositary, to provide depositary services to the Company as required by the AIFMD.

Donations

The Company made no political or charitable donations during the period under review to organisations either within or outside the EU (2020 – none).

Environment, human rights, employee, social and community issues

The Company is required by law to provide details of environmental matters (including impact of the Company’s business on the environment), employee, human rights, social and community issues (including information about any policies it has in relation to these matters and the effectiveness of those policies).  The Company does not have any employees and the board comprises non-executive directors. As an investment trust, its activities do not have a direct impact on the environment. The Company aims to minimise any detrimental effect that its actions may have by adhering to applicable social legislation, and as a result does not maintain specific policies in relation to these matters.

The Company has no operations and therefore no greenhouse gas emissions to report nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors Reports) Regulations 2013, including those within its underlying investment portfolio.  However, the Company believes that high standards of corporate social responsibility such as the recycling of paper waste will support its strategy and make good business sense.

In carrying out its investment activities and in relationships with suppliers, the Company aims to conduct itself responsibly, ethically and fairly.

Modern slavery

Due to the nature of the Company’s business, the board does not consider  the Company to be directly within the scope of modern slavery regulations. The board considers the Company’s supply chains, being with professional service providers within the UK or the EU to be low risk in relation to this matter.

Anti-bribery and corruption

It is the Company’s policy to conduct its business in an ethical manner.  The Company takes a zero tolerance approach to bribery and corruption and is committed to acting professionally, fairly and with integrity in its business dealings.

 

Principal Risks and Uncertainties

The board has carried out a robust assessment of its risks and controls as detailed below. The day-to-day risk management functions of the Company have been delegated to Shard Capital AIFM LLP, which reports to the board.

 

OPERATIONAL RISKS

Third Party Service Providers

The Company has no employees and the directors have all been appointed on a non-executive basis.  Whilst the Company has taken all reasonable steps to establish and maintain adequate procedures, systems and controls to enable it to comply with its obligations, the Company is reliant upon the performance of third-party service providers for its executive function. In particular, the manager, depositary, administrator and registrar amongst others, will be performing services which are integral to the day-to-day operation, including IT, of the Company.

The termination of service provision by any service provider, or failure by any service provider to carry out its obligations to the Company, or to carry out its obligations to the Company in accordance with the terms of its appointment, could have a material adverse effect on the Company’s operations and its ability to meet its investment objective.

Mitigation

Day-to-day oversight of third-party service providers is exercised by the Manager and reported to the board on a quarterly basis. As appropriate to the function being undertaken, each of the service providers is subject to regular performance and compliance monitoring. The performance of Shard Capital AIFM LLP (the ‘Manager’) in its duties to the Company is subject to ongoing review by the board on a quarterly basis as well as formal annual review by the Company’s management engagement committee.

The appointment of each service provider is governed by agreements which contain the ability to terminate each of these counterparties with limited notice should they continually or materially breach any of their obligations to the Company.

Reliance on key individuals

The Company will rely on key individuals at the Manager to identify and select investment opportunities and to manage the day-to-day affairs of the Company.  There can be no assurance as to the continued service of these key individuals at the Manager. The departure of key individuals from the Manager without adequate replacement may have a material adverse effect on the Company’s business prospects and results of operations.  Accordingly, the ability of the Company to achieve its investment objective depends heavily on the experience of the Manager’s team, and more generally on the ability of the Manager to attract and retain suitable staff.

Mitigation

The interests of the Manager are closely aligned with the performance of the Company through the management and performance fee structures in place and direct investment by certain key individuals of the Manager.  Furthermore, investment decisions are made by a team of professionals, mitigating the impact loss of any single key professional within the Manager’s organisation. The performance of the Manager in its duties to the Company is subject to ongoing review by the board as well as formal annual review by the management engagement committee.

Fluctuations in the market price of Issue Shares

The market price of the issued shares may fluctuate widely in response to different factors and there can be no assurance that the issued shares will be repurchased by the Company even if they trade materially below their net asset value.  Similarly, the shares may trade at a premium to net asset value whereby the shares can trade on the open market at a price that is higher than the value of the underlying assets. There can be no assurance, express or implied, that shareholders will receive back the amount of their investment in the issued shares.

 

Mitigation

The Manager and the board closely monitor the level of discount or premium at which the shares trade on the open market. Subject to Shareholders’ approval, the Company may purchase the shares in the market with the intention of enhancing the net asset value per ordinary share, however there can be no assurance that any purchases will take place or that any purchases will have the effect of narrowing any discount to net asset value at which the ordinary shares may trade. When the shares trade at a premium the Company may issue shares to reduce the premium at which shares trade. As at 31 March 2021 the shares were trading at a premium to net asset value.

INVESTMENTS

Achievement of the Investment Objective

There can be no assurance that the Manager will continue to be successful in implementing the Company’s investment objective.

Mitigation

The Company’s investment decisions are delegated to the Manager. Performance of the Company against its investment objectives is closely monitored on an ongoing basis by the Manager and the board and is reviewed in detail at each board meeting. Any action required to mitigate underperformance is taken as deemed appropriate by the Manager.

Borrowing

The Company may use borrowings in connection with its investment activities including, where the Manager believes that it is in the interests of shareholders to do so, for the purposes of seeking to enhance investment returns.  Such borrowings may subject the Company to interest rate risk and additional losses if the value of its investments falls.  Whilst the use of borrowings should enhance the net asset value of the issued shares when the value of the Company’s underlying assets is rising, it will have the opposite effect where the underlying asset value is falling.  In addition, in the event that the Company’s income falls for whatever reason, the use of borrowings will increase the impact of such a fall on the Company’s return and accordingly will have an adverse effect on the Company’s ability to pay dividends to shareholders.

Mitigation

The Manager and the board closely monitor the level of gearing of the Company. The Company has a maximum limitation on borrowings of 20% of net asset value (calculated at the time of borrowing) which the Manager may affect at its discretion. As at the date of this report, the Company had no current borrowings outstanding.

Liquidity of Investments

The Company expects to have a material level of exposure to unquoted companies that are aligned with the Company’s strategy and that present opportunities to enhance the Company’s return on its investments. Such investments, by their nature, involve a higher degree of valuation and performance uncertainties and liquidity risks than investments in listed and quoted securities and they may be more difficult to realise. The illiquidity of such investments may make it difficult for the Company to sell them if the need arises and may result in the Company realising significantly less than the value at which it had previously recorded such investments.  Investments in unlisted equity securities, by their nature, involve a higher degree of valuation and performance uncertainties and liquidity risks than investments in listed securities and therefore may be more difficult to realise.

Mitigation

The Company has established investment restrictions on the extent to which it can invest up to 15% of net asset value in a single investment. However, this restriction does not apply to investments in the Fund or any Further Funds or collective investment vehicles managed by third parties.  Compliance with these restrictions is monitored by the Manager and by the board on an ongoing basis.

REGULATIONS

Tax

Any changes in the Company’s tax status or in taxation legislation could affect the value of investments held by the Company, affect the Company’s ability to provide returns to shareholders and affect the tax treatment for shareholders of their investments in the Company.

 

Mitigation

The Company intends at all times to conduct its affairs so as to enable it to qualify as an investment trust for the purposes of Chapter 4 of Part 24 of the Corporation Tax Act 2010. Both the board and the Manager are aware of the requirements which are to be fulfilled in any accounting period for the Company to maintain its investment trust status.  Adherence to the conditions required to satisfy the investment trust criteria are monitored by the compliance function of the Manager and reviewed by the board on a regular basis.

Breach of applicable legislative obligations

The Company and its third-party service providers are subject to various legislation and regulations, including, but not limited to the Data Protection Act 2018 and the General Data Protection Regulation. Any breach of applicable legislative obligations could have a negative impact on the Company and impact returns to shareholders.

Mitigation

The Company engages only with third party service providers which hold the appropriate regulatory approvals for the function they are to perform, and can demonstrate that they can adhere to the regulatory standards required of them.  Each appointment is governed by agreements which contain the ability to terminate each of these counterparties with limited notice should they continually or materially breach any of their legislative obligations, or their obligations to the Company more broadly.  Additionally, each of the counterparties is subject to regular performance and compliance monitoring by the Manager, as appropriate to their function, to ensure that they are acting in accordance with applicable regulations and are aware of any upcoming regulatory changes which may affect the Company.  Performance of third party service providers is reported to the board on a quarterly basis, whilst the performance of the Manager in its duties to the Company is subject to ongoing review by the board on a quarterly basis as well as formal annual review by the management engagement committee.

 

KEY PERFORMANCE INDICATORS

The board monitors success in implementing the Company’s strategy against a range of key performance indicators (“KPIs”), which are viewed as significant measures of success over the longer term. Although performance relative to the KPIs is also monitored over shorter periods, it is success over the long term that is viewed as more important, given the inherent volatility of short-term investment returns. The principal KPIs are set out below:

KPI

Performance

Year ended 31 March 2021

Year ended 31 March 2020

Movement in net asset value per ordinary share

Decreased by 0.58%

Increased by 11.54%

Premium/discount (after deducting borrowings at fair value)

Traded at a premium of 14.05% at the year end

Traded at a premium of 13.52% at the year end

Movement in the share price

Decreased by 0.12%

Decreased by 0.41%

The Company does not currently follow any benchmark. Similarly, Sure Valley Ventures does not follow any benchmark. Accordingly, the portfolio of investments held by the Company and Sure Valley Ventures will not mirror the stocks and weightings that constitute any particular index or indices, which may lead to the Company’s shares failing to follow either the direction or extent of any moves in the financial markets generally (which may or may not be to the advantage of shareholders).

 

PROMOTING THE SUCCESS OF THE COMPANY

Under Section 172 of the Companies Act 2006, the board has a duty to promote the long-term success of the Company for the benefit of its shareholders as a whole and, in doing so, have regard to the likely consequences of its decisions in the long-term upon the Company’s other stakeholders and the environment.  

The Company’s objective is to achieve capital growth for investors through exposure to early stage technology companies, with a focus on software-centric businesses in its chosen target markets.

The board believes that the values of integrity, accountability and transparency form the basis of the Company’s corporate culture and promote good standards of governance.   

The board has identified the Company’s main stakeholders to be its shareholders, investment manager and other key service providers. The board seeks to understand the priorities of its stakeholders and engages with them through the communication and governance processes that it has put in place.

Shareholders 

The board believes that transparent communication with shareholders is important. In addition to the Annual Report and the Half-yearly Report, the Company publishes quarterly portfolio updates which are available on the Company’s website together with other information that the board believes shareholders will find useful. The board welcomes feedback from shareholders and the Investment Manager provides such feedback to the board on a regular basis. 

During the year, the Company issued 480,769 new ordinary shares in response to investor demand. The board believes that share issues are in the interests of shareholders as a whole as they provide additional finance for investment opportunities, enable the Company’s fixed costs to be spread over a wider base and provide a source of liquidity in the Company’s shares.

 

Investment Manager

The Investment Manager has a fundamental role in promoting the long-term success of the company. The board regularly reviews the performance of the investment portfolio at quarterly board meetings and performs a formal annual evaluation of the performance of the Investment Manager.  This contact enables constructive regular dialogue between the Investment Manager and the board.

 

Other key service providers

The board believes that strong relationships with its other key service providers (Company Secretary, Administrator, Depositary and Registrar) are also important for the long-term success of the Company. There is regular contact between the board and the Company’s other key service providers. The board performs an annual review of the services provided by the Company Secretary, Administrator, Depositary and Registrar to ensure that these are in line with the Company’s requirements.

 

Environmental, Social and Governance (“ESG”)

The board and the Investment Manager recognise the importance of the impact of the Company’s decisions and ESG factors are integrated in the investment process.

 

APPROVAL

The Strategic Report was approved by the board of directors on 29 July 2021 and signed on its behalf by:

Perry Wilson
Chairman

 

5    Directors’ Report

Board of Directors

PERRY WILSON

Chairman of the board and the management engagement committee and a member of the audit committee

Perry Wilson (Chairman) (independent)

Perry Wilson is a financial services professional with over 25 years’ experience in investment banking and fund management, responsible for running portfolio risk positions in global markets. He started his career in accountancy before joining the asset trading group at Lazard in 1987, focusing on illiquid credit and structured products and going on to become a director of the bank.

In 2003 Mr Wilson joined Argo Capital as executive director, an AIM listed alternative investment fund management firm and was part of a small team of portfolio managers that oversaw the group’s fiftyfold AUM growth to US$1.3bn at it’s height. After leaving Argo in 2010 Mr Wilson joined Integra Capital to implement a liquid credit strategy before setting up a fixed income sales and trading operation for a Central Asian investment bank, Visor Capital in 2013.

Since 2015 Mr Wilson has been on the board of a number of UK and offshore financial services firms and investment funds, as independent non-executive director, and also acts as chair of trustees for a UK pension plan, providing corporate governance and oversight utilising his extensive financial markets background and experience.

 

ST JOHN AGNEW

 St John Agnew

St.John trained as a solicitor and was an in-house Commercial and Banking Counsel for TSB Bank. His responsibilities included drafting and negotiating legal documentation in relation to all Bank lending and commercial arrangements. This included many types of commercial contracts and involved a close working relationship with the technology team who required advice on a steady flow of technology contracts.

He became an Investment Manager in 2000 and set up a fund in the Cayman Islands in 2004 based on Technical Analysis which he successfully operated and closed in late 2007. He continues to advise on investment and is currently an Investment Manager registered with Credo Capital with his own private clients.

St.John has also served as Trustee on a Pension fund for a Charity and, using his legal and investment knowledge, he helped to restructure the Board to allow it to recognise and meet its extensive ongoing Pension obligations. He is also currently a Non-Executive Director of a food company, The Big Prawn Company, where he uses his knowledge and experience to help guide this company.

 

GARETH BURCHELL

Gareth Burchell

Gareth Burchell began his career in the insurance industry and spent three years at RBS Insurance prior to beginning his career in investment advice and management. Mr. Burchell is currently Head of Shard Capital Stockbrokers and chairs an investment committee that specialises in providing funding for both listed and unlisted small companies. Mr Burchell has had a focus on the small cap arena for 15 years and he and his team have provided £90 million of funding across 221 companies. He has an in-depth knowledge of the UK listing process of various small cap exchanges.

 

Statutory information

BOARD MEMBERS, AND DIRECTORS’ AND OFFICERS’ INSURANCE

The names and biographical details of the board members who served on the board as at the year end can be found on page 18.

During the year under review the Company’s directors’ and officers’ liability insurance for its directors and officers as permitted by section 233 of the Companies Act 2006 were covered and maintained by Shard Capital AIFM LLP.

 

STATUS OF THE COMPANY

The Company is an investment company within the meaning of section 833 of the Companies Act 2006.

The Company operates as an investment trust in accordance with Chapter 4 of Part 24 of the Corporation Tax Act 2010 and the Investment Trust (Approved Company) (Tax) Regulations 2011. The Company has obtained its initial approval as an investment trust from HM Revenue & Customs. In the opinion of the directors, the Company has conducted its affairs since its initial approval as an investment trust so that it is able to maintain its status as an investment trust. 

The Company is an externally managed closed-ended investment company with an unlimited life and has no employees.

 

INTERNAL CONTROLS AND RISK MANAGEMENT

Details of the Company’s principal risks and uncertainties can be found in the Strategic Report on pages 13 to 15 inclusive of details of the Company’s internal controls. Details of the Company’s application of hedging arrangements are set out on page 70, the Investment Policy section of these financial statements.

 

SHARE CAPITAL – VOTING AND DIVIDEND

As at 31 March 2021, the Company had 5,350,725 (2020: 4,869,956) ordinary shares in issue. There are no other classes of shares in issue and no shares are held in treasury.

At the Company’s last Annual General Meeting held on 24 September 2020, the board was granted authorities to issue up to 48,000,000 ordinary shares of 0.01 each in the capital of the Company and the right to subscribe for or to convert any security into ordinary shares for any purpose, up to an aggregate nominal amount of up to 98.56% of current shares in issue, such authority to apply until the end of next year’s Annual General Meeting (or, if earlier, until the close of business on 30 September 2021).

The maximum number of shares which can be admitted to trading on the LSE without the publication of a prospectus is 20% of the ordinary shares in issue on a rolling 12 month basis at the time of admission of the shares.

The price of any Ordinary Shares issued to Shard Capital Limited (“SCL”) under the SCL Agreement will be not less than the NAV per Ordinary Share at the time of issue plus a premium to cover the expenses of such issue.

During the year under review a total of 480,769 (2020: 305,208) ordinary shares were issued as detailed below:

Shares issued

Price paid per share (pence)

Premium to
net asset value (%) (1)

1 April 2020

250,000

100.00

7.98%

1 July 2020

230,769

97.50

-1.42%

(1) Last published NAV at time of issue

As at 31 March 2021 there were 5,350,725 ordinary shares of 1p in issue. Since the year end a further 662,500 ordinary shares have been issued.

The ordinary shares carry the right to receive dividends and have one voting right per ordinary share. There are no shares which carry specific rights with regard to the control of the Company. The shares are freely transferable. There are no restrictions or agreements between shareholders on the voting rights of any of the ordinary shares or the transfer of shares.

The Company has been incorporated with an unlimited life.

On a winding up or a return of capital by the Company, the ordinary shareholders are entitled to the capital of the Company.

No final dividend is being recommended. The Company’s policy is to pay dividends, if any, on an annual basis, as set out in the Company’s prospectus dated 17 November 2017 and the supplementary prospectus dated 2 January 2018 (the “Prospectus”). There were no dividends paid in respect of the year ended 31 March 2021 (2020 – None).

The Company will pay out such dividends as are required for it to maintain its investment trust status.

 

SUBSTANTIAL SHARE INTERESTS

The Company has received the following notification in accordance with the Disclosure and Transparency Rule 5.1.2R of an interest in the voting rights attaching to the Company’s issued share capital.

The Company received a notification on 8 March 2021 that Pires Investments plc had acquired an interest in 1,500,000 ordinary shares in the Company, representing 28.0% of the Company’s ordinary shares in issue at 31 March 2021.

 

INDEPENDENT AUDITOR

The Company’s independent auditor, PKF Littlejohn LLP (“PKF”), was appointed in the prior year and has expressed its willingness to continue to act as the Company’s auditor for the forthcoming financial year. The audit committee has carefully considered the auditor’s appointment, as required in accordance with its terms of reference, and, having regard to its effectiveness and the services it has provided the Company during the period under review, has recommended to the board that the independent auditor be appointed at the forthcoming AGM. At the AGM resolutions will be proposed for the appointment of the independent auditor and to authorise the directors to agree its remuneration for the forthcoming financial year. In reaching its decision, the audit committee considered the points detailed on pages 31 to 33 of the Audit Committee’s report.

 

AUDIT INFORMATION

As requirebsectio41of thCompanieAc2006thdirectors whheloffice athdate othis reporeach confirthatsfaatheare awarethere ino relevanaudiinformatioowhicthe Companyauditoiunaware aneacdirector hatakealthsteps requireof a director to make themselveawaroanrelevanaudiinformatioanto establisthathCompanyauditoiaware of that information.

 

ARTICLES OF ASSOCIATION

Anamendments to thCompanyarticleoassociatiomusbmadbspecial resolution.

 

BREXIT

The broader impacts of Brexit may have an effect on the financial statements and operations in the future, though it is not possible to quantify likely impacts at this stage, any effects will be reflected in the Company’s underlying investments future price movements. The board and all relevant parties continue to monitor the implications for the Company and implement certain internal controls to mitigate any risks that may arise in the future.

 

COVID-19 PANDEMIC

There has been a global outbreak of a coronavirus disease 2019 (COVID-19), which the World Health Organization has declared a “Public Health Emergency of International Concern”. The impact of COVID-19 may adversely affect the Company’s investments, given that the Company’s operations and profitability could be negatively impacted by the regional and global outbreak of COVID-19. The extent of the impact to the financial performance of the Company will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and actions taken to contain COVID-19 or its impact.

The announcement of vaccines of 95% efficacy to combat COVID-19 rebounded the market. The world leaders are executing necessary procedures to vaccinate their citizens in an attempt to overcome the coronavirus.

 

GOING CONCERN

The directors have reviewed the financial projections of the Company from the date of this report, which shows that the Company will be able to generate sufficient cash flows in order to meet its liabilities as they fall due. Accordingly, the directors are satisfied that the going concern basis remains appropriate for the preparation of the financial statements. The Company also has detailed policies and processes for managing the risks, set out in the Investment Policy on pages 68 to 69.

 

VIABILITY STATEMENT

In accordance with the revised Association of Investment Companies Code of Corporate Governance published in February 2020 and revised UK Corporate Governance Code, published by the Financial Reporting Council in July 2018, the directors have assessed the prospects of the Company over a three-year period ending March 2023. The board believes this period to be appropriate taking into account the current trading position and the potential impact of the principal risks that could affect the viability of the Company. At 31 March 2021, the Company had cash balances of £1,201,153 (2020: £1,412,739) in excess of all liabilities. There are therefore limited risks to the viability of the Company.

Analysis to assess viability has focused on the risks in delivery of the growth of the business and a series of projections have been considered changing funding levels and the performance of the assets acquired.

The analysis demonstrates that, the Company would be able to withstand the impact of the risks identified. Based on the robust assessment of the principal risks, prospects and viability of the Company, the board confirms that they have reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the three-year period ending March 2023.

 

MANAGEMENT AND ADMINISTRATION

Company Secretary

Effective from 1 January 2021, Throgmorton Secretaries LLP (the “Company Secretary”) is the company secretary of the Company. Up to 31 December 2020, Apex Fund Services (Ireland) Ltd (the “Company Secretary”) was the company secretary of the company.

Administrator

Apex Fund Services (Ireland) Ltd (the ‘Administrator’), is the administrator of the Company. The Administrator provides the day-to-day administration of the Company. The Administrator is also responsible for the Company’s general administrative functions, such as the calculation of the net asset value and maintenance of the Company’s accounting records.

Under the terms of the administration agreement, the Administrator is entitled to an annual administration fee equal to the greater of: (i) €28,000 per annum; and (ii) an amount equal to 0.08% of the portion of NAV up to and including €100 million, 0.06% of the portion of NAV between €100 million and €200 million and 0.05% of the portion of NAV above €200 million (exclusive of VAT and out of pocket expenses). The Administrator is also entitled to reimbursement of all reasonable out of pocket expenses incurred by it in connection with the performance of its duties. The administration agreement can be terminated by either party by providing 90 days’ written notice.

Manager

Shard Capital AIFM LLP (the ‘Manager’), a UK-based company authorised and regulated by the Financial Conduct Authority, is the Company’s manager and alternative investment fund manager (“AIFM”) for the purposes of the Alternative Investment Fund Managers Directive (“AIFMD”). The Manager is responsible for the discretionary management of the Company’s assets and ensures that these are valued appropriately in accordance with the relevant regulations and guidance.

Under the terms of the management agreement, the Manager is entitled to a management fee and a performance fee together with reimbursement of reasonable expenses incurred by it in the performance of its duties. From the period from first admission, the management fee payable was based on 1.25% of the net asset value. The Manager is also entitled to receive a performance fee equal to 15% of any excess returns over a high watermark, subject to achieving a hurdle rate of 8% in respect of each performance period.  Further details on the management fee and the performance fee can be found in Note 4 to the financial statements. The management agreement can be terminated by either party providing twelve months’ written notice.

Depositary

The Company’s depositary is Indos Financial Limited (the “Depositary”), a company authorised and regulated by the Financial Conduct Authority. Under the terms of the depositary services agreement the Depositary is entitled to a monthly depositary fee equal to the greater of: (i) £2,000 and £2,917 per month (depending on the activity of the Company); and (ii) an amount equal to 1/12 of 0.03% of NAV (exclusive of VAT and out of pocket expenses). The depositary services agreement can be terminated by either party by providing 90 days’ written notice.

Change of control

There are no agreements which the Company is party to that might be affected by a change of control of the Company.

 

SUBSEQUENT EVENTS

There have been no other subsequent events for the year ended 31 March 2021.

 

FUTURE DEVELOPMENTS

Indications of likely future developments in the business of the Company are set out in the Strategic Report on pages 10-16.

 

REGULATORY DISCLOSURES

The disclosures below are made in compliance with the requirements of Listing Rule 9.8.4.

Listing Rule

9.8.4 (1) – capitalised interest

The Company has not capitalised any interest in the year under review.

9.8.4(2) – unaudited financial information

The Company has not published any unaudited financial information in either a class 1 circular or a prospectus or in respect of any profit forecast or profit estimate in accordance with listing rule 9.2.18.

9.8.4 (3) – deleted

This provision has been deleted.

9.8.4 (4) – incentive schemes

The Company has no long-term incentive schemes in operation.

9.8.4 (5) and (6) – waiver

No director of the Company has waived or agreed to waive any current or future emoluments from the Company.

9.8.4 (7), (8) and (9)

During the year under review, the Company issued a total of 480,769 (2020: 305,208) ordinary shares with a nominal value of £0.01 and an average price of 98.75 pence per share for a total consideration of £475,000 (2020: £293,000) excluding commission and issue costs. Further details can be found on page 47.

9.8.4 (8) and 9.8.4 (9) – relate to companies that are part of a group of companies

The Company is not part of a group of companies.  These Listing Rules therefore, do not apply.

9.8.4 (10) – contract of significance

During the year under review, there were no contracts of significance subsisting to which the Company is a party and in which a director of the Company is or was materially interested or between the Company and a controlling shareholder.

9.8.4 (11)

The Company is not party to any contracts for the provision of services to the Company by a controlling shareholder.

9.8.4 (12) and (13) –

waiving dividends

During the year under review, there were no arrangements under which a shareholder has waived or agreed to waive any dividends or future dividends.

9.8.4 (14)

As set out in the prospectus dated 17 November 2017, the Company has not voluntarily adopted Listing Rule 9.8.4(14).

By order of the board

Throgmorton Secretaries LLP

Company Secretary

Date: 29 July 2021

 

Corporate governance statement

The corporate governance statement explains how the board has sought to protect shareholders’ interests by protecting and enhancing shareholder value. The directors are ultimately responsible for the stewardship of the Company and this section explains how they have fulfilled their corporate governance responsibilities.  This corporate governance statement forms part of the directors’ report.

As set out in the Prospectus, the Company has adopted certain key provisions of the UK Listing Rules in accordance with the London Stock Exchange (LSE) listings. Pursuant to the Listing Rules as voluntarily adopted by the Company, companies must “comply or explain” against each of the provisions of the UK Corporate Governance Code (the “UK Code”) published by the Financial Reporting Council (“FRC”). The board is committed to high standards of corporate governance. The Listing Rules and the Disclosure Guidance and Transparency Rules (“DTR”) require companies to disclose how they have applied the principles and provisions of the UK Code. A copy of the UK Code is available from the website of the Financial Reporting Council at https://www.frc.org.uk/directors/corporate-governance-and-stewardship/uk-corporate-governance-code.

The Association of Investment Companies (“AIC”) has published its own Code on Corporate Governance (the “AIC Code”). The FRC has confirmed that AIC member companies who report against the AIC Code will be meeting their obligations in relation to the UK Code and the associated disclosure requirements of the DTR. The AIC Code is available from the AIC’s website at www.theaic.co.uk.

The board has considered the principles and provisions of the AIC Code. The AIC Code addresses the principles and provisions set out in the UK Code, as well as setting out additional principles and provisions on issues that are of specific relevance to the Company.

The board considers that voluntarily reporting against the principles and provisions of the AIC Code, which has been endorsed by the Financial Reporting Council, provides more relevant information to shareholders.

 

STATEMENT OF COMPLIANCE

The Company has complied with the recommendations of the AIC Code and the relevant provisions of the UK Code, except as set out below.

The UK Code includes provisions relating to:

·   The role of the chief executive;

·   Executive directors’ remuneration;

·   The appointment of a senior independent director; and

·   The need for an internal audit function.

The board considers these provisions are not relevant to the Company, being an externally managed investment company with no executive directors. In particular, all of the Company’s day-to-day management and administrative functions are outsourced to third parties. As a result, the Company has no executive directors, employees or internal operations. The Company has therefore not reported further in respect of these provisions.

In addition, the board does not, at present, consider that separate nomination and remuneration committees would be appropriate given the board’s size, being three members in total. Currently, decisions concerning the board’s remuneration, nomination and board appraisals are undertaken by the board as a whole. However, the need for separate nomination and remuneration committees and an internal audit function will be kept under review.

 

THE BOARD OF DIRECTORS

The board consists of three directors, all of whom are non-executive directors. Biographies of the directors are shown on page 18 and demonstrate the wide range of skills and experience that they bring to the board. The directors possess business and financial expertise relevant to the direction of the Company and consider themselves to be committing sufficient time to the Company’s affairs.

None of the directors has a service contract with the Company, nor are any such contracts proposed.  Each director has been appointed pursuant to a letter of appointment entered into with the Company. The directors’ appointment can be terminated in accordance with the articles of association and without compensation. There are no agreements between the Company and any director which provide for compensation for loss of office in the event that there is a change of control of the Company.

Copies of the letters of appointment will be available at the AGM.

The Chairman, Perry Wilson, is independent and considers himself to have sufficient time to commit to the Company’s affairs. The Chairman’s other commitments are detailed in his biography on page 18.

The directors have determined that the size of the Company’s board does not warrant the appointment of a senior independent director at this time. All of the directors are available to address shareholder queries or engage in consultation as required.

 

THE OPERATION OF THE BOARD

The board of directors meets at least four times a year and more often if required.

The table below sets out the directors’ attendance at board and audit committee meetings held in the financial year ended 31 March 2021, against the number of meetings each board or audit committee member was eligible to attend.

Director

Board

Audit Committee

Perry Wilson

7/7

2/2

Gareth Burchell

7/7

2/2

St John Agnew

7/7

2/2

 

No individuals other than the committee or board members are entitled to attend the relevant meetings unless they have been invited to attend by the board or relevant committee.

Directors are provided with a comprehensive set of papers for each board or committee meeting, which equips them with sufficient information to prepare for the meetings.

The board has a formal schedule of matters specifically reserved to it for decision to ensure effective control of strategic, financial, operational and compliance issues, which includes:

·   The Company’s structure including share issues and setting a discount/premium management programme;

·   Risk management

·   Appointing the Manager and other service providers and setting their fees;

·   Approving board changes including the audit committee and management engagement committee;

·   Considering and authorising board conflicts of interest;

·   Approving the Company’s annual accounts and half yearly accounts including accounting policies;

·   Approving the Company’s level of gearing;

·   The approval of terms of reference and membership of board committees; and

·   Approving liability insurance.

There is a procedure in place for the directors to take independent professional advice at the expense of the Company.  No such professional advice has been taken by the directors during the period under review.

The directors’ and officers’ liability insurance covered by Shard Capital AIFM LLP shall be maintained for the full term of each director’s appointment.

Division of Responsibilities

The Chairman leads the board and is responsible for its overall effectiveness in directing the Company. He ensures that the directors’ views are taken into consideration as part of the board’s decision making process.   The Chairman promotes a culture of openness and debate at the Company’s board meetings and ensures that an appropriate amount of time is devoted to each matter on the agenda for the board’s consideration.  He ensures that the board receives accurate, timely and clear information in order for the directors to discharge their duties.   The Chairman is also available to facilitate the board’s relations with shareholders and the Company’s other stakeholders.

The Company has established audit and management engagement committees which deal with matters determined by terms of reference issued by the board.

The board ensures that an appropriate amount of time is spent on board matters. The board receives papers ahead of board meetings, which are reviewed by the directors to enable them to participate effectively and efficiently at meetings. Other information is received by the board between meetings and input is provided by board members as required.

Independence of Directors

Each of Perry Wilson and St John Agnew were considered, on appointment, to be independent of Shard Capital AIFM LLP and free from any business or other relationship that could materially interfere with the exercise of his independent judgement and remained so throughout the financial year under review.

Gareth Burchell is a member of the Shard Capital AIFM LLP investment committee and is therefore not considered to be independent. Mr. Burchell is also currently Head of Shard Capital Stockbrokers and chairs an investment committee that specialises in providing funding for both listed and unlisted small companies. The board believes that having Mr. Burchell on the board is beneficial to the board as it provides the board with added insight on the Company’s investment portfolio.   Mr. Burchell does not participate in discussions on, or vote on, matters where there would be a conflict or potential conflict of investment, including but not limited, the evaluation of the Investment Manager.

There are no other relationships or circumstances relating to the Company that are likely to affect the judgement of any of the directors.

Composition

The board believes that during the year ended 31 March 2021, its composition was appropriate for an investment company of the Company’s nature and size. Care will be taken at all times to ensure that the board is composed of members who, as a whole, have the required knowledge, abilities and experience to properly fulfil their role and are sufficiently independent.

Directors’ interests

No director holds shares in the Company.

Board evaluation

The most recent board evaluation was completed in July 2021. The results of the evaluation were reviewed by the Chairman and discussed with the board. The conclusions from the board evaluation demonstrated that the directors showed the necessary commitment for effective fulfilment of their duties.

Board training and induction

The Company Secretary, the board or the Manager upon request of the board or any director individually, will offer induction training to new directors about the Company, its key service providers, the directors’ duties and obligations and other matters as may be relevant from time to time.

The board members are encouraged to keep up to date and attend training courses on matters which are directly relevant to their involvement with the Company.

Board appointment, election and tenure

The rules concerning the appointment and replacement of directors are contained in the Company’s articles of association and the Companies Act 2006.

The board takes into account the requirements of the AIC Code with regards to tenure. The board recognises the benefits to the Company of having longer serving directors together with progressive refreshment of the Board. None of the directors consider length of service as an impediment to independence or good judgement but, if they felt that this had become the case, the relevant director would stand down. The Company was incorporated in June 2017, therefore no director has served for more than nine years. The board is currently developing a succession plan.

The Directors of the Company and their biographies are set out on page 18. At the forthcoming AGM, in accordance with the AIC Code, all members of the board will put themselves forward for re-election.

The board considers that all of the current directors contribute effectively to the operation of the board and the strategy of the Company. The board has considered each board member’s independence of the Company and Manager.  As such the board believes that it is in the best interests of shareholders that each of the directors be re-elected.

 

Basis of Directors’ appointment

Consideration is given to the recommendations of the AIC Code on diversity.    The board seeks to appoint new directors on the basis of merit as a primary consideration, with the aim of bringing an appropriate range of skills, diversity and experience together.

Management agreement and continuing appointment

Details of the Manager’s agreement and fees are set out in note 4 to the financial statements.

The board keeps the performance of the Manager under continual review through the Company’s management engagement committee. The most recent evaluation of the Manager was completed on 21 July 2021, following which the board has concluded that due to its specialist knowledge of the sectors in which the Company invests and the Company’s performance to date, the continuing appointment of the Manager is in the best interests of shareholders as a whole.

 

CONFLICTS OF INTEREST

The articles of association provide that the directors may authorise any actual or potential conflict of interest that a director may have, with or without imposing any conditions that they consider appropriate on the director. Directors are not able to vote in respect of any contract, arrangement or transaction in which they have a material interest, and, in such circumstances, they are not counted in the quorum at the relevant board meeting. A process has been developed to identify any of the directors’ potential or actual conflicts of interest. This includes declaring any potential new conflicts before the start of each board meeting.

Audit Committee

The board has delegated certain responsibilities to its audit committee. The committee comprises two or more independent directors. The Chairman of the board may be a member of the committee and due to the size of the Board, the Chairman of the board, Perry Wilson acts as chairman of the Audit Committee. The board has established formal terms of reference for the audit committee which are available from the Company Secretary upon request. An outline of the remit of the audit committee and its activities during the year are set out below.

The audit committee is chaired by Perry Wilson and meets at least twice a year. It is responsible for ensuring that the financial performance of the Company is properly reported and monitored and provides a forum through which the Company’s external auditor may report to the board. The audit committee reviews and recommends to the board the annual and half-yearly reports and financial statements, financial announcements, internal control systems, risk metrics, decisions requiring a significant element of judgement and procedures and accounting policies of the Company.

Further details on the work of the audit committee can be found in the report of the audit committee on pages 31 – 33.

Management Engagement Committee

The Chairman of the Company acts as chairman of the management engagement committee. The management engagement committee meets once a year.  Its principal duties are to formally review the actions and judgements of the Manager, the terms of its management agreement and to review the performance and services of the Company’s other key service providers.  The committee reports to the board on its proceedings after each meeting.

The most recent evaluation of the Manager and other key service providers was completed July 2021.

The terms of reference of the committee are available from the Company Secretary.

 

COMPANY SECRETARY

The board has direct access to the advice and services of the Company Secretary, which is responsible for ensuring that the board and Committee procedures are followed, and that applicable rules and regulations are complied with. The Company Secretary is also responsible for ensuring good information flows between all parties.

 

REVIEW OF SHAREHOLDER PROFILE

The board reviews reports provided by qualified independent industry consultants and Shard Capital Partners LLP on the Company’s shareholder base and its underlying beneficial owners. The Manager and Shard Capital Partners LLP disclose any concerns raised by shareholders to the board.

 

STEWARDSHIP RESPONSIBILITIES AND THE USE OF VOTING RIGHTS

The Financial Reporting Council (FRC) introduced a Stewardship Code which sets out the responsibilities of institutional shareholders in respect of investee companies.  Under the Stewardship Code, managers should:

  • Publicly disclose their policy on how they will discharge their stewardship responsibilities to their clients;
  • Disclose their policy on managing conflicts of interest;
  • Monitor their investee companies;
  • Establish clear guidelines on how they escalate Evaluation;
  • Be willing to act collectively with other investors where appropriate;
  • Have a clear policy on proxy voting and disclose their voting record; and
  • Report to clients.

The Company recognises that with respect to its equity assets one of the important obligations that it has as a shareholder is the right to vote on issues submitted to shareholders. These issues may include the election of directors and other important matters that affect the structure of the investee company. The Manager acts on behalf of the Company in these matters and will exercise its voting rights, supported by independent providers, if considered appropriate, ahead of voting.

 

RELATIONS WITH SHAREHOLDERS

All shareholders have the opportunity to attend and vote, in person or by proxy, at the AGM. However, given the current restrictions as a result of COVID-19, it is recommended that shareholders vote by proxy as attendance at the AGM may not be possible.

The notice of Annual General Meeting (“AGM”) will be sent out separately in due course.   The notice of the AGM, which is sent out at least 21 clear days in advance of the AGM, sets out the business of the meeting and any item not of an entirely routine nature is explained in the directors’ report. Separate resolutions are proposed in respect of each substantive issue.

Any questions that shareholders wish to raise at the AGM can be emailed to info@sureventuresplc.com and the board and/or the Manager will respond as appropriate.

Proxy voting figures will be published on the Company’s website following the AGM.

The Manager holds regular discussions with major shareholders, the feedback from which is provided to and greatly valued by the board. The directors are available to enter into dialogue and correspondence with shareholders regarding the progress and performance of the Company. Further information about the Company can be found on the Company’s website https://www.sureventuresplc.com.

 

INTERNAL CONTROL REVIEW

The board has elected not to have an internal audit function as the Company delegates its operations to third-party service providers and does not employ any staff. Instead it has been agreed that the Company will rely on the internal controls which exist within its third-party providers.

The administrator, depositary and manager have established internal control frameworks to provide reasonable assurance on the effectiveness of the internal controls operated on behalf of their clients. The manager, the administrator, the depositary and the Company Secretary will report on any breaches of law or regulation, if and when they arise, periodically in scheduled board reports. The audit committee considers annually whether there is any need for an internal audit function, and it has agreed that it is appropriate for the Company to rely on the internal audit controls which exist within its third-party providers.

The board keeps under review the effectiveness of the Administrator and the Manager’s systems of internal control and risk management.  During the period under review, the board has not identified any significant failings or weaknesses in the internal control systems of its service providers. Details of the Company’s risks can be found on pages 13 to 15 of the Strategic Report, together with an explanation of the controls that have been established to manage each risk. The risk matrix provides a basis for the audit committee and the board to regularly monitor the effective operation of the controls and to update the matrix when new risks are identified.

The system of internal control and risk management is designed to meet the Company’s particular needs and the risks to which it is exposed.  The board recognises that these control systems can only be designed to manage, rather than eliminate, the risk of failure to achieve business objectives and to provide reasonable, but not absolute, assurance against material misstatement or loss.

ALTERNATIVE INVESTMENT FUND MANAGEMENT DIRECTIVE DISCLOSURE

Quantitative remuneration disclosure

In accordance with 3.3.5 (5) of the Financial Conduct Authority’s Investment Funds Sourcebook (“FUND”) and in accordance with the Financial Conduct Authority’s Finalised guidance – General guidance on the AIFM Remuneration Code (SYSC 19B) (‘the Guidelines’), dated January 2014, the total amount of remuneration paid by or paid to Shard Capital AIFM LLP, for the financial period to the 31 March 2021 in respect of the Company was £.63,311. The Shard Capital AIFM LLP out of its own resources decided to pay rebates out of the management fee. For the financial period to the 31 March 2021, the Company incurred rebate income from Shard Capital AIFM LLP £63,311. There was no performance fee payable in respect of the year ended 31 March 2020. Shard Capital AIFM LLP does not consider that any individual member of staff or partner of Shard Capital AIFM LLP has the ability to materially impact the risk profile of the Company.

Other disclosures

The AIFMD requires that Shard Capital AIFM LLP ensures that certain other matters are actioned and or reported to investors.  Each of these is set out below.

  • Provision and content of an annual report (FUND 3.3.2 and 3.3.5). The publication of the annual report and accounts of the Company satisfies these requirements.
  • Material change of information. The AIFMD requires certain information to be made available to investors in the Company before they invest and requires that material changes to this information be disclosed in the annual report.

Periodic disclosure (FUND 3.2.5 and 3.2.6)

There are no assets subject to special arrangements due to their illiquid nature and no new arrangements for the managing of the liquidity of the Company.

There is no change to the arrangements, as set out in the Prospectus, for managing the Company’s liquidity.

The current risk profile of the Company is set out in the Strategic Report: Principal Risks and Uncertainties on pages 13 to 15 and in note 15 of the Financial Statements, ‘Financial Risk Management’.

The Company is permitted to be leveraged and the table below sets out the current maximum permitted and actual leverage.

As a percentage of net asset value

Gross
method

Commitment
method

Maximuleveoleverage

100%

150%

Leverage as at 31 March 2021

75.61%

101.10%

There have been no breaches of the permitted leverage limits within the reporting period and no changes to maximum level of leverage employed by the Company.

Other matters

Shard Capital AIFM LLP has confirmed that all required reporting to the Financial Conduct Authority has been undertaken in accordance with FUND 3.4.

Approval

This Report was approved by the board of directors on 29 July 2021.

On behalf of the board
Perry Wilson
Chairman

 

Report of the Audit Committee

As chairman of the audit committee I am pleased to present the audit committee report for the year ended 31 March 2021.

 

MEMBERSHIP OF THE AUDIT COMMITTEE

As the board is small with only three members, St John Agnew and Perry Wilson are both appointed members of the audit committee. As chairman of the audit committee, I can confirm that I have relevant financial experience to fulfil my obligations in this capacity.

 

THE ROLE OF THE AUDIT COMMITTEE

The role of the audit committee is defined in its terms of reference, which can be obtained from the Company Secretary.

In summary, the role of the audit committee includes the following:

  • To monitor the financial reporting process;
  • To review and monitor the integrity of the half-year and annual financial statements and review and challenge where necessary the accounting policies and judgements of the manager and administrator;
  • To review the adequacy and effectiveness of the Company’s internal financial and internal control and risk management systems;
  • To make recommendations to the board on the re-appointment or removal of the external auditor and to approve its remuneration and terms of engagement;
  • To review and monitor the external auditor’s independence and objectivity; and
  • To review and consider on an annual basis the need for an internal audit function.

Matters considered during the year

The audit committee has met twice during the year under review and considered the following items:

  • The Company’s audit plan with the external auditor;
  • The policy on non-audit services;
  • The dividend policy; and
  • The accounting restatement of the Income Statement for the year ended 31 March 2020.

The Audit Committee also reviewed the following items:

  • Whether there was a requirement for an internal audit function;
  • The Company’s risk matrix and the internal controls implemented to manage those risks; and
  • The appropriateness of the Company’s accounting policies and whether appropriate estimates and judgements have been made.

UK non-audit services

In relation to non-audit services, the audit committee has reviewed and implemented a policy on the engagement of the auditor to supply non-audit services and this will be reviewed on an annual basis. All requests or applications for other services to be provided by the auditor are submitted to the audit committee and will include a description of the services to be rendered and an anticipated cost. The Company’s policy follows the requirements of the Financial Reporting Council’s Revised Ethical Standard 2019. The policy specifies a number of prohibited services which it is not permitted for the auditor to provide under the revised Ethical Standard.

For the year ended 31 March 2021, there were no non-audit fees services rendered to the Company and none for the year ended 31 March 2020.

The audit committee reviewed the level of non-audit services and were satisfied that the auditors maintained their independence.

 

SIGNIFICANT ACCOUNTING MATTERS

The audit committee met on 21 July 2021 to review the report and accounts for the year to 31 March 2021. The audit committee considered the following significant issues, including principal risks and uncertainties in light of the Company’s activities and issues communicated by the auditors during their review, all of which were satisfactorily addressed:

Issues considered

How the issue was addressed

Retention of investment trust status

The audicommittee receiveassurance frothCompanyInvestment Manager thathCompany has remained compliant with the requirements to maintain its investment trust status. The directors regularly review the investments and their mix to ensure they remain diversified, its retained income levels to ensure sufficient distributions are made and the Company’s shareholdings to determine if the Company has become a close company.

Risk of misappropriation of assets and ownershioinvestments

The audit committee reviews reportfroitservice providerokecontrols ovethassetothCompany.  Ansignificant issueare reported to the board by the manager and/ or thCompanys depositary.  The Manager has put in place procedures to ensurthainvestments can only be made to the extent that thappropriate contractual and legal arrangements are in placto protecthCompanys assets.  The Company’s depositary issues a quarterly report on the status of the assets to the directors for review.

The risk that income is overstated, incomplete or inaccurate through failurto recognise proper income entitlementor to apply the appropriate accountintreatment for recognition of income

The board regularly reviews income forecasts. The external audit includes checks on the completeness and accuracy of income and also checks that this has been recognised in accordance with stated accounting policies.

The risk that valuation of the Investments held may be not be correct.

The audicommittee receiveassurance frothCompanys administrators and manager thathCompany’s valuation policy is followed at all times.

The accounting restatement of the Income Statement for the year ended 31 March 2020.

Through restatement in current year.

External auditor

The Company’s external auditor, PKF Littlejohn LLP (“PKF”), was appointed pursuant to the engagement letter dated 17 June 2021. The audit committee intends to re-tender within the timeframe set by the Financial Reporting Council.

The individual at PKF who acts as the Company’s appointed audit partner is Ian Cowan, whose appointment is reviewed annually.  In accordance with UK legislation, the audit partner must rotate at least every five years.  As this is Ian Cowan’s fourth year as audit partner, he will be due to rotate out of this role following the completion of the audit for the year ended 31 March 2022.

The audit fees for the period under review can be found in note 5 to the financial statements on page 54.

The audit committee monitors the auditor’s objectivity and independence on an ongoing basis.  In determining PKF’s independence, the audit committee has assessed all relationships with PKF and received confirmation from PKF that it is independent and that no issues of conflicts arose during the period.  The audit committee is therefore satisfied that PKF is independent.

The audit committee monitors and reviews the effectiveness of the external audit process on an annual basis and makes recommendations to the board on its re-appointment, remuneration and terms of engagement of the auditor.  The audit committee has met with the audit partner and assessed PKF’s performance to date and to discuss the Company’s audit and other matters concerning the Company.  I can confirm that Ian Cowan did not raise any issues of concern during our meeting.  The review has involved an examination of the auditor’s remuneration, the quality of its work including the quality of the audit report, the quality of the audit partner and audit team, the expertise of the audit firm and the resources available to it, the identification of audit risk, the planning and execution of the audit and the terms of engagement.

The audit committee has direct access to the Company’s auditor and provides a forum through which the auditor reports to the board.  Representatives of PKF attend the audit committee meetings at least twice annually.

Internal audit

The audit committee believes that the Company does not require an internal audit function, principally because the Company delegates its day-to-day operations to third parties, which are monitored by the audit committee, and which provide control reports on their operations at least annually.

This report was approved by the audit committee on 29 July 2021.

 

 

Perry Wilson
ChairmaothAudiCommittee

Statement of Directors’ Responsibilities

The directors are responsible for preparing the Annual Report, the directors’ Remuneration Report and the financial statements in accordance with applicable law and regulations.

Applicable law requires the directors to prepare financial statements for each financial year. As such the directors have prepared the financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. The directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that year. In preparing these financial statements, the directors are required to:

  • select suitable accounting policies and then apply them consistently;
  • make judgements and accounting estimates that are reasonable and prudent;
  • state whether applicable international accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
  • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

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 and the directors’ Remuneration Report 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 directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The directors consider that the Annual Report and financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess a company’s performance, business model and strategy.

Each of the directors, whose names and functions are listed in the Directors’ Report, confirms that, to the best of their knowledge:

  • the financial statements, which have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006, give a true and fair view of the assets, liabilities, financial position and profit of the Company;
  • the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces;
  • so far as the director is aware, there is no relevant audit information of which the Company’s auditors are unaware; and
  • they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.

Directors’ Remuneration Report

 

STATEMENT FROM THE CHAIRMAN

I am pleased to present the directors’ remuneration report for the year ended 31 March 2021, prepared in accordance with The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 and the Companies Act 2006. The Company’s auditor is required to verify certain information within this report subject to statutory audit by the Companies Act 2006. Where information set out below has been audited it is indicated as such.

We are required to seek shareholder approval of the directors’ remuneration policy at least every third year and the remuneration report annually. Any changes to the directors’ remuneration policy will require shareholder approval. The Company’s remuneration policy is set out below and was last approved by shareholders at the AGM held in September 2020. An ordinary resolution to approve the directors’ remuneration policy will be put to shareholders at least once every three years. At the AGM, shareholders will also be asked to consider an advisory resolution on the contents of the directors’ remuneration report.

As at 31 March 2021, the board comprised three non-executive directors, two of whom are independent of the manager.

Given the size of the board, and as the Company has no employees, it is not considered appropriate for the Company to establish separate remuneration and nomination committees. It is, therefore, the Company’s practice for the board to consider and approve directors’ remuneration. Prior to the Company’s incorporation, directors’ fees were set at the rate of £24,000 per director per annum for Perry Wilson. Gareth Burchell has agreed to waive his director’s fee.

As the board’s fees were considered prior to its listing as an investment company, the appointment of external remuneration consultants was not considered necessary. Furthermore, the board took the decision not to revise the board’s fees because they did not feel it was appropriate, given the Company’s short existence.  Many parts of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 do not apply to the Company as the board is comprised entirely of non-executive directors and the Company has no employees.

 

DIRECTORS’ REMUNERATION POLICY

The remuneration policy was approved at the Company’s Annual General Meeting held on 24 September 2020, with all shareholders present voting in favour of the resolution on a show of hands.

The maximum fees for the board as a whole are limited by the Company’s Articles of Association to £300,000 per annum. Subject to this limit, the board’s policy is that remuneration of non-executive directors should reflect the experience of the board member and the time commitment required by board members to carry out their duties, and is determined with reference to the appointment of directors of similar investment companies. The level of remuneration has been set with the aim of promoting the future success of the Company. With this in mind the board considers remuneration in order to attract individuals of a calibre appropriate to promote the long-term success of the Company and to reflect the specific circumstances of the Company and its field of investment, the duties and responsibilities of the directors and the value and amount of time commitment required of directors to the Company’s affairs.

Due regard is taken of the board’s requirement to attract and retain individuals with suitable knowledge and experience and the role that individual directors fulfil. There are no specific performance-related conditions attached to the remuneration of the board and the board members are not eligible for bonuses, pension benefits, share options, long-term incentive schemes or other non-cash benefits or taxable expenses.  No other payments are made to directors other than reasonable out-of-pocket expenses which have been incurred as a result of attending to the affairs of the Company.

In addition to the board’s remuneration, board members are entitled to such fees as they may determine in respect of any extra or special services performed by them, having been called upon to do so. Such fees would only be incurred in exceptional circumstances. An example of such a circumstance would be if the Company was to undertake a corporate action, which would require the board to dedicate additional time to review associated documents and to attend additional meetings.  Such fees would be determined at the board’s absolute discretion and would be set at a similar rate to other comparable investment companies who have undertaken equivalent activities.  The fees would be set with the Company’s long-term success in mind and the interests of the Company’s members as a whole would be considered prior to the setting of such fees.

The directors are entitled to be paid all expenses properly incurred by them in attending meetings with shareholders or other directors or otherwise in connection with the discharge of their duties as directors. Shareholders have the opportunity to express their views in respect of directors’ remuneration at the Company’s AGM. The Company has not sought shareholder views on its remuneration policy. Any comment volunteered by shareholders on the remuneration policy will be carefully considered and appropriate action taken. No communications have been received from shareholders on the Company’s remuneration policy.

The Company’s remuneration policy and its implementation are reviewed by the board as a whole on an annual basis.  Directors do not vote on their own fees. Reviews are based on third parties’ information on the fees of other similar investment trusts.

None of the directors has a service contract with the Company, nor are any such contracts proposed.  Instead, directors are appointed pursuant to a letter of appointment entered into with the Company. There is no notice period specified in the letters of appointment or articles of association for the removal of directors. Directors are not appointed for a specific term. Copies of the directors’ letters of appointment are available at each of the Company’s AGMs.

The directors are not entitled to exit payments and are not provided with any compensation for loss of office.

As with most investment trusts there is no chief executive officer and no employees. The Company’s remuneration policy will apply to new board members, who will be paid the equivalent amount of fees as current board members holding similar roles.

 

VOTING AT ANNUAL GENERAL MEETING

As stated above an ordinary resolution for the approval of the proposed directors’ remuneration policy was last approved by shareholders at the AGM held in September 2020.

The directors’ remuneration report, including the implementation of the directors’ remuneration policy, is subject to an annual advisory vote via an ordinary resolution. An advisory vote is a non-binding resolution.  At the last Annual General Meeting of the Company held on 24 September 2020, the vote to approve the Directors’ Remuneration Report was passed with all shareholders presented voted in favour of the relation by a show of hand and the resolution was passed.

Directors’ fees (audited)

Single total aggregate directors’ remuneration for the year under review was £52,200 (2020 £55,609). The directors who served during the year under review received the following emoluments:

Director

Fees paid during the
year under review
(1 April 2020 to 31 March 2021)

Taxable
benefits

Non-taxable
benefits

Total year to
31 March 2021

John St Agnew (1)

£26,100

£-

£-

£26,100

Perry Wilson (Chair)

£26,100

£-

£-

£26,100

Total

£52,200

£-

£-

£52,200

Director

Fees paid during the
year under review
(1 April 2019 to 31 March 2020)

Taxable
benefits

Non-taxable
benefits

Total year to
31 March 2020

Chris Boody (1)

£8,315

£-

£-

£8,315

John St Agnew (1)

£21,173

£-

£-

£21,173

Perry Wilson (Chair)

£26,121

£-

£-

£26,121

Total

£55,609

£-

£-

£55,609

(1)  Chris Boody resigned on 14 June 2019. John St Agnew appointed on 14 June 2019.

No payments were made to past directors for loss of office. In the absence of further major increases in the workload and responsibility involved, the board does not expect fees to increase significantly over the next three years. The overall remuneration of each director will continue to be monitored by the board, taking into account those matters referred to in the annual statement above. The Company did not pay any other benefits including bonuses, pension benefits, share options, long-term incentive schemes or other non-cash benefits or taxable benefits.

The Company has not made any loans to the directors, nor has it ever provided any guarantees for the benefit of any director or the directors collectively nor does it intend to.

Company Performance

The board is responsible for the Company’s investment strategy and performance, although day-to-day management of the Company’s affairs, including the management of the Company’s portfolio, has been delegated to third-party service providers. An explanation of the performance of the Company is given in the Chairman’s statement and the Investment Manager’s report on pages 4 and 9.

 

EXPENDITURE BY THE COMPANY ON DIRECTORS’ REMUNERATION COMPARED WITH DISTRIBUTIONS TO SHAREHOLDERS

The following table is provided in accordance with The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 which sets out the relative importance of spend on pay in respect of the year ended 31 March 2021. The table shows the remuneration paid to directors for the period under review, compared to the distribution payments to shareholders.

Year from
1 April 2020 to 31 March 2021

Total remuneration paid to Directors

£52,200

Shareholder distribution – dividends or share buybacks

£-

Year from
1 April 2019 to 31 March 2020

Total remuneration paid to Directors

£55,609

Shareholder distribution – dividends or share buybacks

£-

DIRECTORS’ INTERESTS (AUDITED)

The Company does not have any requirement for any director to own shares in the Company.

As at 31 March 2021, the directors do not hold shares in the Company.

There have been no changes to any holdings between 31 March 2021 and the date of this report.

 

APPROVAL OF THE ANNUAL REPORT ON REMUNERATION AND THE DIRECTORS’ REMUNERATION POLICY

The Annual Report on remuneration was approved by the board on 29 July 2021 and signed on its behalf by:

Perry Wilson
Chairman

 

6    Independent Auditors’ Report

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SURE VENTURES PLC

Opinion

We have audited the financial statements of Sure Ventures PLC (the ‘company’) for the year ended 31 March 2021 which comprise the Income Statement, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and international accounting standards in conformity with the requirements of the Companies Act 2006.

In our opinion, the financial statements:

  • give a true and fair view of the state of the company’s affairs as at 31 March 2021 and of its profit for the year then ended;
  • have been properly prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006; 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 public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director’s use of 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:

a.     Reviewing management’s assessment of going concern, including reviewing and challenging any management forecasts over the twelve months immediately following the approval of the financial statements

b.     Reviewing management’s assessment of the Covid-19 impact on the realisation of investments.

c.     Determining if all relevant information has been included in the assessment of going concern.

d.     Reviewing the Company’s ongoing maintenance of investment trust status.

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

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. For planning, we consider materiality to be the magnitude by which misstatements, including omissions, either individually or in aggregate, could reasonably be expected to influence the economic decisions of users that are taken on the basis of the financial statements. Importantly, misstatements below this level will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstance of their occurrence, when evaluating their effect on the financial statements. The application of these key considerations gives rise to two levels of materiality, the quantum and purpose of which are tabulated below.

Materiality measure

Purpose

Amount

Key considerations and benchmarks

Overall financial statement materiality-Based on 1.5% of net assets

Assessing whether the financial statements, as a whole present a true and fair view.

£49,250

(2020: £67,600)

We used net assets as benchmark given the nature of the business, which is asset focused, particularly in respect of the following:

·      The value of the invested assets

·      The level of judgment inherent in the valuation

·      The range of reasonable alternative valuations

We also determine a level of performance materiality which we use to assess the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole. Performance materiality was set at £34,475, being 70% of materiality for the financial statements as a whole.

There were also no revisions in materiality in the course of the audit.

We have agreed with the audit committee that we would report to the committee as individual audit differences in excess of £2,462 (2020: £3,400) as well as differences below these thresholds that, in our view, warranted reporting on qualitative grounds.

Our approach to the audit

Our audit approach was developed by obtaining an understanding of the company’s activities and the overall control environment. Based on this understanding we assessed those aspects of the company’s transactions and balances which were most likely to give rise to a material misstatement and were most susceptible to irregularities including fraud or error. We looked at areas involving significant accounting estimates and judgement by the directors and considered future events that are inherently uncertain. We also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. We identified what we considered to be key audit matters in the next section and planned our audit approach accordingly.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matter

How the scope of our audit addressed the key audit matter

The valuation of investments held at fair value through

profit or loss. (Note 8). 

 

The valuation of investments at 31 March 2021 was

£3,724,611 (2020 – £3,078,560) consisting of a portfolio of listed, unlisted and fund investments.

 

The valuation of the assets held in the investment

portfolio is the key driver of the Company’s net asset

value. Incorrect investment valuations could

materially affect the overall investment portfolio

valuation and subsequently the return generated for

the shareholders.

 

The investments valued at fair value through profit or

loss in the Company’s Non-Current assets at the

period end, are largely driven by the audited Net Asset

Value (“NAV”) of the investee Fund’s portfolio. 

 

The Investee Fund has holdings in private equity

companies being Level 3 investments that are valued

according to a specific investment methodology. 

 

As the investments are material to the overall

performance of the Company and significant

judgement is applied in valuing these, there is a risk

that the underlying investments are inappropriately

valued. 

 

 

 

 

We considered the design and implementation of

controls in place over the valuation of investments

and also reviewed the assumptions and underlying

evidence supporting the year end valuations to

ensure that they are in line with IFRS.

 

We obtained an understanding of the valuation

process applied by the company.

 

We agreed the value of the company’s investment

in the Sure Valley Ventures Fund to the Fund’s

audited financial statements for the year ended 31

March 2021.

 

We reviewed the valuation methodology applied for

each investment to consider whether it was

appropriate based on the investment’s individual

circumstances and not inconsistent with observed

industry best practice and the provisions of the

International Private Equity and Venture Capital

Valuation Guidelines.

 

We agreed the inputs which drive the overall

valuation to source documentation.

 

We considered the appropriateness and relevance

of disclosures in accordance with relevant

accounting standards. 

 

We concluded that the valuations attributed to the

Company’s investments were appropriate.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements 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.

Corporate governance statement

The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the company’s compliance with the provisions of the UK Corporate Governance Statement specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:

  • Directors’ statement with regards the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified [set out on page 21];
  • Directors’ explanation as to its assessment of the entity’s prospects, the period this assessment covers and why they period is appropriate [set out on page 21].
  • Directors’ statement that they consider the annual report and the financial statements, taken as a whole, to be fair, balanced and understandable [set out on page 34];
  • Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks [set out on page 13];

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

  • the information given in the strategic report and the directors’ report for the financial period for which the financial statements are prepared is consistent with the financial statements;
  • 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 and the part of the directors’ remuneration report to be audited are not in agreement with the accounting records and returns; or
  • certain disclosures of directors’ remuneration specified by law are not made;
  • a corporate governance statement has not been prepared by the company; or
  • we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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, 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 taxation, the Listing Rules and the Companies Act 2006.
  • 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:
    • Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations discussed above;
    • Using appropriate checklists and our experience to assess the Company’s compliance with the Companies Act 2006 and the Listing Rules;
    • Reading minutes of meetings of those charged with governance; and
    • Reviewing any legal or regulatory correspondence
  • All engagement team members were briefed on relevant laws and regulations and potential fraud risks at the planning stage of the audit. However, the primary responsibility for the prevention and detection of fraud rest with those charged with governance of the Company.
  • 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 a potential management bias was identified in relation to the following areas: 
    • Valuation of the investments
    • Revenue recognition 
    • We addressed the risk of bias by challenging the assumptions and judgements made by management in each of the above noted areas.
    • 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.

Other matters which we are required to address

We were appointed by the members on 16 April 2018 to audit the financial statements for the period ending 31 March 2018 and subsequent financial periods. Our total uninterrupted period of engagement is four years covering the periods ending 31 March 2018 to 31 March 2021.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the company and we remain independent of the company in conducting our audit.

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience and through discussion with the directors. We have identified the requirements of the Disclosure Guidance and Transparency Rules, the UK Corporate Governance Code and the Companies Act 2006 to be significant in the context of this entity. We considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statements items.

We communicated laws and regulations throughout our audit team and remained alert to any indications of non-compliance throughout the audit.

As with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit opinion is consistent with the additional report to the audit committee.

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.

Ian Cowan (Senior Statutory Auditor)                                                                                                          15 Westferry Circus

For and on behalf of PKF Littlejohn LLP                                                                                                      Canary Wharf

Statutory Auditor                                                                                                                                             London E14 4HD

30 July 2021

 

7    Financial Statements

Income Statement

For the year ended 31 March 2021

2021

2020 Restated

Notes

Revenue

£

Capital
£

Total
£

Revenue

£

Capital
£

Total
£

Income

Gains on disposal of investments

79,883

79,883

946,817

946,817

Other net changes in fair value on financial assets at fair value through profit or loss

178,793

178,793

(237,271)

(237,271)

Rebate management fee

63,311

63,311

55,495

55,495

Total net income

63,311

258,676

321,987

55,495

709,546

765,041

Expenses

Management fee

4

(47,869)

(15,442)

(63,311)

(37,881)

(17,614)

(55,495)

Custodian, secretarial and administration fees

(98,625)

(98,625)

(94,785)

(94,785)

Other expenses

5

(195,456)

(195,456)

(169,280)

(169,280)

Total operating expenses

(341,950)

(15,442)

(357,392)

(301,946)

(17,614)

(319,560)

(Loss) / profit before Taxation and after finance costs

(278,639)

243,234

(35,405)

(246,451)

691,932

445,481

Taxation

6

(Loss) / profit after taxation

(278,639)

243,234

(35,405)

(246,451)

691,932

445,481

Earnings per share

7

(5.21)

4.55

(0.66)

(5.06)

14.21

9.15

The total column of this statement represents the Income statement prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. The supplementary revenue return and capital return columns are both prepared under guidance issued by the Association of Investment Companies. All items in the above statement derive from continuing operations.

The Company does not have any income or expense that is not included in net loss for the year. Accordingly, the net (loss) / profit for the year is also the Total Comprehensive Income for the year, as defined in IAS1 (revised).

The notes on pages 50 to 63 form an integral part of the financial statements.

Statement of Financial Position

As at 31 March 2021                                                                                         Company No. 10829500

Notes

31 March 2021
£

31 March 2020
£

Non-current assets

Investments held at fair value through profit or loss

8

3,724,611

3,078,560

3,724,611

3,078,560

Current assets

Receivables

9

18,620

Cash and cash equivalents

1,255,199

1,700,601

1,255,199

1,719,221

Total assets

4,979,810

4,797,781

Current liabilities

Other payables

10

(54,046)

(287,862)

(54,046)

(287,862)

Total assets less current liabilities

4,925,764

4,509,919

Total net assets

4,925,764

4,509,919

Shareholders’ funds

Ordinary share capital

11

53,507

48,699

Share premium

5,146,030

4,699,588

Revenue reserves

(1,026,510)

(747,871)

Capital reserves

752,737

509,503

Total shareholders’ funds

4,925,764

4,509,919

Net asset value per share

12

92.06p

92.61p

The notes on pages 50 to 63 form an integral part of the financial statements.

The financial statements on pages 46 to 63 were approved by the board of directors and authorised for issue on 29 July 2021. They were signed on its behalf by:

Perry Wilson, Chairman

Statement of Changes in Equity

For the year ended 31 March 2021

Ordinary

Share

Capital

£

Share

Premium

£

Revenue

Reserves

£

Capital

Reserves

£

Total

Reserves

£

Total

Equity

£

Balance at 1 April 2020

48,699

4,699,588

(747,871)

509,503

(238,368)

4,509,919

Ordinary shares issued

4,808

470,192

475,000

Ordinary shares issue costs

(23,750)

(23,750)

(Loss)/profit after taxation

(278,639)

243,234

(35,405)

(35,405)

Dividends paid in the year

Balance at 31 March 2021

53,507

5,146,030

(1,026,510)

752,737

(273,773)

4,925,764

For the year ended 31 March 2020

Ordinary

Share

Capital

£

Share

Premium

£

Revenue

Reserves

£

Capital

Reserves

£

Total

Reserves

£

Total

Equity

£

Balance at 1 April 2019

45,647

4,428,290

(501,420)

(182,429)

(683,849)

3,790,088

Ordinary shares issued

3,052

289,948

293,000

Ordinary shares issue costs

(18,650)

(18,650)

Profit/(loss) after taxation

(246,451)

691,932

445,481

445,481

Dividends paid in the year

Balance at 31 March 2020

48,699

4,699,588

(747,871)

509,503

(238,368)

4,509,919

As at 31 March 2021 the Company had distributable revenue reserves of £nil (2020: £nil) for the payment of future dividends. The distributable reserves are the revenue reserves £nil (2020: £nil) capital reserves £752,737 (2020: £509,503).

The notes on pages 50 to 63 form an integral part of the financial statements.

Statement of Cash Flows

For the year ended 31 March 2021

Notes

For the year ended

31 March 2021
£

For the year ended

31 March 2020
£

Cash flows from operating activities:

Loss/(profit) after taxation

(35,405)

445,481

Adjustments for:

Gain on sale on investment

(79,883)

(946,817)

Decrease/(increase) in receivables

18,620

(18,620)

(Decrease)/increase in payables

10

(233,816)

237,208

Unrealised loss/(gain) on foreign exchange

8

119,496

(76,430)

Net changes in fair value on financial assets at fair value through profit or loss

8

(298,289)

313,482

Net cash (outflow) from operating activities

(509,277)

(45,696)

Cash flows from investing activities:

Purchase of investments

8

(534,171)

(1,894,014)

Sales of investments

8

146,796

1,226,119

Net cash (outflow) investing activities

(387,375)

(667,895)

Cash flows from financing activities*:

Proceeds from issue of ordinary shares

475,000

293,000

Share issue costs

(23,750)

(18,650)

Net cash inflow from financing activities

451,250

274,350

Net change in cash and cash equivalents

(445,402)

(439,241)

Cash and cash equivalents at the beginning of the year

1,700,601

2,139,842

Net cash and cash equivalents

1,255,199

1,700,601

*The Company has no borrowings or liabilities from financing activities.

The notes on pages 50 to 63 form an integral part of the financial statements.

Notes to the Financial Statements

 

1) PRINCIPAL ACCOUNTING POLICIES

Basis of accounting

The financial statements of Sure Ventures plc (the “Company”) have been prepared in accordance with international accounting standards and interpretations in conformity with the requirements of the Companies Act 2006.

The principal accounting policies adopted by the Company are set out below. Where presentational guidance set out in the Statement of Recommended Practice (‘SORP’) for investment trusts issued by the Association of Investment Companies (‘AIC’) in October 2019 is consistent with the requirements of the applicable international accounting standards, the directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

The financial statements have been prepared on a  going concern basis under the historical cost convention, as modified by the inclusion of investments and financial instruments at fair value through profit or loss.

All values are rounded to the nearest pound unless otherwise indicated.

Foreign Currency

The presentation currency of the Company is pounds sterling, the financial statements are prepared in this currency in accordance with the Company’s prospectus. The Company is required to nominate a functional currency, being the currency in which the Company predominantly operates. The board has determined that sterling is the Company’s functional currency.

Foreign exchange gains and losses relating to the financial assets and liabilities carried at fair value through profit or loss are presented in the income statement within ‘other net changes in fair value on financial assets and financial liabilities at fair value through profit or loss’.

Presentation of Income statement

In order to better reflect the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the Income statement between items of a revenue and capital nature has been presented alongside the Income statement.

Income

Dividend income from investments is recognised when the Company’s right to receive payment has been established, normally the ex-dividend date.

Interest income in profit or loss in the Income statement includes bank interest. Interest income is recognised on an accruals basis.

Capital distributions and all changes in fair value of investments held at fair value through profit or loss are recognised in the capital coloumn of the Income statement.

Expenses

All expenses are accounted for on the accruals basis. In respect of the analysis between revenue and capital items presented within the Income statement, all expenses have been presented as revenue items except as follows:

Transaction costs which are incurred on the purchases or sales of investments designated as fair value through profit or loss are expensed to capital in the Income statement.

Expenses are split and presented partly as capital items where a connection with the maintenance or enhancement of the value of the investments held can be demonstrated and, accordingly, the management fee for the financial year has been allocated 75.61% (2020: 68.26%) to revenue and 24.39% (2020: 31.74%) to capital, in order to reflect the directors’ long term view of the nature of the expected investment returns of the Company.

Capital Reserves

Increases and decreases in the valuation of investments and realised/unrealised foreign exchange gain/(loss) held at the year end are accounted for in the capital reserves.

Taxation

In line with the recommendations of the SORP, the allocation method used to calculate tax relief on expenses presented against capital returns in the supplementary information in the Income statement is the ‘marginal basis’. Under this basis, if taxable income is capable of being entirely offset by expenses in the revenue column of the Income statement, then no tax relief is transferred to the capital return column.

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 Statement of Financial Position liability method. Deferred tax liabilities are 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.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the revenue return column of 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.

Investment trusts which have approval under Part 24, Chapter 4 of the Corporation Tax Act 2010 are not liable for taxation on capital gains.

Classification

Financial assets and financial liabilities

In accordance with international accounting standards in conformity with the requirements of the Companies Act 2006., the Company has designated its investments as financial assets at fair value through profit or loss.

i)      Financial assets at fair value through profit or loss

 

The Company has designated all of its investments upon initial recognition as “financial assets at fair value through profit or loss”. Their performance is evaluated on a fair value basis, in accordance with the risk management and investment strategies of the Company.

 

ii)     Financial assets at amortised cost

 

Financial assets that are classified as “financial assets at amortised cost” include cash and cash equivalents and receivables.

 

iii)    Financial liabilities at fair value through profit or loss

 

Financial liabilities that are not at fair value through profit or loss include other payables.

Derecognition

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or where the group has transferred substantially all risks and rewards of ownership. If substantially all the risks and rewards have been neither retained nor transferred and the group has retained control, the assets continue to be recognised to the extent of the group’s continuing involvement. Financial liabilities are derecognised when they are extinguished.

Investments

All investments held by the Company have been designated at fair value through profit or loss (‘FVPL’) but are also described in these financial statements as investments held at fair value, and are valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines (‘IPEVCV’) issued in December 2018 as endorsed by the British Private Equity and Venture Capital Association.

Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional.

Receivables

Receivables do not carry any interest and are short term in nature. They are initially stated at their nominal value and reduced by appropriate allowances for estimated irrecoverable amounts (if any).

Cash and cash equivalents

Cash and cash equivalents (which are presented as a single class of asset on the Statement of Financial Position) comprise cash at bank and in hand and deposits with an original maturity of three months or less. The carrying value of these assets approximates their fair value.

Payables

Payables are non-interest bearing.

Dividends

Interim dividends are recognised in the year in which they are paid. Final dividends are recognised when they have been approved by shareholders.

New standards, amendments and interpretations effective from 1 January 2020

The following standards, amendments and interpretations, which became effective in January 2020, are relevant to the Company.

IAS 1 – Presentation of Financial Statements, IAS 8 – Accounting Policies, Changes in Accounting Policies

The International Accounting Standards Board has issued ‘Definition of Material (Amendments to IAS 1 and IAS 8)’ to clarify the definition of ‘material’ and to align the definition used in the Conceptual Framework and the standards themselves. The amended definition is; Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.

The amendment is effective from 1 January 2020 and the Company has adopted the amendment and it has not resulted in any change to the presentation of these financial statements.

Adoption of New and Revised Standards

There are no standards, amendments to standards or interpretations that are effective for annual periods beginning on or after 1 January 2021 that are expected to have a material effect on the financial statements of the Company.

CAPITAL STRUCTURE

Share Capital

Ordinary shares are classed as equity. The ordinary shares in issue have a nominal value of one penny and carry one vote each.

Share Premium

This reserve represents the difference between the issue price of shares and the nominal value of shares at the date of issue, net of related issue costs.

Capital Reserve

Unrealised gains and losses on investments held at the year end arising from movements in fair value, gains on disposal of investments are taken to the capital reserve.

Revenue Reserve

Net revenue profits and losses of the Company.

 

2)  SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with international accounting standards in conformity with the requirements of the Companies Act 2006. requires the Company to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting year.  Although these estimates are based on the directors’ best knowledge of the amount, actual results may differ ultimately from those estimates.

The areas requiring a higher degree of judgement or complexity and areas where assumptions and estimates are significant to the financial statements are in relation to investments at fair value through profit or loss described below.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Equity Investments

The unquoted equity assets are valued on a periodic basis using techniques including a market approach, costs approach and/or income approach.  The valuation process is collaborative, involving the finance and investment functions within the manager with the final valuations being reviewed by the manager’s valuation committee.

Shareholders should note that increases or decreases in any of the inputs in isolation may result in higher or lower fair value measurements. Changes in fair value of all investments held at fair value are recognised in the Income statement as a capital item. On disposal, realised gains and losses are also recognised in the Income statement.

 

3)  SEGMENTAL REPORTING

The Company’s board and the Investment Manager consider investment activity in selected Equity Assets as the single operating segment of the Company, being the sole purpose for its existence. No other activities are performed.

The directors are of the opinion that the Company is engaged in a single segment of business and operations of the Company are wholly in the United Kingdom.

 

4)  MANAGEMENT AND PERFORMANCE FEE

Management Fee

The management fee is payable quarterly in advance at a rate equal to 1/4 of 1.25% per month of net asset value (the ”Management Fee”). The aggregate fee payable on this basis must not exceed 1.25% of the net assets of the Company in any year.

During the year the Company incurred £63,311 (2020: £55,495) of fees and at 31 March 2021, there was £nil (2020: £nil) payable to the Manager.

Management fee is allocated to revenue and capital expenses in order to reflect the directors’ long term view of the nature of the expected investment returns of the Company. The revenue expense is the percentage of investment held at fair value through profit or loss to the net asset value of the Company. The management fee for the financial year has been allocated 75.61% (2020: 68.26%) to revenue and 24.39% (2020: 31.74%) to capital.

Performance Fee

The Manager is entitled to a performance fee, which is calculated in respect of each twelve month period starting on 1 April and ending on 31 March in each calendar year (‘Calculation Period’), and the final Calculation Period shall end on the day on which the management agreement is terminated or, if earlier, the business day immediately preceding the day on which the Company goes into liquidation.

The Manager is entitled to receive a performance fee equal to 15% of any excess returns over a high watermark, subject to achieving a hurdle rate of 8% in respect of each performance period. There is no performance fee charged during the year ended 31 March 2021. (2020: £nil)

 

5)  OTHER EXPENSES

For the year

ended

31 March 2021
£

For the year

ended

31 March 2020
£

Auditor’s remuneration – audit fees

22,700

29,940

Directors’ fees

52,200

55,609

VAT Expense

26,954

12,285

Legal and other professional

19,039

7,270

Listing fees

50,689

24,433

Service Fee Expense

8,987

8,879

Other expenses

14,887

30,864

Total Other expenses

195,456

169,280

All expenses are inclusive of VAT where applicable. Further details on directors’ fees can be found in the directors’ remuneration report on page 35.

 

6)  TAXATION

As an investment trust the Company is exempt from corporation tax on capital gains. The Company’s revenue income is subject to tax, but offset by any interest distribution paid, which has the effect of reducing that corporation tax to nil (2020: nil). This means the interest distribution may be taxable in the hands of the Company’s shareholders.

Any change in the Company’s tax status or in taxation legislation generally could affect the value of investments held by the Company, affect the Company’s ability to provide returns to shareholders, lead the Company to lose its exemption from UK Corporation tax on chargeable gains or alter the post-tax returns to shareholders. It is not possible to guarantee that the Company will remain a non-close company, which is a requirement to maintain status as an investment trust, as the ordinary shares are freely transferable. The Company, in the event that it becomes aware that it is a close company, or otherwise fails to meet the criteria for maintaining investment trust status, will as soon as reasonably practicable, notify shareholders of this fact.

The Company has obtained initial approval of investment trust status from HM Revenue & Customs and the directors believe that the Company has met the ongoing investment trust requirements since the date of initial approval.

Factors affecting taxation charge for the year

The taxation charge for the year is lower than the standard rate of UK corporation tax of 19.00% (2020: 19.00%). A reconciliation of the taxation charge based on the standard rate of UK corporation tax to the actual taxation charge is shown below.

 

31 March 2021

Revenue
£

Capital
£

Total
£

Return on ordinary activities before taxation

(278,639)

243,234

(35,405)

Return on ordinary activities before taxation multiplied by the standard rate of UK corporation tax of 19%

(52,941)

46,214

(6,727)

Effects of:

Excess management expenses (utilised)/ not utilised

52,941

(46,214)

6,727

Interest distributions paid in respect of the year

Total tax charge in income statement

31 March 2020 Restated

Revenue
£

Capital
£

Total
£

Return on ordinary activities before taxation

(246,451)

691,932

445,481

Return on ordinary activities before taxation multiplied by the standard rate of UK corporation tax of 19%

(46,826)

131,467

84,641

Effects of:

Excess management expenses not utilised

46,826

(131,467)

(84,641)

Interest distributions paid in respect of the year

Total tax charge in income statement

Overseas taxation

The Company may be subject to taxation under the tax rules of the jurisdictions in which it invests, including by way of withholding of tax from interest and other income receipts. Although the Company will endeavour to minimise any such taxes this may affect the level of returns to shareholders.

Factors that may affect future tax charges

At 31 March 2021, the Company had unrelieved losses of £809,433 (2020: £515,352) available to offset future taxable revenue. A deferred tax asset of £153,792 (2020: £97,917) has not been recognised because the Company is not expected to generate sufficient taxable income in future periods in excess of the available deductible expenses and accordingly, the Company is unlikely to be able to reduce future tax liabilities through the use of existing surplus losses.

 

Deferred tax is not provided on capital gains and losses arising on the revaluation or disposal of investments because the Trust meets (and intends to continue for the foreseeable future to meet) the conditions for approval as an Investment Trust company.

 

7)  EARNINGS PER SHARE

For the financial year ended 31 March 2021

Revenue
pence

Capital
pence

Total
pence

Earnings per ordinary share

(5.21)p

4.55p

(0.66)p

The calculation of the above is based on revenue returns of (£278,639) capital returns of £243,234 and total returns of (£35,405) and the weighted average number of ordinary shares of 5,350,725 as at 31 March 2021.

For the financial period ended 31 March 2020 Restated

Revenue
pence

Capital
pence

Total
pence

Earnings per ordinary share

(5.06)p

14.21p

9.15p

The calculation of the above is based on revenue returns of (£246,451) capital returns of £691,932 and total returns of £445,481 and the weighted average number of ordinary shares of 4,869,956 as at 31 March 2020.

 

8)  FAIR VALUE MEASUREMENTS

(a) Movements in the year

As of 31 March 2021

£

As of 31 March 2020
£

Opening cost

Opening fair value

3,078,560

1,700,900

Purchases at cost

534,171

1,894,014

Sale

(66,913)

(279,301)

Realised (loss)

(1,790)

(22,136)

Unrealised gain/(loss)

300,079

(291,347)

Unrealised (loss)/gain on foreign exchange

(119,496)

76,430

Closing fair value at 31 March 2021 and 2020

3,724,611

3,078,560

 

(b) Accounting classifications and fair values

IFRS 13 requires the Company to classify its financial instruments held at fair value using a hierarchy that reflects the significance of the inputs used in the valuation methodologies.  These are as follows:

·   Level 1 – quoted prices in active markets for identical investments;

·   Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayments, credit risk, etc.); and

·   Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).

The following sets out the classifications used as at 31 March 2021 in valuing the Company’s investments:

Carrying amount

Fair value

31 March 2021

Mandatorily at FVTPL

Financial assets at amortised cost

Other financial liabilities

Total carrying amount

Level 1

Level 2

Level 3

Total

£

£

£

£

£

£

£

£

Investments in quoted equity assets

406,172

406,172

406,172

406,172

Investments in unquoted equity assets

3,318,439

3,318,439

3,318,439

3,318,439

3,724,611

3,724,611

406,172

3,318,439

3,724,611

Financial assets not measured at fair value

Cash and cash equivalents

1,255,199

1,255,199

1,255,199

1,255,199

Financial liabilities not measured at fair value

Other payables

54,045

54,045

54,045

54,045

 

Carrying amount

Fair value

31 March 2020

Mandatorily at FVTPL

Financial assets at amortised cost

Other financial liabilities

Total carrying amount

Level 1

Level 2

Level 3

Total

£

£

£

£

£

£

£

£

Investments in quoted equity assets

148,796

148,796

148,796

148,796

Investments in unquoted equity assets

2,929,764

2,929,764

2,929,764

2,929,764

3,078,560

3,078,560

148,796

2,929,764

3,078,560

Financial assets not measured at fair value

Cash and cash equivalents

1,700,601

1,700,601

 Receivables

18,620

18,620

1,719,221

1,719,221

Financial liabilities not measured at fair value

Other payables

287,862

287,862

287,862

287,862

9)  RECEIVABLES

31 March 2021
£

31 March 2020
£

Prepayments

18,620

Total receivables

18,620

The above receivables do not carry any interest and are short term in nature. The directors consider that the carrying values of these receivables approximate their fair value.

 

10)  OTHER PAYABLES

31 March 2021
£

31 March 2020
£

Accruals and deferred income

54,046

37,863

Other creditors

250,000

Total other payables

54,046

287,863

Other Creditors represents cash subscriptions received in advance, which were issued as new shares by the company on 1 April 2020.

The above payables do not carry any interest and are short term in nature. The directors consider that the carrying values of these payables approximate their fair value.

 

11)  ORDINARY SHARE CAPITAL

The table below details the issued share capital of the Company as at the date of the Financial Statements.

Issued and allotted

No. of shares
31 March 2021

£

No. of shares
31 March 2020

£

Ordinary shares of 1 penny each

5,350,725

53,507

4,869,956

48,699

The following table details the subscription activity for the year ended 31 March 2021.

31 March 2021

31 March 2020

Balance as at 1 April 2020

4,869,956

4,564,748

Ordinary shares issued

480,769

305,208

Balance as at 31 March 2021

5,350,725

4,869,956

During the year ended 31 March 2021 and 2020, all proceeds from this issue was received.

12)  NET ASSET VALUE PER ORDINARY SHARE

Year ended 31 March 2021

Year ended 31 March 2020

Year ended 31 March 2021

Net asset
value per
ordinary share
Pence

Net assets
attributable
£

Net asset
value per
ordinary share
Pence

Net assets
attributable
£

Ordinary shares of 1 penny each

92.06p

4,925,764

92.61p

4,509,919

The net asset value per ordinary share is based on net assets at the year ended of £4,925,764 (2020: £4,509,919) and on 5,350,725 (2020: 4,869,956) ordinary shares in issue at the year end.

 

13)  CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS

The Company may invest in Sure Valley Ventures or other collective investment vehicles, subscriptions to which are made on a commitment basis. The Company will be expected to make a commitment that may be drawn down, or called, from time to time at the discretion of the manager of the Fund or other collective investment vehicle. The Company will usually be contractually obliged to make such capital call payments and a failure to do so would usually result in the Company being treated as a defaulting investor by the Fund or other collective investment vehicle.

The Company has to satisfy capital calls on its commitments and will do through a combination of reserves, and where applicable the realisation of Cash and Cash Equivalents and Liquid Investments (as each expression is defined in the prospectus dated 17 November 2017), anticipated future cash flows to the Company, the use of borrowings and, potentially, further issues of Shares.

As of 31 March 2021, the Company had outstanding commitments in relation to the Fund in the amount of 3.3 million (2020: 3.9 million).

 

14)  RELATED PARTY TRANSACTIONS AND TRANSACTIONS WITH THE MANAGER

Directors – The remuneration of the directors is set out in the directors’ Remuneration Report on page 35. There were no contracts subsisting during or at the end of the year in which a director of the Company is or was interested and which are or were significant in relation to the Company’s business.  There were no other transactions during the year with the directors of the Company. The directors do not hold any ordinary shares of the Company.

At 31 March 2021, there was £1,441 (2020: £1,473) payable to the directors for fees and expenses.

Manager – Shard Capital AIFM LLP (the ‘Manager’), a UK-based company authorised and regulated by the Financial Conduct Authority, has been appointed the Company’s manager and authorised investment fund manager for the purposes of the Alternative Investment Fund Managers Directive. Details of the services provided by the manager and the fees paid are given in Note 4.

During the year the Company incurred £63,311 (2020: £55,495) of fees and at 31 March 2021, there was £nil (2020: £nil) payable to the Manager.

During the year the Company paid £23,750 (2020: £18,650) of placement fees to Shard Capital Partners LLP.

The Company paid Corporate Broking Retainer fees of £12,000 (excluding VAT) to Shard Capital Partners LLP during the year ended 31 March 2021.

15)  FINANCIAL RISK MANAGEMENT

The Company’s investment objective is to achieve capital growth for investors pursuant to the investment policy outlined in the prospectus, this involves certain inherent risks. The main financial risks arising from the Company’s financial instruments are market risk, credit risk and liquidity risk. The board reviews and agrees policies for managing each of these risks as summarised below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate. Market risk comprises three types of risk, price risk, interest rate risk and currency risk.

·   Price risk – the risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk);

·   Interest rate risk – the risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in market interest rates; and

·   Currency risk – the risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in foreign exchange rates.

The Company’s exposure, sensitivity to and management of each of these risks is described below. Management of market risk is fundamental to the Company’s investment objective. The investment portfolio is continually monitored to ensure an appropriate balance of risk and reward within the parameters of the investment restrictions outlined in the prospectus.

(a) Price risk

Price risk arises mainly from uncertainty about future prices of financial instruments used in the Company’s business. It represents the potential loss the Company might suffer through holding market positions in the face of price movements (other than those arising from interest rate risk or currency risk) specifically in equity investments purchased in pursuit of the Company’s investment objective, held at fair value through the profit and loss.

As at 31 March 2021 the Company held two direct private equity investments in the participating shares of Sure Valley Ventures (formerly Suir Valley Ventures), a sub-fund of Suir Valley Funds ICAV and VividQ Limited. (2020: the Company held two direct private equity investment in the participating shares of Sure Valley Ventures (formerly Suir Valley Ventures), a sub-fund of Suir Valley Funds ICAV).

As at 31 March 2021 and 2020 the investment in Sure Valley Ventures (formerly Suir Valley Ventures) is valued at the net asset value of the sub-fund, as calculated by its administrator.

At 31 March 2021, had the fair value of investments strengthened by 10% with all other variables held constant, net assets attributable to holders of participating shares would have increased by £372,461 (2020: £307,856). A 10% weakening of the market value of investments against the above would have resulted in an equal but opposite effect on the above financial statement amounts to the amounts shown above, on the basis that all other variables remain constant. Actual trading results may differ from this sensitivity analysis and the difference may be material.

(b) Interest rate risk

Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments.

The Company currently employs no borrowings.

The Company finances its operations mainly through its share capital and reserves, including realised gains on investments.

Exposure of the Company’s financial assets and liabilities to floating interest rates (giving cash flow interest rate risk when rates are reset) and fixed interest rates (giving fair value risk) as at 31 March 2021 and 31 March 2020 is shown below:

 

31 March 2021

31 March 2020

Financial instrument

Floating Rate
£

Fixed or
Administered Rate
£

Total
£

Floating Rate
£

Fixed or
Administered Rate
£

Total
£

Cash and cash equivalents

1,255,199

1,700,601

1,700,601

Total exposure

1,255,199

1,700,601

1,700,601

An administered rate is not like a floating rate, movements in which are directly linked to LIBOR. The administered rate can be changed at the discretion of the counterparty.

(c) Currency risk

As at 31st March 2021 the Company’s largest investment is denominated in Euros whereas its functional and presentation currency is Pounds sterling. Consequently, the Company is exposed to risks that the exchange rate of its currency relative to Euros may change in a manner that has an adverse effect on the fair value of the Company’s assets.

At the reporting date the carrying value of the Company’s financial assets and liabilities held in individual foreign currencies as a percentage of its net assets were as follows:

Foreign currency exposure as a percentage of net assets

31 March 2021

31 March 2020

Euros

57%

54%

Sensitivity analysis

If the Euro exchange rates increased/decreased by 10% against Pounds sterling, with all other variables held constant, the increase/decrease in the net asset attributable to the Company arising from a change financial assets at fair value through profit or loss, which are denominated in Euros, would have been +/- £281,844 (2020: £242,976).

 

16)  CREDIT RISK

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.

The Company’s credit risks arise principally through cash deposited with banks, which is subject to risk of bank default.

The Company ensures that it only makes deposits with institutions with appropriate financial standing.

Due to the low credit risk of the financial assets at amortised cost, the Expected credit loss (“ECL”) was determined to be immaterial and no impairment was recognised on the Fund in the year ended 31 March 2021.

 

Liquidity risk

Liquidity risk is the risk that the Company will have difficulty in meeting its obligations in respect of financial liabilities as they fall due. 

The Company manages its liquid resources to ensure sufficient cash is available to meet its expected contractual commitments. It monitors the level of short-term funding and balances the need for access to short-term funding, with the long-term funding needs of the Company.

Capital Management

The Company’s capital is represented by ordinary shares and reserves.

The Company’s primary objectives in relation to the management of capital are:

  • to maximise the long-term capital growth for its shareholders pursuant to its investment objective;
  • to ensure its ability to continue as a going concern.

 

The Company manages its capital structure and liquidity resources to meet its obligations as described above.

Borrowing limits

Pursuant to the prospectus dated 17 November 2017 the Company can deploy gearing up to 20% of the net asset value of the Company (calculated at the time of borrowing) to seek to enhance returns and for the purpose of capital flexibility and efficient portfolio management. During the year ended 31st March 2021 and 2020 the Company employed no gearing.

 

17)  PRIOR YEAR RESTATEMENTS

There is an adjustment to the classification of Income within the Financial Statements for the year ending 31 March 2020. Sure Ventures owns units in Sure Valley Ventures (SVV) which is an Irish fund. SVV sold its stake in Artomatix for EUR 6.2m, with an initial cash payment of EUR 5.65m on completion, resulting in a capital distribution of EUR 1.4m payable to Sure Ventures.

An amount of £946,817 in respect of the above capital distribution was allocated to the revenue column of the Income Statement contained in the audited financial statements of the Company for the year ended 31 March 2020. Following a review of the position, the Board considers that this treatment does not accurately reflect the capital nature of the Artomatix distribution.   The comparative figures for the year ended 31 March 2020 will be restated to reflect the above distribution as capital rather than revenue.

Management fee distribution of 24.24% and 75.76% revenue and capital expenses respectively have been restated as 68.26% and 31.74% to revenue and capital expenses respectively.

The above restatement had no impact on the Net Asset Value of the Company.

 

18)  ULTIMATE CONTROLLING PARTY

It is the opinion of the directors that there is no ultimate controlling party.

 

19)  EVENTS AFTER THE REPORTING PERIOD

Subsequent to the year end up till the date of signing these financial statements, the Company had the following significant events:

  • 662,500 ordinary shares at £1 per share have been issued
  • investments of £261,361 in Immotion Group plc were sold

 

 

8    Alternative Performance Measures (APMs)

APMs are often used to describe the performance of investment companies although they are not specifically defined under IFRS. Calculations for APMs used by the Company are shown below.

Ongoing charges

A measure expressed as a percentage of average net assets, of the regular, recurring annual costs of running an investment company, calculated in accordance with the AIC methodology.

Year ended 31 March 2021

Page

Average NAV (£’000)

a

not applicable

£5,059

Recurring costs (£’000)

b

47

£231

b/a

4.6%

Premium

The amount, expressed as a percentage, by which the share price is more than the NAV per share.

As at 31 March 2021

Page

NAV per ordinary share

a

not applicable

92.06p

Share price

b

not applicable

105p

(b-a)/a

14.06%

Total return

A measure of performance that includes both income and capital returns. This takes into account capital gains and reinvestment of any dividends paid out by the Company, with reinvestment on ex-dividend date

Year ended 31 March 2021

Page

NAV

Share price

Opening as at 1 April 2020 (p)

a

2

92.61

105.13

Closing at 31 March 2021 (p)

b

2

92.06

105.00

Dividend reinvestment factor

c

n/a

1

1

Adjusted closing (d = b x c )

d

92.06

105.00

Total return

(d-a) / a

-0.59%

-0.12%

9    Glossary

AIC

Association of Investment Companies

Alternative Investment Fund or

“AIF”

An investment vehicle under AIFMD. Under AIFMD (see below) Sure Ventures plc is classified as an AIF.

Alternative Investment Fund

Managers Directive or “AIFMD”

A European Union directive which came into force on 22 July 2013 and has been implemented in the UK.

Annual General Meeting or “AGM”

A meeting held once a year which shareholders can attend and where they can vote on resolutions to be put forward at the meeting and ask directors questions about the company in which they are invested.

the Company

Sure Ventures plc

Custodian

An entity that is appointed to safeguard a company’s assets.

Discount

The amount, expressed as a percentage, by which the share price is less than the net asset value per share.

Depositary

Certain AIFs must appoint depositaries under the requirements of AIFMD. A depositary’s duties include, inter alia, safekeeping of a company’s assets and cash monitoring. Under AIFMD the depositary is appointed under a strict liability regime.

Dividend

Income receivable from an investment in shares.

Ex-dividend date

The date from which you are not entitled to receive a dividend which has been declared and is due to be paid to shareholders.

Financial Conduct Authority or

“FCA”

The independent body that regulates the financial services industry in the UK.

Gearing effect

The effect of borrowing on a company’s returns.

Index

A basket of stocks which is considered to replicate a particular stock market or sector.

Investment company

A company formed to invest in a diversified portfolio of assets.

Investment Trust

An investment company which is based in the UK and which meets certain tax conditions which enables it to be exempt from UK corporation tax on its capital gains. The Company is an investment trust.

Liquidity

The extent to which investments can be sold at short notice.

Net assets or net asset value (‘NAV’)

An investment company’s assets less its liabilities

NAV per Ordinary Share

Net assets divided by the number of Ordinary Shares in issue (excluding any shares held in treasury)

Ordinary Shares

The Company’s ordinary shares in issue.

Portfolio

A collection of different investments held in order to deliver returns to shareholders and to spread risk.

Relative performance

Measurement of returns relative to an index.

Share buyback

A purchase of a company’s own shares. Shares can either be bought back for cancellation or held in treasury.

Share price

The price of a share as determined by a relevant stock market.

Treasury shares

A company’s own shares which are available to be sold by a company to raise funds.

Volatility

A measure of how much a share moves up and down in price over a period of time.

10  Shareholders’ Information

Directors, portfolio manager and advisers

Directors

Administrator

Perry Wilson

Apex Fund Services (Ireland) Limited

Gareth Burchell

2nd Floor, Block 5

John St Agnew

Irish Life Centre

Abbey Street Lower

Dublin 1

DO1 P767

Ireland

Registered Office

Company Secretary

23rd Floor

From 1 January 2021

20 Fenchurch Street

Throgmorton Secretaries LLP

London EC3M 3BY

6th Floor, 125 Wood Street

England

London

EC2V 7AN

Manager and AIFM

United Kingdom,

Shard Capital AIFM LLP

23rd Floor

Upto 31 December 2020

20 Fenchurch Street

Apex Fund Services (Ireland) Limited

London EC3M 3BY

2nd Floor, Block 5

England

Irish Life Centre

Abbey Street Lower

Placing Agent

Dublin 1

Shard Capital Partners LLP

DO1 P767

23rd Floor

Ireland

20 Fenchurch Street

London EC3M 3BY

Registrar

England

Computershare Investor Services PLC

The Pavilions, Bridgewater Road

Website

Bristol BS99 6ZZ

Home

England

Depositary

INDOS Financial Limited

27-28 Clements Lane

London EC4N 7AE

United Kingdom

Independent Auditor

Share Identifiers

PKF Littlejohn LLP

ISIN: GB00BYWYZ460

15 Westferry Circus

Sedol: BYWYZ46

Canary Wharf

Ticker: SURE

London E14 4HD

England

11  Investment Policy

Investment Policy

Asset allocation

The investment policy of the Company is to seek exposure to early stage technology companies, with a focus on software-centric businesses in four chosen target markets:

 

* Augmented reality and virtual reality (AR/VR)

* Financial technology (FinTech)

* The internet of things (IoT)

* Artificial Intelligence (AI)

 

The Company may invest directly in investee companies or obtain exposure to such companies through investment in collective investment vehicles, including Sure Valley Ventures (the “Fund”) and any further funds, which have investment policies that are complementary to that of the Company. Investments may be made using such instruments as the Company in conjunction with Shard Capital AIFM LLP (“SCAIFM”) may determine but are expected to predominantly comprise equities and equity-linked securities (including shares, preference shares, convertible debt instruments, payment-in-kind notes, debentures, warrants and other similar securities) and may include derivative instruments, contractual rights and other similar interests that grant the Company rights equivalent or similar to those conferred by equity and equity-linked securities.

 

The Company may implement its investment policy by investing in class A shares of the Fund and by investing in any further funds and collective investment vehicles managed by third parties. The Company will have discretion as to how to make investments, although it is anticipated that investments in the Fund will represent between 10 and 100%. of the Company’s portfolio at any given time, and that investments in any further funds and collective investment vehicles managed by third parties may similarly constitute a material proportion of the Company’s net asset value subject to the Company’s investment restrictions.

 

DIVERSIFICATION

The Company will seek to hold a diversified portfolio of investments and, once the assets of the Company, the Fund and any other collective investment vehicles through which the Company invests are each fully invested, expects to have a direct or indirect holding of between 20 and 30 investments. It is intended that the Company would ordinarily acquire a significant interest, consisting generally of between 20% and 50% of an investee company’s equity capital. The Company does not envisage taking management control of a portfolio company other than in exceptional circumstances and on a temporary basis, and only if it is considered that such action would be necessary to secure the interests of the Company. The Company has the option to invest directly in quoted companies. Furthermore, a portfolio company may seek a flotation in which case: (i) the Company may continue to hold such investments without restriction; and (ii) the Company may make follow-on investments in such portfolio companies.

The Company’s investments will not be constrained by geographical limits. However, it is expected that the Company’s portfolio will predominantly be exposed to companies that have their principal operations in the UK, Republic of Ireland or elsewhere in the EEA. In addition, the Company will aim to satisfy the following guideline criteria for its portfolio:

 

  • no more than 15% of the Company’s NAV in a single investment no more than 60% of the Company’s NAV invested in a further fund or collective investment vehicle managed by a third party
  • invest in a further fund or collective investment vehicle managed by a third party only if such further fund or collective investment vehicle has an investment policy that is consistent with the investment policy of the Company
  • no investment in companies whose primary business is acquisition or development of real estate
  • no investments in real estate assets
  • no more than 15% of the Company’s NAV to a counterparty in relation to the utilisation of derivatives (including for investment and hedging purposes)

 

BORROWING

The Company may borrow (through bank or other facilities) a maximum of 20% of net asset value in aggregate (calculated at the time of borrowing) to seek to enhance returns and for the purpose of capital flexibility and efficient portfolio management. The Company’s gearing is expected to primarily comprise bank borrowings but may include the use of derivative instruments and such other methods as the board may determine. The board will review the Company’s borrowing policy, in conjunction with Shard Capital AIFM LLP, on a regular basis.

 

HEDGING

Fluctuations in interest rates are influenced by factors outside the Company’s control, and can adversely affect the Company’s results and profitability in a number of ways.  The Company’s investment in the Fund will be denominated in euros. The Company may use derivatives, including forward foreign exchange contracts and contracts for difference, to seek to hedge against any currency risk between the currency of the Company’s investment in the Fund and sterling, the base currency of the Company. Shareholders should note that there is no guarantee that such hedging arrangements will be utilised or, if so, will be successful.

 

CASH MANAGEMENT

The Company may hold cash on deposit and may invest in cash equivalent investments, including short-term investments in money market type funds, tradeable debt securities and government bonds and securities (”Cash and Cash Equivalents”). There is no restriction on the amount of Cash and Cash Equivalents that the Company may hold and there may be times when it is appropriate for the Company to have a significant cash or cash equivalent position instead of being fully or near fully invested. In order to efficiently allocate all of the Company’s available funds, the Company may make short and medium term investments in relatively liquid assets that are in accordance with the Company’s investment policy (”Liquid Investments”). Such Liquid Investments may include shares, bonds and other debt instruments issued by companies as well as shares, units or other interests in collective investment schemes, other investment funds, exchange traded funds and fixed income investments. Prior to the full drawdown of the Company’s commitment to the Fund, the cash held by the Company will be utilised in accordance with the Company’s stated investment policy and cash management policy. The directors, on advice from the Manager, consider that it is the interests of shareholders for the cash held by the Company in respect of its commitment to the Fund to potentially be available for investment in suitable investment opportunities pending drawdown by the Fund.

 

Website

The Company’s website can be found at https://www.sureventuresplc.com. The site provides visitors with Company information and literature downloads.

The Company’s profile is also available on third-party sites such morningstar.co.uk.

Annual report

Copies of the annual report may be obtained from the Company Secretary or by visiting www.sureventuresplc.com.

Share prices and net asset value information

The Company’s ordinary shares of 1p each are quoted on the London Stock Exchange:

·   SEDOL number: BYWYZ46

·   ISIN number: GB00BYWYZ460

·   EPIC code: SURE

The codes above may be required to access trading information relating to the Company on the internet.

Electronic communications with the Company

The Company’s Annual Report and Accounts, half-yearly reports and other formal communications are available on the Company’s website.  To reduce costs the Company’s half-yearly accounts are not posted to shareholders but are instead made available on the Company’s website.

Whistleblowing

As the Company has no employees, the Company does not have a whistleblowing policy.  The Audit Committee reviews the whistleblowing procedures of the manager and administrator to ensure that the concerns of their staff may be raised in a confidential manner.

Warning to shareholders – share fraud scams

Fraudsters use persuasive and high-pressure tactics to lure investors into scams.  They may offer to sell shares that turn out to be worthless or non-existent, or to buy shares at an inflated price in return for an upfront payment.  While high profits are promised, if you buy or sell shares in this way, you will probably lose your money.

How to avoid share fraud

·   Keep in mind that firms authorised by the Financial Conduct Authority are unlikely to contact you out of the blue with an offer to buy or sell shares

·   Do not get into a conversation, note the name of the person and firm contacting you and then end the call

·   Check the Financial Services Register from www.fca.org.uk to see if the person and firm contacting you is authorised by the Financial Conduct Authority

·   Beware of fraudsters claiming to be from an authorised firm, copying its website or giving you false contact details

·   Use the firm’s contact details listed on the register maintained by the Financial Conduct Authority if you want to call it back

·   Call the Financial Conduct Authority on 0800 111 6768 if the firm does not have contact details on the register or you are told they are out of date

·   Search the list of unauthorised firms to avoid at www.fca.org.uk/scams

·   Consider that if you buy or sell shares from an unauthorised firm you will not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme.

·   Think about getting independent financial and professional advice before you hand over any money

·   Remember: if it sounds too good to be true, it probably is!

5,000 people contact the Financial Conduct Authority about share fraud each year, with victims losing an average of £20,000.

Report a scam

If you are approached by fraudsters, please tell the FCA using the share fraud reporting form at fca.org.uk /scams, where you can find out more about investment scams.

You can also call the FCA Consumer Helpline on 0800 111 6768.

If you have already paid money to share fraudsters, you should contact Action Fraud on 0300 123 2040.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

Results of AGM 2021

RNS Number : 2823M | Sure Ventures PLC | 20 September 2021

Sure Ventures PLC

Results of AGM

 

Sure Ventures is a London listed venture capital fund which invests in early stage software companies in the rapidly growing technology areas of Augmented reality (‘AR’), Virtual reality (‘VR’), Internet of Things (‘IoT’) and Artificial Intelligence (AI). The results of the AGM held on the 15th of September 2021 are as follows:

-All resolutions contained in the notice of the AGM were duly passed on a show of hands

-The total number of shares in issue as at 4:30pm on the 14th of September 2021 stood at 6,013,225 shares. Votes were received in respect of 1,146,138 shares and represented a 19.06% turn out.

Copies of all special resolutions numbered 10 to 11 will be made available for inspection from the National Storage Mechanism, situated at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

The results of the AGM will be available shortly on the Company’s website at  www.sureventuresplc.com/documents

For further information about this announcement please contact:

Apex Fund Services (Ireland) Ltd

+353 156 79210

Company Secretary

 

Shard Capital AIFM LLP

+44 (0) 207 186 9914

AIFM

Shard Capital Partners LLP

+44 (0) 207 186 9914

Placing Agent

Computershare Investor Services PLC

+44 (0) 370 707 4023

Registrar

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

VividQ announces £11m seed extension round

RNS Number : 8202D | Sure Ventures PLC | 01 July 2021

VividQ announces £11 million seed extension round

 

Sure Ventures PLC is a London listed venture capital fund which invests in early stage software companies in the rapidly growing technology areas of Augmented reality (‘AR’), Virtual reality (‘VR’), Internet of Things (‘IoT’) and Artificial Intelligence (AI).

Sure Ventures PLC has a both a direct investment of £500K and 25.9% exposure to Sure Valley Ventures holding in VividQ and represents its largest investment by weighting.

Deep technology company VividQ has announced this morning a seed extension round of £11 million, which will be used to scale the team, expand in Asia Pacific US and further product development. This product development includes HoloLCD, which turns consumer-grade screens into holographic displays.  This new investment round has taken place at a significantly higher valuation compared to the valuation at which the initial investment was made by Sure valley Ventures and Sure Ventures PLC.

The Cambridge head-quartered business is powering the display revolution with Computer-Generated Holography and has secured over £17 million in funding to date. Its technology is used in the development of next-generation digital displays and devices by manufacturers in the US, China and Japan.

The latest investment was led by UTokyo IPC, the venture investment arm for the University of Tokyo, who are joined by Foresight Williams Technology (a joint collaboration between Foresight Group and Williams Advanced Engineering), Japanese Miyako Capital, Austrian APEX Ventures, and Silicon Valley’s R42 Group. Previous investors University of Tokyo Edge Capital, Sure Valley Ventures, and Essex Innovations also participated.

Founded in 2017, VividQ has made cutting-edge developments that achieve real-time Computer-Generated Holography with high image quality, at low power. The company collaborates with key providers to bring this technology to everyday applications. VividQ has worked with Arm, demonstrating mobile holographic display for the first time, and other partners include Compound Photonics, Himax Technologies, and iView Displays.

The funding round will further advance the adoption of VividQ’s solutions for Computer-Generated Holography across three applications; in automotive head-up displays (“HUD”), augmented reality (“AR”) wearables, and bringing holography to consumer electronics, with holographic LCD screens.

Gareth Burchell (Director Comment):

” VividQ has an amazing team of founders, that really are developing a cutting edge technology that may well  transform how we view digital content in the future. Holography is a field that used to generate images of Sc-Fi films or superhero movies, but as a technology it is developing at a pace that will make such imaging a reality. The type of Institutional investors that have supported the round validates the deep technology at play here and the partners that the company are working with are truly global leaders in various Industries. Congratulations to VividQ on what really is excellent news for Sure ventures shareholders”

For further information, please visit www.sureventuresplc.com or contact:

Gareth Burchell Sure Ventures plc +44 (0) 20 7186 9918

SmartTech247 – New Contract Win

RNS Number : 6345D | Sure Ventures PLC | 30 June 2021

Sure Ventures plc (‘Sure Ventures’ or ‘the Company’)

SmartTech247-New Contract Win

 

Sure Ventures is a London listed venture capital fund which invests in early stage software companies in the rapidly growing technology areas of Augmented reality (‘AR’), Virtual reality (‘VR’), Internet of Things (‘IoT’) and Artificial Intelligence (AI). We are pleased to announce and update on an investee company in Smarttech247.

SURE VALLEY VENTURES FUND

Sure Ventures made a 7million commitment to Sure Valley Ventures Fund (‘Sure Valley’) representing an interest in Sure Valley of approximately 25.9%.  This commitment was made at a price of €1.00 per share.

Smarttech247-https://www.smarttech247.com/

Sure ventures is pleased to provide an update on recent investment (Via Sure Valley Ventures) in Smarttech247 and Smarttech247’s €6m order from a global manufacturing firm.

Smarttech247 (incorporated in the Republic of Ireland as Zefone Limited) is a global artificial intelligence (“AI”) based cyber security cloud business that protects enterprises as they migrate to cloud-based IT operations. Smarttech247 has over 100 technology partners, including Tanium and Crowdstrike, and 50 clients based in Europe and the US.

Smarttech247 has announced that it has been awarded a purchase order with the value of €6 million for plant level Operational Technology (“OT”) cyber security services, with respect to the contract announced by the Company on 24 June 2021.

 OT is hardware and software that detects or causes a change through the direct monitoring and/or control of physical devices, processes and events in an enterprise. OT is common in Industrial Control Systems (ICS) such as a SCADA System.

 As part of the contract, Smarttech247 will manage, advise and implement security measures and controls that aim to improve the prevention, detection, mitigation, and response capabilities for OT systems, as well as aligning with regulatory requirements.

 Further information on Smarttech247 can be found on its website at  https://www.smarttech247.com/

Gareth Burchell, Sure ventures

” The fact that this RNS has come so shortly after the last announced contract win shows the pace at which the cyber security market and Smarttech247’s pipeline is moving. The threat to Businesses, public sector organisations and governments is increasing significantly. It is clear that Smarttech247 has the technical capability, the bandwidth and global reach to begin to take advantage of this growth”.

For further information, please visit www.sureventuresplc.com or contact:

Gareth Burchell Sure Ventures plc +44 (0) 20 7186 9918

Sure Ventures PLC – SmartTech247-New Investment and Contract Win

RNS Number: 2868D | Sure Ventures PLC | 28 June 2021

Sure Ventures plc (‘Sure Ventures’ or ‘the Company’)

SmartTech247-New Investment and Update on major contract win

 

Sure Ventures is a London listed venture capital fund which invests in early stage software companies in the rapidly growing technology areas of Augmented reality (‘AR’), Virtual reality (‘VR’), Internet of Things (‘IoT’) and Artificial Intelligence (AI). We are pleased to announce and update on an investee company in Smarttech247.

SURE VALLEY VENTURES FUND

Sure Ventures made a 7million commitment to Sure Valley Ventures Fund (‘Sure Valley’) representing an interest in Sure Valley of approximately 25.9%.  This commitment was made at a price of €1.00 per share.

Smarttech247-https://www.smarttech247.com/

Smarttech247 is an established company in cyber security management with 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 amongst both large and small-medium enterprises
  • Proliferation of cyber security data generation that needs to be integrated

Smarttech247 (incorporated in the Republic of Ireland as Zefone Limited), is a global artificial intelligence (“AI”) based cyber security cloud business that protects enterprises as they migrate to cloud-based IT operations. Smarttech247 has over 100 technology partners, including Tanium and Crowdstrike, and 50 clients based in Europe and the US.

Smarttech247 has announced that it has been awarded a multi-year contract for managed cyber security services by a global advanced manufacturing company, employing over 100,000 staff and a leading member of the Fortune Global-1000.  The contract was awarded to support strategic cyber security initiatives and ensure compliance to the latest industry regulated cyber security standards.

This contract will see the cybersecurity services provider deploy its managed detection and response offering which combines the Artificial Intelligence and automation of security tools with Smarttech247’s own 24/7 Cyber Security Operations Centres. This is material contract win for the business.

Gareth Burchell Sure Ventures PLC

“Smarttech247 is an excellent addition to the portfolio, in a space that is becoming more prevalent and critical to all sectors. Cyber security attacks are becoming more common and require specialist, intelligent and AI based software to keep up with change. The contract win is material and landed soon after our initial investment. The pipeline continues to look strong for Smartech247 and we look forward to keeping the market up to date with progress.”

For further information, please visit www.sureventuresplc.com or contact:

Gareth Burchell

Sure Ventures plc

+44 (0) 20 7186 9918

Issue of Equity

RNS Number : 0853B | Sure Ventures PLC
08 June 2021

 

Issue of Equity

Sure Ventures plc (“the Company”) is pleased to announce that it has raised gross proceeds of £ 662,500 by way of a private placing. The Ordinary Shares have been issued at 100p each, which after the costs and expenses of the issue represents a premium to the last published NAV per share of 92.06p per share as at 31 March 2021.

The money will be used for further investments, follow-on investment in the exiting portfolio and for general working capital purposes.

Application has been made in respect of 662,500 Ordinary Shares to be admitted to trading on the Specialist Funds Segment of the Main Market of London Stock Exchange plc (“Admission”). Admission will become effective and dealings in the Ordinary Shares will commence at 8:00 a.m. (London time) on and around the 14th June 2021.

Following Admission, the Company will have 6,013,225 Ordinary Shares in issue. The total number of voting rights of the Company will be 6,013,225. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company.

 

For further information, please contact:

Issuer: Sure Ventures plc – Gareth Burchell – 0207 186 9900

Placing Agent: Shard Capital Partners LLP – Damon Heath – 0207 186 9900

Portfolio Update Q1 2021 period

RNS Number : 6028Y | Sure Ventures PLC | 14 May 20201

Sure Ventures plc (‘Sure Ventures’ or ‘the Company’)

Portfolio Update Q1 2021 period

 

Sure Ventures made a €7million commitment to Sure Valley Ventures Fund (‘Sure Valley’) representing an interest in Sure Valley of approximately 25.9%.  This commitment was made at a price of €1.00 per share. The current NAV of the Sure Valley Ventures ICAV is 99.84 Euro cent.

Sure Valley has several investments across the AI, AR, VR and IoT sectors:

SURE VALLEY VENTURES FUND

Sure Ventures made a €7million commitment to Sure Valley Ventures Fund (‘Sure Valley’) representing an interest in Sure Valley of approximately 25.9%.  This commitment was made at a price of €1.00 per share. The current NAV of the Sure Valley Ventures ICAV is 99.84 Euro cent.

Sure Valley has several investments across the AI, AR, VR and IoT sectors:

VR Education Holdings – https://immersivevreducation.com/

HTC are now a major Shareholder in VRE and this validation has helped it gain break through contracts since 30 June 2020, particularly in the US market, with sales of the ENGAGE platform for training and remote distance learning purposes to several organisations including Facebook, the United States Air Force Academy, University of Arizona, Colorado State University, SNCF, Lobaki, Houston Community College and Stanford University.

There has also been Engage contracts signed in Japan and China via its HTC global sales relationship. Announcements this quarter have shown they have now reached 100 ENGAGE customers and achieved a 4-fold rise in revenues to 800K Euros in first four months of the year. The HTC relationship is progressing well with the ENGAGE product being “bundled” into the VIVE Focus 3 XR launch. Dave Whelan, the CEO, believes this is a major step in their Chinese roll-out.

WarDucks – www.warducks.com

The company has six bestselling titles under its belt, the latest two of which were Top Ten on PlayStation VR. The company is building on its success to date and is now developing a major new AR mobile game that is in the same category as Pokemon Go. To achieve this the company has hired  well-known and renowned game developers from the US and brought them to Dublin. They have brought on the famous game designer John Romero to help design the new product. John Romero, cofounder of BAFTA award-winning Romero Games studio and winner of over 100 awards, will work as a Creative Consultant.

To enable the company to take this product to the market it completed a Series A round of €3.284 million in Q1 2019 with new investors, EQT, investing €2.58 million. Sure Valley has also made a further investment to maintain its percentage holding with an extra €453,858.32. Existing investors have made up the remaining investment. The latest product is in “Alpha”. The transaction completed on the 29th of March 2019. Sure Valley originated the investment by putting in €300,043 in WarDucks at pre-money valuation of €2.5 million and followed on by investing €453,858.32 at a pre-money valuation of €10,000,000. As a result, Sure Valley holds 10.10% of the company on a fully diluted basis. The company recently hosted a visit in their offices from Tim Cook, CEO of Apple to meet the team and view the game. Tim gave the team a positive public endorsement shortly afterwards.

Wia – www.wia.io

WIA https://www.wia.io/ is an Internet of Things (IoT) company with a ground-breaking cloud platform https://www.wia.io/product, enabling developers to turn any type of sensor device into a secure, smart, and useful application in a matter of minutes. This generates considerable time and cost savings for teams who would have previously had to spend many months on 100,000’s of lines of code to try to build out their own IoT cloud infrastructure.

During the COVID-19 lockdown the company has focused on developing IoT Tech to help businesses return to the workplace safely. In June Wia released the next iteration of the Wia Cloud. The new Wia Cloud is designed to help businesses understand and monitor their building, making it a powerful tool in the effort to return to the workplace. The service focuses on:

  • Occupancy and Space Utilisation
  • Energy Utilisation
  • Regulation Compliance

As part of this platform Wia created their own DFS-1 directional motion sensor. The Wia DFS-1 is a whole new way to measure the in-flow and out-flow of people to create safer, greener, and more human-centric buildings. The Wia DFS-1 has been deployed at a number of customer sites including Hubspot and Irish Distillers in Dublin.

Cameramatics – www.cameramatics.com

Cameramatics is the leader in camera and software solutions for commercial fleets. Cameramatics delivers products that allow fleet managers to reduce fleet risk while increasing driver safety and complying with ever-increasing governance and compliance regulations.

Pre Covid-19 the company was performing exceptionally well and to support the company grow rapidly Sure Valley invested a further €750,000 in convertible debt (€250,000 in Q1 2019, €250,000 in Q2, 2019 and €250,000 in Q4, 2019) and Enterprise Ireland invested €250,000 in Q3, 2019. This quarter Covid-19 has led to a short-term drop in revenues since logistics and delivery businesses were closed or inactive. Despite this the management team have done an excellent job of managing cash.

CameraMatics (“Mysafedrive Ltd”) successfully raised over €4 million in a Series A Investment Round (Announced 11th Jan 2021) from a consortium of investors led by Puma Investments. Existing investors, Sure Valley Ventures and Enterprise Ireland also made follow on investments. Sure Valley Ventures had originally led the “Seed Round” in November 2017 and this round represents close to a 4-fold unrealised gain on our initial investment

Quarter 1 has seen increased Sales with total Revenue for Q1 over 200% of the business plan. During the quarter the company added its first mainland Europe customers as well as launching several high profile partnerships in the US market. The overall market for Cameramatics continues to grow as customers continue to migrate from traditional telematics to Cameramatics particularly as insurance companies and government initiatives around the world focus on improving safety for all road users in cities and urban areas. We see this trend continue with initiatives like Vision Zero in the US now starting to gain momentum across many US states and European cities looking to mirror the Direct Vision standards in London.

NDRC Arc Labs – http://www.arclabs.ie/

The NDRC@ArcLabs investment was structured as a subscription as a limited Partner to the Accelerator. The purpose of the Accelerator is source and develop 30 start-ups over two years that Sure Valley had the right to invest in. The Accelerator has run three calls for 10 start-ups over 3 years in areas that are related to the fund’s investment strategy of AR/VR, IoT and AI. As a result of the Accelerator’s programme significantly overlapping with the Fund’s investment areas, we saw this Accelerator being a source of proprietary deal flow. The fund invested €300,000 over three calls. The three calls have been run and the accelerator is now in wind down.

Nova Leah – https://www.novaleah.com/ 

Nova Leah is the leader in cyber security for connected medical devices and is an IoT investment by Sure Valley Ventures. Nova Leah sells directly to the top medical device manufacturers typically in Boston, MA (?) and the west coast of the USA. The founder, Anita Finnegan, is an expert in this area. She originally built the technology in a top medical device software research group (in DKIT),? while doing a PhD. She later spun out the technology and developed a market by selling into several Tier 1 medical device manufacturers.

Sure Valley Ventures invested €750,000 in the company for 10.62% of the company fully diluted. The investment closed on the 5th of October 2018 the company was successful in the Irish government Disruptive Technology Fund (DTIF) programme for €1.5 million. 

The company is making good progress on its Annual Recuring Revenues (ARR) and is in the final stages of completing a deal with major medical device company which will bring its ARR close to the point where it can complete a follow-on raise.

Admix Ltd – https://admixplay.com/

Technically Admix has developed what is called a Supply-Side Platform (SSP) which enables developers to monetize their content by creating, managing and sell advertising inventory. Being an SSP, Admix is a broker that sells developers (think WarDucks) inventory programmatically at scale. Being programmatic automatizes the buying/selling process. Admix enables, for the first time, VR/AR inventory to become immediately available to thousands of advertisers connected to the existing ecosystem, which provides VR/AR developers with instant revenue.

Admix’s proprietary ad formats have been developed together with existing  . The DSP’s that Admix have connected to are market-leading partners, such as Pubmatic, and are amongst the largest platforms in the world. These platforms are used by thousands of brands and advertisers and are processing billions of impressions daily. This gives them significant scale in the market.

To support its growth the company completed a Series A round on the 31st of March 2020, raising $6.25 million with a pre-money valuation creating a substantial uplift on our original investment.

The investment round was led by an investor called Force over Mass investing $4m with participation from Speedinvest who invested $450k and SVV who invested $535k. Admix have used this cash to great effect and revenues have grown 550% year on year and we look forward to continued progress.

VividQ Ltd – https://vivid-q.com/

VividQ is a deep tech software company with world-leading expertise in 3D holography. The company was founded in 2017 by a team of expert engineers, mathematicians and computer scientists from the Universities of Cambridge, Oxford, and St Andrews, who solved key technology barriers in the adoption of holographic display.

Holography has long been considered the ultimate display technology. The science fiction ideal of engineering and manipulating light to produce 3D projections appealed to the imagination of millions through franchises such as Star Wars or Star Trek. While physically possible, the tremendous computing requirements to create full-depth holographic display made it unreachable for commercial applications.

VividQ continue to partner with some of the leading chip manufacturers, hardware developers and users of holographic display. The company announced a partnership with ARM Holdings in the last quarter and signed its first major contract with a Chinese and Hong Kong based car manufacturer.

Ambisencehttps://ambisense.net/

Ambisense’s Ambisense’s Ambilytics™ platform optimises the delivery of environmental risk assessment on some of the world’s largest infrastructure projects across industrial, Oil & Gas and Waste Management verticals, partnering with global multinationals such as CEMEX, SGS & Arcadis. Ambilytics™ encompasses both IoT and AI solutions, combining information from remotely deployed field devices with contextual data sources such as weather, satellite, geophysical and operational data to build machine learning models. These models identify the relationships, patterns, and drivers hidden within the data and allow customers to forecast and predict the behaviour of targeted environmental pollutants.

Since completing our investment, Ambisense have identified increasingly significant government backed infrastructure projects which via tender process, the Company have been successful in winning. In two particular use cases, the contractors concerned feared that the technology they required ‘didn’t exist in the market’, but such is the power behind Ambylitics and the ability of the Company to design effective and bespoke monitoring models, the Company has been successful in winning these multi-year, recurring revenue contracts.

The Company successfully operates on a break-even basis, despite Covid-19 related issues. In fact, it has been successful in winning new contracts due to their ability to solve for IOT monitoring models, whatever the circumstances.

GetVisibility – https://www.getvisibility.com/

Visibility Blockchain Limited trading as Getvisibility was established on the 31st of August 2017 by Ronan Murphy and Mark Brosnan. The company has developed and launched a software platform called Getvisibility targeting this data security sector. This software delivers visibility over unstructured data, e.g., Word documents or pdfs, for enterprises, by automatically, accurately, and precisely scanning and classifying the data to a corporate taxonomy using artificial intelligence (AI) at scale (NLP and Neural Networks).

On 7 August 2020, Getvisibility announced that it had signed a public sector distribution agreement with immixGroup, the leading value-added distributor of enterprise IT for the U.S. public sector. The agreement will allow Getvisibility to grow its public sector business, accelerate sales cycles, and operate more efficiently in the government market. Federal agencies will also be able to deploy Getvisibility products on-premises and into their existing cloud infrastructure.

GetVisibility is experiencing emerging interest to provide a solution for EUC audit compliance which could represent a substantial market vertical. Inbound interest has been expressed by Accenture, KPMG, PWC and Grant Thornton. Getvisbility has started work on an open API and SDK, this will facilitate easier and faster integrations. Phase 1 is expected to be released in early Q2 and the company has obtained advanced EIS assurance ahead of its series A funding round.

Buymie Technologies https://www.buymie.eu/

Buymie is an on-demand grocery service, currently available in Dublin, Ireland and Bristol, UK. An individual can order goods from a selection of local stores such as Tesco and Lidl in Ireland and the Co-op and Asda in the UK via the Buymie app and have them delivered by a personal shopper in as little as 1 hour. Delivery charges from €3.99 (free for orders over €100), up to 30% cheaper than visiting a traditional convenience store. More convenient than traditional eCommerce platforms reducing the environmental impact of grocery shopping.

Sure Valley Ventures initially invested in Buymie’s Seed round in March 2020, investing €300,000 at a pre-money valuation of €8,000,000 giving SVV a fully diluted equity position of 3%. The seed round was led by ACT Venture capital with participation from Haatch Ventures, BVP Ventures, HBAN and Enterprise Ireland.

Sure Valley subsequently participated in Buymie’s Series A round which was completed in June 2020. The total amount of capital raised was €5,400,000 and was led by Wheatsheaf group, the investment arm of the Grosvenor estate. The pre-money valuation was €15,000,000. SVV invested €510,000 and has a fully diluted equity position of 5.05%.

Buymie have now partnered with Co-op, Lidl, Dunnes and are in talks with other major UK and Irish Supermarket chains. The COVID19 environment is accelerating the growth of Buymie and the pace of its expansion continues in an aggressive manner.

Volograms Limited

Volograms is an Augmented Reality (AR) capture and volumetric video company. Volograms’ technology enables users to capture volumetric holograms (or volograms) of real people. By inserting the ‘Volograms’ into videos, people can create their own immersive Augmented Reality (AR) and Virtual Reality (VR) content for use in apps, social media, and VR headsets.

The mobile AR market is forecast to grow from the one billion compatible devices and over $8 billion in revenue in 2019 to 2.5 billion compatible devices and $60 billion in revenue by 2024. The Volograms mobile product will enable mobile phone users to take AR pictures and videos, then view, edit, and share them with others. This can be done directly or through social media platforms.

We believe that Volograms is opening a new market category for AR photos and video. This category should have much greater appeal for content creators and social media users than the existing static 3D content solutions on offer. Central to the company’s future success is (i) its OEM strategy (ii) consumers then adopting the technology. Given this, the SVV deal team agreed with the company that they would bring in some additional people with experience of an OEM strategy and mobile consumer products. If successful Volograms has the potential to be massively scalable and potentially usher in the rapid expansion of the mobile AR industry.

Pre-Cog Systems

Polience Limited t/a PreCog Systems is an InfoSec company that has developed a proprietary system to counter terrorism, prevent crime, support border control agencies and prevent people trafficking. Sure Valley Ventures (ICAV) invested £750,000 for a 15% holding in the company.

Governments, organisations and owners of property assets and inventory need to understand the behaviour and intent of visitors to their sites. They need novel technology to allow them to react in realtime so that actions can be taken to understand the complexities of their environments and to protect them from harm and bad actors.

PreCog is a patent pending software solution that understands visitor flow, protects borders, detects persons of interest and ensures locations are protected from those who wish to cause damage or commit crime. PreCog provides totally unique, scalable, actionable intelligence solution. Customers include top UK and International Government security and law enforcement agencies & transport infrastructure organisations.

DIRECT INVESTMENTS

Investments made directly by Sure Ventures plc:

Immotion PLC  

This is a UK based company that creates its own high-quality VR content and enhances the immersive experience by coupling this content with motion simulation.

In February 2020, the company released a trading update stating that they had deployed above 460 contracted headsets in high footfall tourist attractions globally. This figure represented the estimated number of headsets required to reach breakeven and sales momentum was progressing at a strong pace.

The nature of Immotion’s business meant that COVID 19 and lockdown restrictions reduced their revenues dramatically. The footfall at sites across the globe ground to a halt. The Management team have done a good job of reducing costs and using the various Governmental schemes available to keep the business funded.

Recent market updates show that the company has navigated the situation well, with cash preservation, the sale/launch of its in-home AR/VR product and the sale of its UV light cabinets. We would like to congratulate Martin Higginson, David Marks and the whole team for what can only be described as “dogged” performance. 

VividQ

Sure Ventures PLC has a further direct investment of £500,000 in VividQ, on top of its 25.9% exposure via its holding in Sure Valley Ventures ICAV. The progress being made, the tie ups with major global technology players and the pathway of holography adoption being laid out provides a great deal of promise for the future. (See previous VividQ paragraph above).

Sure Ventures Director, Gareth Burchell said, “We have seen a small decline in our NAV over the quarter due to an FX loss (GBP vs EUR) and the short-term price decline in VR Education (VRE). It is great to see VR Education’s more recent announcements have rectified that decline and significant revenue growth has been achieved. The future for VR Education is looking very bright and the same is true for a number of our technology companies, including new addition Pre-cog Systems.

The COVID-19 environment has accelerated the growth of businesses such as Buymie, Admix and Ambisense. The post pandemic world will have changed enormously, with businesses looking to improve efficiencies via AI/IOT technologies, consumer behaviour experiencing a shift-change towards on-line consumption and the global commercial environment is embracing technological change at a greater pace then we had all imagined. The portfolio that has been established by the AIFM team is very well placed to take advantage of that environment and we look forward to updating investors with what we believe will be a transformational year for SURE Ventures PLC”.

For further information, please visit www.sureventuresplc.com or contact:

 

Gareth Burchell Sure Ventures plc +44 (0) 20 7186 9918

Notes to Editors

Sure Ventures plc listed on the London Stock Exchange in January 2018 giving retail investors access to an asset class that is usually dominated by private venture capital funds.  Sure Ventures is focusing on companies in the UK, Republic of Ireland and other European countries, making seed and series A investments in companies with first rate management teams, products which benefit from market validation with target revenue run rates of at least £400,000 over the next 12 months.  Website: https://www.sureventuresplc.com/

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

Cameramatics Series A Funding Round

RNS Number : 1279L | Sure Ventures PLC | 11 January 2021

Sure Ventures plc (‘Sure Ventures’ or ‘the Company’)

Cameramatics Series A Funding Round

 

Sure Ventures plc, a London listed venture capital fund which invests in early stage software companies in the rapidly growing technology areas of Augmented reality (‘AR’), Virtual reality (‘VR’),  Internet of Things (‘IoT’) and Artificial Intelligence (AI). We are pleased to provide an update on one of Sure Ventures’s investments held through its commitment in Sure Valley Ventures Fund (“SVV”).

Leading IoT Fleet and vehicle safety technology specialist CameraMatics (“Mysafedrive Ltd”) has successfully raised in excess of €4 million in a Series A Investment Round from a consortium of investors led by Puma Investments, along with follow on from existing investors Sure Valley Ventures and Enterprise Ireland. Sure Valley Ventures led the “Seed Round” in November 2017 and this round represents close to a 4 fold unrealised gain from our initial investment. We have followed on in the Series A round and hold just over 13% of the enlarged share capital.

The funds will be used to support further expansion of the US branch of the business and drive forward the recent entry into the mainland European market. CameraMatics expects to create more than 50 jobs over the next two to three years in Ireland along with other roles in the UK, US and mainland Europe. The company also has an extensive roadmap for future product and software development.

Ideally placed in one of the world’s fastest-growing sectors, CameraMatics has grown steadily since launching in Ireland in 2016, and now boasts over 400 customers globally, including some of the sector’s leading and largest fleet operators. The company’s solutions are currently operating live in tens of thousands of vehicles globally – a number increasing daily. CameraMatics has seen a phenomenal 300% growth of recurring revenue in last 12 months despite some of the global challenges of the Covid pandemic and expects this new investment and some of the exciting, large-scale opportunities in its current pipeline to further accelerate the business growth.

Continued product development and innovation are a key area for CameraMatics, and funds will also accelerate continued product development. The company’s customer-centric philosophy means all product development is driven by identifying the challenges customers experience with their fleets and developing high-quality solutions.

The CameraMatics SaaS-based full-stack platform is a modular software platform based on Camera Technology, Vision Systems, AI, Machine Learning and Telematics, combined with Fleet Safety modules enabling fleet operators to drive new safety standards across their fleet and drivers. By reducing accidents, improving operational efficiencies and managing compliance, it gives complete visibility and peace of mind for today’s challenges in fleet operations.

Announcing the investment, Mervyn O’Callaghan CEO of CameraMatics said,

We are delighted with the support we have received from Puma Investments, Sure Valley Ventures and Enterprise Ireland. The funds will enable us to further capitalise on our position as a leader in the fleet safety technology industry in Ireland, the UK, USA – and beyond. IoT is the future and with the automotive IoT market growing significantly year on year we are now extremely well-placed to continue to expand our business and develop our software solutions.”

 

Gareth Burchell-Sure Ventures PLC Director

“This further funding will enable CameraMatics to develop its proven IoT fleet technology even more and to equip an even greater number of fleets, resulting in increased road safety, compliance with regulations and protection. It has been a privilege to support the CameraMatics team so far and we look forward to helping them to take their business to the next level.”

 

Interim Results for six months ended 30 Sept 2020

RNS Number : 8356G | Sure Ventures PLC | 30 November 2020

Sure Ventures plc (‘Sure Ventures’ or ‘the Company’)

Unaudited Interim Report and Financial Statements

For the six months ended 30 September 2020

Sure Ventures plc is a London listed venture capital fund which invests in early stage software companies in the rapidly growing technology areas of augmented reality (‘AR’), virtual reality (‘VR’), Internet of Things (‘IoT’) and Artificial Intelligence (AI). We are pleased to provide its Unaudited Interim Results to September 2020.

 

SURE VALLEY VENTURES FUND

Sure Ventures made a 7million commitment to Sure Valley Ventures Fund (‘Sure Valley’) representing an interest in Sure Valley of approximately 25.9%.  This commitment was made at a price of €1.00 per share. The current NAV of the Sure Valley Ventures ICAV is 1.004 Euros.Sure Valley has several investments across the AI, AR, VR and IoT sectors.#

 

CHAIRMANS STATEMENT

Dear Shareholders.

On behalf of my fellow directors, I am delighted to present the interim results of Sure Ventures plc (the ‘Company’) for the six months ended 30 September 2020.

 

FINANCIAL PERFORMANCE

The Company’s performance for the half year to 30 September 2020 continues to be broadly in line with expectations producing a net asset value return of +3.43% (30 September 2018 +0.08%) and a life to date performance of -4.21%, which takes into account the Company’s initial formation costs incurred at incorporation as well as ongoing operational costs. Throughout the period the Company experienced one significant uplift in an underlying portfolio valuation as a result of a completed funding round, booked profit on a partial holding of one its two listed holdings by selling stock to the value of the original investment, as well as experiencing some volatility in the Company’s other listed holding, in what continues to be a challenging environment for investment managers globally. During the period total shareholders’ funds continued to grow steadily by over £600k to £5.125m as at 30 September 2020.

 

PORTFOLIO UPDATE

The Company’s holdings comprise its 25.9% investment in Sure Valley Ventures Sub-Fund of Suir Valley Fund ICAV (the ‘Fund’) to which the Company has made a total commitment of €7m (increasing its initial commitment from €4.5m in September 2019), as well as investments the Company holds directly – in Immotion Group plc (‘Immotion’), a listed immersive virtual reality (‘VR”) entertainment group and VividQ Limited, a privately owned deep technology company pioneering the application of holography in augmented reality (‘AR’) and VR. The Fund portfolio includes one listed entity, VR Education Holdings plc (‘VR Education’) a developer of VR software and immersive experiences with a specific focus on education, and as at 30 September, a further twelve privately held companies in the AR, VR, internet of things (‘IoT’) and artificial, intelligence (‘AI’) space, including the Fund’s investment in VividQ held alongside the Company’s direct investment.

During the period the Fund announced the following additional portfolio investments:

• Buymie Technologies, an AI app-based home grocery delivery service currently available in Dublin and Bristol allowing shoppers to order from a selection of local stores including Tesco, Lidl and Dunnes Stores in Ireland and the Co-op and Asda in the UK, enabling grocery orders to be delivered by a personal shopper in as little as one hour. The Fund invested in Buymie’s Seed round, followed by a Series A round less than three months later in June 2020 at a valuation representing a x2 uplift of the initial investment.

• Volograms Limited, a reality capture and volumetric video company that allows users to capture volumetric holograms of individuals that can then be incorporated in AR and VR creative content for use in apps, social media and VR headsets. The mobile AR market is forecast to grow from 1bn devices in 2019 to 2.5bn compatible devices in 2024, representing potential revenue growth from US$8bn to US$60bn.

These two additional investments bring their own unique qualities and add to the already diverse and well-balanced composition of the Fund’s portfolio of investee companies.

The half year also featured extremely positive developments from several of the investee companies including VR Education, which was given a substantial boost on the announcement that HTC had taken a stake in the company and entered into strategic partnership agreements for the distribution and licence of the company’s Engage platform. On the back of this news the Fund sold stock to the value of its original investment but continue to retain equity to the equivalent of 4.38% of VR Education.

VividQ also entered into a tie-up with the major technology player Arm, with the announcement of a collaboration enabling the integration of holographic display in AR wearables and to make VividQ’s software compatible with Arm Mali graphic processing units. VividQ represents the Company’s largest exposure by virtue of its direct investment and investment held in the Fund and the move by Arm further endorses VividQ’s technology.

Further information on the investment portfolio is provided in the report of the Investment Manager which follows this statement.

 

COMMITMENTS AND FUNDING

As previously mentioned, the Company has increased its subscription to the Fund by €2.5m from its original investment of €4.5m taking its total commitment to €7m, thereby increasing its share in the Fund from 21.6% to 25.9%. This commitment was made shortly before the Fund closed to new subscribers validating the Company’s belief that the Fund portfolio is now at a mature stage and, with a number of investee companies preparing for further funding rounds, there is demonstrable potential for further uplifts to occur from initial valuations.

The Company believes that it will have sufficient access to funding to meet its commitments to the Fund over the term of the Fund’s investment cycle, through a combination of available cash, anticipated subscriptions and access to undrawn facilities.

 

INVESTMENT ENVIRONMENT

COVID-19 continues to have an impact on global economies and whilst positive recoveries have been witnessed in many global stock markets, particularly in recent weeks on the welcome news of the development and rollout of effective vaccines, the investment environment is likely remain challenging for a while to come. However, the Company is confident that the Investment Manager will continue to identify new businesses in which to invest within the Company’s chosen verticals of AR, VR, IoT and AI. Furthermore, the Company and Investment Manager remain vigilant of risks associated with COVID-19 and its effect on the portfolio companies.

 

DIVIDEND

During the half year to 30 September 2020, the Company has not declared a dividend (30 September 2019: £nil), in line with its dividend policy. Pursuant to the Company’s dividend policy the directors intend to manage the Company’s affairs to achieve shareholder returns through capital growth rather than income. During the six month period ending 30 September, the Company received income following a distribution from the Fund in respect of the partial sale of its holding of VR Education equity and the Board considered that the working capital requirements and anticipated draw down cycle of their current commitments did not allow for sufficient excess liquidity as to declare a special dividend.

The Company does not expect to receive a material amount of dividends or other income from its direct or indirect investments. It should not be expected that the Company will pay a significant annual dividend, if any.

 

GEARING

The Company may deploy gearing of up to 20% of net asset value (calculated at the time of borrowing) to seek to enhance returns and for the purposes of capital flexibility and efficient portfolio management. The Company’s gearing is expected to primarily comprise bank borrowings but may include the use of derivative instruments and such other methods as the Board may determine. During the period to 30 September 2020 the Company did not employ any borrowing (30 September 2019: £nil).

The Board will continue to review the Company’s borrowing, in conjunction with the Company’s Investment Manager on a regular basis pursuant with the Company’s overall cash management and investment strategy.

 

OUTLOOK

Several investee companies remain at different stages of Series A fundraising and upon completion the Company anticipates further positive announcements to this effect within the next one-two quarters. The investment pipeline remains robust and the Company anticipates news in the near term of further portfolio additions, subject to the completion of the Investment Manager’s rigorous filter process and satisfactory due diligence.

As noted in my Chairman’s Statement that accompanied the annual report for the year ending 31 March 2020, COVID-19 has forced structural changes in the way that tasks are performed in the workplace, in education and in entertainment. With physical restrictions again being implemented by lockdown measures designed to combat the spread of the virus, the Company believes that its portfolio of investee companies and its investment strategy continue to be well placed to benefit from new technologies being adopted increasingly in our day-to-day lives.

 

SUBSCRIPTIONS

Following a subscription of 230,769 ordinary shares in July 2020, the total shares in admission as at 30 September 2020 stood at 5,350,725.

The Investment Manager’s Report following this Statement gives further detail on the affairs of the Company. The Board is confident of the long-term prospects for the Company in pursuit of its investment objectives

Perry Wilson

Chairman

 

INVESTMENT MANAGEMENT REPORT

Sure Ventures plc (the “Company”) was established to enable investors to gain access to early stage technology companies in the three exciting and expansive market verticals of augmented reality and virtual reality (AR/VR), artificial intelligence (AI) and the internet of things (IoT).

The Company gains access to deal flow ordinarily reserved for venture capital funds and ultra-high net worth angel investors, establishing a diversified software-centric portfolio with a clear strategy. Listing the fund on the London Stock Exchange offers investors:

  • Relative liquidity
  • A quoted share price
  • A high level of corporate governance.

It is often too expensive, too risky and too labour intensive for investors to build a portfolio of this nature themselves. We are leveraging the diverse skillsets of an experienced management team who have the industry network to gain access to quality deal flow, the expertise to complete extensive due diligence in target markets and the entrepreneurial skills to help these companies to mature successfully. Those investing in the Company will get exposure to Sure Valley Ventures which in turn makes direct investments in the above sectors in the UK & Ireland.

 

Augmented Reality & Virtual Reality

The AR/VR market is evolving at a rapid pace. The market is expected to grow into a US$298 billion industry by 2023 growing at a CAGR of over 60% during the forecast time frame [1]. Significant investment in hardware capability and headset development has been made by major industry players such as Facebook (through its Oculus division), Microsoft, Sony (through its PlayStation division), HTC, Samsung and others. This investment has ignited a new and exciting industry within the technology sector. Hardware manufacturers and AR/VR users are now searching for software capabilities/support and content, and we believe that exposure to this industry via the Fund and direct investment into software companies in the space will offer significant upside potential for investors. Through our network of technology accelerators, angel investor partners and industry contacts in the AR/VR space, we expect to have a strong chance of discovering the industry leaders of tomorrow.

 

Internet of Things

The Internet of Things (IoT) as a segment of the market is a broad investment area; it is defined as the interconnection, via the internet, of computing devices embedded in everyday objects, enabling them to send and receive data. The market was estimated to be worth US$212 billion dollars by the end of 2019 and is predicted to reach a size of US$1.6 trillion by 2025[2]. The global growth and advancement of internet coverage, the increased speed and capability of connectivity and the mass market penetration of smartphones/tablet sales has created significant opportunities for software companies. Businesses from many industries are embracing the efficiencies, cost savings and the “direct to consumer” penetration this technological advancement has offered. We see continued growth in this area and believe that investor returns will benefit from exposure to the space.

 

Artificial Intelligence

According to the market research firm Tractica, the global artificial intelligence software market is expected to experience massive growth in the coming years, with revenues increasing from around US$9.5 billion in 2018 to an expected US$118.6 billion by 2025[3]. The overall AI market includes a wide array of applications such as natural language processing, robotic process automation, and machine learning. McKinsey did an analysis comparing the value created by advanced analytics versus AI and machine learning across common enterprise use cases. McKinsey found that 82% of enterprises adopting machine learning and AI have gained a financial return from their investments. For companies across all industries, the median return on investment from cognitive technologies is 17%. AI and machine learning have the potential to create an additional US$2.6T in value by 2020 in Marketing and Sales, and up to US$2.0T in manufacturing and supply chain planning.

[1]  ARC market research Sep 2019

[2]  Statista 2019

[3]  Tractica 2019

 

PORTFOLIO BREAKDOWN

On 6 February 2018 the Company entered into a €4.5m commitment to Sure Valley Ventures (the “Fund”), the sole sub-fund of Suir Valley Funds ICAV and its investment was equalised into the Fund at that date. On 31 August 2019 a further €2.5m was committed to the Fund, taking the total investment in Sure Valley Ventures to €7m. The first drawdown was made on 5 March 2018 and as at 30 September 2020, a total of €3,595,468 had been drawn down against this commitment.

On 26 April 2019 the Company made a direct investment of £500,000 into VividQ Limited, a deep tech start up with world leading expertise in 3D holography. This investment represents the second direct investment of the Company, alongside Immotion Group PLC, which was announced on 24th April 2018. As detailed in the Statement of Position included in the following financial statements, these two investments alongside the Fund investment represent the entire portfolio of Sure Ventures plc as at 30 September 2020.

On 3 July 2020, the Company announced a placing of 230,769 ordinary shares which were admitted to trading on the Specialist Fund Segment of the London Stock Exchange on 9 June 2010, under the existing ISIN: GB00BYWYZ460, taking the total shares in admission as at 30 September 2020 to 5,350,725.

 

SUIR VALLEY FUNDS ICAV

Suir Valley Funds ICAV (the ”ICAV”) is a close-ended Irish collective asset-management vehicle with segregated liability between sub-funds incorporated in Ireland pursuant to the Irish Collective Asset-management Vehicles Act 2015 and constituted as an umbrella fund insofar as the share capital of the ICAV is divided into different series with each series representing a portfolio of assets comprising a separate sub-fund.

The ICAV was registered on 18 October 2016 and authorised by the Central Bank of Ireland as a qualifying investor alternative investment fund (“QIAIF”) on 10 January 2017. The initial sub-fund of the ICAV is Sure Valley Ventures, or the Fund, which had an initial closing date of 1 March 2017. The Fund invests in a broad range of software companies with a focus on companies in the AR/VR, AI and IoT sectors.

As at 30 September 2020 the Fund had commitments totalling €27m and had made thirteen direct investments into companies spanning the AR/VR, AI and IoT sectors. One of these investments was sold in the prior year, giving the Fund its first realised gain on exit of around 5X return on investment. On 12 March 2018, Immersive VR Education Limited, the Fund’s first investment, completed a flotation on the London Stock Exchange (AIM) and the Dublin Stock Exchange (ESM). The public company is now called VR Education Holdings PLC – ticker VRE. VRE was the first software company to list on the ESM since that market’s inception. Following an increase in the share price of VRE, in June 2020 the Fund sold 3.3m of its 13.8m holding in order to fully recover the costs of its initial investment.

 

PERFORMANCE

In the period to 30 September 2020 the Company’s performance was broadly in line with expectations, returning a net asset value of £0.96 per unit, which is an increase of £0.03 from the 31 March 2020 audited year end figure. This can largely be explained by the positive performance in Sure Valley Ventures Fund. The NAV has also benefitted slightly from an increased share price in Immotion Group PLC, closing the period at 3.05p (March 2020: 1.85p) which, whilst improved, continues to suffer as a result of the recent Covbid-19 pandemic.

 

FUTURE INVESTMENT OUTLOOK

The Fund has achieved one very positive realised gain and more recently realised some additional gains by recovering its initial investment in VRE, as well as a number of unrealised gains across the portfolio and continues to have access to quality deals in our chosen high growth sectors. The portfolio of current investments is now beginning to mature and approach series A funding rounds, which if successful, will begin to provide the NAV growth that was set out to achieve from inception.

We remain confident in the future outlook of the Company in the forthcoming financial year and in line with the prospectus, reserve the right to make further direct investments provided there is sufficient working capital to do so.

 

Shard Capital AIFM LLP

Investment Manager

24 November 2020

 

INTERIM MANAGEMENT REPORT

The report below together with the Chairman’s Statement, Investment Manager’s report and related party disclosures in the notes to the financial statements constitute the Interim Management Report for the six months ended 30 September 2020.

Principal risks and uncertainties

The principal risks and uncertainties associated with the Company’s business are divided into the following main areas:

  • Operational risks, including risks associated with reliance on third party service providers, reliance on key individuals at the Investment Manager and fluctuations in the market price of the Company’s shares;
  • Investment risks, including risks associated with the investment objective, borrowing and liquidity of investments; and
  • Regulatory risks, including risks associated with maintenance of investment trust status and compliance with applicable legislative obligations.

The above risks are described further in the Company’s Annual Report for the year ended 31 March 2020 together with measures that have been put in place to mitigate and manage those risks.

In the view of the directors, the principal risks and uncertainties reported in the latest Annual Report for the year ended 31 March 2020 remain unchanged and will be applicable to the remaining six months of the financial year.

 

COVID-19 PANDEMIC

In the first quarter of 2020, the World Health Organization declared a global health pandemic due to the spread of the “COVID-19” virus. The effects of COVID-19 are causing significant market volatility and have had an effect on the Company through price volatility of the Company’s investments. The ongoing economic and broader impacts of COVID-19 will have an effect on the financial statements and operations in the future, though it is not possible to quantify likely impacts at this stage.

The Board and the Investment Manager continue to closely monitor developments on a regular basis and have invoked internal controls and risk management procedures to mitigate any related risk that may arise.

 

GOING CONCERN

The Board and the Investment Manager believe that the operational viability and going concern status of the Company remains intact and will continue for the next financial 12 months ahead and foreseeable future. The Board has no concerns in regards to the ongoing existence of the Company.

The Board is also satisfied that the key service providers have the ability to continue to operate efficiently in a remote or virtual working environment.

 

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

The directors confirm that, to the best of their knowledge that:

  1. a) the condensed set of unaudited financial statements contained within the half-yearly financial report have been prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting as required by the Disclosure and Transparency Rule 4.2.4R, and give a true and fair view of the assets, liabilities and financial position of the Company;
  2. b) the Interim Management Report includes a fair review, as required by Disclosure and Transparency Rule 4.2.7R, of important events that have occurred during the first six months of the financial year, their impact on the condensed set of unaudited financial statements, and a description of the principal risks and perceived uncertainties for the remaining six months of the financial year; and
  3. c) the Interim Management Report includes a fair review of the information concerning related parties’ transactions as required by Disclosure and Transparency Rule 4.2.8R.

 

For and on behalf of the board of directors

Perry Wilson

Chairman

 

 

ALTERNATIVE PERFORMANCE MEASURES (APMs)

APMS are often used to describe the performance of investment companies although they are not specifically defined under IFRS. Calculations for APMs used by the Company are shown below.

 

ONGOING CHARGES

A measure expressed as a percentage of average net assets, of the regular, recurring annual costs of running an investment company, calculated in accordance with the AIC methodology.

 

Period ended 31 September 2020

 

Average NAV (£’000) a £5,094
Recurring costs (£’000) b £341.3
b/a 6.70%

 

PREMIUM

The amount, expressed as a percentage, by which the share price is more than the NAV per share.

 

As at 30 September 2020

 

NAV per ordinary share a 95.79p
Share price b 97.0p
(b-a)/a 1.26%

 

TOTAL RETURN

A measure of performance that includes both income and capital returns. This takes into account capital gains and reinvestment of any dividends paid out by the Company, with reinvestment on ex-dividend date

 

Year ended 31 March 2020

 

NAV Share price
Opening as at 31 March 2020 (p) A 92.61 95.00
Closing at 30 September 2020 (p) B 95.79 97.00

 

FINANCIAL STATEMENTS

For the six months ended 30 September 2020 (unaudited)

 

Revenue

£

Capital
£
Total
£
Income
Other net changes in fair value on financial assets at fair value through profit or loss  

231,188 231,188
Other income 79,883 79,883
Total net income 311,071 311,071
Expenses
Custodian, secretarial and administration fees (43,095) (43,095)
Other expenses (103,820) (103,820)
Total operating expenses (146,915) (146,915)
Profit / (Loss) before Taxation and after finance costs (146,915) 311,071 164,156
Taxation
Profit / (Loss) after taxation (146,915) 311,071 164,156
Earnings per share (2.75)p 5.81p 3.07p

 

For the six months ended 30 September 2019 (unaudited)

 

Revenue

£

Capital
£
Total
£
Income
Other net changes in fair value on financial assets at fair value through profit or loss  

111,913 111,913
Other income
Total net income 111,913 111,913
Expenses
Management fee
Custodian, secretarial and administration fees (42,478) (42,478)
Other expenses (88,033) (88,033)
Total operating expenses (130,511) (130,511)
(Loss) / Profit before Taxation and after finance costs (130,511) 111,913 (18,598)
Taxation
(Loss) / Profit after taxation (130,511) 111,913 (18,598)
Earnings per share (2.68)p 2.30p (0.38)p

 

The total comprehensive income and expense for the period is attributable to shareholders of the Company. The accompanying notes on pages 19 to 21 form part of these condensed interim financial statements.

Condensed Statement of Financial Position

As at 30 September 2020                              

                                                                                   

Notes 30 September 2020

(unaudited)

£

31 March 2020

(audited)
£

Non-current assets
Investments held at fair value through profit or loss 7 3,657,599 3,078,560
3,657,599 3,078,560
Current assets
Receivables 13,290 18,620
Cash and cash equivalents 1,477,366 1,700,601
1,490,656 1,719,221
Total assets 5,148,255 4,797,781
Current liabilities
Other payables (22,930) (287,862)
(22,930) (287,862)
Total assets less current liabilities 5,125,325 4,509,919
Total net assets 5,125,325 4,509,919
Shareholders’ funds
Ordinary share capital 8 53,449 48,699
Share premium 5,146,088 4,699,588
Revenue reserves 76,460 223,375
Capital reserves (150,672) (461,743)
Total shareholders’ funds 5,125,325 4,509,919
Net asset value per share 95.79p 92.61p

 

The accompanying notes on pages 19 to 21 form part of these condensed interim financial statements.

The financial statements on pages 15 to 18 were approved by the board of directors and authorised for issue on 24th November 2020.

Perry Wilson,

Chairman

Condensed Statement of Changes in Equity

For the six months ended 30 September 2020 (unaudited)

Ordinary

Share

Capital

£

Share

Premium

 

£

Revenue

Reserves

 

£

Capital

Reserves

 

£

Total

Reserves

 

£

Total

Equity

 

£

For the year ended 31 March 2020  48,699  4,699,588  223,375  (461,743)  (238,368)  4,509,919
Ordinary shares issued 4,750 470,250 475,000
Ordinary shares issue costs (23,750) (23,750)
Profit / (Loss) after taxation (146,915) 311,071 164,156 164,156
Dividends paid in the period
Balance at 30

September 2020

53,449 5,146,088 76,460 (150,672) 74,212 5,125,325

 

For the six months ended 30 September 2019 (unaudited)

Ordinary

Share

Capital

£

Share

Premium

 

£

Revenue

Reserves

 

£

Capital

Reserves

 

£

Total

Reserves

 

£

Total

Equity

 

£

For the year ended 31 March 2019 45,647 4,428,290 (501,420) (182,429) (683,849) 3,790,088
Ordinary shares issued 3,052 290,186 293,000
Ordinary shares issue costs (18,650) (18,650)
(Loss) / Profit after taxation (130,511) 111,913 (18,598) (18,598)
Dividends paid in the period
Balance at 30 September 2019 48,699 4,699,588 (631,931) (70,516) (702,447) 4,045,840

 

CONDENSED STATEMENT OF CASHFLOWS

For the six months ended 30 September 2020

30 September 2020

(unaudited)

£

30 September 2019

(unaudited)

£

Cash flows from operating activities:
Profit / (Loss) after taxation 164,156 (18,598)
Adjustments for:
Decrease in receivables 5,330 (6,900)
Decrease in payables (264,932) 1,522
Unrealised Profit on foreign exchange (66,576) (45,187)
Loss on sale of investment 1,790
Net changes in fair value on financial assets at fair value through profit or loss  

(156,338)

(68,570)
Net cash (outflow) from operating activities  

(316,570)

(137,732)
Cash flows from investing activities:
Purchase of investments (424,828) (827,937)
Sale of investments 66,913
Net cash (outflow) from investing activities (357,915) (827,937)
Cash flows from financing activities:
Proceeds from issue of ordinary shares  475,000 293,000
Share issue costs (23,750) (18,650)
Net cash inflow from financing activities 451,250 274,350
Net change in cash and cash equivalents (223,235) (691,319)
 

Cash and cash equivalents at the beginning of the period

 

1,700,601

2,139,842
Net cash and cash equivalents 1,477,366 1,448,523

 

The accompanying notes on pages 19 to 21 form part of these condensed interim financial statements.

Notes to the Condensed Interim Financial Statements

1)  GENERAL INFORMATION

Sure Ventures plc (the “Company”) is a company incorporated in England and Wales (registration number: 10829500) on 21 June 2017, commencing trading on 19 January 2018 upon listing. The registered office of the Company is 23rd Floor, 20 Fenchurch Street, London, United Kingdom, EC3M 3BY.

The Company is an investment company within the meaning of section 833 of the Companies Act 2006.

The Company operates as an investment trust in accordance with Chapter 4 of Part 24 of the Corporation Tax Act 2010 and the Investment Trust (Approved Company) (Tax) Regulations 2011. In the opinion of the directors, the Company has conducted its affairs so that it is able to maintain its status as an investment trust. Approval of The Company’s application for approval as an investment trust was received from HMRC on 22 November 2018, applicable from the accounting period commencing 1 April 2018.

The Company is an externally managed closed-ended investment company with an unlimited life and has no employees.

The information set out in these unaudited condensed interim financial statements for the period ended 30 September 2020 does not constitute statutory accounts as defined in section 435 of Companies Act 2006. Comparative figures 31 March 2020 are derived from the financial statements for that period. The financial statements for the period ended 31 March 2020 have been delivered to the Registrar of Companies and contain an unqualified audit report and did not contain a statement under emphasis of matter or statements under section 498(2) or (3) of the Companies Act 2006. The financial statements of the Company for the year ended 31 March

2020 are available upon request from the Company’s registered office at 23rd Floor, 20 Fenchurch Street, London, United Kingdom, EC3M 3BY.

BASIS OF ACCOUNTING

The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations (IFRS IC) as adopted by the European Union. They do not include all the information required for the full annual financial statements, and should be read in conjunction with the annual

financial statements of the Company for the period ended 31 March 2020. The principal accounting policies adopted in the preparation of the financial information in these unaudited condensed interim financial statements are

unchanged from those used in the Company’s financial statements for the year ended 31 March 2020. This report does not itself contain sufficient information to comply with IFRS.

3)  ESTIMATES

The preparation of the unaudited condensed interim financial statements requires management to make judgement, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these unaudited condensed interim financial statements, the significant judgement made by management in applying the Company’s accounting policies and the key sources of estimation were the same as those that applied to the Company financial statements as at and for the period ended 31 March 2020.

4)  FINANCIAL RISK MANAGEMENT

The Company’s financial risk management objectives and policies are consistent with those disclosed in the Company financial statements as at and for the year ended 31 March 2020.

 

As an investment trust the Company is exempt from corporation tax on capital gains. The Company’s revenue income is subject to tax, but offset by any interest distribution paid, which has the effect of reducing that corporation tax to nil. This means the interest distribution may be taxable in the hands of the Company’s shareholders.

EARNINGS PER SHARE

For the six months period ended 30 September 2020 Revenue
pence
Capital
pence
Total
pence
Earnings per ordinary share (2.75)p 5.81p 3.07p
For the financial period ended 31 from March 2020
Earnings per ordinary share 14.88p (5.74)p 9.15p

 

The calculation of the above is based on revenue return loss of £146,915 (31 March 2020: profit £724,795), capital return profit of £311,071 (31 March 2020: loss £279,314) and total return profit of £164,156 (31 March 2020: profit £445,481) and weighted average number of ordinary shares of 5,350,725 (31 March 2020: 4,869,956) as at 30 September 2020.

INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

As at 30 September 2020

£

As at 31 March 2020
£
Opening cost
Opening fair value 3,078,560 1,700,900
Purchases at cost 424,828 1,894,014
Sale (66,913) (279,301)
Cost at fair value measurement
Realised loss (1,790) (22,136)
Unrealised gain/(loss) 156,338 (291,347)
Unrealised gain on foreign exchange 66,576 76,430
Closing fair value 3,657,599 3,078,560

8)  ORDINARY SHARE CAPITAL

The table below details the issued share capital of the Company as at the date of the Financial Statements.

Issued and allotted No. of shares

30 September

2020

No. of shares
31 March2020
Ordinary Share Capital

30 September 2020
£

Ordinary Share Capital

31 March 2020
£

Ordinary shares of 1 penny each 5,350,725 4,869,956 53,507 48,699

On incorporation, the issued share capital of the Company was £0.01 represented by one ordinary share of £0.01.  Redeemable preference shares of 50,000 were also issued with a nominal value of £1 each, of which 25% were paid. The redeemable shares were issued to enable the Company to obtain a certificate of entitlement to conduct business and to borrow under section 761 of the Companies Act 2006. The redeemable shares were redeemed on listing from the proceeds of the issue of the new ordinary shares upon admission on 19 January 2018.

The following table details the subscription activity for the period ended 30 September 2020.

30 September 2020 31 March 2020
Balance as at 31 March 2020 4,869,956 4,564,748
Ordinary shares issued 480,769 305,208
Balance as at 30 September 2020 5,350,725 4,869,956

 

During the period ended 30 September 2020, all proceeds from this issue was received (31 March 2020 all proceeds from this issue was received)

9)  RELATED PARTY TRANSACTIONS AND TRANSACTIONS WITH THE MANAGER

Directors – There were no contracts subsisting during or at the end of the period in which a director of the Company is or was interested and which are or were significant in relation to the Company’s business.  There were no other transactions during the period with the directors of the Company. The directors do not hold any ordinary shares of the Company.

At 30 September 2020, there was £nil (31 March 2020: £1,473) payable in respect of directors fees and expenses.

Manager – Shard Capital AIFM LLP (the ‘Manager’), a UK-based company authorised and regulated by the Financial Conduct Authority, has been appointed the Company’s manager and authorised investment fund manager for the purposes of the Alternative Investment Fund Managers Directive. Details of the services provided by the manager and the fees paid are given in the prospectus dated 17 November 2017.

During the period the Company incurred £31,938 and was rebated the full amount (31 March 2020 £55,495) of fees and at 30 September 2020, there was £nil (31 March 2020: nil) payable to the manager.

During the period the Company paid £23,750 (31 March 2020: £18,650) of placement fees to Shard Capital Partners LLP.

During the period the Company paid £6,000 (31 March 2020: £12,000) of advisory fees to Shard Capital Partners LLP.

10)  SUBSEQUENT EVENTS

There was no subsequent events which would require disclosure in the financial statements.

For further information, please visit www.sureventuresplc.com or contact:

 

Gareth Burchell Sure Ventures plc +44 (0) 20 7186 9918

Notes to Editors

Sure Ventures plc listed on the London Stock Exchange in January 2018 giving retail investors access to an asset class that is usually dominated by private venture capital funds.  Sure Ventures is focusing on companies in the UK, Republic of Ireland and other European countries, making seed and series A investments in companies with first rate management teams, products which benefit from market validation with target revenue run rates of at least £400,000 over the next 12 months.  Website: https://www.sureventuresplc.com/