LivermoreInvestments
Livermore Investments Group Limited
Annual Report & Consolidated Financial Statements
for the year ended 31 December 2007
Livermore Investments Group Ltd.
Trident Chambers
PO Box 146
Road Town
Tortola
British Virgin Islands
Balance
Potential
Value
Livermore Investments Group Ltd. Annual Report 2007
Livermore Investments Group Ltd. Annual Report 2007
Table of Contents
Table of Contents
Balance, Potential, Value
Highlights
Chairman’s and Chief Executive’s Review
Introduction
Financial Review
Dividend
Annual General Meeting
Review of activities
Principal activities
Introduction and Overview
Global Investment Environment
Livermore's Investment strategy in light of the global economy trends
Review of Significant Investments
Post balance sheet events and investments
Change of Name
Discontinued operations
Litigation
Report of the Directors
The Board's objectives
The Board of Directors
Directors responsibilities in relation to the accounts
Disclosure of information to the auditor
Substantial Shareholdings
Corporate Governance
Introduction
The Board Constitution and Procedures
Board Committees
LivermoreInvestments Annual Report 2007 2
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Internal Control
Independence of Auditor
Remuneration Report
Directors’ Emoluments
Directors’ Interests
Interests of Directors in share options
Share Option Scheme
Remuneration Policy
Review of the business and risks
Risks
Share Capital
Related party transactions
Report of the independent auditor to the members of Livermore Investments Group Limited
Consolidated Income Statement for the year ended 31 December 2007
Consolidated Balance Sheet as at 31 December 2007
Consolidated Statement of Changes in Equity for the year ended 31 December 2007
Consolidated Statement of Cash Flows for the year ended 31 December 2007
Notes on the Financial Statements
Shareholder Information
Registrars
Website
Direct Dividend Payments
Lost Share Certificate
Duplicate Shareholder Accounts
Notice of Annual General Meeting
Ordinary business
Special business
Corporate Directory
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Balance
Potential
Value
LivermoreInvestments Annual Report 2007 4
Livermore strives to
create the optimal
balance through
diversification. Seeking
the potential of
emerging markets and
prospects, Livermore’s
team has the experience
and insight required to
reveal the true value of
unique opportunities.
5
Striking the right
balance for optimal
growth
Balance
Livermore has created a diversified portfolio that combines income-
generating and growth opportunities. By striking the right balance,
Livermore ensures short-term success and future development.
LivermoreInvestments Annual Report 2007 6
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LivermoreInvestments Annual Report 2007
Potential
Livermore investment strategy focuses
on emerging markets and prospects.
This approach is the foundation of
Livermore’s exceptional capacity for
long term growth.
Seeking
potential in
emerging
markets and
prospects
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Revealing the true value of opportunities
Value
LivermoreInvestments Annual Report 2007 0
Each Livermore investment has a strong value-proposition, creating a powerful portfolio.
With experience and insight, Livermore team seeks to reveal the true value of unique investment opportunities.
Highlights
•
•
•
•
•
•
•
•
Successfully completed restructuring and established operations as an investment company
Net Asset Value per share USD 0.97 (49 pence) after payout of . cents per share during the year
Net Asset Value growth of USD 9.m before payment of dividend and treasury share buy back
Gross income from investment activities USD 25.m
Earnings before Interest, Tax, Depreciation, Amortization and non recurring items - USD 22.7m
Net Income after tax of - USD 20.7m
Dividend distributed during the year (for 2006) - USD 9.7m
2007 total payout of 6. cents per share which include a cash dividend of USD 0.0m and treasury shares
purchased for USD 7.2m.
LivermoreInvestments Annual Report 2007 2
Highlights
•
•
•
•
•
•
•
•
Successfully completed restructuring and established operations as an investment company
Net Asset Value per share USD 0.97 (49 pence) after payout of . cents per share during the year
Net Asset Value growth of USD 9.m before payment of dividend and treasury share buy back
Gross income from investment activities USD 25.m
Earnings before Interest, Tax, Depreciation, Amortization and non recurring items - USD 22.7m
Net Income after tax of - USD 20.7m
Dividend distributed during the year (for 2006) - USD 9.7m
2007 total payout of 6. cents per share which include a cash dividend of USD 0.0m and treasury shares
purchased for USD 7.2m.
Chairman’s and Chief Executive’s Review
Introduction
We are pleased to report the results of Livermore's first year as an investment company. At the beginning of
the year, we concluded the disposal of the Group's old activities, its change of name and change of purpose.
This transaction was completed on 9 January 2007 (see note ). Following these initial actions, the Group 's
primary focus was on building up a robust portfolio management infrastructure and recruiting an investment
management team.
LivermoreInvestments Annual Report 2007 4
During 2007 the Group was successful in deploying a significant part of its capital in a few outstanding deep
value opportunities mainly in Europe and Asia. These investments are consistent with Livermore's strategy to
establish a diversified portfolio with income generating and growth opportunities. Each of the investments
presents a strong value proposition and is expected to generate above average returns over the mid-term
period.
Management aims for the overall investment portfolio to generate annualized growth of over 5% over time
with a relatively conservative risk profile.
Financial Review
The NAV of the Group at December 2007 was approximately USD 276.4m following dividend payment of
USD 9.7m, and a share buy back of USD 7.2m. This represents an increase of USD 9.m over the NAV at
December 2006, Net profit was USD 20.7m, which represents a return on equity (ROE) of 7.%.
Operational expenses (excluding amortisation and non-recurring items) were USD .2m, representing .2%
of the NAV.
The increase in the NAV is primarily attributed to the following:
•
•
•
•
Gains from associated companies - USD .m.
Gains from investments in private equity and hedge funds - USD 4.7m.
Gains from real estate investments (rental income, changes in fair value and exchange rate gain) - USD
5.0m.
Net gains due to trading activities (not including hedge funds and private equity investments), and
exchange rate differences on investments in the portfolio at year end - USD 2.9m
the Company distributed dividends totalling USD 9.7m during the year, for the results of 2006.
Dividend
The Board is pleased to recommend a final cash dividend payment for 2007 of USD 0.0m or .5 cents
(. pence) per share. This dividend will be paid on July 200 to shareholders on the register at 0 June
200. Going forward, the Board intends to distribute discretionary dividends based on the net performance of
the Group's investment portfolio.
In addition, over the last financial year the Company purchased ,750,000 shares to be held in treasury,
for total proceeds of USD 7.2m. In 200, the Company purchased an additional ,0,262 shares. The total
number of shares held in treasury at 0 April 200 was 0,55,262.
Annual General Meeting
The Group’s Annual General Meeting will be held on 25 June 200. The Notice for the meeting is on page 70
of this report.
Richard B Rosenberg
Chairman
0 April 200
Noam Lanir
Chief Executive Officer
5
Review of activities
Principal activities
Following the agreement of the disposal of the Group’s online marketing operations on 29 December 2006,
the change of name and change of purpose, the Group commenced activity as an investment company in
January 2007.
The principal activities of the Group for the year ended December 2007 were financial and strategic
oriented investments in real estate, private equity, hedge funds and capital markets.
Introduction and Overview
In 2007, we began our journey as an investment company. Having completed one year, we are pleased to
report that 2007 was a successful first year of operations for Livermore, despite challenging market conditions.
Over the course of the year, Livermore built up a solid management team, set up an advisory office in Zurich,
Switzerland, and deployed most of its capital in a robust and well diversified portfolio. The portfolio has a
mixture of yielding and growth assets with a geographical focus on Europe and India. The NAV at December
2007 was USD 0.97 (49 pence) per share.
The gross income for 2007 was USD 25.m which includes investment income of USD .0m and income from
the purchase of an associate of USD .m. The net profit for 2007 amounted to USD 20.7m, which represents
a ROE of 7.%. The Group is pleased to announce a final dividend for 2007 of USD 0.0m which equates to a
.6% return on capital to investors.
Considering the high liquidity position of Livermore together with the robustness and diversification of its
investment portfolio, the Board believe the Group is well positioned to withstand the current volatile market
conditions and continue to generate superior value for its shareholders. The Board continue to review a high
volume of potential deal flow and are well positioned to take advantage of adverse market conditions.
Global Investment Environment
The global economy grew strongly in the first half of 2007 with growth running above 5%, although turbulence
in financial markets clouded prospects in the second half of 2007 and for 200. China’s economy gained
further momentum through 2007, growing by .5%, while India and Russia continued their strong growth.
These three countries alone accounted for half of global growth over the past year. Among the advanced
economies, growth in the euro zone and Japan slowed in the second quarter of 2007 after two quarters of
strong gains. In the United States, growth averaged 2.25% in the first half of 2007 as the housing downturn
continued to create considerable drag1.
Inflation seemed to be contained in the advanced economies, but rose in many emerging markets and
developing countries, reflecting higher energy and food prices. In the United States, core inflation gradually
eased to below 2%. In the euro zone, inflation generally remained below 2% in 2007, but energy and food
price increases contributed to an increase in September. Some emerging markets and developing countries
saw more inflation pressures, reflecting strong growth and the greater weight of rising food prices in their
*Source: World Economic Outlook 2007, IMF
LivermoreInvestments Annual Report 2007 6
consumer price indices. The acceleration in food prices reflected
pressure from the rising use of corn and other food items for bio-
fuel production and poor weather conditions in some countries. Strong
demand kept oil and other commodity prices high1.
Financial market conditions became more volatile in the third quarter
of 2007. Credit conditions tightened as concerns about the fallout
"...Having completed one year, we
are pleased to report that 2007
was a successful first year of
operations for Livermore, despite
challenging market conditions."
from strains in the U.S. subprime mortgage market increased and led
to a spike in yields on securities collateralized with subprime mortgage
loans as well as other higher-risk securities. Uncertainty about the
distribution of losses and rising concerns about counterparty risk saw
liquidity dry up in segments of the financial markets. Equity markets
retreated, led by falling valuations of financial institutions and long-
term government bond yields declined as investors looked for safe
havens. Emerging markets were also affected, although the impact was
less pronounced than in previous episodes of global financial market
turbulence1.
Prior to the recent market turbulence, central banks around the world
were generally tightening monetary policy to head off nascent inflation
pressures. In August however, faced by mounting market disruptions,
major central banks injected liquidity into money markets to stabilize
short-term interest rates. The Federal Reserve cut the federal funds
rate by 50 basis points in September and another 25 basis points in
December with expectations of further reductions in coming months.
Expectations of monetary policy tightening by the Bank of England,
Bank of Japan, and the European Central Bank have been rolled back
since the onset of the financial market turmoil. Major emerging
markets on the other hand faced the principal challenge of addressing
increasing inflation concerns1.
The major currencies largely continued trends observed since early
2006. The U.S. dollar continued to weaken. The Euro and the Swiss
Franc appreciated but continued to trade in a range broadly consistent
with recent fundamentals. The Indian Rupee appreciated sharply
against the U.S. dollar on account of large inflows of foreign capital1.
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LivermoreInvestments Annual Report 2007
US: Following a weak start to 2007, the U.S. economy rebounded strongly in the second quarter, growing by
.% on an annualised basis. Net exports and business investment provided a significant boost to growth,
although private consumption growth slowed markedly in the face of rising gasoline prices, and residential
investment continued to exert a significant drag on growth. In the latter half, however, the U.S. economy and
financial markets were affected by the credit crisis and falling home prices together with rising foreclosures.
The S&P 500 index rose 0% to an all time high at the beginning of October, before falling 6% by December
2007. Credit spreads widened significantly despite aggressive rate cuts by the Federal Reserve. The US Dollar
depreciated significantly against the Euro, ending the year at .46 versus . at the beginning of the year.
EURO ZONE: The financial market turbulence came at a time when Western Europe had been enjoying its
best economic performance for a decade. A long spell of robust global growth, healthy corporate balance
sheets, accommodative financing conditions, and past reforms laid the foundation for a strong upswing. The
euro area economy expanded at approximately % per annum from mid 2006, although growth eased in
"The net profit for 2007 amounted to USD 20.7m..."
the second quarter of 2007. Growth has been driven by a broad-based acceleration in investment spending,
especially in Germany, in response to high regional and global demand for machinery and equipment, a pickup
in construction, and robust exports. Private consumption softened in the first half of 2007, but consumer
confidence remained fairly robust until June, when it began to weaken. In the United Kingdom, the expansion
continued at a strong and steady pace, with growth of % (year on year) in the second quarter of 2007, led
by consumption. In Norway, Sweden, and Switzerland, growth was also sustained above potential long term
rates in the second quarter.
SWITZERLAND: Switzerland experienced strong growth in 2007, achieving GDP growth of 2.9% year on year.
The economy benefited from a lower exchange rate with respect to the euro. Unemployment in 2007 was low
and an increasing number of foreign nationals were employed in Switzerland. The financial turbulence of the
US markets affected the Swiss equity markets, with the SMI index closing 4.% below where it opened at the
beginning of the year. Increased oil and commodity prices contributed to a surge in inflation, which climbed
to 2% year on year in December – the highest level since October 995.
INDIA: GDP growth in India was stronger than expected over the past year, but is expected to moderate to
.5% in 2007-0, from a high of 9.5% last fiscal year. Headline inflation (WPI), at around %, was below the
Reserve Bank of India’s (RBI) near-term projections, although CPI inflation was higher. The rupee appreciated
significantly against the dollar, but export growth remained strong. The external current account deficit is
expected to widen to about 2% of GDP in 2007-0 against the backdrop of the strengthened rupee and slowing
global growth. The deficit is comfortably financed by private inflows. Reserves exceed $260 billion (over 0
times short-term external debt), and external debt remains low (about 7% of GDP, as of end 2006-07). India’s
financial markets largely recovered from corrections during the summer’s credit-market turbulence, with the
Indian stock indices reaching near record highs. Large inflows of foreign capital and excess liquidity remain a
concern for the RBI and measures such as credit tightening and changes to regulate inflows into the capital
markets were implemented.
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Livermore's Investment strategy in light of the global economy trends
Livermore’s investment strategy is to establish a diversified portfolio of value investments with a
relatively low risk profile and a geographic focus on Europe and Asia. Investments are also focused on
sectors which Management believe will provide superior growth over the mid to long term. In Emerging
LivermoreInvestments Annual Report 2007 20
Markets the Group invests alongside local partners with relevant expertise and proven track record. Up to
0% of the portfolio is allocated to trading opportunities. During 2007, this part of the portfolio was primarily
invested in a few stocks in the energy sector and in specific growth opportunities in Asia.
The Board viewed 2007 in two distinct parts. During first half of the year there continued to be significant
appetite for risk. This changed in the second half of the year, during which the credit market turmoil, together
with the liquidity crunch and a sharp correction in the US housing market, caused severe market dislocations,
which further deteriorated during the first quarter of 200. In contrast emerging markets, such as India,
continued to grow, demonstrating the strength of their respective domestic markets.
The Board continued to implement its strategy of building a diversified portfolio which will generate stable
above market returns for investors over the mid to long term. Through a top down investment approach and
partnerships with top tier management and investment partners, Livermore has invested in a combination of
high growth and deep value opportunities over the course of the year. This process was further accelerated
in the second half of 2007 as the risk-return profile of certain long term opportunities in private equity and
real estate was far superior to that of short term opportunities in the equity markets. The Board believe that
its flexible, though conservative investment approach, and the investment and currency allocation it has
established will shield the Group's shareholders from the current volatility in financial markets and generate
sustainable returns for investors.
Review of Significant Investments
Atlas Estates ("Atlas") – Central and Eastern Europe
In December 2007, Livermore acquired a 2% stake in Atlas, a diversified real estate company prominent in
East Europe, and became its largest shareholder. Since floating on the UK Alternative Investment Market in
2006, Atlas has invested in top quality residential and commercial properties primarily located in Poland,
Romania, and Hungary. These properties include the Warsaw Hilton and Platinum Towers in Poland.
Rationale for investment:
Value Investment: As at December 2007 Atlas' NAV was EUR 4.9 per share. The adjusted NAV, after taking
into account the revaluation of land assets held under operating lease, was EUR 6.6 per share. Livermore's
average purchase price of Atlas shares represents a 4.7% discount to NAV and a % discount to the
adjusted NAV. Atlas enjoys both solid earnings from its high quality yielding assets and upside potential in its
development projects, which were acquired at attractive valuations.
Access to Eastern Europe: The Board believe that Eastern European real estate will continue to benefit from
the ongoing regeneration of the region as more countries (including Romania and Bulgaria) become members
of the European Union and the region experiences increased foreign investment in infrastructure and business
and residential accommodation. The region is already experiencing high GDP growth rates and rising per
capita income, further boosting the real estate sector.
Upside potential: Given that Atlas is trading at a significant discount to its NAV and due to short term
catalysts, such as its recent dual listing on the Warsaw exchange, Atlas has the potential to close part of this
discount. The Board believe that over time, as value is realised, Atlas' share price should converge with its NAV.
Following Livermore's acquisition, Atlas has entered into an agreement to sell the Millennium Plaza in Warsaw
at a profit of approximately EUR 5m.
2
The Board believe that through closing the NAV gap, maximizing the potential of the existing assets in
Atlas' portfolio as well as certain enhancements relating to the structure of the Investment Manager, this
investment will generate significant value for Livermore with very little downside risk.
Wyler Park - Switzerland
In July 2007 the Group finalized its first real estate investment through the purchase and leaseback of Wyler
Park from SBB, the Swiss national railway company. The purchase followed a bid process of over 6 months in
which over 20 parties participated. The property was purchased for CHF 9m through a newly established Swiss
special purchase vehicle. Non recourse finance of some CHF 0m was provided by Merrill Lynch. As part of this
commercial investment, the Company is developing a residential project including 9 residential apartments
to be completed in July 200. The total cost of the residential development project is approximately CHF 5m.
The project includes additional development rights, which the Company expects to utilize in the future. This
high profile investment has positioned the Company well in the Swiss market and has generated significant
deal flow opportunities in the property sector. Some of these projects are currently under various stages of
review and negotiation.
During 2007 the Wyler Park property contributed some USD 4.m to the Group's annual profit before tax,
derived from operating income, revaluation gains, and exchange rate differences due to the appreciation of
the CHF.
Construction of the residential part of the project is progressing in line with expectations and there is strong
demand for the apartments. Construction is expected to be complete in the summer of 200. Following
completion of the residential part, we foresee further appreciation in the property valuation.
DTH Television Group SA, BOOM - Romania
Livermore invested in Boom in October 2007 and acquired a 5% minority stake for approximately EUR 9.5m.
Boom is a Direct-To-Home multi channel satellite television service in Romania which started operations
during the third quarter of 2006. The company plans to leverage on the growth of the Romanian economy,
increased spending by its expanding middle class and the low penetration of digital television service in the
country. Romanians watch television for 06 minutes per day on average, making Romania one of the highest
television consumer nations in Europe and therefore an attractive destination for television related services.
Boom’s competitive advantage lies in providing exclusive content and hi-tech services including High
Definition, Dolby Surround, and ITV to its subscribers. Boom plans to reach 600,000 subscribers by 202
and capture some 20% of the digital TV market in Romania. With a market potential of 7.6m homes and
regulatory encouragement to switch from analogue to digital reception, Boom is well placed to capitalize
on this tremendous window of opportunity. As at December 2007, Boom had 07,000 subscribers (versus
some 70,000 subscribers at the time of Livermore’s acquisition), which was ahead of its target for the year.
This represents a monthly growth rate in new subscribers of 0%. Boom expects to breakeven in 2009 and
make significant profits in the years ahead. In March 200 Boom won the bid for the exclusive rights for the
Romanian Football Champions League in the 2009-2 seasons.
Livermore invested in Boom at an attractive valuation, following thorough due diligence, after closely following
the development of the subscriber base and being satisfied with the Company’s key performance indicators.
Although Boom's shareholders have been approached by a few international media entities that expressed an
interest in acquiring Boom, Livermore as well as the founding shareholders expect to realise this investment
in 2009-200.
LivermoreInvestments Annual Report 2007 22
Montana Tech Components ("Montana") - Europe
Montana, based in Austria, is a leading components manufacturer in the fields of Aerospace Components,
Metal Tech and Varta Micro Power. Montana is the market leader in these defined niches and Livermore
believes it has solid growth potential. Montana pursues a sustainable growth strategy by focusing on growth
sectors featuring advanced components, smart technologies and by outsourcing labour-intensive processes to
Eastern Europe and Asia as well as by making add-on acquisitions. The Aerospace components business has a
50% market share in an industry with very high barriers to entry. Montana’s Metal Technology business is also
well positioned with over 50% market share in an otherwise highly fragmented market. This business produces
tools for identification and marking of Steel products. In their Micro battery business, Montana is the leader in
rechargeable hearing aid batteries, with strong growth potential coming from their Lithium Polymer batteries
division. Livermore invested EUR 5m in Montana, following which, Montana completed a further round of
funding at a higher valuation. Livermore expects to exit via an IPO during 200-2009. Montana reported net
income of EUR 29.2m for 2007, which represents year-on-year growth of 5.2%.
2
CALS refinery - India
In December 2007, Livermore entered into a Total Swap Agreement (TSA)
with respect to a Global Depositary Receipt (GDR) issued by an Indian
refinery company – CALS Refinery. CALS is promoted by Spice group to setup
refineries in India. Spice is a USD 2 billion group with interests in Oil & Gas,
Aviation, Hotels, and Heavy engineering in India and Africa. The company
aspires to become a world-class oil and gas company specializing in the
integrated energy business. CALS plans to relocate a refinery from Germany
to India and the GDR was issued to part-finance the relocation and setup
of this refinery in India. CALS expects the refinery to have a capacity of 4.
Million Metric Tons Per Annum with expected gross refinery margins of 2%.
The TSA has a capital protection structure and enhances the attractiveness
of the GDR, which was a limited issue to an exclusive set of investors at
attractive valuations.
Other Private Equity Investments
The other private equity investments held by the Group, are mainly in the
emerging economies of India and China.
India Blue Mountains: A leading hotel and hospitality development fund
that develops and acquires hotels in India. The fund has acquired land and
is in the process of developing hotels in Mumbai, Chennai, Pune, Gurgaon,
and Goa. Since our investment, the NAV per share has increased by 27.05%
for the year ended December 2007. The fund recently acquired a highly
rated hotel in Mumbai which has yet to be re-valued. The fund plans to exit
via an IPO in 200 - 2009.
Promethean India: India-focused private equity fund, which is AIM quoted
(Ticker: PTHI IN). It operates a hybrid investment strategy, enabling it to
invest in private and quoted equities. Some of its portfolio investments
include a leading tiles manufacturer in India, an established automotive
components manufacturer, a hospitality company with luxury hotels located
in prime locations in top Indian cities, and an m-commerce player.
SRS Partners, JM Financial: Real estate-focused exclusive private equity
fund partnered with JM Financial that has established a successful portfolio
of real estate in India. A significant portion of the investments are in
residential real estate in the highest growth cities in India.
Panda Capital: China-based Private Equity Fund focused on early-stage
industrial operations in China and Taiwan, which represent strong growth
opportunities. The fund is invested in manufacturing, media, healthcare, and
emerging technology industries.
Alternative Investment Managers
During 2007, Livermore constructed a globally diversified portfolio of exclusive
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LivermoreInvestments Annual Report 2007 24
managers. All managers have a proven track record and are led by outstanding individuals or teams whom
Livermore management personally know. This combination of managers and investment strategies focused on
absolute returns generated superior returns during the year in comparison to market peers. The investment
strategies include long/short equities, merger arbitrage, credit opportunities and multi-strategies.
The overall performance of this portfolio in 2007 was growth of approximately 20% (annualised). The Group
reviews talented managers on an on going basis with the aim to source suitable managers that can enhance
the performance of the portfolio and reduce its volatility.
Livermore's portfolio construction and allocation strategy is based on hedge fund strategy and sector
diversification, internal correlations, macro-economic conditions, market cycles, and fund strategy risk
considerations. In its selection process Livermore places special focus on qualitative traits of the investment
manager. Livermore has access to top hedge fund managers, some of whom are not available to the public, as
well as outstanding emerging hedge fund managers. The Group closely monitors the managers and continually
adjusts the portfolio. Livermore's management believe that its approach and access to talented managers will
generate higher risk adjusted returns.
In addition, during 2007 the Group invested in a diversified portfolio of exclusive managers in the credit
arena, mainly through investments in equity tranches of Collateralized Loan Obligations. These investments
were made with a view to taking advantage of the tight financing terms for these deals and the strong
fundamentals of leveraged loans as an asset class, namely high recovery rates and strong cash flows. The total
credit portfolio as at year end amounted to USD 29.m.
Post balance sheet events and investments
The following post balance sheet events and investments were recorded:
SRS Charminar
In January 200, Livermore invested in a leading Indian Real Estate company, in association with SRS Private
and other investors. The target company is a top real estate player in South India, with a land bank of over
USD .bn spread across the city of Hyderabad and the state of Andhra Pradesh.
The investment in the target company was conducted via a fund structure (SRS Charminar) set up by SRS
Private Invest. The fund will in turn invest in the target company in the form of compulsorily convertible
debentures. The proceeds will be used by the target company for development of residential and commercial
real estate on the land bank owned by them.
The exit is expected to be via an IPO within 6 months of the date of investment. Investors are guaranteed
a minimum of 2.5% discount on the IPO price. The deal structure includes a put option for investors, which
can be exercised if the IPO does not take place within years. The put option is secured by land valued at USD
.bn and guarantees a minimum return of approximately 0% IRR if exercised.
Blue Ridge China
The Group committed to invest in Blue Ridge China, a Limited Partnership whose main business will be
running a fund of Portfolio Investments in companies principally engaged in business in China. The Partnership
shall generally have significant influence on the management, operations and strategic direction of investee
companies. The intention of the fund is to raise USD .4bn, of which the committed capital of the limited
Partnership is some USD 50m.
25
Change of Name
The Company changed its name to Livermore Investments Group Limited following the EGM held on 2 February 2007.
Discontinued operations
The Group disposal of the remainder of its operating activities to PartyGaming Plc for a net consideration of $m, was
completed on 9 January 2007 and was included in the 2006 financial accounts. Details and full disclosure of this can be
found in Note to the financial statements.
LivermoreInvestments Annual Report 2007 26
Litigation
In Q 2007, an ex-employee of Empire Online Limited (the Company's previous name), filed a law suit against the Company,
one of its directors, and one of its former subsidiaries, in the Labour Court of Tel Aviv. According to the lawsuit, the plaintiff
claims compensation relating to the event of the sale of all commercial activities of Empire Online Limited until the end of
2006, and for terms relating to the termination of his employment with Empire Online Limited. The Company has taken a
conservative approach and made a provision of USD 750k for all settlement costs and the potential related legal expenses
of this case.
27
Report of the Directors
The Board's objectives
The Board’s primary objectives are to supervise and control the management activities, business development,
and the establishment of a strong franchise in the Group’s business lines. Measures aimed at increasing
shareholders value over the medium to long-term, such as an increase in NAV and dividends paid are used to
monitor performance.
The Board of Directors
Richard Barry Rosenberg (age 52), Non-Executive Director, Chairman of the Board
Richard joined the Group in December 2004. He became Non-Executive Chairman on October 2006,
following the resignation of Lord Leonard Steinberg. He qualified as a chartered accountant in 90 and in
9 co-founded the accountancy practice Sedley Richard Laurence Voulters. He has considerable experience
in giving professional advice to clients in the leisure and entertainment sector. Richard is a director of a large
number of companies operating in a variety of business segments.
Noam Lanir (age 41), Founder and Chief Executive Officer
Noam founded the Group in July 99, to develop a specialist online marketing operation. Noam has led the
growth and development of the group’s operations over the last nine years which culminated in its IPO in June
2005 on AIM. He is also a major benefactor of a number of charitable organisations. Prior to 99, Noam was
involved in a variety of businesses mainly within the leisure and entertainment sector.
Ron Baron (age 40), Executive Director and Chief Investment Officer
Ron was appointed as Executive Director and Chief Investment Officer on 0 August 2007. Ron has wide
investment and M&A experience. From 200 to 2006 Ron served as a member of the management at Bank
Leumi, Switzerland and was responsible for portfolio management activity. Prior to this he spent five years
as a commercial lawyer at Kantor, Elhanani, Tal & Co. Law Offices in Tel Aviv, Israel, advising banks and large
corporations on corporate transactions, including buy-outs and privatisations. He holds an MBA from INSEAD
Fontainebleau and a LLB (LAW) and BA in Economics from Tel Aviv University.
The Directors shall retire from office at the third Annual General Meeting after that at which they were last
elected, and if they so wish, offer themselves up for re-election to the Board. Subject to the Companies Act
and the Articles, the Directors to retire by rotation at the Annual General Meeting in every year shall be in
addition to any Director who wishes to retire and not to offer himself for reappointment and any Director to
retire under the Company's Articles. The interests of the Directors and their related companies in the shares
and options over shares in the Company are as shown on pages to 4. Details of the Directors’ remuneration
and service contracts also appear on pages to 4.
The Directors submit their annual report and audited financial statements of the Group for the year ended
December 2007.
LivermoreInvestments Annual Report 2007 2
Ron Baron,
Executive Director and
Chief Investment Officer
Richard Barry Rosenberg,
Non-Executive Director,
Chairman of the Board
Noam Lanir,
Founder and
Chief Executive Officer
29
Directors responsibilities in relation to the accounts
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and International Financial Reporting Standards as adopted by the European Union.
The Directors are required to prepare financial statements for each financial year which give a true and fair
view of the state of affairs of the Group and of the profit or loss of the Group for that period. In preparing
these financial statements, the Directors are required to:
•
•
•
•
Select suitable accounting policies and then apply them consistently;
Make judgments and estimates that are reasonable and prudent;
State whether applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Group will continue in business.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at
any time the financial position of the Group and enable them to ensure that the financial statements comply
with the applicable law. They are also responsible for safeguarding the assets of the Group 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 corporate and financial information
included on the Group's website. Legislation in the British Virgin Islands governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
Disclosure of information to the auditor
In so far as the Directors are aware:
•
•
there is no relevant audit information of which the Company's auditor is unaware; and
the directors have taken all steps that they ought to have taken to make themselves aware of any relevant
audit information and to establish that the auditor is aware of that information.
Substantial Shareholdings
As at 25 March 200 the following interests in per cent or more of the Company’s existing ordinary share
capital had been reported:
Groverton Management Ltd
Aviv Raiz
Artemis Investment Management
Israel Discount Bank
Ron Baron
Number of
Ordinary Shares
4,969,9
24,57,9
4,2,27
,277,56
,055,50
% of issued ordinary
share capital
5.0
.40
4.9
4.54
4.46
LivermoreInvestments Annual Report 2007 0
Number of
Ordinary Shares
% of issued ordinary
share capital
New Star Asset Management
Livermore Investments Ltd (treasury)
Bank Hapoalim Luxemburg
Deutsche Bank
,49,44
0,55,262
0,0,09
9,725,776
.
.6
.4
.2
Save as disclosed in this report and in the remuneration report, the Company is not aware of any person who
is interested directly or indirectly in per cent or more of the issued share capital of the Company or could,
directly or indirectly, jointly or severally, exercise control over the Company.
Details of transactions with Directors are disclosed in note 0 to the financial statements.
Corporate Governance
Introduction
The Company recognises the importance of the principles of good corporate governance and the Board is
pleased to report its commitment to such high standards throughout the year. As an AIM quoted Company
Livermore is not required to follow the provisions of the 2006 FRC Combined Code (the “Code”).
The Board Constitution and Procedures
The Company is controlled through the Board of Directors, which currently comprises Non-Executive Director
and 2 Executive Directors. The Chief Executive’s responsibilities focus on coordinating the Company’s business
and implementing Group strategy.
A formal schedule of matters is reserved for consideration by the Board, which meets approximately six times
each year. The Board is responsible for implementation of the investing strategy described in the circular to
shareholders dated 29 December 2006 and adopted pursuant to shareholder approval at the Company’s EGM
on 7 January 2007. It reviews the strategic direction of the Group, its codes of conduct, its annual budgets,
its progress towards achievement of these budgets and any capital expenditure programmes. In addition, the
Directors have access to the advice and services of the Company Secretary and all Directors are able to take
independent professional advice in the furtherance of their duties if necessary. The Directors receive training
and advice on their responsibilities as necessary. All Directors, in accordance with the Code, submit themselves
for re-election at least once every three years.
Board Committees
Due to the fact that there is currently only one Non Executive Director on the board of Directors, the Company
does not employ the powers of its Audit, Remuneration and Nomination Committees. The Company is evaluating
the recruitment of an additional Non-Executive Director, and once such appointment is made, it will employ
the full powers of its Board committees. In addition, the board is evaluating the establishment of an advisory
panel to assist in the development and implementation of investment strategy and policy.
a)
Remuneration Committee
Until October 2006 the Remuneration Committee comprised of two Non-
Executive Directors and was chaired by Richard Rosenberg.
The Remuneration Committee considers the terms of employment and overall
remuneration of the Executive Directors and key members of executive management
regarding share options, salaries, incentive payments and performance related pay.
The remuneration of Non-Executive Directors is determined by the Board.
b)
Audit Committee
Until October 2006 the Audit Committee comprised two Non-Executive
Directors and was chaired by the then senior independent Non Executive Director.
The duties of the Committee include monitoring the auditor’s performance and
reviewing accounting policies and financial reporting procedures. The Committee
prepares a summary of its work, which is included each year in the Company’s
Annual Report.
c)
Communication with Investors
The Directors are available to meet with shareholders throughout the year. In
particular the Executive Directors prepare a general presentation for analysts
and institutional shareholders following the interim and preliminary results
announcements of the company. The Chairman, Richard Rosenberg, was available
for meetings with shareholders throughout the year. The Board endeavours to
answer all queries raised by shareholders promptly.
Shareholders are encouraged to participate in the Annual General Meeting at
which the Chairman will present the key highlights of the Group’s performance.
The Board will be available at the Annual General Meeting to answer questions
from shareholders.
Internal Control
The Board is responsible for ensuring that the Company has in place a system
of internal control and for reviewing its effectiveness. In this context, control is
defined as the policies and processes established to ensure that business objectives
are achieved cost effectively, assets and shareholder value safeguarded and that
laws and regulations are complied with. Controls can provide reasonable but not
absolute assurance that risks are identified and adequately managed to achieve
business objectives and to minimise material errors, frauds and losses or breaches
of laws and regulations.
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LivermoreInvestments Annual Report 2007 2
The Group operates a sound system of internal control, which is designed to ensure that the risk of misstatement
or loss is kept to a minimum.
Given the Group’s size and the nature of its business, the Board does not consider that it is necessary to have
an internal audit function. An internal audit function will be established as and when the Group is of an
appropriate size.
The Board will undertake a review of its internal control on an on going basis.
Independence of Auditor
The Board undertakes a formal assessment of the auditor’s independence each year, which includes:
•
•
•
•
•
a review of non-audit related services provided to the Company and related fees;
discussion with the auditor of a written report detailing all relationships with the Company and any other
parties which could affect independence or the perception of independence;
a review of the auditor’s own procedures for ensuring independence of the audit firm and partners and
staff involved in the audit, including the rotation of the audit partner;
obtaining written confirmation from the auditors that they are independent;
a review of fees paid to the auditor in respect of audit and non-audit services.
Remuneration Report
The Directors’ emoluments, benefits and shareholdings during the year ended December 2007 were as
follows:
Directors’ Emoluments
Each of the Directors has a service contract with the Company.
Director
Richard Barry Rosenberg
Noam Lanir
Ron Baron
Andrew Rae Burns
Date of
agreement
Salary/Fees
$000
Benefits
$000
Total Emoluments
2007, $000
Notes
0/06/05
0/06/05
0/09/07
0/09/05
a
b
5
400
94
-
-
-
-
5
400
94
Total
Emoluments
2006, $000
94
,000
-
7
The dates are presented in day / month / year format.
Notes:
a) Service contract terminable on either party to the agreement giving to the other 2 months’ notice;
b) Andrew Rae Burns resigned on August 2007.
Directors’ Interests
Interests of Directors in ordinary shares
Notes
As at .2.2007
As at .2.2006
Number of
Ordinary Shares
Percentage of
ordinary issued
share capital
Number of
Ordinary Shares
Percentage of
ordinary issued
share capital
,40,92
4.%
95,66,7
2.659%
,055,50
5,000
-
4.597%
0.005%
-
-
5,000
20,000
-
0.005%
0.007%
Noam Lanir
Ron Baron
a
b
Richard Barry Rosenberg
Andrew Rae Burns
Notes:
a) Noam Lanir is interested in his ordinary shares by virtue of the fact that he owns directly or indirectly all of
the issued share capital of Groverton Management Limited.
b) On 6 April 2007, a loan of USD 5m was provided to Ron Baron to purchase Livermore shares. The loan bears
an annual interest rate of 6 month USD Libor + 25bp, and is payable years from grant.
Interests of Directors in share options
No of options at 31
December
2007
Date of
grant
Exercise price,
£
Exercise
Price,
$
Vesting period of
options
Noam Lanir
0,000,000
9/07/06
0.7775
.476
9/07/06-9/07/09
Richard Barry
Rosenberg
50,000
75,000
9/07/06
07/2/05
0.7775
0.7
.476
.22
9/07/06-9/07/09
07/2/05-07/2/0
The options are exercisable up to 0 years after the date of grant. No options were exercised during the year
2007.
Share Option Scheme
The Company’s remuneration committee (the “Committee”) is responsible for administering the Share Option
Scheme. Options to acquire Shares in the Company may be granted under the Share Option Scheme to any
employee or director of the Company or member of the Group.
The option exercise price per Ordinary Share is determined by the Committee but will be no less than market
value of the Ordinary Shares on the dealing day immediately preceding the date of grant. The options are not
subject to any performance criteria.
An option is normally exercisable in three equal tranches, on the first, second and third anniversary of the
grant.
The Share Option Scheme will terminate ten years after it is adopted by the Company, or earlier in certain
circumstances.
LivermoreInvestments Annual Report 2007 4
Remuneration Policy
The Group’s policy has been designed to ensure that the Group has the ability to attract, retain and motivate
executive directors and key management personnel to ensure the success of the organization.
The following key principles guide its policy:
•
•
•
•
•
•
•
•
•
policy for the remuneration of executive directors will be determined and regularly reviewed independently
of executive management and will set the tone for the remuneration of other senior executives
the remuneration structure will support and reflect the Group’s stated purpose to maximize long-term
shareholder value
the remuneration structure will reflect a just system of rewards for the participants
the overall quantum of all potential remuneration components will be determined by the exercise of
informed judgement of the independent remuneration committee, taking into account the success of the
Company and the competitive global market
a significant personal shareholding will be developed in order to align executive and shareholder
interests
the assessment of performance will be quantitative and qualitative and will include exercise of informed
judgement by the remuneration committee within a framework that takes account of sector characteristics
and is approved by shareholders
the committee will be proactive in obtaining an understanding of shareholder preferences
remuneration policy and practices will be as transparent as possible, both for participants and
shareholders
the wider scene, including pay and employment conditions elsewhere in the Group, will be taken into
account, especially when determining annual salary increases.
Review of the business and risks
The Company is now an investment company, a more detailed review of the business is given in the Chairman's
and Chief Executive’s review.
Risks
The Board considers that the risks the Shareholders face can be divided into external and internal risks.
External risks to shareholders and their returns are those that can severely influence the investment environment
within which the Group operates, and include economic recession, declining corporate profitability, rising
inflation and interest rates and excessive stock-market speculation.
Current portfolio risks include interest rate increases, a global economic effect on Emerging markets (mainly
India), a global credit shortage caused by the US credit market crisis, and instability in the Private Equity and
Hedge Fund sectors. The mitigation of these risks is achieved by investment diversification, both by sector and
by location.
5
Internal risks to shareholders and their returns are:
Portfolio (investment and location selection and concentration), balance sheet (gearing) and/or investment
mismanagement. In particular the Board has identified the exposure to Atlas Estates Ltd. as a notably large
single investment risk.
In respect of the risks associated with investments, the board is evaluating the establishment of an external
investment advisory board. In addition, a periodic internal review is performed to ensure transparency of
Group activities and investments. All service providers to the Group are regularly reviewed. The mitigation of
the risks related to investments is effected by investment restrictions and guidelines and through reviews at
Board Meetings.
As the portfolio is invested mostly in non USD currencies (mainly EURO, CHF and INR), it is exposed to
movements in these currencies.
On the asset side, the Group’s exposure to interest rate risk is limited to the interest bearing deposits and
portfolio of bonds in which the Group invests surplus funds. On the liability side, the Group's exposure to rising
interest rates is minimal as it has limited borrowings correlated to variable interest rates.
Management monitors liquidity to ensure that sufficient liquid resources are available to the Group. The
Group’s credit risk is primarily attributable to receivables from its CDO / CLO and bond portfolio. Generally the
Group’s maximum credit exposure is the carrying amount of trade and other receivables shown on the face
of the Balance Sheet.
Share Capital
There was no change in the authorised share capital during the year to December 2007. The authorised
share capital is ,000,000,000 ordinary shares with no par value.
Related party transactions
Details of any transactions of the Group with related parties during the year to December 2007 are disclosed
in Note 0 to the Financial Statements.
Report of the independent auditor to the
members of Livermore Investments Group Limited
We have audited the consolidated financial statements of Livermore Investments Group Limited for the year
ended December 2007 which comprise the Consolidated Income Statement, the Consolidated Balance
Sheet, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows and notes
to 4. The consolidated financial statements have been prepared under the accounting policies set out
therein.
This report is made solely to the Company’s members, as a body. 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.
LivermoreInvestments Annual Report 2007 6
Respective responsibilities of directors and auditor
The directors' responsibilities for preparing the Annual Report and the consolidated financial statements in
accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union are
set out in the statement of Directors’ Responsibilities.
Our responsibility is to audit the consolidated financial statements in accordance with relevant legal and
regulatory requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the consolidated financial statements give a true and fair view.
In addition we report to you if, in our opinion, we have not received all the information and explanations
we require for our audit, or if information specified by IFRS regarding directors' remuneration and other
transactions is not disclosed.
We read other information contained in the Annual Report, and consider whether it is consistent with
the audited consolidated financial statements. This other information comprises only the Highlights, the
Chairman’s and Chief Executive's Review, the Review of Activities, the Report of the Directors, the Corporate
Governance statement, the Remuneration Report and the Review of the Business and Risks. We consider the
implications for our report if we become aware of any apparent misstatements or material inconsistencies
with the consolidated financial statements. Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts
and disclosures in the consolidated financial statements. It also includes an assessment of the significant
estimates and judgments made by the directors in the preparation of the consolidated financial statements,
and of whether the accounting policies are appropriate to the Company's circumstances, consistently applied
and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered
necessary in order to provide us with sufficient evidence to give reasonable assurance that the consolidated
financial statements are free from material misstatement, whether caused by fraud or other irregularity or
error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the
consolidated financial statements.
Opinion
In our opinion the consolidated financial statements give a true and fair view, in accordance with IFRSs as
adopted by the European Union, of the state of the group's affairs as at December 2007 and of its profit
for the year then ended.
GRANT THORNTON UK LLP
Registered Auditor
Chartered Accountants
London
Date: 0 April 200
7
Livermore Investment Group Limited
Consolidated Income Statement for the year ended December 2007
Revenue from discontinued operations
Investment income
Interest / dividend income
Property revenue
Gains / losses on investments
Gain on acquisition of associate
Cost of sales
Gross profit
Amortisation and non recurring items
Administrative expenses
Operating profit
Finance expenditure
Profit before taxation
Taxation
Profit after taxation from discontinued operations
Profit from disposal of discontinued operations
Profit from discontinued operations
Profit for period
Earnings per share
Basic earnings per share ($)
Diluted earnings per share ($)
Dividends
Note
4
5
6
7
9
0
4
4
Proposed final dividend per share ($)
Proposed final dividend ($000)
Dividends paid during the year per share ($)
Dividends paid during the year ($000)
6
The notes on pages 42 to 6 form part of these financial statements.
Discontinued
Operations
2006
$000
59,50
-
-
-
-
2007
$000
-
6,57
,22
(,4)
,27
-
(0,256)
2006
$000
-
2,05
-
0
-
-
25,79
29,594
2,9
(4)
(,054)
-
(,4)
5,057
-
5,057
(7)
5,050
6,642
5,692
0.
0.7
(,72)
22,4
(,9)
2,05
(6)
-
-
-
20,77
0.07
0.07
$0.05
0,000
$0.0
9,657
(995)
,9
(70)
,02
-
-
-
5,692
62,720
0.2
0.2
$0.04
0,000
$0.05
24,7
LivermoreInvestments Annual Report 2007
Livermore Investments Group Limited
Consolidated Balance Sheet as at December 2007
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Available- for-sale financial assets
Financial assets designated at fair value through profit or loss
Investment in property
Investment in associate
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Equity
Share capital
Share premium
Other reserves
Retained earnings
Total equity
Liabilities
Non current liabilities
Bank loan
Deferred tax
Current liabilities
Bank overdrafts
Trade and other payables
Current tax payable
Total liabilities
Total equity and liabilities
Net asset valuation per share
Basic net asset valuation per share ($)
Diluted net asset valuation per share ($)
Note
2007
$000
2006
$000
7
9
20
2
22
2
24
25
26
27
2
29
405
45
27,76
729
97,62
69,69
6,2
,50
9,97
,767
97,90
-
202,65
767
7,04
276,44
69,4
25
69,669
5,25
5,94
09
5,6
2,57
97,90
0.97
0.97
49
7
24,49
-
-
24,6
50,795
7,75
,50
,2
-
209,07
2,676
6,76
274,246
-
-
-
4,960
,90
7
,77
,77
,2
0.94
0.94
These Financial Statements were approved by the Board of Directors on 0 April 200.
The notes on pages 42 to 6 form part of these financial statements.
9
Livermore Investments Group Limited
Consolidated Statement of Changes in Equity for the year ended December 2007
Share
capital
$000
Share
premium
$000
Note
Share
option
reserve
$000
Investments
revaluation
reserve
$000
Retained
earnings
$000
Total
$000
Balance at 1 January 2006
-
209,07
277
-
22,297
22,
Changes in equity for the year ended
December 2006
Available-for-sale investments
Valuation gains/(losses) taken to equity
Transferred to profit or loss on sale
Net income recognised directly
in equity
Profit for the year
Total recognised income and expense
for the year
Dividends paid
Share option charge
Share options forfeited
6
Balance at 31 December 2006
Changes in equity for the year ended
December 2007
Available-for-sale investments
Valuation gains/(losses) taken to equity
Transferred to profit or loss on sale
Net income recognised directly in
equity
Profit for the year
Total recognised income and expense
for the year
Dividends paid
6
Purchases of own shares
Share option charge
Share options forfeited
Balance at 31 December 2007
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
,50
(,6)
990
(0)
2
-
-
-
-
990
(0)
2
62,720
62,720
2
62,720
6,602
-
-
-
(24,7)
(24,7)
-
,50
,6
-
209,07 ,794
2
6,76
274,246
-
-
-
-
-
-
(7,72)
-
-
-
-
-
-
-
-
-
2,657
(2)
(7,679)
,
(4,4)
-
-
-
(7,679)
,
(4,4)
-
20,77
20,77
(4,4)
20,77
6,69
-
-
-
-
(9,657)
(9,657)
-
-
(7,72)
2,657
2
-
202,65 4,2
(,466)
7,04
276,44
The notes on pages 42 to 6 form part of these financial statements.
LivermoreInvestments Annual Report 2007 40
Livermore Investments Group Limited
Consolidated Statement of Cash Flows for the year ended December 2007
Note
2007
$000
2006
$000
2,05
62,727
Cash flows from operating activities
Profit before tax
Adjustments for
Depreciation and amortisation
Goodwill fair value adjustment
Interest expense
Equity settled share options
Profit on disposal of business
Loss on sale of property, plant and equipment
Changes in working capital
Decrease in trade and other receivables
Increase / (Decrease) in trade and other payables
Tax paid
Net cash generated from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Acquisition of investments
Acquisition of investment property
Acquisition of associate
Disposal of business assets
Net cash (used in)/from investing activities
Cash flows from financing activities
Dividends paid
Purchase of own shares
Proceeds from bank loan
Interest paid
Net cash from/(used in) financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The notes on pages 42 to 6 form part of these financial statements.
7/
0
7
9
-
,9
2,657
-
25,246
4,945
2,024
()
50,96
76,207
(4)
(6)
(9,49)
(97,62)
(69,69)
-
(266,054)
(9,657)
(7,72)
69,4
(,9)
5,4
(,66)
2,755
(5,90)
,29
797
70
,50
(6,642)
-
,500
,62
(,0)
(7)
(,225)
0,275
()
(96)
(2,609)
-
-
25.7
,240
(24,7)
-
-
(70)
(25,057)
6,45
6,297
2,755
4
Notes on the Financial Statements
1. General Information
(.)
Incorporation, principal activity and status of the Company
The Company was incorporated as an international business company and registered in the British
Virgin Islands (BVI) on 2 January 2002 under IBC Number 47566 with the name Clevedon Services
Limited. The liability of the members of the Company is limited.
The Company changed its name to Empire Online Limited on 5 May 2005 and then changed to Livermore
Investments Group Limited on 2 February 2007.
The principal activity of the Group changed to investment services on January 2007. Before that the
principal activity of the Group was the provision of marketing services to the online gaming industry
and, since January 2006, the operation of online gaming.
The principal legislation under which the Company operates is the BVI Business Companies Act
(2004.).
The registered office and head office of the Company is located at Trident Chambers, PO Box 46, Road
Town, Tortola, British Virgin Islands.
(.2)
(.)
(.4)
(.5)
2. Accounting Policies
(2.)
The significant accounting policies applied in the preparation of the financial informationare
as follows:
a) Basis of preparation
The audited financial statements of Livermore Investments Group Limited have been prepared in
accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European
Union and on a going concern basis. The financial statements have been prepared on the historical cost
except for the following:
•
•
•
•
•
Derivative financial instruments are measured at fair value.
Financial instruments at fair value through profit or loss are measured at fair value.
Available- for- sale financial assets are measured at fair value.
Investment property is measured at fair value.
Share- based payments are fair valued at the date of grant.
The financial information is presented in US dollars because that is the currency in which the Group
primarily operates.
The directors have reviewed the accounting policies used by the Group and consider them to be the
most appropriate.
A new standard, IFRS 7 - Financial Instruments: Disclosure was introduced for accounting periods
beginning on or after January 2007.
IFRS 7 introduces new disclosures to improve the information about financial instruments. It requires
LivermoreInvestments Annual Report 2007 42
the disclosure of qualitative and quantitative information about exposure to risks arising from financial
instruments, including specified minimum disclosures about credit risk, liquidity risk and market
risk, including sensitivity to market risk. It replaces the disclosure requirements in IAS 2 "Financial
Instruments: Disclosure and Presentation".
b) New standards and interpretations not yet adopted
The following standards, issued by the IASB, have not been adopted by the Group and the Group is
currently assessing the impact these standards will have on the presentation of the consolidated
results in future periods:
IFRS - Operating segments (effective for accounting periods beginning on or after January
2009) IFRS contains requirements for the disclosure of information about an entity's operating
segments and also about the entity's products and services, the geographical areas in which it
operates, and its major customers. The standard is concerned only with disclosure and replaces IAS 4
"Segment reporting".
IAS – Presentation of financial statements (revised 2007)
This standard is applicable for accounting periods beginning on or after January 2009. The main
changes triggered by this standard result in a separate presentation of changes in equity that arise
from transactions with owners in their capacity as owners from other changes in equity. The amended
version of this standard also changes the terminology and presentation of the primary financial
statements.
Other standards which will become effective in future periods, but which are not expected to impact
on the Group are:
•
•
•
•
•
•
•
•
Revised IAS 2 – Borrowing Cost
IFRIC – IFRS 2 – Group and Treasury Shares Transactions
IFRIC 2 – Service Concession Agreements
IFRIC – Customer Loyalty Programmes
IFRIC 4 – IAS 9 – The Limit on a Defined Asset, Minimum funding Requirementsand Other
Interactions
IFRS – Business Combinations (revised 200)
IAS 27 Consolidated and Separate Financial Statements (revised 200)
Amendment to IFRS 2 Share-Based Payment Vesting Conditions and Cancellations
c) Basis of Consolidation
The consolidated results incorporate the results of Livermore Investments Group Limited and all of
its subsidiaries undertakings as at December 2007 using the acquisition method of accounting as
required. Profits or losses on intra group transactions are eliminated on consolidation. The results for
the subsidiary undertakings acquired during the year have been included from the date of acquisition.
On acquisition of a subsidiary all of the subsidiary’s assets and liabilities which exist at the date of
acquisition are recorded at fair value. The excess of the fair value of the consideration given over the fair
value of the identifiable net assets acquired, is capitalised net of any provision for any impairment.
4
d)
Investment in associates
The Group’s interest in associates, being those entities over which it holds significant influence and
which are neither subsidiaries nor joint ventures, are accounted for using the equity method.
Under the equity method, the investment in an associate is carried in the balance sheet at cost plus post
acquisition changes in the Group’s share of the net assets of the associate and less any impairment in
the value of individual investments. The Group income statement reflects the share of the associate’s
results after tax. The Group statement of recognized income and expenses reflects the Group’s share of
any income and expenses recognized by the associate outside profit or loss.
Any goodwill arising on the acquisition of an associate, representing the excess of the cost of investment
compared to the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and
contingent liabilities, is included in the carrying amount of the associate and is not amortized. To the
extent that the net fair value of the associate's identifiable assets, liabilities and contingent liabilities
is greater then the cost of the investment, a gain is recognized and added to the Group’s share of the
associate profit and loss in the period in which the investment is acquired.
Financial statements of associates are prepared for the same period as the Group’s. Adjustments are
made to bring the associate’s accounting policies into line with those of the Group.
e) Revenue recognition
Revenue from discontinued operations is recognised in the accounting period in which the transaction
occurs.
Revenue from discontinued operations comprises commissions earned from clients, net of rebates and
chargebacks deducted at source. Commissions are calculated based on a percentage of the net amount
earned by the Group’s clients on their internet websites from players introduced to the websites by the
Group. Where the Company acted as operator, casino net revenue represented commission charged or
tournament entry fees where the player had concluded their participation in the tournament.
f)
Investment Income
Investment income comprises interest income on funds invested, dividend income, and investment
property income. Interest and investment property income is recognised as it accrues. Dividend income
is recognised on the date that the Group's right to receive payment is established, which in the case of
quoted securities is the ex-dividend date.
g)
Foreign currency
Monetary assets and liabilities denominated in non-US dollar currencies are translated into US dollar
equivalents using year-end spot foreign exchange rates. Non-monetary assets and liabilities are
translated using exchange rates prevailing at the dates of the transactions. Exchange rate differences
on foreign currency transactions are included in net finance income.
The results and financial position of all Group entities that have a functional currency different from
US dollars are translated into the presentation currency as follows:
(i)
assets and liabilities for each balance sheet item presented are translated at the closing rate at
the date of that balance sheet; and
LivermoreInvestments Annual Report 2007 44
(ii)
income and expenses for each income statement item are translated at an average exchange
rate (unless this average is not a reasonable approximation of the cumulative effect of the
rates prevailing on the transaction dates, in which case income and expenses are translated at
the dates of the transactions). Exchange differences arising are recognised through the Income
Statement; and
(iii)
exchange differences on the net investment in subsidiary entities with a different functional
currency to the group are recognised through equity.
h)
Taxation
Provision is made for corporation tax on the taxable profits for the year at the appropriate rate in
force.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary
differences arising from differences between the carrying amount of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit. In
principle, 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 liabilities are provided in full with
no discounting.
i)
Goodwill
Goodwill, being the excess of the fair value of cost of an acquisition over the fair value attributed to
the net assets at acquisition, is capitalised.
Goodwill is not being amortised through the income statement; however, it is subject to annual
impairment reviews. Impairment of the goodwill is evaluated by comparing the present value of the
future expected cash flows, (the “value-in-use”) to the carrying value of the underlying net assets and
goodwill. If the net assets and goodwill were to exceed the value-in-use, an impairment would be
deemed to have occurred and the resulting write down in the goodwill would be charged to the income
statement immediately.
j)
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation. Carrying
amounts are reviewed at each balance sheet date for impairment.
Depreciation is calculated using the straight-line method, at annual rates estimated to write off the
cost of the assets less their estimated residual values over their expected useful lives. The annual
depreciation rates used are as follows:
Computer hardware
Fixtures and Fittings
Office renovation
-
-
-
.%
0%
2.5%
k)
Intangible assets
Intangible assets comprise website design costs and computer software and are stated at historic
cost less accumulated amortisation. Carrying amounts are reviewed at each balance sheet date for
indications of impairment.
45
Amortisation is calculated using the straight-line method, at annual rates estimated to write off the
cost of the assets over their expected useful lives. The annual amortisation rates are as follows:
Computer software - .%
l)
Investment property
Certain of the Group’s properties are classified as investment property, being held for long term
investment and to earn rental income.
Investment properties are measured initially at cost, and thereafter are stated at fair value, which
reflects market conditions at the balance sheet date. Gains or losses arising from changes in the fair
values of investment properties are included in the income statement in the year in which they arise.
m) Development property
Investment property under development is stated at cost incurred to date, and is not depreciated.
On completion of development, this asset is transferred to investment property.
n) Equity
Equity issued by the Company is recorded as the proceeds are received, net of direct issue costs.
Equity purchased by the Company is recorded as the consideration paid, including directly associated
assets and is deducted from total equity as treasury shares until they are sold or cancelled. Where such
shares are subsequently sold or reissued, any consideration received is included in total equity.
The share premium account includes any premiums received on the initial issuing of the share capital.
Any transaction costs associated with the issuing of shares are deducted from the premium paid.
Equity-settled share-based employee remuneration is credited to the share option reserve until related
stock options are exercised. On exercise or lapse amounts recognised in the share option reserve are
taken to retained earnings.
Unrealised gains and losses on available for sale financial assets are taken to the investment revaluation
reserve. When these gains/losses are realised, they are taken to the income statement.
o)
Leases
All leases are classified as operating leases and rentals are charged to income on a straight-line basis
over the term of the lease.
p)
Financial instruments
The carrying amounts of cash and cash equivalents, related party creditors, trade receivables, other
accounts receivable, trade payables, customer deposits and other accounts payable approximate to
their fair value.
The Group does not issue derivative financial instruments for trading purposes.
The Group holds derivative financial instruments for trading purposes.
Trade and other receivables
Trade and other receivables are recognised and carried at the original transaction value. An estimate
for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are
LivermoreInvestments Annual Report 2007 46
written off when identified. Where the time value of money is significant receivables are carried at
amortized cost.
Cash and cash equivalents
Cash comprises cash in hand and balances with banks. Cash equivalents are short term, highly liquid
investments that are readily convertible to known amounts of cash. They include unrestricted short-
term bank deposits originally purchased with maturities of twelve months or less.
Trade and other payables
Trade and other payables are recognised and carried at the original transaction value.
Financial assets at fair value through profit or loss
From January 200 all new financial assets acquired will be designated at fair value through profit
or loss upon initial recognition, because management consider this to more fairly reflect the way
these assets are managed by the Group. The Group’s business is investing in financial assets with a
view to profiting from their total return in the form of income and capital growth. This portfolio of
financial assets is managed and its performance evaluated on a fair value basis, in accordance with a
documented investment strategy, and information about the portfolio is provided internally on that
basis to the Group’s Board of directors and other key management personnel.
Financial Assets at fair value through profit and loss include financial assets that are either classified
as held for trading or are designated by the Group to be carried at fair value through profit and loss
upon initial recognition. By definition, all derivative financial instruments that do not qualify for hedge
accounting fall into this category. All assets within this category are measured at their fair value,
with changes in value recognised in the income statement when incurred. Upon initial recognition
attributable transactions costs are recognised in profit or loss when incurred.
Available-for-sale assets
During the year ended December 2007, all financial assets (other than derivatives) were classified
as available for sale on initial recognition. Available for sale financial assets are recognised when the
Company becomes a party to the contractual provisions of the instrument. Available for sale financial
assets are recognised at fair value plus transaction costs.
Available-for-sale financial assets include non-derivative financial assets that are either designated as
such or do not qualify for inclusion in any of the other categories of financial assets. All financial assets
within this category are measured, with changes in value recognised in equity, through the statement
of changes in equity. Gains and losses arising from investments classified as available-for-sale are
recognised in the income statement when they are sold or when the investment is impaired.
In the case of impairment of available-for-sale assets, any loss previously recognised in equity is
transferred to the income statement. Impairment losses recognised in the income statement on equity
instruments are not reversed through the income statement. Impairment losses recognised previously
on debt securities are reversed through the income statement when the increase can be related
objectively to an event occurring after the impairment loss was recognised in the income statement.
47
An assessment for impairment is undertaken at least at each balance sheet date.
A financial asset is derecognised only where the contractual rights to the cash flows from the asset
expire or the financial asset is transferred and that transfer qualifies for derecognition. A financial asset
is transferred if the contractual rights to receive the cash flows of the asset have been transferred or the
Group retains the contractual rights to receive the cash flows of the asset but assumes a contractual
obligation to pay the cash flows to one or more recipients. A financial asset that is transferred qualifies
for derecognition if the Group transfers substantially all the risks and rewards of ownership of the
asset, or if the Group neither retains nor transfers substantially all the risks and rewards of ownership
but does transfer control of that asset.
Valuation of financial assets
•
•
•
•
•
•
Cash and deposits are evaluated per holdings in banks.
Public equities, Credit Notes and Bonds are valued per their bid market prices on quoted exchanges,
or as quoted by market maker.
Hedge Funds and Private Equity funds are valued per reports provided by the funds on a periodic
basis.
Private Equities and Unlisted Investments are valued using market valuation techniques as
determined by the directors.
Investment property is valued at fair value based on valuations provided by a certified external
appraiser. Development projects are valued at cost until completion.
Derivative instruments are valued at close-out cost as provided by counter parties of the derivative
agreement.
q) Share Options
IFRS 2 "Share-based Payment" requires the recognition of equity settled share based payments at fair
value at the date of grant.
The Group issues equity-settled share based payments to certain employees and other advisors. The
fair value of share-based payments to employees at grant date is measured using the Binomial pricing
model. The fair value of share-based payments to other advisors, are measured directly at the fair value
of the services provided.
The fair value determined at the grant date is expensed on a straight-line basis over the vesting period,
based on the Group's estimate of the shares that will eventually vest and adjusted for the effect of non
market-based vesting conditions. The corresponding credit is taken to the share option reserve.
r)
Legal and other disputes
Provision is made where a reliable estimate can be made of the likely outcome of legal and other
disputes against the Group. In addition, provision is made for legal and other expenses arising from
claims received or other disputes. No provision is made for other possible claims or where an obligation
exists but it is not possible to make a reliable estimate. Costs associated with claims made by the
Group are charged to the Income Statement as they are incurred.
LivermoreInvestments Annual Report 2007 4
s)
Critical accounting judgements and key sources of estimation uncertainty
Impairment of financial assets
The group assesses at each balance sheet date whether financial assets are impaired. If an impairment
has occurred, this loss is taken to the income statement.
Assets carried at cost
If there is objective evidence that an impairment loss on unquoted equity instrument that is not
carried at fair value because its fair value cannot be reliably measured, or on a derivative asset that
is linked to and must be settled by delivery of such a unquoted equity instrument, has been incurred,
the amount of the loss is measured as the differences between the asset’s carrying amount and the
present value of estimated future cash flows discounted at the current market rate of return of similar
financial assets.
Provision for legal and other disputes
Determining whether provisions for legal and other disputes
is required requires the Group to assess the likelihood of an
economic outflow occurring as a result of past events. Where
an economic outflow is considered probable, a provision has
been made for the estimated outflow. Where an outflow
is considered possible, but not probable it has only been
disclosed.
Where the information required by IAS 7 “Provisions,
Contingent Liabilities and Contingent Assets” is expected to
prejudice the outcome of legal and other disputes, it has not
been disclosed on these grounds.
Further details of contingent liabilities and provisions are
provided in notes and .
t) Discontinued operations
A discontinued operation is a cash-generating unit, or group
of cash-generating units, that either has been disposed of, or
is classified as held for sale, and:
•
•
Represents a separate major line of business or geographical
area of operations
Is part of a single co-ordinated plan to dispose of a
separate major line of business or geographical area of
operations or
•
Is a subsidiary exclusively with the view to resale
The disclosures for discontinued operations in the prior year
relate to all operations that have been discontinued by the
balance sheet date for the latest period presented.
Y
a
e
l
K
a
s
t
i
e
l
,
l
e
g
a
l
e
d
v
i
s
o
r
49
3. Segment Information
Management consider investment activity to be a single class of business.
Business segments
The Groups’ performance as it is analysed by its business segments is given below:
Revenue by segments
Discontinued operations
Investments
Cost of sales
Amortization and non recurring items
Administration expenses
Finance expenditure
Profit before taxation
4.
Interest / dividend income
Interest from available for sale investments
Interest on Bank deposits and current accounts
Exchange income
Dividend income
5.
Investment property revenue
Rental income
2007
$000
-
25,79
25,79
-
(4)
(,72)
(,9)
2,05
2007
$000
9,7
4,2
2,49
556
6,57
2007
$000
,22
,22
2006
$000
59,50
2,9
72,04
(0,256)
(,054)
(4,47)
(70)
26,05
2006
$000
2,9
9,660
22
-
2,05
2006
$000
-
-
LivermoreInvestments Annual Report 2007 50
6. Gain / losses on investments
Gain on sale of available for sale investments
Property revaluation
Loss on derivative instruments
Loss on impairment
7. Gains on acquisition of associate
Atlas Estates Ltd.
2007
$000
,
,244
(44)
(5,594)
(,4)
2007
$000
,27
,27
2006
$000
0
-
-
-
0
2006
$000
-
-
The investment in associate forms part of the Group’s investment portfolio and therefore has been
included within investment income.
8. Amortisation and non recurring items
Amortisation and non-recurring items refer to:
Amortisation of intangible assets
Amortisation of share options
Non recurring expenses
Compensation to third parties
Income related to discontinued operations
2007
$000
6
2,657
2
-
(2,6)
4
2006
$000
2,5
,50
,44
4,445
-
,054
5
9. Administrative expenses
Operational expenses
Directors fees and expenses
Consultants fees and expenses
Other salaries and expenses
Office cost
Plc costs
Custody fees
Administration services
2007
$000
6
95
50
25
407
425
4
5
2006
$000
57
,77
57
299
52
96
-
00
At December 2007 the Group employed staff ( December 2006: 2).
10. Finance expenditure
,72
4,47
Bank interest and fees
Financing investment property
11. Taxation
Tax charge
2007
$000
550
4
,9
2007
$000
6
6
2006
$000
70
-
70
2006
$000
7
7
The tax charge for the year can be reconciled
to the accounting profit as follows:
Profit before tax
2,05
62,727
Tax effect of domestic corporation tax
Tax effect of share of subsidiaries
Deferred tax
Tax for the year
-
0
25
6
-
7
-
7
LivermoreInvestments Annual Report 2007 52
The Company is an international business company based in the British Virgin Islands (BVI) and, under
its laws is not subject to corporation tax. Corporation tax is calculated with reference to the profit of
the Company’s subsidiaries.
Since the Group trades in a number of jurisdictions, there is a risk that certain tax authorities consider
that it should be subject to tax in those countries. The directors have considered these risks and
concluded that no further tax provision is required.
12. Discontinued operations
On 4 February 2006 certain trade assets were disposed of for $250m. The assets included in the
disposal were certain domain names and the brand names “Empire Poker” and “Ace Club”. These brands
and domain names were used by the Group to direct online poker and casino players to PartyGaming’s
websites, creating net gaming revenue for the Group.
On 29 December 2006, the Company agreed to dispose of its remaining operations to PartyGaming Plc.
This agreement was validated by the EGM held on 9 January 2007.
Cash flows from discontinued operations
Net cash from operating activities
Net cash from investing activities
Net cash from financing activities
Net cash from discontinued operations
13. Disposal of business assets
2007
$000
-
-
-
-
2006
$000
(2,00)
24,49
(24,7)
207,952
Disposal proceeds received
Legal and professional expenses
Compensations to third parties
Warranties provision
Assets written off
Profit from disposal to PartyGaming Plc
Total
Total
Empire Poker Disposal of
2007
$000
-
-
-
-
-
-
2006
$000
2006
$000
27,972
250,000
(944)
-
business
2006
$000
7,972
(944)
(26,27)
(4,22)
(2,705)
(2,000)
(22,559)
(2,000)
(22,559)
6,642
25,7
(99,26)
On 4 February 2006 the Group sold certain business assets to PartyGaming Plc pursuant to a settlement
agreement for a total consideration of $250m. Business assets included in the disposal were certain domain
names and brand names. The consideration represented $250m, which was all in the form of cash.
5
On 9 January 2007, the Group completed the sale to PartyGaming plc of its remaining operating
business. This agreement was signed on 2 December 2006 and was subject to certain conditions
including approval of the Company’s shareholders at an EGM on 7 January 2007. Between signing and
completion the Company continued to operate the business, however during this period restrictions
were placed on the operation of the business by PartyGaming plc. Business assets included in the
disposal were certain domain names, players’ data and brand names. Assets written off, principally,
comprises of acquired intangible goodwill relating to the acquisition of business of Tradal Limited in
May 2005 and the acquisition of Club Dice casinos in September 2005.
The Group received a consideration for the disposal of the business of ,25,94 PartyGaming shares
representing a gross value of $47.9m. As part of the agreement 7,74,67 PartyGaming shares were
transferred to agents as compensation resulting in net disposal proceeds to the Group of $7.9m. The
transaction was conditional on a further payment to a marketing service provider of $0m.
14. Earnings per share
Basic earnings per share has been calculated by dividing the net profit attributable to ordinary
shareholders (profit for the year) by the weighted average number of shares in issue during the relevant
financial periods.
Diluted earnings per share is calculated after taking into consideration the potentially dilutive shares
in existence as at the year ended December 2007 and the year ended December 2006.
2007
Discontinued
Operations
2006
2006
Net profit attributable to ordinary shareholders ($000)
20,77
5,692
62,720
Weighted average number of ordinary shares in issue
26,944,49
292,777,772
292,777,772
Basic earnings per share ($)
0.07
0.
0.2
Weighted average number of ordinary shares including
the effect of potentially diluted shares
26,944,49
299,72,27
299,72,27
Diluted earnings per share ($)
0.07
0.7
0.2
Number of Shares
Weighted average number of ordinary shares in issue
26,944,49
292,777,772
292,777,772
Effect of dilutive potential ordinary shares:
Share options
-
6,945,555
6,945,555
Weighted average number of ordinary shares including
the effect of potentially dilutive shares
26,944,49
299,72,27
299,72,27
LivermoreInvestments Annual Report 2007 54
15. Net asset value per share
Net asset value per share has been calculated by dividing the net assets attributable to ordinary
shareholders by the weighted average number of shares in issue during the relevant financial periods.
Diluted net asset value per share is calculated after taking into consideration the potentially dilutive
shares in existence as at the year ended December 2007 and the year ended December 2006.
Net assets attributable to ordinary shareholders ($000)
2007
276,400
2006
274,246
Weighted average number of ordinary shares in issue
24,027,772
292,777,772
Basic net asset value per share ($)
0.97
0.94
Weighted average number of ordinary shares including
the effect of potentially diluted shares
24,027,772
292,777,772
Diluted NAV per share ($)
0.97
0.94
Number of Shares
Weighted average number of ordinary shares in issue
24,027,772
292,777,772
Effect of dilutive potential ordinary shares:
Share options
-
-
Weighted average number of ordinary shares including
the effect of potentially dilutive shares
24,027,772
299,777,772
16. Dividends
Dividends paid
2007
$000
9,657
2006
$000
24,7
The final dividend for 2006 was paid on June 2007. Dividends for 2007 will be paid on .7.200.
55
17. Property, plant and equipment
Office
Renovation
Computer
Hardware
$000
Fixtures and
Fittings
$000
Cost
As at January 2006
Additions
Disposal
As at January 2007
Additions
Disposal
As at December 2007
Accumulated depreciation
As at January 2006
Charge for the year
Disposal
As at January 2007
Charge for the year
Disposal
As at December 2007
Net book value
As at 31 December 2007
As at 31 December 2006
-
-
-
-
2
-
2
-
-
-
-
(7)
-
(7)
274
-
04
(56)
79
66
(20)
25
(2)
(7)
52
()
(4)
7
(65)
60
4
-
9
-
9
7
-
0
-
()
-
()
()
-
(9)
7
Total
$000
(56)
4
(20)
46
(2)
(79)
52
(9)
(49)
7
()
405
49
LivermoreInvestments Annual Report 2007 56
18. Intangible assets
Goodwill
$000
Website
Design Costs
$000
Domains
$000
Player
data
$000
Computer
Software
$000
Total
$000
Cost
As at January 2006
22,92
,7
575
4,46
Additions
-
Adjustment in fair value
(797)
4
-
-
-
-
-
Disposal
(220,95)
(2,29)
(575)
(4,46)
As at January 2007
Additions
As at December 2007
Accumulated amortisation
As at January 2006
Charge for the year
Disposal
As at January 2007
Charge for the year
As at December 2007
Net book value
As at 31 December 2007
As at 31 December 2006
-
-
-
-
-
-
-
-
-
-
-
19. Available-for-sale financial assets
Fixed income investments
Public Equities investments
Private equities
Hedge funds
Financial and minority holdings
Other investments
-
-
-
-
-
-
-
-
-
(744)
(60)
,604
(0)
(2,7)
-
(2,5)
0
4,46
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2007
$000
96,000
40,940
25,246
25,20
24,62
5,29
6
6
-
-
6
47
(4)
(44)
-
(5)
(44)
227,67
96
(797)
(227,675)
6
47
(,059)
(,29)
6,220
(5)
(44)
(02)
(02)
45
7
45
7
2006
$000
00,975
2,56
-
-
-
-
27,76
24,49
57
Financial assets relate to investments in bonds and equity classified as available for sale. Financial
assets are held in the balance sheet at the year end at fair value. Fair value is measured by reference
to the market value of the assets at the balance sheet date as they are openly traded on a public
market.
20. Financial assets designated at fair value through profit or loss
Derivatives
21. Investment and development property
Investment
property
Development
Property
Valuation as at January 2007
Additions
Change in fair value
Valuation as at December 2007
-
5,040
,244
6,24
-
,4
-
,4
2007
$000
729
729
2007
$000
-
96,
,244
97,62
2006
$000
-
-
2006
$000
-
-
-
-
An investment property, Wylerpark, in Switzerland was purchased on July 2007.
The investment property was valued by Wuest & Partners as at December 2007 on the basis of
open market value in accordance with the appraisal and valuation guidelines of the Royal Institute of
Certified Surveyors, and the European Group of Valuers’ Associations.
22. Investments
Investment in associates
Investments accounted for using the equity method
2007
$000
69,69
69,69
2006
$000
-
-
(a) Investment in associates - The group has 2.2% interest in Atlas Estates Limited, an AIM –quoted
real estate investment and Development Company.
LivermoreInvestments Annual Report 2007 5
The following table illustrates summarised financial information of the group’s investment in Atlas
Estates Ltd:
Share of the associates Balance Sheet
Non-current assets
Current assets
Share of gross assets
Current liabilities
Non-current liabilities
Share of gross liabilities
Share of net assets
2007
$000
2,606
52,546
65,52
(25,274)
(70,29)
(95,5)
69,69
2006
$000
-
-
-
-
-
-
-
Atlas Estates Limited became an associate investment on
December 2007, following the Group’s acquisition of 9.% of Atlas’s
issued share capital. Therefore the Group has not recognised any
share of Atlas’s results in its income statement for the year ended
December 2007.
The excess of net fair value of the associate’s identifiable assets
and liabilities over the cost of investment of $,27,000 has been
recognised in the income statement.
r
e
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l
o
r
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o
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t
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r
o
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o
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a
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i
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s
a
,
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i
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59
(b) Details of group undertakings
Details of the investments in which the group holds 20% or more of the nominal value of any class of
share capital are as follows:
Name of Subsidiary
Place of
incorporation
Holding
Principal activity
Proportion
of voting
rights and
shares held
Livermore Capital
Limited
Livermore Fund I
Limited
British Virgin Islands Ordinary shares
00%
Fund management
Dormant
British Virgin Islands Ordinary shares
00%*
Livermore Capital AG
Switzerland
Ordinary shares
00%
Livermore Investments
AG
Livermore Real Estate
I AG
Switzerland
Ordinary shares
00%*
Switzerland
Ordinary shares
00%
Hedge Fund,
Dormant
Administration
services
Real Estate
management
Real Estate
management,
Dormant
Livermore Enaxor S.a.r.l
Luxemburg
Ordinary shares
00%
Real Estate Owner
LivermoreInvestments
Cyprus Limited
Livermore Investments
Limited
Cyprus
Ordinary shares
00%
Administration
services
United Kingdom
Ordinary shares
00%
Dormant company
Empire Payments Ltd
St. Kitts
Ordinary shares
00%
Dormant company
Sandhirst Ltd
Cyprus
Ordinary shares
00%
Dormant company
Associates
Atlas Estates Ltd
Guernsey
Ordinary shares
2.2%
Real Estates
Investments
* Held by a Subsidiary undertaking.
All cash transactions between the 00% subsidiaries and the Group during the year were eliminated
on consolidation.
LivermoreInvestments Annual Report 2007 60
23. Trade and other receivables
Trade receivables
Other debtors and prepayments
2007
$000
26
,564
,50
2006
$000
,54
49,247
50,795
The carrying value of trade and other receivables approximates to their fair value.
Included in other debtors and prepayments at December 2006 is $47,967,000 due from PartyGaming
Plc on sale of the business as described in note .
24. Cash and cash equivalents
Cash and cash equivalents included in the cash flow statement comprise the following at the balance
sheet date:
Short term deposits
Cash at bank
Bank overdrafts used for cash management purposes
Cash and cash equivalents in the statement of cash flows
25. Shareholders equity
Share capital comprises the following:
As at January 2006 and December 2006
Re-purchased and held in treasury
As at December 2007
2007
$000
500
9,47
9,97
(5,25)
(5,90)
2006
$000
6,522
,9
7,75
(4,960)
2,755
$0 shares
Number
292,777,772
(,750,000)
24,027,772
Share premium
arising
$000
209,07
(7,72)
202,65
,750,000 shares (2006: Nil) were held in treasury at the year end.
The Company has authorised share capital of ,000,000,000 ordinary shares with no par value, and no
restrictions.
6
The Company has a share option scheme. The outstanding share options to acquire ordinary shares as
at December 2007 were as follows:
Outstanding
Share options
Date
Granted
Exercise
price
£
Exercise
price
$
Earliest
exercise
date
Expiry of
exercise
date
As at January 2006
2,99,40
Issued on 5 April 2006
,500,000
05/04/06
.50
2.62
05/04/07 5/04/6
Issued on 9 July 2006
0,950,000
9/07/06
0.7
.42
9/07/07 5/04/6
Share options forfeited on
termination of employment
(2,494,25)
As at January 2007
2,945,555
Share options forfeited on
termination of employment
(,400,000)
As at December 2007
,545,555
The fair value of options granted to employees were determined using the Binomial valuation model.
The model takes into account a volatility rate of between 4-45% calculated using the historical
volatility of a peer group of similar gaming companies and a risk free interest rate of 4.0-4.4% and it
has been assumed the options have a expected life of two years post date of vesting.
The expense for the period has been included in amortisation and non-recurring expenses
(see note ).
26. Bank Loans
Long term bank loan
2007
$000
69,4
69,4
2006
$000
-
-
The long term bank loan is related to Wyler park property investment purchase and is secured on this
property. Interest is payable at 4.5% and the loan balance is repayable on 2 July 204.
27. Bank Overdrafts
Short term bank overdrafts
2007
$000
5,25
5.25
2006
$000
4,960
4,960
LivermoreInvestments Annual Report 2007 62
28. Trade and other payables
Amounts falling due within one year
Trade payables
Other payables and accrued expenses
2007
$000
,607
4,27
5,94
2006
$000
,405
0,505
,90
The Directors consider that the carrying value of trade and other payables approximates to their fair
value.
Included in other payables and accrued expenses is $2,794,000 relating to amounts due on the purchase
of associate. Included in other payables and accrued expenses at December 2006 is $0,004,000
relating to amounts due to agents as part of the PartyGaming Plc transaction in December 2006.
29. Current tax payable
Corporation tax payable
30. Related party transactions
Amounts owed by key management
Interest receivable on key
management balances
Amounts owed to Directors
Administration services provided
by Tradal Limited
Paid in respect of services *
2007
$000
09
2007
$000
5,500
90
94
9
6
2006
$000
7
2006
$000
-
-
9
660
,562
* These payments were made in respect of members of key management either directly to them or to
companies to which they are related.
Tradal Ltd is a related party by virtue of common ownership with Livermore Investments Group
Limited.
Loans of $5,500,000 were made to key management during the period for the acquisition of shares in
the Company. Interest is payable on these loans at US LIBOR plus 0.25% and the loans are secured on
the shares acquired. The loans are repayable on the earlier of the employee leaving the Company or
November 200.
6
31. Contingent liabilities
The agreement with PartyGaming Plc relating to the disposal of the remaining online gaming operations
which was completed in January 2007, could potentially give rise to a liability arising from warranties
and indemnities included within the sale and purchase agreement.
No further information is provided as the directors consider it could prejudice the outcome of any
claim.
32. Other commitments and contingencies
Future minimum lease commitments under property operating leases:
Less than one year
Committed real estate development expenditure
Total commitments falling due within one year
2007
$000
-
6,266
6,266
2006
$000
27
-
27
33. Litigation
A trademark dispute with La Societe des Bains de Mer et du Circle des Etrangers a Monaco was settled
in January 2007 when the Group agreed to an out of court settlement of USD .4m.
During the year the Group was made aware of a possible litigation in relation to a former employee
relating to the termination of his contract following the sale of the operating business to PartyGaming
in December 2006. This litigation procedure is taking place and the Group has made a provision of USD
750k for the Directors’ best estimate of the potential liability and expenses arising.
Other than the above no member of the Group is or has been involved in any legal or arbitration
proceedings which may have, or have had during the 2 months preceding the date of this document,
a significant effect on the Group’s financial position nor are the Directors aware of such proceedings
pending or threatened against any member of the Group.
The Group has provided for litigation claims in line with its accounting policy as set out in note .
34. Financial risk management objectives and policies
Background
The Group’s financial instruments comprise available for sale investments, derivatives, cash balances
and receivables and payables that arise directly from its operations.
Risk Objectives and Policies
The objective of the Group is to achieve growth of shareholder value, yet in line with reasonable risk,
taking into consideration that the protection of long-term shareholder value is paramount. The policy
of the Board is to provide a framework within which the Investment Manager can operate and deliver
the objectives of the Group.
LivermoreInvestments Annual Report 2007 64
Risks Associated with Financial Instruments
Foreign currency risk
Foreign currency risks arise in two distinct areas which affect the valuation of the investment
portfolio, ) where an investment is denominated and paid for in a currency other than US Dollars; and
2) where an investment has substantial exposure to non US Dollars underlying assets or cash flows.
Although the Company reports in USD, most of the Company's assets are in non USD currencies and
the Company in general does not hedge its currency exposure. The investment manager discretionally
partially hedges against foreign currency movements affecting the value of the investment portfolio
based on his view on the relative strength of certain currencies. The Investment Managers monitor the
effect of foreign currency fluctuations through the pricing of the investments by the various markets.
The level of investments denominated in foreign currencies held by the Group at December 2007 is
the following:
2007
$m
2007
$m
2007
$m
2006
$m
2006
$m
2006
$m
Financial assets
Liabilities Net value Financial assets Liabilities Net value
US Dollar
British Pounds
Euro
Swiss Francs
Indian Rupee
Others
56.
45.
66.
05.5
6.
7.
2.
.5
06.
.9
267.4
-
2.9
69.4
-
-
45.
7.4
6.
6.
7.
0.2
2.5
4.
-
-
-
-
-
-
-
0.2
2.5
4.
-
-
Some of the USD denominated investments are backed by underlying assets which are invested in non
USD assets.
Interest rate risk
The Group is exposed to market price risk on its interest-bearing instruments which are affected by
changes in market interest rates and expectations. The Group has borrowings of USD 69.4m (2006: 0)
which have been fixed through the use of an interest rate swap.
The Group has banking credit lines which are available on short notice for the Investment Managers
to use in their investment activities, the costs of which are based on variable rates plus a margin.
When an investment is made utilising the facility, consideration is given to the financing costs which
would impact the returns. The level of banking facilities used is monitored by both the Board and the
Investment Manager on a regular basis. If fully drawn, the credit lines could form up to 40% of the
current value of the investment portfolio. The level of banking facilities utilised at December 2007
was USD 5.m (2006: USD 5.0m).
Interest rate changes will also impact equity prices. The level and direction of change in equity prices
is subject to prevailing local and world economics as well as market sentiment all of which are very
difficult to predict with any certainty. At December 2007 and 2006 the Group had no financial
liabilities that bore an interest rate risk, other than the previously disclosed bank facilities.
65
The Group has floating rate financial assets consisting of bank balances that bear interest at rates
based on the banks floating interest rate. During the period the average rate of interest earned on cash
balances was 5.9%. The Group's interest bearing assets and liabilities are as follows:
Financial assets
Subject to Interest rate changes
Not Subject to interest rate changes
Total
Financial liabilities subject to interest rate changes
Financial liabilities not subject to interest rate changes
Total
2007
$m
29.
29.2
58.3
5.
69.4
85.2
2006
$m
0.9
54.0
64.9
5.0
-
5.0
Changes in market interest rates will affect the valuation of fixed rate interest bearing instruments.
A % change in market interest rates would result in an estimated $.5m change in the value of fixed
rate financial assets.
Market price risk
By the nature of its activities, most of the Group’s investments are exposed to market price fluctuations.
The Board monitors the portfolio valuation on a regular basis and consideration is given to hedging or
adjusting the portfolio against large market movements.
Other than Atlas Estates, which represents some 20% of its portfolio, the Group had no single major
investments that in absolute terms and as a proportion of the portfolio that could result in a significant
reduction in the NAV and share price. The portfolio as a whole does not correlate exactly to any Stock
Exchange Index.
As the Group is now an investment company, many of the market risks are new. Management of risks
is primarily achieved by having a diversified portfolio to spread the market risk. A 0% change in the
value of the Group's portfolio of financial instruments would result in a 2% change in equity.
Derivatives
The Investment Manager may use derivative instruments in order to mitigate market risk or to take a
directional investment. At the year end there were some USD 0.7m of interest rate derivatives. These
provide a limited degree of protection against a rise in interest rates and would not materially impact
the portfolio returns if a large market movement did occur.
Credit Risk
The group invests in a wide range of securities with various credit risk profiles including investment
grade securities, sub investment grade and equity positions. The investment in debt instruments is
usually in investment grade securities, however, the Group may invest also in sub investment grade or
unrated debt instruments. The investment manager mitigates the credit risk via diversification across
LivermoreInvestments Annual Report 2007 66
issuers. However, the Group is exposed to a migration of credit rating, widening of credit spreads and
default of any specific issuer. The Group has a relatively high exposure to the Global and US credit
market in its portfolio of CDOs/CLOs which totals some USD 29.m.
The Group only transacts with regulated institutions on normal market terms which are trade date
plus one to three days. The levels of amounts outstanding from brokers are regularly reviewed by the
Investment Manager. The duration of credit risk associated with the investment transactions is the
period between the date the transaction took place, the trade date and the date the stock and cash are
transferred, the settlement date. The level of risk during the period is the difference between the value
of the original transaction and its replacement with a new transaction. The amounts due to brokers at
December 2007 are USD 50k. The Group is exposed to credit risk in respect of its interest bearing
investments of $5.m.
At .2.2007, the credit rating distribution of the Group's bond portfolio was as follows:
Rating
AAA
AA
A
A-
BBB+
Bbe
Not Rated
Total
Amount,
$000
,02
,779
2,07
6,45
,26
2,022
2,796
58,282
Percentage
.%
2.6%
.6%
.0%
22.5%
.5%
22.0%
100.0%
In the prior year the portfolio of interest bearing financial assets was primarily short term and held
with highly rated institutions.
Liquidity Risk
The only significant financial liability of the Group is the bank loan of $69 million used for purchase of
a real estate property, which has a maturity of 7 years and is fully financed by the rental income from
that same property.
A large proportion of the Group’s portfolio is invested in mid term private equity investments with low
or no liquidity. The investments of the Company in publicly traded securities are subject to availability
of buyers at any given time and may be very low or non existent subject to market conditions.
The Investment Managers take into consideration the liquidity of each investment when purchasing
and selling in order to maximise the returns to Shareholders by placing suitable transaction levels
into the market. Special consideration is given to investments that represent more than 5% of the
investee.
67
Capital Management
The Group considers its capital to be its issued share capital and reserves. The Board regularly monitors
its share discount policy and the level of discounts and whilst it has the option to re-purchase shares,
it considers that the best means of attaining a good rating for the shares is to concentrate on good
shareholder returns.
However, the Board believes that the ability of the Company to re-purchase its own Ordinary shares
in the market may potentially enable it to benefit all equity shareholders of the Company. The re-
purchase of Ordinary shares at a discount to the underlying net asset value would enhance the net
asset value per share of the remaining equity shares.
Under this policy, in 2007, the Company bought ,750,000 of its Ordinary shares.
Financial assets by category:
Non current assets
2007
$000
2006
$000
Available-for-sale financial assets
27,76
24,49
Financial assets designated at fair value through Profit and Loss
729
-
Current assets
loans and other receivables:
Trade and receivables
Cash and cash equivalents
Financial liabilities by category:
Current liabilities
Borrowings
Bank overdrafts
Trade payables
Trade and other payables
Current tax payable
Non current liabilities
Borrowings
Bank loan
LivermoreInvestments Annual Report 2007 6
,50
9,97
50,795
7,75
2007
$000
2006
$000
5,25
4,960
5,94
09
69,4
,90
7
-
Shareholder Information
Registrars
All enquiries relating to shares or shareholdings should be addressed to:
Capita Registrars
The Registry
4 Beckenham Road
Beckenham
Kent BR 4TU
Telephone: 070 62 00, Facsimile: 020 69 242
Change of Address
Shareholders can change their address by notifying Capita Registrars in writing at the above address.
Website
www.livermore-inv.com
The Company’s website provides, amongst other things, the latest news and details of the Company’s activities,
share price details, share price information and links to the websites of our brands.
Direct Dividend Payments
Dividends can be paid automatically into shareholders’ bank or building society accounts. Two primary benefits
of this service are:
•
•
There is no chance of the dividend cheque going missing in the post; and
The dividend payment is received more quickly because the cash sum is paid directly into the account on
the payment date without the need to pay in the cheque and wait for it to clear.
As an alternative, shareholders can download a dividend mandate and complete and post to Capita Registrars.
Lost Share Certificate
If your share certificate is lost or stolen, you should immediately contact Capita Registrars on 070 62 00
who will advise on the process for arranging a replacement.
Duplicate Shareholder Accounts
If, as a shareholder, you receive more than one copy of a communication from the Company you may have
your shares registered in at least two accounts. This happens when the registration details of separate
transactions differ slightly. If you wish to consolidate such multiple accounts, please call Capita Registrars on
070 62 00.
Please note that the Directors of the Company are not seeking to encourage shareholders to either buy or sell
the Company’s shares.
69
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of the Company will be held at 0 Snow Hill, London,
ECA 2AL on 25 June 200 at 0am for the purposes of the following:
Ordinary business
To consider and if thought fit, to pass the following resolutions which will be proposed as Resolutions of
Members:
.
2.
.
4.
5.
To receive and adopt the Report of Directors, the financial statements and the report of the Auditor for
the year ended December 2007.
To authorise the Directors to determine the auditor’s remuneration.
To re-elect Ron Baron who, having been appointed since the date of the last Annual General meeting
of the Company, retires in accordance with the Articles of Association of the Company.
To re-appoint Grant Thornton UK LLP as auditor of the Company to hold office from the conclusion of
this meeting until the conclusion of the next general meeting at which financial statements are laid
before the Company.
That the dividend recommended by the Directors of US .5 cents per ordinary share for the year ended
December 2007 be declared payable on July 200 to holders of ordinary shares registered at the
close of business on 27 June 200 subject to the directors confirming the solvency of the Company in
accordance with applicable laws.
6.
That for the purposes of article 5. of the Articles of Association of the Company:
(a)
(b)
the Directors be and are generally and unconditionally authorised to allot up to a maximum
aggregate amount of 94,029,6 new ordinary shares of no par value of the Company to such
persons and at such times and on such terms as they think proper during the period expiring at
the end of the Annual General Meeting of the Company in 2009 (unless previously revoked or
varied by the Company in general meeting); and
the Company be and is hereby authorised to make prior to the expiry of such period any offer or
agreement which would or might require such ordinary shares to be issued in pursuance of any
such offer or agreement notwithstanding the expiry of the authority given by this resolution;
so that all previous authorities of the Directors pursuant to the said article 5. be and are hereby revoked.
Special business
As a special business to consider and, if thought fit, pass the following resolutions which will be proposed as
special resolutions:
7.
THAT, subject to the passing of resolution 6 set out in the Notice convening this Meeting, the Directors
be and are empowered in accordance with article 5.2 of the Articles of Association of the Company to
allot new ordinary shares of no par value of the Company for cash, pursuant to the authority conferred
on them to allot such shares by that resolution 6 as if the pre-emption provisions contained in article
LivermoreInvestments Annual Report 2007 70
5.2 did not apply to any such allotment, provided that the power conferred by this resolution shall be
limited to:
(a)
the allotment of ordinary shares in connection with an issue or offering in favour of holders of
ordinary shares and any other persons entitled to participate in such issue or offering where the
shares respectively attributable to the interests of such holders and persons are proportionate
(as nearly as may be) to the respective number of ordinary shares held by or deemed to be
held by them on the record date of such allotment, subject only to such exclusions or other
arrangements as the Directors may consider necessary or expedient to deal with fractional
entitlements or legal or practical problems under the laws or requirements of any recognised
regulatory body or stock exchange in any territory; and
(b)
the allotment (otherwise than pursuant to paragraph . above) of up to an aggregate amount
of 4,04,475 of such ordinary shares;
and this power, unless renewed, shall expire at the end of the Annual General Meeting of the
Company to be held in 2009 but shall extend to the making, before such expiry, of an offer or
agreement which would or might require ordinary shares to be allotted after such expiry and
the Directors may allot such shares in pursuance of such offer or agreement as if the authority
conferred hereby had not expired.
.
That, in accordance with its articles of association, the Company be and is hereby generally and
unconditionally authorised to make market purchases (within the meaning of section 6 of the
Companies Act 95 (as amended)) on the AIM market of the London Stock Exchange plc of ordinary
shares of no par value (“ordinary shares”) in the capital of the Company provided that:
(a)
(b)
(c)
the maximum number of ordinary shares hereby authorised to be purchased is 2,20,95;
the authority hereby conferred (unless previously renewed or revoked) shall expire at the
conclusion of the annual general meeting of the Company next following the meeting at which
this resolution is passed; and
the Company may, under the authority hereby conferred and prior to the expiry of that authority,
make a contract to purchase its own shares which will or may be executed wholly or partly after
the expiry of that authority and may make a purchase of its own shares in pursuance of such
contract.
9.
(i) That, Regulation 55. of the Articles of Association of the Company be amended to permit electronic
communications without the consent of the Members of the Company by amending that Regulation as
follows:
(a) by deleting the following words:
“....where the Company and that Member have agreed to the use of electronic communication for this
purpose and the documents are documents to which the agreement applies.”; and
(b) by inserting a full stop after the words,
“Electronic communications may be used (if appropriate) for sending copies of notices or other
documents to a Member.”
7
(ii) That the Registered Agent of the Company is authorised to take any and all steps and file or register
with the Registrar of Corporate Affairs of the British Virgin Islands, any and all documents or notices
related to the foregoing and that are necessary for the purpose of effecting the same.
By order of the Board
Doron Yassur
Company Secretary
Trident Chambers
PO Box 46
Road Town
Tortola
British Virgin Islands
May 200
Notes
(i)
(ii)
(iii)
(iv)
A member entitled to attend and vote at the Meeting convened by the above Notice is entitled to
appoint one or more proxies to attend and, on a poll, to vote in his place. A proxy need not be a member
of the Company. Completion of the Form of Proxy will not prevent you from attending and voting in
person.
To appoint a proxy you should complete the Form of Proxy enclosed with this Notice of Annual General
Meeting. To be valid, the Form of Proxy, together with the power of attorney or other authority (if any)
under which it is signed or a notarially certified or office copy of the same, must be delivered to the
offices of Capita Registrars, The Registry, 4 Beckenham Road, Beckenham, Kent BR 4TU by no later
than 4 hours before the time fixed for the meeting or any adjourned meeting.
In the case of joint holders, the vote of the senior holder who tenders a vote whether in person or by
proxy shall be accepted to the exclusion of the votes of the other joint holders and, for this purpose,
seniority shall be determined by the order in which the names stand in the register of members of the
Company in respect of the relevant joint holding.
In the case of holders of depositary interests representing ordinary shares in the Company, a form of
direction must be completed in order to appoint Capita IRG Trustees Limited, the Depositary, to vote
on the holder's behalf at the meeting or, if the meeting is adjourned, at the adjourned meeting. To
be effective, a completed and signed form of direction (and any power of attorney or other authority
under which it is signed) must be delivered to the Company's Transfer Agent, Capita Registrars, The
Registry, 4 Beckenham Road, Beckenham, Kent, BR 4TU by no later than 72 hours before the time
fixed for the meeting or any adjourned meeting.
LivermoreInvestments Annual Report 2007 72
Corporate Directory
Solicitors
Travers Smith
0 Snow Hill
London
ECA 2AL
England
Corporate Advisors & Stockbrokers
Numis Securities Limited
0 Paternoster Square
London
EC4M 7LT
England
Principal Bankers
Leumi Bank
Claridenstrasse 4
022
Zurich
Switzerland
Bank Hapoalim
Boulevard Royal
BP 70
L-207
Luxembourg
FIBI Bank
Seestrasse 6
Zurich
Switzerland
Registered Office
Trident Chambers
PO Box 46
Road Town
Tortola
British Virgin Islands
Company Number
47566
Cyprus Office
Efesou 2 Emerald Coast Flat 0
452 Agios Tychonas
Limassol
Cyprus
Swiss Office
Gartenstrasse 0
002 Zürich
Switzerland
Secretary
Doron Yassur
Registrars
Capita Registrars
The Registry
4 Beckenham Road
Beckenham
Kent BR 4TU
England
Auditor
Grant Thornton UK LLP
0 Finsbury Square
London
EC2P 2YU
England
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7
LivermoreInvestments Annual Report 2007 74
75
LivermoreInvestments Annual Report 2007 76
Livermore Investments Group Ltd. Annual Report 2007
Livermore Investments Group Ltd. Annual Report 2007
LivermoreInvestments
Livermore Investments Group Limited
Annual Report & Consolidated Financial Statements
for the year ended 31 December 2007
Livermore Investments Group Ltd.
Trident Chambers
PO Box 146
Road Town
Tortola
British Virgin Islands
Balance
Potential
Value