2023
23
Table of Contents
Table of Contents 4
Highlights 6
Chairman’s and Chief Executive’s Review 7
Introduction 7
Financial Review 8
Dividend 8
Review of Activities 9
Introduction and Overview 9
Global Investment Environment 10
Livermore’s Strategy 12
Financial portfolio 12
Events after the Reporting Date 14
Litigation 14
Report of the Directors 15
The Board’s Objectives 15
The Board of Directors 15
Directors’ responsibilities in relation to the financial statements 16
Disclosure of information to the Auditor 16
Substantial Shareholdings 16
Corporate Governance Statement 17
Introduction 17
The Board Constitution and Procedures 17
Board Committees 17
Remuneration Committee 17
Audit Committee 17
The Quoted Company Alliance (QCA) Code 18
Communication with Investors 23
Internal Control 23
Going concern 23
Independence of Auditor 23
4
Annual Report 2023 Remuneration Report 24
Directors’ Emoluments 24
Directors’ Interests 24
Remuneration Policy 25
Review of the Business and Risks 26
Risks 26
Share Capital 27
Related Party Transactions 27
Independent Auditor’s Report to the Members of Livermore Investments Group Limited 28
Consolidated Statement of Financial Position as at 31 December 2023 32
Consolidated Statement of profit or loss for the year ended 31 December 2023 33
Consolidated Statement of Comprehensive Income for the year ended 31 December 2023 34
Consolidated Statement of changes in equity for the year ended 31 December 2023 35
Consolidated Statement of cash flows for the year ended 31 December 2023 36
Notes on the Financial Statements 38
Shareholder Information 71
Registrars 71
Website 71
Direct Dividend Payments 71
Lost Share Certificate 71
Duplicate Shareholder Accounts 71
Corporate Directory 72
5
Annual Report 2023 Highlights
•
Net Profit for the year was USD 13 9m (2022: net loss of USD 24 4m)
• Net Asset Value per share increased by 6 3% to USD 0 82 (2022 USD 0 77) after paying USD
4 9m dividend implying a net return of about 10 2% for the year
•
The Company is conservatively positioned with over USD 52 9m of cash deposits and Government
bonds
• On 21 November 2023, the Company announced an interim dividend of USD 4 9m (USD 0 03 per
share) to members on the register on 01 December 2023 The dividend was paid on 29 December
2023
• Collateralized Loan Obligations (CLO) portfolio generated USD 21 6m in cash distributions and
a total net return of USD 16 2m in 2023 in addition to the USD 2 0m generated from the cash
and bond portfolio
6
Annual Report 2023 Chairman’s and Chief Executive’s Review
Introduction
We are pleased to announce the financial results for Livermore Investments Group Limited
(“Livermore” or “the Company”) for the year ended 31 December 2023 References to the Company
hereinafter also include its consolidated subsidiary (note 8) References to financial statements
hereinafter are to the Company’s consolidated financial statements
2023 was a surprisingly robust year for global growth despite higher interest rates for longer
than anticipated Advanced economies mostly performed well and avoided forecasted recessions
Businesses and consumers were resilient, especially in the United States Inflation rates declined
across most economies although they stayed higher than target levels for their respective Central
Banks Although the Russia-Ukraine conflict continued, energy markets were stable and prices lower
than in 2022 provided much needed relief to people around the world By mid-year, interest rates in
the developed world seemed to have reached their respective peaks Tightened financial conditions
were generally successful in slowing inflation especially in the latter half of the year The failure of
Credit Suisse and a regional banking crisis in the US were the highlights of the year, but optimism
related to significant developments in Artificial Intelligence and safe weight loss drugs boosted
equity markets Larger and better quality companies easily outperformed smaller and interest rate
sensitive companies in 2023
Government bonds eventually performed later in the year as economic slowdown and expectations
of several rate cuts in 2024 fuelled buying interest The US Dollar and Euro traded sideways for most
of the year on a trade-weighted basis
CLOs and US senior secured loans performed quite well in 2023 despite higher rates Higher carry,
short duration, and already lower prices from 2022 overcame concerns over softening credit
fundamentals Still, the economic environment was precarious in 2023 and remains so until interest
rates decline meaningfully Over the year, the Company continued to let its CLO equity book amortize
through distributions and instead increased its exposure to CLO mezzanine bonds Management
traded CLO mezzanine profitably through the year and ended 2023 with a net exposure of USD
15 7m to CLO mezzanine bonds Further, the 2022 year end CLO valuations anticipated extremely
negative scenarios which ultimately did not materialize in 2023 and the CLO portfolio generated USD
16 2m or 24 3% return over its starting valuation in 2023 During the course of 2023, management
maintained its conservative position and is well positioned to take advantage of opportunities
Our investment in Fetcherr continues to surprise positively Fetcherr is a dynamic, high-frequency,
generative pricing engine focused on the airline industry It has received several awards and has
been steadily gaining larger airline clients demonstrating its effectiveness in revenue enhancement
for their clients We expect Fetcherr to continue to successfully execute on its large and growing
pipeline
Our net profit for the year was USD 13 9m (2022 net loss: USD 24 4m) and the year-end NAV was
USD 0 82 per share (2022 NAV: USD 0 77 per share) after paying a dividend payment of USD 4 9m
(USD 0 03 per share)
The Company ended the year with over USD 52 9m of cash invested mainly in deposits and US
government debt
7
Annual Report 2023 Financial Review
The NAV of the Company on 31 December 2023 was USD 135 8m (2022: USD 127 7m) Net profit,
during the year was USD 13 9m, which represents profit per share of USD 0 08 Operating expenses
were USD 3 3m (2022: USD 3 0m)
The overall change in the NAV is primarily attributed to the following:
Shareholders’ funds at beginning of year
Income from investments
Other income
Unrealised (losses) / gains on investments
Operating expenses
Other expenses
Net finance costs
Tax charge
Increase / (decrease) in net assets from operations
Dividends paid
Shareholders’ funds at end of year
31 December 2023
US $m
31 December 2022
US $m
127 7
24 1
0 3
(7 5)
(3 3)
(0 3)
(0 1)
(0 2)
13 0
(4 9)
135 8
177 7
23 7
-
(46 3)
(3 0)
-
(0 2)
(0 2)
(26 0)
(24 0)
127 7
Net Asset Value per share
US $0 82
US $0 77
Dividend
On 21 November 2023, the Company announced an interim dividend of USD 4 9m (USD 0 03 per share)
to members on the register as at 01 December 2023 The dividend was paid on 29 December 2023
The Board of Directors will decide future dividends based on profitability, liquidity requirements,
portfolio performance, market conditions, and the share price of the Company relative to its NAV
Richard B Rosenberg
Chairman
Noam Lanir
Chief Executive Officer
22 May 2024
8
Annual Report 2023
Review of Activities
Introduction and Overview
Overall, the Company remained conservatively positioned until inflation expectations and central
bank actions turn towards supporting growth instead of reducing inflation rates Our exposure has
been primarily towards short duration through floating rate debt and front-end money-market
instruments as well as treasury bills Higher rates afford the luxury of getting paid to wait while
excessive valuations and unviable business are corrected through the cleansing process of fighting
inflation We have seen large US regional banks and too-big-to-fail entities like Credit Suisse fail
in 2023, so caution is warranted
The lessons of the Great Financial Crisis in 2008-2009 seem to have been well learnt by the
regulators and central banks, which acted swiftly, decisively and in unison to support the financial
system from buckling under the pressure of the failure of Credit Suisse and the regional bank-
ing crisis in the US Equity markets performed extremely well in 2023 as significant innovation in
Artificial Intelligence (AI) and development of novel weight-loss drugs created optimism about
productivity gains and future earnings Larger US technology and pharmaceutical companies drove
much of the gains whereas smaller companies and interest rate sensitive sectors continued to
struggle for survival under the weight of higher interest rates
Developed economies government bond market returns were unattractive in 2023 as higher growth
and expansive fiscal policies especially in the US kept rates higher The widely forecasted recession
did not arrive in the US in 2023 although long-end rates rallied hard in the last quarter of 2023 in
hope of several rate cuts in 2024 Corporate bonds had a much better showing as spreads nar-
rowed during the year towards historical averages and the Bloomberg US Corporate Total Return
index gained by over 8% while the High Yield Total Return gained 129% in 2023 The US leveraged
loan market also performed very well with the Credit Suisse Leveraged Loan Index gaining 13%
CLO equity and mezzanine bonds had a good showing in 2023 The extremely negative outcomes
modelled for year-end 2022 valuations did not materialize and provided a significant boost to
performance in 2023 Still, there were several credit issues and while the default rates were lower
than projected, the recovery rates were much lower as well Thus, actual credit losses incurred
through credit events or through trading did materially affect CLO structures, especially older
vintages that had already borne credit stresses from 2020 and before New vintage CLO structures
weathered the issues much better While the Company did not open any warehouses in 2023,
management let older vintage CLOs amortize through their distributions and invested the cash in
deposits and higher quality CLO mezzanine positions Distributions from the CLO portfolio were in
line with expectations generating over USD 23 6m in cashflow and USD 16 2m in net gains
For the 2023 year-end, the Company reported a NAV/share of USD 0 82 after a dividend payment
of USD 4 9m (USD 0 03 per share) and net profit of USD 13 9m Interest and distribution income
amounted to USD 24 05m, of which, USD 21 6m was generated from the CLO portfolio The net
gain of the CLO and warehousing portfolio was USD 16 2m as valuations stayed relatively un-
changed from the beginning of the year
Management invested an additional USD 0 695m in a secondary transaction involving Fetcherr
shares Operating expenses amounted to USD 3 3m The Company ended the year with over USD
52 9m of cash, deposits, and investments in US treasury bills after paying an interim dividend of
USD 4 9m in December 2023
9
Annual Report 2023 The Company does not have an external management company structure and thus does not bear
the burden of external management and performance fees Furthermore, the interests of Liver-
more’s management are aligned with those of its shareholders as management has a large owner-
ship interest in Livermore shares
Considering the strong liquidity positions of Livermore, together with its strong foothold in the US
CLO markets as well as the robustness of its investment portfolio and the alignment of the man-
agement’s interests with those of its shareholders, management believes that the Company is well
positioned to benefit from current conditions
Global Investment Environment
Global economic growth in 2023 remained unexpectedly robust despite challenges such as Russia’s
aggression against Ukraine and monetary policy tightening However, economic growth varied
among regions Advanced economies, especially in Europe, experienced significant slowdowns due
to tighter monetary policies and inflation’s impact on purchasing power The US economy, on the
other hand, remained strong China’s recovery from its zero-COVID policy also supported global
trade, although its domestic property and consumer segments remained weak Tighter financial
conditions affected interest-sensitive expenditures, but household consumption remained steady
due to tight labor markets Core inflation remained sticky despite a decline in headline inflation
due to energy price reversals Internationally, economic growth generally slowed in the second half
of 2023 and most central banks paused policy interest rates, with expectations that some may
start reducing their rates materially in 2024 Overall, the trade-weighted exchange value of the US
dollar slightly increased, appreciating significantly against the Japanese Yen although it weakened
materially against the Swiss Franc
Financial conditions remained restrictive, but equity markets recovered despite temporary disruptions
from regional bank collapses and the failure of Credit Suisse The equity markets were further
boosted by optimism on advancements in Artificial Intelligence and safer weight loss drugs
US: In 2023, the US economy demonstrated resilience despite tighter monetary policy Consumer
price inflation decreased, ending the year at 3 4%, down from 6 5% in December 2022 The Federal
Reserve raised the target range for its policy rate by 1% to 5 25%–5 5% by July and maintained this
level throughout the year, while continuing to reduce its portfolio of Treasury and mortgage-backed
securities Real GDP growth was robust, increasing by 3 1% in 2023, supported by solid consumer
spending and a rebound in housing market activity
Euro Zone: In 2023, the GDP growth in the Euro area was weak at 0 5% Consumer price inflation
decreased significantly but remained above the ECB’s 2% target throughout the year, reaching 2 9%
in December, down from 9 2% a year earlier The ECB raised key interest rates by 2% until September,
reaching a 4% deposit facility rate, and maintained these rates unchanged afterward The Euro
area’s unemployment rate averaged 6 5% in 2023 Although the failure of Credit Suisse created
significant ripples in the financial markets, Euro area banks demonstrated increased resilience, with
the Common Equity Tier 1 ratio reaching 15 6% in the third quarter
China: In 2023, China’s GDP grew robustly by 5 2%, exceeding the previous year’s growth rate of
3 0% and meeting the government’s target of around 5% This growth was fuelled by the relaxation
of the zero-COVID policy toward the end of 2022, leading to a significant economic recovery Despite
this growth, the economic environment posed challenges, including a deteriorating property crisis
and subdued consumer and business sentiment To bolster the economy, authorities implemented
measures from mid-2023 onwards, including increased infrastructure investment and targeted
interventions in the property sector
10
Annual Report 2023 Commodities: The average price of Brent crude oil in 2023 was $83 per barrel, down from $101 in
2022 Throughout the year, crude oil prices experienced fluctuations influenced by factors such as
the EU import ban on Russian oil and interest rate hikes Brent crude prices ended the year at $78
per barrel, $4 lower than the start of the year OPEC+ extended crude oil production cuts through
2024, with Saudi Arabia implementing additional voluntary cuts in July Energy commodity prices,
including oil and gas, declined due to lower demand, despite geopolitical risks and supply cuts
European gas prices dropped by 58% in 2023, with lower industrial demand and reduced household
consumption contributing to decreased gas consumption Stable liquefied natural gas (LNG) supply
enabled European countries to enter the heating season with full gas storage However, supply risks,
such as strikes at Australian LNG terminals, led to periods of high price volatility, highlighting the
market’s sensitivity during the shift away from Russian gas imports
Equities and Bonds: In 2023, financial markets saw a significant rebound following losses from
the previous year The S&P 500 surged by 26 3%, and the MSCI All Country World Index rose
by 22 2% Tech sector performance, led by companies like NVIDIA, drove this recovery Despite
geopolitical tensions, the US economy’s resilience supported the global outlook Small-cap stocks
lagged behind large-cap stocks High-profitability companies outperformed low-profitability ones
in both developed and emerging markets US Treasuries rebounded, but yields remained relatively
higher, fluctuating significantly throughout the year Corporate bond yields declined, with spreads
narrowing, especially for speculative-grade bonds Treasury market functioning was orderly, but
liquidity was low, particularly in short-term securities
Loan Market: In 2023, the leveraged loan market, had a strong performance and its best since
2009 The Credit Suisse Leverage Loan Index (CSLLI) recorded a total return of 13 04% The trailing
12-month average default rate ended at 1 53%, up from 0 72% in 2022 but below the long-term
average of 2 70% Average loan prices rose from 91 89 to 95 32 throughout the year but remained
below pre-Ukraine war levels Refinancing activity surged, accounting for over 58% of new supply
volume, compared to 26% in 2022 Concerns about the maturity wall were alleviated, with significant
reductions in debt maturing before 2026 The growing private credit asset class actually helped
reduce some stress in the leveraged loan market as some stressed borrowers prepaid and refinanced
into new facilities from private credit funds and business development companies (BDCs), with
around $16 billion refinanced by private credit managers in 2023 benefitting the leveraged loan
and CLO market
CLO Market: In 2023, the CLO market saw significant activity, with $116 billion in new CLO issuance
reported by LCD Pitchbook Captive CLO funds represented over 80% of the 208 new BSL CLOs
issued during the year CLO refinancing and reset volumes decreased, totalling $24 6 billion across
57 transactions, with $14 7 billion occurring in the last three months By the end of 2023, CLO
AAA discount margins averaged approximately 175 basis points over SOFR, tightening by 53 basis
points since the previous year’s end With liability spreads still high, management has decided to
not participate in new issue CLO equity and focus on secondary and CLO mezzanine opportunities
As we look ahead in 2024, we anticipate liability spreads to tighten as high current carry, short
duration, and a soft landing expectation create attractive risk-reward characteristics
Sources: Swiss National Bank, Bloomberg, Board of Governors of the Federal Reserve System, European Central Bank (ECB),
Morningstar, JP Morgan, Credit Suisse
11
Annual Report 2023 Livermore’s Strategy
The financial portfolio is focused on fixed income instruments which generate regular cash flows
and include exposure mainly to senior secured and usually broadly syndicated US loans and to a
limited extent emerging market debt through investments in CLOs This part of the portfolio is
geographically focused on the US
Strong emphasis is given to maintaining sufficient liquidity and low leverage at the overall portfolio
level and to re-invest in existing and new investments along the economic cycle
Financial portfolio
The Company manages a financial portfolio valued at USD 127 2m as of 31 December 2023, which is
composed mainly of cash and investments in fixed income and credit related securities
The following is a table summarizing the financial portfolio as of year-end 2023
Name
Investment in the loan market through CLOs
Public equities
Short term government bonds
Long term government bonds
Corporate bonds
Invested total
Cash
Total
2023
US $m
68 3
2 0
28 5
4 2
4 0
107.0
20.2
127.2
2022
US $m
66 6
2 3
24 6
8 3
4 6
106.4
11.0
117.4
Senior Secured Loans and Collateralized Loan Obligations (CLO):
US senior secured loans are a floating rate asset class with a senior secured claim on the borrower and with
overall low volatility and low correlation to the equity market CLOs are managed portfolios invested into
diversified pools of senior secured loans and financed with long term financing
In 2023, US leveraged loans generated strong returns and the Credit Suisse Leverage Loan Index (“CSLLI”)
was up about 13% It was one of the strongest annual returns since the Global Financial Crisis High base
rates provided significant yield and lower prices from 2022 boosted their attractiveness Further, strong
nominal growth in the US allowed most borrowers to manage their pricing structures to cover higher costs
and interest expenses Still, higher rates for longer pose significant threat to several borrowers Fortunately,
open capital markets since Q4 2023 and the growth in private credit had made credit available especially
for better quality borrowers
The trailing 12-month default rate in December 2023 increased to 1 53% from 0 72% a year ago While
12
Annual Report 2023 this is much lower than expected in 2022, lower than average recoveries point to loss rates similar to
higher defaults but higher recoveries Nonetheless, it is encouraging that most borrowers were able to take
advantage of nominal growth in the economy and manage their revenues, costs, and interest expenses
Further, the maturity wall has again been pushed out with about 7% of the loan market as of year-end 2023
maturing before 2026 and this number has been further reduced in 2024
While new issue loans were few and far in-between, the CLO market experienced strong issuance with
over USD 116 billion of new issue CLOs pricing in 2023 despite wide liability spreads Most of this activity
was driven by captive CLO manager funds as the difference between income from loans and liability costs
were unattractive for economic investors such as Livermore Nonetheless, this new CLO creation further
supported demand for loans in 2023
In November 2023, the US Federal Reserve indicated expectations for several rate reductions in 2024
given the decline in inflation This prompted a significant rally in risk assets and CLO liability spreads have
tightened sharply into the first quarter of 2024 along with further gains in underlying loans
In 2023, CLO equity distributions were in line with expectations Our portfolio generated cashflow of
USD 23 6m for the year and net gains of USD 16 2m on a starting valuation of USD 66 6m in January
2023 Further, management profitably traded CLO mezzanine debt and increased exposure to such bonds
given their high current coupons Management did not open any warehouses in 2023 and maintained its
conservative posture allowing its older vintage CLO equity positions to amortize through their distributions
As we look ahead, we expect the interest rates to stay high for longer than the market does and continue
to stay cautious At the same time, tighter liability spreads, generous warehouse terms, and few near-term
loan maturities create an attractive risk-reward profile to restart warehousing and CLO investment activity
The Company’s CLO portfolio is divided into the following geographical areas:
2023
Amount
US $000
68,284
Percentage
100%
2022
Amount
US $000
66,576
Percentage
100%
US CLOs
Fund Investments
The fund investments held by the Company are mainly incorporated in the form of Managed Funds (mostly
closed end funds) in Israel and the emerging economies Also, the Company has some direct venture capital
investments
The following summarizes the book value of the private equity funds at 31 December 2023
Name
Fetcherr Ltd
Phytech
Sauce, Inc (formerly Say2eat Inc)
Other investments
Total
US $m
2 0
2 6
0 8
1 1
6.5
13
Annual Report 2023
Fetcherr Ltd: Fetcherr is the Israeli start-up that has developed proprietary large market AI models
for dynamic pricing systems Fetcherr is disrupting traditional revenue systems in the airline industry
and has signed-up airlines such as Virgin Airlines, Azul Air, etc The Company invested USD 2m in
2021 and another USD 0 695m in a secondary transaction in 2023 at about a USD 67m valuation
Around the same time in 2023, Fetcherr raised capital in the form of a SAFE (convertible debt
instrument) at a maximum valuation of USD 100m As of 31 December 2023, the Company owned
8 3% of Fetcherr issued share capital
Phytech: Phytech is an agriculture-technology company in Israel providing end-to-end solutions for
achieving higher yields on crops and tree data Livermore continues to hold 12 2% in Phytech Global
Advisors Ltd, which in turns now holds 11 95% on a fully diluted basis in Phytech Ltd
Sauce, Inc (formerly Say2eat, Inc ): is a company that has proved it can disrupt the existing food
delivery (3rd party) marketplace model, with a first-party, direct delivery model that is commission-
free Sauce has demonstrated a strong product-market fit by fulfilling a significant 1 million orders
milestone in 2023 across over 1,000 stores With a workforce of 80 employees across four continents,
Sauce, Inc showcases robust unit economics, a solid cash position, and is nearing break-even The
company is well-positioned for further expansion and growth The Company invested USD 0 750m
in Sauce, Inc in 2020
The following table reconciles the review of activities to the Company’s financial assets at 31
December 2023:
Name
Financial Portfolio
Fund investments
Total
Financial assets at fair value through profit or loss (note 4)
Financial assets at fair value through other comprehensive
income (note 5)
Total
US $m
107 0
6 5
113.5
107 0
6 5
113.5
Investments in Subsidiaries
The subsidiaries include investments in the fields of real estate and receivables from the Company
itself as well as third parties The resulting fair value changes are mainly attributed to changes in
the subsidiaries’ net assets including the value of the underlying investments
Events after the reporting date
Details of material events after the reporting date are disclosed in note 27 to the financial statements
Litigation
During 2023, there was one matter in litigation that the Company was involved in Further
information is provided in note 23 to the financial statements
14
Annual Report 2023 Report of the Directors
The Directors submit their annual report and audited financial statements of the Company for the
year ended 31 December 2023
This report has been prepared on a voluntary basis and it does not contain all of the information
that would have been required had it been prepared in accordance with the UK Companies Act 2006
guidance
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 Company’s business lines Measures
aimed at increasing shareholders’ value over the medium to long-term, such as an increase in NAV
are used to monitor performance
The Board of Directors
Richard Barry Rosenberg (age 68) independent, Non-Executive Director, Chairman of the Board
Richard joined the Company in December 2004 He became Non-Executive Chairman on 31 October
2006 He qualified as a chartered accountant in 1980 and in 1988 co-founded the accountancy
practice SRLV 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 57), Founder and Chief Executive Officer
Noam founded the Company in July 1998, to develop a specialist online marketing operation Noam
has led the growth and development of the Company’s operations over the last twenty years which
culminated in its IPO in June 2005 on AIM Prior to 1998, Noam was involved in a variety of
businesses mainly within the online marketing sector He is also a major benefactor of a number of
charitable organisations
Ron Baron (age 56), Executive Director and Chief Investment Officer
Ron was appointed as Executive Director and Chief Investment Officer in August 2007 Ron has led
the establishment and development of Livermore’s investment platform as a leading specialized
house in the credit space Ron also has wide investment and M&A experience From 2001 to 2006
Ron served as a member of the management at Bank Leumi, Switzerland and was responsible for
investment activity Prior to this, he spent five years as a commercial lawyer advising banks and
large corporations on corporate transactions, including buyouts and privatisations Ron has over 18
years of experience as an investment manager with particular focus on the US credit market and
CLOs He holds an MBA from INSEAD Fontainebleau and an LLB (LAW) and BA in Economics from
Tel Aviv University Ron is also the founder and owner of the Israel Cycling Academy a non-profit
professional cycling team
Augoustinos Papathomas (age 61) independent, Non-Executive Director
Augoustinos joined the Board in February 2019 He is a trained and qualified UK Chartered
Accountant He is a Partner of FRP Advisory Cyprus and of APP Audit in Cyprus with over 30 years
of experience in assurance, taxation and advisory for local and international clients He is also an
insolvency practitioner with experience in many liquidations and receiverships Augoustinos has
served as a director in various bodies and organisations
15
Annual Report 2023 Directors’ responsibilities in relation to the financial statements
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 financial position of the Company, and its financial performance and cash flows 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; and
prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Company will continue in business
The Directors are responsible for keeping proper accounting records that are sufficient to show and
explain the Company’s transactions, and at any time enable the financial position of the Company
to be determined with reasonable accuracy and enable them to ensure that the financial statements
comply with the applicable law and International Financial Reporting Standards as adopted by the
European Union They are also responsible for safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Company’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 15 May 2024, the Directors are aware of the following interests in 3 per cent or more of the
Company’s issued ordinary share capital:
Number of Ordinary
Shares
Percentage of issued
ordinary share capital
Percentage of voting
rights*
Groverton Management Ltd
123,048,011
70 39%
74 41%
Livermore Management Limited
25,456,903
14 56%
15 40%
* after consideration of the treasury shares
Save as disclosed in this report and in the remuneration report, the Company is not aware of any other
person or entity that is interested directly or indirectly in 3% 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 22 to the financial statements
16
Annual Report 2023 Corporate Governance Statement
Introduction
The Company recognises the importance of the principles of good Corporate Governance and the
Board is pleased to accept its commitment to such high standards throughout the year
The Board Constitution and Procedures
The Company is controlled through the Board of Directors, which comprises of two independent Non-
Executive Directors (one of which is the Board’s Chairman) and two Executive Directors The Chief
Executive’s responsibility is to focus on co-ordinating the company’s business and implementing
Company strategy
A formal schedule of matters is reserved for consideration by the Board, which meets approximately
four times each year The Board is responsible for implementation of the investing strategy as
described in the circular to shareholders dated 29 December 2006 and adopted pursuant to
shareholder approval at the Company’s EGM on 17 January 2007 It reviews the strategic direction
of the Company, 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 advice
and services of the Company Secretary and all Directors are able to take independent professional
advice if relevant to their duties The Directors receive training and advice on their responsibilities
as necessary All Directors submit themselves to re-election at least once every three years
Board Committees
The Board delegates clearly defined powers to its Audit and Remuneration Committees The minutes
of each Committee are circulated by the Board
Remuneration Committee
The Remuneration Committee comprises of the Non-Executive Chairman of the Board and a Non-
Executive Director 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
Audit Committee
The Audit Committee comprises of the Non-Executive Chairman of the Board and a Non-Executive
Director and is chaired by the Chairman of the Board The duties of the Committee include monitoring
the auditor’s performance and reviewing accounting policies and financial reporting procedures
The Audit Committee’s key objectives are the provision of effective governance over the
appropriateness of the Group’s financial reporting, including the adequacy of related disclosures,
the performance of external audit function, and the management of the Group’s systems of internal
control and business risks
17
Annual Report 2023
The primary roles and responsibilities delegated to, and discharged by, the Committee include:
• monitoring and challenging the effectiveness of internal control and associated functions;
•
•
approving and amending Group accounting policies;
reviewing, monitoring, and ensuring the integrity of interim and annual financial statements,
and any formal announcements relating to the Company’s financial performance;
providing advice (where requested by the Board) on whether the Annual Report and Accounts,
taken, is fair, balanced, and understandable, and provides the information necessary for
shareholders to assess the Company’s position and performance;
reviewing and monitoring the external auditor’s independence, objectivity, and effectiveness
of the audit services; and
•
•
• monitoring and approving the scope and costs of audit
The Quoted Company Alliance (QCA) Code
The Directors of Livermore recognize the importance of good corporate governance in facilitating
Livermore to achieve its goals in our accountability to our stakeholders, and have chosen to apply
the Quoted Companies Alliance Corporate Governance Code (the ‘QCA Code’)
In the statements that follow, we explain our approach to governance, and how the Board and its
committees operate
1 Establish a strategy and business model which promote long-term value for shareholders
Livermore’s strategy is focused primarily on investments which generate regular cash flows
and where the team has considerable investment experience and skills These investments
generally include exposure mainly to senior secured and usually broadly syndicated US loans
through structures such as Collateralized Loan Obligations
Strong emphasis is given to maintaining sufficient liquidity and low leverage at the overall
portfolio level and to re-invest in existing and new investments along the economic cycle
Core pillars of investment strategy are:
- Investing with discipline and patience
- Using data and technology to continuously improve, analyze, and
- Building strong relationships with its counterparties and employees
The key challenges to the business and how these are mitigated are detailed in the “Review of
the Business and Risks” section of our Annual Report and Accounts
2 Seek to understand and meet shareholder needs and expectations
Livermore encourages two-way communication with its investors The Chairman talks regularly
with the Group’s major shareholders and ensures that their views are communicated fully to
the Board
The Board recognizes the AGM as an important opportunity to meet private shareholders The
Chairman and key management are available to listen to the views of shareholders informally
immediately following the AGM
Where voting decisions are not in line with the Company’s expectations the Board will engage
18
Annual Report 2023
with those shareholders to understand and address any issues The Company Secretary is the
main point of contact for such matters
3 Take into account wider stakeholder and social responsibilities and their implications for long-
term success
Livermore is committed to sustainably deliver long term success and creating a win-win
environment for all its stakeholders It does so by fostering strong relations and a sense of
loyalty and integrity in all aspects of our business The Directors receive feedback from its
major stakeholders:
1 Shareholders: Generate strong, consistent returns, encourage open dialogue and continue
reporting on investments and business activities
2 Employees: Continue to encourage independent thinking and development, institute
employee engagement feedback to listen and address issues, and reward competitively and
based on performance
3 Investment and Transaction Counterparties: Active engagement through individual meetings
as well as regular calls and conference attendances
4 Embed effective risk management, considering both opportunities and threats, throughout the
organization:
Audit, risk and internal control: The Company has an established framework of internal
financial controls, which are designed to ensure that risk of mis-statement or loss is kept
to a minimum The controls are reviewed regularly by the Executive Management and the
Audit Committee, as well as our external independent auditors The external auditors include
their review of internal controls in their “Key Issues Memorandum” and report to the Audit
Committee
Given the Company’s size and the nature of its business, the Board does not consider that it is
necessary to have an internal audit function
“Review of the Business and Risks” section of our Annual Report and Accounts details risks to
the business and how these are mitigated
The Board considers risk to the business at every Board meeting (at least 4 meetings are held
each year) Both the Board and senior managers are responsible for reviewing and evaluating
risk The Executive Directors receive regular reports on trading performance, and quarterly
discuss budgets and forecasts and new risks associated with ongoing trading
5 Maintain the board as a well- functioning, balanced team led by the chair
Livermore is controlled by the Board of Directors Richard Rosenberg, the Non-executive
Chairman, is responsible for the running of the Board and Noam Lanir, the Chief Executive, has
executive responsibility for running the Group’s business and implementing Group strategy
Ron Baron, the Chief Investment Officer, is responsible for the investment implementations
and risks
All Directors receive regular and timely information of the Group’s operational and financial
performance Relevant information is circulated to the Directors in advance of meetings In
addition, minutes of the meetings of the Directors are circulated to the Board of Directors
All Directors have direct access to the advice and services of the Company Secretary and are
able to take independent professional advice in furtherance of their duties, if necessary, at the
19
Annual Report 2023
company’s expense
The Board comprises two Executive Directors and two Non-Executive Directors The
Board considers that all Non- executive Directors bring an independent judgement to bear
notwithstanding the varying lengths of service
The Board is supported by the Audit and Remuneration Committee The role of these
Committees is detailed in the “Corporate Governance Statement” section of our Annual
Accounts and Reports
The Board is committed to maintaining appropriate standards for all the Company’s business
activities and ensuring that these standards are set out in written policies Key examples of
such standards and policies include the ‘Market Abuse Regulation Policy” and ‘Anti-Bribery
and Anti-Corruption Policy” and our “AIM Rules Compliance Policy”
The Group maintains appropriate insurance cover in respect of actions taken against the
Directors because of their roles, as well as against material loss or claims against the Group
The insured values and type of cover are comprehensively reviewed on a periodic basis
6 Ensure that between them the directors have the necessary up-to-date experience, skills and
capabilities
The Board of Directors’ biographies are set out on our website and in the Annual Report
The Board is satisfied that, between the Directors, it has an effective and appropriate balance
of skills and experience, including in areas of investment, business management, corporate
governance, tax, and accounting With two Non-executive Board members and two Executive
Board members, the Board believes it has the desired balance between independence and
alignment of interest
All of the Directors are subject to election by shareholders at the first Annual General Meeting
following their appointment to the Board In accordance with the Company’s Articles of
Association Directors are required to seek re-election at least once every three years
The Board is responsible to the shareholders for the proper management of the Group and
meetings are held on a regular basis to set the overall direction and strategy of the Group,
to review operational and financial performance and to discuss the investment environment
as well as opportunities and risks The Board is provided with key information in a timely
manner to enable a proper assessment of all matters requiring a decision or insight All key
operational and investment decisions are subject to Board approval
The Board is supported by Audit and Remuneration Committees which are considered to have
the appropriate skills and knowledge to discharge their duties and responsibilities effectively
20
Annual Report 2023
There were 8 Board or Committee meetings held during the year ended 31 December 2023
Directors’ attendance at these meetings was a follows:
Number of meetings attended
Board
Audit
Remuneration
Richard Barry Rosenberg
Noam Lanir
Ron Baron
Augoustinos Papathomas
5 of 5
5 of 5
5 of 5
5 of 5
2 of 2
1 of 1
-
-
-
-
2 of 2
1 of 1
The Company has effective procedures in place to monitor and deal with conflicts of interest
The Board is aware of the other commitments and interests of its Directors, and changes to these
commitments and interests are reported to and, where appropriate, agreed with the rest of the
Board
The Board oversees the process and makes recommendations on all new Board appointments Where
new Board appointments are considered the search for candidates is conducted, and appointments
are made, on merit, against objective criteria and with due regard for the benefits of diversity on
the Board, including gender
The Company Secretary and our Nominated Advisors support the Chairman in addressing the training
and development needs of Directors
7 Evaluate board performance based on clear and relevant objectives, seeking continuous
improvement
Richard Rosenberg, as Chairman of the Board, has been assessing the individual contributions
of each of the members of the team to ensure that:
- Their contribution is relevant and effective
- That they are committed
- Where relevant, they have maintained their independence
The performance of board members is currently monitored on an ad-hoc basis and through
individual mentoring and training sessions with the assistance of our Nominated Adviser
The Company seeks continuous improvement as part of its considerations for evaluating the
performance of the Board
8 Promote a corporate culture that is based on ethical values and behaviors
Livermore is committed to good practice and ethical behaviour and we fully recognize our
responsibilities to all of our stakeholders The Board firmly believes that sustained success will
best be achieved by adhering to our corporate culture of treating all our stakeholders fairly
and with respect Accordingly, in dealing with each of the Company’s principal stakeholders,
we encourage our staff to operate in an honest and respectful manner
21
Annual Report 2023
Livermore is committed to providing a safe and congenial environment that promotes
accountability, respect, and independent thought for its employees and consultants As well,
the Company has a whistleblower policy that supports and encourages ethical behavior
The Board members of the Company lead by example in their personal lives and to do what is
in the best interest of the Company and the community that they live in
Richard Rosenberg, Chairman of the Board, is a trustee of a Teenage Cancer Trust, and
regularly cycles and runs to raise funds for the charities he supports
Noam Lanir, the CEO and executive director, has been actively involved in philanthropic
activities including working with the Sh’erit ha-Pletah and the Foundation for the Welfare of
Holocaust survivors in Israel
Ron Baron, the CIO and executive director, founded the Israel Cycling Academy, a philanthropic
venture for the development of cycling in Israel as well as a professional Pro-continental
cycling team
The Company tries to embody the ethical values of its Board members and actively looks
to contribute to and engage with institutions and people that share its ethical values and
behaviours
9 Maintain governance structures and processes that are fit for purpose and support good
decision- making by the board
The “Corporate Governance Statement” in our Annual Report & Accounts details the company’s
governance structures and why they are appropriate and suitable for the company to support
good decision-making by the Board members
The Board meets in person at least four times a year and at additional times via
teleconference At each meeting, the members discuss if the current corporate governance
structures are sufficient and what improvements may be required to be in line with the needs
of the Company and the regulatory environment
10 Communicate how the company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Company encourages two-way communication with its investors and aims to respond to
queries received in a timely manner The Chairman is regularly available to communicate with
the Company’s major shareholders and ensures that their views are communicated fully to the
Board
The Board recognizes the AGM as an important opportunity to meet private shareholders The
Directors are available to listen to the views of shareholders informally immediately following
the AGM
A complete index of the disclosures required by the QCA Code, including those on the
Company’s website, can be found at http://www livermore-inv com/CorporateGovernance
Richard Rosenberg, Non-executive Chairman
22
Annual Report 2023
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,
is 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 Company’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 controls
and for reviewing its effectiveness In this context, control is defined in 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
The Company 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 Company’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 Company is of an appropriate size
The Board undertakes a review of its internal controls on an ongoing basis
Going Concern
The Directors have reviewed the current and projected financial position of the Company, making
reasonable assumptions about interest and distribution income, future trading performance, valuation
projections and debt requirements On the basis of this review, the Directors have a reasonable
expectation that the Company has adequate resources to continue in operational existence for the
foreseeable future Accordingly, they continue to adopt the going concern basis in preparing the
Annual Report and accounts
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 auditor that it is independent; and
a review of fees paid to the auditor in respect of audit and non-audit services
23
Annual Report 2023 Remuneration Report
The remuneration report has been formed in accordance with the requirements of AIM rule 19 and
is not intended to comply with the UK statutory requirements
The Directors’ emoluments, benefits and shareholdings during the year ended 31 December 2023
were as follows:
Directors’ Emoluments
Each of the Directors has a service contract with the Company
Director
Date of
agreement
Fees
US $000
Benefits
US $000
Total emoluments
2023
US $000
2022
US $000
Richard Barry
Rosenberg
10 June 2005
Noam Lanir
10 June 2005
Ron Baron
1 September 2007
Augoustinos
Papathomas
1 February 2019
56
400
350
33
Directors’ Interests
Interests of Directors in ordinary shares
-
45
-
-
56
445
350
33
90
445
350
46
At 31 December 2023
At 31 December 2022
Number of
Ordinary
Shares
Percentage
of ordinary
share capital
Percentage of
voting rights *
Number of
Ordinary Shares
Percentage of
ordinary share
capital
Percentage of
voting rights *
Noam Lanir
123,048,011
70 39%
74 41%
123,048,011
70 39%
Ron Baron
25,456,903
14 56%
15 40%
25,456,903
14 56%
74 41%
15 40%
Richard
Barry
Rosenberg
16,046
0 01%
0 01%
16,046
0 01%
0 01%
*after consideration of the treasury shares
Noam Lanir has his interest in ordinary shares through direct or indirect ownership of the whole
24
Annual Report 2023 issued share capital of Groverton Management Limited Further information is provided in note 22
to the financial statements
Ron Baron has his interest in ordinary shares through ownership of the whole issued share capital
of Livermore Management Limited
Remuneration Policy
The Company’s policy has been designed to ensure that the Company has the ability to attract, retain and
motivate executive Directors and other 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 Company’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 Company, will be
taken into account, especially when determining annual salary increases
25
Annual Report 2023 Review of the Business and Risks
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 Company operates, and include economic recession, declining corporate
profitability, higher corporate default rates and lower than historical recoveries, rising inflation and
interest rates and excessive stock-market speculation
The Company’s portfolio is exposed to credit risk, interest rate changes, liquidity risk and volatility
particularly in the US In addition, the portfolio is exposed to currency risks as some of the underlying
portfolio is invested in assets denominated in non-US currencies while the Company’s functional
currency is USD Investments in certain emerging markets are especially exposed to governmental and
regulatory risks
The mitigation of these risks is achieved by following micro and macroeconomic trends and changes,
regular monitoring of underlying assets and price movements and investment diversification The
Company also engages from time to time in certain hedging activities to mitigate these risks
As of the date of this report, although inflation rates seem to have come down towards central bank
targets, they are still too high for comfort and therefore most developed economies remain in a high
interest rate environment High interest rates for a longer period of time can create increased credit
risk and lead to higher defaults and potential underperformance of our investments in Collateralized
Loan Obligations in the US The Company has mitigated risk by limiting reinvestment and retaining
higher amounts of cash in recent years The Company continues to be conservatively positioned with
52 9m of cash, deposits, and investments in US treasury bills as of 31 December 2023 and plans to
maintain strong liquidity and stay debt free
Recent geopolitical events, especially the 7 October 2023 attack on Israel and its subsequent response,
create heightened risk for the overall investment environment
Internal risks to shareholders and their returns are related to Portfolio risks (investment and geography
selection and concentration), balance sheet risk (gearing) and/or investment mismanagement risks
The Company’s portfolio has a significant exposure to senior secured loans of US companies and
therefore has a concentration risk to this asset class
A periodic internal review is performed to ensure transparency of Company activities and investments
All service providers to the Company 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 of the Company is currently invested in USD denominated assets, movements in other
currencies are expected to have a limited impact on the business
On the asset side, the Company’s exposure to interest rate risk is limited to the interest-bearing
deposits and portfolio of bonds and loans in which the Company invests Currently, the Company is
primarily invested in sub-investment grade corporate loans through CLOs, which exposes the Company
to credit risk (defaults and recovery rates, loan spreads over base rate) as well as liquidity risks in the
CLO market
26
Annual Report 2023
Management monitors liquidity to ensure that sufficient liquid resources are available to the Company
The Company’s credit risk is primarily attributable to its fixed income portfolio, which is exposed to
corporate bonds with a particular exposure to the financial sector and to US senior secured loans
Further information on financial risk management is provided in note 25 of the financial statements
Share Capital
There was no change in the authorised share capital during the year to 31 December 2023 The
authorised share capital is 1,000,000,000 ordinary shares with no par value
Related party transactions
Details of any transactions of the Company with related parties during the year to 31 December
2023 are disclosed in note 22 to the financial statements
By order of the Board of Directors
Chief Executive Officer
22 May 2024
27
Annual Report 2023 Independent Auditor’s Report to the
Members of Livermore Investments
Group Limited
Opinion
We have audited the consolidated financial statements of Livermore Investments Group Limited
and its subsidiary Livermore Capital AG (the ‘’Group’’), which are presented in pages 32 to 72
and comprise the Consolidated Statement of Financial Position as at 31 December 2023, and
the Consolidated Statement of Profit or Loss, Consolidated Statement of Comprehensive Income,
Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows for the
year then ended, and notes to the consolidated financial statements, including a summary of
significant accounting policies
In our opinion, the accompanying consolidated financial statements give a true and fair view of
the consolidated financial position of the Group as at 31 December 2023, and of its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European Union
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) Our
responsibilities under those standards are further described in the ‘’Auditor’s Responsibilities for
the Audit of the Consolidated Financial Statements’’ section of our report We are independent
of the Group in accordance with the International Ethics Standards Board for Accountants’ Code
of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that
are relevant to our audit of the consolidated financial statements in Cyprus, and we have fulfilled
our other ethical responsibilities in accordance with these requirements and the IESBA Code We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the consolidated financial statements of the current period These matters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters
28
Annual Report 2023 Investments’ valuation Level 3
The Key audit matter
How the matter was addressed in our audit
As per note 7 2 of the consolidated financial
statements, the Group has financial assets of
$12,3m (2022: $14m) classified within the fair
value hierarchy at level 3, as disclosed in note
7, where $6,5m relates to fund investments and
$5,8m to investments in subsidiaries The fair
value of level 3 financial assets is generally
determined on a basis of either third party
valuations, or when not
available, adjusted Net Asset (NAV) calculations
using inputs from third parties
Due to the use of significant
judgments
by the Board of Directors, the existence of
unobservable inputs and the significant total
value of financial assets within the level 3
hierarchy, we consider the valuation of these
investments as a key audit matter
Our audit work included, but was not restricted to:
Fund Investments:
In responding to the key audit matter, we
performed the following audit procedures:
•
•
•
•
obtained an understanding of the valuation
methodologies applied by the Board of directors
and assessed their appropriateness for each
investment
obtained third party confirmations indicating
either the NAV or fair value of the financial
assets and compared to recorded values and
fund’s financial statements
evaluated the independent professional valuer’s
competence, capabilities and objectivity
in cases where the valuations were performed
by the Board of Directors, evaluated the
reasonableness of the methodology applied and
verified the inputs used by comparing them to
third party sources; and considered the adequacy
of consolidated financial statement disclosures
in relation to the valuation methodologies
used for each class of level 3 financial assets
•
Investments in Subsidiaries:
In responding to the key audit matter,
we performed the following audit procedures:
obtained management accounts of
the
•
subsidiaries to identify their NAV; and evaluated
any significant change in the fair value of
investment
assessed
the management accounts of
the subsidiaries to determine whether the
disclosed NAV is fairly stated by obtaining
portfolio statements and land valuations from
independent valuers
evaluated and assessed the valuers’ competence,
capabilities and objectivity
considered the adequacy of consolidated
financial statement disclosures in relation to
the valuation methodologies used for each
class of level 3 financial assets
•
•
Key observations
We concluded that the judgements and estimates
used by the management in determining the fair
value of investments were reasonable and the
disclosures made in relation to these matters
in the consolidated financial statements were
appropriate
29
Annual Report 2023 Other Information
The Board of Directors is responsible for the other information The other information comprises
the information included in the Highlights, Chairman’s and Chief Executive’s Review, Review of
Activities, Report of the Directors, Corporate Governance Statement, Remuneration report, Review
of the Business and Risks, but does not include the consolidated financial statements and our
auditor’s report thereon
Our opinion on the consolidated financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon
In connection with our audit of the consolidated financial statements, our responsibility is to
read the other information and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements, or our knowledge obtained in the audit or
otherwise appears to be materially misstated If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact
We have nothing to report in this regard
Responsibilities of the Board of Directors for the Consolidated Financial Statements
The Board of Directors is responsible for the preparation of consolidated financial statements
that give a true and fair view in accordance with International Financial Reporting Standards as
adopted by the European Union, and for such internal control as the Board of Directors determines
is necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the Board of Directors either
intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so
Those charged with governance are responsible for overseeing the Group’s financial reporting
process
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion Reasonable assurance is a high level of
assurance but is not a guarantee that an audit conducted in accordance with ISAs will always
detect a material misstatement when it exists Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these consolidated financial
statements
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit We also:
•
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control
• Obtain an understanding of internal control relevant to the audit in order to design audit
30
Annual Report 2023 procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Board of Directors
•
• Conclude on the appropriateness of the Board of Directors’ use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s ability to
continue as a going concern If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report However, future
events or conditions may cause the Group to cease to continue as a going concern
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves a true and fair view
•
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements We are responsible for the direction, supervision and performance of the group
audit We remain solely responsible for our audit opinion
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication
Other Matter
This report, including the opinion, has been prepared for and only for the Group’s members as a body
and for no other purpose We do not, in giving this opinion, accept or assume responsibility for any
other purpose or to any other person to whose knowledge this report may come to
The engagement partner on the audit resulting in this independent auditor’s report is Mr Polyvios
Polyviou
Polyvios Polyviou
Certified Public Accountant and Registered Auditor
for and on behalf of
Grant Thornton (Cyprus) Ltd
Certified Public Accountants and Registered Auditors
Limassol, 22 May 2024
31
Annual Report 2023 Livermore Investments Group Limited
Consolidated Statement of Financial Position at 31 December 2023
Note
2023
US $000
2022
US $000
Assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Financial assets at fair value through profit or loss
Financial assets at fair value through other
comprehensive income
Investments in subsidiaries
Current assets
Trade and other receivables
Financial assets at fair value through profit or loss
Cash and cash equivalents
Total assets
Equity
Share capital
Share premium and treasury shares
Other reserves
Accumulated losses
Total equity
Liabilities
Current liabilities
Trade and other payables
Lease liability – current portion
Current tax payable
Total equity and liabilities
Net asset value per share
4
5
8
9
4
10
11
11
12
46
-
68,284
6,498
5,780
80,608
102
38,750
20,169
59,021
43
87
66,576
7,596
6,546
80,848
72
39,800
10,971
50,843
139,629
131,691
-
163,130
(22,027)
(5,266)
-
163,130
(21,214)
(14,191)
135,837
127,725
3,629
-
163
3,792
3,733
87
146
3,966
139,629
131,691
Basic and diluted net asset value per share (US $)
14
0 82
0 77
These financial statements were approved by the Board of Directors on 22 May 2024
The notes 1 to 27 form part of these consolidated financial statements
32
Annual Report 2023
Livermore Investments Group Limited
Consolidated Statement of Profit or Loss for the year ended 31 December 2023
Investment income
Interest and distribution income
Fair value changes of investments
Other income
Operating expenses
Other expenses
Operating profit / (loss)
Finance costs
Finance income
Profit / (loss) before taxation
Taxation charge
Profit / (loss) for the year
Earnings / (loss) per share
Note
2023
US $000
2022
US $000
16
17
18
23
19
19
20
24,054
(6,671)
17,383
294
(3,369)
(270)
23,665
(44,637)
(20,972)
-
(3,000)
-
14,038
(23,972)
(75)
156
14,119
(231)
13,888
(265)
42
(24,195)
(167)
(24,362)
Basic and diluted earnings / (loss) per share (US $)
21
0 08
(0 15)
The profit / (loss) for the year is wholly attributable to the owners of the parent
The notes 1 to 27 form part of these consolidated financial statements
33
Annual Report 2023
Livermore Investments Group Limited
Consolidated Statement of Comprehensive Income for the year ended 31 December 2023
Profit / (loss) for the year
Note
2023
US $000
2022
US $000
13,888
(24,362)
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss
Foreign exchange gains / (losses) on translation of consolidated
subsidiary
59
(29)
Items that are not reclassified subsequently to profit or loss
Financial assets designated at fair value through other
comprehensive income – fair value losses
5
(875)
(1,606)
Total comprehensive income / (loss) for the year
13,072
(25,997)
The total comprehensive income / (loss) for the year is wholly attributable to the owners of the parent
The notes 1 to 27 form part of these consolidated financial statements
34
Annual Report 2023 Livermore Investments Group Limited
Consolidated Statement of Changes in Equity for the year ended 31 December 2023
Note
Share
premium
US $000
Treasury
Shares
US $000
Translation
reserve
US $000
Investments
revaluation
reserve
US $000
Retained
earnings
US $000
Total
US $000
Balance at 1 January 2022
169,187
(6,057)
84
(18,110)
32,618
177,722
Dividends
Transactions with owners
Loss for the year
Other comprehensive income:
Financial assets at fair value through other
comprehensive income – fair value losses
Foreign exchange losses on translation
of consolidated subsidiary
Transfer of realised gains
Total comprehensive loss for the year
Balance at 31 December 2022
Dividends
Transactions with owners
17
13
169,187
Profit for the year
Other comprehensive income:
Financial assets at fair value through other
comprehensive income – fair value losses
5
Foreign exchange gains on translation of
consolidated subsidiary
Transfer of realised losses
17
Total comprehensive income for the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,057)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(24,000)
(24,000)
(24,000)
(24,000)
(24,362)
(24,362)
-
-
-
-
(1,606)
(29)
-
-
(1,553)
1,553
-
-
(1,606)
(29)
-
(29)
(3,159)
(22,809)
(25,997)
55
(21,269)
(14,191)
127,725
-
-
-
59
-
-
-
(4,960)
(4,960)
(4,960)
(4,960)
-
-
13,888
13,888
(875)
-
3
-
-
(3)
(875)
59
-
59
(872)
13,885
13,072
Balance at 31 December 2023
169,187
(6,057)
114
(22,141)
(5,266)
135,837
The notes 1 to 27 form part of these consolidated financial statements.
35
Annual Report 2023
Livermore Investments Group Limited
Consolidated Statement of Cash Flows for the year ended 31 December 2023
Cash flows from operating activities
Profit / (loss) before tax
14,119
(24,195)
Note
2023
US $000
2022
US $000
Adjustments for
Depreciation
Interest expense
Interest and distribution income
Bank interest income
Fair value changes of investments
Exchange differences
Changes in working capital
Increase in trade and other receivables
Decrease in trade and other payables
Cash flows used in operations
18
19
16
19
17
19
9
12
Interest and distributions received
16,19
Tax paid
Net cash from operating activities
Cash flows from investing activities
Acquisition of investments
Proceeds from sale of investments
Net cash used in investing activities
Cash flows from financing activities
Lease liability payments
Interest paid
Dividends paid
Net cash used in financing activities
4,5
4,5
19
13
98
55
102
36
(24,054)
(23,665)
(156)
6,671
20
(3,247)
(30)
(104)
(3,381)
24,210
(201)
20,628
(55,237)
48,973
(6,264)
(131)
(55)
(4,960)
(5,146)
(42)
44,637
229
(2,898)
(62)
(2,928)
(5,888)
23,707
(32)
17,787
(74,283)
46,729
(27,554)
(127)
(36)
(24,000)
(24,163)
36
Annual Report 2023 Net increase / (decrease) in cash and cash
equivalents
Note
2023
US $000
2022
US $000
9,218
(33,930)
Cash and cash equivalents at the beginning of the year
Exchange differences on cash and cash equivalents
Cash and cash equivalents at the end of the year
10,971
(20)
20,169
19
10
45,130
(229)
10,971
The notes 1 to 27 form part of these consolidated financial statements
37
Annual Report 2023
Notes to the Consolidated
Financial Statements
1. General Information
1 1 The Company was incorporated as an international business company and registered in
the British Virgin Islands (BVI) on 2 January 2002 under IBC Number 475668 The principal
legislation under which the Company operates is the BVI Business Companies Act, 2004
The liability of the members of the Company is limited
1 2 The registered office of the Company is located at Trident Chambers, PO Box 146, Road
Town, Tortola, British Virgin Islands
1 3 The Company is tax resident in the Republic of Cyprus
1 4 The principal activity of the Company is to carry out investment activities
2 Basis of preparation
The consolidated financial statements (“the financial statements”) of Livermore Investments
Group Limited have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) as adopted by the European Union (EU) The financial statements have
been prepared on an accrual basis (other than for cash flow information) using the significant
accounting policies and measurement bases summarised in note 3, and also on a going
concern basis
The financial information is presented in US dollars because this is the currency in which the
Company primarily operates (i e , the Company’s functional currency)
References to the Company hereinafter also include its consolidated subsidiary (note 8)
The Directors have reviewed the accounting policies used by the Company and consider them
to be the most appropriate
3. Accounting Policies
The significant accounting policies applied in the preparation of the financial statements are
as follows:
3 1 Adoption of new and revised IFRS
As from 1 January 2023, the Company adopted any applicable new or revised IFRS and
relevant amendments and interpretations which became effective, and also were endorsed
by the EU This adoption did not have any material impact on the Company’s financial
statements
The following IASB documents were issued by the date of authorisation of these financial
statements but are not yet effective for the year ended 31 December 2023, or have not yet
been endorsed by the EU by 31 December 2023:
38
Annual Report 2023
•
•
IFRS
Accountability: Disclosures”
“Subsidiaries without
19
Public
IFRS 18 “Presentation and Disclosure
Financial Statements”
in
• Amendments to
IAS 21: “The Effects of
Changes in Foreign Exchange Rates: Lack of
Exchangeability”
• Amendments to IAS 7 and IFRS 7: “Supplier
Finance Arrangements”
Endorsed by
EU
IASB
Effective date
No
No
No
No
1 January 2027
1 January 2027
1 January 2025
1 January 2024
• Amendments to IFRS 16: “Lease Liability in a
Sale and Leaseback”
Yes
1 January 2024
• Amendments to
IAS 1: “Classification of
Liabilities as Current or Non-current”
Yes
1 January 2024
• Amendments to IAS 1: “Non-current Liabilities
with Covenants”
Yes
1 January 2024
• Amendment to IFRS 10, and IAS 28: “Sale or
Contribution of Assets between an Investor and
its Associate or Joint Venture”
•
IFRS 14: “Regulatory Deferral Accounts”
No
No
postponed
indefinitely
1 January 2016
IFRS 18 is expected to affect the presentation of the Company’s financial statements when
becomes effective, however the Directors have not yet assessed the magnitude of its impact
The remaining pronouncements when become effective are not expected to have any material
effect on the financial statements
3 2
Investments in subsidiaries and basis of consolidation
Subsidiaries are entities controlled either directly or indirectly by the Company
Control is achieved where the Company is exposed, or has right, to variable returns from its
involvement with a subsidiary and has the ability to affect those returns through its power
over the subsidiary
The Directors have determined that Livermore meets the definition of an investment entity,
as this is defined in IFRS 10 “Financial Statements” As per IFRS 10, an investment entity is
an entity that:
(a) obtains funds from one or more investors for the purpose of providing those investors with
39
Annual Report 2023
(b)
investment management services;
commits to its investors that its business purpose is to invest funds solely for returns from
capital appreciation, investment income, or both; and
(c) measures and evaluates the performance of substantially all of its investments on a fair
value basis
An investment entity is exempted from consolidating its subsidiaries, unless any subsidiary
which is not itself an investment entity mainly provides services that relate to the investment
entity’s investment activities The financial statements consolidate the Company and one
of its subsidiaries providing such services (note 8 shows further details of the consolidated
and unconsolidated subsidiaries)
Investments in unconsolidated subsidiaries are initially recognised at their fair value and
subsequently measured at fair value through profit or loss Subsequently, any gains or
losses arising from changes in their fair value are included in profit or loss for the year
Dividends and other distributions from unconsolidated subsidiaries are recognised as
income when the Company’s right to receive payment has been established
A subsidiary that is not an investment entity itself and which provides services that relate
to the Company’s investment activities is consolidated rather than included within the
investments in subsidiaries measured at fair value through profit or loss
The financial statements of the consolidated subsidiary are prepared using uniform
accounting policies Where necessary, adjustments are made to the financial statements
of consolidated subsidiary to bring its accounting policies into line with those used by the
Company The consolidated subsidiary has a reporting date of 31 December
All transactions between the Company and its consolidated subsidiary and all resulting
balances, income and expenses are eliminated on consolidation
The results and cash flows of any consolidated subsidiary acquired or disposed of during
the year are consolidated from the effective date of acquisition or up to the effective date
of disposal
3 3 Interest and distribution income
•
•
Interest income is recognised based on the effective interest method
Distribution income is recognised on the date that the Company’s right to receive payment
is established, which in the case of quoted securities is the ex-dividend date
3 4 Foreign currency
The financial statements of the Company are presented in USD, which is the currency of
the primary economic environment in which it operates (its functional currency)
Transactions in foreign currencies are recorded at the rates of exchange prevailing on the
dates of the transaction Monetary assets and liabilities denominated in non-functional
currencies are translated into functional currency using year-end spot foreign exchange
40
Annual Report 2023
rates Non-monetary assets and liabilities are translated upon initial recognition using
exchange rates prevailing at the dates of the transactions Non-monetary assets that are
measured in terms of historical cost in foreign currency are not subsequently re-translated
Gains and losses arising on the settlement of monetary items and on the re-translation
of monetary items are included in the profit or loss for the year Those that arise on
the re-translation of non-monetary items carried at fair value are included in the profit
or loss of the year as part of the fair value gain or loss except for differences arising
on the re-translation of non-monetary financial assets designated at fair value through
other comprehensive income in respect of which gains and losses are recognised in other
comprehensive income For such non-monetary items any exchange component of that
gain or loss is also recognised in other comprehensive income
The results and financial position of the consolidated subsidiary, which has a functional
currency of Swiss Francs, are translated into the presentation currency as follows:
(a) assets and liabilities are translated at the closing rate at the reporting date;
(b)
income and expenses and also cash flows 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 the items are translated at the rates
prevailing at the dates of the transactions); and
exchange differences arising are recognised in other comprehensive income within the
translation reserve Such translation exchange differences are reclassified to profit or loss
in the period in which the foreign operation is disposed of
(c)
3 5 Taxation
Current tax is the tax currently payable based on taxable profit for the year in accordance
with the applicable tax laws
Current and deferred tax assets and liabilities are calculated at tax rates that are expected
to apply to their respective period of realisation, provided they are enacted or substantively
enacted as at the reporting date
3 6 Equity instruments
Equity instruments issued by the Company are recorded at proceeds received, net of direct
issue costs
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 received
Own equity instruments purchased by the Company, or its consolidated subsidiary are
recorded as treasury shares at the consideration paid, including transaction costs, and
they are deducted from total equity until they are sold or cancelled Where such shares are
subsequently sold, any consideration received is included in total equity
3 7 Financial assets
Financial assets are recognised when the Company becomes a party to the contractual
provisions of the financial instrument
A financial asset is derecognised only where the contractual rights to the cash flows
41
Annual Report 2023
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 Company 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 Company transfers substantially all the risks and rewards of ownership
of the asset, or if the Company neither retains nor transfers substantially all the risks and
rewards of ownership but does transfer control of that asset
The Company classifies its financial assets in the following measurement categories:
(a) those to be measured at fair value through profit or loss;
(b) those to be measured at fair value through other comprehensive income; and
(c)
those to be measured at amortised cost
At initial recognition, the Company measures a financial asset at its fair value plus, in the
case of a financial asset not at fair value through profit or loss, transaction costs that are
directly attributable to the acquisition of the financial asset Transaction costs of financial
assets carried at fair value through profit or loss are expensed in profit or loss
Financial assets at fair value through profit or loss
The Company classifies the following financial assets at fair value through profit or loss:
(a) equity investments that are held for trading;
(b) other equity investments for which the Directors have not elected to recognise fair value
gains and losses through other comprehensive income; and
(c) debt investments that do not qualify for measurement at either amortised cost or at fair
value through other comprehensive income
All financial assets within this category are measured at their fair value, with changes in
value recognised in the profit or loss when incurred
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income (OCI) comprise equity
securities which are not held for trading, and for which the Company has made an
irrevocable election at initial recognition to recognise changes in fair value through OCI
rather than profit or loss
Where the Company’s management has elected to present fair value gains and losses on
equity investments in other comprehensive income, there is no subsequent reclassification
of fair value gains and losses to profit or loss Dividends from such investments continue to
be recognised in profit or loss when the Company’s right to receive payments is established
Financial assets at amortised cost
Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost A gain
or loss on a financial asset that is measured at amortised cost is recognised in profit or loss
when the asset is derecognised or impaired Interest income from these financial assets is
recognised based on the effective interest rate method
The classification of debt instruments depends on the entity’s business model for managing
the financial assets and the contractual terms of the cash flows Financial assets with
embedded derivatives are considered in their entirety when determining whether their cash
42
Annual Report 2023
flows are solely payment of principal and interest
Impairment
The Company assesses the expected credit losses associated with its assets carried at
amortised cost, on a forward-looking basis The impairment methodology applied depends on
whether there has been a significant increase in credit risk For trade and other receivables
only, the Company applies the simplified approach permitted by IFRS 9, which permits
expected lifetime losses to be recognised from initial recognition of the receivables
Write offs
The Company writes off a financial asset when there is information indicating that the
counterparty is in severe financial difficulty and there is no realistic prospect of recovery,
e g , when the counterparty has been placed under liquidation or has entered into
bankruptcy proceedings Financial assets written off may still be subject to enforcement
activities, taking into account legal advice where appropriate Any recoveries made are
recognised in profit or loss
3 8 Financial liabilities
Financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the financial instrument
A financial liability is derecognised when it is extinguished, discharged, cancelled or
expires
Financial liabilities at amortised cost
Financial liabilities are measured initially at fair value plus transaction costs
After initial recognition financial liabilities are measured at amortised cost using the
effective interest rate method
3 9 Cash and cash equivalents
Cash comprises cash in hand and on demand deposits 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
three months or less
3 10 Segment reporting
In making investment decisions, Management assesses individual investments and then, in
analysing their performance, it receives and uses information for each investment product
separately rather than based on any segmental information Given that, Management
regards that all the Company’s activities fall under a single operating segment
3 11 Critical accounting judgments and key sources of estimation uncertainty
The preparation of financial statements in conformity with IFRS requires the use of
accounting estimates and requires management to exercise its judgement in the process of
applying the Company’s accounting policies It also requires the use of assumptions that
affect the reported amounts of assets and liabilities and disclosures at the reporting date
and the reported amounts of revenues and expenses during the reporting period Although
these estimates are based on management’s best knowledge of current events and actions,
actual results may ultimately differ
43
Annual Report 2023
Estimates and judgements are continually evaluated and are based on historical experience
and other factors, including expectations of future events that are believed to be reasonable
under the circumstances
Critical accounting judgements
(i)
Classification of financial assets
Management exercises significant judgement in determining the appropriate classification
of the financial assets of the Company The Directors determine the appropriate classification
of the Company’s financial assets based on Livermore’s business model An entity’s business
model refers to how an entity manages its financial assets in order to generate cash
flows, considering all relevant and objective evidence The factors considered include the
contractual terms and characteristics which are very carefully examined, and also the
Company’s intentions and expected needs for realisation of the financial assets
All investments (except from certain equity instruments that are designated at fair value
through other comprehensive income) are classified as financial assets at fair value through
profit or loss, because this reflects more fairly the way these assets are managed by the
Company The Company’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 Company’s Board of Directors and other key management
personnel
(ii) Consolidation of subsidiary
Management exercised significant judgment in determining which of the subsidiaries
that are not investment entities themselves, provide services that relate to the Company’s
investment activities and therefore need to be consolidated rather than included within
the investments in subsidiaries measured at fair value through profit or loss
Estimation uncertainty
Management, in preparing these financial statements, has not made any significant
estimates with a risk of material change in value in the next financial period
4. Financial assets at fair value through profit or loss
Non-current assets
Fixed income investments (CLOs)
68,284
66,576
2023
US $000
2022
US $000
Current assets
Fixed income investments
Public equity investments
36,718
2,032
38,750
37,519
2,281
39,800
For description of each of the above categories, refer to note 6
44
Annual Report 2023
The above investments represent financial assets that are mandatorily measured at fair value
through profit or loss
The Company treats its investments in the loan market through CLOs as non-current
investments as the Company generally intends to hold such investments over a period longer
than twelve months
The movement in financial assets at fair value through profit or loss during the year was as
follows:
At 1 January
Purchases
Sales
Settlements
Fair value losses
At 31 December
2023
US $000
106,376
53,463
(46,976)
-
(5,829)
2022
US $000
119,220
73,963
(19,662)
(23,514)
(43,631)
107,034
106,376
Credit Suisse, the second-largest bank in Switzerland, collapsed in March 2023 and
Switzerland’s regulatory authorities approved its takeover by the largest Swiss bank UBS
At that time Livermore owned USD 0 8m nominal of Credit Suisse Additional Tier 1 bonds
purchased at a cost of USD 0 675m (included within Fixed income investments) As a result of
the takeover, the bonds were permanently written down and the Company suffered a loss in
2023 of USD 0 578m (included within fair value losses above)
5. Financial assets at fair value through other comprehensive income
Non-current assets
Fund investments
2023
US $000
2022
US $000
6,498
7,596
For description of the above category, refer to note 6
The above investments are non-trading equity investments that have been designated at fair
value through other comprehensive income
45
Annual Report 2023
The movement in financial assets at fair value through other comprehensive income during
the year was as follows:
At 1 January
Purchases
Settlements
Fair value losses
At 31 December
2023
US $000
7,596
1,774
(1,997)
(875)
2022
US $000
12,435
320
(3,553)
(1,606)
6,498
7,596
6. Financial assets at fair value
The Company allocates its non-derivative financial assets at fair value (notes 4 and 5) as
follows:
•
Fixed income investments relate to fixed and floating rate bonds, perpetual bank debt,
investments in the loan market through CLOs, and investments in open warehouse facilities
• Public equity investments relate to investments in shares of companies listed on public
•
stock exchanges
Fund investments relate to investments in the form of equity purchases in both high
growth opportunities in emerging markets and deep value opportunities in mature markets
The Company generally invests directly in prospects where it can exert influence Main
investments under this category are in the fields of real estate
7. Fair value measurements of financial assets and liabilities
The table in note 7 2 presents financial assets and liabilities measured at fair value in the
consolidated statement of financial position in accordance with the fair value hierarchy This
hierarchy groups financial assets and liabilities into three levels based on the significance of
inputs used in measuring the fair value of the financial assets and liabilities The fair value
hierarchy has the following levels:
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that
the entity can access at the measurement date;
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly; and
• Level 3: unobservable inputs for the asset or liability
The level within which the financial asset is classified is determined based on the lowest
level of significant input to the fair value measurement
7.1 Valuation of financial assets
•
Fixed Income Investments (other than CLOs) and Public Equity Investments are valued per
their closing market prices on quoted exchanges, or as quoted by market maker
CLOs are valued based on the valuation reports provided by market makers CLOs are typically
•
46
Annual Report 2023
valued by market makers using discounted cash flow models The key assumptions for cash
flow projections include default and recovery rates, prepayment rates and reinvestment
assumptions on the underlying portfolios (typically senior secured loans) of the CLOs
Default and recovery rates: The amount and timing of defaults in the underlying
collateral and the amount and timing of recovery upon a default are key to the
future cash flows a CLO will distribute to the CLO equity tranche All else equal,
higher default rates and lower recovery rates typically lead to lower cash flows
Conversely, lower default rates and higher recoveries lead to higher cash flows
Prepayment rates: Senior
loans can be pre-paid by borrowers CLOs that are
within their reinvestment period may, subject to certain conditions, reinvest such
prepayments into other loans which may have different spreads and maturities CLOs
that are beyond their reinvestment period typically pay down their senior liabilities
from proceeds of such pre-payments Therefore, the rate at which the underlying
impacts the future cash flows that the CLO may generate
collateral prepays
Reinvestment assumptions: A CLO within its reinvestment period may reinvest proceeds
from loan maturities, prepayments, and recoveries into purchasing additional loans
The reinvestment assumptions define the characteristics of the loans that a CLO may
reinvest in These assumptions include the spreads, maturities, and prices of such loans
Reinvestment into loans with higher spreads and lower prices will lead to higher cash
flows Reinvestment into loans with lower spreads will typically lead to lower cash flows
Discount rate: The discount rate indicates the yield that market participants expect to receive
and is used to discount the projected future cash flows Higher yield expectations or discount
rates lead to lower prices and lower discount rates lead to higher prices for CLOs
Investments
converted
in
open warehouse
been
to CLOs, are valued based on an adjusted net asset valuation
facilities
have
that
not
yet
•
Fund investments are valued using market valuation techniques as determined by
the Directors, mainly on the basis of valuations reported by third-party managers
independent qualified
of such
property
investments
Underlying property values are determined based on their estimated market values
investments Real Estate entities are valued by
valuers with
relevant experience on
substantial
such
•
Investments in subsidiaries are valued at fair value as determined on a net asset valuation
basis The Company has determined that the reported net asset value of each subsidiary
represents its fair value at the end of the reporting period
47
Annual Report 2023
7.2 Fair value hierarchy
Financial assets measured at fair value are grouped into the fair value hierarchy as follows:
Fixed income
investments
Fund investments
Public equity
investments
Investments in
subsidiaries
2023
US $000
Level 1
2023
US $000
Level 2
2023
US $000
Level 3
2023
US $000
Total
2022
US $000
Level 1
2022
US $000
Level 2
2022
US $000
Level 3
2022
US $000
Total
36,718
68,284
-
105,002
37,519
66,576
-
104,095
-
2,032
-
-
-
-
6,498
6,498
-
-
2,032
2,281
5,780
5,780
-
-
-
-
7,596
7,596
-
2,281
6,546
6,546
38,750
68,284
12,278
119,312
39,800
66,576
14,142
120,518
The Company has no financial liabilities measured at fair value
The methods and valuation techniques used for the purpose of measuring fair value are
unchanged compared to the previous reporting year
No financial assets have been transferred between different levels
48
Annual Report 2023
Financial assets within level 3 can be reconciled from beginning to ending balances as follows:
At fair value
through OCI
At fair value
through
profit or loss
Investments in
subsidiaries
Fund
investment
US $000
Fixed Income
investments
US $000
12,435
320
(3,553)
7,584
15,930
(23,514)
At 1 January 2022
Purchases
Settlement
Losses recognised
in:
-
Profit or loss
-
- Other
comprehensive
income
At 1 January 2023
Purchases
Settlement
Losses recognised in:
-
Profit or loss
- Other
comprehensive
income
(1,606)
7,596
1,774
(1,997)
-
(875)
At 31 December 2023
6,498
-
-
-
-
-
-
-
-
US $000
7,196
356
-
(1,006)
-
6,546
76
-
(842)
-
Total
US $000
27,215
16,606
(27,067)
(1,006)
(1,606)
14,142
1,850
(1,997)
(842)
(875)
5,780
12,278
49
Annual Report 2023
The above losses recognised can be allocated as follows:
At fair value through
OCI
Investments in
subsidiaries
Fund
investment
US $000
US $000
Total
US $000
2022
Profit or loss
-
Financial assets held at
year-end
Other comprehensive income
-
Financial assets held at
year-end
Total losses for 2022
-
(1,006)
(1,006)
(1,606)
(1,606)
-
(1,606)
(1,006)
(2,612)
At fair value through
OCI
Investments in
subsidiaries
Fund
investment
US $000
US $000
Total
US $000
2023
Profit or loss
-
Financial assets held at
year-end
Other comprehensive income
-
Financial assets held at
year-end
Total losses for 2023
-
(875)
(875)
(842)
(842)
-
(842)
(875)
(1,717)
50
Annual Report 2023 The Company has not developed any quantitative unobservable inputs for measuring the fair
value of its level 3 financial assets at 31 December 2023 and 2022 Instead, the Company used
prices from third-party pricing information without adjustment
Fund investments within level 3 represent investments in private equity funds Their value
has been determined by each fund manager based on the funds’ net asset value Each fund’s
net asset value is primarily driven by the fair value of its underlying investments In all cases,
considering that such investments are measured at fair value, the carrying amounts of the
funds’ underlying assets and liabilities are considered as representative of their fair values
Investments in subsidiaries have been valued based on their net asset position The main
assets of the subsidiaries represent investments in the fields of real estate which are measured
at fair value and receivables from the Company itself as well as third parties Their net asset
value is considered as a fair approximation of their fair value
A reasonable change in any individual significant input used in the level 3 valuations is not
anticipated to have a significant change in fair values as above
8.
Investments in subsidiaries
Unconsolidated subsidiaries
At1 January
Additions
Fair value losses
At 31 December
2023
US $000
2022
US $000
6,546
76
(842)
5,780
7,196
356
(1,006)
6,546
Additions in both 2023 and 2022 relate to the fair value of amounts receivable from the
Company’s unconsolidated subsidiary Sandhirst Ltd, that were waived by the Company (note
22)
51
Annual Report 2023
Details of the investments in which the Company has a controlling interest at 31 December
2023 are as follows:
Name of Subsidiary
Place of
incorporation
Holding
Voting
rights and
shares held
Principal
activity
Consolidated subsidiary
Livermore Capital AG
Switzerland
Ordinary shares
100%
Administration
services
Unconsolidated subsidiaries
Livermore Properties Ltd
Mountview Holdings Ltd
British Virgin
Islands
British Virgin
Islands
Ordinary shares
100%
Ordinary shares
100%
Sycamore Loan Strategies Ltd Cayman Islands
Ordinary shares
100%
Livermore Israel Investments Ltd
Israel
Ordinary shares
100%
Sandhirst Limited
Cyprus
Ordinary shares
100%
PNG Trading Limited
Cyprus
Ordinary shares
100%
Holding of
investments
Investment
vehicle
Investment
vehicle
Holding of
investments
Holding of
investments
Trading in
investments
PNG Trading Limited was established on 11 October 2023 as a wholly owned subsidiary of
the Company Until 31 December 2023 the subsidiary remained inactive It became active in
2024
52
Annual Report 2023
9. Trade and other receivables
Financial items
Amounts due from related
parties (note 22)
Non-financial items
Prepayments
VAT receivable
2023
US $000
2022
US $000
16
78
8
102
-
66
6
72
No receivable amounts have been written-off during either 2023 or 2022
10. Cash and cash equivalents
Cash and cash equivalents included in the consolidated statement of cash flows comprise the
following at the reporting date:
Demand deposits
Cash at bank
2023
US $000
20,169
20,169
2022
US $000
10,971
10,971
The Company does not have any bank overdraft balances either at 31 December 2023 or
2022.
53
Annual Report 2023
11. Share capital
Authorised share capital
The Company has authorised share capital of 1,000,000,000 ordinary shares with no par value,
and no restrictions
Issued share capital
Ordinary shares with no par value
Number of
shares
Share premium
US $000
At 31 December 2023 and 2022
174,813,998
169,187
Treasury shares
At 31 December 2022 and 2023
Number of
shares
9,458,577
US $000
6,057
In the consolidated statement of financial position, the amount included as share premium
and treasury shares comprises of:
Share premium
Treasury shares
12. Trade and other payables
Financial items
Trade payables
Amounts due to related parties (note 22)
Legal settlement due (note 23)
Accrued expenses
2023
US $000
169,187
(6,057)
163,130
2022
US $000
169,187
(6,057)
163,130
2023
US $000
2022
US $000
229
3,058
270
72
3,629
63
3,283
-
387
3,733
13. Dividend
On 21 November 2023, the Company announced an interim dividend of USD 4 9m (USD 0 03 per
share) to members on the register as at 01 December 2023 The dividend was paid on 29 December
2023
The Board of Directors will decide future dividends based on profitability, liquidity requirements,
portfolio performance, market conditions, and the share price of the Company relative to its NAV
54
Annual Report 2023
14. Net asset value per share
Net asset value per share has been calculated by dividing the net assets attributable to
ordinary shareholders by the closing number of ordinary shares in issue during the relevant
financial periods
Net assets attributable to
ordinary shareholders (USD 000)
Closing number of ordinary
shares in issue
Basic net asset value per share
(USD)
Number of Shares
Ordinary shares
Treasury shares
Closing number of ordinary
shares in issue
2023
135,837
2022
127,725
165,355,421
165,355,421
0 82
0 77
174,813,998
(9,458,577)
174,813,998
(9,458,577)
165,355,421
165,355,421
The diluted net asset value per share equals the basic net asset value per share since no
potentially dilutive shares exist at 31 December 2023 and 2022
55
Annual Report 2023
15. Segment reporting
The Company’s activities fall under a single operating segment
The Company’s investment income and its investments are divided into the following
geographical areas:
Investment income / (losses)
Other European countries
United States
India
Asia
Investments
Other European countries
United States
India
Asia
2023
US $000
(132)
18,423
(7)
(901)
17,383
5,989
105,854
140
7,329
119,312
2022
US $000
(2,956)
(16,320)
-
(1,696)
(20,972)
6,850
105,577
-
8,091
120,518
Investment income / (losses), comprising interest and distribution income as well as fair value
gains or losses on investments, is allocated on the basis of the issuer’s location Investments
are also allocated based on the issuer’s location
The Company has no significant dependencies, in respect of its investment income, on any
single issuer
16. Interest and distribution income
Interest from investments
Distribution income
2023
US $000
1,921
22,133
24,054
2022
US $000
1,207
22,458
23,665
56
Annual Report 2023
Interest and distribution income is analysed between different categories of financial assets,
as follows:
2023
Distribution
income
US $000
Interest
US $000
2022
Total
US $000
Interest
US $000
Distribution
income
US $000
Total
US $000
Financial assets at
fair value
through profit or loss
Fixed income
investments
Public equity
investments
1,921
21,690
23,611
1,207
22,282
23,489
-
443
443
-
176
176
1,921
22,133
24,054
1,207
22,458
23,665
The Company’s distribution income derives from multiple issuers The Company does not have
concentration to any single issuer
17. Fair value changes of investments
Fair value losses on financial
assets through profit or loss
Fair value losses on investments
in subsidiaries
Fair value (losses) / gains on
derivatives
2023
US $000
(5,808)
(842)
(21)
(6,671)
2022
US $000
(43,782)
(1,006)
151
(44,637)
57
Annual Report 2023
The investments disposed of had the following cumulative (i e , from the date of their acquisition
up to the date of their disposal) financial impact in the Company’s net asset position:
Disposed in 2023
Disposed in 2022
Realised
(losses)/
gains*
US $000
Cumulative
distribution or
interest
US $000
Total
financial
impact
US $000
Realised
(losses)/
gains*
US $000
Cumulative
distribution
or interest
US $000
Total
financial
impact
US $000
Financial assets
at fair value
through profit or
loss
Fixed income
investments
Public equities
Derivatives
Financial assets
at fair value
through OCI
Private equities
513
41
(21)
533
(3)
530
972
1,485
-
-
41
(21)
972
1,505
-
(3)
972
1,502
(5)
1,430
151
1,576
1,553
3,129
524
62
-
586
-
586
519
1,492
151
2,162
1,553
3,715
* difference between disposal proceeds and original acquisition cost
18. Operating expenses
Directors’ fees and expenses
Other salaries and expenses
Professional fees
Legal expenses
Bank custody fees
Office costs
Depreciation
Other operating expenses
Audit fees
Tax fees
2023
US $000
884
234
1,156
6
156
276
98
479
78
2
2022
US $000
932
237
822
13
139
237
102
441
75
2
3,369
3,000
58
Annual Report 2023
Throughout 2023 the Company employed 4 members of staff (2022: 4) Two of those members are
the Company’s executive Directors
Other salaries and expenses include USD 20,034 of social insurance and similar contributions (2022:
USD 18,802), as well as USD 5,002 of defined contributions plan costs (2022: USD 4,508)
19. Finance costs and income
Finance costs
Bank interest expense
Foreign exchange losses
Finance income
Bank interest income
20. Taxation
Current tax charge
2023
US $000
2022
US $000
55
20
75
156
36
229
265
42
2023
US $000
231
2022
US $000
167
The Company is a tax resident in the Republic of Cyprus and is subject to taxation under the tax
laws and regulations in Cyprus
The current tax charge relates to the results of the Company for 2023, as explained above, and
the Company’s consolidated subsidiary in Switzerland (note 8)
59
Annual Report 2023
21. Earnings / (loss) per share
The basic earnings / (loss) per share has been calculated by dividing the profit / (loss) for the year
attributable to ordinary shareholders of the Company by the weighted average number of ordinary
shares in issue of the Company during the relevant financial year
Profit / (loss) for the year attributable
to ordinary shareholders of the parent
(USD 000)
Weighted average number of ordinary
shares outstanding
2023
2022
13,888
(24,362)
165,355,421
165,355,421
Basic earnings / (loss) per share (USD)
0 08
(0 15)
The diluted earnings / (loss) per share equals the basic earnings / (loss) per share since no
potentially dilutive shares were in existence during 2023 and 2022
60
Annual Report 2023
22. Related party transactions
The Company is controlled by Groverton Management Ltd, an entity owned by Noam Lanir, which
at 31 December 2023 held 74 41% (2022: 74 41%) of the Company’s voting rights
Amounts receivable from key management
Directors’ current accounts
16
-
(1)
2023
US $000
2022
US $000
Amounts payable to unconsolidated
subsidiary
Livermore Israel Investments Ltd
(3,046)
(3,046)
Amounts payable to key management
Directors’ current accounts
Amounts payable to other related party
Loan payable
Key management compensation
Short term benefits
Executive Directors’ fees
Non-executive Directors’ fees
Non-executive Directors’ reward payments
Other key management fees
(12)
-
795
89
-
408
1,292
(88)
(149)
795
87
50
385
1,317
(2)
(2)
(3)
(4)
(5)
(1) The Directors’ current accounts with debit balances are interest free, unsecured, and have no stated
repayment date
(2) The amounts payable to unconsolidated subsidiary and Directors current accounts with credit
balances are interest free, unsecured, and have no stated repayment date
(3) A loan of USD 0 149m was payable to a related company (under common control) Chanpak Ltd
During 2023, the right to receive the loan amount was assigned by Chanpak Ltd to Noam Lanir At
the same time, the Company agreed with Noam Lanir to transfer the outstanding loan amount to his
Director current account This loan in 2022 was included within trade and other payables (note 12)
(4) These payments were made directly to companies which are related to the Directors
(5) Other key management fees are included within professional fees (note 18)
During 2023, the Company waived a receivable amount of USD 0 076m from its subsidiary
Sandhirst Ltd, as a means of capital contribution to the subsidiary Similarly in 2022, the
Company waived a receivable amount of USD 0 356m, as a means of capital contribution to
the subsidiary (note 8)
61
Annual Report 2023
No social insurance and similar contributions nor any other defined benefit contributions plan
costs were incurred for the Company in relation to its key management personnel in either
2023 or 2022
23. Litigation
Fairfield Sentry Ltd vs custodian bank and beneficial owners
One of the custodian banks that the Company used faced a litigation in a US court with a
claim up to USD 2 1m plus interest and related legal fees, with regards to the redemption
of shares in Fairfield Sentry Ltd, which were bought in 2008 at the request of Livermore and
on its behalf If the claim proved to be successful, Livermore would have to compensate the
custodian bank since the transaction was carried out on Livermore’s behalf The same case
was also filed in BVI where the Privy Council ruled against the plaintiffs
In December 2023, Livermore came into an out-of-court settlement agreement for USD 0 27m,
which was fully paid in January 2024
24. Commitments
The Company has expressed its intention to provide financial support to its subsidiaries, where
necessary, to enable them to meet their obligations as they fall due
Other than the above, the Company has no capital or other commitments at 31 December
2023
25. Financial risk management objectives and policies
Background
The Company’s financial instruments comprise financial assets at fair value through profit or
loss, financial assets at fair value through other comprehensive income, and financial assets
and liabilities at amortised cost that arise directly from its operations For an analysis of
financial assets and liabilities by category, refer to note 26
Risk objectives and policies
The objective of the Company is to achieve growth of shareholder value, 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 Company
Risks associated with financial instruments
Foreign currency risk
Foreign currency risks arise in two distinct areas which affect the valuation of the investment
portfolio:
1) where an investment is denominated and paid for in a foreign currency; and
2) where an investment has substantial exposure to non-US Dollar underlying assets or cash
flows denominated in a foreign currency
The Company in general does not hedge its currency exposure The Company discretionally and
partially hedges against foreign currency movements affecting the value of the investment
portfolio based on its view on the relative strength of certain currencies Any hedging
transactions represent economic hedges; the Company does not apply hedge accounting in any
case Management monitors the effect of foreign currency fluctuations through the pricing
of the investments The Company’s exposure to financial instruments denominated in foreign
62
Annual Report 2023
currencies is the following:
2023
US $000
2023
US $000
2023
US $000
2022
US $000
2022
US $000
2022
US $000
Financial
assets
Financial
liabilities
Net value
Financial
assets
Financial
liabilities
Net value
British Pounds (GBP)
Euro
Swiss Francs (CHF)
Israel Shekels (ILS)
Japanese Yen (JPY)
Others
Total
2,867
2,083
10
4,690
4,661
21
-
(58)
(88)
(3,046)
-
-
2,867
2,025
(78)
1,644
4,661
21
2,624
127
1,509
5,451
-
-
(122)
2,502
(89)
(70)
(3,046)
-
-
38
1,439
2,405
-
-
14,332
(3,192)
11,140
9,711
(3,327)
6,384
Also, some of the USD denominated investments are backed by underlying assets which
are invested in non-USD assets For instance, investments in certain emerging market
private equity funds are denominated in USD but the funds in turn have invested in assets
denominated in non-USD currencies
A 10% increase of the following currency rates against the rate of United States Dollar (USD)
at 31 December 2023 would have the following impact A 10% decrease of the following
currencies against USD would have an approximately equal but opposite impact
2023
US $000
2023
US $000
2023
US $000
2022
US $000
2022
US $000
2022
US $000
Profit
or loss
Other
comprehensive
income
Equity
Profit
or loss
Other
comprehensive
income
Equity
British Pounds (GBP)
Euro
Swiss Francs (CHF)
Israel Shekels (ILS)
Japanese Yen (JPY)
194
202
(8)
164
466
93
-
-
-
-
287
202
(8)
164
466
250
4
144
240
-
Total
1,018
93
1,111
638
-
-
-
-
-
-
250
4
144
240
-
638
The above analysis assumes that all other variables in particular, interest rates, remain constant
Interest rate risk
The Company is exposed to interest rate risk on its interest-bearing instruments which are
63
Annual Report 2023
affected by changes in market interest rates
At 31 December 2023 and 31 December 2022, the Company had no financial liabilities that
bore an interest rate risk
Interest rate changes will also impact equity prices The level and direction of changes in
equity prices are subject to prevailing local and world economics as well as market sentiment
all of which are very difficult to predict with any certainty
The Company has fixed and floating rate financial assets including bank balances that bear
interest at rates based on the banks floating interest rates In particular, the fair value of
the Company’s fixed rate financial assets is likely to be negatively impacted by an increase in
interest rates The interest income of the Company’s floating rate financial assets is likely to
be positively impacted by an increase in interest rates
The Company has exposure to US bank loans through CLO equity tranches as well as through
warehousing facilities An investment in the CLO equity tranche or first loss tranche of a
warehouse represents a leveraged investment into such loans As these loans (assets of a CLO)
and the liabilities of a CLO are floating rate in nature (typically 3-month LIBOR as the base
rate), the residual income to CLO equity tranches and warehouse first loss tranches is normally
linked to the floating rate benchmark and thus normally do not carry substantial interest rate
risk
The Company’s financial assets affected by interest rate changes are as follows:
Financial assets – subject to:
- fair value changes
- interest changes
Total
2023
US $000
4,067
20,169
24,236
2022
US $000
4,616
10,971
15,587
64
Annual Report 2023
An increase of 1% (100 basis points) in interest rates would have the following impact in
profit or loss and consequently to equity as well An equivalent decrease would have an
approximately equal but opposite impact There would be no impact in other comprehensive
income
Financial assets:
- fair value changes
- interest changes
Total
2023
US $000
Profit or loss
2022
US $000
Profit or loss
(533)
202
(331)
(657)
110
(547)
The above analysis assumes that all other variables, in particular currency rates, remain constant
Market price risk
By the nature of its activities, most of the Company’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
The Company had no single major financial instrument that in absolute terms and as
a proportion of the portfolio could result in a significant reduction in the NAV and share
price Due to the very low exposure of the Company to public equities, and having no specific
correlation to any market, the equity price risk is low The portfolio as a whole does not
correlate exactly to any Index
Management of risks is primarily achieved by having a diversified portfolio to spread the
market price risk The Company mainly has investments in CLO equity tranches as well as first
loss tranches of warehouse facilities Investments in the equity tranche of US CLOs represent
a levered exposure to senior secured corporate loans in the US, and are thus subject to many
risks including but not limited to lack of liquidity, credit or default risk, and risks related to
movements in market prices as well as the variations of risk premium in the market
Prices of these CLO investments may be volatile and will generally fluctuate due to a variety
of factors that are inherently difficult to predict, including but not limited to changes in
prevailing credit spreads and yield expectations, interest rates, underlying portfolio credit
quality and market expectations of default rates on non-investment grade loans, general
economic conditions, financial market conditions, legal and regulatory developments, domestic
and international economic or political events, developments or trends in any particular
industry, and the financial condition of the obligors that constitute the underlying portfolio
A 10% uniform change in the value of the Company’s portfolio of financial assets would result
in a 8 35% change in the net asset value at 31 December 2023 (2022: 6 67%), and would have
the following impact in profit or loss and consequently to equity as well (either positive or
negative, depending on the corresponding sign of the change) There would be no impact in
other comprehensive income
65
Annual Report 2023
2023
US $000
Profit
or loss
2023
US $000
Other
comprehensive
income
2022
US $000
2022
US $000
Profit or loss
Other
comprehensive
income
-
650
-
10,699
10,699
-
650
7,758
7,758
760
*
760
Financial assets at
fair value through
other comprehensive
income
Financial assets at
fair value through
profit or loss
Derivatives
The Investment Manager may use derivative instruments in order to mitigate market risk or
to take a directional investment These provide a limited degree of protection and would not
materially impact the portfolio returns if a large market movement did occur
No derivatives were held either at 31 December 2023 or 2022
Credit risk
The Company invests in a wide range of securities with various credit risk profiles including
investment grade securities and sub investment grade positions The investment manager
mitigates the credit risk via diversification across issuers However, the Company is exposed to
a migration of credit rating, widening of credit spreads and default of any specific issuer
The Company 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 management 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 Company is mainly exposed to credit risk in respect of its fixed income investments
(mainly CLOs) and to a lesser extend in respect of its financial assets at amortised cost, and
other instruments held for trading (perpetual bonds)
The Company has exposure to US senior secured loans and to a lesser degree emerging market
loans through CLO equity tranches as well as warehouse first loss tranches These loans are
primarily non-investment grade loans or interests in non-investment grade loans, which are
subject to credit risk among liquidity, market value, interest rate, reinvestment and certain
other risks It is anticipated that these non-investment grade loans generally will be subject
to greater risks than investment grade corporate obligations
A non-investment grade loan or debt obligation or an interest in a non-investment grade
66
Annual Report 2023
loan is generally considered speculative in nature and may become a defaulted security for
a variety of reasons A defaulted security may become subject to either substantial workout
negotiations or restructuring, which may entail, among other things, a substantial reduction
in the interest rate, a substantial write-down of principal, and a substantial change in the
terms, conditions and covenants with respect to such defaulted security In addition, such
negotiations or restructuring may be quite extensive and protracted over time, and therefore
may result in substantial uncertainty with respect to the ultimate recovery on such defaulted
security Bank loans have historically experienced greater default rates than has been the case
for investment grade securities
The Company has no investment in sovereign debt at 31 December 2023 or 2022
No collaterals are held by the Company itself in relation to the Company’s financial assets
subject to credit risk
The Company’s maximum credit risk exposure at 31 December 2023 and 2022 is as follows:
Financial assets:
At amortised cost
Trade and other receivables
Cash at bank
At fair value through profit or loss
2023
US $000
2022
US $000
16
20,169
104,955
125,140
-
10,971
104,099
115,070
The fair values of the above financial assets at fair value through profit or loss are also
affected by the credit risk of those instruments However, it is not practical to provide an
analysis of the changes in fair values due to the credit risk impact for the year or previous
periods, nor to provide any relevant sensitivity analysis
At 31 December 2023 and 2022 the credit rating distribution of the Company’s asset portfolio
subject to credit risk was as follows:
67
Annual Report 2023
Rating
AA+
AA
A
B
B+
BB
BB+
BBB
BB-
BBB-
Not Rated
2023
2022
US $000
Percentage
US $000
Percentage
32,651
11,932
6,266
3,979
765
2,466
845
1,746
10,402
4,999
49,089
125,140
26 1%
9 5%
5 0%
3 2%
0 6%
2 0%
0 7%
1 4%
8 3%
4 0%
39 2%
100%
28,800
9,812
446
5,347
735
6,108
842
908
805
618
60,649
115,070
25 0%
8 5%
0 5%
4 6%
0 6%
5 3%
0 7%
0 8%
0 7%
0 6%
52 7%
100%
Included within “not rated” amounts are investments in loan market through CLOs (equity
tranches) of USD 49 073m (2022: CLOs of USD 60 649m)
The modelled internal rates of return on the CLO portfolio as well as the warehouse first loss
tranches are in low teens percentage points
Liquidity risk
The following table summarizes the contractual cash outflows in relation to the Company’s
financial liabilities according to their maturity
Carrying amount
US $000
Less than 1 year
US $000
31 December 2023
Trade and other payables
3,629
3,629
Carrying amount
US $000
Less than 1 year
US $000
31 December 2022
Trade and other payables
3,733
3,733
68
Annual Report 2023
A small proportion of the Company’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
There is currently no exchange traded market for CLO securities and they are traded over-the-counter
through private negotiations or auctions subject to market conditions Currently the CLO market is
liquid, but in times of market distress the realization of the investments in CLOs through sales may be
below fair value
Management takes 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
At 31 December 2023, the Company had liquid investments totalling USD 127 2m, comprising of USD
20 2m in cash and cash equivalents, USD 68 3m in investments in loan market through CLOs, USD
36 7m in other fixed income investments, USD 2 0m in public equities Management structures and
manages the Company’s portfolio based on those investments which are considered to be long term,
core investments and those which could be readily convertible to cash, are expected to be realised
within normal operating cycle and form part of the Company’s treasury function
Capital management
The Company considers its capital to be its total equity (i e , its share capital and all of its
reserves)
The Company manages its capital to ensure that it will be able to continue as a going
concern while maximising the return to shareholders through the optimisation of the balance
between its net debt and equity As at 2023 the Company has no borrowings During 2022, the
Company’s only borrowing is a loan payable to a related party of USD 0 149m (note 22) and
therefore to a significant extent it is capital funded
Net debt to equity ratio is calculated using the following amounts as included on the
consolidated statement of financial position, for the reporting periods under review:
Borrowings
Cash at bank
Net Debt
Total equity
Net debt to equity ratio
2023
US $000
-
(20,169)
(20,169)
135,837
(0 15)
2022
US $000
149
(10,971)
(10,822)
127,725
(0 08)
69
Annual Report 2023
26. Financial assets and liabilities by class
Note
2023
US $000
2022
US $000
Financial assets:
Financial assets at amortised cost
9, 10
20,185
10,971
Financial assets at fair value through
profit or loss
Financial assets designated at fair value
through other comprehensive income
4
5
107,034
106,376
6,498
7,596
133,717
124,943
Financial liabilities:
Financial liabilities at amortised cost
12
3,629
3,733
The carrying amount of the financial assets and liabilities at amortised cost approximates to
their fair value
27 Events after the reporting date
The following non-adjusting event occurred after 31 December 2023:
• During 2024 the Company invested an amount of USD 24 7m to two new warehouse facilities
Both warehouses are still open as at the date of approval of these financial statements
There were no other material events after the end of the reporting year, which have a bearing
on the understanding of these financial statements
70
Annual Report 2023
Shareholder Information
Registrars
All enquiries relating to shares or shareholdings should be addressed to:
Link Asset Services
34 Beckenham Road
Beckenham
Kent BR3 4TU
Telephone: 0871 664 0300
Facsimile: 020 8639 2342
Change of Address
Shareholders can change their address by notifying Link Asset Services 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 Link
Asset Services
Lost Share Certificate
If your share certificate is lost or stolen, you should immediately contact Link Asset Services on
0871 664 0300 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
Link Asset Services on 0871 664 0300
Please note that the Directors of the Company are not seeking to encourage shareholders to either
buy or sell the Company’s shares
71
Annual Report 2023
Corporate Directory
Secretary
Chris Sideras
Registered Office
Trident Chambers
PO Box 146
Road Town
Tortola
British Virgin Islands
Company Number
475668
Registrars
Link Asset Services
34 Beckenham Road
Beckenham
Kent BR3 4TU
England
Auditor
Grant Thornton (Cyprus) Ltd
41-49, Agiou Nicolaou Street
Nemeli Court – Block C
2408 Engomi Nicosia
Solicitors
Travers Smith
10 Snow Hill
London
EC1A 2AL
England
Broker
Zeus Capital Limited
125 Old Broad Street
London
EC2N 1AR
England
Nominated And Financial Adviser
Strand Hanson Limited
26 Mount Row
London
W1K 3SQ
England
Principal Bankers
Banque J. Safra Sarasin (Luxembourg) SA
17 - 21, Boulevard Joseph II L-1840
Luxembourg
CBH Compagnie Bancaire Helvétique SA
Löwenstrasse 29 Zurich 8021
Switzerland
Credit Suisse AG
Seeefldstrasse 1
Zurich 8070
Switzerland
UBS AG
Paradeplatz 6
CH-8098 Zürich
Switzerland
Bank Julius Baer & Co. Ltd.
Bahnhofstrasse 36,
CH-8010 Zurich,
Switzerland
72
Annual Report 2023
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