LIVERMORE INVESTMENTS GROUP LIMITED

UNAUDITED INTERIM RESULTS FOR SIX MONTHS ENDED 30 JUNE 2022

Livermore Investments Group Limited (the "Company" or "Livermore") today announces its unaudited interim results for the six months ended 30 June 2022. These results will be made available on the Company's website today.

For further investor information please go to www.livermore-inv.com.

Enquiries:

Livermore Investments Group Limited                                                         +41 43 344 3200

Gaurav Suri

Strand Hanson Limited (Financial and Nominated Adviser)                       +44 (0)20 7409 3494

Richard Johnson / Ritchie Balmer

Arden Partners plc (Broker)                                                                           +44 (0)20 7614 5900

Chairman's and Chief Executive's Review

Introduction

We are pleased to announce the interim financial results for Livermore Investments Group Limited (the "Company" or "Livermore") for the six months ended 30 June 2022. References to the Company hereinafter also include its consolidated subsidiaries (note 8). 

The economic environment of 2022 can be characterized as a period of indigestion from the monetary and fiscal policy largesse in the previous years. Inflation has risen to multi-decade highs. The inflation situation has been further complicated by the energy cost shock emanating from sanctions applied to Russia on its war in Ukraine. Developed economy central banks are therefore being forced to apply the economic breaks and increase interest rates in a bid to contain inflation. Financial markets have tumbled with both fixed income and equity markets recording significant losses in 2022. The US Dollar has rallied against most developed world currencies and is at multi-year highs as the US Federal Reserve leads the monetary policy tightening race.

While management had expected US Federal Reserve to increase rates in the US, Russia's aggression in Ukraine and the significant resulting sanctions portended a potentially ominous path for economic growth. With government bonds offering extremely low to negative yields at the start of the year, rate increases implied negative returns on government bonds and fixed rate instruments in the near future. At the same time, equity markets face a decline in lofty price/earnings multiples while earnings remain under margin pressure. Management therefore decided to reduce risk and rapidly and successfully converted its two open warehouses into new issue CLOs at amongst the lowest financing costs in 2022. As of 30^th June 2022, management had significantly de-risked its portfolio and had no open warehouse positions. Further, management increased cash and short term investments to USD 37.3m allowing the Company to benefit from opportunistic trading and price dislocations. The Company started the year with USD 45.1m cash on its balance sheet received about USD 13.6m from its CLO and warehouse portfolio, divested about USD 7.6m in investments and returned USD 24.0m to shareholders via dividends during the period.

During the period, US loans held up relatively well as their floating rate component guards against rising rates. Further, there are only a few maturities in the near term as most borrowers took advantage of strong markets in 2021 and extended their loan maturities. On the other hand, these borrowers will be expected to pay more interest costs in the future and may face earnings reductions and liquidity issues in 2023 and management is focused on such situations as they arise. CLO equity valuations have declined during the period, especially for positions with reinvestment periods ending in near-term as CLO managers lose some flexibility to manage the portfolios in these positions.

During the first half of 2022, the Company recorded a net loss of USD 21.6m (30 June 2021: gain of USD 15.5m) as cashflow from the Company's CLO and warehouse portfolio was offset by valuation declines of USD 32.7m. The Company distributed an interim dividend of USD 24.0m during the period.

The NAV of the Company stood at USD 0.79 per share as 30 June 2022 after returning USD 24.0m to shareholders through dividend distributions (30 Jun 2021: NAV per share USD 1.00). The losses relate largely to mark-to-market declines of its CLO portfolio offset by net carry from CLO positions and warehouses. During the first half of 2022, the CLO and warehousing portfolio generated USD 13.6m in cash and USD 32.7m in net valuation declines. Management continues to actively manage the financial portfolio and remains in frequent contact with CLO managers with a view to optimizing exposure to US credit markets.

Financial Review

The NAV of the Company as at 30 June 2022 was USD 130.0m (30 June 2021: USD 164.4m). The loss after tax for the first half of 2022 was USD 21.7m, which represents loss per share of USD 0.13. The loss relates largely to the period end valuations of the CLO portfolio and exposure to leveraged loans.

Livermore's Strategy

The Company's primary investment objective is to generate high current income and regular cash flows. The financial portfolio is constructed around fixed income instruments such as Collateralized Loan Obligations ("CLOs") and other securities or instruments with exposure primarily to senior secured and usually broadly syndicated US loans.  The Company has a long-term oriented investment philosophy and invests primarily with a buy-and-hold mentality, though from time to time the Company will sell investments to realize gains or for risk management purposes.

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. 

Dividend & Buyback

On 5 January 2022, the Board announced an interim dividend of USD 24.0m (USD 0.145 per share) to members on the register on 14 January 2022. The dividend was paid on 7 February 2022.

The Board of Directors will decide on the Company's dividend policy for 2022 based on profitability, liquidity requirements, portfolio performance, market conditions, and the share price of the Company relative to its NAV.

29 September 2022

Review of Activities

Economic & Investment Environment

After years of low inflation, the powerful global monetary and fiscal policy responses to the COVID-19 pandemic have finally reignited fears of persistently high inflation. Economic sanctions on Russia, as it wages a war in Ukraine, have driven energy costs higher - adding further fuel to the inflation fire. Already in November 2021, the US Federal Reserve recognized that inflation was no longer a transitory phenomenon and was running too hot, yet it surprisingly kept interest rates unchanged and continued its bond buying programme until March 2022. The result - a 9.1% increase in US Consumer Price Index (CPI), a 9.4% increase in the UK CPI, and an 8.6% increase in euro area inflation rate. Central bankers have once again found themselves behind the curve on inflation, and the cost of catching up and ensuring inflation does not become entrenched may well be significant economic pain and unemployment.

The global economy grew much more slowly since the beginning of 2022. Although unemployment continued to decline in many countries, and in most advanced economies is now back around pre-pandemic lows, high level of inflation and uncertainty from the war in Ukraine had a curbing effect, weighing on purchasing power and reducing demand.

In the US, GDP fell in the first quarter by 1.5% primarily reflecting weak growth in exports due to another pandemic wave and supply chain issues. Unemployment at 3.6% in June is back near its pre-pandemic lows in 2019. Inflation continued to increase in the US reaching a 40-year high of 9.1% increase in June Consumer Price Index. The elevated level of inflation is partly attributable to higher energy and food prices, due to the war in Ukraine. However, core inflation also rose further across the board and stood at 5.9% in June. The US Federal Reserve, in a bid to contain inflation, has vowed to aggressively raise rates and increased its target range for the federal funds rate in March by 25 basis points, 50 basis points in May and by 75 basis points in June, to 1.5 - 1.75%. Further, the Federal Reserve started reducing its balance sheet and signalled additional interest rate hikes to curb inflation.

In the euro area, GDP expanded by 0.7% and 0.8% in the first and second quarter of 2022 respectively. Employment figures in the euro area increased further with unemployment at 6.8% in January and in April, which was lower than its pre-pandemic level. While GDP grew in most member states, it declined in Germany as a result of tightened pandemic containment measures. Manufacturing also recorded slight growth, despite having been burdened for some time by the global shortage of intermediate products. Exports continued to recover and inventory levels increased substantially. However, the war in Ukraine is likely to have a lasting impact on future economic development. Consumer sentiment has deteriorated considerably since the war began, particularly also as higher energy and food prices are weighing on households' real incomes. Furthermore, the war has led to additional supply bottlenecks in manufacturing. Consumer price inflation in the euro area advanced further in recent months and stood at 8.6% in May driven by high energy and food prices which increased substantially with the outbreak of the war in Ukraine. Although the European Central Bank left its key interest rates unchanged in March, it announced its decision to wind down the net purchases under its asset purchase programme (APP) faster than planned. In addition, In June, the European Central Bank decided to end net asset purchases under its asset purchase programme (APP) as of 1 July.

Financial market sentiment declined and volatility increased considerably since the beginning of 2022. Expectations of a faster normalisation of monetary policy in the advanced economies, the war in Ukraine and China's continued zero-COVID policy weighted heavily on fixed income and equity markets. As of 30 June 2022, the SPX 500 Index had declined by 21%, the NASDAQ Composite by 30.3%, and the EuroStoxx 50 Index by 20.2%. Yields on ten-year government bonds in advanced economies rose significantly at the turn of the year, as market participants expected a stronger monetary policy response to rising inflation. The US 10 year bond yield increased from 1.51% to 3.01% during the first half of the year while the German 10 year bond yield increased from 0% to 1.33% resulting in significant price declines. High-yield bonds and investment grade bonds declined by 14% during the period.

The US dollar appreciated on a trade-weighted basis while the euro fell to a five-year low against the dollar. The yen and pound sterling weakened in trade-weighted terms, with the yen dropping to a twenty-year low against the US dollar.

Commodity prices were affected by the war in Ukraine and the sanctions imposed. In March, the price of Brent crude was at times almost USD 130 per barrel; and at the end of quarter 2022, the price of Brent crude hovered around USD 110 per barrel, thus remaining considerably higher than at the beginning of the year

US Leveraged Loan market performed relatively better losing 4.45% in the first half of 2022 as the floating rate component protected investors against rising rates. At the same time, these borrowers face higher interest costs due to rising rates increasing the probability of future stress and default. Countering this headwind is the fact that near-term maturities remain low as most borrowers took advantage of strong demand in 2021 and pushed out their loan maturities. Nonetheless, while default rates remain low (0.28% in June on a trailing twelve-month basis), we expect default rates to increase in 2023 for certain borrowers with potential liquidity needs in the near future and management is intently focused on such exposures.

The CLO market continued to grow in the first half of 2022, albeit at a much slower pace that in 2021, despite all-in debt spreads widening from SOFR+175bps to SOFR+270bps as already open loan warehouses rushed to securitize financing as well as opportunistic investors seeking to take advantage of loans at low prices. As anticipated, CLO refinancing and reset activities were minimal as most transactions were done in 2021 and the current debt costs are not accretive. With most loans trading at discounts to par, most CLO managers have been able to increase principal par in CLOs, which should help in offsetting some future losses from defaults and restructurings. We expect long reinvestment period CLOs to outperform CLOs with reinvestment periods ending in the near-term as CLO managers lose some flexibility in trading once reinvestment periods are over. The mark-to-market valuations of CLO equity already demonstrates this expected outperformance as prices for short reinvestment end period CLO transactions have declined much more sharply in 2022.

Sources: Swiss National Bank (SNB), European Central Bank (ECB), US Federal Reserve, Bloomberg, JP Morgan, S&P Capital IQ

Financial Portfolio and trading activity    

The Company manages a financial portfolio valued at USD 116.2m as at 30 June 2022, which is invested mainly in fixed income and credit related securities.

The following is a table summarizing the financial portfolio as at 30 June 2022

Senior Secured Loans and CLOs

In the first half of 2022, the US senior secured loan market (leveraged loan market) was not immune to the decline in risk assets despite its floating rate component. Still, it outperformed on a relative basis losing 4.45% as measured by the CS Leveraged Loan Index as compared to the high-yield and investment grade bonds losing about 14%. New issue loan market slowed considerably as SOFR-LIBOR transition issues persisted in the initial weeks and thereafter credit spreads widened. Institutional loan issuance finished the first half of 2022 at USD 171.8 billion, compared to USD 330.7 billion for the first half of 2021.

While defaults stayed at very low levels (par-weighted default rate of 0.28% as of June 2022 compared to 1.25% a year ago), defaults in the near to mid term are expected to increase as borrowing costs shift higher due to rising LIBOR/SOFR and margin pressures increase. At the same time, near-term maturities are low and should help in capping the default risk.

Despite debt spreads rising from SOFR+175bps to as wide as SOFR+270bps, new issue CLO market continued to grow supported by existing warehouse investors desire to securitize into long-term financing and opportunistic investors taking advantage of low loan prices. USD 71 billion of new issue CLO transactions were created along with USD 5 billion of refinancing and USD 20 billion of reset activity (extension of reinvestment period and maturity of existing CLOs). This compares to over USD 80 billion of new issue transactions in addition to USD 67 billion of refinancing and USD 70 billion of reset activity.

Management had two warehouses open coming into the year, which it successfully and rapidly converted to new issue CLOs at amongst the lowest cost of debt in 2022. 

During the first half of 2022, the CLO and warehouse portfolio generated USD 13.6m in cash distributions which were offset by mark-to-market valuation declines of USD 32.7m.

Given the challenging and uncertain macroeconomic backdrop, in the first half of the year the Company aggressively de-risked and its increased cash and short-terms holdings. As of end of June 2022, the Company had USD 37.3m in cash and short-term holdings compared to USD 21.1m at the start of the year (after payout of USD 24.0m dividend). Management expects to opportunistically trade when prices are dislocated while maintaining sufficient liquidity and a no-debt position.

The Company's CLO portfolio is divided into the following geographical areas:

Fund Investments (previously described as Private Equities)

The fund investments held by the Company are incorporated in the form of Managed Funds (mostly closed end funds) mainly in emerging economies. The investments of these funds into their portfolio companies were mostly done in 2008 and 2009. Overall, the Company expects that exits of portfolio companies should materialize by 2022.

The following summarizes the book value of the fund Investments as at 30 June 2022:

Cole Capital:  Cole Capital is a fund that trades in digital assets such as Bitcoin and it is advised by Frequant. The advisor has developed automated trading algorithms that have outperformed the underlying digital assets performance by consistently avoiding large drawdowns. The fund declined by 8.9% return in the first half of 2022, although the investment is still up 38.5% since the Company invested in the fund in March 2021.

Fetcherr Ltd:  Fetcherr is the Israeli start-up that has developed a proprietary AI-powered goal based enterprise pricing and workflow optimization system. Founded in 2019 by experts in deep learning, Algo-trading, e-commerce, and digitization of legacy architecture, Fetcherr aims to disrupt traditional rule-based (legacy) revenue systems through reinforcement learning methodologies, beginning with the airline industry. The Company invested USD 2m in 2021.

Phytech:  Phytech is an agriculture-technology company in Israel providing end-to-end solutions for achieving higher yields on crops and trees. In September 2020, Phytech raised USD 25m at a pre-money valuation of USD 105m. As part of the capital raise, the manager of the investment reduced its holding in Phytech and distributed USD 471k (versus our investment of USD 394k) in cash. Following these transactions, 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.

Say2eat Inc:  Say2eat is a company that has proved they can disrupt the existing food delivery (3^rd party) marketplace model, with a first party, direct delivery model that is commission free. The company has shown rapid growth and is now active in over 20 US states from the east coast all the way to Hawaii working with 200 restaurants. The Company invested USD 0.750m in 2020.

 The following table reconciles the review of activities to the Group's financial assets as at 30 June 2022.  

Events after the reporting date

Details of material events after the reporting date are disclosed in note 24 of these interim condensed consolidated financial statements.   

Litigation

Information is provided in note 22 to the interim condensed consolidated financial statements.

Going Concern

The Directors have reviewed the current and projected financial position of the Company, making reasonable assumptions about cash and short-term holdings, 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 interim condensed consolidated financial statements.

Livermore Investments Group Limited

Condensed Consolidated Statement of Financial Position

as at 30 June 2022

Livermore Investments Group Limited

Condensed Consolidated Statement of Comprehensive Income

for the six months ended 30 June 2022

The total comprehensive (loss) / income for the period / year is wholly attributable to the owners of the Company.

Livermore Investments Group Limited

Condensed Consolidated Statement of Changes in Equity

for the period ended 30 June 2022

Livermore Investments Group Limited

Condensed Consolidated Statement of Cash Flows

for the period ended 30 June 2022

Notes to the Interim Condensed Consolidated Financial Statements

1.    Accounting policies

The interim condensed consolidated financial statements of Livermore have been prepared on the basis of the accounting policies stated in the 2021 Annual Report, available on www.livermore-inv.com.

The application of the IFRS pronouncements that became effective as of 1 January 2022 has no significant impact on the Company's consolidated financial statements.

2.    Critical accounting judgements and estimation uncertainty

When preparing the interim condensed consolidated financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results. The judgements, estimates and assumptions applied in the interim condensed consolidated financial statements, including the key sources of estimation uncertainty were the same as those applied in the Company's last annual consolidated financial statements for the year ended 31 December 2021.

3.    Basis of preparation

These unaudited interim condensed consolidated financial statements are for the six months ended 30 June 2022. They have been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union. They do not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Company for the year ended 31 December 2021.

The financial information for the year ended 31 December 2021 is extracted from the Company's consolidated financial statements for the year ended 31 December 2021 which contained an unqualified audit report.

Investment entity status

Livermore meets the definition of an investment entity, as this is defined in IFRS 10 "Consolidated Financial Statements".

In accordance with IFRS 10, 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. In Livermore's situation and as at the reporting date, one of its subsidiaries provide such services. Note 8 shows further details of the consolidated and unconsolidated subsidiaries.  

References to the Company hereinafter also includes its consolidated subsidiary (note 8).

4.    Financial assets at fair value through profit or loss

For description of each of the above categories, refer to note 6.

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:

5.    Financial assets at fair value through other comprehensive income

For description of each of the above categories, refer to note 6.

The above investments are non-trading equity investments that have been designated at fair value through other comprehensive income.

The movement in financial assets at fair value through other comprehensive income during the year was as follows:

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 investments in the loan market through CLOs and open warehouse facilities, as well as investments in fixed and floating rate bonds and perpetual bank debt. 

·      Public equity investments relate to investments in shares of companies listed on public stock exchange.

·      Fund investments (previously described as Private equities) 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 below presents financial assets 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 and liabilities

·      Fixed Income Investments and Public Equity Investments are valued per their closing market prices on quoted exchanges, or as quoted by market makers. Investments in open warehouse facilities that have not yet been converted to CLOs, are valued based on an adjusted net asset valuation.   

The Company values the CLOs based on the valuation reports provided by market makers. CLOs are typically 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 affect 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 collateral prepays impacts the future cash flows that the CLO may generate.

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.  

·      Private Equities are valued using market valuation techniques as determined by the Directors, mainly based on valuations reported by third-party managers of such investments. Real Estate entities are valued by independent qualified property valuers with substantial relevant experience on such investments. Underlying property values are determined based on their estimated market values. 

·      Investments in subsidiaries are valued at fair value as determined on an adjusted 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.

7.2    Fair Value Hierarchy

Financial assets measured at fair value are grouped into the fair value hierarchy as follows:      

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 period.

No financial assets or liabilities have been transferred between different levels. 

Financial assets within level 3 can be reconciled from beginning to ending balances as follows:

The above recognised gains / (losses) are allocated as follows: 

The Company has not developed itself any quantitative unobservable inputs for measuring the fair value of its level 3 financial assets at the reporting date. Instead, the Group used prices from third - party pricing information without adjustment.

Fixed income investments within level 3 represent open warehouses that have been valued based on their net asset value. Their net asset value is primarily driven by the fair value of their underlying loan asset portfolio plus received and accrued interest less the nominal value of the financing and accrued interest on the financing. In all cases, due to the nature and the short life of a warehouse, the carrying amounts of the warehouses' underlying assets and liabilities are considered as representative of their fair values.

Private equities 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 measured at fair value and receivables from the Company itself. 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.    Investment in subsidiaries

Additions for the period relate to the fair value of the receivable amount from the Company's unconsolidated subsidiary Sandhirst Ltd, that has been waived by the Company (note 21).

The investments in which the Company has a controlling interest as at the reporting date are as follows:

9.    Trade and other receivables

For the Company's receivables of a financial nature, no lifetime expected credit losses and no corresponding allowance for impairment have been recognised, as their default rates have been determined to be close to 0%.  

No receivable amounts have been written-off during either 2022 or 2021.

10.  Cash and cash equivalents

Cash and cash equivalents included in the consolidated cash flow statement comprise the following:

11.  Share capital, share premium and treasury shares  

Livermore Investments Group Limited (the "Company") is an investment company incorporated under the laws of the British Virgin Islands.  The Company has an issued share capital of 174,813,998 ordinary shares with no par value.

During the six-month period ended 30 June 2021, the Company purchased 10,888,577 ordinary shares at an average price of US$0.64 (£0.46) per share to be held in treasury. At 30 June 2021 the Company had 10,888,577 ordinary shares held in treasury.

During the second half of 2021, 1,430,000 of the Company's treasury shares were re-issued to a key management member (note 21) in full settlement of an accrued amount of USD 0.7m. The re-issued shares had an average cost of USD 0.916m and a fair value of USD 0.829m, as determined based on their market price, resulting in the recognition of a loss in retained earnings of USD 0.087m.  The difference between the fair value and the accrued amount is included in professional fees (note 18).

In the statement of financial position the amount included as 'share premium and treasury shares' comprises of:

12.  Trade and other payables

13.  Dividend

On 5 January 2022, the Board announced an interim dividend of USD 24.0m (USD 0.145 per share) to members on the register on 14 January 2022. The dividend was paid on 7 February 2022.

The Board of Directors will decide on the Company's dividend policy for 2022 based on profitability, liquidity requirements, portfolio performance, market conditions, and the share price of the Company relative to its net asset value.

14.  Net asset value per share

The diluted net asset value per share equals the basic net asset value per share since no potentially dilutive shares exist at any of the reporting dates presented.

15.  Segment reporting

The Company's activities fall under a single operating segment.

The Company's investment (losses) / income and its investments are divided into the following geographical areas:

Investment (loss) / income, comprising interest and distribution income as well as fair value gains or losses on investments, is allocated based on 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 and distribution income is analysed between the Company's different categories of financial assets, as follows:

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

The investments disposed of had the following cumulative (i.e. from the date of acquisition up to the date of disposal) financial impact in the Company's net asset position:   

* difference between disposal proceeds and original acquisition cost

18.  Operating expenses

19.  Finance costs and income

20.  (Loss) / earnings per share

Basic (loss) / earnings per share has been calculated by dividing the (loss) / profit for the period / year attributable to ordinary shareholders of the Company by the weighted average number of shares in issue of the Company during the relevant financial periods. 

The diluted (loss) / earnings per share equals the basic (loss) / earnings per share since no potentially dilutive shares were in existence during 2022 and 2021.

21.  Related party transactions

The Company is controlled by Groverton Management Ltd, an entity owned by Noam Lanir, which

at 30 June 2022 held 74.41% of the Company's voting rights.

(1)  The amounts receivable from unconsolidated subsidiaries and the Directors' current accounts with debit balances are interest free, unsecured, and have no stated repayment date.

(2)  A loan of USD 1m was made during 2019 to a key management employee and a Company's Director. The loan was free of interest, unsecured and was repayable on demand. During 2021, the Directors agreed to reclassify the loan with a balance of USD 1m as an advance against future remuneration of the specific Director. The advance is included within trade and other receivables (note 9).

(3)  The advances to other key management personnel relate to payments made to members of key management against their fees for the second half of 2022.

(4)  The amounts payable to unconsolidated subsidiaries and Directors' current accounts with credit balances are interest free, unsecured, and have no stated repayment date. 

(5)  A loan with a balance at 30 June 2022 of USD 0.149m has been received from a related company (under common control) Chanpak Ltd. The loan is free of interest, unsecured and repayable on demand. This loan is included within trade and other payables (note 12).

(6)  The amount payable to other key management personnel relates to a payment made on behalf of the Company for investment purposes and accrued consultancy fees.  During 2021, an accrued amount of USD 0.7m was settled by re-issuing 1,207,624 of the Company's treasury shares at their fair value as at the date of transfer.

(7)  These payments were made directly to companies which are related to the Directors.

(8)  During 2021, 222,376 of the Company's treasury shares were re-issued to a key management member for no consideration and no vesting conditions. The fair value of these shares at the date of transfer was USD 0.129m.

Other key management fees are included within professional fees (note 18).

During the period, the Company has waived its receivable balance from its subsidiary Sandhirst Ltd (USD: 0.324m) as a means of capital contribution to the subsidiary (note 8).

No social insurance and similar contributions nor any other defined benefit contributions plan costs incurred for the Group in relation to its key management personnel in either 2022 or 2021.

22.   Litigation

Fairfield Sentry Ltd vs custodian bank and beneficial owners

One of the custodian banks that the Company uses faces a contingent claim up to USD 2.1m, and any interest as will be decided by a US court and related legal fees, with regard 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 proves to be successful Livermore will have to compensate the custodian bank since the transaction was carried on Livermore's behalf. The same case was also filed in BVI where the Privy Council ruled against the plaintiffs.

As a result of the surrounding uncertainties over the existence of any obligation for Livermore, as well as for the potential amount of exposure, no provision has been made.

23.   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 as at 30 June 2022.

24.   Events after the reporting date

There were no other material events after the reporting date, which have a bearing on the understanding of

these interim condensed consolidated financial statements.

25.   Preparation of interim financial statements

Interim condensed consolidated financial statements are unaudited. Consolidated financial statements for Livermore Investments Group Limited for the year ended 31 December 2021, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, on which the auditors gave an unqualified audit report are available on the Company's website www.livermore-inv.com.

Review Report to the Members of Livermore Investments

Group Limited

Review Report on the interim Condensed Consolidated Financial Statements

Introduction

We have reviewed the interim condensed consolidated financial statements of Livermore Investments Group Limited (the ''Company'') and its subsidiary (together with the Company "the Group"), which are presented in pages 8 to 27 and comprise the condensed consolidated statement of financial position as at 30 June 2022 and the consolidated statements of comprehensive income, changes in equity and for the period from 1 January 2022 to 30 June 2022, and notes to the interim condensed consolidated financial statements, including a summary of significant accounting policies.

The Board of Directors is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with International Financial Reporting Standards applicable to interim financial reporting as adopted by the European Union ('IAS34 Interim Financial Reporting'). Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial information does not present fairly, in all material respects, the financial position of the entity as at June 30, 2022, and of its financial performance and its cash flows for the six month period then ended in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union.

Emphasis of Matter

We draw attention to the note 22 of the interim condensed consolidated financial statements which describes the uncertainty related to the outcome of a legal claim against one of the custodian banks that the Group and the Company uses on its behalf. Our conclusion is not modified in respect of this matter.

Other information    

The Board of Directors is responsible for the other information. The other information comprises the information included in the Chairman's and Chief Executive's Review and Review of Activities, but does not include the condensed consolidated financial statements and our review report thereon.

Our conclusion on the condensed consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our review of the condensed 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 review 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.

Other Matter

This report, including the conclusion, 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 conclusion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.