TM
TM
EURO TOUR
CHRISTMAS
CHRISTMAS
Basel, Switzerland
Brussells, Belgium
Beunos Aires, Argentina
Fukoka, Japan
Birmingham, UK
BRICKLIVE Centre, South Korea
LEGO Live, New York
Excel, London,
Touring Assets
Touring Assets
LEGO Live, New York
Fukoka, Japan
LEGO Live, New York
Basel, Switzerland
A Leading Live Events and Entertainment Company
Who We Are
Live Company Group Plc (“LVCG”) (name changed from Parallel Media Group Plc on 22 December 2017)
is an AIM-listed sports and live event entertainment agency which was founded by David Ciclitira in 1987,
although in recent times it had few trading operations. The Board of LVCG had for some time been looking
for an acquisition in the live entertainments sector and on 22 December 2017, LVCG acquired Brick Live
Group Limited and subsidiaries (“Brick Live Group”) and Parallel Live Group Limited and subsidiaries
(“Parallel Live”).
Brick Live Group is an early stage business in fan based live events, whose principal source of revenue is
licensing fee income. Its business specialises in working with the Group’s licence partners to produce
BRICKLIVE branded events internationally. The concept has evolved from an initial once-per-annum brick
exhibition in 2016 to today where it is a brand with a leading network of international partner-driven events,
designed to showcase the benefits of LEGO® as an educational tool. LEGO® is a trademark of the LEGO
Group of companies and Brick Live Group is not associated with the LEGO Group of companies and is an
independent producer of BRICKLIVE events.
The business model has also changed from one where Brick Live Group was originally itself acting as the
promoter of the events as principal, to the current model whereby the Group’s network of licensee partners,
are typically granted a license to organise and stage BRICKLIVE events in a specific territory for a 3 to
5 year period, in exchange for a fee.
The Directors consider that Asia in general and China in particular will be areas where BRICKLIVE events
will be well received and on the same date, LVCG also acquired the remaining 61.1% of shares in Brick
Live Far East Limited, not already owned by the Brick Live Group.
In February 2018, Parallel Live promoted its first Lego® Live event in New York, USA. Whilst the show
received a lot of critical acclaim, financially it incurred a loss. As a result, the Board of LVCG determined
that in future the Company will look for a licence partner for its future BRICKLIVE events in the United States.
Brick Live Group has been growing quickly since it was established in April, 2016 and the Brick Live Group
has been successful in extending the global footprint for BRICKLIVE events which has increased from
1 show in held in the UK during the year ended 31 December 2016 to 18 shows held in UK, Europe, Japan,
South Korea and latterly Brazil during the year ended 31 December 2017. Further growth in the number of
events is planned for the year ended 31 December 2018.
Live Company Group Plc 1
Contents
Page:
3
4
6
11
14
15
21
22
23
25
27
28
Directors and Advisers
Chairman’s Statement
Strategic Report
Directors’ Report
Directors’ Responsibilities Statement
Report of the Independent Auditor
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Statements of Financial Position
Statements of Changes in Equity
Statements of Cash Flows
Notes forming part of the Financial Statements
2 Live Company Group Plc
Directors and Advisers
Directors
David Ciclitira (Chairman)
Maria Serena Ciclitira
Ranjit Murugason
Simon Bennett
Andrew Smith
Public Limited Company No
00630968 – incorporated in England and Wales
Secretary and Registered Office Sole Associates Accountants Limited
3 Park Court, Pyrford Road, West Byfleet,
Surrey, KT14 6SD
Nominated Adviser and Broker
Joint Broker
Auditor
Solicitors
Bankers
Registrars
Stockdale Securities Limited
100 Wood Street,
London, EC2V 7AN
Shard Capital
23rd Floor, 20 Fenchurch Street
London, EC3M 3BY
Kingston Smith LLP
6th Floor, Charlotte Building
17 Gresse Street, London,
W1T 1QL
Fieldfisher LLP
Riverbank House
2 Swan Lane
London, EC4R 3TT
Lloyds Bank Plc
2nd Floor, 25 St George Street, London, W1S 1FS
National Westminster Bank Plc
2nd floor, 65 Piccadilly
London, W1A 2PP
HSBC Bank Plc
Level 6, 71 Queen Victoria Street
London, EC4V 4AY
Link Asset Services
65 Gresham Street
London, EC2V 7NQ
Live Company Group Plc 3
Chairman’s Statement
I have pleasure in presenting the Company’s Annual Report, Strategic Report and Financial Statements for
the year ended 31 December 2017.
The last twelve months has been both exciting and challenging.
Whilst these financial statements cover the 12 month period to 31 December 2017 these only include 9
days trading for the Group subsequent to the acquisitions of Brick Live Group and Parallel Live Group. I
have therefore included in my statement commentary on the Group going forward from this period.
The acquisitions of Brick Live Group and of Parallel Live Group by LVCG has created a global brand in
Brick Live.
The Group made an operating loss of £391,000 (2016: profit £60,000), and a loss of £5,440,000 (2016:
profit £49,000) for the year, as a result of exceptional costs and write downs relating to the reverse
acquisition of Brick Live Group on 22 December 2017. Licence fee revenue in 2017 was £1,715,000.
The first six months of 2018 have seen the continuing growth of the BRICKLIVE brand with the introduction
of BRICKLIVE CENTRES in Korea, China and Guam, the introduction of BRICKLIVE KIDS CAFÉs in Korea
and China, as well as the introduction of BRICKLIVE KIDS in Korea and China. We are also announcing
today the launch of BRICKLIVE TOURING in Korea and Macau. BRICKLIVE TOURING is expected to
become a significant financial contributor to the business.
This year’s growth has led the Board to re-evaluate its priorities for 2018, increasing its focus on Asia and
the USA, whilst reducing its commitment to Brazil. The number of contracted events for 2018 is expected
to be approximately sixty.
One of the key developments in the first six months of 2018 is the various BRICKLIVE brand extensions.
This month (June 2018) has seen the launch of the first BRICKLIVE KIDS CAFÉ in Seoul with a further five
to be launched in China this year. We are also in discussion with parties for the extension of BRICKLIVE
KIDS CAFÉ in a number of other territories globally.
Similarly, in terms of centres we have seen significant growth in the BRICKLIVE CENTRE program. We
expect to have a total of five contracted by the year-end across both Korea, China and Guam.
At the same time as developing the BRICKLIVE footprint, we have continued to invest in our asset pool. In
2017 we invested £738,000 in fixed assets and in the first six months of 2018 we have spent a further
£165,000, principally on content.
We continue to make an investment in staff to ensure that the Group has sufficient resources to
accommodate its planned growth.
With the pipeline for future licence partners and other content deals strong, we expect the 2018 revenues
to show growth on 2017.
I would like to thank our Board of Directors and especially our non-executives who have provided invaluable
experience and advice. As previously stated, it is our intention to add a further Non-Executive Director and
a full time Finance Director to our Board in 2018, provided candidates of sufficient quality can be recruited.
I would like to thank all of our staff, especially those who have been with Brick Live Group since its inception
in April 2016. We are also pleased to announce that we are planning to implement an EMI option scheme
by the end of 2018 for all key staff to share in the growth of our company.
Finally, I would personally like to thank all of our shareholders, both those who are partners within the
business as well as those who have supported me over the last eighteen months, and look forward to
meeting them in person at our Annual General Meeting on 18 September 2018, details of which will be
circulated in due course.
(cid:2)(cid:2)
David Ciclitira
Chairman
27 June 2018
4 Live Company Group Plc
Strategic Report
for the year ended 31 December 2017
Strategic Report
The Directors of the Company and its subsidiary undertakings, which together comprise Live Company
Group, present their Strategic Report for the year ended 31 December 2017.
The Strategic Report is a statutory requirement under the Companies Act 2006 and is intended to provide
fair and balanced information that enables the Directors to be satisfied that they have complied with s172
of the Companies Act 2006, which sets out the Directors’ duty to promote the success of the Company.
Principal Activities
The principal activities of the Group during the year ended 31 December 2017 were live entertainment events.
Organisation Review
The Group moved to strengthen the board of Directors in 2017. This board now comprises an Executive
Chairman, an Executive Director and three Non-Executive Directors. The Board does not presently have a
Finance Director, although it has recently hired an interim Finance Director to take charge of the finance
function. The Group is committed to recruiting a full time Finance Director and at least one further Non-
Executive Director in 2018, provided suitable candidates are identified, who will add further skills, contacts
and expertise to the board.
Profiles of the Directors can be found on the Company’s website: www.livecompanygroup.com.
Founded in 1987 by Executive Chairman, David Ciclitira, and listed on the London Stock Exchange’s AIM
since August 2001 (re-admitted in December 2017 as a result of the reverse acquisition of Brick Live Group
Limited and subsidiaries, and the acquisitions of Parallel Live Group Limited and Brick Live Far East Limited),
the operations of Live Company Group are run from London.
Strategy and Business Plan
The strategy of the Group is to develop BRICKLIVE into a world-renowned entertainment brand. Brick Live
Group has already achieved a global footprint for BRICKLIVE events and the strategy is to build on the
existing footprint, penetrate new territories, particularly the United States, find additional high quality licensee
partners and to identify further opportunities to utilise the existing licensee partner network to deliver more
innovative events, thereby improving the overall quality of BRICKLIVE events wherever they take place
around the world.
Financial and Performance Review
The consolidated Income Statement is set out on page 21. For the year ended 31 December 2017, the
Group made an operating loss of £391,000 (2016: profit £60,000), and a loss of £5,440,000 (2016: profit
£49,000, for the year as a result of exceptional costs and write downs relating to the reverse acquisition of
Brick Live Group on 22 December 2017.
LVCG’s acquisition of Brick Live Group is a reverse acquisition in accordance with International Financial
Reporting Standard no 3 (IFRS 3) “Business Combinations” and has therefore been accounted for in
accordance with the appropriate requirements of this accounting standard. The application of these
requirements means that, for accounting purposes, Brick Live Group is deemed to have acquired Live
Company Group Plc (formerly Parallel Media Group Plc), hence the reported operating loss of £391,000
relates entirely to the trading activities of Brick Live Group.
Further details of the accounting treatment of this reverse acquisition (and the other capital-related
transactions which also happened on 22 December 2017) is explained in more detail in note 2.1, set out
on page 29 of these financial statements.
6 Live Company Group Plc
As referred to above the consolidated income statement for the year ended 31 December 2017 only
includes the consolidated results of the Brick Live Group. These show an increase in turnover from
£1,735,000 million to £1,928,000, although the revenue number was flattered by the inclusion of
approximately £1,100,000 of 2016 revenue derived from the sale of a 50 per cent interest in Brick Live Far
East Ltd (“BLFE”), a joint venture between Brick Live International, a wholly owned subsidiary of the Brick
Live Group and Mr Hyun Seok Kim, Brick Live Group’s Korean licensee partner. Asia and in particular China
are areas where BRICKLIVE events have been well received and as part of the proposals for the acquisition
of the Brick Live Group, LVCG acquired the outstanding shares in BLFE not already owned by the Brick
Live Group, the consideration of £2,950,000 being satisfied entirely by the issue of ordinary shares to
Mr Kim. Overheads for the Brick Live Group have increased to £1,493,000 in 2017 (2016: £1.282,000),
reflecting the planned increase in staff as a result of the substantial increase in the number of BRICKLIVE
events that took place during the year. Just over half of Brick Live Group’s overheads are staff costs and
travel, the latter reflecting the international nature of the business.
The Consolidated Income Statement is set out on page 21 of these financial statements. The Group
made an operating loss of £391,000 before exceptional items (2016: operating profit before exceptional
items of £60,000).
The exceptional costs, which total £5,037,000, comprise three distinct items, the largest of which occurs
as a direct result of the reverse acquisition accounting treatment of the acquisition of the Brick Live Group,
referred to above, under IFRS3 Business Combinations (“reverse accounting treatment”). The Directors
deemed that the reverse accounting treatment of the Brick Live Group was appropriate principally on
account of the size of the acquisition and because the management of Brick Live Group now constitute all
the day to day management of the enlarged group following the acquisition. The significance on these
financial statements of this reverse accounting treatment is that Brick Live Group is considered to be the
acquirer of LVCG for the purposes of these consolidated financial statements. It is however important to
note, that this is only the case for the consolidated accounts, as in LVCG’s own accounts, which are also
set out in these financial statements, it remains the legal buyer of Brick Live Group and therefore recognises
the acquisition as an investment in its own records. Further information on the rationale for the reverse
accounting treatment is set out in Note 2.1 on page 29 to these financial statements.
As a result of the reverse acquisition treatment of the acquisition of the Brick Live Group, the Directors have
had to assign a notional consideration value to LVCG, as more fully set out in Note 3 Accounting estimates
and judgements on page 37 to these financial statements. LVCG (formerly Parallel Media Group plc) was
a listed company and the notional consideration of £903,000 was calculated by taking the market
capitalisation on the date on which the shares were re-admitted to AIM. To this sum was added the group
liabilities of £3,679,000 as at 22 December 2017, which in aggregate produces a goodwill asset of
£4,580,000. Given the limited trading activities of the old Parallel Media Group plc, prior to the acquisition
of the Brick Live Group and having carried out a formal impairment review on this goodwill asset, the
Directors deemed that this amount should be written off in its entirety.
In addition, as part of the terms for the acquisition of Brick Live Group the commission arrangements
with David Ciclitira, the Executive Chairman of LVCG, whereby he was paid a commission on all sales
generated by him, was terminated in exchange for the issue to him of £1,000,000 of LVCG shares.
Whilst commission will continue to be charged in the income statement in the future, as it is matched
against the revenue to which it relates, the commissions payable to David Ciclitira of £355,000 for the
year ended 31 December 2017 have been treated as an exceptional cost. The final element of
exceptional cost is £100,000 which arose a result of an agreement with a company controlled by Mr
Kim to relinquish certain merchandising rights it held for Greater China. In total therefore the exceptional
costs amounted to £5,037,000 (2016: £nil). Further information on these exceptional items is set out in
Note 6 to these financial statements on page 40.
The loss per share amounted to 0.11p (2016: earnings per share of 0.03p), as set out in Note 12 to these
Financial Statements.
Live Company Group Plc 7
Strategic Report
continued
The Statement of Financial Position at 31 December 2017 is set out on page 23 to these financial
statements and show net assets of the Group amounted to £2,844,000 (2016: £49,000), which includes
goodwill amounting to £4,221,000 (2016: £nil). The company’s own Statement of Financial Position, as
described above reflects the legal reality of the Brick Live Group acquisition and therefore recognises the
aggregate investments in Brick Live Group (£5,000,000), Parallel Live Group (£1,000,000) and the
consideration for the 61.1% of BLFE acquired by LVCG (£2,950,000) at the same time. The Directors having
carried out a formal investment review on this goodwill asset and have deemed that no impairment is
required.
Since the year end, the company has twice raised additional funds through the issue of ordinary shares as
follows:
•
•
Issue of 4,571,425 new 1p ordinary shares at 35p per share, raising a total of £1,600,000 (before
costs). These shares were issued on 15 January 2018.
Issue of 1,000,000 new 1p ordinary shares at 35p per share, raising a total of £350,000 (before costs).
These shares were issued on 18 April 2018.
The statement of cash flows are set out on page 27 to these financial statements.
Operating Review
The Directors of LVCG had for some time been looking for an acquisition in the live entertainments sector
and this objective was achieved with the completion of the acquisition of Brick Live Group.
The focus of Brick Live Group for the year ended 31 December 2017 was to continue to extend the footprint
of BRICKLIVE shows internationally. The company’s focus has been on revenue growth and as the Group’s
agreements with its licensee partners are typically for 3 to 5 year periods, on recurring revenue. For the
year ended 31 December, 2017 74 per cent of revenue was recurring.
Brick Live Group has made a considerable investment in personnel with the right skill sets to run an
international live events company. The costs of running a global business, as opposed to a domestic one,
are far higher, particularly due to the necessary travel commitments in the time zones that the Group
operates within. The aggregate of staff and travel costs in the year ended 31 December 2017 accounted
for 64 per cent of total administrative expenses. The Directors of LVCG consider that the growth prospects
for Brick Live Group are considerably better in the international markets the Group already operates within
when compared with those in its domestic market. The strategy for 2018 continues to be to improve and
expand the number of BRICKLIVE events in the markets that the Group already operate in and to look to
find the right partners for areas in which the Group do not have a significant prescence, particularly the
United States.
In February 2018, Parallel Live promoted its first Lego® Live event, which, despite achieving much critical
acclaim, reported a financial loss. The decision has been made by the Board to focus on securing a new
licence partner for future events in the United States.
Principal Risks and Uncertainties
The Admission Document made public on 22 December 2017 made reference to a number of specific
risks within the Group. These are summarised below (the full narrative can be viewed in the publicly available
Admission Document).
Early Stage of Operations
There are a number of additional operational, strategic and financial risks associated with early stage companies.
In particular, the enlarged group’s future growth and prospects will depend on its ability to stay competitive
with its pricing, maintain and develop its business and to manage growth and to continue to improve operational,
financial and management information and quality control systems on a timely basis, whilst at the same time
maintaining effective cost controls. LVCG has only a limited operating history upon which its performance and
prospects can be evaluated. The development of the enlarged group’s revenues is difficult to predict.
8 Live Company Group Plc
Management of growth
The ability of the enlarged group to implement its strategy requires effective planning and management
control systems. LVCG’s growth plans may place a significant strain on its management and operational,
financial and personnel resources. Consequently, the enlarged group’s future growth and prospects will
depend on its ability to manage this growth.
Exposure to Asia
The Directors consider that a significant amount of LVCG’s revenues will be generated in Asia and, in
particular, in China. Investments in Asia involve a broad range of political, economic, legal, financial and
other risks, many of which are unquantifiable and/or unpredictable and not necessarily associated with the
risks involved in activities in more developed and regulated environments.
Reliance on access to good quality content for BRICKLIVE events
LVCG’s ability to offer competitive services will be dependent on its ability to obtain access to good quality
content for BRICKLIVE events, on reasonable commercial terms.
Relationship with LEGO®
There is no formal signed agreement with the LEGO group of companies in relation to the staging of
BRICKLIVE events internationally.
LEGO® is a trademark of the LEGO group of companies and Brick Live Group is not associated with the
LEGO group of companies and is an independent provider of BRICKLIVE events.
Acquiring new licensee partners
LVCG’s future growth and expected profitability is primarily dependent on maintaining good relationships
with and increasing the number of new licensee partners.
Reliance on third parties
LVCG does not make any of the content for its events and uses different third parties to do so.
Retention of business
At present, the majority of LVCG’s revenues are derived from a small number of licensee partners. This
situation is likely to remain until LVCG’s sales and marketing efforts to expand and diversify the customer
base are successful.
Management of intellectual property
The ability to protect its intellectual property, in particular its trade secrets and know-how and the ability to
operate without infringing the proprietary rights of third parties is an important aspect of the LVCG’s
competitive advantage.
Retention of key executives and staff
LVCG’s development and prospects are dependent upon the continued services and performance of its
Directors, senior management and other key personnel.
The Board intends, in the near future, to introduce a long-term share option scheme to motivate, reward
and retain management within the business.
Live Company Group Plc 9
Strategic Report
continued
Key Performance Indicators (“KPIs”)
The primary objectives of Brick Live Group in 2017 were to grow revenue, increase the number of licensee
partners and manage its growth. As such, the principal KPIs revolved around these core objectives:
•
•
•
•
Revenue growth (excluding one-off licence fee in 2016)
Number of licence partners – 2017: 8; 2016:1
Regular review of short, medium and long-term cash flow forecasts
Monitoring of overheads versus budget
Balance sheet ratios such as liquidity ratio and debtor days are also monitored.
Forward Looking Statement
As discussed in the Chairman’s Statement, the group is focused on continuing to extend the footprint of
BRICKLIVE shows internationally and increase recurring revenue.
Particular geographic locations of interest are the United States and Far East. The Directors are investing
significant time and resources into building their new business efforts in these regions as they have been
identified as markets which can deliver rapid and sustainable growth for Brick Live Group.
Corporate Governance
The Group is committed to high standards of corporate governance. The Audit Committee is Chaired by
Simon Bennett and includes Ranjit Murugason. The Remuneration Committee is Chaired by Ranjit
Murugason and includes Simon Bennett
Role of the Board
The Board’s role is to agree LVCG’s long-term strategy and monitor achievement of its objectives. The
Board aims to meet four to six times a year for these purposes and hold additional meetings as and when
necessary. A full board pack is prepared and circulated to Board members in advance of each board
meeting.
Shareholders
The Board seeks to protect shareholders’ interests by following where appropriate the guidelines in the
QCA Corporate Governance Code. The annual general meeting provides the Board with an opportunity to
informally meet and communicate with investors.
This strategic report was approved by the Board of Directors on 27 June 2018 and signed on its behalf by
(cid:2)(cid:2)
David Ciclitira
Chairman
27 June 2018
10 Live Company Group Plc
Directors’ Report
for the year ended 31 December 2017
BASIS OF PREPARATION, FORECASTS AND ASSUMPTIONS
In accordance with section 414 of the Companies Act 2006, the Directors have chosen to include
information about the future developments and principal risks and uncertainties in the Strategic Report.
The financial statements have been prepared on a going concern basis as set out in note 1.1 to these
financial statements, which assumes that the Group will continue in operational existence for the foreseeable
future. The Directors have prepared trading and cash flow forecasts for the Group for the period to
31 December 2019.
BRANCHES IN THE EU
The Group has no branches in the EU.
DIVIDEND
No dividend is recommended in respect of the year ended 31 December 2017 (2016 – £Nil).
DIRECTORS
The Directors during the year and their periods of office were:
David Ciclitira
Maria Serena Ciclitira
Ranjit Murugason
Timothy Sturm
Simon Bennett
Andrew Smith
–
–
–
–
–
–
Executive Chairman for the full year ended 31 December 2017
Non-Executive Director for the full year ended 31 December 2017
Non-Executive Director for the full year ended 31 December 2017
Non-Executive Director for part of the year ended 31 December 2017
until his resignation on 1 May 2017
Non-Executive Director for part of the year ended 31 December 2017
(appointed 28 December 2017)
Executive Director for part of the year ended 31 December 2017
(appointed 28 December 2017)
Directors’ interests in shares and options:
The beneficial interests in the ordinary share capital of the Company of the Directors in office at 31 December
2017 were as follows:
Director
David Ciclitira (and owned companies)
Maria Serena Ciclitira
Ranjit Murugason
Simon Bennett
Andrew Smith
31 December
2017
31 December
2016
Ordinary shares Ordinary shares
of 1p
Fully Paid
1,011,713
1,562
180,742
–
–
of 1p
Fully Paid
26,945,047
1,562
797,242
116,667
–
Live Company Group Plc 11
Directors’ Report
continued
The shares or beneficial interest in the shares held by David Ciclitira are as follows:
Holder
David Ciclitira
Barclays Wealth Trustees (Jersey) Ltd
No. of 1p
shares
31 December
2017
26,622,081
206,532
No. of 1p
shares
31 December
2016
688,747
206,532
Luna Trading Ltd
116,434
116,434
Maria Serena Ciclitira
1,562
1,562
The above table constitutes the David Ciclitira Concert Party.
26,946,609
1,013,275
Reference
Held by D Ciclitira directly
A discretionary trust,
of which D Ciclitira is a
potential beneficiary
A company held by a
discretionary trust,
of which D Ciclitira
is a potential beneficiary
Held indirectly by
Maria Serena Ciclitira
SUBSTANTIAL SHAREHOLDINGS
The following investors notified the Directors that they hold or are beneficially interested in 3% or more of
the Company’s ordinary share capital.
David Ciclitira Concert Party
Hyun Seok Kim
Clive Morton
Fortune Access Limited
Miton Asset Management
Jarvis Investment Management
No. of shares
26,946,609
10,165,393
4,166,667
3,000,000
2,100,001
1,906,020
%
50.1
18.9
7.7
5.6
3.9
3.5
DIRECTORS’ LIABILITY INSURANCE
During the year, Directors’ and officers’ liability insurance was maintained for Directors and other officers of
the Company as permitted by the Companies Act 2006.
AIM COMPLIANCE
In accordance with AIM Rule 31, the Company is required to have in place sufficient procedures, resources
and controls to enable its compliance with the AIM Rules. In order to ensure that these obligations are met,
matters of compliance are managed through regular Board meetings and advice is sought from the Group’s
nominated adviser (Nomad). The Directors are satisfied that the Company’s obligations under AIM Rule 31
have been met during the period under review.
DISCLOSURE OF INFORMATION TO AUDITOR
In the case of each of the Directors who are Directors of the Company at the date when this report is
approved:
•
•
So far as they are individually aware, there is no relevant audit information of which the Company’s
auditor is unaware; and
Each of the Directors has taken all the steps that they ought to have taken as a director to make
themselves aware of any relevant audit information and to establish that the Company’s auditor is
aware of the information.
12 Live Company Group Plc
AUDITOR
LVCG re-appointed Kingston Smith LLP as auditors for the Company and its subsidiaries for the financial
year 2017. A resolution to re-appoint Kingston Smith LLP for the 2018 audit will be put to the shareholders
at the next Annual General Meeting.
On behalf of the Board
(cid:2)(cid:2)
D Ciclitira
Chairman
27 June 2018
Live Company Group Plc 13
Directors’ Responsibilities Statement
The Directors are responsible for preparing the strategic report, the Directors’ report and the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Company financial statements for each financial
year. As required by the AIM Rules of the London Stock Exchange, the Directors have prepared the Group
financial statements in accordance with International Financial Reporting Standards as adopted by the
European Union and have also elected to prepare the parent Company financial statements in accordance
with those standards. Under company law the Directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group
and of the profit or loss of the Group for that period.
In preparing these financial statements the Directors are required to:
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether the Group financial statements have been prepared in accordance with IFRSs as
adopted by the European Union; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Company and the Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Group's transactions and disclose with reasonable accuracy at any time the financial position
of the Company and the Group and enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company's website. Legislation in the United Kingdom governing the preparation and
dissemination of the financial statements and other information included in annual reports may differ from
legislation in other jurisdictions.
14 Live Company Group Plc
Report of the Independent Auditor
Independent Auditor’s Report to the Members of Live Company Group Plc
(Formerly Parallel Media Group Plc)
Opinion
We have audited the financial statements of Live Company Group Plc (formerly Parallel Media Group Plc)
(the ‘parent company’ and its subsidiaries (the ‘group’)) for the year ended 31 December 2017, which
comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, the
Consolidated and Parent Company Statements of Financial Position, the Consolidated and Parent
Company Statements of Cash Flows, the Consolidated and Parent Company Statements of Changes in
Equity and notes to the financial statements, including a summary of significant accounting policies. The
financial reporting framework that has been applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent
company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the group’s and of the parent
company’s affairs as at 31 December 2017 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted
by the European Union;
the parent company financial statements have been properly prepared in accordance with IFRSs as
adopted by the European Union and as applied in accordance with the provisions of the Companies
Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the audit of financial statements section of our report. We are independent of the group
in accordance with the ethical requirements that are relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us
to report to you where:
•
•
the directors’ use of the going concern basis of accounting in the preparation of the financial
statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that
may cast significant doubt about the group’s or the parent company’s ability to continue to adopt
the going concern basis of accounting for a period of at least twelve months from the date when the
financial statements are authorised for issue.
Live Company Group Plc 15
Report of the Independent Auditor
continued
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) we identified, including those which had the greatest
effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Audit area and description
Audit approach
Accounting for business combinations
On 22 December 2017, LVCG entered into three
transactions which were accounted for as
business combinations in accordance with
IFRS3. The first of these transactions, the
acquisition of Brick Live Group, was accounted
for as a reverse acquisition. The reason for this
is that although LVCG legally acquired Brick Live
Group, Brick Live Group was the acquirer in
substance. The second and third acquisitions,
of Parallel Live Group and Brick Live Far East
Limited respectively, did not constitute reverse
acquisitions and were accounted
for as
acquisitions.
As a result, the group financial statements
present the results of Brick Live Group until the
date of the acquisitions and those of the
enlarged group going forward. The company
financial statements are those of LVCG both
before and subsequent to the transactions.
Designation of intangibles
The business combinations during the year
referred to above resulted in material goodwill
balances. No separate intangible assets were
recognised on the acquisitions.
We critically assessed and challenged the judgements
made by the Directors in determining the accounting for
the various transactions, including the determination of
which party was the acquirer, and re-performed the
calculation of the consideration for and goodwill arising
on the acquisitions to determine that it had been
calculated in accordance with the relevant requirements
of IFRS 3.
We discussed the potential existence of intangible
assets other than resulting goodwill, with the Directors.
We challenged the Directors’ assertion that there were
no intangible assets other than goodwill purchased at
the time of the business combinations. We also
reviewed documentation relevant to the various
transactions, including the Admission Document
prepared for the purpose of admission of the group to
AIM, to ensure the assertions made to us by the
Directors at the time of the audit were consistent with
the expectations at the time of the transactions
recorded in the Admission Document and with the
other evidence available to us relating to the
acquisitions.
16 Live Company Group Plc
Audit area and description
Audit approach
Cost and impairment of goodwill
As referred to above, all three business
combinations during the year resulted in the
recognition of goodwill.
The Directors determined that the goodwill
arising on the reverse acquisition of LVCG by
Brick Live Group should be impaired in full at the
year end. The Directors determined that that no
provision for impairment was required in respect
of the goodwill arising on the acquisitions of
Parallel Live and Brick Live Far East.
We re-performed the calculations of the costs of
investment and goodwill arising on the acquisitions
having critically assessed the assumptions made by
the Directors, as noted above.
We critically assessed the Directors’ assertions that
goodwill on the reverse acquisition of LVCG should be
fully impaired with reference to their consideration of
future expected cash flows of LVCG.
We also critically assessed the Directors’ assertion that
impairment of goodwill on acquisition of Brick Live Far
East and Parellel Live was not required with reference
to future trading performance and cash flows of the
acquired entities.
Our application of materiality
The scope and focus of our audit was influenced by our assessment and application of materiality. We
define materiality as the magnitude of misstatement that could reasonably be expected to influence the
readers and the economic decisions of the users of the financial statements. We use materiality to
determine the scope of our audit and the nature, timing and extent of our audit procedures and evaluate
the effect of misstatements both individually and on the financial statements as a whole.
We considered revenue to be the main focus for readers of the financial statements, and this influenced
our judgement of materiality. Based on our professional judgement we determined materiality for the group
to be £31,400 based on a percentage of revenue.
We agreed to report to the Audit Committee all audit differences in excess of the threshold that we had
calculated as clearly trivial to the financial statements, and any other differences that, in our view, warranted
reporting on qualitative grounds. We also reported disclosure matters that we identified when assessing
the overall presentation of the financial statements.
An overview of the scope of our audit
Our audit of the group and parent company financial statements was scoped by obtaining an
understanding of the group and parent company and their environment, including group wide controls,
and assessing the risks of material misstatement at the group and parent company level. The whole of
the group is audited by one audit team, led by the Senior Statutory Auditor. Our approach in respect of
key audit matters is set out in the table in the Key Audit Matters section above.
The audit is performed centrally and comprises all of the companies within the group, significant
components of which were visited by the audit team.
Other information
The Directors are responsible for the other information. The other information comprises the information
included in the annual report, other than the financial statements and our auditor’s report thereon. Our
opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Live Company Group Plc 17
Report of the Independent Auditor
continued
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required to determine
whether there is a material misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the Strategic Report and the Directors’ Report for the financial year for which
the financial statements are prepared is consistent with the parent company financial statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment
obtained in the course of the audit, we have not identified material misstatements in the Strategic Report
or the Directors’ Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us
to report to you if, in our opinion:
•
•
•
•
adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns;
or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 14, the Directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and
fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the group
or the parent company or to cease operations, or have no realistic alternative but to do so.
18 Live Company Group Plc
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the 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 procedures
that are appropriate in the circumstances, but not for the purposes 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 Directors.
Conclude on the appropriateness of the 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 or the parent company’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 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 or the
parent company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
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.
Live Company Group Plc 19
Report of the Independent Auditor
continued
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.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit work has been undertaken for no purpose other than to draw to the
attention of the company’s members those matters which we are required to include in an auditor’s report
addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to
any party other than the company and company’s members as a body, for our work, for this report, or for
the opinions we have formed.
Peter Smithson
27 June 2018
Charlotte Building
Peter Smithson (Senior Statutory Auditor)
for and on behalf of Kingston Smith LLP, Statutory Auditor 17 Gresse Street
London, W1T 1QL
20 Live Company Group Plc
Consolidated Income Statement
for the year ended 31 December 2017
Revenue
Cost of sales
Gross profit
Administrative expenses
Foreign exchange
Depreciation and amortisation of non-financial assets
Other administrative expenses
Total administrative expenses
Operating (loss)/profit before exceptional items
Exceptional items
Operating (loss)/profit after exceptional Items
Finance costs
(Loss)/profit for the period
Tax expense
(Loss)/Profit for the year
Attributable to:
Non-controlling interests
Equity holders of the parent
Year to
31 December
2017
£’000
1,928
(826)
1,102
8 month
period to
31 December
2016
£’000
1,735
(393)
1,342
Note
4
5
6
10
11
(26)
(1)
(1,466)
(1,493)
(391)
(5,037)
(5,428)
(12)
(5,440
–
(5,440)
–
(5,440)
–
(4)
(1,278)
(1,282)
60
–
60
–
60
(11)
49
–
49
(Loss)/earnings per share – basic and diluted
12
(0.11)p
0.03p
A separate Income statement for the parent company LVCG has not been presented as permitted by S408
of the Companies Act 2006. The parent company loss for the year was £664,000 (2016: loss of
£1,651,000).
The accompanying accounting policies and notes form an integral part of the financial statements.
Live Company Group Plc 21
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2017
(Loss)/profit for the year/period
Total comprehensive (expense)/income for the year/period
All of the total comprehensive (expense)/income for the year/period is
attributable to the equity holders of the parent
8 month
Year to period to
31 December 31 December
2017 2016
£’000 £’000
49
49
(5,440)
(5,440)
(5,440)
49
22 Live Company Group Plc
Statements of Financial Position
as at 31 December 2017
Consolidated Company
2017 2016 2017 2016
£’000 £’000 £’000 £’000
Non-current assets
Property, plant and equipment
Intangible assets
Investments
Goodwill
Investments in Joint Ventures
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Current liabilities
Financial liabilities – Borrowings
Trade and other payables
Deferred income and accruals
Total current liabilities
Net current liabilities
Non-current liabilities
Financial liabilities – Borrowings
Deferred tax
Net assets/(liabilities)
13
14
15
16
17
18
19
20
21
21
20
23
798
1
–
4,221
–
5,020
1,125
871
1,996
–
2,557
1,603
4,160
178
–
1
–
–
179
1,105
–
1,105
–
1,224
–
1,224
–
1
8,950
–
–
8,951
219
842
1,061
–
1,645
–
1,645
–
1
–
–
–
1
603
18
621
85
4,899
–
4,984
(2,164)
(119)
(584)
(4,363)
–
12
2,844
–
11
49
–
–
8,367
166
–
(4,528)
Live Company Group Plc 23
Statements of Financial Position
continued
Group Company
2017 2016 2017 2016
£’000 £’000 £’000 £’000
Equity
Share capital
Share premium
Other reserves
Merger reserve
Capital redemption reserve
Retained earnings
Equity attributable to equity holders of the parent
24
4,566
13,695
(23,711)
8,651
5,034
(5,391)
2,844
4,114
9,239
(18,387)
–
5,034
49
49
4,566
13,695
557
8,651
5,034
(24,136)
8,367
4,114
9,239
557
–
5,034
(23,472)
(4,528)
The financial statements were approved and authorised for issue by the Board of Directors on 27 June
2018 and were signed on its behalf by:
(cid:2)(cid:2)
David Ciclitira
Chairman
24 Live Company Group Plc
Statements of Changes in Equity
for the year ended 31 December 2017
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Live Company Group Plc 25
Statements of Changes in Equity
continued
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26 Live Company Group Plc
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Statements of Cash Flows
for the year ended 31 December 2017
Consolidated Company
2017 2016 2017 2016
£’000 £’000 £’000 £’000
Cash flows from operating activities
Operating (loss)/Profit
Depreciation
Amortisation of intangibles – Tournament rights
Impairment provision – Tournament rights
Impairment provision – Investment in subsidiary
Mr David Ciclitira commission paid
Director fees capitalised
Decrease/(increase) in receivables
Increase/(decrease) in payables
Exceptional item
Cash generated from operations
(391)
118
–
–
–
(355)
–
(20)
2,936
–
2,288
60
4
–
–
–
–
–
(1,098)
1,217
–
183
(1585)
–
–
–
–
(438)
–
136
1,321
54
220
(241)
1,344
–
–
(66)
281
(1,182)
(262)
106
Cash flow from investing activities
Acquisition of property, plant and equipment
Net cash (used in)/generated from investing activities
(740)
(740)
(183)
(183)
–
–
Cash flow from financing activities
Issue of new shares
Loans repaid
Interest paid
Net cash used in financing activities
Reconciliation impact of reverse acquisition accounting
Net cash inflow
Cash and cash equivalents at beginning of the year
Net increase in cash and cash equivalents
Cash and cash equivalents at end of the year
1,260
–
(12)
1,244
(1,921)
871
–
871
871
–
–
–
–
–
–
–
11
–
1,260
(81)
(93)
1,086
–
824
18
824
842
–
–
–
(65)
(30)
(95)
–
11
7
11
18
Live Company Group Plc 27
Notes Forming Part of the Financial Statements
for the year ended 31 December 2017
1. Basis of preparation
These financial statements have been prepared on the historical cost basis as modified by use of the
fair-value basis where required and in accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union, and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS as at 31 December 2017.
The preparation of financial statements in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts in the financial
statements which are disclosed in note 3 to these financial statements.
A separate Income Statement or Statement of Comprehensive Income for the parent company LVCG has
not been presented as permitted by section 408 of the Companies Act 2006. The parent company loss for
the year was £664,000 (2016 - £1,651,000 loss).
1.1 Going concern
These financial statements have been prepared on a going concern basis. The Group Statement of Financial
Position shows net current liabilities of £2,164,000 as at 31 December 2017. In assessing going concern
the Directors take into account the groups cash flows, solvency and liquidity positions.
The Directors have prepared trading and cash flow forecasts for the Group up to and including the year
ended 31 December 2019. The forecasts incorporate a number of trading assumptions, including income
from existing licence contracts, and contracts which are in the process of being negotiated. The forecasts
show that the Group has sufficient cash to meet its liabilities as they fall due for a period of 12 months from
the date of signature of the financial statements.
The Directors believe these forecasts to be realistic and consequently have prepared the financial statements
on the going concern basis, which assumes that the Group will continue in operational existence for the
foreseeable future.
1.2 Adoption of standards effective in 2017
The financial statements are prepared in accordance with International Financial Reporting Standards and
Interpretations as adopted by the EU in force at the reporting date.
New and Revised Standards
There were no new standards in effect that have had a significant effect on the financial statements. There
have been improvements to standards which provide clarifications rather than substantive changes to
existing requirements.
IFRS in issue but not applied in the current financial statements
The following IFRS and IFRIC Interpretations have been issued but have not been applied by the Group
and the Company in preparing these financial statements, as they are not as yet effective and, in some
cases, had not yet been adopted by the EU. The Company intends to adopt these Standards and
Interpretations when they become effective, rather than adopt them early.
•
•
•
•
•
IFRS 9, ‘Financial Instruments’
IFRS 15, ‘Revenue from Contracts with Customers’
IFRS 16 ‘Leases’
IFRS 10 and IAS 28 (amendments), ‘Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture’
Amendments to IFRS 2, ‘Classification and Measurement of Share-based Payment Transactions’
28 Live Company Group Plc
1. Basis of preparation continued
•
•
Amendments to IAS 7, ‘Disclosure Initiative’
Amendments to IAS 12, ‘Recognition of Deferred Tax assets for Unrealised Losses’
The Directors do not expect that the adoption of the Standards listed above will have a material impact on
the Group in future periods except that IFRS 9 will impact both the measurement and disclosure of financial
instruments and IFRS 15 may have an impact on revenue recognition and related disclosures. Beyond this,
it is not practicable to provide a reasonable estimate of the effect of IFRS 9 and IFRS 15 until a detailed
review has been completed.
IFRS 16 is a significant change to lease accounting and all leases will require balance sheet recognition of
a liability and a right-of-use asset, except short term leases of low value assets. The effect on the Group is
expected to be immaterial.
A number of IFRS and IFRIC interpretations are also currently in issue which are not relevant for the
Company’s activities and which have not therefore been adopted in preparing these financial statements.
2. Accounting policies
2.1 Business combinations and investments
The consolidated financial statements incorporate:
•
•
The results of Brick Live Group for the year ended 31 December 2017; and
The assets and liabilities of Brick Live Group as parent company and its subsidiary companies
(including LVCG) as at 31 December 2017.
A number of transactions took place on 22 December 2017.
Order of transactions
The Directors have discussed the timing of each of the eight LVCG equity transactions that took place on
22 December 2017 and in accordance with the requirements of IFRS3 determined that they took place in
the order as shown below. This order drives the value of the notional consideration paid by Brick Live Group
for LVCG on the reverse acquisition. The following points are relevant:
•
•
•
•
The acquisition of Brick Live Group was deemed to happen first as, without this acquisition, none of
the other transactions would have been possible. This acquisition gave the Group a business whose
growth prospects encouraged the other equity transactions (such as the fundraising and conversion
of loans) to take place.
The acquisition of Parallel Live took place after the acquisition of Brick Live Group because it is a far
smaller company than Brick Live Group and promoted its first event in the United States, which the
Board consider to be an important area for future potential business.
The acquisition by LVCG of the remaining shares in BLFE (not already owned by Brick Live Group)
was deemed to happen next.
The share placing is determined to have happened next, on the basis that this provided the necessary
working capital for the Group to fund the anticipated increase in the footprint of BRICKLIVE events
globally. This fundraising was integral to the decision by David Ciclitira to convert his outstanding loans
to LVCG to equity and for the two other directors, namely Ranjit Murugason and Simon Bennett, to
capitalise their outstanding fees into equity.
Live Company Group Plc 29
Notes Forming Part of the Financial Statements
continued
2. Accounting policies continued
The equity transactions explained in detail
LVCG issued shares for multiple transactions all on the same day, 22 December 2017.
The detail of each transaction is described below:
1.
LVG acquisition of Brick Live Group Limited and subsidiaries – consideration of 16,666,666
new ordinary shares in LVCG with a nominal value of 1p and a price of 30p per share, resulting
in total transaction consideration of £5,000,000.
LVCG acquired the entire share capital of Brick Live Group Limited for consideration of £5,000,000
settled in shares. In the company’s own records, this was accounted for by recognising the £166,667
nominal value of the shares issued as share capital, with the premium of £4,833,333 recognised as a
merger reserve (on the basis that Merger Relief applies as 90% or more of the consideration was in
the form of shares in the legal acquirer). LVCG’s legal investment in Brick Live Group was subject to
a formal impairment review by the Directors prior to signing these accounts, who concluded that no
impairment was required.
In order to account for the transaction as a reverse acquisition, on a consolidated basis, it was
necessary to ascertain the notional value that the accounting acquirer, Brick Live Group, had paid for
the accounting acquiree, LVCG. This was determined by using the market value price at which the
shares were issued, which was 30p. At that date, the company had 3,009,233 shares in issue,
resulting in calculated consideration of £902,770. LVCG had net liabilities at completion of the
transaction of £3,678,396 (as this was before the loans and outstanding director fees due to David
Ciclitira, Ranjit Murugason and Simon Bennett had been capitalised), resulting in a goodwill asset
arising on acquisition of £4,581,166.
This goodwill asset of £4,581,166 was subject to a formal impairment review by the Directors who
determined that the fair value of LVCG was £nil. As a stand-alone company, it has limited trading
activities and generated no revenue in 2017. These factors, combined, resulted in a full impairment of
the goodwill asset of £4,581,166 generated on consolidation from the reverse acquisition of LVCG by
Brick Live Group.
2.
LVCG acquisition of Parallel Live Group Limited and its subsidiaries – consideration of
3,333,334 new ordinary shares in LVCG with a nominal value of 1p at a price of 30p per share,
resulting in total transaction consideration of £1,000,000.
LVCG acquired the entire share capital of Parallel Live Group Limited for £1,000,000 settled in shares.
In the company’s own records, this was accounted for by recognising the £33,334 nominal value of
the shares issued as share capital, with the premium of £966,666 recognised as a merger reserve (on
the basis that Merger Relief applies as 90% or more of the consideration was in the form of shares in
the legal acquirer).
The acquisition of Parallel Live Group was accounted for using the purchase method of accounting.
Under the purchase method the results of subsidiary undertakings are included from the date of
acquisition and the goodwill value is calculated as the difference between the fair value of the
consideration and the fair value of the net assets/liabilities at the date of the acquisition.
The fair value of the consideration was £1,000,000, whereas the net liabilities of Parallel Live Group
at acquisition were £271,336 and therefore a goodwill asset arose relating to this acquisition of
£1,271,336. This goodwill was subject to a formal impairment review by the Directors prior to signing
these accounts, who concluded that no impairment was required.
30 Live Company Group Plc
2. Accounting policies continued
3.
LVCG acquisition of 61.1% stake Brick Live Far East Limited (“BLFE”) – consideration of
9,832,060 new ordinary shares in LVCG with a nominal value of 1p and a price of 30p per share,
resulting in total transaction consideration of £2,949,618.
Brick Live International Limited (a wholly owned subsidiary of Brick Live Group) already held a direct
38.9% shareholding in BLFE prior to this transaction. BLFE is a company registered in Hong Kong
which owns a 49% stake in the Brick Live Group’s China joint venture company, Brick Live Centre
Education Development (Beijing) Company Limited.
LVCG’s acquisition of BLFE has been accounted for using the purchase method of accounting. Under
the purchase method the results of subsidiary undertakings are included from the date of acquisition
and the goodwill value is calculated as the difference between the fair value of the consideration and
the fair value of the net assets/liabilities at the date of the completion.
The fair value of the consideration was £2,949,618, net assets of BLFE at completion were £nil and
so, hence, the goodwill asset relating to this acquisition is £2,949,618. This investment was subject
to a formal impairment review by the Directors prior to signing these accounts, who concluded that
no impairment was required.
4.
The fund raising of 4,200,000 new ordinary shares in LVCG with a 1p nominal value and a price
of 30p per share (£1,260,000 gross proceeds).
LVCG issued new ordinary shares which generated £1,260,000 of cash prior to the expenses of the
transaction. The nominal value of the shares of £42,000 was taken to share capital with the balance
of £1,218,000 treated as share premium.
5. Conversion of David Ciclitira loans by issue of 6,766,667 new ordinary shares in LVCG with a
1p nominal value at a price of 30p per share
At 22 December 2017, Mr David Ciclitira (a Director) had outstanding loans due to him from the
company of £2,030,000. These loans were converted into new ordinary shares.
6. Conversion of outstanding fees due to Ranjit Murugason by the issue of 616,500 new ordinary
shares in LVCG with a 1p nominal value at a price of 30p per share.
At 22 December 2017, Mr Ranjit Murugason (a Director) was owed a total of £184,950 in respect of
past directors fees and associated costs and his fee for work done in connection with the acquisition
of the Brick Live Group. These outstanding fees were converted into new ordinary shares.
7. Conversion of outstanding fees due to Simon Bennett by issue of 116,667 new ordinary shares
in LVCG with a 1p nominal value at a price of 30p per share.
At 22 December 2017, Mr Simon Bennett (a Director) was owed a total of £35,000 in respect of his
fee for work done in connection with the acquisition of the Brick Live Group. These outstanding fees
were converted into new ordinary shares.
8.
Settlement of merchandising rights for by the issue of 333,333 new ordinary shares in LVCG
with a 1p nominal value and a price of 30p per share.
CIDEA, a Korean company controlled by Mr Hyun Seok Kim, was granted certain merchandising rights
for the Greater China territory. LVCG, Brick Live International and CIDEA entered into a contractual
arrangement whereby CIDEA agreed to relinquish these rights and was as a result issued with shares
to the value of £100,000.
Live Company Group Plc 31
Notes Forming Part of the Financial Statements
continued
2. Accounting policies continued
Rationale
The Directors first considered whether the first three transactions were business combinations in
accordance with the requirements of IFRS3. To be treated as business combinations all parties must be
capable of being conducted and managed for the purpose of providing a return. The Brick Live Group and
Parallel Live were trading and clearly businesses in accordance with the IFRS 3 definition. In 2017, although
LVCG did not generate any revenue, it incurred administrative expenses and the Directors were exploring
opportunities for the company. On this basis the Directors have concluded that the transactions are business
combinations.
The first transaction, being LVCG’s acquisition of Brick Live Group has been treated as a reverse acquisition
predominantly on the basis of the ‘size’ and ‘management’ criteria described in IFRS3:
Size
• Where one entity is significantly greater in size than the other it is usually the acquirer.
For the year ended 31 December 2017 the Brick Live Group reported growing revenue of
£1,928,000 compared with LVCG’s revenue of £nil. In addition, the Brick Live Group had
employees during the year and LVCG did not and Brick Live Group had a significantly lower
level of net liabilities at completion than LVCG.
Management
•
Senior management of the combined entity – the entity whose (former) management dominate the
combined management is usually the acquirer.
Day-to-day management of the enlarged group consists of Brick Live Group’s previous and
current management. All key strategic decisions in the enlarged group relate to the trade of
Brick Live Group.
Impact on Consolidated Income Statement
The impact of treating LVCG’s acquisition of Brick Live Group as a reverse acquisition is that Brick Live
Group is considered to be the acquirer for the purposes of the consolidated financial statements. It is
important to note that this is only the case in the consolidated accounts; in LVCG’s own accounts, LVCG
remains the legal acquirer of Brick Live Group and therefore recognises the acquisition as an investment in
its own financial statements.
The most material consequence of treating Brick Live Group as the accounting acquirer at a consolidated
level, is that the Consolidated Income Statement reflects the trading performance of Brick Live Group for
the year ended 31 December 2017, and LVCG from only the date of the reverse acquisition on 22 December
2017. As a result, there is a material change from the published 2016 financial statements, hence the
comparatives are entirely different from last year’s annual report (as they reflect the 2016 trading
performance of Brick Live Group and not that of LVCG). The results of LVCG would be required to be added
into the 2017 consolidation from the date of acquisition, but as the reverse acquisition of Brick Live Group
was completed on 22 December 2017, only nine days before the financial year end, the results for LVCG
for this period are immaterial and have therefore been excluded.
Impact on Statement of Financial Position
The Statement of Financial Position at 31 December 2017 shows the consolidated assets and liabilities of
the Group and so there is little change as a result of the treatment of the acquisition of Brick Live Group as
a reverse acquisition (other than the treatment of the transaction itself, explained later in this note).
The main impact is shown in equity. IFRS3 has specific requirements for reserves that should be shown in
the financial statements in the event of a reverse acquisition:
•
Legal parent company for all reserves relating to the issue or redemption of shares;
32 Live Company Group Plc
2. Accounting policies continued
•
Accounting acquirer (in this case, Brick Live Group) for all distributable reserves.
This resulted in several adjustments to brought forward reserves:
•
•
•
The consolidated share capital of the group should be that of the parent company, LVCG. That
company issued new share capital during the year ended 31 December 2017 to the value of £452,000
(excluding share premium). This was for the acquisition of Brick Live Group and Parallel Live (£200,000
share capital, plus £5,800,000 treated as a merger reserve due to the acquisition consideration
consisting of over 90% shares in the acquiring company), a share placing for cash on 22 December
2017 (£42,000 share capital, plus £1,218,000 share premium), the acquisition of a 61.1% acquisition
of Brick Live Far East Limited (£98,000 share capital and £2,851,000 share premium), conversion of
Director loan accounts and buy-out of David Ciclitira’s commission arrangements (£108,000 share
capital and £3,142,000 share premium) and the purchase of merchandise stock for shares (£4,000
share capital and £96,000 share premium).
The profit and loss reserve should be that of the deemed accounting acquirer, which under the reverse
acquisition rules, is Brick Live Group. Therefore the 2016 profit and loss reserve has been restated to
reflect the consolidated profit and loss reserve balance of Brick Live Group at 31 December 2016,
which was £49,000.
The Company has applied Merger Relief accounting principles as set out Companies Act 2006 in
relation to the treatment of the acquisition of Brick Live Group in its own accounts. The relief applies
on the basis that at least 90% of the consideration to acquire Brick Live Group was settled in the form
of shares in LVCG. As a result, the credit (which would ordinarily be taken to the share premium
account) is taken to the merger reserve.
The Statement of Changes in Equity also shows several other equity transactions, which all happened on
the same date as the acquisition of Brick Live Group. The accounting treatment is based on the equity
structure of the consolidated group at the point of each equity transaction.
Intercompany balances
All intercompany balances are eliminated on consolidation.
2.2 Intangible assets – Tournament rights
The rights to promote European Tour golf events were acquired by LVCG in September 2006 and are
included in the statement of financial position as intangible assets in the audited financial statements for
the year ended 31 December 2017. These assets were intended to be amortised over their expected life
of 20 years. However, these assets were impaired to a net book value of £1,000 as of 31 December 2016
to reflect the fact that the ongoing business of LVCG is not expected to generate revenues from these rights
in the foreseeable future.
2.3 Investment in joint ventures
A joint venture is an entity over which the Group has joint control. Joint control is the contractually agreed
sharing of control over an economic activity and exists only when the strategic financial and operating
decisions relating to the activity require the unanimous consent of the parties sharing control. The investment
in a joint venture is initially recognised at cost and adjusted for the Group’s share of the changes in the net
assets of the joint venture after the date of acquisition, and for any impairment in value. If the Group’s share
of losses of a joint venture exceeds its interest in the joint venture, the Group discontinues recognising its
share of further losses.
2.4 Property, plant & equipment
All property, plant and equipment assets are stated at cost less accumulated depreciation.
Live Company Group Plc 33
Notes Forming Part of the Financial Statements
continued
2. Accounting policies continued
Depreciation is provided on bricks and content at 25% on a straight-line basis to reflect their useful life.
Residual values, remaining useful lives and depreciation methods are reviewed annually and adjusted if
appropriate.
Bricks and content are capitalised in the periods in which they are purchased and valued at the lower of
cost and net realisable value.
Depreciation on other fixtures, fittings and office equipment is provided at 20% on a straight-line basis.
Residual values, remaining useful lives and depreciation methods are reviewed annually and adjusted if
appropriate.
2.5 Impairment of assets
The carrying amounts of the Group’s assets, other than inventories, are reviewed at each reporting date to
determine whether there is any indication of impairment.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount. Impairment losses are recognised in the Income Statement. An impairment
loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation, if no impairment loss had been recognised.
The Directors have carried out a formal impairment review on all material assets at 31 December 2017. No
impairment losses have been made, other than the impairment relating to the reverse acquisition of BLG
and the investment into the joint venture as set out respectively in notes 2.1 and 17 to these financial
statements.
2.6 Financial instruments
The Group classifies financial instruments, or their component parts, on initial recognition as a financial
asset, a financial liability or an equity instrument in accordance with the substance of the contractual
arrangement.
Financial instruments are recognised on trade date when the Group becomes a party to the contractual
provisions of the instrument. Financial instruments are recognised initially at fair-value plus, in the case of a
financial instrument not at fair-value through profit and loss, transaction costs that are directly attributable
to the acquisition or issue of the financial instrument.
Financial instruments are derecognised on trade date when the Group is no longer a party to the contractual
provisions of the instrument.
2.7 Trade receivables
Trade receivables are stated at their amortised cost. Trade receivables are reduced by appropriate
allowances for estimated irrecoverable amounts.
2.8 Cash and cash equivalents
Cash equivalents comprise short-term, highly liquid investments that are readily convertible into known
amounts of cash and which are subject to an insignificant risk of changes in value.
2.9 Trade payables
Trade payables are stated at their amortised cost.
34 Live Company Group Plc
2. Accounting policies continued
2.10 Interest-bearing borrowings (other than compound financial instruments)
Interest-bearing borrowings are stated at amortised cost using the effective interest method. The effective
interest method is a method of calculating the amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future cash payments through the expected life of the financial liability.
2.11 Revenue recognition
Revenue is the value of goods and services provided by the Group to customers, net of VAT and discounts.
Revenue includes licence fees, revenue from the sale of content (mostly large Lego-based statues), brick
lease fees and ticket sales from self-promoted events. Revenue is recognised when the Group has earned
the right to receive consideration for its performance, measured on the following basis:
(i)
Annual licence fees – on a straight-line basis in accordance with the terms of the agreement, unless
it is non-refundable in which case fees are recognised on the contractual invoice date;
(ii) Event licence fees and revenue shares – on the completion of the event in accordance with the terms
of the agreement;
(iii) Content fees – on delivery of the specific content to the client in accordance with the terms of the
agreement;
(iv) Brick lease fees – on a straight-line basis in accordance with the terms of the agreement; and
(v)
Ticket sales from self-promoted events – on the date of the event.
2.12 Deferred taxation
Deferred tax is provided in full using the balance sheet liability method. Deferred tax is the future tax
consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities
shown on the statement of financial position.
The amount of deferred tax provided is based on the expected manner of recovery or settlement of the
carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting
date.
The Group does not recognise deferred tax liabilities, or deferred tax assets, on temporary differences
associated with investments in subsidiaries, as it is not considered probable that the temporary differences
will reverse in the foreseeable future.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
available against which the asset can be utilised. The carrying amounts of the deferred tax assets are
reviewed at each statement of financial position date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the assets to be recovered.
2.13 Segmental reporting
LVCG has two operating segments, namely: proprietary shows (events) and licences. In identifying these
operating segments, management generally follows the Group’s service lines representing its main products
and services (see note 4). All inter-segment transfers are carried out at arm’s length prices.
For management purposes, the Group uses the same measurement policies as those used in its financial
statements, except for certain items not included in determining the operating profit of the operating
segments, such as share-based payment expenses.
In addition, corporate assets which are not directly attributable to the business activities of any operating
segment are not allocated to a segment. This primarily applies to the Group’s headquarters.
Live Company Group Plc 35
Notes Forming Part of the Financial Statements
continued
2. Accounting policies continued
2.14 Foreign currencies
Monetary assets and liabilities expressed in foreign currencies are translated at the rates of exchange ruling
at the reporting date. Transactions in foreign currencies are translated at the rate ruling at the date of the
transaction. Differences on exchange arising on translation of subsidiaries are charged directly to other
comprehensive income. All other exchange differences have been charged to the Income Statement in the
period under review.
2.15 Business combinations
The information contained in this note sets out how the group typically accounts for Business Combinations,
which is effectively using the purchase method explained in IFRS3, “Business Combinations”. However, it
is important to that that LVCG’s acquisition of Brick Live Group was not accounted for in this way, as it was
considered to be a reverse acquisition under the IFRS3 reverse acquisition requirements.
In the event of acquisitions which are not treated as a reverse acquisition, the company accounts for these
transactions using the purchase method as follows:
The cost of an acquisition is measured as an aggregate of the consideration transferred, measured at the
acquisition date fair-value and the amount of any non-controlling interest in the acquiree. For each business
combination, the Group measures the non-controlling interest in the acquiree at the proportionate share of
the acquiree’s identifiable net assets. Subsequent changes in the proportion of the non-controlling interests,
which do not result in de-recognition of the subsidiary, are accounted for in equity. Costs incurred in
connection with the acquisition are recognised in profit or loss as incurred.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and
pertinent conditions at the acquisition date.
If the business combination is achieved in stages, the acquisition date fair-value of the Group’s previously
held equity interest in the acquiree is re-measured to fair-value at the acquisition date through profit or loss.
Goodwill is initially measured at cost being the excess of the consideration transferred over the Group’s
share of net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair-
value of nets assets of the subsidiary acquired, the difference is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any recognised impairment losses. For the purpose
of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated
to either the acquired business or to each of the Group’s cash generating units that are expected to benefit
from the combination irrespective of whether other assets or liabilities of the acquiree are assigned to those
units.
Where goodwill forms a part of a cash-generating unit and part of the operation within that unit is disposed
of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation
when determining the gain or loss on disposal of the operation. Goodwill disposed of in these circumstances
is measured based on the relative values of the operation disposed of and the portion of the cash-generating
unit until retained.
Goodwill arising from business combinations is assessed for impairment annually.
The results of the acquired operations are included in the consolidated Income Statement and consolidated
statement of comprehensive income from the date on which control is obtained.
36 Live Company Group Plc
2. Accounting policies continued
2.16 Exceptional items
Exceptional costs and are those costs incurred by the Group which are considered by the Directors to be
material in size and are unusual and infrequent in occurrence which require separate disclosure within the
financial statements. See note 7 for details of exceptional items ensuing in the year.
2.17 Prior Period Restatement
These 2017 accounts reflect a historic restatement to share capital and the share premium account.
On 27 December 2013, a capital reorganisation took place whereby 49,140,569 existing Ordinary Shares
of 2.2p each were consolidated on a 24:1 basis creating 2,047,523 ordinary shares of 52.8p each.
Immediately following this, each Ordinary share of 52.8p was subdivided into one New Ordinary Share of
1p each, and one New Deferred Share of 51.8p each. This resulted in 2,047,523 New Ordinary Shares
and 2,047,523 New Deferred Shares with effect from 27 December 2013.
On 30 December 2013, a total of 961,710 New Ordinary Shares were issued at £1.56 per share which
should have been accounted for as increasing nominal share capital by £9,617 and increasing share
premium by £1,490,650.
However, these shares were incorrectly accounted for as having been issued before the capital
reorganisation and were subsequently treated as having been for Ordinary Shares of 52.8p, and therefore
the incorrect position of 3,009,233 New Deferred Shares was arrived at. This led to the nominal share
capital balance being overstated, and the share premium balance being understated.
To rectify this, the share capital balance for 2016 has been reduced by £498,166 and the balance standing
to the credit of the share premium account has been increased by the same amount.
Accordingly, the issued share capital of the Company at 31 December 2013 comprised: 3,009,233 ordinary
shares of £0.01 each; 2,047,523 new deferred shares of £0.518 each; 199,831,545 deferred ordinary
shares of £0.005 each and 103,260 deferred B shares of £19.60 each. This position remained unchanged
at 31 December 2016.
3. Accounting estimates and judgements
The preparation of financial information in accordance with generally accepted accounting practice, in the
case of the Group, being International Financial Reporting Standards as adopted by the European Union,
requires the Directors to make estimates and judgements that affect the reported amount of assets,
liabilities, income and expenditure and the disclosures made in financial statements. Such estimates and
judgements must be continually evaluated based on historical experience and other factors, including
expectations of future events.
The significant judgements made by management in applying the Group’s accounting policies as set out
above, and the key source of estimation, were:
Notional consideration value of LVCG
As the acquisition of Brick Live Group by LVCG was treated as a reverse acquisition, the Directors have
had to assign a notional consideration value to LVCG. As a publicly traded company, this was calculated
by using the market value that the shares were issued at to fund the legal acquisition of Brick Live Group
by LVCG. This is explained in more detail in note 2.1.
Impairment review of value of LVCG
The reverse acquisition of LVCG by Brick Live Group created a goodwill asset of £4,581,000. The Directors
carried out a formal impairment review on this goodwill asset and deemed that it should be fully impaired.
This is on the basis that LVCG has limited trading activities and generated no revenue in 2017, as explained
in note 2.1.
Live Company Group Plc 37
Notes Forming Part of the Financial Statements
continued
3. Accounting estimates and judgements continued
Impairment review of Brick Live Group
The Directors have carried out an impairment review of LVCG’s £5,000,000 investment into Brick Live
Group, £1,000,000 investment into Parallel Live and LVCG’s £2,949,618 investment in BLFE, all held within
the consolidated group as at 31 December 2017. It was deemed that no impairment is required to the cost
of these investments or the related goodwill.
Depreciation
Depreciation rates have been set to accurately reflect the reduction in value of assets over their economic
life, less their expected residual value. This requires judgement by the Directors, who have set the
depreciation rates as detailed in Note 2.4 to these financial statements based on their knowledge of the
industry and typically how long each asset type retains its value.
Revenue recognition
Revenue from contracts is assessed on an individual basis with revenue earned being ascertained as the
right to the economic benefit from the contract transfers to the Group. This requires judgement as each
revenue transaction is assessed separately, albeit under the general guidelines of the accounting policies
for revenue recognition as explained in note 2.11 to these financial statements.
4. Segment reporting
As described in note 1 to these financial statements, the Directors consider that the Group’s internal financial
reporting is organised along product and service lines and therefore segmental information has been
presented about LVCG’s business segments. The segmental analysis of the Group’s business was derived
from its principal activities as set out below.
Reportable segments
The reportable segment results for the year ended 31 December 2017 are as follows:
Revenues from external customers
Total revenue
Cost of sales
Administrative expenses
Finance costs
Exceptional items
Segment (loss)/profit for the year
Events
£000s
213
213
280
48
–
–
(115)
Licences
£000s
1,715
1,715
Unallocated
£000s
–
–
546
1,145
–
–
–
300
12
5,037
24
(5,349)
The reportable segment results for the year ended 31 December 2016 are as follows:
Events
£000s
428
428
91
–
–
337
Licences
£000s
1,307
1,307
302
780
–
225
Unallocated
£000s
–
–
–
502
11
(513)
Revenues from external customers
Total revenue
Cost of sales
Administrative expenses
Taxation
Segment profit/(loss) for the year
38 Live Company Group Plc
Total
£000s
1,928
1,928
826
1,493
12
5,037
(5,440)
Total
£000s
1,735
1,735
393
1,282
11
49
4. Segment reporting continued
Segment assets consist primarily of property; plant and equipment, intangible assets, investments, goodwill,
trade and other receivables and cash and cash equivalents. Unallocated assets comprise deferred taxation;
available for sale financial assets, financial assets held at fair value through profit or loss, and derivatives.
Segment liabilities comprise operating liabilities; liabilities such as deferred taxation are not allocated to
individual business segments.
Segment assets and liabilities as at 31 December 2017 are as follows:
Assets
Liabilities
Events
£000s
50
Licences
£000s
6,966
Unallocated
£000s
–
Total
£000s
7,016
549
3,611
12
4,172
Segment assets and liabilities are reconciled to the Group’s assets and liabilities as follows:
Segment assets/liabilities
Unallocated:
Deferred tax
Segment assets and liabilities as at 31 December 2016 are as follows:
Assets
£000s
Liabilities
£000s
–
–
12
12
Tota
£000s
1,284
Events
£000s
141
Licences
£000s
1,142
Unallocated
£000s
1
431
793
11
1,235
Assets
Liabilities
Segment assets and liabilities are reconciled to the Group’s assets and liabilities as follows:
Segment assets/liabilities
Unallocated:
Deferred taxation
Investment
Assets
£000s
Liabilities
£000s
1
1
11
11
Geographical information
The Group’s business segments operate in three principal geographical areas, although they are managed
on a worldwide basis from the Group’s head office in the United Kingdom.
A geographical analysis of the Group’s revenue and non-current assets is given below. Revenue is allocated
based on the location of the customer; non-current assets are allocated based on the physical location of
the asset.
Revenue
United Kingdom
Europe
Far East and China
2017
£’000
634
440
854
1,928
2016
£’000
423
–
1,312
1,73
Live Company Group Plc 39
Notes Forming Part of the Financial Statements
continued
4. Segment reporting continued
Non-current assets
United Kingdom
Europe
Unallocated
2017
£’000
798
–
4,222
5,020
2016
£’000
179
–
–
179
Major customers
Included within revenue arising from licences are revenues of approximately £455,000 (2016: £378,000)
which arose from sales to the Group’s largest customer.
5. Operating (loss)/profit before exceptional items
This is stated after charging:
Content and Bricks Depreciation (included within cost of sales)
Office Equipment Depreciation (included within administrative expenses)
Exceptional items (see Note 6 below)
6. Exceptional items
The exceptional items are made up as follows:
Impairment of goodwill
David Ciclitira commission
Merchandising rights
2017
£’000
117
1
5,037
2017
£’000
4,582
355
100
5,037
2016
£’000
–
4
–
2016
£’000
–
–
–
–
2017 Exceptional Items
•
As a result of the reverse acquisition treatment of the acquisition of Brick Live Group by LVCG, notional
consideration was applied to the transaction which created a goodwill asset on consolidation of
£4,581,166. This goodwill asset was subject to a formal impairment review by the Directors who
determined that the fair value of LVCG was £nil. As a stand-alone company, it has limited trading
activities and generated no revenue in 2017. These factors, combined, resulted in a full impairment of
the goodwill at 31 December 2017.
•
•
Prior to the acquisition of Brick Live Group by LVCG, Mr David Ciclitira charged £355,000 of
commission on related sales made during 2017, in line with his agreement with Brick Live Group. This
contractual agreement was settled by the Company on 22 December 2017 in exchange for
£1,000,000 of shares in LVCG. This commission will therefore not be an ongoing cost in the company
(other than that which would normally be released as part of the deferred revenue balance) and so
has been treated as exceptional.
A company controlled by Mr Hyun Seok Kim has agreed to relinquish certain merchandising rights in
Asia for a consideration of £100,000, which was settled by the issue of 333,333 new ordinary shares
in LVCG.
40 Live Company Group Plc
6. Exceptional items continued
2016 Exceptional Items
There are no exceptional items in 2016 as the accounts have been prepared using reverse acquisition
accounting and so the consolidated profit and loss account relates to the trading performance of Brick Live
Group.
Readers of these financial statements should be aware that the 2016 annual report for LVCG included
£1,182,000 of exceptional items relating to the holding company (mostly impairment review write-downs).
Full analysis of these exceptional items can be reviewed in the publicly available 2016 annual report.
7. Auditor’s remuneration
Fees payable to the auditor Kingston Smith LLP for the audit of the
annual accounts of the Group, the Company and the Group subsidiaries.
Services relating to taxation
8. Employees
Group
The average number of employees (including Directors not under
employment contracts) during the year was:
Administration
The aggregate payroll costs including Directors not under employment
contracts) were:
Wages, salaries and fees
Social security costs
2017
£’000
51
10
61
2016
£’000
30
5
35
2017
2016
(Number)
5
(Number)
0
2017
£’000
394
4
398
2016
£’000
–
–
–
Due to the requirements of IFRS 3 in relation to the reverse acquisition, the wages and salaries figures
above constitutes that of Brick Live Group and not LVCG.
9. Remuneration of Directors
The Directors are the key management personnel of the Group. Directors’ remuneration and fees, relating
to LVCG and including non-executive Directors, during the year were as follows:
LVCG Directors
David Ciclitira (Chairman)
Maria Serena (Non–Executive)
Ranjit Murugason (Non–Executive)
Timothy Sturm (Non–Executive)
Total Emoluments
2017
£’000
191
30
185
–
430
2016
£’000
110
15
35
15
175
Live Company Group Plc 41
Notes Forming Part of the Financial Statements
continued
9. Remuneration of Directors continued
In addition to the disclosures above, Clive Morton, a Director of Brick Live Group in the year, was paid total
emoluments from Brick Live Group of £152,000 (2016: £47,000).
•
•
Mr Ciclitira received £8,000 in respect of life insurance and pension contributions and £12,000 in
respect of healthcare costs. In addition, he reclaimed £38,000 in business expenses incurred.
All the Group Directors are covered by Group Directors’ liability insurance policy.
The directors’ emoluments referred to in this note refer solely to the directors of LVCG. As such, these do
not refer back to the Consolidated Income Statement (which constitutes just Brick Live Group because of
the reverse acquisition accounting treatment); however, the remuneration of all Group directors has been
provided for transparency. Further details are provided in the Related Parties Note 27 to these Financial
Statements.
It should be noted that £105,000 of the above director fees related to project fees for work done in
connection with the reverse takeover of the Brick Live Group by LVCG by Ranjit Murugason and Simon
Bennett as set out in the Admission document.
10. Finance costs
Bank fees
Finance costs
11. Tax
UK Corporation tax in respect of current year:
Current taxation
Total tax charge for the year
(Loss)/profit on ordinary activities before tax
(Loss)/profit on ordinary activities at the standard rate of corporation
tax of 2017 19% (2016 – 20%)
Effect of:
Tax losses carried forward/utilised against profits – deferred tax not recognised
Total tax charge for the year
2017
£’000
12
12
2017
£’000
–
–
(5,440)
–
–
–
2016
£’000
–
–
2016
£’000
11
11
60
11
–
11
42 Live Company Group Plc
12. Earnings per share
The basic earnings per share is calculated by dividing the (loss)/profit attributable to equity shareholders by
the weighted average number of shares in issue during the year. In calculating the diluted earnings per
share, any outstanding share options, warrants and convertible loans are taken into account where the
impact of these is dilutive.
(Loss)/profit for the financial year after tax (£'000s)
(Loss)/profit for the year on continuing operations (£'000s)
(Loss)/profit for the year on continuing operations (£'000s)
Weighted average number of shares in issue
Basic and diluted earnings per share on total operations*
Basic and diluted earnings per share on continuing operations*
2017
(5,440)
(5,440)
(5,440)
48,207,793
2016
49
49
49
16,666,667
(0.11p)
(0.11p)
0.03p
0.03p
* Diluted earnings per share in both 2017 and 2016 are the same as basic earnings per share, as there are no options in issue
during these years.
The 2016 calculation is based on IFRS guidance as to calculating earnings per share in a reverse acquisition.
The weighted average number of shares is taken to be the number of shares issued for the reverse
acquisition, which in this case was 16,666,667.
13. Property, plant & equipment
The useful lives of each class of property, plant and equipment are reviewed annually to assess impairment.
Where the asset is found to be impaired an appropriate charge is taken to the Income Statement.
Cost
Cost at start of year
Additions for year
Cost at end of year
Depreciation
Cumulative depreciation at start of year
Charge for year
Cumulative depreciation at end of year
Net book value at end of year
Net book value at start of year
Group
2017
£’000
182
738
920
4
118
122
798
178
2016
£’000
–
182
182
–
4
4
178
–
Company
2017
£’000
2016
£’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
The majority of the 2017 additions relating to Lego® content and bricks for long term use within LVCG’s
business.
Live Company Group Plc 43
Notes Forming Part of the Financial Statements
continued
14. Intangible assets
Tournament rights
Tournament rights are the rights to promote European Tour golf events acquired in a market transaction in
September 2006. These assets are carried at cost less amortisation. Amortisation was initially calculated
to write off the assets over their expected useful life of 20 years; however, the Directors undertook an
impairment review regarding the value of the Tournament rights in 2016 which resulted in a write down to
£1,000. The net book value of these tournament rights is unchanged at 31 December 2017.
Group
2016
£’000
Company
2017
£’000
2016
£’000
2,713
2,713
Cost
Cost at start of year
Deemed acquisitions as a result of reverse
acquisition accounting
Additions in the year
Cost at end of year
Amortisation
Cumulative amortisation at start of year
Cumulative amortisation on acquisitions
as a result of reverse acquisition accounting
Impairment during the year
Net book value at start of year
Net book value at end of year
15. Investments
Investment in subsidiary
Impairment review
2017
£’000
–
2,713
–
2,713
–
2,712
2,712
–
1
2017
£’000
–
–
–
–
–
–
–
–
–
–
–
–
–
2,713
2,712
–
2,712
1
1
–
2,713
1,255
136
1,321
2,712
1,458
1
2016
£’000
54
(54)
–
Group
Company
2016
£’000
1
–
1
2017
£’000
8,950
–
8,950
Within the company, there are investments totalling £8,950,000. Of this amount, £5,000,000 relates to
Brick Live Group, £1,000,000 to Parallel Live Group and £2,950,000 to the additional shares purchased of
BLFE which had not previously been owned by Brick Live Group.
44 Live Company Group Plc
16. Goodwill
Goodwill
Impairment
Group
Company
2017
£’000
8,802
(4,581)
4,221
2016
£’000
–
–
–
2017
£’000
–
–
–
2016
£’000
–
–
–
All goodwill was created during 2017. The £4,581,166 goodwill asset created and subsequently impaired
to £nil in the year relates to the reverse acquisition of LVCG by Brick Live Group, as more fully explained in
note 2.1 to these financial statements.
The year-end net book value of £4,221,000 relates to £1,271,000 of goodwill for the acquisition of Parallel
Live and £2,950,00 for the acquisition by LVCG of the remaining shares in BLFE not already owned by
Brick Live Group. A formal impairment review has been carried out on these carrying values and the
Directors have determined that that no impairment of goodwill is required. This is explained further in note
3.
17. Investments in joint ventures
In July 2017, Brick Live Far East entered into a long-term agreement with Fortune Access, to create a jointly
owned limited liability foreign enterprise company in China called BRICKLIVE China. BLFE has agreed to
invest 980,000 RMB (approximately £112,000) for a 49 percent shareholding in BRICKLIVE China, with
the final instalment being due by 30 December 2018. At the year end, £56,215 had been invested into the
joint venture.
The results of the joint ventures owned during the year are:
Turnover
Loss before tax
Taxation
Loss after tax
–
2017
£’000
–
(64)
(64)
2016
£’000
–
–
–
On the basis of the above performance, the £56,215 investment into the joint venture was impaired to
£nil.
18. Trade and other receivables
Trade receivables
Amounts owed by subsidiaries
Other receivables
Prepayments and accrued income
Trade and other receivables
Group
Company
2017
£’000
359
–
209
557
1,125
2016
£’000
94
–
839
172
1,105
2017
£’000
–
143
76
–
219
2016
£’000
20
583
–
–
603
At 31 December 2017 all amounts included under trade receivables are due within one year.
Live Company Group Plc 45
Notes Forming Part of the Financial Statements
continued
19. Cash and cash equivalents
Sterling bank accounts
Cash at bank
Bank overdrafts
Total cash and cash equivalents
Group
Company
2017
£’000
871
871
–
871
2016
£’000
-
–
–
–
2017
£’000
842
842
–
842
20. Current financial liabilities – Borrowings
Bank facility
Group
Company
2017
£’000
–
–
2016
£’000
–
–
2017
£’000
–
–
2016
£’000
18
18
–
18
2016
£’000
85
85
The bank facility at 31 December 2016 totalling £251,000 (£85,000 in current liabilities and £166,000 in
non-current liabilities) was secured by a personal guarantee provided by David Ciclitira at a monthly cost in
2016 of £1,183. This loan was fully repaid at 31 December 2017.
21. Trade and other payables
Trade payables
Amounts owed to subsidiaries
Other payables
Other tax and social security
Accruals and deferred income
Trade and other payables
Group
Company
2016
£’000
272
–
1
10
941
1,224
2017
£’000
1,112
6
353
–
174
1,645
2016
£’000
695
2,420
1,379
258
147
4,899
2017
£’000
2,172
–
385
–
1,603
4,160
22. Financial instruments
The Group and Company operations expose them to a number of financial risks. The Directors aim to
protect the Group and Company against the potential adverse effects of these financial risks.
Financial assets
Financial assets include cash and trade and other receivables (excluding prepayments) which are classified
as “loans and receivables”; and equity investments which are classified as “available for sale” (excluding
investments in subsidiaries and joint ventures). These amounts, where appropriate, have been shown
separately on the face of the statement of financial position. Funds not immediately required for the Group
and Company’s operations are invested in bank deposits. It is the Directors’ opinion that the carrying values
of cash, trade receivables and investments approximate to their fair values.
Financial liabilities
Financial
liabilities include current and non-current borrowings, convertible loans and trade and other
payables (excluding: tax & social security, and deferred income). All amounts are carried at amortised cost.
These amounts have been disclosed in the notes to the financial statements. It is the Directors’ opinion
that the carrying values of financial liabilities approximate to their fair-value.
46 Live Company Group Plc
22. Financial instruments continued
Liquidity risk
The Group and Company’s surplus liquid resources were maintained on short-term interest bearing
deposits. The Group and Company plans to continue to meet operating and other loan commitments as
they fall due. Liquidity risk is managed through cash flow forecasts and regular planning.
Remaining contractual maturities year ended 31 December 2017
Group
Bank loans & borrowings
Trade & other payables
(excluding tax and deferred income)
Company
Bank loans & borrowings
Trade & other payables
(excluding tax and deferred income)
Within
3 months
£000s
–
3,033
3,033
Within
3 months
£000s
–
1,645
1,645
> 3 months
< 1 year
£000s
–
> one year
< 5 years
£000s
–
Total carrying
amount
£000s
–
–
–
–
–
3,033
3,033
> 3 months
< 1 year
£000s
–
> one year
< 5 years
£000s
–
Total carrying
amount
£000s
–
–
–
–
–
1,645
1,645
Set out below are Liquidity risk comparative tables as at 31 December 2016
Remaining Contractual Maturities Year ended 31 December 2016
Group
Bank loans & borrowings
Trade & other payables
(excluding tax and deferred income)
Company
Bank loans & borrowings
Trade & other payables
(excluding tax and deferred income)
Within
3 months
£000s
–
377
377
Within
3 months
£000s
21
4,494
4,515
> 3 months
< 1 year
£000s
–
> one year
< 5 years
£000s
–
Total carrying
amount
£000s
–
–
–
–
–
377
377
> 3 months
< 1 year
£000s
64
> one year
< 5 years
£000s
166
Total carrying
amount
£000s
251
–
64
–
166
4,494
4,745
Live Company Group Plc 47
Notes Forming Part of the Financial Statements
continued
22. Financial instruments continued
Credit risk
Financial assets past due but not impaired as at 31 December 2017:
Not impaired
and not due
(£’000) Not impaired but past due by the following amounts
>30 days
£000s £000s
>60 days >90 days
£000s £000s
>120 days
£000s
Group: Trade & other receivables
(excluding prepayments and accrued income)
Company: Trade & other receivables
(excluding prepayments and accrued income)
489 24
– –
219 –
– –
55
–
Financial assets past due but not impaired as at 31 December 2016:
Not impaired
and not due
(£’000) Not impaired but past due by the following amounts
>30 days
£000s £000s
>60 days >90 days
£000s £000s
>120 days
£000s
Group: Trade & other receivables
(excluding prepayments and accrued income)
Company: Trade & other receivables
(excluding prepayments and accrued income)
933 –
– –
583 20
– –
–
–
Group trade and other receivables excluding prepayments as at 31 December 2017 were £1,048,000, all
of which were assets not impaired. All remaining trade and other receivables as at 31 December 2017 are
collected and/or collectable and are considered of low credit risk. All bank deposits are maintained in the
UK and are low credit risk.
Market risk
(a)
Neither the Company nor the Group had any bank loans at the year end, this risk is therefore not significant.
Interest rate risk
Foreign currency risk
(b)
Although the Company is based in the UK, a significant part of the Group’s and Company’s operations are
overseas, and the operating or functional currency of a large part of the Asian business is in US Dollars or
Euros. As a result, the Company’s consolidated sterling accounts can be affected by movements in the
US Dollar/Sterling and the Euro/Sterling exchange rates.
48 Live Company Group Plc
22. Financial instruments continued
The foreign assets and liabilities of the Group and Company are closely matched as at 31 December 2017.
The table below sets out the carrying amounts of assets and liabilities for the Group in their presentational
currency (i.e. sterling) and a total impact for each 10% fluctuation in exchange rates. Based on the carrying
amounts of foreign assets and liabilities as at 31 December 2017, for each 10% fluctuation in exchange
rates, net assets are expected to be impacted by +/- £177,000 (2016: £60,000).
Year ended 31 December 2017 Carrying Forex Risk
Carrying amount (sterling equiv.) Amount (-10%)
£ $ € HK$ KRW
‘000 ‘000 ‘000 ‘000 ‘000 £’000 £’000
Financial Assets
Cash
Trade receivables
Total financial assets
Financial Liabilities
Borrowings<1 year
Trade payables
Other payables
Other taxation
Accruals and deferred
income
Non-current borrowings
871
–
871
–
1,067
359
26
576
–
2,028
Net Impact
Market risk (continued)
–
359
359
–
1,018
–
–
1,027
–
2,045
–
–
–
–
24
–
–
–
–
24
–
–
–
–
1
–
–
–
–
1
–
–
–
–
62
–
–
–
–
62
871
359
1,230
–
2,172
359
26
1,603
–
4,160
–
36
36
–
(110)
–
–
(103)
–
(213)
(177)
Year ended 31 December 2016 Carrying Forex Risk
Carrying amount (sterling equiv.) Amount (-10%)
£ $ € HK$ SGD
‘000 ‘000 ‘000 ‘000 ‘000 £’000 £’000
Financial Assets
Cash
Trade receivables
Total financial assets
Financial Liabilities
Borrowings<1 year
Trade payables
Other payables
Non-current borrowings
Accruals and deferred
income
Total financial liabilities
Net Impact
1
–
1
–
191
11
–
327
575
–
94
94
–
81
–
–
614
695
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1
94
95
–
272
11
–
941
1,224
–
9
9
–
(8)
–
–
(61)
(69)
(60)
10%
£’000
–
(36)
(36)
–
110
–
–
103
–
213
177
10%
£’000
–
(9)
(9)
–
8
–
–
61
69
60
Live Company Group Plc 49
Notes Forming Part of the Financial Statements
continued
23. Deferred taxation
LVCG carries a deferred tax asset at 31 December 2017 of £10,000 (2016: £Nil) – note that the £12,000
deferred tax liability shown in the Statement of Financial Position is set off by a £22,000 asset included in
Other Debtors. Due to the availability of UK tax losses, subject to agreement with the HM Revenue and
Customs, there is an estimated deferred tax asset of £4,344,000 (2016: £4,282,000). This is not recognised
as there is insufficient evidence of future taxable profits against which these losses could be utilised.
There were no deductible temporary differences or unused tax credits at either 31 December 2017 or
31 December 2016. There were no amounts of deferred tax recognised in the Income Statement for either
the year ended 31 December 2017 or for the year ended 31 December 2016.
24. Share capital
The issued share capital is set out in the table below:
2017 2016
No. of shares
£’000
No. of shares
£’000
Issued and fully paid
Ordinary shares of 1p
New deferred shares of 51.8p
Deferred ordinary shares of 0.5p each
Deferred B shares of £19.60
48,207,793
2,047,523
199,831,545
103,260
3,009,233
2,047,523
199,831,545
103,260
482
1,061
999
2,024
4,566
30
1,061
999
2,024
4,114
The only changes in 2017 were to ordinary 1p shares, relating to the various capital transactions on
22 December 2017. The table below summarises the changes:
1p ordinary shares bought forward at 1 January 2016 and 1 January 2017
1p ordinary shares issued on 22 December 2017:
Consideration for acquisition of Brick Live Group
Consideration for acquisition of Parallel Live
Consideration for acquisition of BLFE
Share placing
Capitalisation of David Ciclitira loans
Capitalisation of Ranjit Murugason outstanding fees
Capitalisation of Simon Bennett outstanding fees
Purchase of David Ciclitira commission contract
Merchandising rights
1p ordinary shares carried forward at 31 December 2017
Number of
shares
3,009,233
16,666,667
3,333,333
9,832,060
4,200,000
6,766,667
616,500
116,667
3,333,333
333,333
45,198,560
48,207,793
Nominal
value of
shares
£’000s
30
166,667
33,333
98,321
42,000
67,667
6,165
1,167
33,333
3,333
451,986
452,016
Deferred B shares
(i)
The deferred shares do not entitle their holders to receive any dividend or other distribution, they do not
entitle their holders to receive notice of or to attend, speak or vote at any general meeting of the Company,
and they do not entitle their holders on a return of assets on a winding-up of the Company or otherwise
only to the repayment of the capital paid up on such deferred shares and only after repayment of the capital
paid up on each ordinary share in the capital of the Company and the payment of a further £100,000 on
each such ordinary share (£1,000,000 in the case of each deferred B share).
50 Live Company Group Plc
New Deferred shares
(ii)
Upon consolidation of the shares in 2013 each ordinary share of 52.8p was subdivided and converted into
one new ordinary share of 1p and one new deferred share of 51.8p each. The new deferred shares share
the same rights as the existing deferred B shares. This resulted in 2,047,523 new ordinary shares and
2,047,523 new deferred shares with effect from 27 December 2013. See note 2.17 for more details
25. Share based payments
There were no share options outstanding at the year ended 31 December 2017 (2016 - £nil) and therefore
there was no weighted average exercise price (2016 - £nil). No options were exercised during the year.
There were no warrants outstanding.
Share warrants
No new warrants grants were entered into during the year. There were no warrants outstanding at
31 December 2017 (2016 – £nil).
Share based payments measured directly
During the year ended 31 December 2017, no share-based payments were granted.
26. Capital management
LVCG’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern, so that it can continue to provide returns to shareholders and benefits for other stakeholders. The
Group had net assets of £2,844,000 as at year ending 31 December 2017. The Group's capital
management strategy is to retain sufficient working capital for day to day operating requirements and to
ensure sufficient funding is available to meet commitments as they fall due and to support growth.
Bank facility
Total Debt
Cash
Net Debt
31 December
2017
£000s
–
–
(871)
31 December
2016
£000s
–
–
–
(871)
–
In order to maintain or adjust the capital structure the Group may issue new shares or sell assets to
reduce debt.
27. Related parties
Total compensation of the Directors of Brick Live Group in respect of fees and expenses owed in the year
were as follows:
David Ciclitira
Maria Serena Ciclitira
Clive Morton
Andrew Smith
Total
2017
£401,000
£24,000
£152,000
£22,000
£599,000
2016
£195,000
£nil
£47,000
£nil
£242,000
These amounts were charged in the year and are included within the Consolidated Income Statement
presented within these accounts.
Live Company Group Plc 51
Notes Forming Part of the Financial Statements
continued
27. Related parties continued
In order to give a true reflection of the related parties within the year, the below balances reflect the
compensation paid within LVCG in the year, however these amounts are not reflected within the
Consolidated Income Statement.
David Ciclitira
Ranjit Murugason
Simon Bennett
Maria Serena Ciclitira
Timothy Sturm
Total
2017
£302,000
£185,000
£144,000
£30,000
£nil
£661,000
David Ciclitira
Brick Live Group
During the year ended 31 December 2017, Mr. Ciclitira’s commission in Brick Live Group was £355,000.
Further compensation included expenses of £46,000. A total of £401,000.
Live Company Group (“the Company”)
During the year ended 31 December 2017, Mr. Ciclitira’s total consultancy fees were £191,000 (2016 -
£110,000). In relation to these amounts, Mr. Ciclitira waived half of the fees owed to him in 2016 and waived
one quarter of the fees owed to him in 2017. Further compensation included business expenses and
healthcare costs of £58,000 (2016 - £49,000) and £53,000 of amounts invoiced by Parallel Contemporary
Art, a company wholly owned by Mr Ciclitira (note that this £53,000 is not included in the Remuneration of
Directors, Note 9, of these Financial Statements. A total of £302,000.
In addition to the above fees and expenses received, Mr. Ciclitira was also paid the following amounts:
•
•
•
•
•
£1,000,000 in respect of settling his ongoing commission arrangement with Brick Live Group (see
operating review)
A £70,000 provision has been made in the LVCG balance sheet for a contribution towards the costs
of liquidating the subsidiary companies sold to James Golf Limited, a company owned by Mr. Ciclitira,
on 22 December 2017.
£89,000 repayment of interest incurred in relation to company loans
£60,000 repayment for cheques paid personally by Mr. Ciclitira for business expenditure
£43,000 of sponsorship of START (a business venture owned by Mr. Ciclitira)
Therefore, total amounts paid to Mr. Ciclitira for the year ended 31 December 2017 for the whole group
were £1,965.000.
Total amounts owed to Mr. Ciclitira and entities under his control at 31 December 2017 were £355,000.
This was made up of amounts due to Parallel Contemporary Art Ltd of £4,000, Mr. Ciclitira £247,000, and
James Golf Limited £104,000 (2016: £1,417,000 owed to David Ciclitira).
As at 30 April 2018, Mr Ciclitira’s fees, commission and expenses totalled £222,000 for the period started
1 January 2018. £80,000 was owed to Mr Ciclitira at 30 April 2018 – this was made up of £79,000 with
regards to commission owed, £65,000 owed in relation to Mr Ciclitira’s fees and expenses and less £64,000
which is owed by Parallel Contemporary Art (Mr Ciclitira’s company) to Brick Live International Limited.
Clive Morton
Mr. Morton’s remuneration from Brick Live Group was £152,000 for the year ended 31 December 2017 in
his role as company director.
52 Live Company Group Plc
27. Related parties continued
As of 31 December 2017, Mr. Morton owed the Group £19,000 in respect of loans taken out from the
company, however Mr. Morton was also owed a further £3,000 in respect of his fees. Therefore, the net
amount owed by Mr. Morton at 31 December 2017 was £15,000.
As at 30 April 2018, Mr Morton’s fees and expenses in his role as director totalled £42,000 for the period
started 1 January 2018. The outstanding balance on Mr Morton’s loan at 30 April 2018 was £8,000, and
Mr Morton was owed £1,000 in respect of director’s fees.
Ranjit Murugason
Mr. Murugason’s total compensation from Live Company Group (“the Company”) was £185,000 for the
year ended 31 December 2017 (2016 - £65,000), this was £150,000 in accrued NED fees from 2013 to
date, plus £35,000 of fees for additional services provided in respect of the Group’s admission.
As at 31 December 2017, a balance of £10,000 was owed to Mr. Murugason.
As at 30 April 2018, Mr Murugason’s fees for his role as NED and Chairman of the remuneration committee
totalled £9,000 for the period started 1 January 2018. At 30 April 2018, Mr Murugason was owed £14,000
in respect of his NED fees.
Simon Bennett
Mr Bennett was appointed a Director of LVCG on 28 December 2017 and was paid no fees for his role as
a director in the year. He did, however, receive fees of £144,000 for services provided to the Group prior to
being appointed a Director. £70,000 was in respect of services provided in relation to the Group’s admission
and a further £74,000 of fees owed for accounting services provided to the Group.
As at 31 December 2017, a total of £12,000 was owed to Mr. Bennett.
As at 30 April 2018, Mr Bennett’s fees and expenses in his role as NED and Chairman of the audit committee
totalled £13,000 for the period started 1 January 2018. At 30 April 2018, Mr Bennett was owed £24,000
in respect of his NED fees.
Maria Serena Ciclitira
Mrs. Ciclitira’s total remuneration during the year ended 31 December 2017 was £54,000, split £24,000
due from Brick Live Group, and £30,000 from Live Company Group (“the Company”). Of this amount,
£15,000 was in relation to accrued NED fees from 2016 that had not yet been paid.
As at 31 December 2017, Mrs. Ciclitira was owed £78,000 in respect of NED fees not yet paid.
As at 30 April 2018, Mrs Ciclitira’s fees in her role as NED totalled £7,000 for the period started 1 January
2018. Mrs Ciclitira was owed £54,000 in respect of NED fees not yet paid.
Andrew Smith
Mr Smith’s remuneration was £22,000 for the year ended 31 December 2017 in his role as Managing
Director of Brick Live Group.
As at 31 December 2017, no amounts were owed to Mr. Smith.
As at 30 April 2018, Mr Smith’s fees and expenses totalled £45,000 for the period started 1 January 2018.
Mr Smith was owed £nil as at 30 April 2018.
None of the above balances owed are secured, and no expense has been recognised in the current year
or prior year for bad or doubtful debts in respect of any amounts owed by related parties.
Live Company Group Plc 53
Notes Forming Part of the Financial Statements
continued
28. Operating Leases
There are no future minimum lease payments under non-cancellable operating leases. Lease payments
recognised in the Consolidated Income Statement for the period amounted to £nil (2016 - £nil).
29. Subsidiaries
At 31 December 2017, LVCG had the following (direct and indirect) subsidiaries:
Subsidiaries remaining in Enlarged Group
Company
number
Country of
incorporation % owned
Principal
activities
201131009R
Singapore
100
Management of events
Held directly:
Parallel Media Group Asia PTE Ltd
The Championship (Singapore)
PTE Ltd
Brick Live Group Limited
201427355K
10151705
Singapore
UK
Parallel Live Group Limited
09932658
UK
Brick Live Far East Ltd
2460460 Hong Kong
100
100
95 Management of sports events
Licenced and Managed
Brick Events
Licenced and Managed
Brick Events
Licenced and Managed
Brick Events and owner
of the group's share
of the China joint venture
61.1
Held indirectly:
Brick Live International Ltd
10257756
UK
Brick Live Hong Kong Ltd
2460496 Hong Kong
Brick Live Far East Ltd
Brick Live Far East Ltd
10308158
UK
2460460 Hong Kong
100
100
100
38.9
Parallel Live (NY) Ltd
Parallel Live (NY) LLC.
10790554
6339763
UK
USA
100
100
Licenced and Managed
Brick Events
Licenced and Managed
Brick Events
Dormant
Licenced and Managed
Brick Events and owner of the
group’s share of the China
joint venture
Dormant
Licenced and Managed
Brick Events
On 22 December 2017, LVCG disposed of a number of its subsidiaries to James Golf Limited, a company
which is wholly owned by David Ciclitira. These subsidiaries were disposed of for consideration of £1. As
part of the sale contract, LVCG also agreed to reimburse James Golf Limited with up to £70,000 in closure
costs for these companies, which has been accrued at the year end and created a loss on disposal of
subsidiary companies in LVCG’s own profit and loss account of £70,000.
The subsidiaries disposed of on 22 December 2017 were as follows:
Subsidiaries remaining in enlarged Group
Held directly:
Causeway Trophy PTE Ltd
Parallel Media Italia SRL
Parallel Media (Jersey) Ltd
Parallel Media (Americas) Ltd
Parallel Media Hong Kong Ltd
Parallel Media Korea (New Media) Ltd
54 Live Company Group Plc
Country of
incorporation
% owned
Singapore
Italy
Jersey
BVI
Hong Kong
UK
50
100
100
100
100
100
Principal
activities
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
29. Subsidiaries continued
Subsidiaries remaining in enlarged Group
Held indirectly:
Parallel Media Europe Ltd
Parallel Smart Media UK Ltd
PGAA Media Ltd
Parallel Smart Media Ltd
Parallel Media Americas Inc
Parallel Media Group International Ltd
Country of
incorporation
% owned
UK
UK
BVI
UK
US
Jersey
100
100
83.9
100
100
100
Principal
activities
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
At 30 June 2017 the intercompany balances between the parent company LVCG (then Parallel Media Group
plc) and certain of its subsidiary companies were written off resulting in a credit of £1,835,579 in the LVCG
parent company Statement of Income only. This does not impact the group accounts.
30. Post Balance Sheet Events
LVCG has completed two equity funding rounds post year end as follows:
•
•
Issue of 4,571,425 new 1p ordinary shares at a price of 35p, raising a total of £1,600,000 (before
costs). These shares were issued on 15 January 2018.
Issue of 1,000,000 new 1p ordinary shares at a price of 35p, raising a total of £350,000 (before costs).
These shares were issued on 18 April 2018.
Live Company Group Plc 55
Brussells, Belgium
Beunos Aires, Argentina
Fukoka, Japan
Birmingham, UK
BRICKLIVE Centre, South Korea
LEGO Live, New York
Excel, London,
Touring Assets
Touring Assets
LEGO Live, New York
Fukoka, Japan
LEGO Live, New York
Basel, Switzerland
TM
TM
EURO TOUR
CHRISTMAS
CHRISTMAS
Basel, Switzerland