EC2R 6AR
London
35-39 Moorgate
.centralnic.com www
 
Annual Report 2015
  Annual Report 2015 oup Plc CentralNic Gr                         CentralNic’s global business footprint
Business footprint
Designed and produced by fourthquarter
Contents
Highlights 1
Introduction to CentralNic 2
CentralNic’s key advantages 5
Chairman’s statement 8
Chief Executive’s report 11
Strategic report 13
Chief Financial Officer’s report 16
Board of Directors 20
Directors’ report 22
Corporate governance 26
Remuneration report 29
Independent Auditors’ report 32
Financial statements 33
Shareholder information 73 • A successful year proving the scalability of the Group with
revenues growing by 71% to £10.39m (2014: £6.07m) and
adjusted EBITDA growing by 89% to £3.25m (2014: £1.72m).
• All three divisions experienced growth in both revenues and profits.
• First full year of trading from retailer Internet.BS contributed
£3.33m of revenue to the Retail Division, representing
21% revenue growth over the run rate pre-acquisition.
• Wholesale Division was ranked as the world’s Number One new
TLD registry services provider by volume, increasing market
share from below 20% to above 23%, with five Top-Level
Domains (“TLDs”) in the top 20, and 14 TLD launches in 2015. 
• Enterprise revenues included £3.22m (2014: £1.61m) of
premium domain name sales along with a registry licence sale
to a major telecommunications operator, the first revenues
post-launch from Dot Brand clients and the first domain name
management software sale under CentralNic’s ownership.
• Acquisition of Instra Group completed on 14 January 2016
for a total consideration of £16.02m (£14.56m cash, £1.46m
equity) subject to adjustment for working capital. Instra Group
generated unaudited revenue of £7.86m and Adjusted EBITDA
of £1.18m in the year ended 30 June 2015.
Highlights
CentralNic Group Plc Annual Report 2015 1 2 CentralNic Group Plc Annual Report 2015
Headquartered in London, the business operates globally, with
customers in almost 200 countries. The Group is focused on
identifying and exploiting growth opportunities across its three
divisions, through winning new clients, launching new products
and services, and acquiring other companies that enhance
and accelerate the growth strategy.
The Wholesale Division
CentralNic’s Wholesale Division was ranked number one
globally by volume of domains registered among “Registry
Backends” for new Top-Level Domains at the end of 2015 by
the industry statistics website ntldstats.com. The two most
important contributing factors behind this achievement are
the Division’s technology platforms and operations, and
the domain name inventory for which CentralNic is the
exclusive global wholesaler.
Technology Platforms and Operations
CentralNic’s Wholesale Division powers specific domain names
and is also their exclusive distributor through retailers globally.
The DNS system which powers the domains is a global network
of nameservers, which expanded from 25 to 40 locations in
2015, and which assures the stability, security and resilience of
the domain names supported by CentralNic. During 2015 this
system maintained its unblemished record of 100% uptime for
the 19th consecutive year.
Meanwhile CentralNic’s “registry engine” technical and
operational system enables retailers around the world to sell
an increasing range of internet domain names, as well as
handling billing and cash collection on behalf of registry clients –
the rights holders to the domains that CentralNic distributes.
CentralNic also supports its registry clients with value added
services such as policy advice and sales and marketing.
CentralNic’s registry engine experienced 99.98% uptime in
2015, comparing favourably with the standard 95% set by
industry regulator ICANN.
CentralNic’s distribution platform is directly integrated with
around 1,500 retailers globally and through them the channel
reaches out to over 100,000 resellers. For the past three years,
China has been one of CentralNic’s most buoyant markets,
reflecting a business development and operational focus on
China that has positioned the Company ideally to benefit from
the unprecedented demand for domain names in that market
in 2015 and 2016.
Domain Name Inventory
Every Top-Level Domain extension, such as .com, .org and
.co.uk has an exclusive Wholesaler (known in the domain name
industry as a “registry backend”). CentralNic’s platform supports
all five categories of domain name extensions: the Country
Code Domain Extensions .la and .pw; Second-Level Domain
extensions such as .uk.com and .us.com; Generic Top-Level
Domain extensions like .xyz and .online; “sponsored” domains
for a specific purpose such as .coop, the internet designation
for cooperatives; and finally “DotBrand” Top-Level Domains
such as .stc for Saudi Telecom Corporation, which use
CentralNic’s wholesale platform to power domains not for
sale but for the rights holder’s own use. During 2015 CentralNic
retailed domain names to customers in over 200 countries
globally through its multiple retail websites.
Internetbs.net (IBS) is focused on a specific customer group –
domain investors and internet professionals such as hosting
and web design companies – offering “trade” pricing and
sophisticated tools for managing domain name portfolios.
During 2015, it increased its overall registered domains by
over 100,000 – a growth rate of 17% during CentralNic’s
first full year of ownership.
CentralNic’s other retail websites each specialise in domains
under a single Top-Level Domain (.ASIA, .LUXURY, etc.) and
they also sell additional services such as hosting, email and
website builders.
CentralNic Group plc (LSE: CNIC) (“CentralNic”) is one of the world’s
leaders in the domain name industry, continuously developing to
meet the market’s evolving challenges and opportunities. CentralNic
currently comprises three profitable and growing operating divisions
each with its own proprietary technology platform. The Wholesale
Division powers domain names and sells them through an integrated
network of retailers; the Retail Division sells domain names to end
users; and the Enterprise Division sells domain names, consultancy
services and licenses software to corporations.
Introduction to CentralNic CentralNic Group Plc Annual Report 2015 3
Domain extensions exclusively using the CentralNic platform in 2015
.LA                                         .PW
COUNTRY CODE TOP-LEVEL DOMAINS
.COOP
SPONSORED TOP-LEVEL DOMAIN
.ETISALAT                             .KFH
.STC                                      .STCGROUP
.VIVA                                      .WME
“DOTBRAND” TOP-LEVEL DOMAINS
During 2015 CentralNic retailed domain names to customers
in over 200 countries globally through its multiple retail
websites, which included:
Internetbs.net
www.buy.menu
www.buydomains.london
www.CentralNicFintech.com
www.cymru.domains
www.domain.build
www.domain.LUXURY
www.domains.ASIA
www.domains.bar
www.domains.rest
www.la
www.register.reit
www.registrar.hoteles
www.tickets.domains
www.wales.domains
RETAIL DIVISION
.CONTACT                            .FAN
.FORUM                                 .PID
.REALTY                                .STORE (Launched 2016)         
NEW GENERIC TOP-LEVEL DOMAINS
CONTRACTED BUT NOT LAUNCHED IN 2015
.BAR                                      .COLLEGE
.DESIGN                                .FANS
.FEEDBACK                           .HOST
.INK                                       .LOVE
.ONLINE                                .PRESS
.PROTECTION                       .REIT
.RENT                                    .REST
.SECURITY                            .SITE
.SPACE                                  .TECH
.THEATRE                             .TICKETS
.WEBSITE                              .WIKI
.XYZ
NEW GENERIC TOP-LEVEL DOMAINS
.AE.ORG                                .AR.COM
.BR.COM                               .CN.COM
.CO.COM                               .COM.DE
.COM.SE                               .DE.COM
.EU.COM                               .GB.COM
.GB.NET                                .GR.COM
.HU.COM                               .HU.NET
.IN.NET                                  .JP.NET
.JPN.COM                             .KR.COM
.MEX.COM                             .NO.COM
.QC.COM                               .RU.COM
.SA.COM                               .SE.COM
.SE.NET                                 .UK.COM
.UK.NET                                 .US.COM
.US.ORG                                .UY.COM
.WEB.IN                                 .ZA.BZ
.ZA.COM
SECOND-LEVEL DOMAIN EXTENSIONS 4 CentralNic Group Plc Annual Report 2015
During 2015, CentralNic started the process to acquire Instra
Group, a group of domain name retailers focused on two new
market segments for CentralNic: small businesses in emerging
markets, and companies registering portfolios of domain names
across multiple country codes. The acquisition was successfully
completed in January 2016, giving CentralNic access to a much
greater customer base, as well as enhancing its capabilities,
products and services.
Enterprise Division
The enterprise market is gaining in importance in the domain
name industry, and CentralNic is addressing this market in
several ways.
DotBrands
CentralNic provides technical services to companies seeking
their own “DotBrand” TLDs – a newly introduced type of
intellectual property (“IP”) which allows brands and company
names to occupy the Top-Level of domain names previously
restricted to country codes and generic terms like .com. As this
new form of IP can be operated by a company, exclusively,
globally and ongoing it has attracted significant interest in the
corporate sector. DotBrand clients who use CentralNic’s
technical and consulting services include Global 1000
companies such as Saudi Telecom Company, Etisalat and
Kuwait Finance House.
Software
CentralNic acquired a high quality domain management
software product, DomiNIC in 2013, and the company that
supports the software, dnsXperts, in 2015. DomiNIC is a
workflow management software for the registration and
management of domain names, which can be used as an
in-house tool by enterprise clients, or as technology enabling
corporations with large SME customer bases to monetise
those customers by selling them domain names. DomiNIC
is already used by some of the largest corporations in the
German-speaking markets, and CentralNic has started
introducing it to other markets.
CentralNic has also succeeded in licensing its registry software
as a component of its offering to corporations launching
DotBrand Top-Level Domains, with its first sale to a .brand
applicant being completed to a Telecoms operator in 2015.
Domain Names
Like many of its peers, CentralNic also has a revenue stream
from the sale of premium domain names, which are particularly
favoured by large companies for a number of uses. They may
correspond to a company brand name, they may be easily
memorable and marketable (like a two-letter .com domain or a
common word), and they may already benefit from internet traffic
comprising potential customers. CentralNic trades in its own
portfolio, which has increased from 20,000 to over 37,000
premium domain names (with values ranging from a small
premium over normal retail pricing to seven figure sums) as
well as brokering premium domain sales for third parties in
exchange for a commission.
CentralNic is also a shareholder in and distributor of the
.tickets TLD – an innovative new use of a top-level domain
intended to allow venues, artists, sports teams and other
rights holders to retail tickets direct to consumers, while giving
consumers the comfort of knowing that any website using a
.tickets domain is legitimate.
Introduction to CentralNic continued CentralNic Group Plc Annual Report 2015 5
CentralNic’s key advantages
1. Attractive profit margins
The business continues to be profitable, with the Group
delivering an adjusted EBITDA margin of 31% in 2015.
2. Cash precedes revenues
Across the Wholesale and Retail Divisions, CentralNic typically
receives payments prior to recognising revenues and this can
be for domain registration terms of up to 10 years. A number
of customers for both the Retail and Wholesale Divisions
pre-fund their accounts.
3. Recurring revenues
Domain name sales is an annuity revenue business. Domain
owners are required to make renewal payments typically on
an annual basis. This means that a portion of CentralNic’s revenues
do not result from the current year’s activities or market conditions,
but from customers paying an annual fee (or multiples of an annual
fee for multi-year registrations) to retain their existing website or
domain name – a reliable and predictable earnings stream.
4. Diversity of revenue sources
CentralNic’s revenue in its Wholesale and Retail Divisions is
comprised of millions of small value transactions, so individual
customer retention risk is relatively low in this context. Exceptions
are the high value transactions that would typically be included in
the Enterprise Division such as sales of premium domain names
and the non-recurring elements of licensing contracts.
5. Scalable business with largely fixed costs
CentralNic’s business is scalable through automation as the
core technical development work on the Group’s platforms
was completed years ago, and the ongoing development and
operational costs are largely fixed. For example, during 2015,
CentralNic’s wholesale business grew from around 800,000
new TLD domains under management to 2.3 million new
TLD domains under management with relatively low cost
increases in that division.
6. Exposure to rapidly growing markets
CentralNic’s focus on emerging markets, especially China, gives
it exposure to the faster growing markets in the domain industry.
For example trade press reports indicate that 460,000 domains
were registered on 8 November 2015 alone, with the majority
of that sales volume occurring in China.
(Source: TheDomain.com) http://www.thedomains.com/2015/11/08/
domain-registration-at-a-record-pace-460000-yesterday/
The acceleration in domain name registrations in 2015 paralleled
global policy developments. In September 2015, the United
Nations adopted new Sustainable Development Goals (SDGs)
for the planet and its people. Target 9c of the SDGs is “Significantly
increase access to information and communications technology
and strive to provide universal and affordable access to the Internet
in least developed countries by 2020.” This goal was supported
by a global call to action led by Mark Zuckerberg in conjunction
with the ONE campaign, in a ‘Connectivity Declaration’ supporting
the UN and stating that internet access is “essential for achieving
humanity’s goals” and seeking to deliver it to everyone on Earth
by 2020. CentralNic is delighted that its own commercial vision
and activities match so closely with policy makers and leading
organizations’ goals and is well positioned to play its part in
supporting the ongoing expansion of the internet.
7. Distribution network
CentralNic’s global distribution channel is a significant asset, as
one of the world’s most extensive and well-established global
distribution networks for domain names. Over 1,500 retailers are
integrated directly with CentralNic’s databases, including the
world’s largest and most recognised domain name retailers,
such as Go Daddy and Alibaba’s Hi-China. These in turn enable
CentralNic to access over 100,000 resellers, worldwide.
So far only a small number of registrars have been accredited by
the industry regulator ICANN to sell domain names using new
gTLDs. CentralNic and its clients have secured more registrars
actively selling domains using their TLDs than any other wholesaler
– at the time of writing, .XYZ, is actively sold via 139 accredited
registrars, 17% more than the TLD with the next highest number
of active registrars with any CentralNic competitor, according to
industry statistics website ntldstats.com.
8. Premium domain name portfolio
CentralNic owns and trades from it’s own portfolio of around
37,000 premium domain names, and has also been contracted
to broker additional domain names on behalf of third parties.
Values of these premium domains range from slightly higher
than standard retail prices up to seven figure sums.
9. Proven Mergers and Acquisitions and integration expertise
CentralNic successfully initiated and completed the acquisition of
the trade and assets of Internet BS Corp in 2014 and was able
to grow its domains under management by over 100,000 (17%)
in 2015, demonstrating a successful integration. A second major
acquisition of Instra Group for AU$33m, including funding from
debt and equity, was undertaken in 2015 and completed in
January 2016. These transactions demonstrate CentralNic’s
ability to continue growing through acquisition.
10. Excellent clients and partners
A list of DotBrand and Generic TLD clients is shown overleaf.
The dynamics of CentralNic’s business are quite specific and
attractive to investors, notably with recurring earnings and a
proven ability to grow rapidly. 6 CentralNic Group Plc Annual Report 2015
CentralNic’s key advantages continued
DotBrand clients
Kuwait Finance House
Kuwait Finance House (KFH) is a pioneer of the banking
phenomenon known as Islamic Finance. They are the first
Islamic bank established in the State of Kuwait, and today they
are one of the foremost Islamic Financial Institutions in the world.
Etisalat
One of the global telecommunications industry’s innovation
pacesetters, Etisalat is the Middle East’s leading
telecommunications operator and one of the largest
corporations in the six Arab countries of the Gulf
Cooperation Council, with a market value of approximately
AED153 billion (US$42 billion).
Saudi Telecom Company (STC)
STC is the largest telecommunications services provider in the
Middle East & North Africa. It is the leading operator within the
Kingdom of Saudi Arabia, and its international presence
extends to 11 countries. They hold a strong market position
in Saudi Arabia, with an expanding presence in key regional
growth markets.
NAREIT
NAREIT®, the National Association of Real Estate Investment
Trusts®, is the worldwide representative voice for REITs and
publicly traded real estate companies with an interest in U.S. real
estate and capital markets. NAREIT’s members are REITs and
other businesses throughout the world that own, operate, and
finance income-producing real estate, as well as those firms and
individuals who advise, study, and service those businesses.
WME
William Morris Endeavor (WME) is the world’s largest diversified
talent agency, with offices in Beverly Hills, New York City,
London, Miami, and Nashville. WME represents artists across all
media platforms, specifically movies, television, music, theatre,
digital and publishing. WME acquired IMG in May 2014. CentralNic Group Plc Annual Report 2015 7
Generic TLD clients
Daniel Negari
Daniel Negari, CEO of XYZ, is the youngest registry operator in
the world. XYZ successfully launched the #1 new gTLD, .XYZ,
in 2014 and the company has since launched .college, .rent,
.theatre, .security and .protection. In 2015, Google launched its
new holding company, Alphabet, on a .xyz domain name –
www.abc.xyz – receiving significant media interest. Negari has
been featured in major publications such as CNBC, WIRED,
Forbes, Bloomberg, The Telegraph and Live on Fox Business.
Raymond King
Raymond King is the CEO of Top Level Design – the company
behind the .wiki, .ink and .design TLDs. Through Top Level
Design, King is still pursuing his bid for .gay. King is also Director
of ICANNWiki, and Founder and former CEO of Snapnames.
Punto 2012
Headed by father / son team Carlos and Aaron Grego, Punto
2012 operates .bar and .rest – the global domains for bars
and restaurants. Firmly entrenched in the hospitality industry,
the Gregos also run Mexico City’s premier restaurant guide,
Queremoscomer.com, as well as various other ventures
focused on facilitating online presence for businesses in
the hospitality world.
Jay Westerdal
Jay Westerdal launched .feedback with a proprietary platform
offering in 2015. Westerdal also owns .contact, .pid, .realty
and .forum and is a successful high-tech business entrepreneur
and investor, with his last sale being valued at over 16 million
US dollars.
Joshua Merchant
Joshua Merchant is a Managing Director for the new .love
TLD. Mr. Merchant is also a Lawyer with Merchant Law Group
LLP, a firm well-known for innovation and fostering good
business relationships.
Radix
Radix is one of Asia’s largest new gTLD applicants, having
applied for 31 new Top Level Domains. Radix operates 20% of
the industry’s Top 20 new TLDs, and since 2014 has launched
the likes of .website, .press, .host, .tech, .online, .site and
.space. Radix also runs the highly successful .pw TLD.
Asiamix Digital
Asiamix Digital is a Hong Kong based company that operates
the .fans TLD. Plans to launch the company’s second TLD,
.fan, are currently underway.
Co.com
Led by well-known domain entrepreneurs Ken Hansen, Paul
Goldstone and Gregg McNair, .co.com is the solution for new
businesses looking for a strong, short and unique domain
with a .com ending.
Dot LA Marketing Company
Dot LA Marketing Company is the official marketing entity for
.LA – the city TLD for Los Angeles – that is retailed through
leading domain registrars such as Go Daddy, United Domains
and 123-reg.
Accent Media
Accent Media operates .tickets – the trusted domain partner
to the world of ticketing. Since its 2015 launch, .tickets has
acquired an enviable portfolio of sporting and entertainment
clients. Accent Media plans to launch a unique ticketing platform
as an added value service for .tickets domain registrants. In 2015 the Group focused on extending its retail presence,
completing the substantial acquisition of the Instra Group shortly
after the end of the year. This has enabled the Group to scale
up significantly as well as acquiring capability and access to key
market segments across multiple territories. This presents a
significant advancement towards achieving our Strategy –
namely to grow quickly by providing domain names and
related internet services to growth markets.
Mike Turner Chairman
In September 2015 I was delighted to accept the role of Chairman
of the CentralNic Group, and since that date I have been pleased
to see the Group’s transition into a larger and more diverse
business, notably with a significant retail presence. At this stage
of the Group’s development, in a consolidating market,
step-changes in scale are clearly attractive as we seek to improve
the Group’s capabilities and quality of earnings, creating and
maintaining value for our shareholders.
2015 was a positive year for the Group, with progress made in
terms of increasing the scale of the business. While the Instra
Group acquisition was completed in early January 2016, much
of the diligence had been completed during the second half of
2015, culminating in the fund raising and General Meeting that
took place at the end of the year. I was delighted to see the
Group execute this acquisition, with high levels of support from
shareholders and other stakeholders. The Instra Group
acquisition is transformational for the Group, providing access to
new markets, additional products, a strong customer base, well
established brands and an exciting white label offering. Along
with my Board colleagues, I look forward to delivering the
opportunities provided by the acquisition.
It was also noteworthy that our Retail Division’s Internet.BS, a
domain retailer which CentralNic acquired in June 2014, enjoyed
21% organic revenue growth in 2015, its first full year of earnings
under CentralNic. Part of the strategy for Internet.BS was to
expand the range of products offered to customers, in particular
as new generic Top-Level Domains were launched onto the
market. In total 49 new TLDs were added to the Internet BS
online store during the year, with pleasing results.
In 2015 the roll out of the new Top-Level Domains accelerated.
This is the largest change in the industry since the earliest days
of the internet, and it means there are more choices for domain
name consumers than ever before. Indeed it is one of the reasons
that expansion of our retail business is strategically attractive
given so many different domains to supply.
Our wholesale business also benefitted from the expansion,
with 14 new gTLDs launched during 2015. Alongside
these launches, the .xyz domain continued occupying the
market-leading position by volume, with CentralNic’s systems
and processes scaling admirably to cater for very high levels
of demand, especially from Asian markets.
Chairman’s statement
8 CentralNic Group Plc Annual Report 2015 CentralNic Group Plc Annual Report 2015 9
I was very pleased to welcome new Board members shortly after
my own appointment, namely new Executive Director and CEO of
the Retail Division, Desleigh Jameson from Instra Group, as well as a
new Non-Executive Director, Iain McDonald, who is also now the
Audit Committee Chair. These appointments have strengthened the
Board and its sub-committees, which I see as vital to ensuring the
business is well governed. I would also like to thank former Board
members, Robert Pooke and my predecessor, John Swingewood,
for their services to the business over the preceding years.
I believe it is important to regularly review the Group’s strategy,
to ensure it remains best-suited in a rapidly evolving business
environment to deliver our ambitious growth plans while striving for
performance improvements. As our markets, capabilities and
products evolve so must our strategy and I look forward to working
with the Board and the Executives to realise our strategic goals
and objectives, not least to ensure we maintain focus on the
opportunities of most value to the Group as well as managing a
business of growing scale.
Performance
I am pleased to report that the Group’s financial performance was
in line with expectations, with a further year of significant growth in
revenues and Adjusted EBITDA.
The Group’s net revenue grew by over 70%, reflecting a full year of
revenues from a growing Internet.BS, trading valuable premium
domain names on the secondary market and steady organic
growth in the wholesale business. Adjusted EBITDA also grew by
89% to £3.25m (2014: £1.72m reflecting the growth in revenues.
Net cashflow from operating activities improved to £5.69m
(2014: £1.41m) reflecting the working capital dynamics associated
with the new Top-Level Domains and the strong cash-generative
business model.
In terms of divisional performance, it was particularly encouraging to
see the retail business revenues growing to £3.41m, an increase of
120% over the prior year (2014: £1.55m) or 21% on a proforma
basis. The growth included the first full year of Internet.BS revenues
combining with growth in the underlying run rate, boosted by strong
demand for .com domain names and the addition of market-leading
new gTLDs such as .xyz and .site. This was pleasing in the context
of a market which continues to exhibit low levels of awareness of
the new domain names available.
The Group’s Enterprise Division also continued to make
progress, with substantial premium domain name sales
combining with the launch of our clients’ Dot Brand Top-Level
Domains and a significant software licence sale to a
Telecommunications operator, to deploy for their new Dot Brand
domain registry. The Board regards larger corporates as an
attractive segment, where we believe the Group can add
considerable value in satisfying a number of corporate clients’
domain name requirements. This segment will form a key
focus for the business in the coming years.
The year also saw the first sale of the DomiNIC Domain
Management software under CentralNic’s ownership, a modest
sale to a banking institution to assist them in securely managing
their domain portfolio. Progress with DomiNIC has been slower
than expected in terms of converting a pipeline of opportunities
and is an area of focus for the Board. Unlocking the potential
of DomiNIC should be further enabled by the acquisition of
dnsXperts UG that we completed during 2015, the developers/
implementers of the DomiNIC software.
In the wholesale business, it was encouraging to see net revenue
growing to £3.13m, an increase of 10% compared to the previous
year (2014: £2.83m). The mix of business in this division continues
to evolve, with higher volumes coming from the new gTLDs but
with a lower average sale price than the lower volume SLDs. A
balanced portfolio approach is required, while recognizing that
market demand is more geared to the generic Top-Level Domains,
such as .xyz and .website. We recognize the need to continue our
successful strategy of scaling up activity levels in this division to
sustain growth. Our ability to scale proves we are a strong
competitor, which should serve us well in the potential future
application rounds of new gTLDs.
Dividend
While it remains the intention of the Group to generate income
returns for investors, in the future as part of a progressive and
commercially prudent dividend policy, due to the continued
expansion opportunities within the sector the Directors do not
propose a final dividend in 2015.
Outlook
The outlook is encouraging, with the continuing roll out of new
Top-Level Domains and enduring demand for established generic
and country code Top-Level Domains presenting the Group with
retail and wholesale opportunities across the majority of the world’s
markets. Indeed, while the world’s internet users are still less
than half of the global population, the industry is set to continue
growing, especially with increasing access to mobile data devices
across emerging geographic territories.
While it is probably fair to say there is an ongoing “awareness
shortfall” regarding the additional consumer choices presented by
the new Top-Level Domains, adoption in the year by high profile
brands, such as Google’s new parent Alphabet who adopted
abc.xyz, did stimulate additional demand for .xyz domain names
as well as media interest. We would expect further coverage
in the future as other so called “super brands” start launching
and using their own TLDs.
The acquisition of the Instra Group brought a step change in
Group revenues and resources from January 2016. The Group
recognises the need to integrate the businesses well, in turn
delivering synergies and generating new revenue streams as
well as benefitting from exposure to faster growing developing
geographic markets. 10 CentralNic Group Plc Annual Report 2015
The Group is also focused on domain-related services for larger
corporate customers in its Enterprise Division. It will be a high
priority item for the business to unlock the potential of the
corporate market segment for domain names and related services.
The amount of change in the business is significant, with activity
levels high across each of our three divisions and with our mergers
and acquisitions programme continuing to bring considerable
benefits and present new and interesting opportunities to the
Group. I would like to take this opportunity to thank staff across the
enlarged Group for their dedication to CentralNic and for the
passion they have for their industry. I would also particularly like to
thank our existing and new investors who have supported our
team during a transformational period for the Group.
There is still work to be done to transform our business but we
have demonstrated positive steps with the acquisition and
integration of Instra.
Assuming continued progress in all areas of our business, at this
stage of the year we remain confident in the outlook for 2016. 
Mike Turner Chairman
25 May 2016
Chairman’s statement continued CentralNic Group Plc Annual Report 2015 11
In 2015 CentralNic’s growth strategy was validated not only
by the strong results delivered, but also by the strategic
successes across the business.
Ben Crawford  Chief Executive
Chief Executive’s report
Performance overview
CentralNic delivered continued promising growth: achieving
billings of £26.87m (a 172% increase over 2014), £10.39m
in revenues (up 71% over 2014) and EBITDA of £3.25m
(an increase of 89% over 2014). All three of our divisions –
Wholesale, Retail and Enterprise – experienced profitable growth
above 10% based on their respective EBITDA contributions.
Our strategic successes were equally notable. In 2015 the
world’s largest company, Alphabet (the newly-launched
holding company for Google), selected and now uses a
CentralNic-powered domain name abc.xyz as the address for
its official website. In 2015 CentralNic emerged as the world’s
leading wholesaler of domains using new Top-Level Domains.
We grew our retail business Internet.BS, with revenues growing
organically by 21% in its first full year under our ownership. We
won our first client for DomiNIC, our domain name management
software, and achieved initial revenues from licensing our
software to a Dot Brand registry operator.
At the end of the year the Group had cash balances of
£19.06m (2014: £3.06m) reflecting the equity placing in
December (in readiness for the completion of the acquisition of the
Instra Group in January 2016) combining with favourable working
capital movements as a result of demand for the new gTLDs.
Wholesale Division
With revenues of £3.13m (2014: £2.83 million) in its
Wholesale Division, CentralNic emerged as the world’s
leading wholesaler (or “Registry Backend Provider”) of domain
names using new gTLDs. CentralNic had more retailers actively
selling its new gTLDs than any competitor; it was the first
wholesaler to achieve the two million domains under
management milestone; and it finished the year with more
new gTLD domains under management than any competitor,
including five new TLDs in the ranks of the Top Twenty sellers,
from a total universe of around 800 launched by CentralNic and
its peers. (Source: industry statistics website ntldstats.com)
A number of factors are contributing to the success of
CentralNic’s Wholesale Division. These include our proven ability
to win new business, with nine of the TLDs we launched
originally contracted to competitors, and another, .COOP,
migrated onto our platform after we won the contract through
an open tender.
Our focus on emerging markets, especially China, which predates
our IPO in 2013, has proven prescient, as the Chinese market for
domain names experienced growth unprecedented anywhere in
the world during 2015. China continues to be our largest market
for new registration volumes globally, whilst our core recurring
renewal revenues are spread around the world, mitigating our
exposure to future fluctuations in any individual market.
CentralNic wholesales a wide range of TLDs from higher priced
restricted domains like .reit (for Real Estate Insurance Trusts)
and .tickets to mass market generic domain names priced
affordably for emerging markets, such as .xyz, .online,
.website, .site and .space, which are all in the top twenty
best-selling new TLDs by volume.
.xyz continues to be the clear leader among all new Top-Level
Domains, finishing the year with 1.8 million domains under
management. .xyz is also the new TLD with the highest number
of websites built on it, attracted by the .xyz brand which has
become synonymous with “new” and “cool.” .xyz customers
include not only the official website of Alphabet, but also
Facebook’s Mark Zuckerberg who used the domain
http://stream.hacktv.xyz/qandawithmark-ext to post a video
of one of his town hall meetings, and the co-founders of
Skype, whose new business of supplying robots for deliveries,
can be found at starship.xyz. 12 CentralNic Group Plc Annual Report 2015
Chief Executive’s report continued
CentralNic’s Wholesale Business is agile and is able to scale to
satisfy market demand. Prior to the launch of the new TLDs,
CentralNic’s Wholesale Business had been reliant on SLDs such
as .uk.com. Whilst these domains continue to contribute to
revenues and profits, the mix of revenues is evolving towards
the new TLDs due to market demand, and we expect it to
continue to evolve as we take advantage of new opportunities.
Retail Division
CentralNic’s Retail Division revenues in 2015 were £3.41m
(2014: £1.55m). Internet.BS, the domain name retailer acquired
by CentralNic in June 2014, experienced growth by over
100,000 domains under management in 2015, an increase of
17%. This growth was achieved in the context of a highly
competitive market with aggressive new entrants seeking to
win customers in the domain name investor/web professionals
category. The Retail Division also launched new dedicated
websites for the TLDs .reit, .cymru, .wales and .bank. Accent
Media (in which CentralNic holds a minority equity stake)
launched the .tickets TLD to a responsive industry with early
clients including all teams in the US National Football League,
Major League Baseball and National Basketball Association,
Formula 1, English Premier League teams, and popular music
artists such as Adele and U2 among others.
Significant management and Retail Division resources were
deployed during 2015 on the acquisition of Instra Group, which
completed in January 2016. This deal enhances CentralNic’s
quality of earnings by increasing the amount of recurring revenues
as a percentage of total earnings. Instra gives CentralNic access
to a new customer base of corporate and SME customers.
Moreover it enhances CentralNic’s capabilities with the proven
skills required to profitably enter emerging markets and to satisfy
customers’ needs for almost any domain name.
Enterprise Division
CentralNic’s Enterprise Division continued to grow in 2015, with
revenues of £3.86m (2014: £1.69m). Our premium domain name
business performed well with revenue of £3.22m achieved during
the year (2014: £1.61m). And with our assistance a number of
corporate clients completed the ICANN processes required to
obtain their own Dot Brand Top-Level Domains, with the objective
of launching these in 2016.
CentralNic also secured the first enterprise clients for our
domain name registry and workflow automation software
products, which enable enterprise customers to manage
domain name related services internally, rather than relying on
more expensive outsource service providers. To ensure the
ongoing support of this software, CentralNic acquired dnsXperts
in 2015, a small German technology company specialising
in domain name related development and support.
Investor market activity
CentralNic was active in the investor market in 2015, conducting
one fund raise to accommodate an institutional investor seeking
to join our share register, and a second towards funding the
Instra acquisition. We are delighted that a number of funds
new to the Company have elected to invest in our business,
and we thank our investors for their continued support.
Outlook
I am delighted to report a number of major steps forward in
2016. Our Wholesale business was the first to cross the three
million new TLD domains under management mark in February
2016 and four million new TLD domains under management
milestone in April 2016. We also announced that CentralNic is
the exclusive global wholesaler for the new TLD .store, which
was launched in April 2016. We completed the acquisition of
Instra in January 2016 and have made good progress with
the integration of this business.
Demand for value-priced new TLDs continues in China,
where CentralNic’s Wholesale Division has a leading position.
In addition to enjoying continued growth in this sector, CentralNic
has a healthy pipeline of new TLD clients with industry-specific
domains to launch in 2016 and beyond. Additionally, the
industry regulator ICANN has commenced a review of the new
TLD programme as a first step towards opening future rounds
of applications – meaning future opportunities for CentralNic.
Continuing demand from emerging markets and for
industry-specific and country-specific TLDs is expected to
continue to drive growth in our Retail Division, which is among
the leading vendors of domains ranging from .law for lawyers
to .ae for the United Arab Emirates.
Increased concern in the corporate world about cyber-security is
likely to lead to increased demand for expertise on vulnerabilities
in the areas of domain names and DNS. CentralNic recognises
the need to adapt its enterprise services to compete in this area
of online security and protection. Strategic plans are underway
to supplement its existing services with additional offerings to
position it to win business in this segment.
And the earliest stages of the new engagement of enterprise
with domain names is starting to emerge, with companies like
Barclays Bank, BNP Paribas, BMW and Google starting to use
their own Top-Level Domains. We expect to see these Dot
Brand initiatives gain momentum from 2016, including with the
introduction of Internet of Things applications, which could also
create entirely new opportunities for CentralNic.
CentralNic has proven its ability to identify and exploit growth
opportunities in the domain name industry, by winning clients,
launching new businesses and successfully acquiring and
integrating other businesses. This dynamic and agile approach
to a rapidly evolving market has driven CentralNic’s 71%
revenue growth in 2015, and we fully anticipate it will continue
to serve the Group equally well in the future.
Ben Crawford, Chief Executive
25 May 2016 Strategic report
CentralNic Group Plc Annual Report 2015 13
CentralNic’s culture is derived from the Group’s entrepreneurial
roots, with a focus on entering and profitably competing in new
markets. It can be characterized by the following qualities:
a) A focus on growth and recurring high quality earnings
b) A global perspective
c) Innovation
d) The best technology
e) Expert and flexible client service
f) Excellence in execution
We would describe ourselves as a leading challenger brand in
an exciting fast-paced sector, able to match and often exceed
service levels provided by larger competitors in the areas above.
In turn we see our organisation transitioning from a smaller albeit
successful player into a well-reputed leader within the domain
name industry – with a truly global reach.
Wholesale Division growth strategies
The growth strategies for CentralNic’s Wholesale Division are
as follows:
Domain Name Inventory
CentralNic has sought out and won clients with excellent
domain name inventory combined with the resources and
know-how to successfully penetrate their chosen markets. This
inventory includes a range of domain extensions with different
business strategies – from value-based mass market generic
domains like .xyz and .website, to industry-specific TLDs such
as .host, .tickets, and .bar. And for the country code market
country codes such as .LA (the code for Laos repurposed for
Los Angeles and Latin America) and .PW (the code for Palau
repurposed as “Professional Web”), to country specific
Second-Level Domain extensions like.cn.com and .uk.com
(which present alternative domain extensions to the country
code Top Level Domains). CentralNic is active in developing
a pipeline of new domains to add to its Wholesale platform.
Service Provision Model
In addition to traditional “backend” technical and billing services,
CentralNic offers expert advisers and account managers, as
well as sales, marketing and policy resources on a fee for
service model. The result is that as well as being one of the
most successful wholesale service providers in the industry,
CentralNic is one of the very few companies generating
profits from new Top-Level Domains.
Retailer Network
CentralNic’s Wholesale Division supplies an integrated network
of around 1,500 retailers and through them over 100,000
resellers. Among these, only a small number are accredited by
the industry regulator ICANN, and therefore able to be supplied
with new TLD domains. CentralNic supplies more of these
accredited registrars actively selling its domains than any of
its peers, and it will continue to pursue its programme of
introducing new vendors as they become accredited.
CentralNic has a dedicated operation which optimises its
vendor network with multiple channels of communication and
customer service as well as ongoing promotions.
Retail Division growth strategies
The acquisition of Instra Group was a significant step forward in
CentralNic’s retail growth strategy, and Instra’s capabilities are
instrumental to most elements of that strategy moving forward.
Comprehensive suite of services
CentralNic segments the market for domain names and offers
specific services and brands for different segments. For example,
CentralNic’s vision is to be a substantial force globally in the growth
markets for domain names and associated services, through a
combination of winning new customers, launching new services and
acquiring businesses. Led by this vision, CentralNic’s structure
continues to evolve, comprising three profitable business divisions
relating to some of the fastest growing areas of the internet: new
substitutes for domain names with traditional endings like .com and
.co.uk (“new Top-Level Domains”); providing businesses in emerging
markets with the tools to get online; and helping some of the world’s
largest companies with their next generation internet initiatives. Strategic report continued
Internet BS serves the domain professional and investor market
with the most popular domain names at “trade” prices, combined
with sophisticated domain portfolio management tools. Only
Domains serves small to medium sized businesses in developed
and developing markets with their local country code domain
names, website hosting and a DIY website builder. And Instra
serves larger companies seeking domain name portfolios
securing their brands on all relevant country code and gTLD
extensions. CentralNic has identified additional attractive market
segments and is in the process of putting in place dedicated
retail offerings to service them.
Identifying and entering new growth markets
New growth markets may be driven by new inventory, such as
the launch of a new “Dot Industry” domain name (like .law or
.insurance) or a policy liberalization or price reduction for a
country code TLD, increasing a domain’s sale potential.
CentralNic’s registrars are vigilant for these opportunities and
aggressive with taking advantage of these opportunities as they
arise, with strong results. For instance CentralNic’s registrars are
the second highest sellers of both .law domains for law firms
and .ae domains for the United Arab Emirates.
Growth opportunities may also come from the continued increases
in demand in emerging markets, emanating from the rise in smart
phones and broadband connectivity and governmental support for
their local digital economy. Here again, CentralNic’s retailers are
actively engaging with those new markets to ensure exposure to
growth, wherever it occurs in the world.
Customer acquisition and retention
CentralNic deploys a number of customer acquisition techniques,
including search engine and user interface optimization, search
engine marketing, email marketing, events and exhibitions,
partnerships with registries and industry associations, outbound
activity from our call centre, and face-to face sales. Our customer
acquisition strategies are closely managed and monitored to
continuously improve our return on investment.
CentralNic also excels in customer retention. Our teams of very
knowledgeable, multi-lingual account managers ensure that
customer service is very responsive and that the voice of the
customer is clearly heard throughout the organisation, influencing
the development of our services.
Enterprise Division growth strategies
The internet is entering a new phase in which large companies
will play a far greater role than ever before in the domain name
sector in a number of ways. CentralNic is active in assisting
those companies in these new activities.
DotBrand Solutions
CentralNic launched a service dedicated to companies seeking
their own branded Top-Level Domains. DotBrand Solutions
provides 360 degree services to its corporate clients, including
registry services, registrar services, domain management
services, domain registration process management, policy,
market intelligence and other consulting services. CentralNic’s
DotBrand Solutions can render services to both the 400 current
DotBrand registries and to companies wishing to apply for their
own DotBrand TLD in the future.
Additional Corporate Services
CentralNic currently offers software and managed services
allowing telcos and other companies to provide domain names
to their clients. CentralNic also brokers the sale of its own and
third party owned premium domain names to corporate clients.
CentralNic is also committed to extending its operations by
introducing the full suite of services sought by corporate clients
including portfolio management and monitoring domain name
registration and internet content for IP infringements.
Financial performance
A review of the financial performance of the Group is provided
in the Chief Financial Officer’s report on page 16.
Key Performance Indicators
Details of the Key Performance Indicators are provided on
page 16.
Principal risks and uncertainties facing the Group
The Directors have considered the principal risks and
uncertainties facing the Group, the main ones being
outlined below.
Regulatory
The businesses of both registries and registrars are subject to
the legal and contractual environment. These are subject to
change, not least in the ICANN community, and changes have
the potential to influence business outcomes.
CentralNic satisfies ICANN technical and operational
requirements, and maintains an active voice in the development
of policy within the ICANN community.
Market
There is a risk that the market for domains owned by the Group
or for which the Group provides registry and registrar services
may not increase as quickly as expected or that the new TLDs
may not generate the revenue levels anticipated by the Board.
In either case the Group’s revenues could reduce below
expectations with an impact on profitability.
The risk is mitigated to a degree by operating multiple lines of
business exposed to many markets and segments within those
markets, some of which have very little reliance on new TLDs.
14 CentralNic Group Plc Annual Report 2015 CentralNic Group Plc Annual Report 2015 15
IT security
If the Group does not prevent security breaches or becomes
susceptible to cyber-attacks, it may be exposed to lawsuits,
lose customers, suffer harm to its reputation, and incur
additional costs. Unauthorised access, computer viruses,
accidents, employee error or malfeasance, intentional
misconduct by computer “hackers”, and other disruptions
can occur that could compromise the security of the
Group’s infrastructure or confidential information.
The Group has created a resilient network infrastructure and
Domain Name System server constellation, with failover
secondary systems to ensure critical registry functions are
maintained. The Group has been accredited under ISO
27001/2013 for data security, thereby mitigating risk by
adherence to international best practice.
Supplier risk
A number of the key technical services used by the Group are
outsourced to key suppliers, thereby creating the potential for
risk in the case of the failure or loss of a supplier.
In view of these risks, redundancies have been introduced
between the suppliers and internal resources, ensuring that no
single point of failure could result in the inability of CentralNic
to meet its contractual or compliance obligations.
Currency risk
The Group reports its revenues and costs in British Pounds
Sterling, whilst some of these revenues and costs may arise in
currencies other than this. Fluctuations in exchange rates may
adversely affect the Group’s reported profits, and make its
overseas contracts relatively less valuable.
CentralNic contracts are usually denominated in British Pounds
Sterling, US Dollars or Euros and the Directors keep the
currency exposure under regular review. The Directors consider
the use of hedging instruments in the event that currency
exposure is considered a material performance risk. A currency
instrument was deployed to protect the Group’s interests on
completion of the acquisition of Instra Group.
Dependence on key personnel
The Group has a small management team and the loss of any
key individual or the inability to attract appropriate personnel
could impact upon the Group’s future performance. Incentives
and a performance culture remain an important focus to the
achievement of the Group’s objectives.
Other risk factors
In addition to the impact of the downturn of the world’s
economies, the Group may be adversely affected by other
changes in economic, political, judicial, administrative, taxation
or other regulatory or other unforeseen matters.
This strategic report was approved by the Board of Directors
on 25 May 2016 and signed on its behalf by:
Mike Turner Chairman Chief Financial Officer’s report
16 CentralNic Group Plc Annual Report 2015
The Group delivered growth in revenues across all 3 divisions
in 2015, which drove a significant 89% increase in Adjusted
EBITDA. These results included the first full year of trading for
Internet BS and significant domain name trading from
CentralNic’s portfolio of premium domain names.
In terms of access to funding, the year included two successful
equity placings (raising over £12m gross of fees) and securing
a £3.5m term debt facility. The funds raised supported the
acquisition of the Instra Group for a total consideration of
£16.53m, including initial cash consideration of £14.56m. This
acquisition which was completed shortly after the year-end. Due
to the respective timings of these events, the financial statements
include the equity fund raising, but do not include any trading
results for the Instra Group or the drawing down on the debt
finance (due to these events taking place after the year-end).
To provide context, having applied CentralNic’s revenue
recognition policies, the Instra Group generated unaudited
revenues of AU$14.84m in the year ended 30 June 2015 and
Adjusted EBITDA of AU$2.23m for the same period. At the
average exchange rates for the period, this equated to £7.86m
of revenue and £1.18m of Adjusted EBITDA. Renewals
revenues accounted for approximately 57% of Instra Group
revenues for this period.
Key Performance Indicators
In terms of the 2015 year financial results:
• Gross billings (including partner share) £26.87m (2014: £9.89m)
• Revenue £10.39m (2014: £6.07m)
• Adjusted EBITDA* £3.25m (2014: £1.72m)
• Profit before taxation £1.45m (2014: £0.52m)
*Excludes impact of share payment expense for the share options issued to
Directors and Employees and Acquisition costs and non-recurring fees
The Group generated net revenue growth of 71%, with
revenue increasing to £10.39m (2014: £6.07m). This growth
was achieved through the combination of retail revenues of
£3.41m (2014: £1.55m), wholesale revenues of £3.13m
(2014: £2.83m) and enterprise revenues of £3.86m
(2014: £1.69m).
The quality of the Group’s earnings remains a key area of
focus which will be enhanced when bringing in the Instra
Group results in 2016. While there was organic growth in the
Retail and Wholesale Divisions in 2015, a significant contributor
to the growth achieved was from premium domain name
trading, a more unpredictable source of earnings.
2015 has been a year of consolidation combined with raising
funds to support future expansion via acquisition. Trading
performance was in line with expectations with revenue and
EBITDA growth across all 3 divisions, while completing the
acquisition of the Instra Group shortly after the year-end was a
major milestone – creating a step change in scale for the Group.
Glenn Hayward  Chief Financial Officer CentralNic Group Plc Annual Report 2015 17
Revenue growth in the retail business benefitted from the first
full year of trading for Internet BS under the Group’s ownership
(having been acquired in June 2014). Internet BS contributed
£3.33m of revenues in the year (2014: £1.51m). When
comparing the 2015 revenue for Internet BS versus the full year
2014 proforma numbers (factoring in the period pre-acquisition),
approximately 21% of revenue growth was achieved. This was
very pleasing, reflecting the addition of a number of new domain
products onto the Internet BS online store combined with
marketing to the customer base and enduring demand for the
legacy generic Top-Level domains, notably .com. Adjusted
EBITDA from Internet BS was £0.36m (2014: £0.19m).
The Enterprise Division generated significant revenues totalling
£3.86m (2014: £1.69m), especially from trading in premium
domain names from the Group’s portfolio. Revenues from
premium domain name trading totalled £3.22m (2014: £1.61m).
These sales are unpredictable, although they also demonstrate
the potential values that can be achieved from desirable names
traded in the secondary domain name market.
Other Enterprise Division sales included licence sales for registry
software of £0.21m (2014: £0.02m). A major telecommunications
company purchased a licence to operate an incidence of
CentralNic’s registry software to act as the platform for distribution
of their new .brand Top-Level Domain. In addition, the first
revenues were generated from dot Brand clients opting for
CentralNic’s managed registry service, generating £0.07m of new
revenues (2014: £nil). This included revenues from high profile
Fortune 1000 companies who had delegated their names within
the ICANN release process, with modest future monthly recurring
revenues contracted to CentralNic.
During the year, the Group also completed the acquisition of
dnsXperts UG, the German developer of the DomiNIC domain
management software. The Group acquired a 45% stake in
February 2015 and in July 2015 acquired the remaining 55%
equity for a total consideration of €171,000. The dnsXperts
revenues for the second half combined with a small DomiNIC
sale to a banking institution resulting in revenues of £0.24m
(2014: £nil). While the DomiNIC software is sophisticated and
well suited particularly to the management and distribution of
domain names as an in-house solution, unlocking the
potential is taking longer than expected.
The Wholesale Division generated revenues of £3.13m
(2014: £2.83m). The revenue growth reflected a relatively
strong volume-based performance from new generic Top-Level
domains, such as .xyz, .website and .online. Unit revenues
from new gTLDs are relatively low, as they are sold in large
volumes in markets that compete on price, but as renewals
start flowing through in larger numbers it is expected that the
average revenue per domain will stabilise. During the year
14 new gTLD domains were launched, along with the addition
of .coop onto CentralNic’s wholesale platform.
The recurring revenues in the Retail and Wholesale Divisions
combined totalled £4.16m in 2015 (2014: £2.93m),
representing 57% of the total revenue for these divisions
before deferrals (2014: 63%).
Adjusted EBITDA, before the share based payment expense
and acquisition deal fees and non-recurring fees, totalled
£3.25m for the year (2014: £1.72m).
This result reflected growth in EBITDA contributions across all
3 divisions. Notably Enterprise Division grew EBITDA by £1.20m
during 2015, mainly driven by premium domain name trading.
Organic growth in EBITDA in the wholesale business of £0.15m
was mainly driven by the new TLD revenues reflecting the
significant increase in volumes, albeit at relatively low average
prices. EBITDA in the retail business grew by £0.18m, reflecting
the full year effect of Internet BS trading which was in line with
expectations. AIM and corporate overheads, which have not
been allocated by division, were consistent with the prior year
at £0.93m (2014: £0.94m).
Fees associated with acquisitions and investments totalled
£0.83m (2014: £0.47m), while in addition there were professional
fees associated with arranging the debt funding of £0.35m (2014:
£nil) and with the equity placings £0.69m including brokers fees
(2014: £0.02m). These costs were impacted by the relatively
complex nature of the Instra Group acquisition, given multiple
legal jurisdictions and a broad scope of Due Diligence.
Non-cash expenses included amortisation of intangible assets
of £0.58m (2014: £0.45m) reflecting the first full year of
charges for the customer list and software acquired with the
Internet.BS trade (noting 2014 was a part-year). Other non-
cash expenses included depreciation and the share based
payments expense. In accordance with IFRS 2 Share Based
Payments, we have included a £0.32m charge for Director
and employee share options within administrative expenses
(2014: £0.22m). Further details can be found in note 26
to the financial statements.
While holding a 45% equity stake, the Group accounted for
dnsXperts as an associated undertaking between 9 February
2015 and 30 June 2015. Thereafter, dnsXperts became a
subsidiary undertaking once the Group had acquired control
increasing the equity stake to 100%.
The Group’s effective tax rate was 37.7% (2014: 30.1%), with the
increase attributed to higher non-allowable expenses including
acquisition fees and share-based payment expenses. Profit after
taxation was £0.91m (2014: £0.36m).
Basic earnings per share at 1.40 pence (2014: 0.60 pence)
reflected the improved earnings in the business but then offset
by non-recurring acquisition costs and professional fees and
non-cash charges. Diluted earnings per share, at 1.36 pence Chief Financial Officer’s report continued
(2014: 0.60 pence), reflected the dilutive effect of the share
options and also the warrants issued during the flotation.
Further details of the earnings per share calculations are
provided in note 11 to the financial statements.
Pensions
The Group does not currently operate a pension scheme, but is
committed to complying with latest legislation and will create a
scheme under the new auto-enrolment provisions as required
in the UK. The staging date for the Group to adopt the new UK
pension obligations is June 2016 and work is under way to
implement the required arrangements.
Dividends
It remains the Directors intention to consider payment of a
dividend when appropriate and commercially prudent, as part of
a progressive dividend policy. However, due to the continued
expansion opportunities for the Group requiring investment,
the Directors do not propose a final dividend for 2015.
Group statement of financial position
The Group had net assets of £20.05m at 31 December 2015
(2014: £6.90m), with the growth in net assets reflecting the
equity issued during the year (totalling £11.6m after fees; 2014:
£1.45m) combined with the retained profits for the year. The
December 2015 equity placing totalled £9.40m after fees, with
the funds subsequently used in January 2016 as part of
the funding of the Instra Group acquisition.
Capital expenditure and investing activities
Aside from the work preparing for the Instra Group acquisition,
the year was relatively modest in terms of investing activities,
reflecting the relatively low levels of capital expenditure required
on tangible assets (which is a feature of CentralNic’s business).
Capital expenditure on plant and equipment totalled £0.04m
(2014: £0.13m) while capitalised intangible asset additions
totalled £0.30m (2014: £4.68m, mainly relating to the assets
resulting from the acquisition of the trade of Internet.BS).
The intangible asset additions included £0.11m for capitalised
development and £0.19m for the goodwill associated with
the acquisition of dnsXperts UG.
Further details are provided in notes 12, 13 and 23 to the
financial statements.
Cashflow and net cash
There are a number of significant movements in cash
reflected in the cashflow statement for the Group, which in
part relate to timing of the equity raise for the Instra Group
acquisition and in part reflect the impact on the Group’s
working capital from new gTLD demand (impacting
particularly on amounts owing to registry operators and
payments received on account from distributors).
Net cashflow from operating activities was high at £5.69m
(2014: £1.41m). This reflected a favourable working capital
movement of £3.19m relating to cash received in advance to
satisfy demand for new gTLDs. This was mainly due to
increased balances owing to registry operators for their revenue
shares and to registrars for payments received on account.
Financing activities reflected the two equity placings during the
year, which generated a net cash inflow after the deduction of
broker and related professional fees of £11.60m in the year
(2014: £nil). The net cash inflow from the December 2015
equity placing, which was to generate funds to acquire the
Instra Group, totalled £9.40m (2014: £nil). The deferred
consideration settlement related to the scheduled deferred
and contingent consideration for the acquisition of the trade
and assets of Internet.BS.
Banking facilities
The Group arranged new banking facilities during the year,
which included a debt facility. The facility agreement was
committed during December 2015 and drawn down in
January 2016.
The principal terms of the debt facility include a capital sum of
£3.50m amortising in equal quarterly instalments over a 3 year
term, with interest repayments also settled quarterly based on
a margin above LIBOR. The debt facility is secured over the
material companies within the Group. Further detail is provided
in note 28 of the financial statements.
As the debt was not drawn until January 2016, and given
the funds were received from the equity placing in December
2015, the Group ended the year with net cash of £19.06m
(2014: £3.06m).
Critical accounting policies
The Summary of the Group’s Significant Accounting Policies
is set out in note 3 to the Financial Statements.
The Group’s Revenue recognition policy may be summarised as:
• Revenue from the sale of services is recognised when the
amounts of revenue and cost can be measured reliably
• Domain sales are recognised over the period to which the
underlying sales contract relates, which can be for periods
between one and ten years. Revenues attributable to future
periods are deferred to future periods and are included in
“Deferred Revenues” and in the case of the retail business,
the direct costs, associated with domain name retail
revenues, that are payable to wholesale suppliers of the
domains are recognised in deferred costs
18 CentralNic Group Plc Annual Report 2015 CentralNic Group Plc Annual Report 2015 19
• Revenues from strategic consultancy and other similar
services are recognised in proportion to the stage of
completion of the work.
The Group makes estimates and assumptions regarding the
future, which are regularly evaluated including expectations
of the future that are considered reasonable given historic
experience and current circumstances. In the future actual
experience may differ from these estimates and assumptions.
The Board considers the carrying value of Intangible assets in
particular given the relative materiality to the Group. While the
Board acknowledges that estimates and assumptions could
have a material impact on the carrying value of the intangible
assets, the Board has considered the potential for impairment
as well as the estimated useful lives of the assets and does
not consider the carrying values to be impaired. Further details
are provided in note 4 to the financial statements.
Group financial risk management
The Board reviews the financial risk management policy, noting
that the Group is exposed to market risk, credit risk and liquidity
risk arising from financial instruments. Further details of the
Financial Risk Management Framework is provided in note 27
to the financial statements.
The Group’s finance function is responsible for managing
investment and funding requirements including cashflow
monitoring and projections. The cashflow projections are
reviewed regularly by the Board to ensure the Group has
sufficient liquidity at all times to meet its cash requirements
and execute its business strategy.
The Group’s strategy is to finance its operations through the
cash generated from operations and where necessary equity
and debt finance, notably to support investing activities.
The Group’s financial instruments comprise cash and various
items such as trade and deferred receivables. The Group
unusually had £19.06m of cash at the year-end, with interest
bearing financial assets bearing interest at fixed interest rates.
Deposit risk is mitigated by the Directors setting policy that
the Group only places deposits with banks and financial
institutions with high credit ratings.
The Group’s exposure to credit risk from trade receivables is
relatively low, due to the fact that the business has traditionally
dealt with customers who generally pay at the point or sale or
in advance. Where there are credit accounts, which is an
increasing trend in the industry, receivables are controlled
through credit limits and regular monitoring.
Foreign currency risk
The Board notes that the Group has predominantly traded in
US Dollars, Euros and GB Pounds Sterling, and considers the
exposure to foreign currency risk to be acceptable. The Group
has held reserves in each of these currencies to meet trading
obligations as required. The currency risk is actively monitored
through a periodic review of inflows and outflows by currency,
including an assessment of the extent to which currencies
are naturally hedged across the Group’s business lines.
Where this is not the case consideration is given to the use
of hedging instruments.
In the case of the acquisition of the Instra Group, the cash
element of the consideration was denominated in Australian
Dollars (AU$30m before adjustment for acquired working
capital). A participating forward contract was arranged in
December 2015 to mitigate the effect of potential unfavourable
movements in the exchange rates prior to completion of the
acquisition in January 2016. Having completed the acquisition,
the enlarged Group will be assessing the exposure to currency
risk as part of its ongoing monitoring procedures.
Glenn Hayward Chief Financial Officer
25 May 2016 Board of Directors
The Board regards its principal duties to include the provision
of entrepreneurial leadership to the Group, while also
overseeing business performance and compliance; and
deploying good corporate governance commensurate with
the size and scope of the Group’s activities.
Mike Turner Chairman (aged 55)
Mike Turner is a leading international mergers and acquisitions lawyer. He has
over 30 years of experience working in London, New York and Los Angeles,
advising private and publicly held clients on corporate transactions in technology,
telecoms, advertising/marketing services, traditional/digital media, internet and
e-commerce sectors. Mike is a Partner and International Head of Technology
Media and Communications at the international law firm Taylor Wessing.
Previously, Mike was a General Partner responsible for technology investments
at Oakfield Partners. Mike obtained an LLB at the University of Reading.
He joined CentralNic as Chairman in September 2015.
Benjamin Crawford (“Ben”) Chief Executive Officer (aged 50)
Ben Crawford is one of the best-known figures in the domain industry, and
is frequently quoted on developments in the internet in the global media.
Ben has been the Chief Executive Officer of CentralNic since 2009,
successfully globalising the company into new markets including the Middle
East, China, Japan and Russia, entering the gTLD market, listing on the AIM
market and achieving growth organically, through winning new contracts,
and via acquisitions. Ben is a specialist in global business and corporate
development – his former positions included Founding President of Louise
Blouin Media, integrating 11 acquisitions in three countries and launching
artinfo.com; Managing Director of SportBusiness Group, where he launched
the world’s leading online gambling trade media Group, iGamingBusiness.com;
and Executive Producer of the official website of the Sydney Olympic Games.
Ben has an MBA from the Australian Graduate School of Management and
a First Class Honours Degree from the University of Sydney.
Glenn Hayward Chief Financial Officer (aged 43)
Glenn joined CentralNic in February 2014, bringing 20 years’ experience across a
variety of sectors, with particular experience working with technology companies,
most notably in the domain name industry. Most recently, Glenn worked as
Executive Director, Business Development and Finance, for Nominet, the
organisation which manages the .uk internet domain. Glenn has a bachelor’s
degree in Physics from the University of Birmingham and between 2011 and 2012
qualified in the Institute of Director’s Certificate and then Diploma in Company
Direction with distinctions. He also won Finance Director of the Future at the UK’s
Finance Director Excellence Awards 2011. Glenn qualified as a Chartered
Accountant in 1998 while working for Morris & Co Chartered Accountants.
Desleigh Jameson Executive Director (aged 46)
Desleigh Jameson is the Chief Executive of CentralNic’s Retail Division, having
joined the board following CentralNic’s acquisition of the Instra Group in January
2016. She has more than 15 years of experience in retail management and
start-ups. Prior to joining Instra, Desleigh was a director at Six Corporation
Limited and the CEO of Retail Institute in New Zealand. She was also the
founder of Allied Fastening Limited, a supplier of niche fastenings products to
power utilities, construction, and engineering companies. Desleigh has an
Executive MBA from the University of Auckland in New Zealand.
20 CentralNic Group Plc Annual Report 2015 Iain McDonald Non-Executive Director (aged 45)
Iain McDonald is a global expert in technology and e-commerce, having had a
strong track record in investing in early stage companies such as ASOS, The
Hut Group, Eagle Eye Solutions, Anatwine and Metapack. He is an advisor to
the William Currie Group, a family office founded by financier Bill Currie to invest
mainly in technology and e-commerce companies. Iain is also a non-executive
director of various of his investee companies, as well as other technology
companies such as My Sale Group plc and Houseology Design Group Limited,
and was nominated as a NED of the year in 2015 by the Sunday Times NED
Awards. Previously, Iain was a top-ranked retail and e-commerce analyst and
held positions in a number of UK investment banks. Iain graduated from the
London School of Economics and Political Science (LSE), with a Bachelor of
Science in Economics & Economics History.
Samuel Dayani Non-Executive Director (aged 39)
Samuel Dayani is a partner at the Joseph Samuel Group and responsible for
managing the Group investments and business development. He is also a
Director of Opes Industries Ltd, a waste to energy, landfill and recycling
business. From 2001-2005, Samuel was the Chief Operating Officer and then
Managing Director of ViaVision Ltd, an interactive TV company, before it was
sold to Yoomedia plc.
Samuel graduated from Queen Mary College, University of London with a
Bachelor of Science in Business and Biology in 2000.
Thomas Rickert Non-Executive Director (aged 46)
Thomas Rickert is an attorney-at-law in Germany. He is the owner of Rickert
Rechtsanwaltsgesellschaft mbH, a law firm in Bonn. Thomas has extensive
experience in the domain industry working on domain disputes as well as
advising Registrars, Registry Service Providers and new gTLD applicants both
on contractual as well as policy matters. Thomas is an expert speaker on
domain related subjects both at the national and international level. Thomas
was previously appointed by ICANN’s Nominating Committee to serve on the
Council of the Generic Names Supporting Organisation (GNSO), which is the
body responsible for developing policy for generic domain names. He is the
co-chair of the Cross Community Working Group on enhancing ICANN
accountability in the context of IANA Stewardship Transition.
Thomas Pridmore (“Tom”) Non-Executive Director (aged 44)
Tom Pridmore began his career as a solicitor at Norton Rose, specialising in
corporate finance, where he acted on behalf of institutional clients in relation to a
variety of corporate finance and M&A activities. Tom then joined Flextech/Telewest
Plc as Head of Corporate Strategy, where he was responsible for directing
investment into strategic Internet and interactive television companies. In 2000, Tom
co-founded the international fund manager and investment adviser Development
Capital Management Limited. In this capacity he has set-up and managed real
estate investment and development operations in Turkey, India, North Africa,
Eastern Europe and the UK on behalf of both institutional and private clients.
CentralNic Group Plc Annual Report 2015 21 Directors’ report
Principal activities
CentralNic Group Plc is the ultimate holding company of a
Group of companies.
The principal activities of the Group are the provision of Domain
Name wholesale (registry), retail (registrar) and enterprise
services. A more comprehensive description of the Group’s
activities, performance, and likely developments are provided
in the Chairman’s statement, the Chief Executive’s Report,
the Strategic Report, the Chief Financial Officer’s Report, the
Corporate Governance Report and the Remuneration Report,
which are incorporated by reference into this report.
A list of the subsidiary undertakings is disclosed in note 15
to the Financial Statements.
Financial instruments
Details of the use of financial instruments and financial risk
management are included in note 27 to the Financial Statements.
Results and dividends
Information on the results and dividends is provided in the
Chairman’s Statement and the Chief Financial Officer’s Report.
Directors
The Company was incorporated on 19 June 2013, with a view
to becoming the parent company of the Group after admission
to AIM. The admission was completed on 2 September 2013,
and at this time the Board was expanded.
In 2015 there were further changes in Board members to reflect
the development of the business. The Directors who served
during the year were as follows:
Executive Directors
Benjamin Crawford (Chief Executive Officer)
Glenn Hayward (Chief Financial Officer and
Company Secretary)
Robert Pooke (Executive Director) – resigned from
Board on 5 February 2016 
While she did not serve as an Executive Director during the
year, Desleigh Jameson was appointed to the Board on
5 February 2016, following the completion of the acquisition
of the Instra Group.
Non-Executive Directors
Mike Turner (Non-Executive Chairman –
appointed 15 September 2015)
John Swingewood (Non-Executive Chairman –
resigned 15 September 2015)
Samuel Dayani
Thomas Rickert
Thomas Pridmore
Iain McDonald (appointed 8 December 2015)
The biographical details of the Directors are provided on
pages 20 and 21 of this report.
Five Directors will retire at the Company’s Annual General
Meeting, and being eligible will offer themselves for re-election.
The Directors and their interests in the shares in the Group
The Directors of the Company, and their interests in the shares
and share options of the Company, are shown in the
Remuneration Report on pages 29 to 31 of this report.
Transactions with any parties related to the Directors are
disclosed in note 24 to the Financial Statements.
Directors conflicts of interest
Each Director is required, in accordance with the provisions of
the Companies Act 2006, to declare any interests that may give
rise to a conflict of interest with the Company on appointment
and subsequently as they arise. Where such a conflict or
potential conflict arises, the Board is empowered under the
Company’s Articles of Association to consider and authorise
such conflicts as appropriate.
Articles of Association
The Company’s Articles of Association set out the Company’s
internal regulation and cover such matters as the rights of
shareholders, the appointment and removal of Directors and
the conduct of Board and general meetings.
A copy of the Company’s Articles of Association is available on the
Group’s website (https://www.centralnic.com/investors/reports).
Subject to the provisions of legislation, the Company’s Articles
of Association and any directions given by resolutions of the
shareholders, the Board may exercise all powers of the
Company and may delegate authorities to committees and
management as it sees fit. Details of the committees of the
Board and their activities are contained in the Corporate
Governance Report on pages 26 to 28 of this report.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website.
Principal risks and uncertainties
The board’s assessment of the principal risks and uncertainties,
together with the mitigating factors are presented in the
strategic report on pages 14 and 15.
22 CentralNic Group Plc Annual Report 2015 Substantial shareholders
In addition to the Directors Interests disclosed in the
Remuneration Report, and in accordance with Part 22 of the
Companies Act 2006, the Company has been notified that the
following shareholder’s interests exceeded 3% of the Company’s
ordinary share capital in issue at the 30 April 2016:
Ordinary shares Percentage
Erin investments 21,630,382 22.61%
Kestrel Partners LLP 10,652,500 11.13%
Living Bridge VC LLP 8,983,019 9.39%
UBS Private Banking
(R Pooke) 8,400,581 8.78%
Schroder 7,509,131 7.85%
Jabella 5,687,891 5.94%
Christian Phillips 3,059,000 3.20%
Natwest FIS Nominees 3,699,000 3.87%
Antonio Lentino 3,656,450 3.82%
Unicorn Asset Management 3,611,479 3.77%
Miton Asset Management Ltd 3,250,000 3.40%
Herald Investment
Management Ltd 3,125,000 3.27%
No substantial shareholders have different voting rights to other
holders of the share capital of the Company.
Corporate governance
The Corporate Governance Report, on pages 26 to 28 is
incorporated into this report by reference.
Corporate responsibility
The Board recognises its employment, environmental and
health and safety responsibilities, and devotes appropriate
resources towards monitoring and improving compliance
with existing standards.
Management and staff
CentralNic’s management team has been assembled to
ensure the Group has the number of people and range of skills
required to deliver the business strategy. The team is diverse
and brings functional expertise across a number of disciplines
including technical and operational delivery, finance, law,
marketing and sales.
While the business is managed under budgetary controls, the
Directors focus on ensuring there is succession planning in
place as is appropriate for a business of our size. We also
ensure there is regular communication of information affecting
our managers and their teams, to ensure all employees are
kept up to date with issues affecting them.
Our staff and consultants represent a number of different
nationalities, and we are also pleased by the gender diversity
in our business.
The executive leaders within the business recognize the
importance of engaging with our employees and do so
informally on a day to day basis. We often use a cascade
approach to employee communications, with the heads of
departments disseminating appropriate information to their
teams, including those in various locations around the world.
While we do not believe that human rights issues are a
significant risk to our business currently, we are conscious
that as we expand into new international markets issues of
human rights may become more significant. The Directors
keep all aspects of business development under review,
and act with caution and integrity to ensure all our activities
and specifically business development activities are
respectful of human rights.
The Board recognises the importance of engaged
employees working within the Group and how they are
vital to the future success of the business. However, given
the size of the Group there is dependency on a few key
individuals and this is discussed further in the Risks and
Uncertainties on pages 14 and 15.
The Group is committed to achieving equal opportunities and
to complying with anti-discrimination legislation. The Group is
committed to offering employees and job applicants equal and
fair opportunity to benefit from employment without regard to
their sex, sexual orientation, marital status, race, religion or
belief, age or disability.
Communication with employees is primarily through formal and
informal meetings and through the use of the Group’s
information systems.
The Group has a policy of share participation for employees
across the Group at all levels.
Quality accreditations
CentralNic is both ISO 27001 (information security management)
and ISO 9001 (quality management system) accredited.
These accreditations are internationally recognised and provide
CentralNic’s partners with additional levels of assurance as to
the technical integrity of the Group’s IT systems.
CentralNic Group Plc Annual Report 2015 23 Directors’ report continued
Anti-bribery and corruption compliance
CentralNic conducts business ethically, maintains financial integrity
and strives to behave responsibly in our business dealings.
The Group Directors and its senior management are committed
to ensuring strict adherence to our anti-bribery and corruption
policy, and compliance with anti-bribery and corruption laws.
All Directors, employees and consultants have received
training in maintaining the highest standards of professional
conduct and are aware of the need to carry out business
fairly, honestly and openly. Clear lines of communication
and responsibility are in place to report any incidences or
suspected incidences of abuse to provide an effective,
trusted reporting mechanism.
Environment
The Group is committed to operating in an environmentally
responsible manner. The Directors consider environmental
impact when making decisions.
The community, charitable and political donations
The Directors consider the impact on the community when
making decisions.
During the year charitable donations totalling £218 were
made (2014: £150).
The Group made no political donations during the year, either
in the UK or overseas.
Policy on the payment of creditors
The Group’s policy is to agree terms and conditions for its
business transactions with suppliers and to endeavour to abide
by these terms and conditions, subject to the supplier meeting
their obligations.
No one supplier is considered to be essential to the business
of the Group.
Health and safety
The Directors and senior management are committed to
providing for the welfare, health and safety of the Group’s
employees and have procedures in place, including regular
monitoring by third party specialists, to ensure compliance
with our legal and contractual obligations.
Business continuity
The Group has built a resilient technology infrastructure,
designed to provide data security and continuity of service.
The Board recognises the importance of resilience to cyber
threats and invests in primary and secondary data centres along
with a distributed domain name server constellation operated
by the Group and third party providers. The Board keeps the
infrastructure requirements under review and adopts a
continuous improvement approach to further investment, within
appropriate parameters, as business activities expand. The
technical provision, alongside customer support, is considered
one of the most significant aspects of Business Continuity.
Statement of Directors responsibilities in respect of the
Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable
laws and regulations.
Company Law requires the Directors to prepare both the Group
and Parent Company financial statements for each financial
year. As required by the AIM Rules of the London Stock
Exchange they are required to prepare the Group financial
statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the EU and applicable law.
The Parent Company financial statements have been prepared
under applicable UK accounting 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 their profit or loss for that period. In preparing
each of the Group and Parent Company financial statements,
the Directors are required to:
• Select suitable accounting policies and then apply
them consistently;
• Make judgements and estimates that are reasonable
and prudent;
• State whether they have been prepared in accordance
with IFRS as adopted by the EU; and
• Prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the Group
and the Parent Company will continue in business.
24 CentralNic Group Plc Annual Report 2015 The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Parent
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the Parent Company and
enable them to ensure that its financial statements comply with
the provisions of the Companies Act 2006. The Directors have
general responsibility to take such steps as are reasonably open
to them to safeguard the assets of the Group and to prevent
and detect 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 UK governing the
preparation and dissemination of financial statements may
differ in other jurisdictions.
Disclosure of audit information
The Directors confirm that, as at the date of approval of this
annual report and these financial statements, so far as each
Director is aware there is no relevant audit information of
which the Company’s auditor is unaware and that he or she
has taken all the steps that he or she ought to have taken as
a Director in order to make himself or herself aware of any
relevant audit information and to establish that the Company’s
auditor is aware of that information.
Going concern
The Directors have in place procedures to review the forecasts
and budgets for the coming year, which have been drawn
up with appropriate regard for both the macroeconomic
environment in which the Group operates and the particular
circumstances influencing the Domain Name industry and the
Group itself. These were prepared with reference to historic and
current industry knowledge, contracted trading activities, and
prospects that relate to the future strategy of the Group. As a
result, at the time of approving the financial statements, the
Directors consider that the Company and the Group have
sufficient resources to continue in operational existence for the
foreseeable future and that it is appropriate to adopt the going
concern basis in the preparation of the financial statements.
As with all forecasts, the Directors cannot guarantee that the
going concern basis will remain appropriate given the inherent
uncertainty relating to future events. Principal areas of
Uncertainty and Risks are highlighted on pages 14 and 15.
Auditors
The Company’s independent external auditors, Crowe Clark
Whitehill LLP, were initially appointed on 17 July 2013 and were
most recently reappointed at the Company’s Annual General
Meeting of 28 May 2015. It is proposed by the Board they be
put forward for reappointment as auditors and a resolution
concerning their reappointment will be proposed at the
forthcoming AGM.
Registered office
35-39 Moorgate, London EC2R 6AR
Registered number: 08576358
Approved by the Board and signed on it’s behalf by:
Mike Turner Chairman
25 May 2016
CentralNic Group Plc Annual Report 2015 25
Cautionary statement
Under the Companies Act 2006, a Company’s Directors’ Report is required,
among other matters, to contain a fair review by the Directors of the Group’s
business, through a balanced and comprehensive analysis of the development
and performance of the business of the Group and the position of the Group
at the year end, consistent with the size and complexity of the business.
The Directors’ Report set out above, including the Chairman’s Statement, the
Chief Executive’s Report, and the Chief Financial Officer’s Report incorporated
into it by reference (together with the Directors’ Report), has been prepared only
for the shareholders of the Company as a whole, and its sole purpose and use
is to assist shareholders to exercise their governance rights. In particular, the
Directors’ Report has not been audited or otherwise independently verified. The
Company and its Directors and employees are not responsible for any other
purpose or use or to any other person in relation to the Directors’ Report.
The Directors’ Report contains indications of likely future developments and
other forward-looking statements that are subject to risk factors associated
with, among other things, the economic and business circumstances occurring
from time to time in the countries, sectors and business segments in which the
Group operates. These factors include, but are not limited to, those discussed
under Principal Risks and Uncertainties. These and other factors could
adversely affect the Group’s results, strategy and prospects. Forward-looking
statements involve risks, uncertainties and assumptions. They relate to events
and/or depend on circumstances in the future which could cause actual results
and outcomes to differ materially from those currently anticipated. No obligation
is assumed to update any forward looking statements, whether as a result of
new information, future events or otherwise. Corporate governance
Board governance and policy
The Directors acknowledge the importance of the principles set
out in the UK Corporate Governance Code. Although the
Corporate Governance Code is not compulsory for AIM listed
companies, the Directors have applied the principles in the Code
as far as practicable and appropriate for a company of its size
and nature, in accordance with the QCA Corporate Governance
Code for small and mid-sized Quoted Companies 2013.
The Board comprises a Non-Executive Chairman, three
executive directors and four non-executive directors. The Board
meets regularly to consider the business strategy, performance
and the framework of internal controls. To enable the Board to
discharge its duties, all Directors receive appropriate and timely
information. Briefing papers are distributed to all Directors in
advance of Board meetings. All Directors have access to the
advice and services of the Company Secretary, who is
responsible for ensuring that the Board procedures are followed
and that applicable rules and regulations are complied with.
In addition, procedures are in place to enable the Directors to
obtain independent professional advice in the furtherance of
their duties, if necessary, at the Company’s expense.
In line with the requirements of the UK Corporate Governance
Code and the Company’s Articles of Association, the Group
has voluntarily chosen that five Directors will retire at the
Annual General Meeting and being eligible, will offer
themselves for re-election.
Board Committees
The Company has established Audit, Nomination and
Remuneration Committees.
The terms of reference for the three committees were reviewed
during the year and are available for inspection on request from
the Company Secretary.
Audit Committee
The Audit Committee has Iain McDonald as Chairman and other
members of the Committee include Mike Turner, Thomas
Rickert and Thomas Pridmore. The Chief Financial Officer is
invited to and regularly does attend the Committee meetings,
as does the Chief Executive Officer.
The primary responsibilities of the Committee, having due regard
for the interests of Shareholders include:
• Monitoring the integrity of the half yearly and annual financial
statements and formal announcements regarding the Group’s
financial performance
• Reviewing significant accounting policies, areas of significant
estimates and judgments and disclosures in financial reports
• Monitoring the quality and effectiveness of internal control
procedures and risk management systems
• Considering the requirement for Internal Audit, taking into
account the size and nature of the Company and the Group
• Reviewing the external auditor reports relating to the
Company’s accounting and internal control procedures
• Overseeing the Board’s relationship with the external
auditors, including their continued independence and
making recommendations to the Board on the selection
of external auditors.
The Audit Committee is required to meet at least twice a year.
During the year the Committee met on two occasions.
The appointment of the independent external auditor is
approved by the shareholders annually. The independent
auditor’s audit of the financial statements is conducted in
accordance with International Standards on Auditing, ISA (UK
and Ireland) issued by the Auditing Practices Board.
It is noted that the external auditor also operates procedures
designed to safeguard their objectivity and independence.
The Audit Committee reviews all fees related to non-audit work,
and the committee reviews any material non-audit work prior to
commencement. Details of auditor fees can be found in note 7
to the financial statements.
Remuneration Committee
The Group’s Remuneration Committee is responsible, on
behalf of the Board, for developing remuneration policy.
Details of objectives and policy are provided in the
Remuneration Report on pages 29 to 31.
The Remuneration Committee has Tom Pridmore as its
Chairman and other members of the Committee include
Mike Turner, Samuel Dayani and Thomas Rickert.
The primary responsibilities of the Committee, having due
regard for the interests of Shareholders include:
• Determining and agreeing with the Board the
remuneration policy for the Chairman of the Board,
the non-Executive Directors and the Executive Directors
and other senior managers
• Reviewing the design of share incentive plans for approval
by the Board and determining the award policy to Executive
Directors and personnel under existing plans
• Determining the remainder of the remuneration packages
(principally salaries, bonus and pension) for the Executive
Directors and senior management including any
performance-related targets
• Reviewing and noting remuneration trends across the Group
26 CentralNic Group Plc Annual Report 2015 • Co-ordinating with the Nominations Committee in relation
to the remuneration to be offered to any new Executive
Director; and
• Taking responsibility for the selection criteria and if appropriate
selecting, appointing and setting terms of reference for any
remuneration consultants engaged to advise the Committee.
The Remuneration Committee was created in September 2013
and is required to meet at least twice a year. During 2015 the
Committee met on two occasions.
It is the Group’s policy that Executive Directors’ service
contracts contain at least a 3 month notice period.
Nominations Committee
The Group’s Nominations Committee has the power and
authority to carry out a selection process of candidates before
proposing new appointments to the Board.
The Nominations Committee has Mike Turner as its Chairman
and other members of the Committee include Iain McDonald,
Thomas Rickert and Tom Pridmore.
The Nominations Committee was created in September 2013
and is required to meet at least once a year. During 2015 the
Committee met on two occasions.
The Group has adopted a policy for Directors and key employee
share dealings which is appropriate for an AIM-quoted Group.
The Directors comply with Rule 21 of the AIM rules relating to
Director’s dealings and take reasonable steps to ensure
compliance by the Group’s applicable employees.
The Executive and Non-Executive Directors service contracts
are available for inspection by shareholders on request to the
Company Secretary.
The Chairman and Non-Executive Directors do not participate in
agenda items at any meeting when discussions in respect of
matters relating to their own position take place.
Risk management and internal controls
The Board has primary responsibility for establishing and
maintaining the Group’s financial and non-financial controls,
as well as identifying the major risks facing the Group.
Internal control systems are designed to meet the particular
needs of the Group and the risks to which it is exposed. By their
nature, internal controls can provide reasonable but not absolute
assurance against material misstatement or loss.
The Executive Directors and Senior Management have specific
responsibilities for aspects of the Group’s affairs and have
regular discussions to address operational matters, as well as
considering the skill sets required in their teams to maintain the
internal controls required.
Accounting procedures
The financial processes and control systems are kept under
regular review by the Executives with oversight from the Board,
with a view to further evolution and improvement as the Group’s
activities expand. This includes the maintenance of and
adherence to a Financial Procedures Board Memorandum
which is reviewed and updated periodically.
Accounting procedures are managed on a day to day basis by
the Finance team. Responsibility levels are set and agreed with
the Board, with authority delegated to appropriate responsible
managers as well as the Executive. Segregation of duties is
deployed to the degree this is practical and efficient, noting
the size and geographic distribution of the Group.
Monthly management accounts are reported to the Board,
under IFRS (EU) with the content aligned to the Group’s
management information requirements. The Board reviews the
accounts in detail during each Board meeting and requests
further information as the need arises. Comparisons to
approved budgets and forecasts are prepared with associated
commentary provided.
The Company prepares annual Budgets which are reviewed by
the Board. The Budgets are then updated during the year to
provide latest forecasts.
Capital expenditure is regulated by the Budget process, and is
kept under regular review during the year. Investment appraisal
techniques, using discounted cashflow projections, are
deployed in relation to material investments and are reviewed
by the Board as part of good governance such that material
transactions that are significant in terms of their size or type
are only undertaken after Board review.
The Board acknowledges that there are processes in place for
identifying, evaluating and managing risks faced by the Group,
and places emphasis on continuous process improvement.
CentralNic Group Plc Annual Report 2015 27 Corporate governance continued
Corporate responsibility, the environment
and health and safety
The Group is committed to maintaining and promoting high
standards of business integrity. Company values, which
incorporate the principles of corporate social responsibility
and sustainability, guide the Group’s relationships with its
stakeholders including clients, employees and the communities
and environment in which the Group operates.
The Group’s approach to sustainability addresses both our
environmental and social impacts, supporting the Group’s vision
to remain an employer of choice, while meeting client demands
for socially responsible partners. By way of example the Group
companies have arranged and promoted a number of ACE
(Athletics, Community and Environmental) activities in the past.
The Company is also certified by the Carbon Neutral Company.
The Group respects local laws and customs while supporting
international laws and regulations. These policies have been
integral in the way Group companies have done business in the
past and will continue to play a central role in influencing the
Group’s practice in the future.
Communications with shareholders
The Board regards the importance of effective communication
with shareholders as essential.
Relations with shareholders are managed principally by the Chief
Executive Officer and the Chairman, and meetings are regularly
held with institutional investors and analysts during the year.
The Chairman, Chief Executive Officer, the Chief Financial Officer
and if required other Executive and Non-Executive Directors
make themselves available for meetings with major shareholders
either individually or collectively. The Group’s shareholders are
invited to attend the AGM at which the majority of Directors are
present. The Group’s Nominated Advisors and Joint Brokers also
convey shareholder opinions to the Chairman and Chief
Executive Officer and these are discussed with the Board.
The Group’s website contains information on current business
activities, including the annual and interim results.
Annual General Meeting date
The Annual General meeting will be convened in accordance
with the provisions of the Companies Act 2006. The Annual
General Meeting will take place on 28 June 2016 at 10.00am
at the offices of the Company’s solicitors:
DWF LLP
20 Fenchurch Street
London
EC3M 3AG
The proposed resolutions together with proxy forms and
this annual report will be distributed to shareholders by the
3 June 2016, if not before.
28 CentralNic Group Plc Annual Report 2015 Remuneration report
CentralNic Group Plc Annual Report 2015 29
As the Company is an AIM listed company, it is not required to
present a Directors’ Remuneration report. However, the Board
has chosen to do so in line with evolving best practice.
Remuneration Committee
The membership of the Committee and the principal activities
are detailed in the Corporate Governance section of the annual
report on pages 26 and 27.
Remuneration policy
The Company’s remuneration policy is focussed on being able to
attract, retain and incentivise management with the appropriate
skills and expertise to realise the Group’s strategic objectives and
align managements’ interests with those of shareholders.
In particular the Remuneration Committee seeks to link payment
to performance and as a result create a performance culture
within the business.
The Directors believe that it is important to properly motivate and
reward key senior employees and executives and to do so in a
manner that aligns their interests with that of the Shareholders.
The Directors also recognise the importance of ensuring that all
employees are well motivated and identify closely with the
profitability of the Company.
Directors remuneration
The average number of staff employed by the Group is included
in note 8 to the financial statements.
Disclosure of the remuneration for key management personnel,
as required under IAS 24, is also detailed in note 8 to the
financial statements.
In terms of the remuneration of the Company’s Directors, entries
to profit and loss included in the Statement of Comprehensive
Income include:
Included in the Directors’ salaries and fees above is a charge
of £nil in the year to the Company and Group by Robert Pooke
Consulting (2014: £54,000) of which Robert Pooke has a
controlling interest.
Included in the Directors’ salaries and fees above is a charge
of £25,000 in the year to the Company and Group by Laura
Trading LLC (2014: £25,000) of which Samuel Dayani has
a controlling interest.
Included in the Directors’ salaries and fees above is a charge
of £nil in the year to the Company and Group by Swingewood
Consulting Ltd (2014: £40,150) of which John Swingewood
has a controlling interest.
Included in the Directors’ emoluments above is a charge of
£254,000 in the year to the Company and Group by Ben
Crawford FZE (2014: £206,333) of which Ben Crawford has
a controlling interest.
Included in the Directors’ salaries and fees above is a charge
of £nil in the year to the Company and Group by WJP
Consulting Ltd (2014: £18,767) of which Tom Pridmore has
a controlling interest.
Included in the Directors’ salaries and fees above is a charge
of £11,667 to the Company and Group by Taylor Wessing LLP
(2014: £nil), a partnership where Mike Turner is a partner.
Included in the Directors’ emoluments above is a charge of
£nil in the year to the Company and Group by Mataxis Ltd
(2014: £5,333) of which Donald Baladasan has a controlling
interest. Consultancy fees of £nil have also been incurred
during 2015 (2014: £16,500).
                                                                                                                                                                                     Share-based
                                                                                       Salaries & fees                    Bonus                  Pension               payments                      2015                      2014
                                                                                                     £’000                     £’000                     £’000                     £’000                     £’000                     £’000
Non-Executive Directors
Samuel Dayani                                                        25                    –                    –                    –                  25                  25
Thomas Rickert                                                       25                    –                    –                  13                  38                  38
Tom Pridmore                                                         27                    –                    –                  13                  40                  38
Mike Turner                                                             12                    –                    –                    –                  12                    –
Iain McDonald                                                           –                    –                    –                    –                    –                    –
John Swingewood                                                  39                    –                    –                    –                  39                  40
Executive Directors
Robert Pooke                                                          67                    –                    –                    –                  67                  60
Ben Crawford                                                        155                105                    –                163                423                375
Glenn Hayward                                                     146                  37                  11                  54                248                152
Donald Baladasan                                                     –                    –                    –                    –                    –                    6
                                                                            496                142                  11                243                892                734 Remuneration report continued
30 CentralNic Group Plc Annual Report 2015
Share options
Prior to admission to AIM CentralNic established an unapproved
share option scheme under which certain key executives and
employees were invited to participate.
In addition, again prior to AIM admission, CentralNic also
granted options under an Enterprise Management Incentive
Scheme (EMI) under separate EMI option agreements to certain
qualifying key executives and employees. These options were
rolled over into the Company during 2013.
To reflect existing commitments, the options granted in June
2013 for the unapproved option scheme and the EMI scheme
will vest in 12 equal instalments at 3 month intervals following
Admission (so that the options will have fully vested 3 years after
the date of the grant). The unapproved options granted on
14 October 2013 will vest 3 years after the date of grant.
Ben Crawford participates in both the June 2013 and October
2013 unapproved scheme, and Donald Baladasan (a former
Director) participates in the June 2013 unapproved scheme.
Glenn Hayward is the only Director who participates in the EMI
scheme, with options granted on 28 April 2015. The EMI options
granted to Glenn Hayward will vest on 10 February 2017.
These share incentive arrangements are designed to support
the strategy of generating significant sustainable value for
shareholders by linking the rewards for executives and the board
with the value created for Shareholders and thereby aligning the
interests of key executives with those of Shareholders.
Shares acquired or options granted under any share incentive
arrangements operated by the Company will be limited in total
to 10 per cent of the Company’s issued share capital from
time to time.
The table below shows the outstanding share options issued
to Directors and former Directors at 31 December 2015:
                                                                                                                                            Number of options                        Exercise price                    Options granted
Outstanding at 1 January 2015
Ben Crawford                                                                                           1,316,000                           10p              1 June 2013
Donald Baladasan (former Director)                                                              125,000                           10p              1 June 2013
Ben Crawford                                                                                              850,000                           55p       14 October 2013
Thomas Rickert                                                                                             88,000                           55p       14 October 2013
Tom Pridmore                                                                                               88,000                           55p       14 October 2013
Total                                                                                                        2,467,000
Outstanding at 31 December 2015
Ben Crawford                                                                                           1,316,000                            10p              1 June 2013
Donald Baladasan (former Director)                                                                 52,083                            10p              1 June 2013
Ben Crawford                                                                                              850,000                            55p       14 October 2013
Thomas Rickert                                                                                             88,000                            55p       14 October 2013
Tom Pridmore                                                                                                88,000                            55p       14 October 2013
Glenn Hayward                                                                                            500,000                            35p             28 April 2015
Total                                                                                                         2,894,083
Since 31 December 2015, further unapproved options have been issued to some of the Directors, with vesting dates as follows:
Issued on 5 February 2016
                                                                                                                                                                                                    Total number                         Options held 
                                                               Number of                                                                            Expected                      of options held                     as % of existing
                                                        options granted                        Exercise price                          vesting date                 following the grant                          share capital
Mike Turner                             750,000                           40p            15 Sept 2018                    750,000                        0.78%
Iain McDonald                         350,000                           40p              26 Oct 2018                    350,000                        0.37%
Tom Pridmore                         350,000                           40p                3 Feb 2019                    438,000                        0.46%
Thomas Rickert                       350,000                           40p                3 Feb 2019                    438,000                        0.46%
Desleigh Jameson                   200,000                           40p              14 Jan 2019                    200,000                        0.21%
72,917 options were exercised during the year by Donald Baladasan and no options have expired. All options expire within
10 years of grant.
Further details are provided in relation to share based payments in note 26 to the financial statements. CentralNic Group Plc Annual Report 2015 31
In addition, a further 1,710,500 options over ordinary shares
were in issue at 31 December 2015, being held by the
Company’s employees. This number has increased since the
end of the year to reflect the addition of Instra Group employees
to the unapproved option scheme. At 30 April 2016, a total of
1,909,083 options over ordinary shares were in issue, held by
the Company’s employees.
The IFRS2 charge in the year for all share option plans relating
to the Directors was £242,810 (2014: £189,518).
On 31 December 2015, the closing market price of CentralNic
Group plc ordinary shares was 48.5 pence. The highest and
lowest price of these shares in the year were 73.5 pence on 14
September 2015 and 23 pence on 31 March 2015 respectively.
Directors’ interests
(a) As at 31 December 2015, the interests of the Directors
(including Directors who were appointed during the year and
those who retired), including persons connected with the
Directors within the meaning of section 252 of the Companies Act
2006, in the issued share capital of the Company are as follows:
Ordinary Shares Percentage
Erin Invest & Finance Ltd* 21,630,382 23.51%
UBS Private Banking
Nominees Ltd (R Pooke)** 8,400,581 9.13%
Jabella Group Ltd*** 5,687,891 6.18%
Natwest FIS Nominees**** 3,699,000 4.02%
Iain McDonald**** 11,500 0.01%
* The beneficial holder of Erin and Natwest FIS Nominee Limited is the father
of Samuel Dayani, a Director of the Company. Of these shares 5,687,891
Ordinary Shares are held by Jabella Group Limited in which Erin has a
53.80 per cent. interest
** 5,687,891 Ordinary Shares are held by Jabella Group Limited in which
Robert Pooke has a 32.0 per cent. interest
*** Jabellla Group Limited is a BVI company owned inter alia, by Erin, Natwest
FIS Nominee Limited, John Swingewood and Robert Pooke.
**** 5,687,891 Ordinary Shares are held by Jabella Group Limited in which
Natwest FIS Nominee Limited has a 8.40 per cent interest
***** Iain McDonald has an interest, held through a contract for difference,
in 11,500 ordinary shares in the Company.
There are no changes to this information as at the date
of this report.
(b) Save as disclosed in this annual report, none of the
Directors nor any members of their families, nor any person
connected with them within the meaning of section 252 of
the Act, has any interest in the issued share capital of the
Company or its subsidiaries.
(c) Save as disclosed in this annual report, as at the date of
this Document, no Director has any option over any warrant to
subscribe for any shares in the Company.
(d) None of the Directors nor any members of their families,
nor any person connected with them within the meaning of
section 252 of the Act, has a related financial product (as
defined in the AIM Rules) referenced to the Ordinary Shares.
(e) None of the Directors is or has been interested in any
transaction which is or was unusual in its nature or conditions
or significant to the business of the Company and which was
effected by the Company and remains in any respect
outstanding or unperformed.
(f) There are no outstanding loans made or guarantees
granted or provided by the Company to or for the benefit of
any Director other than disclosed in notes 16 and 24 to the
financial statements.
(g) Save as disclosed in this Annual report, there are no potential
conflicts of interest between any duties to the Company of the
Directors and their private interests or their other duties. We have audited the financial statements of CentralNic Group
plc for the year ended 31 December 2015 which comprise the
Group Statement of Financial Position and Parent Company
Balance Sheet, the Group Statement of Comprehensive
Income, the Group Cash Flow Statement, the Group Statement
of Changes in Equity and the Parent Company Reconciliation of
Movements in Shareholders’ Funds and the related notes set
out on pages 33 to 72.
The financial reporting framework that has been applied in the
preparation of the Group financial statements is applicable law
and International Financial Reporting Standards (IFRSs) as
adopted by the European Union. The financial reporting
framework that has been applied in the preparation of the
Parent Company financial statements is applicable law and
United Kingdom Accounting Standards (United Kingdom
Generally Accepted Accounting Practice).
This report is made solely to the Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so
that we might state to the Company’s members those matters
we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the
Company and the Company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditors
As explained more fully in the Statement of Directors’
Responsibilities, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view. Our responsibility is to audit and express
an opinion on the financial statements in accordance with
applicable law and International Standards on Auditing (UK
and Ireland). Those standards require us to comply with the
Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give reasonable
assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an
assessment of: whether the accounting policies are appropriate to
the Company’s circumstances and have been consistently applied
and adequately disclosed; the reasonableness of significant
accounting estimates made by the Directors; and the overall
presentation of the financial statements.
In addition, we read all the financial and non-financial information
in the Strategic Report and the Directors’ Report to identify
material inconsistencies with the audited financial statements and
to identify any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit.
If we become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
Opinion on financial statements
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 2015 and of the Group’s profit and the Parent
Company’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 United Kingdom Generally
Accepted Accounting Practice; and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the
Companies Act 2006
In our opinion 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
financial statements.
Matters on which we are required to report by exception
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
Stephen Bullock
Senior Statutory Auditor
For and on behalf of
Crowe Clark Whitehill LLP
Statutory Auditor
St Bride’s House
10 Salisbury Square
London
EC4Y 8EH
25 May 2016
Independent Auditors’ report
to the Members of CentralNic Group plc
32 CentralNic Group Plc Annual Report 2015 CentralNic Group Plc Annual Report 2015 33
Consolidated statement of
comprehensive income
for the year ended 31 December 2015
                                                                                                                                                                                                                                                     Restated**
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                  Note                            £’000                            £’000
Revenue                                                                                                                          5,6                 10,393                   6,067
Cost of sales                                                                                                                                          (5,533)                 (2,755)
Gross profit                                                                                                                                             4,860                   3,312
Administrative expenses                                                                                                                         (3,085)                 (2,593)
Share based payments expense                                                                                                                (316)                    (222)
Operating profit                                                                                                                                     1,459                      497
Adjusted EBITDA*                                                                                                                                 3,254                   1,724
Depreciation                                                                                                                   12                       (71)                      (90)
Amortisation of intangible assets                                                                                     13                     (578)                    (448)
Acquisition costs and non recurring fees                                                                                                  (830)                    (467)
Share based payments expense                                                                                     26                     (316)                    (222)
Operating profit                                                                                                                                   1,459                      497
Finance income                                                                                                                  9                        33                        23
Finance costs                                                                                                                    9                         (2)                         –
Finance income – net                                                                                                         9                        31                        23
Share of loss of investments accounted for using the equity method                                   23                       (36)                         –
Profit before taxation                                                                                                       7                   1,454                      520
Income tax expense                                                                                                          10                     (548)                    (156) 
Profit after taxation attributable to equity shareholders                                                                          906                      364
Items that may be reclassified subsequently to profit and loss
Exchange difference on translation of foreign operation                                                                                   (1)                         –
Cash flow hedges – effective portion of changes in fair value                                              17                      245                          –
Total comprehensive income for the financial year
attributable to equity shareholders                                                                                                       1,150                      364
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                  Note                           Pence                            pence
Earnings per share
Basic                                                                                                                               11                     1.40                     0.60
Diluted                                                                                                                             11                     1.36                     0.60
*   Earnings before interest, tax, depreciation and amortisation, non-trading items and non-cash charges.
** Restatement of 2014 reflects reallocation of merchant fees from administrative expenses to cost of sales.
All amounts relate to continuing activities.
The notes on pages 37 to 63 form an integral part of these financial statements. 34 CentralNic Group Plc Annual Report 2015
Consolidated statement
of financial position
as at 31 December 2015
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                  Note                            £’000                            £’000
ASSETS
Non-current assets
Property, plant and equipment                                                                                           12                        65                        90
Intangible assets                                                                                                               13                   5,390                   6,118
Deferred receivables                                                                                                         14                      295                      916
Investments                                                                                                                      15                      997                      997
Deferred tax assets                                                                                                           21                      168                        74
                                                                                                                                                              6,915                   8,195
Current assets
Trade and other receivables                                                                                              16                   5,486                   2,333
Derivative financial instruments                                                                                          17                      245                          –
Cash and bank balances                                                                                                  18                 19,060                   3,056
                                                                                                                                                            24,791                   5,389
Total assets                                                                                                                                         31,706                 13,584
EQUITY AND LIABILITIES
Equity
Share capital                                                                                                                    19                        92                        61
Share premium                                                                                                                 19                 16,522                   4,935
Share based payments reserve                                                                                                                1,390                   1,018
Foreign exchange translation reserve                                                                                                               –                          1
Foreign currency hedging reserve                                                                                                               245                          –
Retained earnings                                                                                                                                   1,797                      885
Total equity                                                                                                                                         20,046                   6,900
Non-current liabilities
Other payables                                                                                                                 20                      845                      725
Deferred tax liabilities                                                                                                         21                        65                        72
                                                                                                                                                                 910                      797
Current liabilities
Trade and other payables and accruals                                                                             22                 10,349                   5,671
Taxation payable                                                                                                                                        401                      216
                                                                                                                                                            10,750                   5,887
Total liabilities                                                                                                                                     11,660                   6,684
Total equity and liabilities                                                                                                                   31,706                 13,584
These financial statements were approved and authorised for issue by the Board of Directors on 25 May 2016 and were
signed on it’s behalf by:
Mike Turner Chairman
Company Number: 08576358
The notes on pages 37 to 63 form an integral part of these financial statements.  CentralNic Group Plc Annual Report 2015 35
Consolidated statement
of changes in equity
for the year ended 31 December 2015
                                                                                                                                                                                 Foreign            Foreign
                                                                                                                                                 Share based         exchange           currency
                                                                                                           Share               Share         payments        translation           hedging          Retained 
                                                                                                          capital          premium             reserve             reserve             reserve           earnings                Total
                                                                                                           £’000               £’000               £’000               £’000               £’000               £’000               £’000
Balance as at 31 December 2013                                59         3,485            742                1                –            521         4,808
Profit for the year                                                            –                –                –                –                –            364            364
Other comprehensive income
Translation of foreign operation                                       –                –                –                –                –                –                –
Total comprehensive income for the year                        –                –                –                –                –            364            364
Transactions with owners
Issue of new shares                                                       2         1,472                –                –                –                –         1,474
Share issue costs                                                          –             (22)               –                –                –                –             (22)
Share based payments                                                  –                –            222                –                –                –            222
Share based payments 
– deferred tax asset                                                       –                –              54                –                –                –              54
Balance as at 31 December 2014                              61         4,935         1,018                1                –            885         6,900
Profit for the year                                                            –                –                –                –                –            906            906
Other comprehensive income
Translation of foreign operation                                       –                –                –               (1)               –                –               (1)
Cash flow hedge                                                            –                –                –                –            245                –            245
Total comprehensive income for the year                        –                –                –               (1)           245            906         1,150
Transactions with owners
Issue of new shares                                                     31       12,277                –                –                –                –       12,308
Share issue costs                                                          –           (690)               –                –                –                –           (690)
Share based payments                                                  –                –            316                –                –                –            316
Share based payments 
– reclassify lapsed options                                             –                –               (6)               –                –                6                –
Share based payments 
– deferred tax asset                                                       –                –              62                –                –                –              62
Balance as at 31 December 2015                               92       16,522         1,390                –            245         1,797       20,046
• Share capital represents the nominal value of the Company’s cumulative issued share capital. 
• Share premium represents the cumulative excess of the fair value of consideration received for the issue of shares in excess
of their nominal value less attributable share issue costs and other permitted reductions. 
• Retained earnings represent the cumulative value of the profits not distributed to shareholders, but retained to finance the
future capital requirements of the CentralNic Group. 
• Share based payments reserve represents the cumulative value of share based payments recognised through equity. 
• Foreign exchange translation reserve represents the cumulative exchange differences arising on Group consolidation.
• Foreign currency hedging reserve represents the effective portion in the fair value of derivatives.
The notes on pages 37 to 63 form an integral part of these financial statements. 36 CentralNic Group Plc Annual Report 2015
Consolidated statement
of cash flows
for the year ended 31 December 2015
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                  Note                            £’000                            £’000
Cash flow from operating activities
Profit before taxation                                                                                                                                1,454                      520
Adjustments for:
Depreciation of property, plant and equipment                                                                                               71                        90
Amortisation of intangible assets                                                                                                                 578                      448
Reclassification of intangible assets                                                                                                             448                          –
Finance income/(cost) – net                                                                                                                           (1)                         –
Share based payments                                                                                                                              316                      222
Share of result of associate                                                                                                                           36                          –
Operating profit before working capital changes                                                                                 2,902                   1,280
Increase in trade and other receivables                                                                                                    (2,649)                    (664)
Increase in trade and other payables and accruals                                                                                    5,839                      934
Increase in inventories                                                                                                                                   (1)                         –
Cash flow from operations                                                                                                                    6,091                   1,550
Income tax paid                                                                                                                                         (405)                    (136)
Net cash flow generated from operating activities                                                                               5,686                   1,414
Cash flow used in investing activities
Purchase of property, plant and equipment                                                                                                  (43)                    (126)
Purchase of intangible assets                                                                                                                     (104)                 (1,838)
Loan repayments received from third parties                                                                                                    –                     (102)
Purchase of investments                                                                                                                                 –                     (997)
Acquisition of a subsidiary, net of cash acquired                                                                23                        12                          –
Net cash flow used in investing activities                                                                                               (135)                 (3,063)
Cash flow used in financing activities
Proceeds from issuance of ordinary shares                                                                                            11,618                          –
Reduction in deferred consideration                                                                                                        (1,159)                    (230)
Net cash flow generated from/(used in) financing activities                                                               10,459                     (230)
Net increase in cash and cash equivalents                                                                                             16,010                  (1,879)
Cash and cash equivalents at beginning of the year                                                                                  3,056                   4,932
Exchange losses on cash and cash equivalents                                                                                             (6)                         3
Cash and cash equivalents at end of the year                                                                                    19,060                   3,056
The notes on pages 37 to 63 form an integral part of these financial statements.  CentralNic Group Plc Annual Report 2015 37
Notes to the consolidated
financial statements
for the year ended 31 December 2015
1. General information
(a) Nature of operations
CentralNic Group Plc is the UK holding company of a group of companies which are engaged in the provision of global domain
name services. The Company is registered in England and Wales. Its registered office and principal place of business is
35-39 Moorgate, London, EC2R 6AR. 
The CentralNic Group provides wholesale (“registry”), retail (“registrar”) and enterprise services and strategic consultancy for new
Top Level Domains (“TLDs”), Country Code TLD’s (“ccTLDs”) and Second-Level Domains (“SLDs”) and it is the owner and registrant
for a portfolio of domain names, which it uses as SLD domain extensions and for resale on the domain aftermarket.
(b) Component undertakings
The principal activities of the subsidiaries and other entities included in the financial statements are as follows:
Place of
incorporation/                                                                                                        Issued and paid-up/
Name establishment                           Principal activities                                                  registered capital                Effective interests
CentralNic Limited England and Wales       Domain registry services provider        Ordinary shares                  100%
CentralNic USA Limited USA                             US sales office                                   Ordinary stock                    100%
GB.com Limited England and Wales       Dormant – holds domain name           Ordinary shares                  100%
Whois Privacy Limited England and Wales       Dormant                                            Ordinary shares                  100%
TLD Registrar Solutions Limited England and Wales       Domain registrar services provider       Ordinary shares                  100%
Internet Domain Service Commonwealth of        Domain registrar services provider       Ordinary shares                  100%
BS Corp The Bahamas
Whois Privacy Corp Commonwealth of        Domain registrar services provider       Ordinary shares                  100%
The Bahamas
Hoxton Domains Limited England and Wales       Aftermarket domain services               Ordinary shares                  100%
dnsXperts UG* Germany                      Domain management                         Ordinary shares                  100%
                                    software services
Instra Holdings (UK) Ltd** England and Wales       Holding Company                              Ordinary shares                  100%
Instra Holdings (Aus) Pty Ltd** Australia                       Holding Company                              Ordinary shares                  100%
Instra Holdings (NZ) Ltd** New Zealand                Holding Company                              Ordinary shares                  100%
*   The acquisition of dnsXperts UG was completed on 1 July 2015, see note 23.
** These companies were incorporated during the year for the purpose of acquiring the entire share capital of the Instra Group. The acquisition was completed
in January 2016, see note 28.
2. Application of IFRS
(a) Basis of preparation
The financial statements are measured and presented in sterling (£), unless otherwise stated, which is the currency of the primary
economic environment in which the entities operate. They have been prepared under the historical cost convention, except for
financial instruments that have been measured at fair value through profit and loss.
The financial statements have been prepared on the going concern basis, which assumes that the Group will continue to be able
to meet its liabilities as they fall due for the foreseeable future. The financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the EU (“IFRS”) issued by the International Accounting Standards Board
(“IASB”), including related interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”).
The Directors have reviewed forecasts and budgets for the coming year having regard to both the macroeconomic environment in
which the Group operates, historic and current industry knowledge and contracted trading activities and the future strategy of the
Group. As a result of that review the Directors consider that it is appropriate to adopt the going concern basis of preparation. 38 CentralNic Group Plc Annual Report 2015
2. Application of IFRS continued
(b) Standards, amendments and interpretations to published standards not yet effective
A number of new standards and amendments to standards and interpretations have been issued but are not yet effective and in
some cases have not yet been adopted by the EU.
The Directors do not expect that the adoption of these standards will have a material impact on the financial statements of the
Group in future periods, except that IFRS 9 will impact both the measurement and disclosures of financial instruments and IFRS 15
may have an impact on revenue recognition and related disclosures. At this point it is not practicable for the directors to provide
a reasonable estimate of the effect of IFRS 9 and IFRS 15 as their detailed review of these standards is still ongoing.
3. Summary of significant accounting policies 
The financial statements have been prepared on the historical cost basis, as explained in the accounting policies set out below,
which have been prepared in accordance with IFRS. The principal accounting policies are set out below.
(a) Basis of consolidation
The consolidated financial statements include the financial statements of all subsidiaries. The financial year ends of all entities in the
Group are coterminous.
The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control over the
operating and financial decisions is obtained and cease to be consolidated from the date on which control is transferred out of the
Group. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee.
All intercompany balances and transactions, including recognised gains arising from inter-group transactions, have been eliminated in full.
Unrealised losses are eliminated in the same manner as recognised gains except to the extent that they provide evidence of impairment. 
(b) Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the
consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. For each
business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate
share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. 
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 as at the acquisition date.
This includes the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, any previously held equity interest is remeasured at its acquisition date fair value
and any resulting gain or loss is recognised in profit or loss. 
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent
consideration classified as an asset or liability that is a financial instrument and within the scope of IAS 39 Financial Instruments:
Recognition and Measurement, is measured at fair value with changes in fair value recognised either in either profit or loss or as
a change to Other comprehensive income. If the contingent consideration is not within the scope of IAS 39, it is measured in
accordance with the appropriate IFRS. Contingent consideration that is classified as equity is not remeasured and subsequent
settlement is accounted for within equity. 
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised
for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the
fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has
correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the
amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets
acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing,
goodwill acquired in a business combination is, from the acquisition date, allocated 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.
Notes to the consolidated
financial statements continued CentralNic Group Plc Annual Report 2015 39
3. Summary of significant accounting policies continued
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill
associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on
disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the
portion of the cash-generating unit retained.
(c) Functional and foreign currencies
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (the ‘functional currency’). The consolidated financial statements are presented in pounds
sterling (£) the Group’s and the Company’s presentational currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency at the exchange rates prevailing at the dates of the
transactions or valuation where items are re-measured. Foreign currency gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in the income statement, except where deferred in other comprehensive income as qualifying cash flow hedges and
qualifying net-investment hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are
presented in the income statement within finance income or finance costs. All other foreign exchange gains and losses are
recognised in profit and loss within administrative expenses.
(iii) Group companies
The results and financial position of all of the Group entities, none of which has the currency of a hyper-inflationary economy,
that have a functional currency different from the presentation currency of the Group are translated as follows:
a) assets and liabilities for each statement of financial position are translated at the closing rate at the date of that statement
of financial position;
b) income and expenses for each income statement are translated at average exchange rates (unless this average is not a
reasonable approximation of the cumulative effect of the rates prevailing at the transaction dates, in which case income and
expenses are translated at the rate on the dates of the transactions).
c) All resulting exchange differences are recognised in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign
entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.
(d) Financial instruments
Financial assets and liabilities are recognised in the statements of financial position when CentralNic or one of the CentralNic Group
entities has become a party to the contractual provisions of the instruments.
The CentralNic Group’s financial assets and liabilities are initially measured at fair value plus any directly attributable transaction costs.
The carrying value of the CentralNic Group’s financial assets, primarily cash and bank balances, and liabilities, primarily CentralNic’s
payables and other accrued expenses, approximate their fair values.
Financial instruments are offset when the CentralNic Group has a legally enforceable right to offset and intends to settle either on a
net basis or to realise the asset and settle the liability simultaneously.
Financial instruments recognised in the pro forma aggregated statements of financial position are disclosed in the individual policy
statement associated with each item.
(i) Financial assets 
On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity
investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate. 
Trade and other receivables
Trade and other receivables (including deposits and prepayments) that have fixed or determinable payments that are not quoted in
an active market are classified as other receivables, deposits, and prepayments. Other receivables, deposits, and prepayments are
measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying
the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. 40 CentralNic Group Plc Annual Report 2015
Notes to the consolidated
financial statements continued
3. Summary of significant accounting policies continued
Derivative financial instruments
Cash flow hedge
Derivatives are initially recognised at fair-value on the date a derivative contract is entered into and are subsequently re-measured at
their fair-value. The method of recognising the resulting gain or loss depends on whether the derivative is designated a hedging
instrument, and if so, the nature of the item being hedged.
The Group has only undertaken hedges of a particular risk associated with a recognised asset or liability or a highly probable
forecast transaction (cash flow hedges).
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as
risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment,
both at hedge inception and on an ongoing basis, of whether the derivatives which are used in hedging transactions are highly
effective in offsetting changes in fair values or cash flows of hedged items.
The fair values of derivative instruments used for hedging purposes are set out in note 17.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in
other comprehensive income. The gain or loss relating to the ineffective portion, if any, is recognised immediately in the income
statement under ‘Other gains /(losses) – net’. 
Amounts accumulated in equity are reclassified to profit and loss in the period or periods that the hedged item affects profit and loss.
When a hedging instrument expires or is sold, or where a hedge no longer meets the criteria for hedge accounting any cumulative
gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised
in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss which was
reported in equity is immediately transferred to the income statement under ‘Other gains /(losses)’ – net. 
Cash and bank balances
Cash and bank balances comprise cash balances that are subject to insignificant risk of changes in their fair value, and are used
by the CentralNic Group in the management of its short-term commitments.
(ii) Financial liabilities and equity instruments
Financial liabilities are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest,
dividends, gains and losses relating to financial liabilities are reported in profit or loss. Distributions to holders of financial liabilities
are classified as equity and charged directly to equity.
Financial liabilities
Financial liabilities comprise long-term borrowings, short-term borrowings, trade and other payables and accruals, measured 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 income
over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all
fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or
discounts) through the expected life of the financial liability, or, where appropriate, a shorter period to the net carrying amount
on initial recognition.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all its liabilities.
Equity instruments issued by the CentralNic Group are recognised at the proceeds received, net of direct issue costs.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are
shown in equity as a deduction, net of tax, from proceeds.
Dividends on ordinary shares are recognised as liabilities when approved for appropriation.
(e) Property, plant, and equipment 
Property, plant and equipment, including leasehold improvements and office furniture and equipment, are stated at cost less
accumulated depreciation and impairment losses, if any.  CentralNic Group Plc Annual Report 2015 41
3. Summary of significant accounting policies continued
Depreciation is calculated under the reducing balance method to write off the depreciable amount of the assets over their estimated
useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is
fully depreciated. The principal annual rates used for this purpose are:
• Computer equipment 60% – 65%
• Furniture and fittings 15% – 20%
The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting
period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected
pattern of consumption of the future economic benefits embodied in the asset.
Subsequent component replacement costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow
to the CentralNic Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is
derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which
the CentralNic Group are obligated to incur when the asset is acquired, if applicable.
An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from its use.
Any gain or loss arising from de-recognition of the asset is recognised in profit or loss. The revaluation reserve included in equity is
transferred directly to retained profits on retirement or disposal of the asset.
(f) Intangible assets
Intangible assets represent amounts paid to acquire the rights to own and act as registrant for a portfolio of domain names or
amounts in respect of such intangible assets originally included at directors valuation but treated as deemed cost on transition to
IFRS which, for the purposes of these financial statements, was 1 January 2010.
Capitalised domain names have a finite useful life and are measured at cost less accumulated amortisation and impairment losses,
if any. Domain names are amortised on an annual basis at the rate of 10% to 20% reducing balance.
Domain names not held for resale are included in the balance sheet at amortised cost and classified as “Domain Names” and
amortised over their useful lives. Domain names held for resale are included in the balance sheet at the lower of cost and net
realisable value and classified as stock held for sale, no amortisation being charged. If a decision is taken to sell a domain name
previously included in intangible assets it is reclassified as stock at net book value prior to sale.
Development costs that the CentralNic Group incurs for identifiable and unique software will be capitalised, where the following
criteria are met:
• it is technically feasible to complete the software so that it will be available for use;
• management intends to complete the software product and use or sell it;
• there is an ability to use or sell the software product;
• it can be demonstrated that the asset will probably generate future economic benefits; and
• the expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software product include the employee costs and an appropriate portion
of the relevant overheads.
Computer software development recognised as assets are amortised over their estimated useful lives, which are determined by
the Directors.
Costs for development initiatives that the CentralNic Group undertakes that are not otherwise allocable to specific domain names
or projects are charged to expense through profit and loss when incurred.
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business
combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any
accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development
costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite. 
Intangible assets are tested for impairment annually if facts and circumstances indicate that impairment may exist. In the event that
the expected future economic benefits of the intangible assets are no longer probable or expected to be recovered, the capitalised
amounts are written down to their recoverable amount through profit and loss. Notes to the consolidated
financial statements continued
42 CentralNic Group Plc Annual Report 2015
3. Summary of significant accounting policies continued
(g) Impairment 
(i) Impairment of financial assets
Financial assets not categorised at fair value through profit or loss are assessed at the end of each reporting period to determine
whether there is any objective evidence of impairment. A financial asset is impaired if there is objective evidence of impairment as a
result of one or more events that occurred after the initial recognition of the asset and that loss event(s) had an impact on the estimated
future cash flows of the asset. Objective evidence that financial assets are impaired includes default or delinquency by a debtor and
the restructuring of an amount due to the CentralNic Group on terms that the CentralNic Group would not consider otherwise.
An impairment loss in respect of a financial asset measured at amortised cost, including other receivables, deposits, and
prepayments, is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present
value of estimated future cash flows, discounted at the financial asset’s original effective interest rate. Losses are recognized in profit
or loss and reflected in an allowance account against the amounts receivables.
When the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the
impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the
carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have
been had the impairment not been recognised. 
(ii) Impairment of non-financial assets
The carrying values of non-financial assets, other than deferred tax assets, are reviewed at the end of each reporting period to
determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
The recoverable amount of the assets is the higher of the assets’ fair value less cost to sell and their value-in-use, which is measured
by reference to discounted future cash flows. 
An impairment loss is recognised if the carrying value of the asset exceeds its recoverable amount.
An impairment loss is recognised in profit or loss immediately.
In respect of assets other than goodwill, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the
previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net
of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately. 
(h) Cash and cash equivalents
Cash and bank balances comprise of cash in hand, bank balances, deposits with financial institutions and short-term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(i) Employee benefits
Short-term employee benefits, including wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits
are accrued in the period in which the associated services are rendered by employees of the CentralNic Group.
(j) Leases
Assets held under leases are classified as operating leases and are not recognised in the CentralNic Group’s statement of financial
position. Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease.
Lease incentives received are recognised as part of the total lease expense, over the term of the lease.
(k) Taxation
Taxation for the year comprises of current and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the
tax rates that have been enacted or substantively enacted at the end of the reporting period.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. 
Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the
acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business
combination costs or from the initial recognition of an asset or liability in a transaction which is not a business combination and at
the time of the transaction, affects neither accounting profit nor taxable profit. CentralNic Group Plc Annual Report 2015 43
3. Summary of significant accounting policies continued
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent
that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses
and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period
and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the
deferred tax assets to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or
the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when the deferred income taxes relate to the same taxation authority.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised
in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax arising from a
business combination is included in the resulting goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s
identifiable assets, liabilities and contingent liabilities over the business combination costs. 
(l) Share based payments
Employees (including Directors and Senior Executives) of the Group receive remuneration in the form of share-based payment
transactions, whereby these individuals render services as consideration for equity instruments (“equity-settled transactions”). These
individuals are granted share option rights approved by the Board which can only be settled in shares of the respective companies
that award the equity-settled transactions. Share options rights are also granted to these individuals by majority shareholders over
their shares held. No cash settled awards have been made or are planned.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the
performance and/or service conditions are fulfilled, ending on the date on which the relevant individuals become fully entitled to the
award (“vesting point”). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting
date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments
and value that will ultimately vest. The statement of comprehensive income charge for the year represents the movement in the
cumulative expense recognised as at the beginning and end of that period.
The fair value of share-based remuneration is determined at the date of grant and recognised as an expense in the statement of
comprehensive income on a straight line basis over the vesting period, taking account of the estimated number of shares that will
vest. The fair value is determined by use of Black Scholes model method.
(m) Provisions, contingent liabilities and contingent assets
Provisions are recognised if, as a result of a past event, the CentralNic Group has a present legal or constructive obligation, when it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable
estimate of the amount can be made. Provisions are reviewed at the end of each financial reporting period and adjusted to reflect
the current best estimate. Where effect of the time value of money is material, the provision is the present value of the estimated
expenditure required to settle the obligation.
A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the
occurrence of one or more uncertain future events not wholly within the control of the CentralNic Group. It can also be a present
obligation arising from past events that is not recognised because it is not probable that outflow of economic resources will be
required or the amount of obligation cannot be measured reliably.
A contingent liability is not recognised in the financial statements but is disclosed in the notes to the financial statements. When a
change in the probability of a contingent outflow occurs so that the outflow is probable, a liability will be recognised as a provision.
A contingent asset is a probable asset that arises from past events and whose existence will be confirmed only by the occurrence or
non-occurrence of one or more uncertain events not wholly within the control of the CentralNic Group. The CentralNic Group does not
recognise contingent assets but discloses their existence where inflows of economic benefits are probable, but not virtually certain. Notes to the consolidated
financial statements continued
44 CentralNic Group Plc Annual Report 2015
3. Summary of significant accounting policies continued
(n) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services
provided in the course of ordinary activities, net of discounts and sales related taxes.
Revenue from the sale of services is recognised when the amounts of revenue and cost can be measured reliably. In particular:
(i) Sale of wholesale (“registry”) services for domain names (“Wholesale Domain sales”)
Revenue from the provision of wholesale and similar services under contracts for the sale of domain names by registrars and re-sellers
reflect the period over which the underlying sales contract has been entered into by the registrar or re-seller, which can be for periods of
between one and ten years. Revenues attributable to future periods are deferred to future periods and included in ‘Deferred revenues’.
Revenue from strategic consultancy and similar services is recognised in profit and loss in proportion to the stage of completion of
the assignment at the reporting date. The stage of completion is determined based on completion of work performed.
(ii) Sale of retail (“registrar”) services for domain names (“Retail Domain sales”)
Revenue from the provision of retail and similar services under contracts for the sale of domain names by registrants and re-sellers
reflect the period over which the underlying sales contract has been entered into by the registrant or re-seller, which can be for
periods of between one and ten years. Revenues attributable to future periods are deferred to future periods and included in
‘Deferred revenues’. These revenues are matched to deferred wholesale costs which cover the same period of the underlying sale.
(iii) Sale of enterprise services including premium domain names (“Enterprise including Premium Domain Name Sales”)
Revenue from enterprise services and premium domain name sales are recognised in profit and loss at the point of sale. Revenue
from the provision of computer software to a customer is recognised when the Group has delivered the related software and
completed all of the adaptions required by the customer for either the whole contract or for a specific milestone deliverable within
the contract. Where no adaptions are required revenue is recognised on delivery.
Revenue from strategic consultancy and similar services is recognised in profit and loss in proportion to the stage of completion of
the assignment at the reporting date. The stage of completion is determined based on completion of work performed.
(o) Investment in associates
An associate is an entity over which the CentralNic Group has significant influence. Significant influence is the power to participate
in the financial and operating policy decisions of the investee, but is not control or joint control over those policies. 
The considerations made in determining significant influence or joint controls are similar to those necessary to determine control over
subsidiaries. The CentralNic Group’s investments in its associate and joint venture are accounted for using the equity method.
Under the equity method, the investment in an associate or a joint venture is initially recognised at cost. The carrying amount of the
investment is adjusted to recognise changes in the CentralNic Group’s share of net assets of the associate or joint venture since the
acquisition date. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is not
tested for impairment individually. 
The statement of profit or loss reflects the CentralNic Group’s share of the results of operations of the associate or joint venture.
Any change in OCI of those investees is presented as part of the CentralNic Group’s OCI. In addition, when there has been a
change recognised directly in the equity of the associate or joint venture, the CentralNic Group recognises its share of any changes,
when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the
CentralNic Group and the associate or joint venture are eliminated to the extent of the interest in the associate or joint venture. 
The aggregate of the CentralNic Group’s share of profit or loss of an associate and a joint venture is shown on the face of the
statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the
subsidiaries of the associate or joint venture. 
The financial information of the associate or joint venture are prepared for the same reporting period as the CentralNic Group.
When necessary, adjustments are made to bring the accounting policies in line with those of the CentralNic Group.  CentralNic Group Plc Annual Report 2015 45
3. Summary of significant accounting policies continued
At each reporting date, the CentralNic Group determines whether there is objective evidence that the investment in its associate or
joint venture is impaired. If there is such evidence, the CentralNic Group calculates the amount of impairment as the difference
between the recoverable amount of the associate or joint venture and its carrying value, and then recognises the loss as ‘Share of
profit of an associate or joint venture’ in the statement of profit or loss and other comprehensive income.
Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and recognises any
retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant
influence or joint control and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss. 
4. Critical accounting judgments and key sources of
estimating uncertainty
In the application of the CentralNic Group’s accounting policies, which are described in note 3, the Directors are required to make
judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not apparent from other sources.
The estimates and assumptions are based on historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if
the revision affects both current and future periods.
The following are the key assumptions concerning the future and other key sources of estimation uncertainty at the statement of
financial position date that have a significant risk of causing a significant adjustment to the carrying amounts of assets and liabilities
in the Financial statements:
Impairment testing
The recoverable amounts of individual non-financial assets are determined based on the higher of the value-in-use calculations and
the recoverable amount, or fair value less costs to sell. These calculations will require the use of estimates and assumptions. It is
reasonably possible that assumptions may change, which may impact the Directors’ estimates and may then require a material
adjustment to the carrying value of tangible and intangible assets.
The Directors review and test the carrying value of tangible and intangible assets when events or changes in circumstances suggest
that the carrying amount may not be recoverable. For the purposes of performing impairment tests, assets are grouped at the lowest
level for which identifiable cash flows are largely dependent of cash flows of other assets or liabilities. If there are indications that
impairment may have occurred, estimates will be prepared of expected future cash flows for each group of assets.
Expected future cash flows used to determine the value in use of tangible and intangible assets will be inherently uncertain and could
materially change over time. The carrying value of the Group’s tangible and intangible assets are disclosed in notes 12 and 13 respectively.
Estimation of useful life
The charge in respect of periodic amortisation and depreciation is derived after determining an estimate of an asset’s expected
useful life. The useful lives of the assets are determined by management at the time the asset is acquired and are reviewed
continually for appropriateness.
Share based payments
The fair value of share-based remuneration is determined at the date of grant and recognised as an expense in the statement of
comprehensive income on a straight line basis over the vesting period, taking account of the estimated number of shares that will
vest. The fair value is determined by use of Black Scholes model method. Notes to the consolidated
financial statements continued
46 CentralNic Group Plc Annual Report 2015
5. Segment analysis
CentralNic is an independent global domain name service provider. It provides wholesale, retail and enterprise services and it is the
owner and registrant of a portfolio of domain names, which it uses as SLD domain extensions. Management reviews the activities of
the CentralNic Group in the segments disclosed below:
2015
                                                                                                                      Adjusted              Non-current                     Current              Non-current 
                                                                                   Revenue                     EBITDA                       assets                       assets                   liabilities      Current liabilities
                                                                                         £’000                         £’000                         £’000                         £’000                         £’000                         £’000
Wholesale Domain Sales                         3,129                1,403                2,711              20,544                   585                8,522
Retail Domain Sales                                3,405                   174                4,198                4,116                   325                2,154
Enterprise including Premium
Domain Name Sales                              3,859                2,608                       6                   131                        –                     74
Group overheads including costs
associated with public company
status                                                          –                  (931)                       –                        –                        –                        –
                                                            10,393                3,254                6,915              24,791                   910              10,750
2014
                                                                                                                   Adjusted               Non-current                      Current               Non-current                      Current 
                                                                                 Revenue                     EBITDA                       assets                       assets                     liabilities                     liabilities
                                                                                      £’000                        £’000                        £’000                        £’000                        £’000                        £’000
Wholesale Domain Sales                         2,827               1,258               3,741               3,397                  570               4,235
Retail Domain Sales                                1,550                      (9)               4,454               1,992                  227               1,652
Enterprise including Premium
Domain Name Sales                             1,690               1,412                       –                       –                       –                       –
Group overheads including costs
associated with public
company status                                           –                  (937)                      –                       –                       –                       –
                                                              6,067               1,724               8,195               5,389                  797               5,887
The geographical locations of the non-current assets are primarily located in Europe (including UK) and ROW. The total non-current
assets of the Europe segment at 31 December 2015 were £3,073,000 (2014: £4,188,000) and the total non-current assets of
the ROW segment were £3,842,000 (2014: £4,007,000).
6. Revenue
The CentralNic Group’s revenue is generated from the following geographical areas:
                                                                                                                                                                                                                       2015                             2014
Wholesale Domain Sales                                                                                                                                                                 £’000                            £’000
UK                                                                                                                                                             902                      938
North America                                                                                                                                            997                      860
Europe                                                                                                                                                       458                      483
ROW                                                                                                                                                         772                      546
                                                                                                                                                              3,129                   2,827
                                                                                                                                                                                                                       2015                             2014
Retail Domain Sales                                                                                                                                                                           £’000                            £’000
UK                                                                                                                                                             214                        76
North America                                                                                                                                            744                      358
Europe                                                                                                                                                    1,149                      491
ROW                                                                                                                                                      1,051                      475
Other Revenues                                                                                                                                         247                      150
                                                                                                                                                              3,405                   1,550 CentralNic Group Plc Annual Report 2015 47
6. Revenue continued
                                                                                                                                                                                                                       2015                             2014
Enterprise including Premium Domain Name Sales                                                                                                         £’000                            £’000
UK                                                                                                                                                                 –                          –
North America                                                                                                                                         3,286                   1,612
Europe                                                                                                                                                       246                          –
ROW                                                                                                                                                         327                        78
                                                                                                                                                              3,859                   1,690
Enterprise including premium domain name sales by nature are subject to annual variation depending on customer demand. 
Consultancy and other services previously disclosed separately are now included in the appropriate division.
The following table shows customers that represented 10% or more of the wholesale domain sales:
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Customer A                                                                                                                                               393                      382
Customer B                                                                                                                                               333                      326
Other customers                                                                                                                                     2,403                   2,119
                                                                                                                                                              3,129                   2,827
No single customer contributes greater than 10% or more of the retail domain sales. 
The enterprise including premium domain name sales were principally driven by premium domain name sales of £3,221,000
(2014: £1,612,000) of which £3,079,000 was made to one customer (2014: £1,610,000 to one customer)
7. Profit before taxation
The profit before taxation is stated after charging the following amounts.
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Employee benefit expense – wages and salaries                                                                                      1,192                      775
Employee benefit expense – social security                                                                                                 130                        98
Employee benefit expense – share payments                                                                                                73                        32
Staff Consultancy fees                                                                                                                                516                      370
Directors’ remuneration – fees and salaries                                                                                                  649                      558
Directors’ remuneration – share payments                                                                                                   243                      190
Operating Leases – land and buildings                                                                                                          42                        42
Fees payable to the Company’s auditor for the audit of Parent Company
and consolidated financial statements                                                                                                         35                        40
Net gain on foreign currency translation                                                                                                      (211)                      (47)
Depreciation and amortisation expense                                                                                                       649                      538 Notes to the consolidated
financial statements continued
48 CentralNic Group Plc Annual Report 2015
8. Employee information
The average number of persons employed by the Group (excluding directors) during the year were 30 (2014: 20), analysed by
category, as follows;
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Management and finance                                                                                                                               3                          1
Technical                                                                                                                                                     13                        10
Sales and Marketing                                                                                                                                       8                          5
Administrative                                                                                                                                                 3                          2
Operations                                                                                                                                                     3                          2
Key management personnel
Total remuneration of key management personnel being the directors and key senior personnel is £1,018,000 (2014: £855,000),
and is set out below in aggregate for each of the categories specified in IAS24, related party disclosures. 
2015 2014
                                                                                                                           Senior key                                                                          Senior key 
                                                                                               Directors              personnel                      Total                Directors               personnel                       Total
                                                                                                     £’000                      £’000                      £’000                     £’000                     £’000                     £’000
Short -term benefits                                               649                 105                 754                558                  86                644
Share based payments expense                            243                   21                 264                190                  21                211
                                                                            892                 126              1,018                748                107                855
9. Finance income and costs
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Interest income on loans to related parties                                                                                                     18                        18
Interest income on loans to third parties                                                                                                           –                          4
Interest income on short-term bank deposits                                                                                                   –                          1
Re-measurement of fair value of pre-existing interest in acquired entity (note 23)                                             15                          –
Finance income                                                                                                                                          33                        23
Interest expense on bank borrowings                                                                                                             (2)                         –
Finance costs                                                                                                                                              (2)                         –
Net finance income                                                                                                                                    31                          –
10. Income tax expense
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Current tax on profits for the year                                                                                                                593                      166
Adjustments in respect of previous years                                                                                                         –                          –
Current income tax                                                                                                                                     593                      166
Deferred income tax (note 21)                                                                                                                      (45)                      (10)
Income tax expense                                                                                                                                   548                      156 CentralNic Group Plc Annual Report 2015 49
10. Income tax expense continued
A reconciliation of the current income tax expense applicable to the profit before taxation at the statutory tax rate to the current
income tax expense at the effective tax rate of CentralNic is as follows: 
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Profit before taxation                                                                                                                                1,454                      520
Tax calculated at domestic tax rates applicable to profits in the respective countries                                     404                      112
Tax effects of:
Expenses not deductible for tax purposes                                                                                                   168                        51
Unutilised tax losses                                                                                                                                     21                          –
Capital allowance in excess of depreciation                                                                                                     –                          3
Current income tax                                                                                                                                     593                      166
The Company provides for income taxes on the basis of its income for financial reporting purposes, adjusted for items that are not
assessable or deductible for income tax purposes, in accordance with the regulations of domestic tax authorities.
The effective rate of tax for the year is 37.7% (2014: 30.1%), when excluding the impact of the non-cash share based payments
expense the effective rate of tax for the year is 31.0% (2014: 21.0%).
In the UK, the applicable statutory tax rate for 2015 is 20% (2014: 21%). 
In the USA, federal taxes are due at 34% on taxable income. Under California tax legislation an additional 8.84% of state tax is due
on taxable income.
In Germany, federal taxes are due at 15% on taxable income. With an additional 5.5% solidarity surcharge due on the income tax.
A community business tax of c.17% is also levied with rates determined by the municipality.
11. Earnings per share
Earnings per share has been calculated by dividing the consolidated profit after taxation attributable to ordinary shareholders by the
weighted average number of ordinary shares in issue during the period.
Diluted earnings per share has been calculated on the same basis as above, except that the weighted average number of ordinary
shares that would be issued on the conversion of all the dilutive potential ordinary shares (arising from the Group’s share option
scheme and warrants) into ordinary shares has been added to the denominator. There are no changes to the profit (numerator) as
a result of the dilutive calculation. 
                                                                                                                                                                                                                       2015                             2014
Profit after tax attributable to owners (£’000)                                                                                                906                      364
Weighted average number of shares:
Basic                                                                                                                                             64,537,714          60,047,493
Effect of dilutive potential ordinary shares                                                                                           1,953,680               970,814
Diluted                                                                                                                                           66,491,394          61,018,307
Earnings per share:
Basic (pence)                                                                                                                                            1.40                     0.60 
Diluted (pence)                                                                                                                                          1.36                     0.60 Notes to the consolidated
financial statements continued
50 CentralNic Group Plc Annual Report 2015
12. Property, plant and equipment
                                                                                                                                                                          Computer                        Furniture 
                                                                                                                                                                         equipment                     and fittings                              Total
                                                                                                                                                                                £’000                            £’000                            £’000
Cost
At January 2014                                                                                                            187                        34                      221
Additions                                                                                                                       124                          2                      126
At 31 December 2014                                                                                                   311                        36                      347
Additions                                                                                                                         41                          2                        43
Acquisition of subsidiary                                                                                                     4                          –                          4
At 31 December 2015                                                                                                  356                         38                       394
Accumulated depreciation
At 1 January 2014                                                                                                         137                        30                      167
Charge for the year                                                                                                          89                          1                        90
At 31 December 2014                                                                                                   226                        31                      257
Charge for the year                                                                                                          70                          1                        71
Acquisition of subsidiary                                                                                                     1                          –                          1
At 31 December 2015                                                                                                  297                         32                       329
Property, plant, and equipment, net
At 31 December 2015                                                                                                    59                           6                         65
At 31 December 2014                                                                                                     85                          5                        90
Depreciation of property, plant and equipment is included in administrative expenses in the consolidated statement of
comprehensive income.  CentralNic Group Plc Annual Report 2015 51
13. Intangible assets
                                                                                                  Domain
                                                                                                   names                        Software                 Customer list                        Goodwill                              Total
                                                                                                     £’000                            £’000                            £’000                            £’000                            £’000
Cost or deemed cost
At 1 January 2014                                             3,447                      206                          –                          –                   3,653
Additions                                                                  3                      754                   2,548                   1,379                   4,684
Reclassification                                                    (300)                         –                          –                          –                     (300)
Exchange Differences                                              14                          –                          –                          –                        14
At 31 December 2014                                       3,164                      960                   2,548                   1,379                   8,051
Additions                                                                   –                      104                          –                      194                      298
Reclassification                                                    (835)                         –                          –                          –                     (835)
Exchange Differences                                              11                          –                          –                          –                        11
At 31 December 2015                                       2,340                    1,064                    2,548                    1,573                    7,525
Amortisation
At 1 January 2014                                             1,712                          –                          –                          –                   1,712
Charge for the year                                               222                        99                      127                          –                      448
Reclassification                                                    (240)                         –                          –                          –                     (240)
Exchange differences                                              13                          –                          –                          –                        13
At 31 December 2014                                       1,707                        99                      127                          –                   1,933
Charge for the year                                               142                      181                      255                          –                      578
Reclassification                                                    (387)                         –                          –                          –                     (387)
Exchange differences                                              11                          –                          –                          –                        11
At 31 December 2015                                       1,473                       280                       382                           –                    2,135
Intangible assets, net
At 31 December 2015                                         867                       784                    2,166                    1,573                    5,390
At 31 December 2014                                       1,457                      861                   2,421                   1,379                   6,118
Amortisation of intangible assets is included in administrative expenses in the consolidated statement of comprehensive income. 
Certain domain names previously held as intangible assets were reclassified to stock held for resale in the 2015 and the 2014 periods.
Goodwill and customer list
The Group tests goodwill and customer list recognised through business combinations annually for impairment. Additions to
goodwill arose through the business combination outlined in note 23. The carrying value of goodwill and the customer list is
allocated to the respective segments as follows:
Customer list Goodwill
                                                                                                                                            2015                             2014                             2015                             2014
                                                                                                                                           £’000                            £’000                            £’000                            £’000
Retail Division                                                                                 2,166                   2,421                   1,379                   1,379
Enterprise Division                                                                                  –                          –                      194                          –
Total carrying value                                                                         2,166                   2,421                   1,573                   1,379
The recoverable amount of goodwill of £1,572,616 and customer list of £2,165,801 at 31 December 2015, is determined based on
a value in use using cash flow projections from financial budgets approved by senior management covering a five year period. Cash
flow projections beyond the five year timeframe are extrapolated by applying a flat growth rate in perpetuity. The pre-tax discount rate
applied to the cash flow projections is 10.0%. As a result of the analysis, management did not identify any impairment of goodwill.
Discount rates
Discount rates represent the current market assessment of the risks specific to the CGU, taking into consideration the time value of
money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate
calculation is based on the specific circumstances of the Group and its operating segments and is derived from its WACC, with
appropriate adjustments made to reflect the risks specific to the CGU and to determine the pre-tax rate. The cost of equity is
derived from the expected return on investment by the Group’s investors. Notes to the consolidated
financial statements continued
52 CentralNic Group Plc Annual Report 2015
14. Deferred receivables
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Amounts due from shareholders                                                                                                                     –                      711
Deferred costs                                                                                                                                           295                      205
                                                                                                                                                                 295                      916
15. Investments
                                                                                                                                                                                                                                                            £’000
At 31 December 2014                                                                                                                                                            997
Additions                                                                                                                                                                                    –
At 31 December 2015                                                                                                                                                           997
The Company owns less than 20% of the following undertakings which are incorporated in the United Kingdom (UK):
Place of incorporation/                                                                                           Issued and paid-up/ 
Name establishment                           Principal activities                                                  registered capital                Effective interests 
Accent Media Ltd UK                               Domain registry operator                     Ordinary shares                 10.4%
The Company owns more than 50% of the following undertakings which are incorporated in the United Kingdom, USA, the
Commonwealth of The Bahamas, Germany, Australia and New Zealand:
Place of incorporation/                                                                                           Issued and paid-up/ 
Name establishment                           Principal activities                                                  registered capital                Effective interests
CentralNic Limited England and Wales       Domain registry services provider        Ordinary shares                  100%
CentralNic USA Limited USA                             US sales office                                   Ordinary stock                    100%
GB.com Limited England and Wales       Dormant – holds domain name           Ordinary shares                  100%
Whois Privacy Limited England and Wales       Dormant                                            Ordinary shares                  100%
TLD Registrar Solutions Limited England and Wales       Domain registrar services provider       Ordinary shares                  100%
Internet Domain Services Commonwealth of        Domain registrar services provider       Ordinary shares                  100%
BS Corp The Bahamas
Whois Privacy Corp Commonwealth of        Dormant                                            Ordinary shares                  100%
The Bahamas
Hoxton Domains Limited England and Wales       Domain registrar services provider       Ordinary shares                  100%
dnsXperts UG* Germany                      Domain management                         Ordinary shares                  100%
                                    software services
Instra Holdings (UK) Ltd** England and Wales       Intermediate Holding Company           Ordinary shares                  100%
Instra Holdings (Aus) Pty Ltd** Australia                       Intermediate Holding Company           Ordinary shares                  100%
Instra Holdings (NZ) Ltd** New Zealand                Intermediate Holding Company           Ordinary shares                  100%
*   The acquisition of dnsXperts UG was completed on 1 July 2015, see note 23.
** These companies were incorporated during the year for the purpose of acquiring the entire share capital of the Instra Group. The acquisition was completed
in January 2016, see note 28. CentralNic Group Plc Annual Report 2015 53
16. Trade and other receivables
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Trade receivables                                                                                                                                    1,855                      475
Accrued revenue                                                                                                                                        225                        52
Stock held for resale                                                                                                                                     61                        60
Deferred costs                                                                                                                                        1,486                   1,185
Prepayments                                                                                                                                              110                      101
Prepaid finance costs                                                                                                                                 350                          –
Supplier payments on account                                                                                                                   333                      206
Loan to third party                                                                                                                                          –                      102
Amounts due from shareholders                                                                                                                 729                          –
Other receivables                                                                                                                                       337                      152
                                                                                                                                                              5,486                   2,333
As of 31 December 2015, trade receivables of £209k (2014: nil) were past due but not impaired. These primarily relate to one
customer for whom there is considered a low risk of default. Deferred costs reflect the wholesale cost of domain names in the
Internet BS retail business. Supplier payments on account reflect payments to domain name registries for use against future
wholesale domain purchases within the Internet BS retail business.
The loan to third party of £102k at 31 December 2014 related to dnsXperts UG and was converted to equity on acquisition of
dnsXperts UG by CentralNic Ltd on 1 July 2015, see note 23.
The prepaid finance costs relate to the debt facility agreement signed on 8 December 2015, see note 28.
Deferred receivables represent amounts due from Jabella Group Limited, a shareholder during the period. Amounts due from
Jabella Group Limited were interest free until 31 August 2013, from which time the balance accrued interest at 2% above LIBOR
(2015: £18,032; 2014: £17,502). The loan was granted in August 2011 for an initial term of five years, the balance is currently
£729,268. The directors consider the loan to be fully recoverable. The directors consider that the fair value of this receivable is
not materially different from the carrying value.
17. Derivative financial instruments
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Forward foreign exchange contracts – cash flow hedges                                                                             245                          –
                                                                                                                                                                 245                          –
On 18 December 2015, CentralNic entered into two forward foreign exchange option contracts in relation to the funding of the
acquisition of the Instra Group.
The principal amount of the first contract was to purchase AU$30m at an effective exchange rate of AU$2.068 per pound sterling
with an expiry date of 7 January 2016. In the event that the prevailing spot rate at the date of expiration was favourable to this rate
then the contract would effectively purchase AU$15m with a strike price of AU$2.068 per pound sterling and the remaining
AU$15m would be purchased at the prevailing spot rate.
The notional principal amounts of the outstanding forward foreign exchange contracts at 31 December 2015 were AU$30m (2014: Nil).
As at 31 December 2015, the hedged transactions denominated in a foreign currency were considered highly probable to occur in
January 2016 and subsequently did so. Notes to the consolidated
financial statements continued
54 CentralNic Group Plc Annual Report 2015
18. Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents comprise the following:
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
CentralNic UK*                                                                                                                                      16,060                   2,310
CentralNic USA                                                                                                                                          948                      289
TLD Registrar Solutions Ltd                                                                                                                           72                        38
Internet Domain Service BS Corp                                                                                                             1,962                      419
dnsXperts UG                                                                                                                                              18                          –
                                                                                                                                                            19,060                   3,056
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Amounts held on deposit
GBP                                                                                                                                                     11,403                      693
USD                                                                                                                                                       6,307                   2,127
EUR                                                                                                                                                        1,347                      233
Other                                                                                                                                                             3                          3
                                                                                                                                                            19,060                   3,056
*   The cash balances for CentralNic UK include the net proceeds of the equity placing completed on the 29 December 2015. These funds were subsequently
used to complete the acquisition of the Instra Group in January 2016, see note 28.
19. Share capital
The Company’s issued and fully paid share capital is as follows:
                                                                                                                                                                                                           Share capital              Share premium
                                                                                                                                                                             Number                            £’000                            £’000
At 1 January 2015                                                                                             61,181,647                        61                   4,935
Share options exercised 18 May 2015                                                                      75,834                          –                          8
Placing 17 June 2015                                                                                          5,750,000                          6                   2,294
Placing 29 December 2015                                                                               25,000,000                        25                   9,975
Less: share issue costs                                                                                                      –                          –                     (690)
At 31 December 2015                                                                                      92,007,481                         92                  16,522
On 17 June 2015 the Company raised £2,300,000 (gross of fees) via a placing of 5,750,000 new ordinary shares of 0.1 pence
each at 40 pence per share. A share premium was created on the issue of these shares totalling £2,294,250. 
On 29 December 2015 the Company raised £10,000,000 (gross of fees) via a placing of 25,000,000 new ordinary shares of
0.1 pence each in connection with the acquisition of the Instra Group at 40 pence per share. A share premium was created on the
issue of these shares totalling £9,975,000. 
The Company has no authorised share capital.
20. Non-current other payables 
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Deferred revenue                                                                                                                                       845                      725
                                                                                                                                                                 845                      725 CentralNic Group Plc Annual Report 2015 55
21. Deferred tax
Deferred tax assets                                                                                                                                                                                                                  £’000
At 1 January 2014                                                                                                                                                                      –
Deferred tax on excess tax deduction arising on share options                                                                                                   74
At 31 December 2014                                                                                                                                                              74
Deferred tax on excess tax deduction arising on share options                                                                                                   94
At 31 December 2015                                                                                                                                                           168
Deferred tax liabilities                                                                                                                                                                                                             £’000
At 1 January 2014                                                                                                                                                                    62
Charged to the income statement                                                                                                                                             10
At 31 December 2014                                                                                                                                                              72
Charged to the income statement                                                                                                                                              (7)
At 31 December 2015                                                                                                                                                             65
22. Trade and other payables and accruals
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Accounts payable                                                                                                                                   2,425                      319
Accrued expenses                                                                                                                                  1,859                      322
Other taxes and social security                                                                                                                     81                        74
Deferred consideration                                                                                                                                 36                      837
Contingent consideration                                                                                                                                –                      322
Deferred revenue                                                                                                                                     3,126                   2,725 
Customer payments on account                                                                                                              2,779                   1,040
Accrued interest                                                                                                                                             3                          –
Other liabilities                                                                                                                                              40                        32
                                                                                                                                                            10,349                   5,671
23. Business combinations
On 9 February 2015 the Group acquired a 45% stake in dnsXperts UG (“dnsXperts”), an entity which provides services in connection
with a product owned by CentralNic Ltd called DomiNIC (a domain management software solution which originated in German-speaking
Countries), by converting a loan of €60,000 (£47,785) into equity. At this point it is considered that the CentralNic Group does not exert
a significant influence over dnsXperts UG and has therefore classified the investment in associate using the equity method. 
                                                                                                                                                                                                                       2015                             2015
                                                                                                                                                                                                                      €’000                            £’000
Investment in associate
Balance as at 1 January 2015                                                                                                                        –                          –
Addition                                                                                                                                                       60                        48
Share of results in associate                                                                                                                        (49)                      (36)
Transfer carrying value of associate on acquisition of remaining 55%                                                             (11)                      (12)
Balance as at 31 December 2015                                                                                                                –                          – Notes to the consolidated
financial statements continued
56 CentralNic Group Plc Annual Report 2015
23. Business combinations continued
The following table summarises the financial information of dnsXperts as included in its own financial statements, adjusted for fair
value adjustments at acquisition and differences in accounting policies. The table also reconciles the summarised financial
information to the carrying amount of the CentralNic Group’s interest in dnsXperts. The information includes the results of dnsXperts
only for the period from 9 February 2015 to 30 June 2015, because dnsXperts became a wholly owned subsidiary on 1 July 2015.
                                                                                                                                                                                                                       2015                             2015
                                                                                                                                                                                                                      €’000                            £’000
Percentage ownership interest                                                                                                              45%                     45%
Revenue                                                                                                                                                    203                      146
Profit/(loss) from continuing operation (100%)                                                                                             (121)                      (87)
Other comprehensive income/(loss) (100%)                                                                                                  12                          8
Total comprehensive income/(loss) (100%)                                                                                                 (109)                      (79)
Total comprehensive income/(loss) (45%)                                                                                                     (49)                      (36)
On 1 July 2015 the Group acquired the remaining 55% stake of dnsXperts UG by converting a loan of €110,000 (£86,341),
with accrued interest of €11,297 (£8,588) and a cash consideration of €50,000 (£35,554). The rationale for completing the full
acquisition of dnsXperts UG was to expand and complement existing services offered by the Enterprise Division and to enable the
Group to utilise technical expertise within dnsXperts UG.
The CentralNic Group elected to measure the non-controlling interest in the acquiree at the proportionate share of its interest in the
acquiree’s identifiable net assets at fair value. 
The following table summarises the consideration to acquire the share capital of dnsXperts UG and the fair value of the assets and
liabilities at the acquisition date in line with Group accounting policies.
Consideration                                                                                                                                                                                        €’000                            £’000
Loans (including interest) converted to Equity                                                                                               121                        95
Fair value of pre-existing interest in dnsXperts                                                                                                33                        28
Deferred cash consideration                                                                                                                         50                        36
Total consideration                                                                                                                                  204                      159
Fair value recognised on acquisition                                                                                                                                        €’000                            £’000
Assets
Intangible assets                                                                                                                                            1                          1
Property, plant & equipment                                                                                                                            5                          4
Trade receivables                                                                                                                                         51                        36
Other receivables                                                                                                                                         20                        15
Cash                                                                                                                                                           17                        12
                                                                                                                                                                   94                        68
Liabilities
Trade payables                                                                                                                                            13                          9
Trade and other payables and accruals                                                                                                       131                        94
                                                                                                                                                                 144                      103
Total identifiable net liabilities at fair value                                                                                               (50)                      (35)
Goodwill arising on acquisition                                                                                                                    254                      194
Purchase consideration                                                                                                                           204                      159
The deferred cash consideration was paid on the 19 February 2016. The exchange rate used in the above table was the spot rate
at 1 July 2015 of €1.40633/£ for the fair values and the prevailing exchange rate when the initial loans were made. CentralNic Group Plc Annual Report 2015 57
23. Business combinations continued
The re-measurement to fair value of the CentralNic Group’s existing 45% interest in dnsXperts resulted in a gain of £15,881
(£28,144 less the £12,263 carrying amount of the equity accounted investee at the date of acquisition). This amount has been
included in finance income (see note 9).
                                                                                                                                                                                                                                                      Cash flow
                                                                                                                                                                                                                                                on acquisition
                                                                                                                                                                                                                                                            £’000
Net cash acquired with the subsidiary                                                                                                                                       12
Cash paid                                                                                                                                                                                  –
Net cash flow on acquisition                                                                                                                                                     12
The gross amount of trade receivables which is £21,000 is approximately at its fair value. None of the trade receivables have been
impaired and it is expected that the full contractual amounts can be collected.
From the date of acquisition, the acquired group contributed revenue of £268,000 and net loss of £65,000 to the Group’s result.
If the acquisition had taken place at the beginning of the year, Group revenue and loss for the 2015 year would have been
£484,000 and £149,000 respectively. 
24. Related party disclosures
(a) Ultimate controlling party
The Company is not controlled by any one party.
CentralNic Group Plc has 100% ownership of CentralNic Limited, TLD Registrar Services Limited, Hoxton Domains Limited,
Instra Holdings (UK) Ltd, Instra Holdings (AUS) Pty Ltd and Instra Holdings (NZ) Ltd.
CentralNic Limited owns 100% of CentralNic USA Ltd, Whois Privacy Limited, GB.com Limited and dnsXperts UG.
TLD Registrar Services Limited owns 100% of Internet Domain Service BS Corp and Whois Privacy Corp.
(b) Related party transactions 
Key management are considered to be the directors – and key management personnel compensation has been disclosed in Note 8,
further information can be found in the Remuneration Report on page 29.
(i) Shareholders
Balances outstanding with shareholders:
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Jabella Group Limited                                                                                                                                 729                      711
Amounts due from Jabella Group Limited were interest free until 31 August 2013, from which time the balance accrued interest at
2% above LIBOR (2015: £18,032; 2014: £17,502).
Transactions with two members of Erin Investments & Finance Limited:
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Operating lease payments                                                                                                                            42                        42
(ii) Non-Executive Directors
During the year CentralNic engaged with Schollmeyer and Rickert Rechtsanwaltsgesellschaft mBH, of which Thomas Rickert has
a controlling interest, to provide legal services in relation to the purchase of intangible assets and advise on potential acquisitions.
The fees for 2015 were £13,000 (2014 £95,000). 
CentralNic has also engaged with Rickert Rechtsanwaltsgesellschaft mBH, of which Thomas Rickert has a controlling interest,
to provide legal services in relation to the purchase of intangible assets and advice on potential acquisitions. The fees for 2015
£52,000 were £ (2014 £nil). Notes to the consolidated
financial statements continued
58 CentralNic Group Plc Annual Report 2015
25. Commitments
Operating lease commitments
At the end of each of the reporting periods, the minimum lease payments under non-cancellable leases are payable as follows:
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Less than one year                                                                                                                                       42                        42
Between one and five years                                                                                                                            –                          –
                                                                                                                                                                   42                        42
The Group leases office space located at 35-39 Moorgate, London, EC2R 6AR under an operating lease. The lease agreement
was entered into on 1st January 2010 for an initial term of 6 years and has been extended to 1 January 2017. 
The Group leases equipment under various operating leases. These leases typically run for periods from one month to five years.
26. Share options and warrants
Share Options
The share option scheme, which was adopted by CentralNic during 2013, was established to reward and incentivise the executive
management team and staff for delivering share price growth.
The share option scheme is administered by the Remuneration Committee.
There were 1,144,000 options granted during 2015, no options were granted in 2014. Out of the 4,604,583 outstanding options
(2014: 3,556,000), 2,019,583 options (2014: 968,895) were exercisable. Options exercised in 2015 resulted in 75,834 shares
(2014: nil) being issued at a weighted average price of 10p each. In addition 14,583 options lapsed during the year.
A charge of £316,199 (2014: £222,269) has been recognised in the statement of comprehensive income for the year relating to
these options.
These fair values were calculated using the Black Scholes option pricing model. The inputs into the model were as follows:
Date of options grant                                                          1 June 2013           14 October 2013                 28 April 2015                 28 April 2015                   5 May 2015
Options granted                                          2,530,000            1,026,000               537,000               500,000               107,000
Stock price                                                           10p                      55p                      35p                      35p                   33.5p
Exercise price                                                       10p                      57p                      35p                      35p                   33.5p
Interest rate                                                            5%                       5%                       5%                       5%                       5%
Volatility                                                                75%                     75%                     75%                     75%                     75%
Vesting period                                        
1
⁄ 12 per quarter         3 years from         3 years from          10 February         3 years from 
                                                              from the date                the date                the date                    2017                the date 
                                                                       of grant                of grant                of grant                                             of grant
Time to maturity                                              10 years               10 years               10 years               10 years               10 years
Options are exercisable in accordance with the contracted vesting schedules. The expected volatility was determined with reference
to similar entities trading on AIM. CentralNic Group Plc Annual Report 2015 59
26. Share options and warrants continued
Details of the share options outstanding at the year end are as follows:
31 Dec 2015 31 Dec 2014
                                                                                                                                      Number                           WAEP*                         Number                          WAEP*
Outstanding at 1 January                                                         3,551,000                       23p            3,556,000                      23p
Granted during year                                                                 1,144,000                       34p                          –                          –
Exercised during year                                                                   (75,834)                      10p                          –                          –
Lapsed during year                                                                      (14,583)                      10p                  (5,000)                     10p
Outstanding at 31 December                                                   4,604,583                       26p            3,551,000                      23p
Exercisable at 31 December                                                    2,019,583                       10p               968,895                      10p
* weighted average exercise price.
The weighted average remaining contractual life of the options outstanding at the statement of financial position date is 8.0 years.
Warrants
On 12 August 2013, CentralNic Group executed a warrant instrument to create and issue warrants to Zeus Capital to subscribe for an
aggregate of 1,772,727 ordinary shares. The warrants will expire six years after admission and were exercisable after the first anniversary
of admission (2 September 2014) at the placing price of 55p. The ordinary shares to be allotted and issued on the exercise of any or all of
the warrants will rank for all dividends and other distributions declared after the date of the allotment of such shares but not before such
date and otherwise pari passu in all respects with the ordinary shares in issue on the date of such exercise allotment. 
These fair values were calculated using the Black Scholes warrant pricing model. The inputs into the model were as follows:
                                                                                                                                                                                                                                            Warrants issued
                                                                                                                                                                                                                                            12 August 2013
Warrants Granted                                                                                                                                                         1,772,727
Stock price                                                                                                                                                                             55p
Exercise price                                                                                                                                                                         55p
Interest rate                                                                                                                                                                             5%
Volatility                                                                                                                                                                                 75%
Time to maturity                                                                                                                                                                 6 years
A charge of £675,409 was recognised in the share premium account in 2013. 
27. Financial instruments
The CentralNic Group is exposed to market risk, credit risk and liquidity risk arising from financial instruments. The CentralNic Group’s
overall financial risk management policy focusses on the unpredictability of financial markets and seeks to minimise potential adverse
effects on the CentralNic Group’s financial performance. The Group does not trade in financial instruments.
The principal financial instruments used by the CentralNic Group, from which financial instrument risk arises, are as follows:
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Financial assets
Loan and receivables
Trade and other receivables                                                                                                                     5,486                   2,333
Cash and cash equivalents                                                                                                                    19,060                   3,056
                                                                                                                                                            24,546                   5,389
Financial liabilities measure at amortised costs
Trade and other payables                                                                                                                      10,349                   5,671
Loan and borrowing                                                                                                                                        –                          –
                                                                                                                                                            10,349                   5,671 Notes to the consolidated
financial statements continued
27. Financial instruments continued
(a) Financial risk management framework
The Directors’ risk management policies are established to identify and analyse the risks faced by the CentralNic Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. 
(i) Market risk 
Foreign currency risk
The CentralNic Group is exposed to foreign currency risk on transactions and balances that are denominated in a currency other
than its functional currency, primarily the US$. Foreign currency risk is monitored on an on-going basis to ensure that the net
exposure is at an acceptable level. 
The CentralNic Group’s exposure to foreign currency risk is minimal as it trades predominately in US Dollars, Euros and GB Pound
Sterling. Exposure to currency risk is negated by the CentralNic Group holding adequate reserves in these three currencies to meet
trading and provisioned obligations as the need arises.
As the Group evolves, foreign currency risk will be monitored more closely given exposure to additional markets and currencies. The
foreign currency risk was mitigated on the acquisition of the Instra Group through the participating forward contract agreed, see note 28.
The carrying amounts of the CentralNic Group’s financial instruments are denominated in the following currencies at 31 December 2015:
                                                                                                                                                                                 Other
                                                                                                                                                                          currencies 
                                                                                                                                                                         (USD/EUR)                             GBP                              Total
                                                                                                                                                                                £’000                            £’000                            £’000
Financial assets
Loan and receivables
Trade and other receivables                                                                                        1,925                   3,561                   5,486
Cash and cash equivalents                                                                                         7,657                 11,403                 19,060
                                                                                                                                  9,582                 14,964                 24,546
Financial liabilities measure at amortised costs
Trade and other payables                                                                                            4,875                   5,474                 10,349
Loan and borrowing                                                                                                           –                          –                          –
                                                                                                                                  4,875                   5,474                 10,349
The sensitivity analyses in the table below details the impact of changes in foreign exchange rates on the CentralNic Group’s
post-tax profit or loss for the year ended 31 December 2015.
It is assumed that the named currency is strengthening or weakening against all other currencies, while all the other currencies
remain constant.
If the GBP strengthened or weakened by 10% against the other currencies, with all other variables in each case remaining constant,
then the impact on the CentralNic Group’s post-tax profit or loss would be gains or losses as follows:
                                                                                                                                                                                                                                                   Strengthen/
                                                                                                                                                                                                                                                         weaken
                                                                                                                                                                                                                                                            £’000
2015
USD                                                                                                                                                                                 +/- 320
EUR                                                                                                                                                                                   +/- 16
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. The CentralNic Group’s exposure to interest rate risk arises mainly from interest-bearing financial assets and liabilities.
The Directors’ policy is to obtain the most favorable interest rates available.
As at each of 31 December 2014 and 2015, all of the CentralNic Group’s interest-bearing financial instruments bore interest at
fixed interest rates.
60 CentralNic Group Plc Annual Report 2015 27. Financial instruments continued
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Cash and bank balances                                                                                                                       19,060                   3,056
Effect of interest rate change of 100 basis points                                                                                   +/- 190                  +/- 30
Equity price risk
The CentralNic Group does not have any quoted investments as at each of 31 December 2014 and 2015 and as such does not
have significant exposure to equity price risk.
(ii) Credit risk
The CentralNic Group’s exposure to credit risk arises mainly from counterparty’s failure to meet its obligation to settle a financial
asset, primarily prepayments and other receivables. The Directors consider the CentralNic Group’s exposure to credit risk arising
from trade receivables to be minimal as the CentralNic Group is generally paid at the outset or in advance. Credit risk arising from
other receivables is controlled through monitoring procedures, including credit approvals and credit limits. 
The CentralNIc Group uses ageing analysis to monitor the credit quality of the trade receivables. Any receivables having significant
balances past due or more than 90 days, which are deemed to have higher credit risk, are monitored individually. Analysis of the
trade receivables past due is disclosed in note 16.
For cash and bank balances, the Directors minimise the CentralNic Group’s credit risk by dealing exclusively with banks and
financial institution counterparties with high credit ratings.
The carrying amounts of financial assets at the end of the reporting periods represent the maximum credit exposure. 
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Deferred receivables                                                                                                                                   295                      916
Other receivables, deposits and prepayments                                                                                          5,486                   2,333
Cash and bank balances                                                                                                                       19,060                   3,056
                                                                                                                                                            24,841                   6,305
(iii) Liquidity risk
Liquidity risk is the risk that the CentralNic Group will encounter difficulty in settling its financial obligations that are settled with cash or
another financial asset. The Directors’ objective is to maintain, as much as possible, a level of its cash and bank balances adequate
enough to ensure that there will be sufficient liquidity to meet its liabilities when they fall due.
The following set forth the remaining contractual maturities of financial liabilities as at:
£’000                                                                                                                       Carrying amount                               Total                   Within 1 year                      1 – 5 years
31 December 2014
Trade and other payables and accruals                                           6,396                   6,396                   5,671                      725
                                                                                                      6,396                   6,396                   5,671                      725
31 December 2015
Trade and other payables and accruals                                         11,194                  11,194                  10,349                       845
                                                                                                    11,194                  11,194                  10,349                       845
CentralNic Group Plc Annual Report 2015 61 62 CentralNic Group Plc Annual Report 2015
Notes to the consolidated
financial statements continued
27. Financial instruments continued
(b) Capital risk management
The Directors define capital as the total equity of CentralNic. The Directors’ objectives when managing capital are to safeguard the
CentralNic Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital
structure, the Directors may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares
or sell assets to reduce debt.
The Directors manage CentralNic’s capital based on debt-to-equity ratio. The debt-to-equity ratio is calculated as net debt divided
by total equity. Net debt is calculated as total liabilities less cash and cash equivalents. 
The debt-to-equity ratio of the CentralNic Group as at the end of each of the reporting periods was as follows:
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Total liabilities                                                                                                                                        11,660                   6,684
Less: cash and bank balances                                                                                                             (19,060)                 (3,056)
Net debt/(cash)                                                                                                                                      (7,400)                  3,628
Total equity                                                                                                                                           20,046                   6,900
Debt-to-equity ratio                                                                                                                                     n/a                     0.53
(c) Fair values of financial instruments
In addition to the fair value of financial instruments disclosed elsewhere in the financial statements, the following carrying amounts of
the financial assets and liabilities reported in the consolidated financial statements approximate their fair values:
2015 2014
£’000                                                                                                                Carrying amount                      Fair value            Carrying amount                       Fair value
Trade and other receivables                                                            5,486                    5,486                   2,333                   2,333
Deferred receivables                                                                          295                       295                      916                      916
Cash and bank balances                                                              19,060                  19,060                   3,056                   3,056
                                                                                                    24,841                  24,841                   6,305                   6,305
Trade and other payables and accruals                                         11,194                  11,194                   6,396                   6,396
                                                                                                    11,194                  11,194                   6,396                   6,396
(d) Fair value hierarchy
Financial instruments carried at fair value are analysed by the levels in the fair value hierarchy. The different levels are defined as follows:
Level 1: Fair value measurements are derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Fair value measurements are derived from inputs other than quoted prices included within level 1 that are observable
for the asset or liability, either directly or indirectly; and
Level 3: Fair value measurements derived from valuation techniques that include inputs for the asset or liability that are not
based on observable market data (unobservable inputs). CentralNic Group Plc Annual Report 2015 63
28. Post balance sheet events
On 14 January 2016 CentralNic Group completed the acquisition of the entire issued share capital of the companies forming
the Instra Group for a total consideration of AU$33m, consisting AU$30m in cash and AU$3m in shares in CentralNic Group plc,
plus a cash adjustment for working capital at completion.
The following table summarises the consideration to acquire the share capital of the Instra Group and the provisional fair value of the
assets and liabilities at the acquisition date in line with Group accounting policies.
Consideration                                                                                                                                                                                   AU$’000                            £’000
Cash                                                                                                                                                    30,000                 14,560
Equity Instruments (3,656,450 ordinary shares)                                                                                        3,000                   1,463
Adjustment for working capital                                                                                                                 1,049                      508
Total consideration                                                                                                                             34,049                 16,531
Fair value recognised on acquisition                                                                                                                                   AU$’000                            £’000
Assets
Intangible assets – customer list                                                                                                             18,005                   8,738
Intangible assets – software                                                                                                                     3,275                   1,589
Intangible assets – domain names                                                                                                           2,310                   1,121
Other intangible assets                                                                                                                                   3                          2
Property, plant & equipment                                                                                                                        129                        63
Trade receivables                                                                                                                                       815                      395
Other receivables                                                                                                                                    5,382                   2,612
Cash                                                                                                                                                      1,150                      558
                                                                                                                                                            31,069                 15,078
Liabilities
Trade payables                                                                                                                                          391                      190
Other payables and accruals                                                                                                                   1,835                      891
Deferred revenue                                                                                                                                  13,513                   6,558
Current income tax liabilities                                                                                                                       (127)                      (62)
                                                                                                                                                            15,612                   7,577
Total identifiable net liabilities at fair value                                                                                         15,457                   7,501
Goodwill arising on acquisition                                                                                                               18,592                   9,030
Purchase consideration                                                                                                                      34,049                 16,531
The fair value of the 3,656,450 ordinary shares issued as part of the consideration paid was based on the 40 pence per share
achieved in the placing of the 29 December 2015. The mid-market foreign exchange rate used was as at 12 noon on
13 January 2016 being the business day pre-completion.
AU$5m of the cash consideration has been placed in to an escrow account and will be released to the vendor over 5 years in
equal instalments on the anniversary of the completion date.
The cash consideration was funded by the equity placing of the 29 December 2015, together with a new secured debt facility
comprising a £3.5m term loan with the remainder from existing cash balances held by the Group. 64 CentralNic Group Plc Annual Report 2015
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                  Note                            £’000                            £’000
ASSETS
Fixed assets
Investments                                                                                                                       7                      536                      252
Current assets
Derivative financial instruments                                                                                          12                      245                          –
Other debtors, deposits and prepayments                                                                           8                 17,095                   6,395
                                                                                                                                                            17,340                   6,395
Total assets                                                                                                                                         17,876                   6,647
LIABILITIES
Current liabilities
Creditors – amounts falling due within one year                                                                  10                      668                   1,305
                                                                                                                                                                 668                   1,305
Total liabilities                                                                                                                                          668                   1,305
Net assets                                                                                                                                           17,208                   5,342
CAPITAL AND RESERVES
Share capital                                                                                                                      9                        92                        61
Share premium                                                                                                                  9                 16,522                   4,935
Share based payments reserve                                                                                         11                      736                      964
Foreign currency hedging reserve                                                                                      12                      245                          –
Retained Earnings                                                                                                                                     (387)                    (618)
Shareholders funds                                                                                                                             17,208                   5,342
These financial statements were approved and authorised for issue by the Board of Director’s on 25 May 2016 and were
signed on it’s behalf by:
Mike Turner Chairman
Company Number: 08576358
The notes on pages 67 to 72 form an integral part of these financial statements.
Company statement of
financial position
as at 31 December 2015 CentralNic Group Plc Annual Report 2015 65
Company statement of
changes in equity
for the period ended 31 December 2015
                                                                                                                                                                                                Foreign
                                                                                                            Share                   Share         Share based               currency               Retained 
                                                                                                            capital               Premium             Payments                hedging               earnings                     Total
                                                                                                            £’000                   £’000                   £’000                   £’000                   £’000                   £’000
Balance as at 31 December 2013                               59            3,485               742                   –              (263)           4,023
Total comprehensive income for the year                         –                   –                   –                   –           (1,330)          (1,330)
Issue of new shares                                                        2            1,472                   –                   –                   –            1,474
Share issue costs                                                           –                (22)                  –                   –                   –                (22)
Share based payments                                                   –                   –               222                   –                   –               222
Dividend received                                                           –                   –                   –                   –               975               975
Balance as at 31 December 2014                               61            4,935               964                   –              (618)           5,342
Profit for the year                                                             –                   –                   –                   –           (1,585)          (1,585)
Other comprehensive income for the year –
cash flow hedge                                                            –                   –                   –               245                   –               245
Issue of new shares                                                      31          12,277                   –                   –                   –          12,308
Share issue costs                                                           –              (690)                  –                   –                   –              (690)
Share based payments                                                   –                   –              (222)                  –                   –              (222)
Share based payments 
– reclassify lapsed options                                               –                   –                  (6)                  –                   6                   –
Dividend received                                                           –                   –                   –                   –            1,810            1,810
Balance as at 31 December 2015                               92           16,522                736                245               (387)          17,208
• Share capital represents the nominal value of the Company’s cumulative issued share capital. 
• Share premium represents the cumulative excess of the fair value of consideration received for the issue of shares in excess
of their nominal value less attributable share issue costs and other permitted reductions. 
• Retained earnings represent the cumulative value of the profits not distributed to shareholders, but retained to finance the future
capital requirements of the Company.
• Share based payments reserve represents the cumulative value of share based payments recognised through equity. 
• Foreign currency hedging reserve represents the effective portion of changes in the fair value of derivatives.
The notes on pages 67 to 72 form an integral part of these financial statements. 66 CentralNic Group Plc Annual Report 2015
Company statement
of cash flows
for the period ended 31 December 2015
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Cash flow from operating activities
Loss before taxation                                                                                                                               (1,340)                 (1,330)
Adjustments for:
Depreciation of property, plant and equipment                                                                                                 –                          –
Amortisation of Intangible Assets                                                                                                                     –                          –
Share based payments                                                                                                                                   –                          –
Operating profit before working capital changes                                                                                (1,340)                 (1,330)
Increase in other debtors, deposits and prepayments                                                                            (11,213)                 (2,330)
Increase in other payables and accruals                                                                                                      935                   2,186
Net cash outflow from operating activities                                                                                        (11,618)                 (1,474)
Income tax paid                                                                                                                                              –                          –
Net cash outflow from operating activities                                                                                        (11,618)                 (1,474)
Capital expenditure and financial investment
Purchase of investments                                                                                                                                 –                          –
Net cash outflow from capital expenditure and financial investment                                                         –                          –
Financing
Proceeds from issuance of ordinary shares                                                                                            11,618                   1,474
Net cash inflow from financing                                                                                                           11,618                   1,474
Net increase/(decrease) in cash and cash equivalents                                                                                     –                          –
Cash and cash equivalent at beginning of the period                                                                                       –                          –
                                                                                                                                                                     –                          –
Cash and cash equivalent at end of the period                                                                                           –                          –
The notes on pages 67 to 72 form an integral part of these financial statements.  CentralNic Group Plc Annual Report 2015 67
1. General information
Nature of operations
CentralNic Group Plc (“the Company”) is the UK holding company of a group of companies which are engaged in the provision of
global domain name services. The Company is registered in England and Wales. Its registered office and principal place of business
is 35-39 Moorgate, London, EC2R 6AR. 
2. Basis of preparation
The financial statements have been prepared in accordance with the historical cost convention as modified by the revaluation of
certain fixed assets. The financial statements have been prepared in accordance with FRS 102 – The Financial Reporting Standard
applicable in the UK and Republic of Ireland and the Companies Act 2006. The principal accounting policies are described below.
They have all been applied consistently throughout the period.
Information on impact of first-time adoption of FRS 102 is given in note 14.
3. Significant accounting policies 
(a) Going Concern
At 31 December 2015, the Company had net current assets of £16,672,000 (2014: £5,090,000) with the main current asset
being amounts owed from its subsidiaries CentralNic Ltd and TLD Registrar Solutions Limited amounting to £16,719,000
(2014: £6,377,000). The Company has assessed its ongoing costs with cash generated by its subsidiaries to ensure that it can
continue to settle its debts as they fall due.
The Directors have, after careful consideration of the factors set out above, concluded that it is appropriate to adopt the going
concern basis for the preparation of the financial statements and the financial statements do not include any adjustments that would
result if the going concern basis was not appropriate.
(b) Investments
Investments held as fixed assets are stated at cost less provision for impairment.
(c) Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax
rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where
transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at
the balance sheet date. Timing differences are differences between the Company’s taxable profits and its results as stated in the
financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which
they are recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can
be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing
differences can be deducted.
Deferred tax is not recognised when fixed assets are revalued unless by the balance sheet date there is a binding agreement to sell
the revalued assets and the gain or loss expected to arise on sale has been recognised in the financial statements. Neither is
deferred tax recognised when fixed assets are sold and it is more likely than not that the taxable gain will be rolled over, being
charged to tax only if and when the replacement assets are sold.
Taxation arising on disposal of a revalued asset is split between the profit and loss account and the statement of total recognised
gains and losses on the basis of the tax attributable to the gain or loss recognised in each statement.
Notes to the Company
financial statements
for the year ended 31 December 2015 68 CentralNic Group Plc Annual Report 2015
3. Significant accounting policies continued
(d) Financial instruments
Financial assets and liabilities are recognised in the statements of financial position when the Company has become a party to the
contractual provisions of the instruments.
The Company’s financial assets and liabilities are initially measured at fair value plus any directly attributable transaction costs. The
carrying value of the Company’s financial assets, primarily cash and bank balances, and liabilities, primarily the Company’s payables
and other accrued expenses, approximate their fair values.
(i) Financial assets 
On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity
investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate. 
Trade and other receivables
Trade and other receivables (including deposits and prepayments) that have fixed or determinable payments that are not quoted in
an active market are classified as other receivables, deposits, and prepayments. Other receivables, deposits, and prepayments are
measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying
the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
Derivative financial instruments
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in
other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in the income statement.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged items affects profit or loss.
(ii) Financial liabilities and equity instruments
Financial liabilities are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest,
dividends, gains and losses relating to financial liabilities are reported in profit or loss. Distributions to holders of financial liabilities are
classified as equity and charged directly to equity.
Financial liabilities
Financial liabilities comprise long-term borrowings, short-term borrowings, trade and other payables and accruals, measured 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 income over
the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees on
points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts)
through the expected life of the financial liability, or, where appropriate, a shorter period to the net carrying amount on initial recognition.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all its liabilities. Equity
instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.
(e) Debtors
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of
transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
(f) Creditors
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair
value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Notes to the Company
financial statements continued CentralNic Group Plc Annual Report 2015 69
4. Critical accounting judgements and key sources of
estimation uncertainty
In the application of the Company’s accounting policies, which are described in note 3, the Directors are required to make
judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not apparent from other sources.
The estimates and assumptions are based on historical experience and other factors, including expectations of future events that
are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if
the revision affects both current and future periods.
The following are the key assumptions concerning the future and other key sources of estimation uncertainty at the statement of
financial position date that have a significant risk of causing a significant adjustment to the carrying amounts of assets and liabilities
in the Financial statements:
Share based payment
The fair value of share-based remuneration is determined at the date of grant and recognised as an expense in the statement of
comprehensive income on a straight line basis over the vesting period, taking account of the estimated number of shares that will
vest. The fair value is determined by use of Black Scholes model method.
Recognition of deferred tax assets
The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will
be available in the future against which the reversal of temporary differences can be deducted. To determine the future taxable
profits, reference is made to the latest available profit forecasts. Where the temporary differences are related to losses, relevant tax
law is considered to determine the availability of the losses to offset against the future taxable profits. 
5. Loss for the financial period
The Company has taken advantage of section 408 of the Companies Act 2006 and, consequently, a profit and loss account for the
Company alone has not been presented. The Company’s loss for the financial period was £1,340,000 (2014: £1,330,000). The
Company’s loss for the financial year has been arrived at after charging auditor’s remuneration payable to Crowe Clark Whitehill LLP
for audit services to the Company of £35,126 (2014: £39,758).
6. Employees and directors’ remuneration
Staff costs during the period by the Company were as follows:
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Non-executive directors fees                                                                                                                      154                      152
Executive directors                                                                                                                                     738                      595
                                                                                                                                                                 892                      747
The average number of employees of the Company during the period was:
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                  Number                         Number
Directors and management                                                                                                                             2                          2 70 CentralNic Group Plc Annual Report 2015
7. Investments
                                                                                                                                                                                                                                                            £’000
At 31 December 2014                                                                                                                                                            252
Additions
Share options issued on behalf of subsidiaries                                                                                                                         316
Share options – deferred tax                                                                                                                                                    (32)
At 31 December 2015                                                                                                                                                          536
The Company owns more than 50% of the following undertakings which are incorporated in the United Kingdom, USA, the
Commonwealth of The Bahamas, Germany, Australia and New Zealand:
Place of incorporation/                                                                                           Issued and paid-up/ 
Name establishment                           Principal activities                                                  registered capital                Effective interests 
CentralNic Limited England and Wales       Domain registry services provider        Ordinary shares                  100%
CentralNic USA Limited USA                             US sales office                                   Ordinary stock                    100%
GB.com Limited England and Wales       Dormant – holds domain name           Ordinary shares                  100%
Whois Privacy Limited England and Wales       Dormant                                            Ordinary shares                  100%
TLD Registrar Solutions Limited England and Wales       Domain registrar services provider       Ordinary shares                  100%
Internet Domain Services Commonwealth of        Domain registrar services provider       Ordinary shares                  100%
BS Corp The Bahamas
Whois Privacy Corp Commonwealth of        Dormant                                            Ordinary shares                  100%
The Bahamas
Hoxton Domains Limited England and Wales       Domain registrar services provider       Ordinary shares                  100%
dnsXperts UG* Germany                      Domain management                         Ordinary shares                  100%
                                    software services
Instra Holdings (UK) Ltd** England and Wales       Intermediate Holding Company           Ordinary shares                  100%
Instra Holdings (Aus) Pty Ltd** Australia                       Intermediate Holding Company           Ordinary shares                  100%
Instra Holdings (NZ) Ltd** New Zealand                Intermediate Holding Company           Ordinary shares                  100%
*   On 1 July 2015, CentralNic Limited completed the acquisition of dnsXperts UG.
**  These companies were incorporated during the year for the purpose of acquiring the entire share capital of the Instra Group. The acquisition was completed in January 2016.
8. Debtors
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Amounts owed by Group undertakings                                                                                                   16,719                   6,324
Prepaid finance costs                                                                                                                                 350                          –
Other debtors                                                                                                                                              26                        51
Deferred tax asset                                                                                                                                          –                        20
                                                                                                                                                            17,095                   6,395
Notes to the Company
financial statements continued CentralNic Group Plc Annual Report 2015 71
9. Share capital and share premium
Details of the Company’s share capital are set out in Note 19 to the consolidated financial statements.
10. Creditors: amounts falling due within one year
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Trade Creditors                                                                                                                                          113                        44
Accruals and deferred income                                                                                                                    552                      102
Accrued Interest                                                                                                                                             3                          –
Deferred Consideration                                                                                                                                   –                      837
Contingent Consideration                                                                                                                               –                      322
                                                                                                                                                                 668                   1,305
11. Share based payments reserve 
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Balance brought forward                                                                                                                             964                      742
Share based payments expense                                                                                                                (222)                     222
Share based payments – reclassify lapsed options                                                                                         (6)                         –
Balance carried forward                                                                                                                              736                      964
Details of the Company’s share options and warrants are set out in Note 26 to the consolidated financial statements.
12. Derivative financial instruments
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Forward foreign exchange contracts – cash flow hedges                                                                             245                          –
                                                                                                                                                                 245                          –
On 18 December 2015, the Company entered into two forward foreign exchange option contracts in relation to the funding of the
acquisition of the Instra Group.
The principal amount of the first contract was to purchase AU$30m at an effective exchange rate of AU$2.068 per pound sterling
with an expiry date of 7 January 2016. In the event that the prevailing spot rate at the date of expiration was favourable to this rate
then the contract would effectively purchase AU$15m with a strike price of AU$2.068 per pound sterling and the remaining
AU$15m would be purchased at the prevailing spot rate.
The notional principal amounts of the outstanding forward foreign exchange contracts at 31 December 2015 were AU$30m
(2014: Nil).
As at 31 December 2015, the hedged transactions denominated in a foreign currency were considered highly probable to occur
in January 2016 and subsequently did so. 13. Financial instruments
                                                                                                                                                                                                                       2015                             2014
                                                                                                                                                                                                                      £’000                            £’000
Financial assets
Financial assets that are debt instruments measured at amortised cost:
Other debtors, deposits and prepayments                                                                                              17,095                   6,395
                                                                                                                                                            17,095                   6,395
Financial liabilities
Financial liabilities measured at amortised cost:
Creditors – amounts falling due within one year                                                                                            668                   1,305
                                                                                                                                                                 668                   1,305
14. First time adoption of FRS 102
The policies applied under the entity’s previous accounting framework are not materially different to FRS 102 and have not
impacted on equity or profit or loss.
72 CentralNic Group Plc Annual Report 2015
Notes to the Company
financial statements continued CentralNic Group Plc Annual Report 2015 73
Financial calendar
Annual General Meeting
The Annual General Meeting will be held on Tuesday,
the 28 June 2016 at 10.00am at the offices of the
Company’s solicitors:
DWF LLP
20 Fenchurch Street
London EC3M 3AG
Announcements
• Half-year results for 2016 are expected in September 2016.
• Full year results for 2016 are expected in April 2017.
Dates are correct at the time of printing, but are subject
to change.
Directors
Mike Turner (Chairman)
Benjamin Crawford (Chief Executive Officer)
Glenn Hayward (Executive Director)
Desleigh Jameson (Executive Director)
Samuel Dayani (Non-Executive Director)
Thomas Rickert (Non-Executive Director)
Thomas Pridmore (Non-Executive Director)
Iain McDonald (Non-Executive Director)
Registered office
35-39 Moorgate
London EC2R 6AR
Company Secretary
Glenn Hayward
Company website
www.centralnic.com
Nominated Adviser and Broker
Zeus Capital Limited
82 King Street
Manchester M2 4WQ
41 Conduit Street
London W1S 2YQ
3 Brindleyplace
Birmingham B1 2JB
Joint Broker
Peel Hunt LLP
Moor House
120 London Wall
London EC2Y 5ET
Auditors
Crowe Clark Whitehill LLP
St Bride’s House
10 Salisbury Square
London EC4Y 8EH
Solicitors to the Company
DWF LLP
20 Fenchurch Street
London EC3M 3AG
Solicitors to the Nominated Adviser and Broker
DAC Beachcroft LLP
100 Fetter Lane
London EC4A 1BN
Financial PR
Abchurch Communications
125 Old Broad St
London EC2N 1AR
Bankers
Silicon Valley Bank
Alphabeta
14-18 Finsbury Square
London EC2A 1BR
HSBC Bank plc
89 Buckingham Palace Road
London SW1W 0QL
Shareholder information 74 CentralNic Group Plc Annual Report 2015
Company Registrars
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Capita Asset Services is our registrar and they offer many
services to make managing your shareholding easier and
more efficient.
Share portal
The Share Portal is a secure online site where you can manage
your shareholding quickly and easily. You can:
• View your holding and get an indicative valuation
• Change your address
• Arrange to have dividends paid into your bank account
• Request to receive shareholder communications by email
rather than post
• View your dividend payment history
• Make dividend payment choices
• Buy and sell shares and access a wealth of stock market
news and information
• Register your proxy voting instruction
• Download a stock transfer form.
To register for the Share Portal just visit www.capitashareportal.com.
All you need is your investor code, which can be found on your
share certificate or your dividend tax voucher.
Customer support centre
Alternatively, you can contact Capita’s Customer Support
Centre which is available to answer any queries you have in
relation to your shareholding:
By phone – UK – 0871 664 0300 (UK calls cost 10p per minute
plus network extras). From overseas – +44 20 8639 3399. 
Lines are open 9.00am to 5.30pm, Monday to Friday,
excluding public holidays.
By email – shareholderenquiries@capita.co.uk
By post – Capita Asset Services, The Registry,
34 Beckenham Road, Beckenham, Kent, BR3 4TU.
Sign up to electronic communications
Help us to save paper and get your shareholder information
quickly and securely by signing up to receive your shareholder
communications by email.
Registering for electronic communications is very straightforward.
Just visit www.capitashareportal.com. All you need is your
investor code, which can be found on your share certificate or
your dividend tax voucher.
Donate your shares to charity
If you have only a small number of shares which are
uneconomical to sell you may wish to donate them to charity
free of charge through ShareGift (Registered Charity10528686).
Find out more at www.sharegift.org.uk or by telephoning
020 7930 3737.
Share fraud warning
Share fraud includes scams where investors are called out of
the blue and offered shares that often turn out to be worthless
or non-existent, or an inflated price for shares they own. These
calls come from fraudsters operating in ‘boiler rooms’ that are
mostly based abroad.
While high profits are promised, those who buy or sell shares
in this way usually lose their money.
The Financial Conduct Authority (FCA) has found most share
fraud victims are experienced investors who lose an average of
£20,000, with around £200m lost in the UK each year.
PROTECT YOURSELF
If you are offered unsolicited investment advice, discounted
shares, a premium price for shares you own, or free company or
research reports, you should take these steps before handing
over any money:
• Get the name of the person and organisation contacting you.
• Check the Financial Services Register at
http://www.fca.org.uk/ to ensure they are authorised.
• Use the details on the FCA Register to contact the firm.
• Call the FCA Consumer Helpline on 0800 111 6768 if there
are no contact details on the Register or you are told they
are out of date.
• Search our list of unauthorised firms and individuals to avoid
doing business with.
Shareholder information
continued CentralNic Group Plc Annual Report 2015 75
REMEMBER: if it sounds too good to be true, it probably is!
If you use an unauthorised firm to buy or sell shares or other
investments, you will not have access to the Financial
Ombudsman Service or Financial Services Compensation
Scheme (FSCS) if things go wrong.
REPORT A SCAM
If you are approached about a share scam you should tell the FCA
using the share fraud reporting form at http://www.fca.org.uk/
scams, where you can find out about the latest investment scams.
You can also call the Consumer Helpline on 0800 111 6768.
If you have already paid money to share fraudsters you should
contact Action Fraud on 0300 123 2040.
Identity theft
Tips for protecting your shares in the Company:
• Ensure all your certificates are kept in a safe place or hold
your shares electronically in CREST via a nominee.
• Keep correspondence from us and Capita in a safe place and
destroy any unwanted correspondence by shredding.
• If you change address, inform Capita in writing or update your
address online via the shareholder portal. If you receive a letter
from Capita regarding a change of address but have not
moved, please contact them immediately.
• Consider having your dividend paid directly into your bank.
This will reduce the risk of the cheque being intercepted or
lost in the post. If you change your bank account, inform
Capita of the details of your new account. You can do this by
post or online via the shareholder portal.
• If you are buying or selling shares, only deal with brokers
registered and authorised to carry out that type of business.
• Be wary of phone calls or e-mails purporting to come from us
or Capita asking you to confirm personal details or details of
your investment in our shares. Neither we nor Capita will ever
ask you to provide information in this way. 76 CentralNic Group Plc Annual Report 2015
Top Level Domain or ‘TLD’
The suffix attached to internet domain names e.g., .com, .net
Second Level Domain or ‘SLD’
A domain that is directly below a top-level domain e.g. uk.com
Country Code Top Level Domain or ‘ccTLD’
An Internet top-level domain generally used or reserved for a
country, a sovereign state, or a dependent territory e.g., .uk, .jp
Domain Name System or ‘DNS’
A hierarchical distributed naming system for computers, services,
or any resource connected to the Internet or a private network
Domain Name Registrar
An organisation or commercial entity that manages the
reservation of Internet domain names
Registry Service Provider
A company that runs the operations of a TLD on behalf of the
TLD owner or licensee. The registry service provider keeps the
master database and generates zone files to allow computers
to route Internet traffic using the DNS
The Internet Corporation for Assigned Names
and Numbers or ‘ICANN’
A non profit private organisation that was created to oversee a
number of Internet-related tasks previously performed directly
on behalf of the U.S. government
Registry Operator
An entity that maintains the database of domain names for a given
top-level domain and generates the zone files which convert
domain names to IP addresses. It is responsible for domain name
allocation and technically operates its top-level domain
Glossary CentralNic’s global business footprint
Business footprint
Designed and produced by fourthquarter
Contents
Highlights 1
Introduction to CentralNic 2
CentralNic’s key advantages 5
Chairman’s statement 8
Chief Executive’s report 11
Strategic report 13
Chief Financial Officer’s report 16
Board of Directors 20
Directors’ report 22
Corporate governance 26
Remuneration report 29
Independent Auditors’ report 32
Financial statements 33
Shareholder information 73  
EC2R 6AR
London
35-39 Moorgate
.centralnic.com www
 
Annual Report 2015
  Annual Report 2015 oup Plc CentralNic Gr