manx t elecom plc
annual report and accounts
2013
investing and  
innovating for  
growth
manx t elecom plc annual report and accounts 2013 Our vision is to provide  
the most complete 
advanced communication 
service, richly enhancing 
lives and businesses at 
home and overseas.
On 10 February 2014,  
Manx T elecom successfully 
floated on the Alternative 
Investment Market of the 
London Stock Exchange 
resulting in a market 
capitalisation of £160m.
manxtelecom.com
Manx T elecom is the leading 
communication solutions 
provider on the Isle of Man.  
Our operations touch the lives 
of almost every individual and 
business on the Island. In every 
area of our business, we offer 
class-leading technology, 
delivered with a passion and  
a painstaking dedication to our 
customers’ best interests. Revenue (£m)
2013
2012
76.0
72.4
Capital expenditure (£m)
2013
2012
9.9
4.8
Adjusted EBITDA (£m)
2013
2012
27.5
24.6
Adjusted operating profit (£m)
2013
2012
18.1
15.1
01
highlights
operational financial
+5%
Revenues up 5% to £76.0m, 
generating adjusted operating 
profit of £18.1m, up 19.9% 
Fixed line, broadband and data 
revenues grew 2% driven by good 
take up of high speed broadband
Data centre revenues  
increased 17%, with strong 
demand from e-gaming and 
financial services companies
Investment in our third data 
centre and 4G mobile network  
on the Isle of Man
increase  
in revenue 
to £76.0m
contents
chairman’s statement
our strategy
ceo’s review
financial statements
strategic report
01 highlights
02 market overview
04 company overview
06 business model
08 chairman’s statement
09 our vision and values
10 ceo’s review
13 our strategy
14 strategy in action
18 financial review
21 principal risks
22 our responsibility
24 our community
governance
26 board of directors
27 executive team
28 directors’ report
32 corporate governance report
36  statement of directors’ 
responsibilities
financial statements
37  report of the  
independent auditors
38  financial statements  
and notes
other
ibc  directors, secretary, 
registered office and advisers
8
13
10
38 02 manx telecom plc annual report and accounts 2013 strategic report
market overview
our Island
The Isle of Man, which occupies a central position  
in the Irish Sea, is a self-governing British Crown 
Dependency. The Island has its own Government, 
laws and currency but is inextricably linked to the UK 
through a shared history, community and economic 
partnerships with the City of London and the North 
West business community. The Island is 33 miles long 
and 13 miles wide and has a population of 
approximately 85,000 people.
29
years of  
unbroken growth
 
and lifestyle attractions make it a  
special place in which to live, work,  
and do business. We play our part  
in that mix by driving forward the 
Island’s communications infrastructure, 
ensuring that the Isle of Man possesses 
the telecoms and related technology 
necessary for a prosperous 21st century 
economy, and a thriving community. 
+4k businesses
Over the last ten years, we have 
invested some £100m in the Island’s 
telecommunications infrastructure. We 
benefit from a zero % corporate tax rate.
2.4% unemployment
Some of our milestones in 2013
In August, we announced the completion 
of our largest managed services  
contract with the Isle of Man Post Office. 
The contract centred on the provision  
of a suite of services including fixed line 
telephony, internet, wide area and local 
area network management, and IT 
service support provided through a 
dedicated managed services platform.  
It supports a workforce of 450 Post Office 
staff and 32 separate locations across  
the Island, making it one of the biggest 
deployments of its kind on the Isle of Man.
In October, we launched 39 free  
WiFi hotspots around the Island in  
coffee shops, cafés, pubs, and many 
other locations. The hotspots are  
free for all Manx Telecom mobile  
and broadband customers.
Also in October, we started work on a 
£10m investment in a new three-phase 
purpose-built data centre. Phase one of 
the Greenhill Data Centre was open for 
business in the first quarter of 2014.
In November, we announced a 
partnership with leading global 
information and communications 
technology (‘ICT’) solutions provider 
Huawei, to deliver a 4G (LTE) mobile 
broadband network.
The Isle of Man is a leading international 
business centre renowned for innovation, 
professionalism and a longstanding policy 
of positive engagement with international 
initiatives and standards. Perhaps best 
known for its financial services industry, 
the Island has successfully encouraged 
diversification of its economy in a wide 
range of sectors including: aircraft 
registration, bio-tech, e-business and 
e-gaming, film, high tech manufacturing, 
ship registration and space commerce.
35k homes
The Island is required by a self-imposed 
law to budget for a surplus in its annual 
spending from the proceeds of direct 
and indirect taxation. The Isle of Man has 
seen 29 years of unbroken economic 
growth, including throughout the recent 
recession, and a 6% average annual 
growth in GDP over the past decade.  
It has a high GDP per capita (21% higher 
than the UK) and low unemployment 
levels at approximately 2.4%.
+6%
average annual growth 
in GDP over 10 years
Manx Telecom is proud to have 
operated in some shape or form on the 
Island for the last 125 years. The link to 
the Isle of Man in our company name 
helps differentiate us relative to our 
competitors in what is an Island with a 
proud heritage and identity. The Island’s 
particular mix of legislative, regulatory,  03
51.5k
25.3k
voice  
lines
broadband 
customers
mobile pre-paid 
customers
mobile post-paid 
customers
Isle of Man network:
36k
28.7k
4G
Our Summer launch of 4G 
will be instrumental in 
increasing our post-paid 
customer base and 
maximising our growth in 
mobile data. In March 2014 
we launched the Island’s first 
live in-store demonstration  
of 4G.
Culture of 
entrepreneurialism
The Isle of Man is rightly proud of its 
entrepreneurial spirit and passion. 
Here are just a few examples:
High tech manufacturers produce 
essential components for use in 
sectors such as aerospace, space, 
laser surgery and gas and oil.
The Island’s Aerospace cluster forms 
part of the UK’s North West Aerospace 
Alliance and is involved in design, 
manufacturing and service provision.
The Isle of Man film sector has been 
involved in more than 96 film and 
television productions since 1995.
Businesses on the Island rely on  
Manx Telecom to provide a world-
class telecoms infrastructure. 04 manx telecom plc annual report and accounts 2013 strategic report
company overview
our business
Manx T elecom is the leading 
communication solutions provider on the 
Isle of Man. We offer a wide range of fixed 
line, broadband, mobile and data centre 
services to businesses, consumers and the 
public sector on the Isle of Man. We also 
provide a growing portfolio of innovative 
solutions to offshore customers.
Our key business lines are:
We provide fixed line, broadband and connectivity services, 
connecting approximately 35,000 homes and 4,000 
businesses on the Island. At 31 December 2013, we had 
approximately 51,500 voice lines and 25,300 broadband 
customers. We have made high speed broadband Fibre to  
the Cabinet (‘FTTC’) services available to 81% of households.
Our mobile business offers pre-paid and post-paid tariffs  
to all market segments and also sells mobile handsets and 
accessories, serving a substantial proportion of the existing 
available customers in the Isle of Man. At 31 December 2013,  
we had approximately 36,000 pre-paid customers and  
28,700 post-paid customers.
Using our mobile technology platform, we enable international 
wholesale and corporate customers to offer a variety of 
innovative mobile services using Manx Telecom SIMs. There are 
six key areas: wholesale text messaging, strongest signal 
roaming, inbound services, machine 2 machine services, 
wholesale voice termination, and UK mobile virtual network 
enabler services.
Our data centre business offers co-location, managed hosting, 
cloud and disaster recovery to an international corporate client 
base, via three data centres on the Island, at Douglas North, 
Douglas Centre and the Greenhill Data Centre (‘GDC’).
This area of our business includes the Manx T elecom telephone 
directory, inbound roaming, hardware equipment, mobile 
termination, managed services and interconnection fees.
Fixed line, broadband 
and data
Mobile
Off-Island
Data Centre
Other services 05
99%
81%
3G mobile 
coverage
Manx T elecom has a record  
of innovation, being the first 
European operator to launch  
a 3G mobile service and the 
first in the world to launch a 
3.5G mobile service. 4G services 
are expected to be launched in 
the summer of 2014, while our 
high speed VDSL broadband 
service is available to 81% of 
homes on the Island. We have 
two Tier III data centres with 
international connectivity and 
our operations are business-
critical to the economic 
strategy of the Isle of Man.
VDSL  
high speed 
broadband 
coverage 06 manx telecom plc annual report and accounts 2013 strategic report
business model
our approach
We operate from a unique and beautiful Island 
whose particular mix of legislative, regulatory, 
and lifestyle attractions make a special place  
in which to live, work, and do business. We play 
our part in that mix by driving forward the 
Island’s communications infrastructure, ensuring 
that the Isle of Man possesses the telecoms and 
related technology necessary for a prosperous  
21st century economy , and a thriving community.
commitment
expertise
reliability
culture
enterprise
Strong market position
Highly skilled workforce
Quality service
Attractive and affluent 
local market
Growth in data centre and 
off-island businesses 07
£10m
Manx Telecom is the only operator of  
a fixed line copper network providing 
fixed line services on the Island. 
Additionally we are the leading 
provider by market share across  
all our major business lines.
One of the largest employers on the 
Island, Manx Telecom employs 280 
people; we’re proud to say we have  
the largest pool of skills and 
experience in telecoms, IT and  
related industries on the Island.
We have a long tradition of pioneering 
new technologies and bringing 
innovative new products and services 
to the Isle Man, and to the customers 
we serve. We focus on providing  
a superior service and having a  
reliable, trustworthy reputation.
Manx Telecom operates in a growing, 
relatively affluent local market with a 
population of nearly 85,000, with the 
benefit of zero % corporate tax rate.
We see significant growth 
opportunities within the off-island 
and data centre markets, as well as in 
high-value managed service contracts.
three-year 
investment 
in 4G started  
in 2013
£3.5m
investment in phase 
one of our Greenhill 
Data Centre in 2013 08 manx telecom plc annual report and accounts 2013 strategic report
chairman’s 
statement
I am pleased to present my inaugural 
report as Chairman of Manx Telecom 
plc (the ‘Company’ or ‘MT’) following  
the Company’s successful IPO on  
10 February 2014. I am delighted to 
report a positive set of results for 2013 
which include a 5% increase in revenues 
to £76.0m, and a 19.9% increase in 
adjusted operating profit to £18.1m.
10.02.14
successful 
flotation on AIM
Post year end, on 10 February 2014 the 
Company completed its successful IPO 
and admission to trading on the AIM 
market of the London Stock Exchange 
raising £89.2m (before expenses) for  
the Company. Together with a new 
£80m credit facility agreement the IPO 
proceeds were used to refinance the 
balance sheet which leaves the 
Company well positioned to execute its 
strategy for future growth. The IPO also 
enabled Hg Capital and CPS Partners  
to divest their interests in the Company. 
As a result 97.6% of our shares are now 
freely traded and in the most part held 
by long-term institutional investors.
There are several other benefits of  
Manx Telecom being a public company. 
The process has brought stability and 
certainty to the Company’s ownership 
and the Company’s brand and profile 
should also be enhanced, creating further 
opportunities to grow the business.  
Our people will also benefit from being 
part of public company life through  
career opportunities and the opportunity 
to participate in incentive schemes.
+5%
increase  
in revenue
Dividend policy
As stated in our AIM admission 
document, the Company intends to 
operate a progressive dividend policy; 
this will take into account our profitability, 
underlying growth in earnings and  
cash flows. It is the Board’s intention, 
based on current and future trading,  
to pay a dividend in respect of the year  
to 31 December 2014 that equates to 7% 
dividend yield, calculated on the IPO 
placing price of 142p per share.
Therefore, the Board plans to  
declare a maiden interim dividend  
with the Company’s results for the  
six months ending 30 June 2014, 
payable in November 2014. It is our 
intention to announce these results  
in September 2014.
97.6%
of shares  
freely traded
People, management and Directors
The Company is fortunate to have an 
effective and hardworking workforce, 
which takes pride in providing a high 
standard of customer service.
The Board was restructured at IPO, 
when I joined as Non-Executive 
Chairman. Previous MT Holdings Ltd 
independent Directors Jeff Hume  
and Sir Miles Walker have been 
appointed to the plc Board as Senior 
Independent Non-Executive Director  
and Non-Executive Director respectively. 
Kevin Walsh
Non-Executive Chairman
+19.9%
increase in  
operating profit
I also believe a public Manx Telecom plc is 
in the interests of the Island as a whole. 
The Government has expressed a desire 
to have a well-invested telecoms 
infrastructure and the Company is now 
well placed to support its strategy of 
attracting e-commerce and other 
business to the Island.
An IPO process can be very demanding. 
Therefore it is appropriate that I 
acknowledge and thank the strong and 
capable senior team, together with the 
hardworking and dedicated people in 
MT, who remained focused on our 
customers to ensure that we delivered 
their expectations, whilst at the same 
time growing our revenues.
”
“
 Both these results and the 
successful IPO of Manx T elecom 
are a testament to the hard 
work and dedication of our 
talented and long-serving 
workforce, who take pride in 
providing an excellent customer 
experience. In addition it will 
also allow us to reward our 
shareholders with an attractive 
dividend which we expect  
to initiate during the current 
financial year . The Board 
confirms that current trading  
is in-line with expectations. 09
enterprising
proactive
confident
trusted
To be the Island’s leader in providing  
high quality, innovative communications 
services, richly enhancing lives and 
businesses at home and overseas.
Our values are the most important 
behaviours and attitudes that  
our colleagues aspire to in their  
day-to-day working lives in order  
to achieve their goals.
We are resourceful, spirited,  
enthusiastic and keen. In short,  
we make things happen.
We are alert, hard-working and 
committed. In short, we are the first  
to take ownership and responsibility.
We are positive, commercially assertive, 
taking credit where it’s due. In short,  
we lead by example.
We are dependable, credible,  
reputable, and community minded.
our vision
our values
Importantly the Board also includes the 
two Executive Directors, Mike Dee CEO 
and Gary Lamb Finance Director, who 
were both Directors of the business 
pre-IPO and who both played a pivotal 
role during the flotation.
Outlook
Trading in the first three months of 2014 
is in line with the Board’s expectations.
With the AIM admission successfully 
completed management is free to 
concentrate fully on maintaining and 
developing the key strengths of the 
business: our customer base and high 
standards of customer service; our 
strong market share and cash generative 
assets; the continued development of an 
experienced and motivated workforce; 
and the important contribution we make 
to the local community. This renewed 
focus should ensure we continue to 
deliver further growth in 2014, as well as 
support our plans for a maiden interim 
dividend in November 2014.
We remain committed to creating 
shareholder value through our dual 
strategy of defending our significant 
on-Island presence, whilst seeking 
off-Island opportunities to exploit our 
data centre capability and to leverage 
our market-leading mobile platform.
Finally, on behalf of the Board,  
I would like to thank all the MT team  
for their commitment and contribution  
to making this year a success.
Kevin Walsh
Chairman
Our vision is a rallying call for everyone in our 
business and a focus for our strategies. It’s an 
expression of our collective ambition – our desire 
to provide a genuinely different service  
to our customers.
our vision and values
  Revenue (£m)
2013
2012
76.0
72.4
Adjusted operating profit (£m)
2013
2012
18.1
15.1
10 manx telecom plc annual report and accounts 2013 strategic report
ceo’s review
Manx Telecom provides a wide range  
of communications services to 
consumers, businesses and the public 
sector on the Isle of Man. We have 
strong market positions across fixed line, 
mobile and data services and are 
investing in growth opportunities, 
including expanding our data centre 
footprint and growing off-island services, 
which leverage our flexible approach,  
our telecoms expertise, and our 
international roaming agreements.
We believe that following the IPO and its 
associated capital raise, Manx Telecom 
is well set for future success. As the only 
operator of a fixed line copper network 
providing local access on the Island, 
Manx Telecom is in a strong position, 
serving almost all of the existing 
available residential and business 
customers for fixed line, and providing  
a substantial proportion of the Island’s 
existing available customers with 
broadband and mobile services.
We operate in a growing, relatively 
affluent, local market, with a population 
of approximately 85,000 people, and  
the benefit of a zero % corporate tax  
rate which applies to the vast majority  
of Manx Telecom’s business means that 
the Group currently pays no corporation 
tax on both on and off-island profits.  
The Isle of Man has seen 29 years of 
unbroken economic growth, including 
throughout the recent recession.
We focus on providing a superior service 
and having a reliable, trustworthy 
reputation. Our goal is to ‘innovate and 
invest for growth’ reflecting our desire  
to maintain and develop existing  
and new customer relationships.
The Company sees growth 
opportunities within the off-island  
and data centre markets, including 
high-value managed service contracts, 
and aims to be the Island’s leading, 
quality data centre operation. Off-island, 
we intend to grow revenues through 
our various mobile virtual network 
operator (‘MVNO’) relationships, as well 
as through increasing penetration of 
connected devices and expansion into 
M2M market.
Results overview
2013 has been another good year  
for Manx Telecom. We have continued  
to drive an increase in revenue and 
profits, with a focus on growth being 
maintained in all areas of the business, 
whilst continuing to implement 
operational efficiencies to improve 
margins. Revenue growth in the year of 
5% was mainly driven by our off-island 
and data centre channels. However , we 
have also been able to achieve growth 
in fixed line services and maintain 
mobile revenues at a similar level to 
2012. By focusing on opportunities to 
improve the way we run our business, 
in particular our interaction with our 
customers and tight cost control, we 
have increased EBITDA, operating profits 
and margins in 2013. Cash generation 
remained strong and free cash flow 
remained at similar levels to last year 
despite increased capital expenditure  
on the commencement of the two 
significant capital projects, namely the 
4G network and data centre.
Mike Dee
Chief Executive Officer
 These are our first results 
since the Company’s 
successful IPO and admission 
to trading on the London 
Stock Exchange and underline 
Manx T elecom’s strengths 
and solid prospects for the 
future. We have seen good 
progress across our key areas 
of growth – data centre and 
off-island – while the core 
business continues to generate 
good levels of cash, which will 
enable us to invest in future 
growth whilst also paying an 
attractive dividend. 
“
” 11
Our 4G mobile service is due for launch 
in the summer of 2014 bringing high 
speed data services to our mobile 
customers as well as a significant uplift  
to our current 2G and 3G data services. 
4G enabled handsets and new mobile 
data packages have been made available 
in preparation for the summer launch.
Phase one of the new data centre 
project was completed at the end of Q1 
2014, bringing additional capacity as well 
as dual site resilience opportunities. The 
conversion of the existing engineering 
centre means the project is being 
undertaken in an extremely cost 
effective manner as well as having 
scope for further development, 
potentially trebling our existing hosting 
capacity. This phased approach to 
expansion means that we can link 
capex spend to customer demand, 
minimising risk and maximising returns.
+17%
growth in data 
centre revenues
Fixed, broadband and data services
Fixed and broadband provides fixed line 
voice, broadband and connectivity 
services for customers, connecting 
approximately 35,000 homes and 
approximately 4,000 businesses on the 
Island. At 31 December 2013, the Group 
had 51,500 voice lines. Customers have 
access to ADSL and high speed VDSL 
broadband services throughout the 
Island, via a high quality copper and 
fibre network. 
As at 31 December 2013, we had 
approximately 36,000 pre-paid 
subscribers and approximately 28,700 
post-paid. In terms of network, we have 
a 2G/3G mobile network with 60 sites.
Despite this being the area where we 
have the strongest competition, mobile 
revenues remained at the same level  
as the previous year. Increased revenues 
from the sale of higher value handsets 
and post-paid tariff plans as well as 
increased inbound roaming revenues 
helped counter the slowdown in 
pre-paid. Competition remains strongest 
in the pre-pay area and the introduction 
of lower priced packages and continuing 
loss of market share, albeit at a lower 
rate than previous years, contributed to 
the decline.
+26%
growth in off-island 
revenues
Data centre
Data centre offers co-location, managed 
hosting, cloud and disaster recovery to  
an international corporate client base,  
via three data centres on the Island, at 
Douglas North, Douglas Centre and the 
Greenhill Data Centre (‘GDC’). Manx 
Telecom’s data centres at GDC and 
Douglas North are ranked as Tier III data 
centres (according to Telecommunications 
Industry Association standards). This 
provides high standards of data security, 
resilience, and expandable hosting 
capacity, including business continuity and 
distributed denial of service protection. 
The Company’s data centres already 
provide hosting services for many leading 
private sector brands.
Revenue
2013 
£’000
% 
Total Rev
2012 
£’000
% 
Total Rev
Y on Y 
%
Fixed, broadband and data 30,985 40.8% 30,310 41.9% 2.2%
Core Mobile 19,195 25.2% 19,165 26.4% 0.2%
Data Centre 6,461 8.5% 5,539 7.7% 16.6%
Off-Island 13,576 17.9% 10,799 14.9% 25.7%
Other 5,812 7.6% 6,580 9.1% –11.7%
Total Revenue 76,029 72,393 5.0%
At 31 December 2013, Manx Telecom  
had approximately 25,300 broadband 
subscribers, a substantial proportion of 
the Island’s existing available customers. 
In addition, Manx Telecom delivers 
connectivity solutions to corporate 
customers, which can include voice, 
data and video services.
Further focus on rolling out high speed 
broadband has resulted in revenue 
growing 2.2% in the year due partially  
to the overall increase in the number of 
broadband customers but, in particular , 
due to the up-sell from basic speed to 
high speed broadband. With further 
roll-out of high speed broadband 
planned for 2014 and relatively low  
take up there remains further scope  
for revenue growth in this area.
Core fixed revenues remained flat in the 
year with reducing call usage offset by 
increased revenue from line rental 
charge increases.
Data services revenues grew by 
around 3.5% in the year mainly due  
to connectivity associated with data 
centre customers.
Mobile
Mobile offers a combination of pre-paid 
and post-paid tariffs addressing all 
market segments and also sells mobile 
hardware (mobile handsets and 
accessories), serving a substantial 
proportion of the existing available 
customers in the Isle of Man. 
+5%
increase  
in revenues  
to £76.0m Fixed, broadband and 
data revenues (£m)
2013
2012
31.0
30.3
Mobile revenues (£m)
2013
2012
19.2
19.2
Data centre revenues (£m)
2013
2012
6.5
5.5
Off-island revenues (£m)
2013
2012
13.6
10.8
12 manx telecom plc annual report and accounts 2013 strategic report
ceo’s review
continued
On 28 March 2014 we announced the 
completion of phase one of the third 
data centre, GDC, at a total cost of £3.5m, 
which houses 100 racks of storage 
space. This additional capacity increases 
the total storage space to 385 racks.
Phases two and three, which are 
planned for completion in 2015 and 2017 
and will add a further 120 and 320 racks, 
making GDC the biggest data centre on 
the Island in terms of rack space. We 
were delighted to win the opportunity to 
significantly increase our hosting revenue 
with one of our key customers in Q3 2012, 
which in turn contributed to the delivery 
of a 17% increase in hosting revenues in 
2013. Since completing the project, focus 
on this area of our business and 
attendance at a number of international 
exhibitions has resulted in continuing 
interest from various sectors and the 
desire to complete phase one of our new 
data centre to meet the levels of demand.
Off-Island – Global Solutions
Off-island primarily relates to the  
mobile technology platform, enabling 
wholesale and corporate customers  
to offer a variety of mobile products 
using Manx Telecom SIMs. There are  
six key areas including wholesale text 
messaging, strongest signal roaming, 
inbound services, M2M, wholesale  
voice termination, UK Mobile Virtual 
Network Enabler and a service 
management platform.
Off-island revenue continued to grow  
in 2013 by almost 26%. The 2013 growth 
follows significant focus in this area  
of the business and accelerated 
development of our capabilities and 
products. Good progress was made 
across our off-island product range 
including strongest signal mobile 
(branded Chameleon), mobile virtual 
network enabler services (‘MVNE’)  
and M2M services.
Other Revenues
Other revenues comprise: the Manx 
Telecom telephone directory, inbound 
roaming, hardware equipment, mobile 
termination, managed services and 
interconnection fees.
Revenues fell by 12% in the year mainly 
due to a reduction in equipment sales. 
However , 2012 included a large equipment 
order for one of our key customers.
Encouragingly, managed services 
revenues grew by 3% in the year and 
we are attracting increasing interest in 
this area. Directory advertising revenues 
remained fairly constant.
Summary
Overall, this is a good set of results for 
2013 giving us a solid platform to move 
into 2014 as a public company. With the 
launch of phase one of our new data 
centre already completed and our  
4G launch due for later in 2014, it will  
be a very busy first half year with 
opportunities to capitalise on these 
investments coming through in the 
second half. We look forward to 
maintaining our on-island customer base, 
continuing to grow our off-island and 
data centre revenues whilst seeking new 
opportunities to expand our business, 
using our core strengths of our on Island 
network, experienced workforce and  
a high standard of customer service.
Mike Dee
Chief Executive Officer 13
The Company intends to execute its 
strategy in the following ways:
Fixed line, broadband and data
We aim to defend our existing fixed line customer base and optimise packages, whilst 
growing our broadband business through up-sale of higher speed packages. We strive 
to be the partner of choice for corporate customers in relation to data services.
Mobile
We intend to grow our high value post-paid customer base and maximise growth 
in mobile data, including through the launch of our 4G network, expected in 
summer 2014.
Off-Island
We intend to grow revenues through our various MVNO relationships, as well as 
through increasing penetration of connected devices. We see opportunity for 
expansion into the machine-to-machine market, for example through the provision  
of metering and car tracking services. We also intend to provide premium roaming 
coverage for UK strongest signal roaming services, whilst continuing to develop our 
MVNE offering.
Data Centre
We see opportunities in high value managed service contracts and aim to be  
the Island’s leading, quality data centre operation. We are also looking to push  
into the small and medium enterprises market with the provision of cloud services. 
The provision of additional data centre facilities in early 2014 should facilitate good 
growth in this area.
our strategy
 
Our strategy is to maintain our leading position in our  
core markets of fixed line, broadband, data and mobile;  
by continuing to provide a high quality of service. In addition, 
it is our strategy to grow by exploiting new market opportunities 
which we are continuing to see in the off-island and data 
centre markets, by leveraging our existing Island infrastructure. 
In 2012 and during 2013, this strategy has been successful, 
with revenue growth achieved both on-island and off-island. maintain
In November 2013, we 
partnered with leading  
global information and 
communications technology 
(ICT) solutions provider 
Huawei to deliver a 4G L TE 
mobile broadband network. 
Our goal is ‘ 4G for all’ – a high 
speed mobile broadband 
service which allows 
customers to download music, 
upload photos, play games, 
stream films and watch HDTV , 
faster than ever before.
superfast  
4G mobile 
broadband
manx telecom plc annual report and accounts 2013 strategic report 14 15
strategy in action
81%
of homes can 
access VDSL 
high speed 
broadband
investment in 
high speed 
broadband
We continue to invest in VDSL 
(‘Very High Bit-Rate Digital 
Subscriber Line’) technology 
to increase the number of 
homes and businesses on the 
Island that can receive 
superfast broadband 
services, providing speeds of 
up to 40Mbps downstream 
and 2Mbps upstream; up to 
three times faster than 
regular broadband.
Families are increasingly embracing the 
digital age, using smartphones, tablets, 
games consoles, laptops and internet 
enabled TVs to access the internet, often 
simultaneously. VDSL is available to 81% of 
homes on the Island and our strategy is 
to up-sell broadband customers to higher 
speed packages to satisfy this trend.
evolving our 
managed 
services 
capabilities
Our recent contract for the 
provision of managed IT  
and telecoms services to the 
Isle of Man Post Office is a 
perfect example of how we 
are evolving from a provider  
of pure communications 
solutions to fully outsourced 
managed services.
Increasingly, we are seeing more and 
more businesses seeking a full end-to-
end managed service solution as it 
means that they can focus their efforts 
on growing the core elements of their 
business, secure in the knowledge that 
their IT and telecoms needs are 
managed on their behalf by a world-
class provider. Supporting a workforce 
of 450 Post Office staff, Manx Telecom’s 
managed services platform covers 32 
separate locations across the Island, 
making it one of the biggest deployments 
of its kind on the Isle of Man. 16
grow
e-gaming 
success
The successful growth of  
the e-gaming sector on the  
Isle of Man has in no small 
part been due to our continued 
investment in our own world-
class telecommunications 
infrastructure. T estament to 
this, we currently host the 
world’s largest online poker 
sites and Europe’s largest 
online bookmaker . We also 
provide adaptable and 
scalable services to many 
start-up and smaller 
operations based wordwide. 
We aim to build on this success 
over the coming years.
manx telecom plc annual report and accounts 2013 strategic report 17
385
racks of 
storage 
space on  
the Island
strategy in action
£10m Greenhill 
Data Centre
On March 27 this year , we 
opened phase one of our new 
Greenhill Data Centre (‘GDC’) 
for business. 
GDC is constructed to the same Tier III 
world-class specification, and has the 
same industry accreditations, as 
Douglas North, which already provides 
hosting services for many leading private 
sector companies.
When combined with our world-class 
global connectivity, GDC will significantly 
increase our capacity to provide  
hosting and managed services solutions  
in the e-gaming, finance, big data  
and cloud sectors – all of which are 
important for the continued growth  
of the Island’s economy.
global solutions 
development
We see significant growth opportunities 
relating to our mobile technology 
platform which enables international 
wholesale and corporate customers  
to offer a variety of products using  
Manx Telecom SIMs. Marketed under 
the brand name ‘Chameleon’,  
strongest signal roaming is an offering 
for businesses and organisations for 
whom mobile coverage is paramount; 
for example emergency and security 
services and organisations seeking 
business continuity. We have roaming 
agreements in place with over 400 
partners and we use these roaming 
relationships in the UK to offer a  
single SIM which will automatically  
roam to any network, aiming to provide 
100% coverage.
We also see opportunities for expansion 
into the machine-to-machine market, 
for example through the provision of 
metering and car tracking services. Gary Lamb
Finance Director
18 manx telecom plc annual report and accounts 2013 strategic report
financial review
assets following the start of a project to 
roll out a 4G mobile network across the 
Isle of Man.
Profit after tax was lower at £0.4m 
(2012: £3.2m) primarily due to this charge 
and an increase in financing costs as a 
result of steps taken to restructure the 
Group’s borrowings in order to reduce 
shareholder loans.
Costs
Overall costs (excluding finance 
expenses) increased by 6% in the year 
(£3.3m). Pay costs, which represent 
almost 30% of total costs, increased by 
5%. The greater than forecast growth in 
revenue and EBITDA earned increased 
bonus payments across the business.
Roaming costs increased by 22% in the 
year, mainly due to the success of our 
off-island business. Energy costs were 
up 11% reflecting increased growth and 
usage by data centre customers. Mobile 
handset costs were up 9% due to the 
increased sale of higher value 
smartphones. Maintenance charges 
increased 7% and are expected to 
increase in 2014 as the warranty period 
on the Next Generation Network 
(‘NGN’) equipment comes to an end.
Net finance costs
Net finance costs were £15.9m  
(2012: £13.3m) including interest payments 
on bank facilities of £7.1m (2012: £4.0m) 
and interest payable on shareholder 
loan notes of £3.9m (2012: £8.5m).
Also included within the finance costs 
was a £3.3m charge against previously 
capitalised transaction charges, following 
Profitability
Revenue grew by over 5% to £76.0m 
(2012: £72.4m) with a 2.2% increase in 
fixed, broadband and data services 
supplemented by strong growth  
in our data centre and off-island 
revenue streams.
The fixed line, broadband, data and 
mobile business lines remained steady, 
reporting revenues of £31.0m (2012: 
£30.3m) and £19.2m (2012: £19.2m) 
respectively. Off-island performed well 
in 2013 with growth of 26% to £13.6m 
(2012: £10.8m). The data centre business 
line also saw good growth, with £6.5m 
revenues up from £5.5m in 2012. ‘Other’ 
revenues were £5.8m (2012: £6.6m) 
reflecting a lower level of low margin kit 
sales following a peak in 2012.
As a result of maintaining good cost 
control our adjusted EBITDA grew by 11.5% 
to £27.5m (2012: £24.6m) with the margin 
improving to 36.1% from 34.0% in 2012.
Depreciation was £9.2m (2012: £9.4m) 
which includes charges for network 
infrastructure (fixed network, 
broadband network and 2G/3G mobile 
networks) as well as IT equipment and 
office equipment.
Our adjusted operating profit from 
operations, before the write down of 
assets described below, increased by 
19.9% to £18.1m compared to £15.1m in 
2012 with the margin improving to 23.8% 
from 20.9% in 2012.
We recorded an impairment of 
equipment of £2.7m in relation to the 
write down of 2G/3G mobile network 
 I am pleased to report on  
a strong financial performance 
by Manx T elecom during 2013. 
All areas of the business 
performed well, resulting in  
a 5% growth in revenues and  
a near 20% growth in adjusted 
operating profit. The IPO  
has given us independence 
and a strong group of new 
investors who provide a 
supportive shareholder base 
for the future. We continue to 
generate strong cash flow from 
our core business which will 
enable ongoing investment.
£18.1m
£27.5m
operating profit from 
operations (adjusted)
adjusted EBITDA
“
” Revenue (£m)
2013
2012
76.0
72.4
Operating profit (£m)
2013
2012
15.5
15.1
Revenue
25% 18%
Off-island Mobile
48%
Fixed,
broadband,
data services
& Other
Data
centre
9%
19
the debt refinancing exercise in 2013. 
Amortisation of the transaction costs on 
the change in banking facilities during the 
year was £0.7m (2012: £0.8m). Other 
interest income was £0.2m (2012: £0.6m).
Our financing arrangements throughout 
the year were designed to meet the 
interests of our majority private equity 
shareholders who exited the business 
at the time of the IPO. As such they 
should not be taken as a guide to future 
financing costs.
Taxation
There is no corporate taxation payable 
on our profits for both 2013 and the 
comparative year. We have the benefit of 
an Isle of Man zero % corporate tax rate.
Cash flow
Our free cash flow after investing 
activities was £16.0m, an increase of 8.1% 
(2012: £14.8m), out of which we serviced 
our borrowings.
Operating cash flow was £28.1m  
(2012: £22.3m). This good cash flow 
performance represents an adjusted 
EBITDA cash conversion of 103%  
(2012: 91%). Working capital improved 
significantly in 2013 to -£0.8m compared 
with -£4.3m in 2012.
Capital expenditure
Capital expenditure increased 
significantly in the year to £10m. The 
increase in spend this year includes 
£5.4m on the two key projects; 4G and 
phase one of the data centre 
conversion, split into £3.3m on the 4G 
project and £2.1m on the data centre 
conversion project.
26%
growth in off-island
 We have the benefit of an  
Isle of Man zero % corporate 
tax rate.
The 4G project has a total cost of £10m 
spilt over 2013-2015 and the total cost for 
phase one of the data centre conversion 
is £3.5m, with the remainder of the cost 
falling into early 2014. Completion of 
phase one of the data centre was 
announced on 28 March 2014 and 4G 
launch is due in the summer 2014.
The remaining capital expenditure was 
spread across a number of business 
areas including network enhancements, 
IT and customer projects.
Balance sheet
Property, plant and equipment 
decreased during the year by £2.3m to 
£62.6m primarily due to the write down 
of the 2G/3G network following the 
decision to invest in a 4G mobile 
network. Capital expenditure of £10.0m 
exceeded the depreciation and 
amortisation run rate of £9.2m.
We retain goodwill of £84.3m on the 
balance sheet arising from the purchase 
of Manx Telecom from Telefonica in 
2010, which is robustly supported by 
current valuations.
Current assets increased by £2.8m 
primarily due to an increase in cash 
held at the end of the period, increasing 
to £13.5m from £10.4m. Trade receivables 
improved by £0.9m due to 
improvements in collections during the 
year. In 2013 the Company entered into 
an interest rate swap covering 67% of its 
£122m third party debt. The fair value of 
the interest rate swap was £0.6m at the 
year end (2012: £0.4m liability).
Financial summary 
2013 
£’000
2012 
£’000 Increase
Revenue 76,029 72,393 5.0%
Adjusted EBITDA* 27,450 24,610 11.5%
Margin 36.1% 34.0%
Adjusted operating profit* 18,124 15,115 19.9%
Margin 23.8% 20.9%
Profit after tax 364 3,161
Cash generated from operations 28,143 22,277 26.3%
Cash conversion rate 103% 91%
Capital expenditure 9,947 4,787
Free cash flow 16,027 14,827
* adjusted for net finance costs, impairment of equipment, unrealised profit on interest swaps, depreciation 
and amortisation (adjusted EBITDA only). 
“
” 20 manx telecom plc annual report and accounts 2013 strategic report
financial review
continued
Current liabilities reduced by 15% to 
£25.8m primarily due to a reduction in 
interest-bearing loans and borrowings.
Non-current liabilities were £153.1m  
(2012: £138.8m). Borrowings and interest 
payable were £115.7m (2012: £54.7m),  
an increase on 2012 following the 
refinancing in 2013. Shareholder loans 
reduced to £31.0m (2012: £84.1m).
The Group operates two pension 
schemes, a defined benefit scheme, 
which is closed to new joiners, and  
a defined contribution plan. The 
retirement benefits liability increased to 
£6.4m (2012: £1.4m asset) primarily due 
to an increase in the scheme liabilities 
driven by a change in financial 
assumptions (higher inflation and a 
lower discount rate). The Company is 
currently in the process of discussions 
with the trustees, our employees and 
unions to close the defined benefit 
scheme to future accruals.
Refinancing of net debt
At 1 January 2013 the Company had 
borrowings of £146.0m comprising 
£61.4m of bank debt with a consortium 
of banks in tranches with interest rates 
of 4.6% margin on LIBOR (£19.7m) and 
5.5% margin on LIBOR (£41.7m), and a 
£84.6m shareholder loan primarily with 
Hg Capital at an interest rate of 10.0%.
At the same time, the Company also 
entered an £80m banking facility with  
a consortium of banks from which 
£70m was drawn. These funds and  
the balance of the placing were used  
to pay down all previous borrowings 
and to exit the related interest rate 
swap arrangements.
Net debt on admission to AIM was 
£63.5m broken down as £70.0 gross 
debt and £6.5m of cash. The bank 
facilities’ maturity date is 30 June 2018.
Restatement
In 2010 Manx Telecom Holdings Limited 
drew down on a loan facility from Lloyds 
TSB as part of the purchase of the Group 
by Hg Capital. Transaction costs relating 
to the Lloyds TSB facility were expensed 
in 2010 rather than being capitalised and 
amortised over the life of the facility in 
accordance with IFRS. The transaction 
costs were expensed as it was expected 
that the facility would be refinanced 
within 12 to 18 months, and it was 
considered prudent to accelerate the 
recognition of transaction costs in 2010. 
However, the facility was not refinanced 
until 2013, and therefore, the prior year 
figures have been restated.
Gary Lamb
Finance Director
The business has strong 
foundations which provide a solid 
base for future growth.
On 19 March 2013 the Company entered 
into a new funding arrangement with 
GE Capital and Ares Capital Corporation, 
resulting in all existing borrowing with 
external banks being repaid and 
shareholders’ loans reducing by £55.7m 
at this time. This left the Company with 
total debt of £151.0m comprising bank 
debt of £122.0m at an interest rate of 
6.5% margin on LIBOR, and a 
shareholder loan primarily with Hg 
Capital at £29.0m at an interest rate  
of 10.0%.
Subsequent Events
On 10 February 2014, the Group was 
admitted to the Alternative Investment 
Market (‘AIM’). Hg Capital and minority 
partners sold their entire stakes in the 
Company, as part of a placing that 
raised £156.3m before expenses from 
institutional investors. Management 
shareholders retained 50% of their 
previous shareholdings. In the course  
of these developments the Company’s 
ordinary shares were redenominated 
into ordinary shares of 0.2 pence each 
from a nominal value of 1.0 pence. 2014 
costs associated with the IPO include 
£13.6m of fees and the write-off of 
£4.6m previously capitalised 2013 debt 
refinancing fees. Bank fees relating to 
the new debt were £1.0m and will be 
amortised over the life of the debt 
(matures 30 June 2018).
“
” 21
principal risks
Regulation
We enjoy a constructive relationship 
with our regulator, the Isle of Man 
Communications Commission, and 
benefit from a regime that recognises 
the benefits of promoting innovation 
and investment. An adverse change in 
regulation or to our licence is the biggest 
single risk, but is unlikely. 
We fully participate in dialogue with  
the Isle of Man Communications 
Commission, and adopt a collegiate 
approach when addressing concerns 
that might arise. We take comfort from 
the fact that we own the assets, positive 
feedback from the regulator and our 
track record of investment and delivery.
Increased competition
We have maintained a strong market 
share across all key service lines (+75%). 
However, competition has increased 
and our largest competitor has made 
some inroads into the price sensitive 
mobile pre-pay market. 
We welcome competition and continue 
to review and revise our packages and 
seek to introduce higher value added 
propositions rather than competing 
purely on price.
Tax
The Isle of Man has a zero % corporate 
tax rate which benefits Manx Telecom 
both directly and indirectly (through the 
additional business that it attracts to the 
economy). A change would be negative 
but looks unlikely as this is a key 
differentiator for the Island when 
competing with other jurisdictions  
for business. 
There is little opportunity to directly 
impact Government policy in this area, 
excepting that we show our support for 
the current policy by working to attract 
new business to the Island.
Pension The Company participates in a defined 
benefit pension scheme for some of its 
employees, and this has an IAS 19 deficit 
of £6.4m (gross liabilities are £73.2m). 
Changes in interest rates, longevity 
assumptions or inflation expectations 
could materially impact the deficit  
and contributions. 
The scheme has been closed to new 
entrants for a number of years, and 
new staff are provided with an 
alternate defined contributions scheme. 
Discussions are ongoing with a view to 
closing the scheme to future accruals.
Risk Potential impact Mitigation 22
we grow,  
everyone  
grows
Giving something back to the 
Isle of Man and its residents  
is something Manx T elecom  
is extremely passionate about 
and which we encourage our 
employees to actively 
participate in.
manx telecom plc annual report and accounts 2013 strategic report 23
In practice, our commitment to social 
responsibility plays out in many ways. 
From ensuring our employees 
consistently apply our values to 
embedding social and ethical 
considerations into our business policies 
and decision making. Here are just a 
few examples: 
Support for our colleagues
Our Compliment Scheme allows local 
charities to benefit from a donation 
when customers contact us to pay 
tribute to a member of staff who has 
given them especially good service.  
Each year, our staff are also able to 
nominate local charities and community 
organisations which they are personally 
involved in, to benefit from a small but 
helpful financial donation.
We are committed members of the 
Internet Watch Foundation, the UK 
internet hotline for the public to report 
inadvertent exposure to online child 
sexual abuse content hosted anywhere 
in the world, and criminally obscene 
adult content hosted in the UK.
Landscape protection
We live on a beautiful Island and always 
consider the environmental case when 
we are planning new installations. We 
have buried hundreds of kilometres of 
overhead telephone cables underground 
and, wherever possible, we will always 
put new cabling in to the ground.
Manx Telecom staff are given time to 
help local charities and organisations, 
including: local secondary schools, as 
advisers/mentors, Isle of Man Business 
School, Isle of Man College, local primary 
schools, local commissioners, and Isle of 
Man Hospice.
Mobile phone recycling
We introduced the first mobile phone 
recycling initiative on the Isle of Man. 
Anyone can take an old mobile phone 
and charger to our shop in Douglas or 
to the Manx Telecom Headquarters 
building on the Isle of Man Business 
Park. Mobiles which are in good enough 
condition are refurbished and reused  
in developing countries. Those which 
are not reusable are disposed of safely, 
with no harmful elements put into 
landfill where they might leak into  
the environment.
We also offer a trade-in scheme, where 
customers can trade in their old device 
to receive a discount off a new handset 
or tablet. In this instance, we partner 
with Mazuma mobile, who refurbish 
and redistribute the handsets overseas 
where mobile phones have become 
indispensable in helping drive social 
change and economic growth in 
developing countries.
Online safety
We have a raft of initiatives designed to 
help young people stay safe, both when 
using the internet, and their mobile phone.
Our Staying Safe Online leaflet was 
produced to help make children more 
aware of the dangers when using social 
networks and chatrooms.
At Manx T elecom, we know that it’s not enough to  
provide great products and services, and support  
the community through a range of sponsorships and 
charitable initiatives. Our responsibility to the Isle of Man 
goes much further and embraces wider social, 
environmental, and ethical concerns.
our responsibility
280 employees
 
we are one of the largest 
employers on the Island 24 manx telecom plc annual report and accounts 2013 strategic report
our community
We know our continued success depends on the 
health of the wider community, and have an active 
and extensive programme which supports events, 
people, and community groups in a whole variety of 
ways – from simple donation of funds, to sponsorship, 
hands-on help, and donations of equipment.
team manx 
telecom
2013 was the fifth year we have 
sponsored the Manx Road cycling club 
whose members include Tour de 
France star and 2011 World Road Race 
Champion Mark Cavendish, and Peter 
Kennaugh, a gold medallist at the 
London 2012 Olympics and the 2012 
World Track Championships. The team 
competes in its distinctive blue and 
white Team Manx Telecom kit.
1,700
competitors have  
overcome personal  
challenges just to take part
manx telecom 
end 2 end 
mountain bike 
challenge
Manx T elecom supports the 
End2End Mountain Bike 
Challenge with both funding 
and technical support. 
One of the highlights of the Island’s 
sporting calendar, the End2End is a 
unique event; a gruelling 75 kilometre 
ride from the North to the South of the 
Island. Many of the 1,700 competitors 
have overcome personal challenges just 
to take part. For many people, finishing 
the End2End – or even just making it to 
the start line – represents the 
culmination of a long struggle to 
overcome hardship, injury, or illness, 
and many raise funds for a charity that 
is close to their heart. The 2014 event 
takes place on September 7. 25
We sponsor the Parish Walk and provide 
a comprehensive timing and results 
service for the race. We’re proud of the 
support we give to the event organisers 
which in 2013 celebrated its centenary 
year. The Manx Telecom Parish Walk 
brings out the very best in our Island 
community and every year those who 
take part raise huge sums for charities 
and other good causes. The 2014 walk 
takes place on June 21.
the Disabled, Southern Befrienders, 
Laxey Workingmen’s Institute, David Grey 
House, IOM Crown Green Bowls, 
Soundcheck Youth Arts Centre and 
Friends of St John Ambulance.
Our community online
We’re proud of our contribution to the 
Island’s online community. Manx.net is 
the Island’s most popular website with 
over 40 million page views every year, 
whilst isleofman.com provides a 
window into the Isle of Man for 
businesses, visitors and residents 
worldwide. Launched in February 2012, 
MTTV brings local life alive through a 
dedicated online news and 
entertainment platform, already 
recording an impressive 1 million views.
manx telecom 
parish walk
The famous 85-mile Parish 
Walk around each of the  
Isle of Man’s 17 parishes is, 
perhaps, the biggest 
community sporting event  
on the Island, with over  
1,700 entrants. 
it’s our 
community
This is our scheme that 
supports a whole range of 
local community projects 
with cash awards. 
Since it began in 2008 the scheme has 
donated thousands of pounds to 
charities and community groups across 
the Island. Previous successful applicants 
have included: St Germans Cathedral 
Hand Bell Ringers, Manx Workshop for 
We’re also delighted to be the official 
communications partner for Island  
of Culture 2014 which will celebrate 
dance, music, theatre, the visual arts, 
literature, cultural festivals, film and 
digital innovation.
for 2014
We’re proud to once again support the 
fastest Manxman on two wheels, Conor 
Cummins. Conor is a great ambassador 
for his sport and for the Island and we  
are proud to support his motor-racing 
ambitions again in 2014. 
Manx Telecom is proud to be a Team 
Isle of Man champion supporting our 
Commonwealth Games squad as they 
go for gold at Glasgow 2014. 26 manx telecom plc annual report and accounts 2013 governance
board of directors
Kevin was appointed Chairman on  
the Company’s admission to AIM.  
He is also Chairman of the 
Remuneration Committee.
Kevin is also an Executive Director of 
KCOM Group plc, a position he has held 
since May 2004. In addition he was the 
Chief Executive for the KC brand, which 
is the market-leading internet and 
telecoms provider for Hull and East 
Yorkshire. Prior to joining KCOM in 2000 
Kevin was Managing Director of an 
internet start-up and held a number  
of Divisional Managing Director roles 
within the Electrolux group.
Mike Dee is a qualified accountant 
(CIMA) and was appointed CEO in  
April 2011. He has 28 years of experience 
at Manx Telecom. In 1987, Mike was part 
of the BT team involved in setting up 
Manx Telecom and as former Finance 
Director and Company Secretary  
was instrumental in the Company’s 
subsequent ownership changes.  
Before joining British Telecom plc  
in 1983, Mike held positions with the 
Dowty Group, Iloman Engineering  
and Castle Industries.
Jeffrey Hume joined the business in 
January 2013 as a Non-Executive 
Director of Manx Telecom Holdings Ltd 
and Chairman of its Audit Committee. 
He is the Senior Independent Director  
of Hyder Consulting plc, Deputy Chairman 
of the Dover Harbour Board and an 
Independent Director of the housing 
association Moat Homes Ltd. He is  
also a member of the London Stock 
Exchange’s Primary Markets Group  
and is a Fellow of both the Institute  
of Chartered Accountants and the 
Association of Corporate Treasurers.
Gary Lamb joined the business in 
October 2011 as Finance Director . Gary is  
a qualified accountant (CIMA) who has 
gained extensive business experience 
over the past 20 years in numerous 
senior roles. Prior to joining Manx 
Telecom, Gary was a Founder Director 
of Bladon Jets Limited and remains  
a Non-Executive Director. Prior to this, 
Gary was the Finance & IT Director of 
Strix Limited, a world-leading innovator 
and manufacturer of thermostatic 
controls for water boiling appliances.
Sir Miles was awarded a Knight 
Batchelor in 1997 for services to the 
Government of the Isle of Man and was 
honoured as Commander of the British 
Empire in 1990. He became a director  
of the family company, which was 
involved with dairy farming and the 
retail dairy industry. From 1976 to 2001, 
Sir Miles was a member of the Isle of Man 
Government, having been re-elected in 
1981, 1986, 1991 and 1996. Highlights of his 
career include being in First Ministerial 
Office from 1981 to 1986, Chief Minister 
from 1986 to 1996 and a Member of 
Treasury from 1996 to 2001.
Kevin Walsh
Non-Executive Chairman
Mike Dee
Chief Executive Officer
Jeffrey Hume
Senior Independent Non-Executive Director
Gary Lamb
Finance Director and Company Secretary
Sir Miles Walker, CBE, LLD (hc)
Non-Executive Director 27
 executive team
Kevin has more than 30 years’ 
experience in the telecoms and IT 
industries and joined Manx Telecom in 
2013 with responsibility for all technology 
aspects of Manx Telecom’s product 
portfolio, and service delivery on and off 
the Island. Before joining Manx Telecom, 
Kevin was with eircom, Ireland’s largest 
telecommunications operator. From 
2007 to 2010, Kevin worked for Level 3 
Communications as Senior Vice 
President Technology Services – Europe 
and prior to that held senior positions 
with Cable & Wireless and Vodafone UK.
Prior to joining Manx Telecom in 2003, 
John held a number of key HR roles, 
primarily within the finance sector.  
He spent 16 years with the Zurich 
Financial Services group, and moved  
to live on the Island in 1995 to review  
and build the HR function within  
Allied Dunbar. He also spent time  
at Mi Research Ltd, an international 
consultancy group specialising in 
organisational culture change.
Stuart Paul joined the business in 
October 2011 and has responsibility for 
the strategic growth of the data centre 
business and the day-to-day 
operational effectiveness of the data 
centres. Before joining Manx Telecom, 
Stuart was Hosting Operations Director 
at Iomart plc, a post he took up in 2007. 
Stuart was also Head of Data Centre 
Services at Cable & Wireless from 2000 
to 2007 and prior to this was Head of 
Facilities at Merita Nordbanken.
David joined Manx Telecom in  
January 2011 and leads the marketing 
communications, product management 
and consumer sales teams. Prior to 
joining Manx Telecom, David was 
Regional Vice President Marketing 
Communications for Cable & Wireless  
in the Caribbean where he played a 
major role in developing and launching 
new brand propositions across 13 
countries. He has also held senior 
marketing positions for telecoms 
operators in the UK, the Channel 
Islands, the Caribbean and Pakistan.
Fergal joined Manx Telecom as Sales 
Director in January 2012. He has 
extensive experience gained working 
first with Siemens Nixdorf and more 
recently with Cable & Wireless and  
Colt in leadership positions in Ireland, 
the UK and Europe. He was Director  
of Corporate Sales in Ireland and  
also led Colt’s sales team in the UK 
finance sector, focusing on major 
international banks.
Kevin Paige
Customer Services and Technology Director
John McChesney
Human Resources Director
Stuart Paul
Data Centres Director
David Smith
Marketing Director
Fergal McKenna
Sales Director 28 manx telecom plc annual report and accounts 2013 governance
directors’ report
The Directors are 
pleased to present 
the first Annual 
Report and 
consolidated 
financial statements 
of Manx T elecom plc 
for the year ended 
31 December 2013.
Subsequent to the year end the 
Company changed its name from 
Trafford Equityco Limited to Manx 
Telecom plc and appointed a new 
Board. On 10 February 2014 the 
Company secured admission to the 
London Stock Exchange as an AIM stock 
(‘Admission’). At this point its private 
equity controlling shareholders exited. 
As a result, approximately 97.6% of the 
Company’s shares are now freely 
traded and in the most part held by 
long-term institutional investors.
The Group’s business activities, together 
with the factors likely to affect its future 
development, performance and position 
are set out in the Strategic Report on 
pages 2 to 25 which is incorporated into 
this report by reference together with 
the Corporate Governance Report on 
pages 32 to 35. These together contain 
certain forward-looking statements and 
forecasts with respect to the financial 
condition, results, operations and 
business of Manx Telecom plc which 
may involve risk and uncertainty 
because they relate to events and 
depend upon circumstances that will 
occur in the future. There are a number 
of factors that could cause actual results 
or developments to differ materially 
from those expressed or implied by 
these forward-looking statements and 
forecasts. Nothing in this Annual Report 
to shareholders should be construed  
as a profit forecast.
Results and dividends
Results for the year are set out in the 
financial statements on pages 38 to 65. 
The financial position of the Group, its 
cash flows and liquidity position are 
further described in the Financial 
Review on pages 18 to 20.
The Directors are not recommending  
the payment of a final dividend in 
respect of the year ended 31 December 
2013. The Board, however, plans to 
declare a maiden interim dividend  
with the Company’s results for the  
six months ending 30 June 2014, 
payable in November 2014. It is the 
intention to announce these results  
in September 2014.
In May 2013, prior to the IPO, a dividend 
of £2m was paid (2012: £nil).
Directors
The names and biographies of the 
current Directors of the Company are 
set out on pages 26 and 27 of this 
Annual Report. The following Directors 
were appointed as Directors of the 
Company on 14 January 2014:
Mike Dee
Gary Lamb
Kevin Walsh
Jeffrey Hume
Sir Miles Walker
The following Directors resigned on  
3 February 2014:
Simon Cain
Alexander King
Faye Moffatt
Directors’ share interests
Particulars of the number of ordinary 
shares of the Company in which the 
Directors were beneficially interested 
immediately following Admission on  
10 February 2014 and at 31 December 
2013 are set out below. 
At 10 
February 
2014
At 31 
December 
2013
Mike Dee 576,228 –
Gary Lamb 500,000 –
Jeffrey Hume 70,422 –
Sir Miles Walker 63,523 –
Kevin Walsh 70,422 – 29
Directors’ remuneration
No Directors’ fees have been paid by the 
Group to those in office during either 2013 
(Simon Cain, Alexander King and Faye 
Moffatt) or 2012 (Simon Cain, Alexander 
King, John Melia and Faye Moffat) and 
they have received no share-based 
payments or other remuneration.
Related parties
Hg Capital received £40,000 in both 2013 
and 2012 as a monitoring fee in relation 
to services to the Group of Alexander 
King. Appleby received £2,000 in both 
2013 and 2012 in relation to the services 
of the other Directors of the Company.
Directors’ indemnities
The Articles permit the Board to grant 
the Directors indemnities in relation to 
their duties as Directors, including third 
party indemnity provisions (within the 
meaning of the Isle of Man Companies 
Act 2006) in respect of any liabilities 
incurred by them in connection with  
any negligence, default, breach of duty 
or breach of trust in relation to the 
Company. Deeds of indemnity have 
been granted to each Director, but do 
not cover criminal acts. 
Directors’ and officers’ liability 
insurance
Directors’ and Officers’ Liability Insurance 
cover is in place at the date of this 
report, having been purchased prior  
to the IPO. The Board remains satisfied 
that an appropriate level of cover is in 
place and a review of cover will take 
place on an annual basis.
Articles of Association
The Articles of Association (Articles), 
adopted on 3 February 2014, may only  
be amended by special resolution of  
the shareholders. A copy of the Articles  
is available on request from the 
Company Secretary.
Share capital: structure, rights  
and restrictions
Details of the Company’s share capital 
are set out in note 16 to the financial 
statements on pages 38 to 65. Following 
Admission, the Company has a single 
class of share capital divided into 
112,822,287 ordinary shares of £0.002 
each. The rights and obligations attaching 
to these shares are governed by Isle of 
Man law and the Company’s Articles. 
Restrictions on the transfer of shares 
and voting rights attaching to shares
There are no restrictions on the transfer 
of the ordinary shares other than:
• each of the Directors has undertaken 
not to effect any direct or indirect sale 
or enter into any agreement to effect 
any direct or indirect sale of any of 
his shares within 12 months of 
Admission. Each of the Directors has 
further undertaken that they shall not 
effect any direct or indirect sale or 
enter into any agreement to effect 
any direct or indirect sale of any of 
his shares within 24 months of 
Admission except in circumstances 
where they have discussed in 
advance the manner and timing of 
such sale with Liberum Capital Ltd, as 
the Company’s Nominated Adviser;
• each of those considered at 
Admission to be Selling Shareholders 
(other than those who are also 
Directors) has undertaken not to 
effect any direct or indirect sale or 
enter into any agreement to effect 
any direct or indirect sale of any of 
his or its shares in the Company 
within six months of Admission. 
Certain of these Selling Shareholders 
have further undertaken that they 
shall not effect any direct or indirect 
sale or enter into any agreement to 
effect any direct or indirect sale of 
any of his or its shares at any time  
for a period of 12 months after 
Admission except in circumstances 
where they have discussed in 
advance the manner and timing of 
such sale with Liberum Capital Ltd;
• awards made at Admission under 
the Co-Investment Plan are 
conditional upon the participant 
retaining his investment shares; 
• where, from time to time, certain 
restrictions may become imposed by 
laws and regulations (for example, 
insider trading laws); and 
• pursuant to the Listing Rules of the 
Financial Conduct Authority whereby 
certain Directors, officers and 
employees of the Company require 
the approval of the Company to deal 
in the ordinary shares. 
Voting rights attaching to shares
Ordinary shareholders are entitled to 
receive notice and to attend and speak 
at any general meeting of the Company. 
On a show of hands every shareholder 
present in person or by proxy (or being 
a corporation represented by a duly 
authorised representative) shall have 
one vote, and on a poll every 
shareholder who is present in person 
or by proxy shall have one vote for 
every share of which he is the holder. 
The Notice of Annual General Meeting 
specifies deadlines for exercising voting 
rights and appointing a proxy or proxies.
Deadlines for exercising voting rights 
attaching to shares
The Articles provide a deadline for the 
submission of proxy forms (whether by 
an instrument in writing or electronically) 
of not less than 48 hours before the 
time appointed for the holding of the 
meeting or the adjourned meeting.
Shares in uncertificated form
Directors may determine that shares 
may be held in uncertificated form  
and title to such shares may be 
transferred by means of a relevant 
system or that shares should cease  
to be so held and transferred.
Variation of rights attaching 
to shares
The Articles provide that rights attached 
to any class of shares may be varied 
with the written consent of the holders 
of not less than three-quarters in 
nominal value of the issued shares, or 
with the sanction of a special resolution 
passed at a separate general meeting  
of the holders of those shares. At every 
such separate general meeting, the 
quorum shall be two persons holding or 
representing by proxy at least one-third 
in nominal value of the issued shares 
(calculated excluding any shares held in 
treasury). The rights conferred upon the 
holders of any shares shall not, unless 
otherwise expressly provided in the 
rights attaching to those shares, be 
deemed to be varied by the creation or 
issue of further shares raking pari passu 
with them. 30 manx telecom plc annual report and accounts 2013 governance
directors’ report
continued
No shareholder holds securities carrying 
special rights as to the control of the 
Company. There are no limitations on 
the holding of securities. There are no 
restrictions on voting rights or any 
arrangements by which, with the 
Company’s cooperation, financial rights 
carried by securities are held by a 
person other than the holder of the 
securities. There are no agreements 
between holders of securities that are 
known to the Company which may 
result in restrictions on the transfer  
of voting rights.
Authority to purchase own shares
The Directors have been authorised  
to purchase up to 10% of its issued 
ordinary share capital as at Admission. 
This authority will expire at the Annual 
General Meeting in 2014 at which a 
resolution to renew the authority for a 
further year will be proposed. No shares 
have been purchased by the Company 
since Admission.
As at 12 May 2014, being the latest 
practicable date prior to the publication 
of this report, the Company did not hold 
any shares in treasury.
Appointment and replacement  
of Directors
Unless determined by ordinary resolution 
of the Company, the number of Directors 
shall not be less than two. A Director is 
not required to hold any shares in the 
Company by way of qualification. 
The Board may appoint any person  
to be a Director and such Director  
shall hold office only until the next AGM, 
when he or she shall be eligible for 
appointment by the shareholders.  
The Articles provide that at each AGM, 
one-third of the Directors for the time 
being (or, if their number is not a multiple 
of three, then the number nearest to but 
not exceeding one-third) shall retire from 
office. A Director who retires at any  
AGM shall be eligible for re-appointment. 
In addition, any Director appointed by 
the Board shall hold office only until the 
next following AGM and shall then be 
eligible for appointment.
Power of Directors
Subject to the Articles, the Isle of Man 
Companies Act 2006 and any directions 
given by special resolution, the business 
of the Company shall be managed by 
the Board who may exercise all the 
powers of the Company to, for example: 
borrow money; mortgage or charge any 
of its undertakings, property and 
uncalled capital; and issue debentures 
and other securities, whether outright or 
as collateral security for any debt, liability 
or obligation of the Company.
Political donations
The Company has made no political 
donations since Admission on 10 February 
2014 and intends to continue its policy of 
not doing so for the foreseeable future.
Post balance sheet events
Post balance sheet events are set out  
in note 24 to the financial statements  
on page 63 and are described in the 
Financial Review on page 20. 31
Going concern
After making enquiries, the Directors 
have a reasonable expectation that  
the Group has adequate resources to 
continue in operational existence for  
the foreseeable future. In making this 
assessment they have considered the 
Company and Group budgets, and  
cash flow forecasts for the period to 
December 2015. The Group has 
considerable financial resources, 
negligible liquidity risk and is operating 
within a sector that is experiencing 
relatively stable demand for its products. 
The Directors therefore have a reasonable 
expectation that the Company and the 
Group have adequate resources to 
continue in operational existence for the  
foreseeable future. Thus they continue  
to adopt the going concern basis of 
accounting in preparing the annual 
financial statements.
Audit information
Each of the Directors at the date of the 
approval of this report confirms that:
• so far as he is aware, there is no 
relevant audit information of which 
the Company’s auditors are 
unaware; and
• he has taken all the reasonable steps 
that he ought to have taken as a 
Director to make himself aware of 
any relevant audit information and to 
establish that the Company’s auditors 
are aware of the information.
Registered agent
The registered agent of the Company at 
31 December 2013 was Appleby Trust (Isle 
of Man) Limited who served throughout 
the year and has continued to date.
Auditors
The Auditors, KPMG Audit LLC, have 
indicated their willingness to continue  
in office and a resolution seeking to 
reappoint them will be proposed at  
the Annual General Meeting.
Annual General Meeting
The Company’s Annual General Meeting 
will be held at Isle of Man Business Park, 
Cooil Road, Braddan, Isle of Man IM99 
1HX on 30 June 2014 at 5pm. Details of 
the meeting venue and the resolutions  
to be proposed are set out in a separate 
Notice of Meeting. 
The Directors’ Report has been approved 
by the Board of Manx Telecom plc.
Signed on behalf of the Board.
Gary Lamb
Company Secretary
19 May 2014
Manx Telecom plc
Registered Office: 
33-37 Athol Street  
Douglas 
Isle of Man  
IM1 1LB
Company No: 005328V
Major interests in shares
As at 12 May 2014, the Company had been advised, in accordance with the Disclosure and Transparency Rules of the Financial 
Conduct Authority, of the following notifiable interests (whether directly or indirectly held) in 3% or more of its voting rights: 
Number of securities in issue – 112,822,287. AIM securities not in public hands – 2.16%. 
Identity of significant shareholders (over 3%) as follows:
%
Artemis Investment Management LLP 9.36
BlackRock Investment Management (UK) Limited 7.52
Standard Life Investments Limited 7.35
FIL Investment Services (UK) Limited 6.32
Premier Fund Managers Limited 6.01
AXA Investment Managers UK Limited 5.65
Kames Capital PLC 3.95
Miton Asset Management Limited 3.56
Hargreave Hale Limited 3.43
Oakley Capital Management Limited 3.43
UBS Global Asset Management (UK) Limited 3.18 32 manx telecom plc annual report and accounts 2013 governance
corporate 
governance report
Dear Shareholder, 
Principles of Corporate Governance
As a Board we recognise that applying 
sound governance principles in running 
the Company is essential to provide  
a solid platform for growth and to 
maintain the trust of our stakeholders. 
The Directors intend to apply the 
principles set out in the QCA Code from 
Admission, which is a similar but 
simplified version of the UK Corporate 
Governance Code (‘the Code’). The 
Directors also acknowledge the 
importance of the principles set out  
in the Code and, although adherence  
to the Code is not compulsory, the 
Directors will aim for the Company  
to apply the Code to a greater extent, 
relative to its size, at a later stage.
The Board
The Board has arranged a schedule  
of meetings to consider strategy, 
performance and the framework of 
internal controls. To enable the Board  
to discharge its duties, all Directors  
will receive appropriate and timely 
information. Briefing papers will be 
distributed to all Directors in advance  
of Board meetings. All Directors will 
have access to the advice and services 
of the Company Secretary, who will be 
responsible for ensuring that the Board 
procedures are followed and that 
applicable rules and regulations are 
complied with.
The Company has established Audit 
and Remuneration Committees of the 
Board with formally delegated duties 
and responsibilities. These two 
committees replace similar committees 
established by the subsidiary Manx 
Telecom Holdings Ltd.
I believe we have a Board that will 
support and challenge management  
to deliver its objectives.
As Chairman I would like to state my  
full commitment to maintaining high 
standards of corporate governance  
and to being transparent about our 
arrangements and intentions for future 
improvement. This report should be 
seen as a step towards these goals 
which will be further developed as  
the Company evolves.
Kevin Walsh
Chairman
Operation of the Board and  
its Committees
The role of the Board
On 3 February 2014 the Board approved 
a Schedule of Matters Reserved for the 
Board which sets out the Board’s 
responsibilities. The key tasks of the 
Board are:
• setting the Company’s values and 
standards;
• approval of the Group’s strategic 
aims and objectives;
• approval of operating and capital 
expenditure budgets;
• oversight of operations ensuring 
adequate systems of internal controls 
and risk management are in place, 
ensuring maintenance of accounting 
and other records and compliance 
with statutory and regulatory 
obligations;
• review of performance in light of 
strategy and budgets ensuring any 
necessary corrective actions are taken;
• approval of the financial statements, 
Annual Report and accounts, 
material contracts and major 
projects;
• approval of dividend policy;
• changes to structure, size and 
composition of the Board;
• determining remuneration policy for 
the Directors and senior executives 
and approval of the remuneration  
of the Non-Executive Directors;
• approval of communications with 
shareholders and the market. 33
Composition of the Board
Following Admission on 10 February 2014, 
the Board comprises five Directors, two 
of whom are Executive Directors, and 
three of whom are Non-Executive 
Directors, reflecting a blend of different 
experience and backgrounds. A majority 
of the Directors are resident on the Isle  
of Man. Notwithstanding the previous 
involvement which Sir Miles Walker has 
had with the Group, each Non-Executive 
Director is deemed independent for the 
purposes of the QCA Code. Details of 
each of the Directors’ experience and 
background is given in their biographies 
on pages 26 and 27.
Appointments to the Board  
and re-election
With regard to re-election of Directors  
the Company is governed by its Articles. 
Commencing with the Company’s first 
Annual General Meeting, and at each 
Annual General Meeting of the Company 
thereafter, one-third of the Directors who 
are subject to retirement by rotation or,  
if their number is not three or a multiple 
of three, the number nearest to but not 
exceeding one-third, shall retire from 
office. If there are fewer than three 
Directors who are subject to retirement 
by rotation, one Director shall retire from 
office. Under the Articles, the Board has 
the power to appoint a Director during 
the year but any person so appointed 
must stand for election at the next 
Annual General Meeting. Mike Dee will 
stand for re-election at the 2014 Annual 
General Meeting. 
Division of responsibilities
Chairman and Chief Executive Officer
The division of responsibilities between 
the Chairman and Chief Executive 
Officer has been agreed by the Board. 
Senior Independent Director
The Senior Independent Director is 
Jeffrey Hume who is available to 
shareholders as a communication 
channel if required.
Non-Executive Directors
The Non-Executive Directors’ letters of 
appointment set out the duties of the 
Director and commitment expected. 
Non-Executive Directors are appointed 
for an initial three-year term with typical 
tenure expected of two three-year 
terms, subject to re-election by 
shareholders. They are expected to 
commit to at least 24 days per annum  
to their role. Key elements of the 
Non-Executive Director’s role are:
• Strategy – Constructively challenge 
and develop proposals;
• Performance – Scrutinise the 
performance of management in 
meeting agreed goals and objectives 
and monitor reporting of 
performance;
• Risk – Non-Executive Directors should 
satisfy themselves on the integrity of 
financial information and that 
financial controls and systems of risk 
management are robust; and
• People – Determine appropriate 
levels of remuneration of Executive 
Directors and prime role in 
appointing Executive Directors and 
succession planning.
Development, information 
and support
The Directors are encouraged to attend 
training and continuing professional 
development courses as required.
The Finance Director, Gary Lamb, is also 
the Company Secretary and supports 
the Chairman in ensuring that the Board 
receive the information and support they 
need in order to carry out their roles.
Conflicts of interest
A process has been developed to 
identify any of the Directors’ potential or 
actual conflicts of interest. This includes 
declaring any new conflicts before the 
start of each Board meeting.
Performance evaluation
An internal performance evaluation of 
the Board and its Committees will be 
carried out in 2015 as a period of time 
over which the Board operates together 
needs to take place before any 
meaningful assessment can be made.
The Board Committees
Membership of the two Board 
Committees is composed of the 
Chairman and the two Non-Executive 
Directors. As such they are compliant 
with both the UK Corporate 
Governance and QCA Codes.
The roles of the Board Committees  
are set out below. Members of both 
Committees are authorised to obtain,  
at the Company’s expense, professional 
advice on any matter within their terms 
of reference and to have access to 
sufficient resources in order to carry out 
their duties.
The Role of the Audit Committee
Members of the Audit Committee
The Audit Committee consists entirely  
of independent Non-Executive Directors. 
The Chairman, Jeffrey Hume, has 
extensive financial experience and is a 
Fellow of both the Institute of Chartered 
Accountants and the Association of 
Corporate Treasurers.
Jeffrey Hume (Chairman)
Sir Miles Walker
Kevin Walsh
Duties
The Audit Committee has primary 
responsibility for monitoring the quality 
of internal controls and ensuring that the 
financial performance of the Group is 
properly measured and reported on. 
The main duties of the Audit Committee 
are set out in its Terms of Reference and 
include:
• to monitor the integrity of the financial 
statements of the Company, including 
its annual and interim reports;
• to review and challenge where 
necessary any changes to, and 
consistency of, accounting policies, 
whether the Company has followed 
appropriate accounting standards 
and made appropriate estimates 
and judgements, taking into account 
the views of the external auditor, the 
going concern assumption and all 
material information presented with 
the financial statements;
• to keep under review the 
effectiveness of the Company’s 
internal control systems (including 
financial, operational and compliance 
controls and risk management) and 
to review and approve the 
statements to be included in the 
annual report concerning internal 
controls and risk management;
• to review the internal audit 
programme;
• to consider and make 
recommendations to the Board, to 
be put to shareholders for approval 
at the Annual General Meeting, in 
relation to the appointment, 
reappointment and removal of the 
Company’s external auditor; 34 manx telecom plc annual report and accounts 2013 governance
corporate 
governance report
continued
• to oversee the relationship with the 
external auditor including approval of 
their remuneration, approval of their 
terms of engagement, assessment 
annually of their independence and 
objectivity taking into account relevant 
professional and regulatory 
requirements and the relationship 
with the auditor as a whole, including 
the provision of any non-audit 
services;
• to meet regularly with the external 
auditor and at least once a year, 
without any Executive Director or 
other member of management 
present to discuss any issues arising 
from the audit;
• to review and approve the annual 
audit plan and review the findings  
of the audit; and
• to review the Company’s 
arrangements for its employees  
and contractors to raise concerns  
in confidence about possible 
improprieties in financial reporting  
or other matters, the Company’s 
procedures for detecting fraud and the 
Company’s anti-bribery procedures.
External audit
The external auditors, KPMG Audit LLC, 
prepare an audit plan for their review  
of the full year and half year financial 
statements. The audit plan sets out the 
scope of the audit, areas to be targeted 
and audit timetable. This plan is 
reviewed and agreed in advance by  
the Audit Committee and the auditors 
present their report on their findings to 
the Audit Committee for discussion.
The Audit Committee monitors the 
relationship with the external auditor, 
KPMG Audit LLC, to ensure that auditor 
independence and objectivity are 
maintained. As part of its review the 
Committee monitors the provision of 
non-audit services by the external 
auditor. The breakdown of fees 
between audit and non-audit services  
is provided on page 50. The Audit 
Committee also assess the auditor’s 
performance. Having reviewed the 
auditor’s independence and 
performance the Audit Committee is 
recommending that KPMG Audit LLC be 
reappointed as the Company’s auditors 
at the next Annual General Meeting.
Internal audit
The Audit Committee monitors and 
reviews the scope, extent and 
effectiveness of the activity of the Internal 
Audit department. Reports from the 
Internal Audit Manager usually include 
updates on audit activities, progress of the 
audit plan, management action plans to 
address areas requiring improvement 
and the resource requirements of the 
Internal Audit department.
Accountability
Internal controls and risk 
management
The Company has in place a system  
of internal financial controls 
commensurate with its current size and 
activities, which is designed to ensure 
that the possibility of misstatement or 
loss is kept to a minimum. These 
procedures include the preparation  
of management accounts, forecast 
variance analysis and other ad hoc 
reports. There are clearly defined 
authority limits throughout the Group, 
including those matters which are 
reserved specifically for the Board. Risks 
throughout the Group are considered 
and reviewed on a regular basis. Risks 
are identified and mitigating actions put 
into place as appropriate. Principle risks 
identified are set out in the Strategic 
Report on page 21.
Financial and business reporting
The Board seeks to present a balanced 
and understandable assessment of the 
Groups’ position and prospects in all half 
year, final and price-sensitive reports 
and other information required to be 
presented by statute. 35
The Role of the Remuneration 
Committee
Members of the Remuneration 
Committee
The Committee consists entirely of 
independent Non-Executive Directors. 
Kevin Walsh (Chairman)
Jeffrey Hume
Sir Miles Walker
The Remuneration Committee will play 
an increasingly important role in 
ensuring that remuneration policy 
underpins strategy and the long-term 
visionary goals of the Company.
Duties
The Remuneration Committee will 
review the performance of the 
Executive Directors and take decisions 
relating to their remuneration. The 
Remuneration Committee will also 
make recommendations to the Board 
on proposals for the granting of share 
options and other equity incentives 
pursuant to any share option scheme 
or equity incentive scheme in operation 
from time to time.
The main duties of the Remuneration 
Committee are set out in its Terms of 
Reference and include:
• determining the framework or  
broad policy for the remuneration  
of the Company’s Chief Executive,  
the Executive Directors, the Company 
Secretary and such other members 
of the executive management as  
it is designated to consider. The 
remuneration of Non-Executive 
Directors shall be a matter for the 
Chairman and the executive 
members of the Board;
• reviewing the ongoing 
appropriateness and relevance of 
the remuneration policy;
• approving the design of, and 
determining targets for, any 
performance-related pay schemes;
• reviewing the design of all share 
incentive plans for approval by the 
Board and shareholders;
• determining the policy for, and scope 
of, pension arrangements for each 
Executive Director and other senior 
executives;
• determining the total individual 
remuneration package of each 
Executive Director and other senior 
executives including bonuses, 
incentive payments and share 
options or other share awards; and
• establishing the selection criteria, 
selecting, appointing and setting the 
terms of reference for any 
remuneration consultants who 
advise the Committee.
Relations with shareholders
The Board is committed to maintaining 
an ongoing communication with its 
shareholders. The Directors are keen  
to build a mutual understanding of 
objectives with its institutional 
shareholders. The Directors also 
encourage communications with private 
shareholders and encourage their 
participation in the Company’s Annual 
General Meeting. 
The Company uses its corporate 
website (www.manxtelecom.com)  
to communicate with institutional 
shareholders and private investors and 
contains the latest announcements, 
press releases, published financial 
information, current projects and other 
information about the Company.
The Annual Report and Accounts is a key 
communication document and is also 
available on the Company’s website. 
This years’ Annual General Meeting of 
the Company will be held on 30 June 
2014. A separate Notice of Annual 
General Meeting will be sent out at least 
20 working days before the meeting and 
will be available on the Company’s 
website at www.manxtelecom.com. 
Separate resolutions will be provided  
on each issue so that they can be given 
proper consideration. Proxy votes are 
counted and the level of proxies lodged 
on each resolution reported after it has 
been dealt with on a poll. 36 manx telecom plc annual report and accounts 2013 governance
The Directors are responsible for 
keeping proper accounting records  
that are sufficient to show and explain 
the Company’s transactions and 
disclose with reasonable accuracy at 
any time its financial position. They have 
general responsibility for taking 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 
preparing the Annual Report and the 
financial statements in accordance  
with applicable law and regulations.  
In addition, the Directors have elected  
to prepare the financial statements in 
accordance with International Financial 
Reporting Standards as adopted by 
the EU.
The financial statements are required to 
give a true and fair view of the state of 
affairs of the Group and Company and 
of the profit or loss of the Group for that 
period. In preparing these financial 
statements, the Directors are required to:
• select suitable accounting policies and 
then apply them consistently;
• make judgements and estimates that 
are reasonable and prudent;
• state whether they have been 
prepared in accordance with 
International Financial Reporting 
Standards 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 Company will continue  
in business.
statement of directors’ 
responsibilities
in respect of the annual report  
and the financial statements
The Directors are responsible for  
the maintenance and integrity of the 
corporate and financial information 
included on the Company’s website. 
Legislation governing the preparation 
and dissemination of financial 
statements may differ from one 
jurisdiction to another.
By order of the Board
Gary Lamb
Company Secretary
19 May 2014
Manx Telecom plc
Registered Office: 
33-37 Athol Street  
Douglas 
Isle of Man  
IM1 1LB
Company No: 005328V 37
Respective responsibilities  
of Directors and Auditor
As explained more fully in the Statement 
of Directors’ Responsibilities set out on 
page 36, the Directors are responsible 
for the preparation of financial 
statements that 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 
(APB’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 Group’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.
report of the independent auditors, KPMG audit llc
to the members of manx telecom plc (formerly trafford equityco limited)
We have audited the financial 
statements of Manx Telecom plc 
(formerly Trafford Equityco Limited) for 
the year ended 31 December 2013 which 
comprise the Consolidated Statement  
of Comprehensive Income, the 
Consolidated and Company Statements 
of Financial Position, the Consolidated 
and Company Statements of Changes in 
Equity and the Consolidated Statement 
of Cash Flows and the related notes. 
The financial reporting framework that 
has been applied in their preparation  
is applicable law and International 
Financial Reporting Standards as 
adopted by the EU (IFRSs).
This report is made solely to the 
Company’s members, as a body. Our 
audit work has been undertaken so 
that we might state to the Company’s 
members those matters we are 
required to state to it 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.
Opinion on the financial statements
In our opinion the financial statements:
• give a true and fair view of the state 
of the Group’s and Company’s affairs 
as at 31 December 2013 and of the 
Group’s profit for the year then 
ended; and
• have been properly prepared in 
accordance with IFRSs.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man 
IM99 1HN
19 May 2014         38 manx telecom plc annual report and accounts 2013 financial statements
consolidated statement of comprehensive income
for the year ended 31 december 2013
Note
2013 
£’000
Restated* 
2012 
£’000
Revenue 1.13 76,029 72,393
Cost of sales (30,836) (30,504)
Gross profit 45,193 41,889
Administrative expenses (29,742) (26,774)
Operating profit 4 15,451 15,115
 Adjusted EBITDA 27,450 24,610
 Depreciation and amortisation (9,326) (9,495)
 Adjusted operating profit 18,124 15,115
 Impairment of equipment (2,673) –
 Operating profit 15,451 15,115
Other income 47 667
Financial income 5 219 557
Financial expenses 5 (15,938) (13,305)
Unrealised profit on interest rate swaps 17(d) 585 127
Profit before tax 364 3,161
Taxation 6 – –
Profit for the year attributable to the owners of the Group 364 3,161
Other comprehensive income – items that will never be reclassified to profit or loss
Actuarial (losses) on defined benefit pension scheme 15 (9,100) (4,400)
Total comprehensive loss for the year attributable to the owners of the Group (8,736) (1,239)
* The restatement is detailed in note 25.
The Directors consider that all results are derived from continuing activities.
The notes on pages 43 to 65 form an integral part of these financial statements. 39
consolidated and company statements of financial position
as at 31 december 2013
Note
Group  
2013 
£’000
Restated* 
Group 
2012 
£’000
Company 
2013 
£’000
Restated* 
Company 
2012 
£’000
Non-current assets
Property, plant and equipment 7 62,622 64,882 – –
Goodwill 3 84,277 84,277 – –
Intangible assets 8 362 465 – –
Retirement benefit asset 15 – 1,400 – –
Investments in subsidiaries 9 – – 100 100
147,261 151,024 100 100
Current assets
Inventories 10 543 657 – –
Trade and other receivables 11 17,194 18,071 – –
Due from related parties 19 100 98 187 112
Interest rate swaps 17(d) 585 – – –
Cash and cash equivalents 12 13,506 10,350 – –
31,928 29,176 187 112
Current liabilities
Interest-bearing loans and borrowings 13 (957) (3,331) – –
Due to subsidiary 19 – – (2,119) (111)
Trade and other payables 14 (24,849) (26,665) – –
Interest rate swaps 17(d) – (413) – –
(25,806) (30,409) (2,119) (111)
Net current assets/(liabilities) 6,122 (1,233) (1,932) (13)
Non-current liabilities
Interest-bearing loans and borrowings 13 (115,690) (54,714) – –
Due to shareholders 19 (30,968) (84,090) – –
Retirement benefit liability 15 (6,400) – – –
(153,058) (138,804) –
Net assets/(liabilities) 325 10,987 (1,832) 101
Equity attributable to the owners of the Group and Company
Share capital 16 100 98 100 98
Retained earnings/(deficit) 225 10,889 (1,932) 3
Total equity 325 10,987 (1,832) 101
* The restatement is detailed in note 25.
The notes on pages 43 to 65 form an integral part of these financial statements.
These financial statements were approved by the Board of Directors and were signed on its behalf by:
   
Mike Dee  Gary Lamb 
Director   Director
19 May 2014 40 manx telecom plc annual report and accounts 2013 financial statements
consolidated statement of changes in equity
for the year ended 31 december 2013
Share 
capital 
£’000
Restated* 
Retained 
earnings 
£’000
Total  
equity 
£’000
Balance at 1 January 2012 95 12,114 12,209
Total comprehensive loss for the year
Profit for the year – 3,161 3,161
Other comprehensive income – (4,400) (4,400)
Total comprehensive loss for the year – (1,239) (1,239)
Transactions with owners of the Group, recorded directly in equity
Share-based payment transactions (note 22) – 14 14
Issue of shares (note 16) 3 – 3
Total contributions by and distributions to the owners of the Group 3 14 17
Balance at 31 December 2012 98 10,889 10,987
Balance at 1 January 2013 98 10,889 10,987
Total comprehensive loss for the year
Profit for the year – 364 364
Other comprehensive income – (9,100) (9,100)
Total comprehensive loss for the year – (8,736) (8,736)
Transactions with owners of the Group, recorded directly in equity
Share-based payment transactions (note 22) – 72 72
Issue of shares (note 16) 2 – 2
Dividend paid (note 23) – (2,000) (2,000)
Total contributions by and distributions to the owners of the Group 2 (1,928) (1,926)
Balance at 31 December 2013 100 225 325
* The restatement is detailed in note 25.
The notes on pages 43 to 65 form an integral part of these financial statements. 41
company statement of changes in equity
for the year ended 31 december 2013
Share 
capital 
£’000
Restated* 
Retained 
earnings 
£’000
Total  
equity 
£’000
Balance at 1 January 2012 95 (7) 88
Total comprehensive loss for the year
Loss for the year – (4) (4)
Total comprehensive loss for the year – (4) (4)
Transactions with the owners of the Company, recorded directly in equity
Share-based payment transactions (note 22) – 14 14
Issue of shares 3 – 3
Total contributions by and distributions to the owners of the Company 3 14 17
Balance at 31 December 2012 98 3 101
Balance at 1 January 2013 98 3 101
Total comprehensive loss for the year
Loss for the year – (7) (7)
Total comprehensive loss for the year – (7) (7)
Transactions with the owners of the Company, recorded directly in equity
Share-based payment transactions (note 22) – 72 72
Issue of shares 2 – 2
Dividend paid – (2,000) (2,000)
Total contributions by and distributions to the owners of the Company 2 (1,928) (1,926)
Balance at 31 December 2013 100 (1,932) (1,832)
* The restatement is detailed in note 25.
The notes on pages 43 to 65 form an integral part of these financial statements. 42 manx telecom plc annual report and accounts 2013 financial statements
consolidated statement of cash flows
for the year ended 31 december 2013
Note
2013 
£’000
Restated*  
2012 
£’000
Cash flows from operating activities
Profit for the year 364 3,161
Adjustments for:
 Depreciation of property, plant and equipment 7 9,188 9,368
 Amortisation of intangibles 8 137 127
 Impairment of property, plant and equipment 4 2,673 –
 Profit on disposal of property, plant and equipment 4 – (66)
 Pension charge 15 1,400 1,400
 Finance income 5 (219) (557)
 Finance expense 5 15,938 13,305
 Unrealised profit on fair value through profit or loss liability 17(d) (585) (127)
 Equity-settled share-based payments transactions 22 72 14
Changes in:
 Inventories 10 114 295
 Trade and other receivables 11 877 (4,503)
 Trade and other payables 14 (1,816) (140)
27,779 19,116
Net cash generated from operating activities 28,143 22,277
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 346 66
Purchase of property, plant and equipment 7 (9,947) (4,787)
Purchase of intangible assets 8 (34) (286)
Pension contributions 15 (2,600) (2,700)
Interest received 5 119 257
Net cash used in investing activities (12,116) (7,450)
Cash flows from financing activities
Proceeds from new borrowings 13 122,129 –
Transaction costs related to loans and borrowings 13 (6,209) –
Repayment of borrowings (62,261) (8,454)
Repayment of shareholder loans (43,844) (7,950)
Interest paid (20,686) (6,089)
Dividends paid 23 (2,000) –
Net cash used in financing activities (12,871) (22,493)
Net increase/(decrease) in cash and cash equivalents 3,156 (7,666)
Cash and cash equivalents brought forward 10,350 18,016
Cash and cash equivalents at 31 December 12 13,506 10,350
* The restatement is detailed in note 25.
The notes on pages 43 to 65 form an integral part of these financial statements. 43
notes
(forming part of the financial statements  
for the year ended 31 december 2013)
1 Accounting policies
Manx Telecom plc (the ‘Company’) is a company incorporated and domiciled in the Isle of Man in accordance with the Isle of Man 
Companies Act 2006. The Company, formerly Trafford Equityco Limited, changed its name on 3 February 2014 (see note 24).
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the ‘Group’).  
The parent company financial statements present information about the Company as a separate entity.
Basis of preparation
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards  
as adopted by the EU (‘IFRS’).
Restated comparatives
A number of adjustments have been made to those figures previously reported for the year ended 31 December 2012, as 
detailed in note 25 of these financial statements. All comparatives in these financial statements and related notes have been 
adjusted, where relevant, for these adjustments. The effect of these restatements is described in note 25.
Going concern
The consolidated financial statements have been prepared on the going concern basis. Maintaining revenue in core business 
and increasing revenues in off-island, broadband and data centre revenue streams has resulted in the Group achieving 
revenue growth of 5% at 31 December 2013 compared to December 2012. The Group maintains covenants with an average of 
54.5% implied headroom for interest cover and 26.9% implied headroom for net leverage in the year ending 31 December 2013 
(2012: 47% and 35.4%). Cash headroom has been an average of £4,000,000 in the year ending 31 December 2013 (2012: £9,000,000).
Forecasts and sensitivity analysis have been completed for the next three years which show with a sensitivity of 10% revenue 
reduction, the Group is able to meet cash funding requirements as they fall due.
As a result of the successful growth, admittance to the London Stock Exchange AIM stock market, and ongoing working capital 
facility, the Board believes the Group has adequate resources to continue in operational existence for the foreseeable future.
1.1 Measurement convention
The financial statements are prepared on the historical cost basis except where IFRS requires assets and liabilities to be stated 
at their fair value.
1.2 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and 
operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration 
potential voting rights that are currently exercisable. The acquisition date is the date on which control is transferred to the 
acquirer. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control 
commences until the date that control ceases. Losses applicable to the non-controlling interests in a subsidiary are allocated to 
the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance. The investment in 
subsidiaries are held at cost.
1.3 Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange 
rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet 
date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences 
arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms  
of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary 
assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency  
at foreign exchange rates ruling at the dates the fair value was determined.
1.4 Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and 
cash equivalents, amounts due to/from Group and related companies, loans and borrowings, and trade and other payables.
The Group initially recognises financial assets such as loans and receivables and deposits on the date that they are originated. 
All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade 
date at which the Group becomes a party to the contractual provisions of the instrument. 44 manx telecom plc annual report and accounts 2013 financial statements
notes  
continued
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers 
the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and 
rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or 
retained by the Group is recognised as a separate asset.
The Group initially recognises financial liabilities such as payables and liabilities designated at fair value through profit or loss  
on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when the contractual obligations to the cash flows from the asset relating to the 
liability expire, or it transfers the obligations to pay the contractual cash flows on the financial asset in a transaction in which 
substantially all the risks and rewards of ownership of the financial liability are transferred. Any interest in transferred financial 
liabilities that is created or retained by the Group is recognised as a separate liability.
Trade and other receivables
Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are measured at 
amortised cost using the effective interest method, less any impairment losses.
Trade and other payables
Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised 
cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial 
recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method.
1.5 Derivative financial instruments and hedging
Derivative financial instruments
Derivative financial instruments are recognised at fair value and classified as held for trading. The gain or loss on 
remeasurement to fair value is recognised immediately in profit or loss.
1.6 Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation and accumulated impairment losses except for  
land and buildings which have been revalued to fair value. Any gain arising on the remeasurement of land and buildings is 
recognised in profit or loss to the extent that it reverses a previous impairment loss on the specific property, with any remaining 
gain recognised in other comprehensive income and presented in the revaluation reserve. The cost of property, plant and 
equipment includes directly attributable incremental costs incurred in their acquisition and installation.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when  
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be 
measured reliably.
Depreciation is provided on property, plant and equipment from the date they are brought into use, in equal instalments over 
their estimated useful lives. The lives assigned to property, plant and equipment are:
• Facilities (including property) 40 years
• Network assets 5 to 20 years
• Plant and machinery 4 to 10 years
• Computers, software and office equipment 3 to 10 years
• Motor vehicles 7 years
No depreciation is provided on freehold land or assets in course of construction. Where there is evidence of impairment, fixed 
assets are written down to recoverable amounts. Any such write down is charged to operating profit as an impairment loss 
and separately disclosed if material. Each year an asset re-life exercise is undertaken to ensure the fair value is the same as 
the carrying value.
Gains and losses on disposal of an item of property, plant and equipment are recognised within the statement of 
comprehensive income. When revalued assets are sold, the amounts included within the revaluation reserve are transferred 
to retained earnings.
1 Accounting policies continued 45
1.7 Business combinations
All business combinations are accounted for by applying the acquisition method. Business combinations are accounted for 
using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group.
The Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests in the acquiree; plus
• the fair value of the existing equity interest in the acquiree; less
• the net recognised amount (fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in the statement of comprehensive income.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is 
classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the 
fair value of the contingent consideration are recognised in profit or loss.
1.8 Intangible assets and goodwill
Goodwill
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not 
amortised but is tested annually for impairment by completing a goodwill assessment at the reporting date. In respect of equity 
accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment in the investee.
Other intangible assets
Software
Non-current assets which incorporate both tangible and intangible elements are assessed to determine whether they should 
be classed as an intangible asset or as property, plant and equipment. The treatment is determined by an assessment of 
which element is more significant.
Acquired software is capitalised on the basis of the costs incurred to acquire and bring into use the specific software. These 
costs are amortised over their estimated useful lives of three to five years. Amortisation is charged to cost of sales in the 
statement of comprehensive income.
Domain names
Domain names are not amortised but are assessed for impairment on an annual basis.
1.9 Inventories
Inventories mainly comprise items of equipment held for sale or rental and consumable items. They are stated at the lower  
of cost, including appropriate overheads, and estimated net realisable value. Where necessary, provision is made for obsolete, 
slow moving and defective inventories. Inventories are shown net of any provisions made.
1.10 Impairment excluding inventories
Financial assets
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there 
is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has 
occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash 
flows of that asset that can be estimated reliably.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its 
carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest 
rate. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent 
event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.
Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than inventories, are reviewed at each reporting date to 
determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount  
is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the 
recoverable amount is estimated each year at the same time.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. 
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate 
that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of 
1 Accounting policies continued 46 manx telecom plc annual report and accounts 2013 financial statements
notes  
continued
impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that 
generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets 
(the ‘cash-generating unit’). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated 
to cash-generating units, or (‘CGUs’) where appropriate.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. 
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to 
reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets 
in the unit (group of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior 
periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment 
loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is 
reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been 
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
1.11 Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Group pays fixed contributions into a separate 
entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined 
contribution pension plans are recognised as an expense in the income statement in the periods during which services are 
rendered by employees.
Employee benefits – pension obligations
A defined benefit scheme is a pension scheme that sets the amount of pension benefit that an employee will receive on 
retirement, usually dependent on one or more factors such as age, years of service and compensation.
The Group operates two pension arrangements. The Manx Telecom Trading Limited (formerly Manx Telecom Limited (see 
note 9)) Combined Pension Scheme is a defined benefit scheme and the Manx Telecom Employee Retirement Plan is a defined 
contribution plan.
The assets of the schemes are held independently of the Group’s finances.
The asset or liability recognised in the statement of financial position in respect of the defined benefit pension plan is the 
present value of the defined benefit obligation at the period end date less the fair value of plan assets.
The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The 
present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest 
rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have 
terms to maturity approximating to the terms of the related pension liability.
In accordance with IAS 19 ‘Employee benefits’, the Group recognises the full assets and liabilities of its defined benefit pension 
scheme in the statement of financial position. Remeasurements of the net defined benefit asset/liability are recognised 
immediately in other comprehensive income.
For the defined contribution plan, the Group pays fixed contributions to a privately administered pension plan on behalf of 
employees. The Group has no further payment obligations once the contributions have been paid. The contributions are 
recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent 
that a cash refund or a reduction in the future payments is available.
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is 
provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the 
Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee 
and the obligation can be estimated reliably.
Share-based payments – equity-settled
The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with 
a corresponding increase in equity. The amount recognised as an expense is adjusted to reflect the number of awards for 
which the related service and non-market performance conditions are expected to be met, such that the amount ultimately 
recognised as an expense is based on the number of awards that meet the related service and non-market performance 
conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the 
share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and 
actual outcomes.
1 Accounting policies continued 47
1.12 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable 
that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.
1.13 Revenue
Revenue, which excludes value added tax and other sales taxes, comprises of the value of services provided, equipment sales 
and other revenue.
Revenue is recognised on a gross basis where the Group’s role is that of principal in a transaction. The gross basis represents 
the gross value of the billing to the customer after trade discounts, with any related costs being charged to operating expenses. 
Where the Group acts as agent in a transaction, the net revenue earned is recognised as revenue.
Revenue from calls is recognised once the call is made over the Groups’ network regardless of whether the customer pays in 
advance or is billed in arrears. Prepayments made by customers are recorded in deferred income and recognised in revenue 
as and when usage occurs.
Inbound roaming revenue, earned from other mobile operators whose customers roam onto the Group’s network, and 
outbound roaming revenue, earned from customers roaming outside their domestic coverage area, is recognised upon usage.
Subscription fees are recognised evenly throughout the periods to which they relate. Hardware revenue principally consists of 
revenue from the sale of wireless mobile devices. The revenue associated with the sale of wireless handsets and accessories 
is recognised when the products are delivered and accepted by the customer. The amount of revenue recognised is the value 
of the cash received from the sale.
Other revenue comprises managed services and equipment sales. All revenue is recognised when the goods and services 
have been provided and accepted by the customer. The value recognised for equipment sales is the value of the cash received 
from the sale. Managed service revenues are recognised in the period to which they relate.
1.14 Expenses
Operating expenses
Operating expenses are recognised on an accruals basis.
Operating lease payments
Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating 
leases. Rentals under operating leases are charged to the statement of comprehensive income in equal annual instalments 
over the periods of the leases.
Finance lease payments
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The 
finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the 
remaining balance of the liability.
Financing income and expenses
Financing expenses comprise interest payable, loan repayment fee costs, finance charges on shares classified as liabilities and 
finance leases recognised in profit or loss using the effective interest method, unwinding of the discount on provisions, and net 
foreign exchange losses that are recognised in the income statement (see note 1.3).
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a substantial 
time to be prepared for use are capitalised as part of the cost of that asset.
Loan arrangement fees are capitalised and amortised over the loan term.
Finance income comprises interest receivable on funds invested, dividend income, and net foreign exchange gains. Interest 
income and interest payable is recognised in profit or loss as it accrues, using the effective interest method. Dividend income is 
recognised in the income statement on the date the entity’s right to receive payments is established. Foreign currency gains and 
losses are reported on a net basis.
1 Accounting policies continued 48 manx telecom plc annual report and accounts 2013 financial statements
notes  
continued
1.15 New currently effective requirements and forthcoming requirements
The following effective standards have been adopted in the year and the financial statements have incorporated them 
accordingly:
IAS 1 Presentation of Items of Other Comprehensive Income
IAS 19 Employee Benefit (revised)
IFRS 7 Offsetting
IFRS 8 Operating segments (not previously adopted by the Group)
IFRS 13 Fair Value Measurement
The following forthcoming IFRS requirements have been issued and are available for early adoption but are not yet effective. 
Their adoption is not expected to have a material effect on the financial statements:
Amendments/improvements EU effective date
IFRS 10 & 
IAS 27
Consolidated Financial Statements 
IAS 27 (2011) Separate Financial Statements
1 January 2014
IFRS 11 Joint Arrangements 1 January 2014
IFRS 12 Disclosure of Interests in Other Entities 1 January 2014
IAS 27 Separate Financial Statements 1 January 2014
IAS 28 Investments in Associate and Joint Ventures (2011) 1 January 2014
IAS 32 Offsetting Financial Assets and Financial Liabilities  
– Amendments to IAS 32
1 January 2014
IAS 36 Recoverable amount disclosures for non-financial assets  
– Amendments to IAS 36
Not yet endorsed, IASB effective date 
1 January 2014
1.16 Government grants
Government grants are recognised where there is a reasonable assurance that the grant will be received and all attached 
conditions complied with. When the grant relates to an expense item, it is recognised as income over the period necessary to 
match the grant on a systematic basis to the costs that it is intended to compensate.
Where the grant relates to an asset, it is recognised as a reduction in the carrying amount of the asset. The grant is then 
recognised as income over the useful life of a depreciable asset by way of a reduced depreciation charge.
1.17 Subscriber acquisition costs
Subscriber acquisition costs, which include the commission costs associated with acquiring new subscribers and other 
incremental costs of customer acquisition, are charged to the statement of comprehensive income as incurred.
1.18 Accounting estimates and judgements
Management consider the key estimates and judgements used in the preparation of these financial statements to be:
• Recoverability of receivables (for further details on credit risk see note 17).
• Pension scheme assumptions used in the actuarial valuation prepared by independent actuaries Tower Watson for the 
financial year ended 31 December 2013 (and 31 December 2012). During 2011 the Isle of Man Government confirmed the use of 
CPI as the base index for pension scheme increases where the scheme provisions make direct reference to UK (as opposed 
to Isle of Man) statutory pension increase provisions. After taking legal advice, the trustees made the decision to reference 
CPI for pension increases in deferment for all sections, reference CPI for A/B section pension increases and reference RPI for 
section C pension increases.
• Impairment of non-financial assets such as goodwill. Key estimates and judgements have been used to determine the 
discount factor of 30% on the PE ratio used to calculate the fair value of Manx Telecom Trading Limited (formerly Manx 
Telecom Limited (see note 9)) to ensure goodwill is not impaired.
• A number of the Group’s accounting policies and disclosures require the measurement of fair values for both financial and 
non-financial assets and liabilities. Further information about the fair value assumptions are included in the following notes:
• Note 7 – Property, plant and equipment
• Note 17 – Financial instruments (derivative financial instruments)
• Note 22 – Share-based payment – equity-settled
1 Accounting policies continued 49
2 Operating segments
The Group has five reportable revenue segments which management report on and base their strategic decisions on:
Group 
2013 
£’000
Group 
2012 
£’000
Fixed line, broadband and data 30,985 30,310
Mobile 19,195 19,165
Off-Island 13,576 10,799
Data Centre 6,461 5,539
Other 5,812 6,580
76,029 72,393
The segmental analysis shows revenue classified according to market source. However, the Group is not structured on  
a divisional basis and has functional departments, processes, assets and obligations which serve each of these revenue 
streams. These are not allocated in the financial reports received by the Board and its decisions are not routinely based on  
any such identification. Consequently the analysis shown above does not extend to any segmentation of profits and net assets. 
The amounts reported are based on the financial information used to prepare the consolidated financial statements.
There is no inter-segmental trading.
The products and services included within each of the five segments are as follows:
Fixed line, broadband and data includes revenues from ADSL and VDSL rental and connection charges, fixed line call charges, 
fixed line rental and connection charges, and private circuit rental and connection charges.
Mobile includes revenues from mobile calls, SMS and data charges, mobile rental charges, mobile handset and accessory 
sales, and roaming.
Off-island includes revenues from mobile termination, products such as Chameleon, strongest signal mobile and M2M 
(machine to machine).
Data centre includes revenues from hosting services provided.
Other includes kit sales, directory revenues and managed service rental charges.
3 Goodwill – Group
Cost £’000
Balance at 1 January 2012 84,277
Additions during the year –
Balance at 31 December 2012 84,277
Additions during the year –
Balance at 31 December 2013 84,277
Carrying amount
As at 31 December 2013 84,277
As at 31 December 2012 84,277
On 29 June 2010, the Group acquired all of the ordinary shares in Manx Telecom Trading Limited (previously Manx Telecom 
Limited) for £133,800,000 satisfied in cash.
Goodwill is deemed to have an indefinite life and so is not subject to amortisation. An impairment review was undertaken  
as at the reporting date to determine whether any impairment has occurred. Upon review, the Board deemed that no 
impairment was necessary (2012: nil).
The cash-generating unit of the Group is considered to be the operations of Manx Telecom Trading Limited in its entirety due  
to the structure of the Company, which operates as one telecommunications business. Goodwill is considered to be impaired 
if the carrying amount exceeds the recoverable amount. 50 manx telecom plc annual report and accounts 2013 financial statements
notes  
continued
In 2013 the Group has used the enterprise value methodology to determine the fair value of Manx Telecom Trading Limited.  
An enterprise value multiple was estimated by management based on similar publicly traded telecommunications enterprise 
value multiples, adjusted for Manx Telecom’s business model and discounted by 30%. This calculation also used earnings based 
on the last 12 months’ rolling EBITDA. Using this methodology fair value less costs to sell were considered to be higher than the 
total asset value, therefore no impairment is required.
4 Operating profit
The operating profit/(loss) is stated after charging/(crediting) the following:
2013 
£’000
2012 
£’000
Staff costs 14,691 14,391
Depreciation of property, plant and equipment – owned assets 9,188 9,368
Amortisation of software licences – intangibles 137 127
Impairment of property, plant and equipment 2,673 –
Profit on disposal of property, plant and equipment – (66)
Net operating lease rentals payable – property 167 475
Trade receivables impairment 225 322
Audit services – statutory audit 84 98
  – non-audit service fees 165 2
5 Finance income and expense
Recognised in profit or loss
2013 
£’000
Restated* 
2012 
£’000
Finance income
Other interest receivable 119 257
Net interest on net pension asset 100 300
219 557
Financial expense
Interest on shareholder loan notes (3,928) (8,450)
Interest on borrowings (7,064) (4,040)
Finance lease interest (3) –
Amortisation of loan transaction costs (672) (815)
Release of capitalised transaction costs (3,301) –
Refinancing costs (970) –
Total financial expense (15,938) (13,305)
Net total finance expense (15,719) (12,748)
* The restatement is detailed in note 25.
In May 2010 Hg Capital LLP acquired Manx Telecom Trading Limited (formerly Manx Telecom Limited (see note 9)) and as a 
result the Group obtained bank debt and incurred financing costs of £5,341,000. These costs were capitalised.
The debt was subsequently repaid as a result of refinancing in April 2013. The remaining unamortised financing costs have 
been charged to the Consolidated Statement of Comprehensive Income in 2013. Refinancing costs incurred in 2013 of £5,239,115 
have been capitalised.
6 Taxation
The Company’s profits are charged at the Isle of Man standard rate of 0% for 2013 (2012: 0%). Therefore no provision has been 
made for taxation for 2013 (2012: £nil). Whilst the Group is required to apply Isle of Man Retail Tax to Isle of Man retail activity, 
profits from this revenue stream are not substantial enough to meet the taxable threshold.
3 Goodwill – Group continued 51
7 Property, plant and equipment – Group
Land and 
buildings 
£’000
Plant and 
equipment 
£’000
Under 
construction 
£’000
Total 
£’000
Cost
Balance at 1 January 2012 32,469 111,235 7,832 151,536
Additions – – 4,787 4,787
Transfer 608 5,704 (6,312) –
Disposals (94) (3,743) – (3,837)
Balance at 31 December 2012 32,983 113,196 6,307 152,486
Balance at 1 January 2013 32,983 113,196 6,307 152,486
Additions – – 9,947 9,947
Transfer 1,035 4,853 (5,888) –
Disposals – (2,347) – (2,347)
Impairment – (26,928) – (26,928)
Balance at 31 December 2013 34,018 88,774 10,366 133,158
Depreciation and impairment
Balance at 1 January 2012 6,581 75,492 – 82,073
Depreciation charge for the year 1,287 8,081 – 9,368
Disposals (94) (3,743) – (3,837)
Balance at 31 December 2012 7,774 79,830 – 87,604
Balance at 1 January 2013 7,774 79,830 – 87,604
Depreciation charge for the year 1,294 7,894 – 9,188
Disposals – (2,338) – (2,338)
Impairment – (23,918) – (23,918)
Balance at 31 December 2013 9,068 61,468 – 70,536
Net book value at 31 December 2013 24,950 27,306 10,366 62,622
Net book value at 31 December 2012 25,209 33,366 6,307 64,882
A formal independent valuation of the four main properties has been undertaken by Dean Wood Estate Agents on  
17 December 2013. This has confirmed that the current net book value is considered to be the same as the fair value of the  
land and buildings. During 2013 the Board agreed the implementation of 4G. As such, the 2G and 3G assets were fully impaired 
although remain operational.
No revaluation was carried out in 2012 as in the opinion of the Directors there were no significant changes to the carrying value 
of the property, plant and equipment and there were no indicators of impairment, subsequent to the last formal valuation 
performed during 2011.
The carrying value of land and buildings held under the revaluation model is the same as if it were held under the historical 
cost model.
The accounting policies set out in note 1.6 are applicable to assets under construction and the capital commitments in respect 
of assets under construction are detailed in note 21. 52 manx telecom plc annual report and accounts 2013 financial statements
notes  
continued
8 Intangible assets – Group
Domain 
names 
£’000
Computer 
software 
£’000
Total 
£’000
Cost
Balance at 1 January 2012 – 1,039 1,039
Additions 109 177 286
Balance at 31 December 2012 109 1,216 1,325
Balance at 1 January 2013 109 1,216 1,325
Additions – 34 34
Balance at 31 December 2013 109 1,250 1,359
Amortisation and impairment
Balance at 1 January 2012 – (733) (733)
Amortisation for the year – (127) (127)
Balance at 31 December 2012 – (860) (860)
Balance at 1 January 2013 – (860) (860)
Amortisation for the year – (137) (137)
Balance at 31 December 2013 – (997) (997)
Net book value at 31 December 2013 109 253 362
Net book value at 31 December 2012 109 356 465
The domain names were acquired on 1 March 2012. The Directors have considered the carrying value of the assets at  
31 December 2013 and in their opinion there are no indicators of impairment as the revenue base is maintained.
9 Investments in subsidiaries – Company
The Company has the following investments in its subsidiaries:
Company Holding Principal activity
Country of 
incorporation
Class of 
shares held
Ownership 
2013
Ownership 
2012
Trafford Shareholder Debtco Limited Direct Holding company Isle of Man Ordinary 100% 100%
Trafford Midco Limited Indirect Holding company Isle of Man Ordinary 100% 100%
Manx Telecom Holdings Limited Indirect Holding company Isle of Man Ordinary 100% 100%
Manx Telecom Trading Limited Indirect Telecommunications provider Isle of Man Ordinary 100% 100%
Manx Telecom Limited changed its name on 3 February 2014 to Manx Telecom Trading Limited.
10 Inventories – Group
Group 
2013 
£’000
Group 
2012 
£’000
Raw materials and consumables 50 31
Work in progress 121 51
Finished goods 372 575
543 657
11 Trade and other receivables – Group
Group 
2013 
£’000
Group 
2012 
£’000
Amounts falling due within one year:
Trade receivables 7,391 6,370
Less provisions for impairment of receivables (491) (762)
Trade receivable – net 6,900 5,608
Other trade receivables 6,486 8,859
Prepayments 1,539 1,580
Accrued income 2,269 2,024
17,194 18,071 53
The movement in the trade receivables provision for doubtful debts during the year is as follows:
£’000
Doubtful debt provision at 1 January 2012 440
Additions 322
Reductions/amount paid –
Doubtful debt provision at 31 December 2012 762
Additions –
Reductions/amount paid (271)
Doubtful debt provision at 31 December 2013 491
Additions and reductions in the provision are recognised in administration costs within the Statement of Comprehensive Income.
12 Cash and cash equivalents – Group
Group 
2013 
£’000
Group 
2012 
£’000
Cash held at bank 13,506 10,350
13 Interest-bearing borrowings – Group
This note provides information about the contractual terms of the Group’s interest-bearing bank loans and borrowings, which 
are measured at amortised cost. For more information about the Group’s exposure to interest rate and liquidity risk, see note 17.
Group 
2013 
£’000
Restated* 
Group 
2012 
£’000
Non-current liabilities
Finance lease liability 129 –
Secured bank loans 115,561 54,714
115,690 54,714
Current liabilities
Current portion of secured bank loans 957 3,331
116,647 58,045
* The restatement is detailed in note 25.
The secured PIK notes are interest bearing at 10%. These have been included in ‘due to shareholders’ (note 19).
Terms and debt repayment schedule
Currency
Nominal 
interest 
rate 
% Date of maturity
Carrying 
amount 
2013 
£’000
Restated* 
Carrying 
amount 
2012 
£’000
Finance lease GBP 2.92 31 July 2018 129 –
Senior debt (GE Ares) GBP 6.500 25 March 2019 121,085 –
Senior facility term A GBP 4.600 30 June 2016 – 19,686
Senior facility term B GBP 5.518 29 June 2017 – 41,660
Unamortised finance costs GBP (4,567) (3,301)
116,647 58,045
* The restatement is detailed in note 25.
Facility agreement
The Group’s third party debt existing as at 31 December 2013 consisted of £121,085,000 senior term and £5,000,000 revolving 
facilities agreement arranged by GE Corporate Finance Bank SAS and with GE Corporate Finance Bank SAS, London Branch 
as agent and security agent and entered into on 19 March 2013 (the ‘Agreement’).
The Agreement provides for two tranches: (i) a term loan tranche (the ‘Term Loan’) and (ii) a revolving loan tranche (the ‘Revolver’).
11 Trade and other receivables – Group continued 54 manx telecom plc annual report and accounts 2013 financial statements
notes  
continued
The main purpose of the Agreement was to refinance the Group’s then existing third party debt entered into in 2010. Amounts 
drawn under the Revolver have also been used for general corporate purposes and working capital purposes of the Group.
The opening interest rate applicable to drawn amounts under the Term Loan is the applicable interbank offer rate plus a 
margin of 6.5% p.a. and, under the Revolver, the applicable interbank offer rate plus a margin of 4.5% p.a.
The Agreement also contains certain undertakings (including limitations on capital expenditure), guarantees and covenants 
(including financial covenants based on the ratio of total net debt to EBITDA, the ratio of net finance charges to EBITDA and cash 
flow cover) and provides for certain events of default.
As detailed in note 24 of these financial statements, subsequent to the year, and following the admission of shares to AIM, the 
Group refinanced existing debt via a new facility as detailed in that note.
Transaction costs incurred as part of the Group’s refinancing of existing debt are amortised over the period of the loan. As a 
result, in 2013 transaction costs of £5,200,000 were capitalised and amortised over the loan period.
Facility agreement existing in prior periods
As part of financing the acquisition of Manx Telecom Trading Limited (formerly Manx Telecom Limited), a consortium of banks 
lent the Group a total of £80m (comprising of loan 1 and 2) plus an agreed £5.0m facility. The outstanding amount of £19.7m of 
loan 1 (2012: £5.2m) and £41.7m of loan 2 (2012: £3.2m) were repaid during the year and have therefore been fully repaid.
In an attempt to mitigate the Group’s exposure to interest rate risk, the Group entered into three interest swap agreements 
with the banks. See note 17(d) for further details.
Transaction costs incurred as part of the debt financing are amortised over the period of the loan. As a result, in 2010 the 
transaction costs of £5,300,000 were capitalised and amortised over the loan period. Due to the refinancing in April 2013, the 
unamortised transaction costs of £3,301,000 were released into the Consolidated Statement of Comprehensive Income.
14 Trade and other payables – Group
Group 
2013 
£’000
Group 
2012 
£’000
Current
Trade payables 4,981 3,106
Other taxation and social security 4,212 3,332
Other payables 4,376 3,284
Accrued expenses 8,605 14,522
Deferred income 2,675 2,421
24,849 26,665
The contractual, undiscounted payments of the Company’s financial liabilities are equivalent to the carrying value.
15 Retirement benefit obligations – Group
The Group operates two pension schemes. The Manx Telecom Limited Combined Pension Scheme is a defined benefit 
scheme that is closed to new entrants and the Manx Telecom Employee Retirement Plan is a defined contribution plan.
The Manx Telecom Limited Combined Pension Scheme (the ‘Scheme’) provides benefits based on final pensionable salary. The 
assets of the Scheme are managed by independent Trustees and are held separately from those of the Group with a Legal & 
General managed portfolio and also with cash deposits.
The Isle of Man does not have minimum funding requirements. The only requirement is for a Schedule of Contributions, agreed 
between the Company and the Trustees, to be put in place after each actuarial valuation that is deemed by the Actuary to be 
sufficient to cover any shortfall revealed by the triennial actuarial valuation.
Under the projected unit method the current service cost will increase as the members of the Scheme approach retirement.
The contributions relating to the Scheme have been assessed in accordance with the advice of independent qualified actuaries 
and are funded by the Group. Independent actuarial valuations are carried out on a triennial basis by Towers Watson 
(formerly Watson Wyatt LLP), Actuaries and Consultants. The last such full valuation was carried out at 31 March 2010 and in 
accordance with IAS 19 the defined benefit liabilities have been measured using the ‘projected unit method’.
13 Interest-bearing borrowings – Group continued 55
The Group paid contributions of £2,200,000 (2012: £2,300,000) together with employee contributions of £400,000 (2012: £400,000) 
to the Manx Telecom Combined Pension Scheme for the financial year ended 31 December 2013.
With effect from 1 October 2009 the Scheme changed to a career average revalued earnings basis for benefits earned from 
that date. Members had the option of choosing between a normal retirement age of 62 with an 8% employee contribution 
rate, or a normal retirement age of 65 with a 6% employee contribution rate. No changes were made to benefits earned 
before 1 October 2009.
The actuarial valuation of the Manx Telecom Limited Combined Pension Scheme as at 31 March 2010 has been updated to  
31 December 2013. Scheme assets are stated at fair value.
The main assumptions adopted for the Scheme under IAS 19 (per annum) are as follows:
2013 
%
2012 
%
Nominal rate of increase for in-payment benefits 2.55-3.20 2.10-2.90
Nominal rate of increase for deferred benefits 2.55 3.00
Discount rate 4.65 4.80
Retail Price Index (RPI) 3.55 3.20
Consumer Price Index (CPI) 2.55 2.20
Rate of salary increase 4.55 4.10
During 2011 the Isle of Man Government confirmed the use of CPI as the base index for pension scheme increases where the 
scheme provisions make direct reference to UK (as opposed to Isle of Man) statutory pension increase provisions. After taking 
legal advice, the trustees made the decision to reference CPI for pension increases in deferment for all sections, reference CPI 
for A/B section pension increases and reference RPI for section C pension increases.
The risks associated with the actuarial assumptions include longevity, inflation, interest rate and market (investment) risks.  
The Scheme is not exposed to any unusual, entity or scheme specific risks.
The Scheme holds a large proportion of equities which are expected to outperform bonds in the long term but give exposure 
to volatility and risk in the short term. The Trustees are responsible for investment strategy, and a reasonable proportion of 
equity investment is justified, given the time horizon of the Scheme and to provide a reasonable long-term return. If equities 
were to fall by 20%, the pension liability would increase by approximately £5,800,000 to £12,200,000.
However, a fall in equity prices would be associated with a fall in the value of corporate bonds and a rise in corporate bond 
yields. The former would lead to a further reduction in scheme assets, just under £11,000,000 of which were invested in 
corporate bonds at 31 December 2013. However, the increase in corporate bond yields, which are used to determine the value 
of the defined benefit obligation would lead to a reduction in liabilities, which would partially or wholly offset the impact of the 
fall in asset values on the reported pension liability.
Sensitivity analysis on significant actuarial assumptions
The table below illustrates the impact on the financial statements that certain changes in the actuarial assumptions would have.
31 December 2013
Mortality 
–1 year 
£’000
Discount 
rate 
+1% 
£’000
Inflation 
(including 
CPI and 
salary) 
+0.5% 
£’000
Real salary 
escalation 
+0.25% 
£’000
CPI inflation 
only 
+0.25% 
£’000
Balance sheet deficit +1,800 –13,000 +6,700 +800 +1,400
Net benefit expense +100 –100 +500 – –
Service cost – –300 +200 – –
Net interest cost +100 –700 +300 – –
15 Retirement benefit obligations – Group continued 56 manx telecom plc annual report and accounts 2013 financial statements
notes  
continued
The amounts recognised in the statement of comprehensive income in respect of defined benefit obligation for the year ended 
31 December 2013 are as follows:
2013 
£’000
Restated* 
2012 
£’000
Analysis of the amount charged to profit or loss:
Current service cost 1,400 1,400
Past service cost – –
Net interest income (100) (300)
Total charged in profit before tax 1,300 1,100
* The restatement is detailed in note 25.
Analysis of the amount recognised in other comprehensive income:
2013 
£’000
Restated* 
2012 
£’000
Actuarial loss due to liability experience 3,300 –
Actuarial loss due to liability assumption changes 7,600 4,600
Actuarial loss arising during the period 10,900 4,600
Return on Scheme assets greater than discount rate (1,800) (200)
Remeasurement effects recognised in other comprehensive income (9,100) (4,400)
* The restatement is detailed in note 25.
The pension assets and liabilities recognised in the statement of financial position are as follows:
2013 
£’000
% of total 
fair value 
of scheme 
assets 
31 Dec 2013 
%
2012 
£’000
% of total 
fair value 
of scheme 
assets 
31 Dec 2012 
%
Fair value of assets:
 – Equities 29,300 43.8 27,600 44.6
 – UK Government bonds 37,200 55.7 34,000 54.9
 – Other bonds – 0.0 – 0.0
 – Other 300 0.5 300 0.5
Fair value of assets 66,800 61,900
Present value of defined benefit obligations (73,200) (60,500)
Net (liability)/asset recognised in the balance sheet (6,400) 1,400
Deferred tax assets – –
Net pension (deficit)/surplus (6,400) 1,400
Analysis of the movement in the statement of financial position
Movements in the present value of defined benefit obligations in the current period were as follows:
2013 
£’000
2012 
£’000
At start of year 60,500 53,600
Current service cost 1,400 1,400
Interest cost 2,900 2,800
Actuarial loss due to liability experience 3,300 –
Actuarial loss due to liability assumption changes 7,600 4,600
Benefits paid from scheme assets (2,500) (1,900)
At end of year 73,200 60,500
15 Retirement benefit obligations – Group continued 57
Movements in the fair value of scheme assets in the current and preceding year were as follows:
2013 
£’000
Restated*  
2012 
£’000
At start of year 61,900 57,800
Interest income on scheme assets 3,000 3,100
Return on scheme assets excluding interest income 1,800 200
Contributions 2,600 2,700
Benefits paid (2,500) (1,900)
At end of year 66,800 61,900
* The restatement is detailed in note 25.
A summary of the Manx Telecom Limited Combined Pension Scheme is as follows:
2013 
£’000
2012 
£’000
Total fair value of assets 66,800 61,900
Present value of scheme liabilities (73,200) (60,500)
(Deficit)/surplus in the scheme (6,400) 1,400
The defined benefit scheme’s impact on the Group’s future cash flows is affected by:
• Funding policy and arrangements – the Isle of Man does not have minimum funding requirements. A Schedule of 
Contributions is agreed between the Company and the Trustees and put in place following each successive actuarial 
valuation that is deemed by the actuary to be sufficient to cover any shortfall revealed by the triennial valuation.
• Contributions to the Scheme for the next annual reporting period – expected employer contributions for the year ended  
31 December 2014 are £2,500,000 and expected benefit payments from Scheme assets are £2,200,000.
• Timing of benefit payments and duration of the defined benefit obligation – the weighted average duration of the defined 
benefit obligation is 23.5 years and benefit payments are expected as set out in the below maturity profile.
Expected benefit payments during annual reporting period ended: £’000
31 December 2014 2,200
31 December 2015 2,500
31 December 2016 2,700
31 December 2017 2,900
31 December 2018 3,100
31 December 2019 through 31 December 2023 18,500
Defined contribution plan
The Manx Telecom Employee Retirement Plan is a defined contribution pension scheme, which operates for employees who 
commenced employment after 1 July 2002. The assets of the Scheme are held separately from those of the Group in an Aviva 
administered pension plan. The total cost charged to the statement of comprehensive income for this plan during the period 
ended 31 December 2013 totalled £301,000 (year ended 31 December 2012: £272,000).
16 Capital and reserves – Company
Share capital
2013 
£’000
2012 
£’000
In issue at 1 January 98 95
Issued during the period 2 3
In issue at 31 December 100 98
2013 
£’000
2012 
£’000
Allotted, called up and subject to payment
Ordinary shares of 9,979,673 @ 1p each (2012: ordinary shares of 9,789,673 @ 1p each) 100 98
100 98
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per 
share at meetings of the Company.
15 Retirement benefit obligations – Group continued 58 manx telecom plc annual report and accounts 2013 financial statements
notes  
continued
During the year the Company issued 200,000 1p ordinary shares for a consideration of £2,000 which is unpaid. The Company 
repurchased 10,000 1p ordinary shares for a consideration of £100. The unpaid amount represents the amount due from 
shareholders in note 19.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains healthy capital ratios in order to 
support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it,  
in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may make dividend payments 
to the shareholder, return capital to the shareholder or issue new shares.
The Group ensures that banking covenants are met including the net leverage ratio. At 31 December 2013 the net leverage ratio 
was 3.99x (2012: 2.04x), the covenant threshold was 5.37x (2012: 3.15x) which implies headroom of 25.8% (2012: 35.4%).
17 Financial instruments
17(a) Fair values of financial instruments
Trade and other receivables
The fair value of trade and other receivables, excluding construction contract debtors, is estimated as the present value of 
future cash flows, discounted at the market rate of interest at the balance sheet date if the effect is material.
Trade and other payables
The fair value of trade and other payables is estimated as the present value of future cash flows, discounted at the market 
rate of interest at the balance sheet date if the effect is material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated as its carrying amount where the cash is repayable on demand. 
Where it is not repayable on demand then the fair value is estimated at the present value of future cash flows, discounted at 
the market rate of interest at the balance sheet date.
Interest-bearing borrowings
Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest 
at the balance sheet date. For finance leases the market rate of interest is determined by reference to similar lease agreements.
Derivative financial instruments
The fair value of interest rate swaps is based on broker quotes.
The fair values of all financial assets and financial liabilities by class, together with their carrying amounts shown in the 
consolidated statement of financial position, are as follows:
Carrying 
amount 
2013 
£’000
Fair value 
2013 
£’000
Carrying 
amount 
2012 
£’000
Fair value 
2012 
£’000
Financial assets measured at amortised cost
Cash and cash equivalents (note 12) 13,506 13,506 10,350 10,350
Trade and other receivables (note 11) 15,655 15,655 16,491 16,491
Financial assets designated as fair value through profit or loss
Derivatives (note 17d) 585 585 – –
Total financial assets 29,746 29,746 26,841 26,841
Carrying 
amount 
2013 
£’000
Fair value 
2013 
£’000
Carrying 
amount 
2012 
£’000
Fair value 
2012 
£’000
Financial liabilities measured at amortised cost
Finance leases 129 129 – –
Due to shareholders (note 19) 30,968 30,968 84,090 84,090
Other interest-bearing loans and borrowings (note 13) 116,518 116,518 58,045 58,045
Trade and other payables (note 14) 24,849 24,849 26,665 26,665
Financial liabilities designated as fair value through profit or loss
Derivatives (note 17d) – – 413 413
Total financial liabilities 172,464 172,464 169,213 169,213
16 Capital and reserves – Company continued 59
Financial risk management
The Group’s operations expose it to a variety of financial risks including credit risk, currency risk, interest rate risk and liquidity 
risk. The Group’s overall risk management policies focus on the unpredictability of financial markets and seek to minimise 
potential adverse effects on the Group’s financial performance and net assets.
The principal financial risks of the Group and how the Group manages these risks are discussed below.
17(b) Credit risk
The Group’s principal credit risks are attributable to its cash and cash equivalents, trade receivables, related party receivables 
and swaps.
Trade receivables are presented in the statement of financial position net of allowances for doubtful receivables, estimated by 
the Group’s management based on prior experience and their assessment of the current economic environment. 
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis using credit checks.
At the reporting date there were no significant concentrations of third party credit risk, with exposure spread over a large 
number of counterparties and customers. The maximum exposure to credit risk is represented by the carrying amount of 
each financial asset, including derivative financial instruments, in the statement of financial position. The Group does not 
require collateral in respect of financial assets.
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its 
contractual obligations, and arises principally from the Group’s receivables from customers and investment securities.
The Group manages its exposure to credit risk by only placing its financial assets with reputable financial institutions with strong 
credit ratings.
The carrying amount of financial assets represents the maximum credit exposure. Therefore, the maximum exposure to credit 
risk at 31 December 2013 was £29,746,000 (2012: £26,841,000) being the total of the carrying amount of cash and cash 
equivalents, trade and other receivables and related party receivables.
In accordance with IFRS 7 ‘Financial Instruments: Disclosures’, the following disclosures have been made regarding the trade 
receivable balances.
Overdue on the reporting date
Carrying 
amount 
£’000
Not overdue 
on the 
reporting 
date 
£’000
Less than 
90 days 
£’000
Between  
90 to 180 
days 
£’000
Between 
180 to 360 
days 
£’000
Over  
360 days 
£’000
Trade receivables as at 31 December 2013 7,391 2,242 3,600 1,085 559 82
Overdue on the reporting date
Carrying 
amount 
£’000
Not overdue 
on the 
reporting 
date 
£’000
Less than 
90 days 
£’000
Between  
90 to 180 
days 
£’000
Between 
180 to 360 
days 
£’000
Over  
360 days 
£’000
Trade receivables as at 31 December 2012 6,370 1,970 3,103 649 520 128
For the debtors which are not impaired and which are overdue at the reporting date, there has been no indication that their 
payment obligations will not be met.
17(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash to meet its obligations. The Group aims to maintain 
appropriate liquidity through the daily monitoring of its actual and projected cash position. Mitigation of liquidity risk is also 
provided by the revolving credit facility negotiated with GE Corporate Finance Bank SAS (as detailed in note 13) and by the use 
of interest rate swaps to partially offset interest rate movements impacting variable rate loans and borrowings.
17 Financial instruments continued 60 manx telecom plc annual report and accounts 2013 financial statements
notes  
continued
Liquidity risk – Group
The following are the contractual maturities of financial liabilities, including estimated interest payments (all cash flows  
are undiscounted).
2013
Carrying 
amount 
£’000
1 year  
or less 
£’000
1 to  
<2 years 
£’000
2 to  
<5 years 
£’000
5 years  
and over 
£’000
Non-derivative financial liabilities
Finance leases 129 – – – 129
Secured bank loans 116,518 957 957 2,869 111,735
Trade and other payables 24,849 24,849 – – –
Due to shareholders 30,968 – – – 30,968
25,806 957 2,869 142,832
2012
Carrying 
amount 
£’000
1 year  
or less 
£’000
1 to  
<2 years 
£’000
2 to  
<5 years 
£’000
5 years  
and over 
£’000
Non-derivative financial liabilities
Secured bank loans 58,045 3,331 4,647 33,686 16,381
Trade and other payables 26,665 26,665 – – –
Due to shareholders 84,090 – – – 84,090
29,996 4,647 33,686 100,471 –
Derivative financial liabilities
Derivatives (note 17d) 413 413 – – –
30,409 4,647 33,686 100,471
17(d) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect 
the Group’s income or the value of its holdings of financial instruments.
The Group incurs foreign currency risk on purchases that are denominated in currency other than sterling. However, the 
Group’s exposure to currencies other than sterling is not considered to be material.
The Group’s exposure to the risk of changes in market interest rates relates primarily to bank loans. The terms of the bank 
loans and interest rates are disclosed in note 13.
Market risk – interest rate risk
At the balance sheet date the interest rate profile of the Group’s interest-bearing financial instruments was:
Group 
2013 
£’000
Group 
2012 
£’000
Company 
2013 
£’000
Company 
2012 
£’000
Variable rate financial instruments
Financial assets 29,746 26,841 – –
Financial liabilities (141,496) (85,123) – –
(111,750) (58,282) – –
Fixed rate financial instruments
Financial liabilities (30,968) (84,090)
(142,718) (142,372) – –
The amount due to shareholders (note 19) has been included as the debt is interest bearing, however, there is less interest rate 
risk as the interest rate is fixed at 10%.
Sensitivity analysis
An increase of 100 basis points in interest rates at the balance sheet date would have decreased profit by £360,201  
(2012: £178,570). A decrease of 100 basis points in interest rates would have resulted in an increased in profit of £568,843  
(2012: £238,705). This calculation assumes that the change occurred across the whole period and had been applied to risk 
exposures existing at that date.
This analysis assumes that all other variables, in particular foreign currency rates, remain constant and considers the effect  
of financial instruments with variable interest rates, financial instruments at fair value through profit or loss or available for  
sale with fixed interest rates and the fixed rate element of interest rate swaps.
17 Financial instruments continued 61
The Group’s exposure to interest rate risk is managed by the interest rate swaps entered into by the Group.
The Group held the following interest rate swaps as at 31 December 2013:
Bank
Interest 
rate 
%
Notional 
amount 
£’000
Fair value 
£’000
Bank of Ireland 0.6650 81,333 585
585
The Group held the following interest rate swaps as at 31 December 2012:
Bank
Interest rate 
%
Notional 
amount 
£’000
Fair value 
£’000 
RBS International 0.59688 9,204 (80)
Bank of Ireland 0.59688 15,718 (138)
Lloyds 0.59688 22,280 (195)
(413)
Fair value hierarchy
The table below analyses financial instruments carried at fair value. Interest rate swaps are valued based on broker quotes. 
Similar contracts are traded in an active market and the quotes reflect the actual transactions in similar instruments. Other 
financial assets and liabilities are valued based on discounted cash flows. This method is not considered to be materially 
different from fair value as set out in IFRS 13. The different levels have been defined as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3: inputs for the asset or liability that are not based on observable market data
31 December 2013
Level 1 
£’000
Level 2 
£’000
Level 3 
£’000
Total 
£’000
Financial assets – 29,746 – 29,746
Financial liabilities – (172,464) – (172,464)
31 December 2012
Level 1 
£’000
Level 2 
£’000
Level 3 
£’000
Total 
£’000
Financial assets – 26,841 – 26,841
Financial liabilities – (169,213) – (169,213)
18 Operating leases
The Group had annual commitments under non-cancellable land and buildings operating leases as follows:
2013 
£’000
2012 
£’000
Not later than one year 495 460
Later than one year not later than five years 1,983 1,878
Expiring in more than five years 2,055 1,829
The Group leases various offices, shops, vehicles and mast sites under non-cancellable operating lease agreements. These leases 
have various terms and renewal rights.
The total future minimum sublease payments expected to be received under non-cancellable subleases at 31 December 2013 
are £nil (31 December 2012: £nil).
17 Financial instruments continued 62 manx telecom plc annual report and accounts 2013 financial statements
notes  
continued
19 Related parties – Group and Company
The compensation of key management personnel including the Directors is as follows:
Group 
2013 
£’000
Group 
2012 
£’000
Company 
2013 
£’000
Company 
2012 
£’000
Salaries and short-term employee benefits 1,701 1,105 – –
Post employment benefits 36 34 – –
1,737 1,139 – –
As noted in note 24, subsequent to the year end Manx Telecom plc (formerly Trafford Equityco Limited), the ultimate parent 
company, was admitted to trade its shares on AIM. As a result, ownership of Manx Telecom plc (formerly Trafford Equityco 
Limited) has subsequently changed, as have related parties. Subsequent to admission to AIM, there is not considered to be any 
ultimate owner of the parent company.
Other related party transactions – Group
Related party Relationship
Receivables 
outstanding 
2013 
£’000
Payables 
outstanding 
2013 
£’000
Receivables 
outstanding 
2012 
£’000
Payables 
outstanding 
2012 
£’000
Shareholders Shareholders 100 30,968 98 84,090
100 30,968 98 84,090
The shareholder loans are interest bearing at 10% per annum, are unsecured and expire in the year ending 31 December 2020. 
Loan interest payable of £3,927,000 had accrued and was included in the payables balance as at 31 December 2013 (2012: 
£18,019,000). The shareholder loans were repaid in full after the year end (see note 24).
Other related party transactions – Company
Related party Relationship
Receivables 
outstanding 
2013 
£’000
Payables 
outstanding 
2013 
£’000
Receivables 
outstanding 
2012 
£’000
Payables 
outstanding 
2012 
£’000
Trafford Shareholder Debtco
Limited Direct subsidiary – 100 – 100
Manx Telecom Trading Limited  
(formerly Manx Telecom Limited) Indirect subsidiary 87 19 14 11
Manx Telecom Holdings Limited Indirect subsidiary – 2,000 – –
Shareholders Shareholders 100 – 98 –
187 2,119 112 111
The intercompany loans are unsecured, repayable on demand and non-interest bearing.
20 Ultimate parent company and parent company
Manx Telecom plc is the ultimate parent company for whom consolidated financial statements are prepared. As at  
31 December 2013, Manx Telecom plc was ultimately owned by Rowan Nominees Limited, a nominee company holding  
on behalf of a series of private equity funds under management of Hg Capital LLP.
As noted in note 24, subsequent to the year end Manx Telecom plc (formerly Trafford Equityco Limited) was admitted to  
trade its shares on AIM. As a result, ownership has subsequently changed. Subsequent to admission to AIM, there is not 
considered to be any ultimate parent company.
21 Capital and other financial commitments
2013 
£’000
2012 
£’000
Contracts placed for future capital expenditure relating to property, plant and equipment
Data Centre – NG Bailey 1,533 –
4g – Huawei 5,396 –
6,929 – 63
22 Share-based payment – equity settled
Subsequent to the acquisition of Manx Telecom Trading Limited in 2010, key management and employees have been given the 
option to purchase ordinary shares in the Company at nominal value. The shares are recorded at the grant date fair value 
with the expense being amortised over the estimated vesting period. The vesting period has been estimated to be the period 
from date of grant to June 2015, being the latest date by which the shares are expected to vest unconditionally.
In order for the shares to vest unconditionally there requires a sale or listing of the Group and the employee must remain 
employed or be considered as a ‘good leaver’. The shares awarded are subject to a number of conditions, including 
restrictions on the transfer of the shares prior to a sale or listing of the Group.
Should an employee leave employment with the Group by resignation, the shares will be cancelled and repurchased by the 
Group at the original nominal consideration value.
Equity-settled share-based transactions made during the period were as follows:
2013 
£’000
2012 
£’000
Share awards granted 200,000 250,000
Share awards repurchased – –
Fair value of shares granted – £/share £2.45 £0.34
No options for employees or key management to acquire shares were outstanding as at 31 December 2013 (2012: nil).
The total expense in respect of equity-settled share-based payments for the year ended 31 December 2013 was £72,493  
(2012: £14,229).
The fair value placed on the share awards as at grant date is shown in the table above. This value has been calculated by 
estimating the average value of the total shares as being half the net asset value of the Group. The 50% discount applied to net 
asset value was intended to reflect the average of a net asset value basis and an alternative valuation model using earnings as 
a base. This has then been discounted by 20% to represent the illiquidity of the shares as at the time of granting. No adjustment 
was applied in respect of dividends as the shares awarded give the holders the same rights to dividends as all other 
shareholders. The valuation basis has been agreed with Isle of Man Treasury as being an appropriate basis for tax purposes.
23 Dividends
Final dividends are recognised as a liability in the year in which they are declared and approved by the Company’s 
shareholders at the Annual General Meeting. Interim dividends are recognised when they are paid. Ordinary dividends of 
£2,000,000 were paid in respect of the year ended 31 December 2013 (2012: £nil). The dividend per share was £0.20 in 2013 
(2012: £nil).
24 Post balance sheet events
The Company changed its name from Trafford Equityco Limited to Manx Telecom plc on 3 February 2014 as the Admission 
required adoption of public liability status. On 10 February 2014, Manx Telecom plc (formerly Trafford Equityco Limited) was 
admitted to trade its shares on the Alternative Investment Market of the London Stock Exchange (‘the Admission’). On the same 
date the Group’s borrowing facilities were also restructured (see below).
The listing costs have been charged directly to equity in the period in which they occurred. A breakdown of the costs 
associated with the AIM admission is as follows:
2014 
£’000
Related parties
CPS Partners 837
Directors and key management 1,550
Other
Other IPO fees 10,919
13,306 64 manx telecom plc annual report and accounts 2013 financial statements
notes  
continued
New facility agreement
Subsequent to the listing, on 3 February 2014, Manx Telecom Holdings Limited and Manx Telecom Trading Limited (previously 
Manx Telecom Limited) entered into an £80m revolving credit facility agreement with Barclays Bank plc, Lloyds Bank plc and 
The Royal Bank of Scotland plc as arrangers and Lloyds Bank plc as agent and security agent (the ‘Facility Agreement’).
The proceeds of first drawdown under the Facility Agreement in an amount of up to £70m are to be used to (among other 
things) refinance the indebtedness existing at year end (detailed in note 13) and to pay fees, costs and expenses in relation to 
the Admission process and the debt refinancing. Additional amounts may be drawn under the Facility Agreement for general 
corporate purposes and/or working capital purposes and the payment of fees, costs and expenses.
The opening interest rate is the applicable interbank offer rate plus a margin of 2.0% p.a. and, from 30 June 2014, is subject to 
an adjustment to the margin ranging from 2.0% p.a. to 3.5% p.a. based on the ratio of total net debt to EBITDA.
Amounts drawn under the Facility Agreement are to be repaid on the last day of each applicable interest period unless the 
relevant borrower elects otherwise and amounts repaid will (subject to certain drawdown conditions) remain available for 
re-drawing unless cancelled. The Facility Agreement will terminate and all amounts outstanding thereunder must be repaid  
on 30 June 2018.
The Facility Agreement also provides for the payment of a commitment fee, agency fee and arrangement fee and contains 
certain undertakings, guarantees and covenants (including financial covenants based on the ratio of total net debt to EBITDA 
and the ratio of net finance charges to EBITDA) and provides for certain events of default.
Transaction costs incurred as part of the debt financing are amortised over the period of the loan. As a result, in 2014 
transaction costs of £1,048,074 were capitalised and amortised over the loan period.
As part of the refinancing that occurred in connection with this transaction, all shareholder loans (note 19) and PIK notes were 
repaid subsequent to the year end.
25 Prior period restatement
Capitalisation of transaction costs
In 2010 Manx Telecom Holdings Limited drew down on a loan facility from Lloyds TSB as part of the purchase of the Group 
Manx Telecom by Hg Capital. Transaction costs relating to the Lloyds TSB facility were expensed in 2010 rather than being 
capitalised and amortised over the life of the facility in accordance with IFRS. The transaction costs were expensed as it was 
expected that the facility would be refinanced within 12 to 18 months and it was considered prudent to accelerate the 
recognition of transaction costs in 2010. However, the facility wasn’t refinanced until 2013 so the prior year figures have been 
restated (see summary of quantitative impacts of prior period restatement below).
The impact of this restatement is to reduce the profit before tax in 2012 by £815,000, and increase net assets by £3,301,000 for the 
year ended 31 December 2012. The impact of further refinancing during the year ended 31 December 2013 is set out in note 13.
Share-based payment – equity-settled expense
As detailed in note 22, the total expense in respect of equity-settled share-based payments for the year ended 31 December 
2012 was £14,229. Subsequent to the approval of the financial statements for the year end 31 December 2012, it was noted that 
this amount had not been charged to profit and loss for the year then ended, with a provision set up for the amount 
accordingly. This has been adjusted retrospectively. See summary of quantitative impacts of prior period restatement below.
Adoption of IAS 19 revised ‘Employee Benefits’
As a result of the revised IAS 19 standard, the Group has changed its accounting policy for determining the income or expense 
that relates to its post employment defined benefit scheme.
The Group now determines the net interest expense/(income) on the net defined benefit liability/(asset) for the period by 
applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net 
defined benefit liability/(asset) at the beginning of the annual period. It takes into account any changes in the net defined benefit 
liability/(asset) during the period as a result of contributions and benefit payments. The net interest on the net defined benefit 
liability/(asset) comprises:
• interest cost on the defined benefit obligation; and
• interest income on the scheme asset.
Previously, the Group determined interest income on scheme assets based on their long-term rate of expected return.
24 Post balance sheet events continued 65
A revised actuarial report was received in relation to the year ended 31 December 2012 under the revised IAS 19 requirements, 
which resulted in a restatement; see quantitative impact below.
Summary of quantitative impacts of prior period restatement
Consolidated Statement of Financial Position
Impact of changes in accounting policy
As 
previously 
reported 
2012 
£’000
Capitalisation of 
transaction 
costs 
£’000
Share- 
based 
payment 
– equity- 
settled 
expense 
£’000
Employee 
benefits 
£’000
As restated 
2012 
£’000
Interest bearing borrowings (non-current) (57,202) 2,488 – – (54,714)
Interest bearing borrowings (current) (4,144) 813 – – (3,331)
Retained earnings 7,588 3,301 – – 10,889
Company Statement of Financial Position
Impact of changes in accounting policy
As 
previously 
reported 
2012 
£’000
Capitalisation of 
transaction 
costs 
£’000
Share- 
based 
payment 
– equity- 
settled 
expense 
£’000
Employee 
benefits 
£’000
As restated 
2012 
£’000
Due from related parties 98 – 14 – 112
Retained earnings (11) – 14 – 3
Consolidated Statement of Comprehensive Income
Impact of changes in accounting policy
As 
previously 
reported 
2012 
£’000
Capitalisation of 
transaction 
costs 
£’000
Share- 
based 
payment 
– equity- 
settled 
expense 
£’000
Employee 
benefits 
£’000
As restated 
2012 
£’000
Administrative expenses (26,760) – (14) – (26,774)
Finance income 3,157 – – (2,600) 557
Finance expense (15,289) (815) – 2,800 (13,305)
Actuarial (losses) on defined benefit pension scheme (4,200) – – (200) (4,400)
26 Directors’ shareholdings
Subsequent to the AIM listing, Directors’ ordinary shareholdings in Manx Telecom plc are as follows:
Denomination Holding
Miles Walker £0.002 63,523
Mike Dee £0.002 576,228
Gary Lamb £0.002 500,000
Jeffrey Hume £0.002 70,422
Kevin Walsh £0.002 70,422
25 Prior period restatement continued 66 manx telecom plc annual report and accounts 2013 financial statements
notes   67 68 manx telecom plc annual report and accounts 2013 financial statements
notes   Directors Kevin Walsh (Non-Executive Chairman) 
Mike Dee (Chief Executive Officer) 
Gary Lamb (Finance Director) 
Sir Miles Walker (Non-Executive Director) 
Jeffrey Hume (Senior Independent Non-Executive Director)
Company Secretary Gary Lamb
Registered Agent Appleby Trust (Isle of Man) Limited  
33–37 Athol Street
Douglas
Isle of Man  
IM1 1LB
Registered office  
of the Company
33–37 Athol Street  
Douglas  
Isle of Man  
IM1 1LB
Head office of  
the Company
Isle of Man Business Park  
Cooil Road, Braddan  
Isle of Man  
IM99 1HX
Nominated Adviser  
and Corporate Broker 
to the Company
Liberum Capital Limited  
Ropemaker Place, Level 12  
25 Ropemaker Street  
London  
EC2Y 9LY
Financial Adviser  
to the Company
Oakley Capital Limited  
3 Cadogan Gate  
London  
SW1X 0AS
English legal advisers  
to the Company
Linklaters LLP  
One Silk Street  
London  
EC2Y 8HQ
Isle of Man legal 
advisers to the 
Company
Appleby (Isle of Man) LLC  
33–37 Athol Street  
Douglas  
Isle of Man  
IM1 1LB
Reporting Accountants 
and Auditors
KPMG Audit LLC  
Heritage Court  
41 Athol Street  
Douglas  
Isle of Man  
IM99 1HN
Registrars Computershare Investor Services (IOM) Limited  
Millennium House  
46 Athol Street  
Douglas  
Isle of Man  
IM1 1JE
Financial PR advisers Powerscourt
1 Tudor Street  
London  
EC4Y 0AH
directors, secretary,  
registered office and advisers manx t elecom
Isle of Man Business Park
Cooil Road, Braddan 
Isle of Man  
IM99 1HX
www.manxtelecom.com
manx t elecom plc annual report and accounts 2013