35-39 Moorgate
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EC2R 6AR
www.centralnic.com
Annual Report 2014
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CentralNic Group Plc Annual Report 2014 CentralNic’s global business footprint
Business footprint
Designed and produced by fourthquarter.co.uk
Contents
Highlights 1
Introduction to CentralNic 2
CentralNic’s key advantages 4
Chairman’s statement 8
Chief Executive’s report 10
Strategic report 12
Chief Financial Officer’s report 15
Board of Directors 18
Directors’ report 20
Corporate governance 24
Remuneration report 27
Independent Auditors’ report 30
Financial statements 31
Shareholder information 65 • A year of rapid Profitable Growth combined with Investing
earnings and funds raised at the IPO
• Net revenue grew by 99% to £6.07m (2013: £3.05m) – growing
revenues from registry, registrar and enterprise services
• Adjusted EBITDA grew by 70% to £1.72m (2013: £1.02m) –
reflecting strong revenue growth offset by additional
costs invested in the fledgling in-house registrar and
enterprise businesses
• Ranked as the world’s Number Two new TLD registry provider
by volume – launched 8 new generic Top-Level Domains
during the year, including the leader by volume,.xyz;
• Entered the global top 30 domain retailers via the Internet.BS
acquisition in June 2014 and numerous launches of
TLD-specific retail stores
• Acquired a 12% Equity Stake in Accent Media Limited, the
successful applicant for the highly sought-after .tickets new
Top-Level Domain
• Finished the year with 3 profitable operating divisions: registry
services, registrar services and enterprise services (including the
premium domains business created in the second half of the
year) – reflecting a diversified and resilient business model
Highlights
CentralNic Group Plc Annual Report 2014 1 2 CentralNic Group Plc Annual Report 2014
CentralNic’s businesses
CentralNic Group plc (LSE: CNIC) (“CentralNic”)
is one of the world’s leaders in the domain name
industry, supplying domain names and related
software and services through three profitable
divisions: wholesaling domains as a business-to-
business supplier (the “registry” division) ; retailing
directly to end-users (the “registrar” division); and
selling to enterprise clients (the “enterprise” division).
Headquartered in London, the business operates globally, with
customers in almost 200 countries. CentralNic’s goals include
growing the volume of transactions supported by its technology
platform via sales and marketing activities, increasing the
inventory of domain names supported by winning new service
contracts, and by extending the scope and scale of its
domain-related activities, including via acquisitions.
The CentralNic registry platform
CentralNic’s registry services (wholesale) business provides
high quality technical and operational services, via its
proprietary domain provision, billing and cash collection platform.
The platform enables retailers around the world to sell an
increasing range of internet domains, and supplies the core
internet infrastructure (“DNS”) that powers the domains that
CentralNic distributes. Gross Billings represent the total value
of invoices raised on CentralNic’s platform, while Net Revenue
reflects CentralNic’s share of the Gross Billings.
CentralNic’s exclusive wholesale inventory
Domain names are registered by end users for various reasons:
not only to build websites, but for email, to protect their brand
or business name, to capture online traffic, and for investment.
In the most sophisticated markets, even small companies and
individuals often own portfolios of domain names.
CentralNic finished the 2014 year with domains using 43
different suffixes distributed exclusively via its platform.
CentralNic’s platform supports all three categories of domain
name extensions. The best known of these are new generic
Top-Level Domains (“gTLDs”), that are alternatives to .com and
.org currently being introduced under the auspices of internet
regulator ICANN. At the end of 2014 CentralNic had launched
eight new gTLDs, and was ranked second among Registry
“backend” operators, with over 700,000 domains under
management – representing roughly one in five new gTLD
domains registered. This ranking is due largely to the great
success of .xyz – the new TLD with by far the greatest
number of registrations.
Despite the high profile and future promise of new TLDs,
CentralNic actually earned more revenues in 2014 from its
growing portfolios of the other two types of domain suffixes:
country code Top-Level Domains (“ccTLDs” ) and Second Level
Domain extensions (“SLDs”). CentralNic launched two SLD
suffixes in 2014 – the global .co.com and .com.se for Sweden –
ending the year with 33 SLD domain extensions. CentralNic is
also the exclusive platform for .LA (the country code for Laos
sold in Los Angeles, Latin America and China) and .PW (the
country code for Palau sold as “Professional Web”).
At the time it was listed on AIM in September 2013, CentralNic
projected that it would win a total of 15 exclusive contracts to
distribute gTLDs via its global wholesale platform. It is now
confirmed to have 26 such agreements, as it has proven its
ability to attract new clients previously contracted to rival
service providers. Most notably in 2014 CentralNic won
the Radix Registry distribution business, including the new
top level domains .online, .site, .tech, .website, .press,
.space and .host.
In 2014, CentralNic also invested in and won the distribution
business for the .tickets TLD – an innovative new use of a
top-level domain to allow venues, artists, sports teams and
other rights holders to retail tickets direct to consumers,
while giving consumers the comfort of knowing that any
website using a .tickets domain is legitimate.
Registrar services
In 2014 CentralNic expanded its scope of activities to access
retail margins in the domain name supply chain, by taking
advantage of recent regulatory changes enabling domain name
registry operators to also become retailers of domains.
CentralNic’s TLD Registrar Solutions (“TRS”) registrar business
launched 7 “flagship store” retail websites to sell domain
names ending with the suffixes .asia, .bar, .build, .london,
.luxury, .menu and .rest.
In June 2014, CentralNic acquired the trade of Internet.bs
(“IBS”), one of the world’s top 30 registrars in terms of domains
managed, with a global customer base and service offerings
in 8 different languages. IBS is an established business which
has grown profitably under CentralNic’s ownership.
Enterprise services
In addition to clients seeking retail distribution for their TLDs,
CentralNic also provides technical services to companies
seeking their own “DotBrand” TLDs to brand their own portfolio
of websites. CentralNic’s clients include Global 1000 companies
such as Saudi Telecommunications and Kuwait Finance House,
as well as media and entertainment leaders, The Guardian and
the world’s largest talent agency, William Morris Endeavor IMG.
Towards the end of 2013 CentralNic acquired a high quality
domain management software product, DomiNIC. The software
enables the registration and management of domain name
portfolios as well as control of access rights to maintain
disciplined domain management functions. CentralNic had
intended to develop an extension to its software platform to fulfil
this role, and the acquisition of DomiNIC allowed CentralNic to
accelerate this development in a cost effective way.
Introduction to CentralNic The product of eighteen years of development, DomiNIC is used
by some of the largest corporations in the German-speaking
markets. CentralNic is developing this software in multiple
languages with customised versions for corporate customers
including telcos, financial institutions and DotBrand TLDs, as
well as for domain name registrars.
DomiNIC forms one cornerstone of a suite of software and
services that CentralNic is now offering to corporate clients,
including registrar services, various consulting offerings and
premium domain services.
The premium domains business also sits within CentralNic’s
enterprise division. This business either trades in domain names
or provides broking services to domain investors. This business
contributed US$2.5m in revenues to CentralNic in 2014,
ensuring that all three divisions of the Group were profitable.
TABLE 1
Domain extensions using the CentralNic platform
launched in general availability in 2014
.bar .co.com
.com.se .host
.ink .press
.rest .website
.wiki .xyz
TABLE 2
Domain extensions using the CentralNic platform
launched prior to 2014
.ae.org .africa.com .ar.com
.br.com .cn.com .com.de
.de.com .eu.com .gb.com
.gb.net .gr.com .hu.com
.hu.net .in.net .jp.net
.jpn.com .kr.com .la
.mex.com .no.com .pw
.qc.com .ru.com .sa.com
.se.com .se.net .uk.com
.uk.net .us.com .us.org
.uy.com .za.bz .za.com
TABLE 3
Uncontested new TLDs to be launched using
the CentralNic platform
To be distributed at retail
.college (launched Q1 2015)
.contact
.coop (won in a competitive tender in 2015)
.design (launched Q1 2015)
.fan
.fans
.feedback
.forum
.love
.online
.pid
.realty
.reit
.rent
.site
.space (launched Q1 2015)
.tech
.tickets
“DotBrand” TLDs
.stc .viva
.observer .theguardian .mozaic
.stcgroup .etisalat .kfh
.qtel .wme
TABLE 4
CentralNic Group retail websites
www.la
www.buy.menu
www.buydomains.london
www.domains.asia
www.domain.build
www.domains.bar
www.domain.luxury
www.domains.rest
www.internetbs.net
CentralNic Group Plc Annual Report 2014 3 4 CentralNic Group Plc Annual Report 2014
Multiple revenue streams
CentralNic earns four different revenue streams from global
domain name sales – as a domain owner, a wholesale service
provider, a retailer, and as a domain-related service provider to
corporations. Furthermore, CentralNic benefits from the breadth 
of domain inventory it supports – not only new TLDs, but ccTLDs,
SLDs and premium domains. It also offers comprehensive domain
management software and value-adding consultancy services.
This breadth of services coupled with market demand provides 
a robust and resilient basis for future growth.
Scalable business
The registry and registrar businesses operate on automated
platforms, with largely fixed costs and a history of delivering
healthy profits. Due to the high levels of automation, these
platforms are able to scale up to satisfy increasing demand
without incurring significant additional costs.
CentralNic’s strategy is focussed on achieving growth. Historically
the business has achieved organic growth in its registry division,
and more recently also in its registrar division. Securing new
service provider contracts and focussing on acquisitions present
further opportunities to accelerate the growth.
Healthy profits and cash flows
The business is profitable, with the Group delivering an Adjusted
EBITDA margin of 28% in 2014.
The majority of CentralNic’s revenues are recurring, as the end
users for domain names normally pay annual fees to renew them.
Software licences can also involve subscription-based fees, again
providing a regular income stream. The business also enjoys
healthy cash flows. It collects revenues in advance for domain
registration fees, which can often be for multiple years.
Distribution network
CentralNic’s global distribution channel is a significant asset,
giving it access to over 80% of the global retail market for
domain names (measured by domains under management).
Over the nineteen year evolution of the business, CentralNic has
developed one of the world’s most extensive global distribution
networks for domain names. Over 1,500 retailers are integrated
directly with CentralNic’s databases, including the world’s largest
and most recognised domain name retailers, such as Go Daddy
and Alibaba’s Hi-China. These in turn enable CentralNic to
access over 100,000 resellers, worldwide.
So far only a small number of registrars have been accredited by
the industry regulator ICANN to sell domain names using new
gTLDs. CentralNic and its clients have secured more registrars
actively selling domains using their TLDs than any other registry
service provider – as at the end of March 2015, .xyz, is actively
sold via 108 accredited registrars and .website via 104
registrars. Both are supported by CentralNic’s technology
platform. The TLD with the next highest number of active
registrars has 96.
Premium domain name portfolio
CentralNic owns and trades it’s own portfolio of around 20,000
premium domain names, and has also been contracted to
broker additional domain names on behalf of third parties.
As well as trading inventory, CentralNic owns such valuable
two-letter .com domains as uk.com, us.com, de.com, cn.com
and eu.com which all operate as SLD’s. Two letter .com
domains are highly valued, for example IG.com sold for
US$4.7m in 2013 and MI.com sold for US$3.6m in April 2014.
CentralNic’s key advantages
CentralNic’s multiple revenue streams, scalability, healthy cash
flows, expansive distribution network and premium domain
assets – combined with its access to funds via the AIM market –
position the Company ideally to continue its growth trajectory. CentralNic Group Plc Annual Report 2014 5
Registrars
CentralNic’s own registrar websites include: Our distribution network includes: 6 CentralNic Group Plc Annual Report 2014
CentralNic’s key advantages
Brand clients
Kuwait Finance House
Kuwait Finance House (KFH) is a pioneer of the banking
phenomenon known as Islamic Finance. They are the first
Islamic bank established in the State of Kuwait, and today they
are one of the foremost Islamic Financial Institutions in the world.
Etisalat
One of the global telecommunications industry’s innovation
pacesetters, Etisalat is the Middle East’s leading
telecommunications operator and one of the largest corporations
in the six Arab countries of the Gulf Cooperation Council, with
a market value of approximately Dh97 billion (US$26 billion).
Etisalat is pioneering several advanced “green” technologies
and is a regional leader in providing environmentally-friendly
information and communication solutions. 
Saudi Telecom Company (STC)
STC is the largest telecommunications services provider in the
Middle East & North Africa. It is the leading operator within the
Kingdom of Saudi Arabia, and its international presence extends to
11 countries. They hold a strong market position in Saudi Arabia,
with an expanding presence in key regional growth markets.
The Guardian
Published by Guardian News & Media (GNM), The Guardian
newspaper's groundbreaking journalism and innovation were
recognised at the Press Awards 2011 where it was named
Newspaper of the Year. In recent years the Guardian has
significantly developed and expanded its digital operations.
In June 2011 Guardian News & Media announced plans to
become a digital-first organisation, placing open journalism
on the web at the heart of its strategy.
Ooredoo
Formerly known as Qtel Group, Ooredoo are a leading
international communications company delivering mobile, fixed,
broadband internet, and corporate managed services tailored to
the needs of consumers and businesses across markets in the
Middle East, North Africa and Southeast Asia. Ooredoo have
a customer base of 107 million and reported revenues of
USD 9.1 billion in 2012.
NAREIT
NAREIT®, the National Association of Real Estate Investment
Trusts®, is the worldwide representative voice for REITs and
publicly traded real estate companies with an interest in U.S. real
estate and capital markets. NAREIT's members are REITs and
other businesses throughout the world that own, operate, and
finance income-producing real estate, as well as those firms and
individuals who advise, study, and service those businesses.
WME
William Morris Endeavor (WME) is the world’s largest diversified
talent agency, with offices in Beverly Hills, New York City,
London, Miami, and Nashville. WME represents artists across all
media platforms, specifically movies, television, music, theatre,
digital and publishing. WME's artists have had a huge impact on
the live touring industry, leading Billboard to name the company
"Top Touring Agency” of 2012. The agency also represents the
NFL (National Football League).  CentralNic Group Plc Annual Report 2014 7
TLD clients
Daniel Negari
Daniel Negari, CEO of XYZ, is the youngest registry operator in
the world. XYZ successfully launched the #1 new gTLD, .xyz,
in 2014 and is currently launching .College. XYZ has recently
announced its acquisition of .rent. With the global success of his
TLDs, Negari has been featured in major publications such as
The Telegraph and Live on Fox Business.
Raymond King
Raymond King is the CEO of Top Level Design – the company
responsible for launching .wiki and .ink in 2014. Through Top
Level Design, King is now in the process of launching .design
while still pursuing bids for .gay, .art and .llc. King is also Director
of ICANNWiki, and Founder and former CEO of Snapnames.
Punto 2012
Headed by father / son team Carlos and Aaron Grego, Punto 2012
operates .bar and .rest – the global domains for bars and restaurants.
Firmly entrenched in the hospitality industry, TheGregos also run
Mexico City’s premier restaurant guide, Queremoscomer.com,
as well as various other ventures focused on facilitating online
presence for businesses in the hospitality world.
Jay Westerdal
Jay Westerdal is behind the new .feedback TLD which is slated to
launch in 2015. Westerdal also owns .contact, .pid and .realty
and is a successful high tech business entrepreneur and investor,
with his last sale being valued at over 16 million US dollars. 
Joshua Merchant
Joshua Merchant is a Managing Director for the new .love TLD. Mr.
Merchant is also a Lawyer with Merchant Law Group LLP , a firm
well-known for innovation and fostering good business relationships. 
Radix
Radix is one Asia’s largest new gTLD applicants, having applied
for 31 new Top Level Domains. To date Radix has rolled out
launches for .website, .press, .host and .space and will be
launching coveted TLDs like .online, .site and .tech in the
upcoming year. Radix also runs the successful .pw namespace.
Asiamix Digital
Asiamix Digital is a Hong Kong company formed with a specific
purpose to apply for a number of new TLDs to ICANN and
operate a TLD registry. Currently, Asiamix Digital is preparing to
launch .fan and .fans TLDs.
Co.com
Led by well-known domain entrepreneurs Ken Hansen,
Paul Goldstone and Gregg McNair, .co.com is the solution for
new businesses looking for a strong, short and unique domain
with a .com ending.
Dot LA Marketing Company
Dot LA Marketing Company is the official marketing entity for
.LA which is retailed through leading domain registrars such as
GoDaddy, United Domains and 123-reg.
Africa.com
Africa.com is the fastest growing Africa-related website, with
about five million page views per month from visitors in over
200 countries throughout the world. The site was established
by Teresa Clarke – who launched the .africa.com domain as
“the .com for Africa” in 2012. In 2014 the Group has successfully transitioned its business to
offering a range of domain-related services as a wholesaler,
retailer and supplier to enterprise customers. This provides the
Group with multiple opportunities in the domain name supply
chain at a time of considerable change within the industry.
John Swingewood Chairman
2014 has been a very good year for the Group, successfully
acquiring and investing in exciting new business opportunities.
The Group also invested in strengthening the leadership
capabilities within the business. For these reasons, the Group
is well positioned to take advantage of the new TLD market as
it develops, and I am extremely pleased with our strategic
progress during the year.
In 2014 the roll out of the new Top-Level Domains gathered pace,
with approaching 500 new domain extensions having launched
by the end of the year. The Group successfully launched 8 new
domains during the year, including the programme’s highest
volume domain .xyz, resulting in CentralNic taking a leading
position among the world’s domain registry service providers.
In parallel to this activity, the Group’s existing portfolio of Second
Level Domains continued to exhibit revenue growth which was
pleasing in the context of new competition in the market. Overall
our registry business continues to grow profitably, enabling us
to invest in developing our other business lines.
As highlighted in the previous year, our strategy includes
investing in opportunities within the domain name industry. In
2014 we acquired the retail trade of Internet BS and a minority
equity stake in Accent Media, the successful applicant for the
much sought-after .tickets new Top-Level Domain. Both present
very promising earnings-enhancing opportunities.
Performance
I am pleased to report that the Group’s financial performance
was in line with expectations, growing revenues and Adjusted
EBITDA whilst also investing to expand the scope of the
Group’s business activities.
The Group’s net revenue grew by nearly 100%, reflecting steady
organic growth in the registry business, a half year of revenues
from our acquired retail business and trading valuable premium
domain names on the aftermarket, a new venture for the Group.
It was encouraging to see net revenue from our registry
business (wholesale) growing to £2.8m, an increase of 8% over
the prior year (2013: £2.6m). Growth included early revenues
from the new top level domains combined with steady
performance from CentralNic’s legacy portfolio of Second-Level
Domain extensions (including the likes of .uk.com, .us.com
and .cn.com) and country codes like .LA and .PW.
CentralNic invested during the year, acquiring the Internet.BS
registrar in June for a total consideration of up to US$7.5m.
This marked a significant entry into the retail market for the Group,
seeking the benefits of vertical integration within the domain
name supply chain. As a result, the Group’s retail activities
contributed £1.6m of net revenues during the second half of
the year in line with the business case. A second significant
Chairman’s statement
8 CentralNic Group Plc Annual Report 2014 CentralNic Group Plc Annual Report 2014 9
investment was acquiring a 12% equity stake in Accent Media
Limited for US$1.6m in September. Accent Media is the
successful applicant for the .tickets new Top-Level Domain,
which is scheduled to launch in 2015.
Other new activities launched during the year included an
enterprise division focussed on providing domains, domain related
software and services to the corporate market. This division
includes a premium domains business which began trading in the
second half of the year, selling domains from the Group’s portfolio
to contribute £1.6m to Group net revenues. The remaining
enterprise business closed the year in the pre-revenue phase,
although indications are promising for the future.
The Group also continued its investment programme during the
year, expanding its resources to grow its in-house registrar
business and commence the enterprise business as well as
further strengthening the Board and the management team.
Despite these additional operating costs, the Group delivered
Adjusted EBITDA of £1.72m (2013: £1.02m) and net cashflow
from operating activities of £1.41m (2013: £1.13m)
Dividend
It remains the Directors intention to recommend payment of a
dividend when appropriate and commercially prudent to do so.
While it is the intention of the Group to generate income returns
for investors in the future as part of a progressive dividend
policy, due to the continued expansion opportunities within the
sector the Directors do not propose a final dividend in 2014.
Outlook
The Group is strongly placed to benefit from the re-organisation
of the internet namespace, with access to earnings from
domains as both a wholesaler and retailer in the primary markets
and as a broker in the secondary market. Furthermore, the
Group is exposed to both developed and emerging economies,
being active in those markets either directly or via the Group’s
extensive distribution channel. With the world’s internet users
estimated at 3.1bn, there is still more than half of the global
population who are yet to get online. As such, continuing
sustained growth in the world’s internet users presents us
with considerable opportunity.
It is fair to say that current demand for the new Top-Level
Domains is still at a very early stage, reflecting only the
beginnings of consumer awareness to the choices available
when seeking to purchase domain names. Awareness should
grow in 2015 with an increased retail footprint and the expected
launch and promotion of new Top-Level Domains by the
so-called “super-brands”. This has potential to stimulate growth
for alternative TLDs and that will benefit the Group – whether
this be via the Group’s proprietary Second Level Domains or via
the new Top-Level Domains serviced on behalf of clients. Since
the end of 2014, the Group has started to launch four more
TLDs and has a minimum of 22 further new Top-Level Domains
yet to launch, with the majority expected to start earning
revenues in 2015. Plus the business continues to secure new
TLD clients, converting from a healthy pipeline.
The registrar business also presents considerable opportunities
in terms of diversifying the revenue streams into other
value-added services. Work is under way to broaden the
Group’s retail offerings with a view to delivering a more
comprehensive set of services for consumers seeking to
deploy their online presence.
Demand for domain names and related services from
Corporates is also a market segment presenting considerable
opportunity. The Group has built out the solutions it can offer to
this enterprise segment, whether this be via the proprietary
Domain Management software (DomiNIC) and related domain
portfolio services or via consultancy offerings to Corporates who
themselves applied for their own .brand Top-Level Domain.
Coupled with Corporate demand for premium domain names
the Group is able to present comprehensive solutions for the
Corporate segment of the market.
I would like to thank CentralNic’s personnel for their professionalism
and commitment to the ongoing development of the business in
what has been a period of considerable progress for the Group.
It is thanks to them, working in tandem with our clients and our
distribution channel partners, that we continue to enhance our
industry leading position and reputation.
John Swingewood Chairman
28 April 2015 10 CentralNic Group Plc Annual Report 2014
During 2014, CentralNic was transformed from a company
with one line of business, to having three profitable divisions
in the domain name industry – registry, registrar and
enterprise solutions. CentralNic also emerged in 2014
as an early global leader in new Top-Level Domains –
the largest restructuring of the internet to date.
Ben Crawford  Chief Executive
Performance overview
CentralNic has made significant progress in 2014. Billings
were £9.89 million, representing a 154% increase on 2013;
revenues were up 99% to £6.07 million, and Adjusted EBITDA
of £1.72 million was achieved – an increase of 70% over 2013.
This growth is the result of our threefold strategy: firstly as a
wholesaler, launching our first eight TLDs together with
continued growth in our legacy domains business. Secondly, we
acquired the trade of domain retailer Internet.bs and launched
seven additional retail websites – adding retail revenues and
profits. And thirdly, our enterprise division started successfully
trading in premium domain names and offering consulting
services, also contributing both revenues and profits in its
first year of trading.
At the end of a year of launches, investments and acquisitions, the
Group had cash balances of £3.06 million (2013: £4.93 million).
New top-level domains
2014 witnessed the earliest launch stages of what the internet
industry regulator ICANN called “the biggest change since the
inception of the internet,” with the introduction of the new gTLD
programme, allowing new entrants to join the ranks of .com,
.org, and .net. Only a small number of retailers received their
accreditations from ICANN to sell domains under the new TLDs
in 2014, and a lack of public awareness pending the launches
of the “superbrand TLDs” such as .google, .apple and .sony,
meant that the market for new TLDs in 2014 was softer than
had been projected by ICANN and other industry experts. It was
essentially limited to domain investors and other early adopters.
However, CentralNic fared exceptionally well with the TLDs
contracted exclusively to use our technical and billing platform.
The eight new TLDs we launched represented less than 2% of
the total number of top level domains launched, yet we achieved
and maintained the ranking of the world’s Number Two new TLD
registry provider by total number of registrations with almost 20%
global market share. We are also pleased to rank as the world’s
Number One for the highest number of active retailers for any
one TLD. CentralNic’s client .xyz is the TLD with the overall
highest number of registrations, based on an aggressive global
sales and marketing campaign supported by CentralNic.
Business development
When CentralNic listed on the AIM market in 2013 our clearly
stated objective was to accelerate our growth by focussing on
the full gamut of revenue opportunities in the domain industry,
and not relying solely on the new Top-Level Domains already
Chief Executive’s report CentralNic Group Plc Annual Report 2014 11
contracted with us. Considerable progress was made in 2014
in realising those objectives:
1. Adding new domains to our inventory
When CentralNic listed, its expectations were to obtain
distribution contracts for an additional five domain extensions
over the ensuing two years. This objective was actually met by
April 2014 with .co.com, .website, .press, .space and .host,
and we have now been awarded a further eleven exclusive TLD
contracts: .coop, .design, .fan, .forum, .love, .online, .realty,
.rent, .site, .tech and .tickets – all expected to launch in 2015
and 2016. CentralNic is also an investor in Accent Media Ltd
which holds the exclusive rights to the .tickets TLD, which will
have an exposure to actual ticketing revenue as it bundles
ticket vending software with a domain name.
Today, in my opinion the portfolio of new TLDs available via
CentralNic is second to none, and we hope to augment the
portfolio further by converting additional opportunities from
our sales pipeline.
2. Increasing our global retail market coverage
While relatively few retailers are actively selling domains using new
TLDs at this stage, CentralNic is efficiently engaging with those
that are already part of our global network, and on-boarding those
that are not – working with our partners to become a clear leader
in the industry, as measured by the metric “highest number of
retailers for an individual TLD.” China continues to be CentralNic’s
fastest growing geographic market, with other emerging markets
also presenting a key focus for our growth.
3. Entering the retail marketplace ourselves
CentralNic was one of the earliest adopters of vertical integration
in the domain industry in 2014 when it joined the ranks of the
world’s top thirty domain name retailers by acquiring the trade of
registrar Internet.bs (“IBS”), serving customers from 200 countries
in eight languages; and at the same time it launched seven
“flagship store” websites, each retailing domain names targeted
at a single territory or industry vertical (such as domains.asia and
buydomains.london; domain.luxury and domain.bar).
4. Engaging with growth markets
CentralNic has identified two key growth markets, and is
engaging with both.
The first is the enterprise market: with around 400 global
corporations which have applied to obtain their own brands as
Top-Level Domains, and thousands more starting to focus on
the challenges and opportunities presented by an increasingly
complex and important Domain Name System, CentralNic is
selling a suite of software and services to an increasing number
of telcos, banks, and media and entertainment businesses,
both at Global 1000 level and below.
Secondly, CentralNic is focussed on developing economies
including China and countries in the MENA region. As both
telecoms companies and major internet infrastructure providers
work to deliver internet access to “the next five billion” internet
users, CentralNic is attuned to the resulting new opportunities to
assist businesses in those territories to acquire domain names
and get their businesses online to serve their rapidly expanding
local and international markets.
Outlook
CentralNic is on a continuing rapid growth trajectory. Having
doubled revenues and increased Adjusted EBITDA by 70%
in 2014, our strategy is working and we continue to move
forward accordingly.
Though 2014 marked a slow start to the roll-out of new Top-Level
Domains, CentralNic’s clients accounted for one in five of all new
TLD domains registered – and that was with only the first eight of
our TLDs launched. CentralNic has another eighteen TLDs
already confirmed for retail distribution, including those widely
predicted to be the future bestsellers: such as .design and
.online. Plus we have a healthy pipeline of future opportunities.
Moreover, with so much new product to take to market, it is a
great time to be a domain name retailer, and CentralNic’s retail
division expects continued growth in its chosen markets.
Finally, CentralNic’s focus on large corporations and government
contracts makes us part of the two leading growth drivers of
the domain industry – enterprises entering the domain industry
and developing world Governments supporting the expected
rapid expansion in mobile-enabled internet use to enable
economic development.
In 2014, CentralNic demonstrated the ability to launch new
businesses, win new service contracts and successfully
integrate new acquisitions. We are confident in our ability to
use these same strategies to meet our commercial objectives
in the years to come.
Ben Crawford Chief Executive Officer
28 April 2015 Strategic report
The registry division
The registry division includes the core of CentralNic’s legacy
business, which continued to grow in 2014 against a backdrop
of multiple new competitors entering the market. CentralNic
continues to actively market domains with suffixes including
.us.com, .uk.com and .la – which derive healthy revenues when
compared to most of the new TLDs. The domains often present
an alternative choice for consumers, especially if their first choice
of domain is not available in other TLD’s; while these domains
are suitable for international markets, such as in the Far East
where growth rates typically exceed those in more developed
western markets.
We believe that our well established registry infrastructure,
distribution network, flexible implementation approach and
expertise in launching domains has presented CentralNic’s
clients with a considerable competitive advantage. While still in
the earliest stages of launch – with only around 100 online
retailers and none of the large corporate “anchor tenants” of
the new TLD programme yet launched (ie. .google, .apple,
.sony, .walmart, etc.) – CentralNic has succeeded in gaining
almost 20% market share of all registrations under new TLDs
with only 8 of its clients’ gTLDs launched; representing over
700,000 registrations at the end of 2014. Gross billings in the
registry business grew to £6.41m (2013: £3.47m) as a result.
CentralNic has been successful in partnering with entrepreneur
investors in new TLDs who have the business skills and
resources to build successful businesses but require the
expert technical, policy and sales and marketing support that
CentralNic provides. Both CentralNic and its clients have
benefited from these complementary relationships. Notably,
CentralNic’s client TLD .xyz is the clear frontrunner among all
new TLDs launched to date in terms of volumes of registrations.
Through an aggressive global channel sales and marketing
campaign, .xyz has also consistently secured more registrars
actively selling its domains than any other new TLD, and is
notably achieving excellent sales in the fastest growing
market in the world, China.
CentralNic’s inventory of new gTLDs as yet unlaunched at the
end of 2014 was projected at seven when CentralNic listed
on AIM in September 2013, but it is rapidly growing and is
already confirmed at 22. This growth is due to CentralNic
securing the business of additional clients who have chosen to
change their registry service providers (for example, by securing
CentralNic entered 2014 a wholesaler with no gTLDs launched,
and ended 2014 with double its previous revenues, three
profitable trading divisions, and as the number two global
player among its peers in gTLDs.
12 CentralNic Group Plc Annual Report 2014
.bar and .rest launch party the Radix Registry business, CentralNic obtained exclusive
wholesale distribution rights to the TLDs .website, .site, .online,
.host, .space, .press and .tech). In other instances, CentralNic’s
entrepreneur clients acquired other gTLDs and brought them
to CentralNic.
In the case of .tickets, CentralNic was attracted by the innovative
business proposal for deployment of the domain. As a result,
CentralNic invested £1 million to acquire 12% of the equity of
Accent Media Ltd, the registry operator for the .tickets registry.
Accent Media then contracted with CentralNic to become the
exclusive wholesale distributor. The business model for .tickets
includes a share of ticketing revenues as well as domain name
sales, and CentralNic expects to see early revenues in the
second half of 2015.
CentralNic’s registry strategy moving forward is a continuation of
the current activities, namely: active sales and marketing of
CentralNic’s legacy domains; close collaboration with its
entrepreneur clients to maximize sales of their domains; and a
focus on bringing more clients and TLDs to the CentralNic
platform. As consumer awareness and demand for domain
names grows in future years, CentralNic’s registry division is
ideally positioned to benefit.
The registrar division
The removal of restrictions by ICANN over common ownership of
registrars and registries was an important development, enabling
CentralNic to enter the retail business with a dual strategy to
capture retail margins from domain sales and enter into direct
relationships with end users. Firstly, CentralNic created TLD
Registrar Solutions, focussed on the opportunity to launch
“flagship store” single-domain retail websites under the new gTLD
programme. Examples of these include buydomains.london,
domain.luxury and cymru.domains. Seven of these were
launched in 2014 with a view to becoming established vendors
of domains and other internet-related services for specific
territories or industry verticals, with revenue benefits to flow in
future years as the new gTLDs grow in demand.
The second strand of CentralNic’s retail strategy was the
June 2014 acquisition of the trade and assets of Internet.bs,
a top thirty accredited retailer selling domain names to a global
customer base of end users. Internet.BS is a profitable, cash
generative business which had delivered operating profits
of US$730,000 for the year ended 31 December 2013.
Profits have grown under CentralNic’s ownership, enhancing
Group earnings (before acquisition deal fees).
Key strategic drivers for the acquisition included:
• Gaining a proven retail platform already supporting 28,000
users in eight languages, making it a highly suitable platform
for entering emerging and fast-growing markets globally;
• Enhancing the revenues and profits of CentralNic with an
additional cash generative business retailing domains to
consumers and other domain name retailers;
• Providing a retail platform able to support future sales of
additional retail products such as hosting, email, and website
builders, as well as new Top-Level Domains.
CentralNic’s strategy for the registrar business is to continue
aggressive growth following the direction started in 2014,
optimizing the benefits of scale and vertical integration
while seeking out opportunities for further expansion in
emerging markets.
The enterprise division
In addition to its entrepreneur clients, CentralNic has contracted
to provide technical and ICANN compliance services to brand
owners, who themselves have applied to register their brands as
new Top-Level Domains. Our client portfolio includes such Global
1000 companies as Etisalat (the Emirates Telecommunications
company), Kuwait Finance House, and Saudi Telecom, as well
as media and entertainment leaders, The Guardian and William
Morris Endeavor IMG. These clients form one of the foundations
of CentralNic’s enterprise division, launched in 2014 to supply
corporations with the software and services they require to
benefit from changes to the Domain Name System and related
technologies.
The second pillar of CentralNic’s new enterprise division was
the acquisition of a sophisticated domain management software
platform, calledDomiNIC, in December 2013. The software is
regarded as one of the world’s leading applications, used by a
number of major corporates in the German-speaking world to
manage their portfolio of domain names, as well as by domain
retailers. CentralNic has been building a pipeline of future
potential users outside the German-speaking markets.
CentralNic has also invested in adapting DomiNIC for use by
brand TLD applicants, and has started engaging with potential
clients in 2014, with a view to taking orders when the Dot Brand
domains start to launch over the coming years.
As a third component of its enterprise offering, CentralNic
launched its own premium domain name trading service in
2014, as a direct route to selling premium priced domain names
to corporate clients. The inventory being sold includes domains
from CentralNic’s own portfolio of around 20,000 premiums,
premium domain inventory from clients, and other inventory for
which CentralNic can secure exclusive broking rights. This
activity resulted in revenues of £1.61m in 2014, resulting in a
profit for the enterprise division in its first year of trading.
With the entry into the domain name business of around 400
new corporations through the Dot Brand TLD programme, and
the need for large companies globally to adapt to the major
changes in the expansion of the Domain Name System,
CentralNic is confident that its enterprise division puts it at the
forefront of an important, highly scalable and potentially
disruptive change to the domain industry.
CentralNic Group Plc Annual Report 2014 13 Key Performance Indicators
Details of the Key Performance Indicators are provided on
page 15.
Principal risks and uncertainties facing the Group
The Directors have considered the principal risks and uncertainties
facing the Group, the main ones being outlined below.
Regulatory
The businesses of both registries and registrars are subject to
the legal and contractual environment. These are subject to
change, not least in the ICANN community, and changes have
the potential to influence business outcomes.
CentralNic satisfies ICANN technical and operational
requirements, and maintains an active voice in the development
of policy within the ICANN community.
Market
There is a risk that the market for domains owned by the Group
or for which the Group provides registry and registrar services
may not increase as quickly as expected or that the new TLDs
may not generate the revenue levels anticipated by the Board.
In either case the Group’s revenues could reduce below
expectations with an impact on profitability.
The risk is mitigated to a degree by operating multiple lines of
business exposed to many markets and segments within those
markets, some of which have very little reliance on new TLDs.
IT security
If the Group does not prevent security breaches or becomes
susceptible to cyber-attacks, it may be exposed to lawsuits,
lose customers, suffer harm to its reputation, and incur
additional costs. Unauthorised access, computer viruses,
accidents, employee error or malfeasance, intentional
misconduct by computer “hackers”, and other disruptions can
occur that could compromise the security of the Group’s
infrastructure or confidential information.
The Group has created a resilient network infrastructure and
Domain Name System server constellation, with failover
secondary systems to ensure critical registry functions are
maintained. The Group has been accredited under ISO
27001/2013 for data security, thereby mitigating risk by
adherence to international best practice.
Supplier risk
A number of the key technical services used by the Group are
outsourced to key suppliers, thereby creating the potential for
risk in the case of the failure or loss of a supplier.
In view of these risks, redundancies have been introduced
between the suppliers and internal resources, ensuring that no
single point of failure could result in the inability of CentralNic to
meet its contractual or compliance obligations.
Currency risk
The Group reports its revenues and costs in British Pounds
Sterling, whilst some of these revenues and costs may arise in
currencies other than this. Fluctuations in exchange rates may
adversely affect the Group’s reported profits, and make its
overseas contracts relatively less valuable.
CentralNic contracts are usually denominated in British Pounds
Sterling, US Dollars or Euros and the Directors keep the
currency exposure under regular review. The Directors consider
the use of hedging instruments in the event that currency
exposure is considered a material performance risk.
Dependence on key personnel
The Group has a small management team and the loss of any
key individual or the inability to attract appropriate personnel
could impact upon the Group’s future performance. Incentives
and a performance culture remain an important focus to the
achievement of the Group’s objectives.
Other risk factors
In addition to the impact of the downturn of the world’s
economies, the Group may be adversely affected by other
changes in economic, political, judicial, administrative, taxation
or other regulatory or other unforeseen matters.
This strategic report was approved by the Board of Directors on
28 April 2015 and signed on its behalf by:
John Swingewood Chairman
Strategic report continued
14 CentralNic Group Plc Annual Report 2014 2014 has been a year of investment for the Group, resulting
in a more diversified and resilient business model exposed
to global domain name markets across multiple market
segments. The investment has been funded out of the capital
raised from the IPO, combined with profits generated by the
registry business and the acquired registrar business.
Glenn Hayward  Chief Financial Officer
Chief Financial Officer’s report
The Group has delivered strong performance in 2014 as
evidenced by the growth in revenues and Adjusted EBITDA for
the Group. This step-change in the scale of the Group’s
activities reflects organic growth within the registry business,
combined with the results of the acquired registrar business and
the successful creation of the enterprise business, including
premium domain trading.
Key Performance Indicators
• Gross billings (including partner share) £9.89m (2013: £3.89m)
• Net revenue £6.07m (2013: £3.05m)
• Adjusted EBITDA* £1.72m (2013: £1.02m)
• Profit before taxation £0.52m (2013: £0.70m)
*Excludes impact of share payment expense for the share options issued to
Directors and Employees and Acquisition deal fees
The Group generated net revenue growth of 99%, with revenue
increasing to £6.07m (2013: £3.05m). This growth was
achieved through the combination of Registry revenues of
£2.80m (2013: £2.59m), Registrar revenues of £1.55m
(2013: £nil) and premium domain trading generating £1.61m
of revenues (2013: £0.07m). Consultancy and other service
revenues were £0.10m (2013: £0.40m).
Revenue growth in the registry business was driven by a
combination or organic growth in the historic business (including
registration of domains using the Group’s Second Level
Domains such as uk.com, us.com and cn.com) together with
the initial revenues for services provided to new Top-Level
Domains, notably .xyz. The Group has a strong portfolio of
Second-Level and new Top-Level domains supported by the
Registry Business, with at least 22 more new Top-Level
Domains to launch in 2015 and 2016. Gross billings in the
registry business grew to £6.41m (2013: £3.47m) mainly
reflecting gross billings for the new Top-Level Domains.
Entry into the registrar business was accelerated significantly by the
acquisition of the trade of Internet.BS in June. A half year of trading
generated the vast majority of revenues in the registrar business,
contributing £0.19m to Adjusted EBITDA. The profit performance
was in line with the Board’s expectations on acquisition.
The Group also launched an enterprise division including a
premium domains trading business during the second half of the
year. Initial revenues generated through the sale of non-core
premium domain names have been pleasing at £1.61m
(2013: £0.07m). The Group owns a trading portfolio of almost
20,000 premium domain names and also offers broking
services to third parties.
CentralNic Group Plc Annual Report 2014 15 Chief Financial Officer’s report continued
Adjusted EBITDA, before the share based payment expense
and acquisition deal fees, totalled £1.72m for the year
(2013: £1.02m). The strong profit performance from the registry
business, the acquired registrar business and the premium
domains business contributed £2.55m to Group EBITDA
(2013: £0.68m). This was then offset by lower consultancy
and licence sales of £0.10m (2013: £0.48m) combined
with £0.93m of operating costs (2013: £0.15m) taking into
account the first full year of costs related to being on AIM as
well as investing in the fledgling new business areas.
Fees associated with acquisitions and investments totalled
£0.47m (2013: £nil). Non-cash expenses included amortisation
of intangible assets of £0.45m (2013: £0.24m) reflecting the
charge for the customer list and software acquired with the
Internet.BS trade. Other non-cash expenses included depreciation
and the share based payments expense. In accordance with IFRS
2 Share Based Payments, we have included a £0.22m charge
for Director and employee share options within administrative
expenses (2013: £0.07m). Further details can be found in
note 26 to the financial statements.
The Group’s effective tax rate was 30.1% (2013: 24.4%),
although when excluding the impact of the non-cash share
based payments expense this becomes 21.0% (2013: 22.3%).
Profit after taxation was £0.36m (2013: £0.53m).
Basic earnings per share at 0.60 pence (2013: 1.00 pence)
reflected the effects of investing in the business, driven by the
additional non-cash charges and the non-recurring professional
fees associated with acquisitions and investments. Diluted
earnings per share, at 0.56 pence (2013: 0.91 pence),
reflected the share options and warrants issued during the
flotation. Further details of the earnings per share calculations
are provided in note 12 to the financial statements.
Pensions
The Group does not currently operate a pension scheme, but is
committed to complying with latest legislation and will create a
scheme under the new auto-enrolment provisions as required in
the UK. The staging date for the Group to adopt the new UK
pension obligations is June 2016 and work is under way to
implement the required arrangements.
Dividends
It remains the Directors intention to consider payment of a
dividend when appropriate and commercially prudent, as part of
a progressive dividend policy. However, due to the continued
expansion opportunities for the Group requiring investment,
the Directors do not propose a final dividend in 2014.
Group statement of financial position
The Group had net assets of £6.90m at 31 December 2014
(2013: £4.81m), with the growth in Net Assets reflecting the
share-based element of the consideration for the acquisition
of the Internet.BS trade combined with the retained profits
for the year.
Capital expenditure and investing activities
This was a year of investment, with capital expenditure totalling
£4.33m for the acquisition of the trade of Internet.BS (including
Intangible additions to Software, Customer List and Acquired
Goodwill). Other investing activities included £1.00m invested
in a 12% equity stake in Accent Media Ltd, the successful
applicant for the .tickets Top-Level Domain. The remaining
capital expenditure included £0.13m on plant and equipment
(2013: £0.05m) and £0.25m for capitalised development
and enhancements to DomiNIC, the Domain portfolio
management software (2013: £0.21m).
Further details are provided in notes 13, 14 and 16 to the
financial statements.
Cashflow and net cash
The significant movements in net cash reflected the investments
made during the year in executing the growth strategy. This
combined with strong underlying cash conversion from Adjusted
EBITDA, partly offset by the professional fees for acquisitions
and investments.
Total net cashflow used in investing activities was £3.06m, with
£1.58m of net cash consideration for acquiring the trade of
Internet BS and £1.00m for the investment in Accent Media
Limited. The remainder included capitalised software
development and a £0.10m short term loan to DNS Xperts,
the software developers of the DomiNic software.
Net cash flow from operating activities was £1.41m (2013: £1.13m).
This reflected a strong underlying conversion to operating cashflow
from Adjusted EBITDA, but then offset by £0.47m of professional
fees related to acquisitions and investments.
Financing activities included the final scheduled deferred
consideration payments of £0.23m for the unencumbered
ownership rights for the gb.com and us.com domain extensions
(2013: £0.22m).
Banking facilities
The Group ended the year with net cash of £3.06m (2013:
£4.93m) and accordingly does not have in place any significant
debt facilities.
16 CentralNic Group Plc Annual Report 2014 Critical accounting policies
The Summary of the Group’s Significant Accounting Policies is
set out in note 3 to the Financial Statements.
The Group’s Revenue recognition policy may be summarised as:
• Revenue from the sale of services is recognised when the
amounts of revenue and cost can be measured reliably
• Domain sales are recognised over the period to which the
underlying sales contract relates, which can be for periods
between one and ten years. Revenues attributable to future
periods are deferred to future periods and are included in
“Deferred Revenues”
• Revenues from strategic consultancy and other similar
services are recognised in proportion to the stage of
completion of the work.
The Group makes estimates and assumptions regarding the
future, which are regularly evaluated including expectations of
the future that are considered reasonable given historic
experience and current circumstances. In the future actual
experience may differ from these estimates and assumptions.
The Board considers the carrying value of Intangible assets in
particular given the relative materiality to the Group. While the
Board acknowledges that estimates and assumptions could
have a material impact on the carrying value of the intangible
assets, the Board has considered the potential for impairment
as well as the estimated useful lives of the assets and does not
consider the carrying values to be impaired. Further details are
provided in note 4 to the financial statements.
Group financial risk management
The Board reviews the financial risk management policy, noting
that the Group is exposed to market risk, credit risk and liquidity
risk arising from financial instruments. Further details of the
Financial Risk Management Framework is provided in note 27
to the financial statements.
The Group’s finance function is responsible for managing
investment and funding requirements including cash flow
monitoring and projections. The cashflow projections are
reviewed regularly by the Board to ensure the Group has
sufficient liquidity at all times to meet its cash requirements
and execute its business strategy.
The Group’s strategy is to finance its operations through the cash
generated from operations and where necessary equity finance.
The Group’s financial instruments comprise cash and various items
such as trade and deferred receivables. The Group had £3.06m of
cash at the year-end, with interest bearing financial assets bearing
interest at fixed interest rates. Deposit risk is mitigated by the
Directors setting policy that the Group only places deposits with
banks and financial institutions with high credit ratings.
The Group’s exposure to credit risk from trade receivables is
relatively low, due to the fact that the business has traditionally
dealt with customers who generally pay at the point or sale or in
advance. Where there are credit accounts, which is an
increasing trend in the industry, receivables are controlled
through credit limits and regular monitoring.
Foreign currency risk
The Board notes that the Group predominantly trades in US
Dollars, Euros and GB Pounds Sterling, and considers the
exposure to foreign currency risk to be acceptable. The Group
holds reserves in each of these currencies to meet trading
obligations as required. The currency risk is actively monitored
through a periodic review of inflows and outflows by currency,
including an assessment of the extent to which currencies
are naturally hedged across the Group’s business lines.
Where this is not the case consideration is given to the use
of hedging instruments.
Glenn Hayward Chief Financial Officer
28 April 2015
CentralNic Group Plc Annual Report 2014 17 Board of Directors
The Board comprises individuals with the appropriate
relevant background and experience to carry out its duties.
The Board regards its principal duties to include the provision
of entrepreneurial leadership to the Group, while also managing
business performance, compliance and practising good
corporate governance as appropriate for a Group of our size.
John Swingewood  Chairman (aged 59) 
John is a serial entrepreneur and investor, active in both public and private
companies. He is the Chairman of Emizon Group Ltd, an “Internet of Things”
technology company. Previously he was director of AIM listed Mobile Tornado
Plc and was a founder of Digital Interactive Television Group, acquired by AIM
listed Yoomedia Plc for £28 million. He was formerly Director of New Media
at BskyB and Director of Internet and Multimedia and General Manager,
Broadcast TV Services at British Telecom, a £500 million division employing
over 1,000 people worldwide. John obtained a First Class Honours Degree
in Electronics at Surrey University.
Benjamin Crawford (“Ben”) Chief Executive Officer (aged 49)
Ben Crawford is one of the best-known figures in the domain industry, and
is frequently quoted on developments in the internet in the global media.
Ben has been the Chief Executive Officer of CentralNic since 2009, successfully
launching the company into new markets including the Middle East, China,
Japan and Russia, entering thegTLD market, listing on the AIM market and
achieving growth organically, through winning new contracts and via
acquisitions. Ben is a specialist in global business and corporate development –
his former positions included Founding President of LouiseBlouin Media,
integrating 11 acquisitions in three countries and launching artinfo.com;
Managing Director of SportBusiness Group, where he launched the world’s
leading online gambling trade media Group, iGamingBusiness.com; and
Executive Producer of the official website of the Sydney Olympic Games.
Ben has an MBA from the Australian Graduate School of Management and
a First Class Honours Degree from the University of Sydney.
Glenn Hayward Chief Financial Officer (aged 41)
Glenn joined CentralNic in February 2014, bringing 20 years’ experience
across a variety of sectors, with particular experience working with technology
companies, most notably in the domain name industry. Most recently, Glenn
worked as Executive Director, Business Development and Finance, for Nominet,
the organisation which manages the .uk internet domain. Nominet has a turnover
of £26 million with 130 employees. Glenn has a bachelor’s degree in Physics
from the University of Birmingham and between 2011 and 2012 qualified in the
Institute of Director’s Certificate and then Diploma in Company Direction with
distinctions. He also won Finance Director of the Future at the UK’s Finance
Director Excellence Awards 2011. Glenn qualified as a Chartered Accountant
in 1998 while working for Morris & Co Chartered Accountants.
18 CentralNic Group Plc Annual Report 2014 Robert Pooke  Executive Director (aged 54)
Robert Pooke is one of the founders of CentralNic and has been involved in
the domain name industry since 1998. Prior to that, he founded (and later sold)
two online companies, one of which was a multi-player games business.
In the earliest part of his career, for 13 years, Robert opened and ran a small
chain of 3 discount retail stores, which he eventually sold.
Samuel Dayani Non-Executive Director (aged 38)
Samuel Dayani is a partner at the Joseph Samuel Group and responsible for
managing the Group investments and business development. He is also a
Director of Opes Industries Ltd, a waste to energy, landfill and recycling
business. From 2001-2005, Samuel was the Chief Operating Officer and
then Managing Director of ViaVision Ltd, an interactive TV company, before
it was sold to Yoomedia plc.
Samuel graduated from Queen Mary College, University of London with a
BSc in Business and Biology in 2000.
Thomas Rickert Non-Executive Director (aged 45)
Thomas Rickert is an attorney-at-law in Germany. He is the Managing Director
and owner of Rickert Rechtsanwaltsgesellschaft mbH, a law firm in Bonn.
Thomas has extensive experience in the domain industry working on domain
disputes as well as advising Registrars, Registry Service Providers and new
gTLD applicants both on contractual as well as policy matters. Thomas is an
expert speaker on domain related subjects both at the national and international
level. Thomas has been appointed by ICANN’s Nominating Committee to serve
on the Council of the Generic Names Supporting Organisation (GNSO), which is
the body responsible for developing policy for generic domain names. He is also
co-chair of the Cross Community Working Group on enhancing ICANN
accountability in the context of IANA Stewardship Transition.
Thomas Pridmore (“Tom”) Non-Executive Director (aged 43)
Tom Pridmore began his career as a solicitor at Norton Rose, specialising in
corporate finance, where he acted on behalf of institutional clients in relation
to a variety of corporate finance and M&A activities. Tom then joined
Flextech/Telewest Plc as Head of Corporate Strategy, where he was
responsible for directing investment into strategic Internet and interactive
television companies. In 2000, Tom co-founded the international fund
manager and investment adviser Development Capital Management Limited.
In this capacity he has set-up and managed real estate investment and
development operations in Turkey, India, North Africa, Eastern Europe and
the UK on behalf of both institutional and private clients.
CentralNic Group Plc Annual Report 2014 19 Directors’ report
Principal activities
CentralNic Group Plc is the ultimate holding company of a
Group of companies.
The principal activities of the Group are the provision of Domain
Name registry, registrar and enterprise services. A more
comprehensive description of the Group’s activities, performance,
and likely developments are provided in the Chairman’s
statement, the Chief Executive’s Report, the Strategic Report,
the Chief Financial Officer’s Report, the Corporate Governance
Report and the Remuneration Report, which are incorporated
by reference into this report.
A list of the subsidiary undertakings is disclosed in note 16 to
the Financial Statements.
Financial instruments
Details of the use of financial instruments and financial risk
management are included in note 27 to the Financial Statements.
Results and dividends
Information on the results and dividends is provided in the
Chairman’s Statement and the Chief Financial Officer’s Report.
Directors
The Company was incorporated on 19 June 2013, with a view
to becoming the Parent Company after admission to AIM. The
admission was completed on 2 September 2013, and at this
time the Board was expanded.
The Directors who served during the year were as follows:
Executive Directors
Benjamin Crawford (Chief Executive Officer)
Glenn Hayward (Chief Financial Officer and Company
Secretary – appointed to the Board 10 February 2014)
Donald Baladasan (Chief Financial Officer – resigned
from Board 10 February 2014)
Robert Pooke (Executive Director)
Non-Executive Directors
John Swingewood (Non-Executive Chairman)
Samuel Dayani
Thomas Rickert (appointed 2 September 2013)
Thomas Pridmore (appointed 2 September 2013)
The biographical details of the Directors are provided on pages
18 and 19 of this report.
Two Directors will retire at the Company’s Annual General
Meeting, and being eligible will offer themselves for re-election.
The Directors and their interests in the shares in the Group
The Directors of the Company, and their interests in the
shares and share options of the Company, are shown in the
Remuneration Report on pages 27 to 29 of this report.
Transactions with any parties related to the Directors are
disclosed in note 24 to the Financial Statements.
Directors conflicts of interest
Each Director is required, in accordance with the provisions of
the Companies Act 2006, to declare any interests that may give
rise to a conflict of interest with the Company on appointment
and subsequently as they arise. Where such a conflict or
potential conflict arises, the Board is empowered under the
Company’s Articles of Association to consider and authorise
such conflicts as appropriate.
Articles of Association
The Company’s Articles of Association set out the Company’s
internal regulation and cover such matters as the rights of
shareholders, the appointment and removal of Directors and
the conduct of Board and general meetings.
A copy of the Company’s Articles of Association is available on the
Group’s website (https://www.centralnic.com/investors/reports).
Subject to the provisions of legislation, the Company’s Articles
of Association and any directions given by resolutions of the
shareholders, the Board may exercise all powers of the
Company and may delegate authorities to committees and
management as it sees fit. Details of the committees of the
Board and their activities are contained in the Corporate
Governance Report on pages 24 to 26 of this report.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website.
Principal risks and uncertainties
The board’s assessment of the principal risks and uncertainties,
together with the mitigating factors are presented in the
strategic report on page 14.
20 CentralNic Group Plc Annual Report 2014 Substantial shareholders
In addition to the Directors Interests disclosed in the
Remuneration Report, and in accordance with Part 22 of the
Companies Act 2006, the Company has been notified that the
following shareholder’s interests exceeded 3% of the Company’s
ordinary share capital in issue at the 31 March 2015:
Ordinary shares Percentage
Erin Invest & Finance Ltd 21,630,382 35.35%
UBS Private Banking
Nominees Ltd (R Pooke) 8,400,581 13.73%
Jabella Group Ltd 5,687,891 9.30%
Schroder Investment
Management 5,090,909 8.32%
Christian Phillips 4,750,000 7.76%
Natwest FIS Nominees 3,699,000 6.05%
Unicorn Asset Management 3,188,181 5.21%
Marco Rinaudo 2,090,738 3.42%
No substantial shareholders have different voting rights to other
holders of the share capital of the Company.
Corporate governance
The Corporate Governance Report, on pages 24 to 26 is
incorporated into this report by reference.
Corporate responsibility
The Board recognises its employment, environmental and
health and safety responsibilities, and devotes appropriate
resources towards monitoring and improving compliance with
existing standards.
Management and staff
CentralNic’s management team has been assembled to
ensure the Group has the number of people and range of skills
required to deliver the business strategy. The team is diverse
and brings functional expertise across a number of disciplines
including technical and operational delivery, finance, law,
marketing and sales.
While the business is managed under budgetary controls, the
Directors focus on ensuring there is succession planning in
place as is appropriate for a business of our size. We also
ensure there is regular communication of information affecting
our managers and their teams, to ensure all employees are
kept up to date with issues affecting them.
Our staff and key consultants represent a number of different
nationalities, and we are also pleased by the gender diversity
in our business.
The executive leaders within the business recognize the
importance of engaging with our employees and do so informally
on a day to day basis. We often use a cascade approach to
employee communications, with the heads of departments
disseminating appropriate information to their teams, including
those located elsewhere around the world.
While we do not believe that human rights issues are a
significant risk to our business currently, we are conscious that
as we expand into new international markets issues of human
rights may become more significant. The Directors keep all
aspects of business development under review, and act with
caution and integrity to ensure all our activities and specifically
business development activities are respectful of human rights.
The Board recognises the importance of engaged employees
working within the Group and how they are vital to the future
success of the business. However, given the size of the Group
there is dependency on a few key individuals and this is
discussed further in the Risks and Uncertainties on page 14.
The Group is committed to achieving equal opportunities and to
complying with anti-discrimination legislation. The Group is
committed to offering employees and job applicants equal and
fair opportunity to benefit from employment without regard to
their sex, sexual orientation, marital status, race, religion or
belief, age or disability.
Communication with employees is primarily through formal and
informal meetings and through the use of the Group’s
information systems.
The Group has a policy of share participation at all levels.
Quality accreditations
CentralNic is both ISO 27001 (information security management)
and ISO 9001 (quality management system) accredited.
These accreditations are internationally recognised and provide
CentralNic’s partners with additional levels of assurance as to
the technical integrity of the Group’s IT systems.
CentralNic Group Plc Annual Report 2014 21 Directors’ report continued
Anti-bribery and corruption compliance
CentralNic conducts business ethically, maintains financial
integrity and behaves responsibly in our business dealings.
The Group Directors and its senior management are committed
to ensuring strict adherence to our anti-bribery and corruption
policy, and compliance with anti-bribery and corruption laws.
All Directors, employees and consultants have received training
sessions in maintaining the highest standards of professional
conduct and are aware of the need to carry out business fairly,
honestly and openly. Clear lines of communication and
responsibility are in place to report any incidences or
suspected incidences of abuse to provide an effective,
trusted reporting mechanism.
Environment
The Group is committed to operating in an environmentally
responsible manner. The Directors consider environmental
impact when making decisions.
The community, charitable and political donations
The Directors consider the impact on the community when
making decisions.
During the year charitable donations totalling £150 were made to
WaterAid UK, a charity that works specifically to improve water
sanitation and hygiene in the developing world (2013: £650).
The Group made no political donations during the year, either in
the UK or overseas.
Policy on the payment of creditors
The Group’s policy is to agree terms and conditions for its
business transactions with suppliers and to endeavour to abide
by these terms and conditions, subject to the supplier meeting
their obligations.
No one supplier is considered to be essential to the business
of the Group.
Health and safety
The Directors and senior management are committed to
providing for the welfare, health and safety of the Group’s
employees and have procedures in place, including regular
monitoring by third party specialists, to ensure compliance
with our legal and contractual obligations.
Business continuity
The Group has built a resilient technology infrastructure,
designed to provide data security and continuity of service.
The Board recognises the importance of resilience to cyber
threats and invests in primary and secondary data centres along
with a distributed domain name server constellation operated
by the Group and third party providers. The Board keeps the
infrastructure requirements under review and adopts a
continuous improvement approach to further investment, within
appropriate parameters, as business activities expand. The
technical provision, alongside customer support, is considered
one of the most significant aspects of Business Continuity.
Statement of Directors responsibilities in respect of the
Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable laws
and regulations.
Company Law requires the Directors to prepare both the
Group and Parent Company financial statements for each
financial year. As required by the AIM Rules of the London Stock
Exchange they are required to prepare the Group financial
statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the EU and applicable law.
The Parent Company financial statements have been prepared
under UK GAAP .
Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company and the
Group and of their profit or loss for that period. In preparing
each of the Group and Parent Company financial statements,
the Directors are required to:
• Select suitable accounting policies and then apply them
consistently;
• Make judgements and estimates that are reasonable
and prudent;
• State whether they have been prepared in accordance
with IFRS as adopted by the EU; and
• Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and the
Parent Company will continue in business.
22 CentralNic Group Plc Annual Report 2014 The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Parent
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the Parent Company and
enable them to ensure that its financial statements comply with
the provisions of the Companies Act 2006. The Directors have
general responsibility to take such steps as are reasonably open
to them to safeguard the assets of the Group and to prevent
and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may
differ in other jurisdictions.
Disclosure of audit information
The Directors confirm that, as at the date of approval of this
annual report and these financial statements, so far as each
Director is aware there is no relevant audit information of which
the Company’s auditor is unaware and that he has taken all the
steps that he ought to have taken as a Director in order to make
himself aware of any relevant audit information and to establish
that the Company’s auditor is aware of that information.
Going concern
The Directors have in place procedures to review the forecasts
and budgets for the coming year, which have been drawn
up with appropriate regard for both the macroeconomic
environment in which the Group operates and the particular
circumstances influencing the Domain Name industry and the
Group itself. These were prepared with reference to historic and
current industry knowledge, contracted trading activities, and
prospects that relate to the future strategy of the Group. As a
result, at the time of approving the financial statements, the
Directors consider that the Company and the Group have
sufficient resources to continue in operational existence for the
foreseeable future and that it is appropriate to adopt the going
concern basis in the preparation of the financial statements.
As with all forecasts, the Directors cannot guarantee that the
going concern basis will remain appropriate given the inherent
uncertainty relating to future events. Principle areas of
Uncertainty and Risks are highlighted on page 14.
Auditors
The Company’s independent external auditors, Crowe Clark
Whitehill LLP , were initially appointed on 17 July 2013 and then
reappointed at the Company’s Annual General Meeting of
11 June 2014. It is proposed by the Board they be put forward
for reappointment as auditors and a resolution concerning their
reappointment will be proposed at the forthcoming AGM.
Registered office
35-39 Moorgate, London EC2R 6AR
Registered number: 08576358
Approved by the Board and signed on it’s behalf by:
John Swingewood Chairman
28 April 2015
CentralNic Group Plc Annual Report 2014 23
Cautionary statement
Under the Companies Act 2006, a Company’s Directors’ Report is required,
among other matters, to contain a fair review by the Directors of the Group’s
business, through a balanced and comprehensive analysis of the development
and performance of the business of the Group and the position of the Group
at the year end, consistent with the size and complexity of the business.
The Directors’ Report set out above, including the Chairman’s Statement, the
Chief Executive’s Report, and the Chief Financial Officer’s Report incorporated
into it by reference (together with the Directors’ Report), has been prepared only
for the shareholders of the Company as a whole, and its sole purpose and use
is to assist shareholders to exercise their governance rights. In particular, the
Directors’ Report has not been audited or otherwise independently verified. The
Company and its Directors and employees are not responsible for any other
purpose or use or to any other person in relation to the Directors’ Report.
The Directors’ Report contains indications of likely future developments and
other forward-looking statements that are subject to risk factors associated
with, among other things, the economic and business circumstances
occurring from time to time in the countries, sectors and business segments
in which the Group operates. These factors include, but are not limited to,
those discussed under Principal Risks and Uncertainties. These and other
factors could adversely affect the Group’s results, strategy and prospects.
Forward-looking statements involve risks, uncertainties and assumptions.
They relate to events and/or depend on circumstances in the future which
could cause actual results and outcomes to differ materially from those
currently anticipated. No obligation is assumed to update any forward looking
statements, whether as a result of new information, future events or otherwise. Corporate governance
Board governance and policy
The Directors acknowledge the importance of the principles set
out in the UK Corporate Governance Code. Although the
Corporate Governance Code is not compulsory for AIM quoted
companies, the Directors have applied the principles in the Code
as far as practicable and appropriate for a company of its size
and nature, in accordance with the QCA Corporate Governance
Code for small and mid-sized Quoted Companies 2013.
The Board comprises a Non-Executive Chairman, three
executive directors and three non-executive directors. The Board
meets regularly to consider the business strategy, performance
and the framework of internal controls. To enable the Board to
discharge its duties, all Directors receive appropriate and timely
information. Briefing papers are distributed to all Directors in
advance of Board meetings. All Directors have access to the
advice and services of the Company Secretary, who is
responsible for ensuring that the Board procedures are followed
and that applicable rules and regulations are complied with.
In addition, procedures are in place to enable the Directors to
obtain independent professional advice in the furtherance of
their duties, if necessary, at the Company’s expense.
In line with the requirements of the UK Corporate Governance
Code and the Company’s Articles of Association, the Group
has voluntarily chosen that two Directors will retire at the
Annual General Meeting and being eligible, will offer
themselves for re-election.
Board Committees
The Company has established Audit, Nomination and
Remuneration Committees.
The terms of reference for the three committees were reviewed
during the year and are available for inspection on request from
the Company Secretary.
Audit Committee
The Audit Committee has John Swingewood as Chairman and
other members of the Committee include Samuel Dayani,
Thomas Rickert and Thomas Pridmore. The Chief Financial Officer
is invited to and regularly does attend the Committee meetings.
The primary responsibilities of the Committee, having due regard
for the interests of Shareholders include:
• Monitoring the integrity of the half yearly and annual financial
statements and formal announcements regarding the
Group’s financial performance
• Reviewing significant accounting policies, areas of
significant estimates and judgments and disclosures in
financial reports
• Monitoring the quality and effectiveness of internal control
procedures and risk management systems
• Considering the requirement for Internal Audit, taking into
account the size and nature of the Company and the Group
• Reviewing the external auditor reports relating to the
Company’s accounting and internal control procedures
• Overseeing the Board’s relationship with the external
auditors, including their continued independence and
making recommendations to the Board on the selection
of external auditors.
The Audit Committee is required to meet at least twice a year.
During the year the Committee met on three occasions.
The appointment of the independent external auditor is
approved by the shareholders annually. The independent
auditor’s audit of the financial statements is conducted in
accordance with International Standards on Auditing, ISA
(UK and Ireland) issued by the Auditing Practices Board.
It is noted that the external auditor also operates procedures
designed to safeguard their objectivity and independence.
The Audit Committee reviews all fees related to non-audit work,
and the committee reviews any material non-audit work prior
to commencement. Details of auditor fees can be found in
note 7 to the financial statements.
Remuneration Committee
The Group’s Remuneration Committee is responsible, on behalf of
the Board, for developing remuneration policy. Details of objectives
and policy are provided in the Remuneration Report on page 27.
The Remuneration Committee has John Swingewood as its
Chairman and other members of the Committee include Samuel
Dayani, Thomas Rickert and Thomas Pridmore.
The primary responsibilities of the Committee, having due
regard for the interests of Shareholders include:
• Determining and agreeing with the Board the remuneration policy
for the Chairman of the Board, the non-Executive Directors and
the Executive Directors and other senior managers
• Reviewing the design of share incentive plans for approval
by the Board and determining the award policy to Executive
Directors and personnel under existing plans
• Determining the remainder of the remuneration packages
(principally salaries, bonus and pension) for the Executive
Directors and senior management including any
performance-related targets
• Reviewing and noting remuneration trends across the Group
• Co-ordinating with the Nominations Committee in relation to
the remuneration to be offered to any new Executive
Director; and
• Taking responsibility for the selection criteria and if
appropriate selecting, appointing and setting terms of
reference for any remuneration consultants engaged to
advise the Committee.
24 CentralNic Group Plc Annual Report 2014 The Remuneration Committee was created in September 2013
and is required to meet at least twice a year. During 2014 the
Committee met on three occasions.
It is the Group’s policy that Executive Directors’ service contracts
contain at least a 6 month notice period.
Nominations Committee
The Group’s Nominations Committee has the power and
authority to carry out a selection process of candidates before
proposing new appointments to the Board.
The Nominations Committee has John Swingewood as its
Chairman and other members of the Committee include Samuel
Dayani, Thomas Rickert and Thomas Pridmore.
The Nominations Committee was created in September 2013
and is required to meet at least once a year. During 2014 the
Committee met on one occasion.
The Group has adopted a policy for Directors and key employee
share dealings which is appropriate for an AIM-quoted Group.
The Directors comply with Rule 21 of the AIM rules relating to
Director’s dealings and take reasonable steps to ensure
compliance by the Group’s applicable employees.
The Executive and Non-Executive Directors service contracts
are available for inspection by shareholders on request to the
Company Secretary.
The Chairman and Non-Executive Directors do not participate
in agenda items at any meeting when discussions in respect
of matters relating to their own position take place.
Risk management and internal controls
The Board has primary responsibility for establishing and
maintaining the Group’s financial and non-financial controls,
as well as identifying the major risks facing the Group.
Internal control systems are designed to meet the particular
needs of the Group and the risks to which it is exposed. By their
nature, internal controls can provide reasonable but not absolute
assurance against material misstatement or loss.
The Executive Directors and Senior Management have specific
responsibilities for aspects of the Group’s affairs and have
regular discussions to address operational matters, as well as
considering the skillsets required in their teams to maintain the
internal controls required.
Accounting procedures
The financial processes and control systems are kept under
regular review by the Executives with oversight from the Board,
with a view to further evolution and improvement as the
Group’s activities expand.
Accounting procedures are managed on a day to day basis by
the Finance team. Responsibility levels are set and agreed with
the Board, with authority delegated to appropriate responsible
managers as well as the Executive. Segregation of duties is
deployed to the degree this is practical and efficient, noting
the size of the Group.
Monthly management accounts are reported to the Board,
under IFRS (EU) with the content aligned to the Group’s
management information requirements. The Board reviews the
accounts in detail during each Board meeting and requests
further information as the need arises. Comparisons to
approved budgets and forecasts are prepared with associated
commentary provided.
The Company prepares annual Budgets which are reviewed by
the Board. The Budgets are then updated during the year to
provide latest forecasts.
Capital expenditure is regulated by the Budget process, and is
kept under regular review during the year. Investment appraisal
techniques, using discounted cashflow projections, are
deployed in relation to material investments and are reviewed
by the Board as part of good governance such that material
transactions that are significant in terms of their size or type
are only undertaken after Board review.
The Board acknowledges that there are processes in place for
identifying, evaluating and managing risks faced by the Group,
and places emphasis on continuous process improvement.
Corporate responsibility, the environment
and health and safety
The Group is committed to maintaining and promoting high
standards of business integrity. Company values, which
incorporate the principles of corporate social responsibility and
sustainability, guide the Group’s relationships with clients,
employees and the communities and environment in which
the Group operates.
The Group’s approach to sustainability addresses both our
environmental and social impacts, supporting the Group’s vision
to remain an employer of choice, while meeting client demands
for socially responsible partners. By way of example the Group
companies have arranged and promoted a number of ACE
(Athletics, Community and Environmental) activities in the past
and these are likely to continue; the Company is certified by
the Carbon Neutral Company.
The Group respects local laws and customs while supporting
international laws and regulations. These policies have been
integral in the way Group companies have done business in the
past and will continue to play a central role in influencing the
Group’s practice in the future.
CentralNic Group Plc Annual Report 2014 25 Corporate governance continued
Communications with shareholders
The Board regards the importance of effective communication
with shareholders as essential.
Relations with shareholders are managed principally by the Chief
Executive Officer and the Chairman, and meetings are regularly
held with institutional investors and analysts during the year.
The Chairman, Chief Executive Officer, the Chief Financial Officer
and if required Non-Executive Directors make themselves
available for meetings with major shareholders either individually
or collectively. The Group’s shareholders are invited to attend the
AGM at which the majority of Directors are present. The Group’s
Nominated Advisors and Joint Brokers also convey shareholder
opinions to the Chairman and Chief Executive Officer and these
are discussed with the Board.
The Group’s website contains information on current business
activities, including the annual and interim results.
Annual General Meeting date
The Annual General meeting will be convened in accordance
with the provisions of the Companies Act 2006. The Annual
General Meeting will take place on 28 May 2015 at 10.00am
at the offices of the Company’s solicitors:
DWF LLP
20 Fenchurch Street
London
EC3M 3AG
The proposed resolutions together with proxy forms and
this annual report will be distributed to shareholders by the
4 May 2015, if not before.
26 CentralNic Group Plc Annual Report 2014 Remuneration report
CentralNic Group Plc Annual Report 2014 27
As the Company is an AIM listed company, it is not required to
present a Directors’ Remuneration report. However, the Board
has chosen to do so in line with evolving best practice.
Remuneration Committee
The membership of the Committee and the principal activities
are detailed in the Corporate Governance section of the annual
report on pages 24 and 25.
Remuneration policy
The Company’s remuneration policy is focussed on being able to
attract, retain and incentivise management with the appropriate
skills and expertise to realise the Group’s strategic objectives and
align managements’ interests with those of shareholders.
In particular the Remuneration Committee seeks to link payment
to performance and as a result create a performance culture
within the business.
The Directors believe that it is important to properly motivate and
reward key senior employees and executives and to do so in a
manner that aligns their interests with that of the Shareholders.
The Directors also recognise the importance of ensuring that all
employees are well motivated and identify closely with the
profitability of the Company.
Directors remuneration
The average number of staff employed by the Group is included
in note 8 to the financial statements.
Disclosure of the remuneration for key management personnel,
as required under IAS 24, is also detailed in note 8 to the
financial statements.
In terms of the remuneration of the Company’s Directors, entries
to profit and loss included in the Statement of Comprehensive
Income include:
Included in the Directors’ salaries and fees above is a charge of
£54,000 in the year to the Company and Group by Robert
Pooke Consulting (2013: £51,335) of which Robert Pooke has
a controlling interest.
Included in the Directors’ salaries and fees above is a charge of
£25,000 in the year to the Company and Group by Laura
Trading LLC (2013: £48,333) of which Samuel Dayani has a
controlling interest.
Included in the Directors’ salaries and fees above is a charge of
£40,150 in the year to the Company and Group by Swingewood
Consulting Ltd (2013: £13,333) of which John Swingewood has
a controlling interest. Consultancy fees of £nil were incurred
during 2014 (2013: £33,333).
Included in the Directors’ emoluments above is a charge of
£206,333 in the year to the Company and Group by Ben
Crawford FZE (2013: £64,251) of which Ben Crawford has a
controlling interest. Consultancy fees of £nil were incurred
during 2014 (2013: £129,500).
Included in the Directors’ salaries and fees above is a charge
of £18,767 in the year to the Company and Group by WJP
Consulting Ltd (2013: £nil) of which Tom Pridmore has a
controlling interest.
Included in the Directors’ emoluments above is a charge of
£5,333 in the year to the Company and Group by Mataxis Ltd
(2013: £18,879) of which Donald Baladasan has a controlling
interest. Consultancy fees of £16,500 have also been incurred
during 2014 (2013: £39,275).
                                                                                                                                                                                     Share-based
                                                                                        Salaries & fees                    Bonus                  Pension               payments                      2014                      2013
                                                                                                     £’000                     £’000                     £’000                     £’000                     £’000                     £’000
CentralNic Limited
Non-Executive Directors
Robert Pooke                                                            –                    –                    –                    –                    –                  33
Samuel Dayani                                                          –                    –                    –                    –                    –                  40
CentralNic Group PLC followingIPO
Non-Executive Directors
Samuel Dayani                                                        25                    –                    –                    –                  25                    8
John Swingewood                                                   40                    –                    –                    –                  40                  13
Thomas Rickert                                                       25                    –                    –                  13                  38                  11
Tom Pridmore                                                          25                    –                    –                  13                  38                  12
Executive Directors
Robert Pooke                                                          60                    –                    –                    –                  60                  20
Ben Crawford                                                        146                  66                    –                163                375                108
Glenn Hayward                                                     113                  23                  16                    –                152                    –
Donald Baladasan                                                     6                    –                    –                    –                    6                  23
                                                                            440                  89                  16                189                734                268 Remuneration report continued
28 CentralNic Group Plc Annual Report 2014
In addition, the following fees were also paid to Directors for
work undertaken in relation to the placing of shares in 2013
and included in the 2013 share issue costs:
Fees
£’000
Samuel Dayani (Laura Trading LLC) 30
Ben Crawford (Ben Crawford FZE) 79
Donald Baladasan (Mataxis Ltd) 46
John Swingewood (Swingewood Consulting Ltd) 8
Robert Pooke (Robert Pooke Consulting) 8
171
Share options
Prior to admission to AIM CentralNic established an unapproved
share option scheme under which certain key executives and
employees were invited to participate.
In addition, again prior to AIM admission, CentralNic also granted
options under an Enterprise Management Incentive Scheme
(EMI) under separate EMI option agreements to certain qualifying
key executives and employees. These options were rolled over
into the Company during 2013.
To reflect existing commitments, the options granted in June
2013 for the unapproved option scheme and the EMI scheme
will vest in 12 equal instalments at 3 month intervals following
Admission (so that the options will have fully vested 3 years after
the date of the grant). The unapproved options granted on
14th October 2013 will vest 3 years after the date of grant.
None of the Directors participate in the EMI scheme, but Ben
Crawford participates in both the June 2013 and October 2013
unapproved scheme, and Donald Baladasan (a former Director)
participates in the June 2013 unapproved scheme.
These share incentive arrangements are designed to support
the strategy of generating significant sustainable value for
shareholders by linking the rewards for executives with the value
created for Shareholders and thereby aligning the interests of
key executives with those of Shareholders.
Shares acquired or options granted under any share incentive
arrangements operated by the Company will be limited in total to 10
per cent of the Company’s issued share capital from time to time.
The table below shows the outstanding share options issued to
Directors and former Directors at 31 December 2014, noting
that no options were granted during 2014:
None of the options have been exercised during the year and no
options have expired. All options expire within 10 years of grant.
Further details are provided in relation to share based payments
in note 26 to the financial statements.
In addition, a further 1,084,000 options over ordinary shares are
in issue, being held by the Company’s employees.
The IFRS2 charge in the year for all share option plans relating
to the Directors was £189,518 (2013: £51,585).
On 31 December 2014, the closing market price of CentralNic
Group plc ordinary shares was 43 pence. The highest and lowest
price of these shares in the year were 98 pence on 1 January
2014 and 36 pence on 24 November 2014 respectively.
                                                                                                                                            Number of options                        Exercise price                    Options granted
Outstanding at 1 January and 31 December 2014
Ben Crawford                                                                                            1,316,000                            10p              1 June 2013
Donald Baladasan (former Director)                                                               125,000                            10p              1 June 2013
Ben Crawford                                                                                              850,000                            55p       14 October 2013
Thomas Rickert                                                                                              88,000                            55p       14 October 2013
Tom Pridmore                                                                                                88,000                            55p       14 October 2013
Total                                                                                                        2,467,000 CentralNic Group Plc Annual Report 2014 29
Directors’ interests
(a) As at 31 December 2014, the interests of the Directors,
including persons connected with the Directors within the
meaning of section 252 of the Companies Act 2006, in the
issued share capital of the Company are as follows:
Ordinary Shares Percentage
Erin Invest & Finance Ltd* 21,630,382 35.35%
UBS Private Banking
Nominees Ltd (R Pooke)** 8,400,581 13.73%
Jabella Group Ltd*** 5,687,891 9.30%
Natwest FIS Nominees**** 3,699,000 6.05%
* The beneficial holder of Erin and Natwest FIS Nominee Limited is the father
of Samuel Dayani, a Director of the Company. Of these shares 5,687,891
Ordinary Shares are held by Jabella Group Limited in which Erin has a
53.80 per cent. interest
** 5,687,891 Ordinary Shares are held by Jabella Group Limited in which
Robert Pooke has a 32.0 per cent. interest
*** Jabella Group Limited is a BVI company owned inter alia, by Erin, Natwest
FIS Nominee Limited, John Swingewood and Robert Pooke.
**** 5,687,891 Ordinary Shares are held by Jabella Group Limited in which
Natwest FIS Nominee Limited has a 8.40 per cent interest
There are no changes to this information as at the date of
this report.
(b) Save as disclosed in this annual report, none of the Directors
nor any members of their families, nor any person connected with
them within the meaning of section 252 of the Act, has any interest
in the issued share capital of the Company or its subsidiaries.
(c) Save as disclosed in this annual report, as at the date of this
Document, no Director has any option over any warrant to
subscribe for any shares in the Company.
(d) None of the Directors nor any members of their families, nor
any person connected with them within the meaning of section
252 of the Act, has a related financial product (as defined in the
AIM Rules) referenced to the Ordinary Shares.
(e) None of the Directors is or has been interested in any
transaction which is or was unusual in its nature or conditions
or significant to the business of the Company and which was
effected by the Company and remains in any respect
outstanding or unperformed.
(f) There are no outstanding loans made or guarantees
granted or provided by the Company to or for the benefit of
any Director other than disclosed in notes 15 and 24 to the
financial statements.
(g) Save as disclosed in this Annual report, there are no potential
conflicts of interest between any duties to the Company of the
Directors and their private interests or their other duties. We have audited the financial statements of CentralNic Group
plc for the year ended 31 December 2014 which comprise the
Group Statement of Financial Position and Parent Company
Balance Sheet, the Group Statement of Comprehensive
Income, the Group Cash Flow Statement, the Group Statement
of Changes in Equity and the Parent Company Reconciliation of
Movements in Shareholders’ Funds and the related notes set
out on pages 31 to 64.
The financial reporting framework that has been applied in the
preparation of the Group financial statements is applicable law
and International Financial Reporting Standards (IFRSs) as
adopted by the European Union. The financial reporting
framework that has been applied in the preparation of the Parent
Company financial statements is applicable law and United
Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice).
This report is made solely to the Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so
that we might state to the Company’s members those matters
we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the
Company and the Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditors
As explained more fully in the Statement of Directors’
Responsibilities, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give a
true and fair view. Our responsibility is to audit and express an
opinion on the financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland).
Those standards require us to comply with the Auditing Practices
Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give reasonable
assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an
assessment of: whether the accounting policies are appropriate
to the Company’s circumstances and have been consistently
applied and adequately disclosed; the reasonableness of
significant accounting estimates made by the Directors; and
the overall presentation of the financial statements.
In addition, we read all the financial and non-financial information
in the Strategic Report and the Directors’ Report to identify
material inconsistencies with the audited financial statements
and to identify any information that is apparently materially
incorrect based on, or materially inconsistent with, the
knowledge acquired by us in the course of performing the audit.
If we become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion:
• the financial statements give a true and fair view of the state
of the Group’s and of the Parent Company’s affairs as at
31 December 2014 and of the Group’s profit and the Parent
Company’s loss for the year then ended;
• the Group financial statements have been properly prepared
in accordance with IFRSs as adopted by the European Union;
• the Parent Company financial statements have been properly
prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion the information given in the Strategic Report
and the Directors’ Report for the financial year for which the
financial statements are prepared is consistent with the
financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if,
in our opinion:
• adequate accounting records have not been kept by the
Parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
• the Parent Company financial statements are not in
agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by
law are not made; or
• we have not received all the information and explanations
we require for our audit
Stephen Bullock
Senior Statutory Auditor
For and on behalf of
Crowe Clark Whitehill LLP
Statutory Auditor
St Bride’s House
10 Salisbury Square
London
EC4Y 8EH
28 April 2015
Independent Auditors’ report
to the Members of Centralnic Group plc
30 CentralNic Group Plc Annual Report 2014 CentralNic Group Plc Annual Report 2014 31
Consolidated statement of
comprehensive income
for the year ended 31 December 2014
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                   Note                             £’000                             £’000
Revenue                                                                                                                          5,6                   6,067                   3,051
Cost of sales                                                                                                                                          (2,494)                    (713)
Gross profit                                                                                                                                             3,573                   2,338
Administrative expenses                                                                                                                          (2,854)                 (1,578)
Share based payments expense                                                                                                                (222)                      (66)
Operating profit                                                                                                                                        497                      694
Adjusted EBITDA*                                                                                                                                  1,724                   1,015
Depreciation                                                                                                                   13                       (90)                      (16)
Amortisation of intangible assets                                                                                      14                     (448)                    (239)
Acquisition deal fees                                                                                                                                (467)                         –
Share based payments expense                                                                                                              (222)                      (66)
Operating profit                                                                                                                                      497                      694
Finance income                                                                                                                10                        23                          7
Profit before taxation                                                                                                        7                      520                      701
Income tax expense                                                                                                          11                     (156)                    (171)
Profit after taxation attributable to equity shareholders                                                                           364                      530
Other comprehensive income
Other comprehensive income                                                                                                                          –                          1
Total comprehensive income for the financial year attributable to equity shareholders                             364                      531
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                   Note                           Pence                            pence
Earnings per share
Basic                                                                                                                                12                     0.60                     1.00
Diluted                                                                                                                              12                     0.56                     0.91
* Earnings before interest, tax, depreciation and amortisation, non-trading items and non-cash charges.
All amounts relate to continuing activities.
The notes on pages 35 to 57 form an integral part of these financial statements. 32 CentralNic Group Plc Annual Report 2014
Consolidated statement
of financial position
as at 31 December 2014
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                   Note                             £’000                             £’000
ASSETS
Non-current assets
Property, plant and equipment                                                                                           13                        90                        54
Intangible assets                                                                                                               14                   6,118                   1,941
Deferred receivables                                                                                                          15                      916                      694
Investments                                                                                                                      16                      997                          2
Deferred tax assets                                                                                                           21                        74                          –
                                                                                                                                                               8,195                   2,691
Current assets
Trade and other receivables                                                                                               17                   2,333                      316
Cash and bank balances                                                                                                   18                   3,056                   4,932
                                                                                                                                                               5,389                   5,248
Total assets                                                                                                                                          13,584                   7,939
EQUITY AND LIABILITIES
Equity
Share capital                                                                                                                     19                        61                        59
Share premium                                                                                                                 19                   4,935                   3,485
Share based payments reserve                                                                                                                1,018                      742
Foreign exchange translation reserve                                                                                                               1                          1
Retained Earnings                                                                                                                                       885                      521
Total equity                                                                                                                                            6,900                   4,808
Non-current liabilities
Other payables                                                                                                                 20                      725                      457
Deferred tax liabilities                                                                                                         21                        72                        62
                                                                                                                                                                  797                      519
Current liabilities
Trade and other payables and accruals                                                                              22                   5,671                   2,427
Taxation payable                                                                                                                                         216                      185
                                                                                                                                                               5,887                   2,612
Total liabilities                                                                                                                                        6,684                   3,131
Total equity and liabilities                                                                                                                    13,584                   7,939
These financial statements were approved and authorised for issue by the Board of Directors on 28 April 2015 and were signed
on it’s behalf by:
John Swingewood Chairman
Company Number: 08576358
The notes on pages 35 to 57 form an integral part of these financial statements. CentralNic Group Plc Annual Report 2014 33
Consolidated statement
of changes in equity
for the year ended 31 December 2014
                                                                                                                                                                                                    Foreign
                                                                                                                                                                Share based            exchange
                                                                                                                    Share                  Share            payments            translation             Retained 
                                                                                                                    capital             premium                reserve                reserve              earnings                    Total
                                                                                                                    £’000                  £’000                  £’000                  £’000                  £’000                  £’000
Balance as at 31 December 2012                                       50                  –                  –                  –              629              679
Profit for the year                                                                   –                  –                  –                  –              530              530
Other comprehensive income for the year –
translation of foreign operation                                             –                  –                  –                  1                  –                  1
Total comprehensive income for the year                               –                  –                  –                  1              530              531
Dividends                                                                             –                  –                  –                  –             (638)            (638)
Issue of new shares                                                              9           4,991                  –                  –                  –           5,000
Share issue costs                                                                 –          (1,506)                 –                  –                  –          (1,506)
Share based payments                                                         –                  –              742                  –                  –              742
Balance as at 31 December 2013                                       59           3,485              742                  1              521           4,808
Profit for the year                                                                   –                  –                  –                  –              364              364
Other comprehensive income for the year –
translation of foreign operation                                             –                  –                  –                  –                  –                  –
Total comprehensive income for the year                               –                  –                  –                  –              364              364
Issue of new shares                                                              2           1,472                  –                  –                  –           1,474
Share issue costs                                                                 –               (22)                 –                  –                  –               (22)
Share based payments                                                         –                  –              222                  –                  –              222
Share based payments – deferred tax asset                          –                  –                54                  –                  –                54
Balance as at 31 December 2014                                     61           4,935           1,018                  1              885           6,900
Share capital represents the nominal value of the Company’s cumulative issued share capital. Share premium represents the
cumulative excess of the fair value of consideration received for the issue of shares in excess of their nominal value less attributable
share issue costs and other permitted reductions. Retained profits represent the cumulative value of the profits not distributed to
shareholders, but retained to finance the future capital requirements of the CentralNic Group. Share based payments reserve
represents the cumulative value of share based payments recognised through equity. Foreign currency translation reserve
represents the cumulative exchange differences arising on Group consolidation.
The notes on pages 35 to 57 form an integral part of these financial statements. 34 CentralNic Group Plc Annual Report 2014
Consolidated statement
of cash flows
for the year ended 31 December 2014
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Cash flow from operating activities
Profit before taxation                                                                                                                                   520                      701
Adjustments for:
Depreciation of property, plant and equipment                                                                                               90                        16
Amortisation of intangible assets                                                                                                                  448                      239
Share based payments                                                                                                                               222                        66
Operating profit before working capital changes                                                                                  1,280                   1,022
Increase in trade and other receivables                                                                                                       (664)                    (138)
Increase in trade and other payables and accruals                                                                                       934                      375
Cash flow from operations                                                                                                                    1,550                   1,259
Income tax paid                                                                                                                                         (136)                    (125)
Net cash flow from operating activities                                                                                                 1,414                   1,134
Cash flow used in investing activities
Purchase of property, plant and equipment                                                                                                 (126)                      (50)
Purchase of intangible assets                                                                                                                  (1,838)                    (216)
Disposal of intangible assets                                                                                                                           –                          –
Loan repayments (paid to)/received from third parties                                                                                  (102)                     283
Purchase of investments                                                                                                                            (997)                         –
Net cash flow used in investing activities                                                                                            (3,063)                       17
Cash flow used in financing activities
Proceeds from issuance of ordinary shares                                                                                                      –                   4,169
Repayments of borrowings                                                                                                                              –                      319
Dividends paid                                                                                                                                                –                     (638)
Reduction in deferred consideration                                                                                                            (230)                    (223)
Net cash flow generated from/(used in) financing activities                                                                   (230)                  3,627
Net increase in cash and cash equivalents                                                                                               (1,879)                  4,778
Cash and cash equivalents at beginning of the year                                                                                  4,932                      160
Exchange losses on cash and cash equivalents                                                                                              3                         (6)
Cash and cash equivalents at end of the year                                                                                      3,056                   4,932
The notes on pages 35 to 57 form an integral part of these financial statements. CentralNic Group Plc Annual Report 2014 35
Notes to the consolidated
financial statements
for the year ended 31 December 2014
1. General information
(a) Nature of operations
CentralNic Group Plc is the UK holding company of a group of companies which are engaged in the provision of independent
global domain name registry services. The Company was incorporated on 19 June 2013 to become the holding company of the
Group following a reorganisation which took place on 9 August 2013. The Company is registered in England and Wales. Its
registered office and principal place of business is 35-39 Moorgate, London, EC2R 6AR.
The CentralNic Group provides registry, registrar and enterprise services and strategic consultancy for new Top Level Domains
(“TLDs”), Country Code TLD’s (“ccTLDs”) and Second-Level Domains (“SLDs”) and it is the owner and registrant for a portfolio of
domain names, which it uses as SLD domain extensions and for resale on the domain aftermarket.
(b) Component undertakings
The principal activities of the subsidiaries and other entities included in the financial statements are as follows:
Place of
incorporation/                                                                                                         Issued and paid-up/
Name establishment                           Principal activities                                                   registered capital                Effective interests 
CentralNic Limited England and Wales       Domain registry services provider        Ordinary shares                  100%
CentralNic USA Limited USA                             US sales office                                   Ordinary stock                    100%
GB.com Limited England and Wales       Dormant – holds domain name           Ordinary shares                  100%
Who Is Privacy Limited England and Wales       Dormant                                             Ordinary shares                  100%
TLD Registrar Solutions Limited England and Wales       Domain registrar services provider       Ordinary shares                  100%
Internet Domain Service Commonwealth of        Domain registrar services provider       Ordinary shares                  100%
BS Corp The Bahamas
Whois Privacy Corp Commonwealth of        Domain registrar services provider       Ordinary shares                  100%
The Bahamas
Hoxton Domains Limited England and Wales       Aftermarket domain services               Ordinary shares                  100%
2. Application of IFRS
(a) Basis of preparation
The Company was incorporated on 19 June 2013 and on 9 August 2013 acquired the entire share capital of CentralNic Limited.
As a result of this transaction, the ultimate shareholders in CentralNic Limited received shares in the Company in direct proportion
to their original shareholdings in CentralNic Limited.
Under IFRS 3 (revised) “Business Combinations”, the acquisition of CentralNic Limited by the Company has been accounted for as
a reverse acquisition and the consolidated IFRS financial statements of the Company is therefore a continuation of the financial
statements of CentralNic Limited.
As a result any financial statements after 9 August 2013 represent consolidated financial statements of the Group. Prior to this date,
the historical financial statements represent the financial statements of the Company’s subsidiary, CentralNic Limited (see Note 3 of the
Company financial statements), and CentralNic Limited’s subsidiary undertakings. On this basis, the comparative information is pro-forma.
The financial statements are measured and presented in sterling (£), unless otherwise stated, which is the currency of the primary
economic environment in which the entities operate. They have been prepared under the historical cost convention, except for
financial instruments that have been measured at fair value through profit and loss.
The financial statements have been prepared on the going concern basis, which assumes that the Group will continue to be able
to meet its liabilities as they fall due for the foreseeable future. The financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the EU (“IFRS”) issued by the International Accounting Standards Board
(“IASB”), including related interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”).
The Director’s have reviewed forecasts and budgets for the coming year having regard to both the macroeconomic environment in
which the Group operates, historic and current industry knowledge and contracted trading activities and the future strategy of the
Group. As a result of that review the Director’s consider that it is appropriate to adopt the going concern basis of preparation. 36 CentralNic Group Plc Annual Report 2014
2. Application of IFRS continued
(b) Standards, amendments and interpretations to published standards not yet effective
The Directors have considered those Standards and Interpretations, which have not been applied in the Financial Statements but
are relevant to the Group’s operations, that are in issue but not yet effective and do not consider that any will have a material
impact on the future results of the Group.
3. Summary of significant accounting policies
The financial statements have been prepared on the historical cost basis, as explained in the accounting policies set out below,
which has been prepared in accordance with IFRS. The principal accounting policies are set out below.
(a) Basis of consolidation
The consolidated financial statements include the financial statements of all subsidiaries. The financial year ends of all entities in the
Group are coterminous.
The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control over
the operating and financial decisions is obtained and cease to be consolidated from the date on which control is transferred out of
the Group. Control exists when the Company has the power, directly, or indirectly, to govern the financial and operating policies of
an entity so as to obtain economic benefits from its activities.
On 9 August 2013, the Group, previously headed by CentralNic Limited underwent a re-organisation under which CentralNic
Limited’s shareholders in their entirety exchanged their shares for shares in CentralNic Group Plc a newly formed company, which
then became the ultimate Parent Company of the Group.
Notwithstanding the change in the legal parent of the Group, this transaction has been accounted for as a reverse acquisition
under IFRS 3 (revised) “Business Combinations” and the consolidated financial statements are prepared on the basis of the new
legal parent having been acquired by the existing Group.
All intercompany balances and transactions, including recognised gains arising from inter-group transactions, have been eliminated in full.
Unrealised losses are eliminated in the same manner as recognised gains except to the extent that they provide evidence of impairment.
(b) Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate
of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the
acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at
fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred
and included in administrative expenses. 
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
This includes the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, any previously held equity interest is remeasured at its acquisition date fair value
and any resulting gain or loss is recognised in profit or loss. 
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent
consideration classified as an asset or liability that is a financial instrument and within the scope of IAS 39 Financial Instruments: Recognition
and Measurement, is measured at fair value with changes in fair value recognised in either profit or loss or as a change to Other
comprehensive income. If the contingent consideration is not within the scope of IAS 39, it is measured in accordance with the appropriate
IFRS. Contingent consideration that is classified as equity is not remeasured and subsequent settlement is accounted for within equity. 
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised
for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair
value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has
correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the
amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired
over the aggregate consideration transferred, then the gain is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing,
goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are
expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Notes to the consolidated
financial statements continued CentralNic Group Plc Annual Report 2014 37
3. Summary of significant accounting policies continued
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill
associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on
disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the
portion of the cash-generating unit retained.
(c) Functional and foreign currencies
(i) Functional and presentation currency
The financial statements are presented in £ rounded to the nearest thousand, which is CentralNic’s functional and presentation currency.
The individual financial statements of CentralNic Group entities are presented in the currency of the primary economic environment
in which the entity operates, which is either £ or US$.
(ii) Transactions and balances
Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange
rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are
translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed
when the values were determined. All exchange differences are recognised in profit or loss.
(d) Financial instruments
Financial assets and liabilities are recognised in the statements of financial position when CentralNic or one of the CentralNic
Group entities has become a party to the contractual provisions of the instruments.
The CentralNic Group’s financial assets and liabilities are initially measured at fair value plus any directly attributable transaction
costs. The carrying value of the CentralNic Group’s financial assets, primarily cash and bank balances, and liabilities, primarily
CentralNic’s payables and other accrued expenses, approximate their fair values.
Financial instruments are offset when the CentralNic Group has a legally enforceable right to offset and intends to settle either on a
net basis or to realise the asset and settle the liability simultaneously.
Financial instruments recognised in the pro forma aggregated statements of financial position are disclosed in the individual policy
statement associated with each item.
(i) Financial assets
On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity
investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate.
Trade and other receivables, deposits, and prepayments
Trade and other receivables (including prepayments) that have fixed or determinable payments that are not quoted in an active
market are classified as other receivables, deposits, and prepayments. Other receivables, deposits, and prepayments are
measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by
applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
Cash and bank balances
Cash and bank balances comprise cash balances that are subject to insignificant risk of changes in their fair value, and are used
by the CentralNic Group in the management of its short-term commitments.
(ii) Financial liabilities and equity instruments
Financial liabilities are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest,
dividends, gains and losses relating to financial liabilities are reported in profit or loss. Distributions to holders of financial liabilities
are classified as equity and charged directly to equity.
Financial liabilities
Financial liabilities comprise long-term borrowings, short-term borrowings, trade and other payables and accruals, measured at
amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest income over
the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees on
points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts)
through the expected life of the financial liability, or, where appropriate, a shorter period to the net carrying amount on initial recognition. 38 CentralNic Group Plc Annual Report 2014
Notes to the consolidated
financial statements continued
3. Summary of significant accounting policies continued
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all its liabilities.
Equity instruments issued by the CentralNic Group are recognised at the proceeds received, net of direct issue costs.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are
shown in equity as a deduction, net of tax, from proceeds.
Dividends on ordinary shares are recognised as liabilities when approved for appropriation.
(e) Property, plant, and equipment
Property, plant and equipment, including leasehold improvements and office furniture and equipment, are stated at cost less
accumulated depreciation and impairment losses, if any.
Depreciation is calculated under the reducing balance method to write off the depreciable amount of the assets over their
estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless
the asset is fully depreciated. The principal annual rates used for this purpose are:
• Computer equipment 60% – 65%
• Furniture and fittings 15% – 20%
The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting
period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected
pattern of consumption of the future economic benefits embodied in the asset.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the
cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the CentralNic Group and
the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the
day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial
estimate of dismantling and removing the asset and restoring the site on which it is located for which the CentralNic Group are
obligated to incur when the asset is acquired, if applicable.
An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from its use.
Any gain or loss arising from de-recognition of the asset is recognised in profit or loss. The revaluation reserve included in equity
is transferred directly to retained profits on retirement or disposal of the asset.
(f) Intangible assets
Intangible assets represent amounts paid to acquire the rights to own and act as registrant for a portfolio of domain names or
amounts in respect of such intangible assets originally included at Directors valuation but treated as deemed cost on transition to
IFRS which, for the purposes of these financial statements, was 1 January 2010.
Capitalised domain names have a finite useful life and are measured at cost less accumulated amortisation and impairment losses,
if any. Domain names are amortised on an annual basis at the rate of 10% to 20% reducing balance.
Development costs that the CentralNic Group incurs for identifiable and unique software will be capitalised, where the following
criteria are met:
• it is technically feasible to complete the software so that it will be available for use;
• management intends to complete the software product and use or sell it;
• there is an ability to use or sell the software product;
• it can be demonstrated that the asset will probably generate future economic benefits; and
• the expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software product include the employee costs and an appropriate
portion of the relevant overheads.
Computer software development recognised as assets are amortised over their estimated useful lives, which are determined by
the Directors.
Costs for development initiatives that the CentralNic Group undertakes that are not otherwise allocable to specific domain names
or projects are charged to expense through profit and loss when incurred. CentralNic Group Plc Annual Report 2014 39
3. Summary of significant accounting policies continued
Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is
reflected in profit or loss in the period in which the expenditure is incurred. The useful lives of intangible assets are assessed as
either finite or indefinite.
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a
business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost
less any accumulated amortisation and accumulated impairment losses.
Intangible assets are tested for impairment annually if facts and circumstances indicate that impairment may exist. In the event that
the expected future economic benefits of the intangible assets are no longer probable or expected to be recovered, the capitalised
amounts are written down to their recoverable amount through profit and loss.
(g) Impairment
(i) Impairment of financial assets
Financial assets not categorised at fair value through profit or loss are assessed at the end of each reporting period to determine
whether there is any objective evidence of impairment. A financial asset is impaired if there is objective evidence of impairment as a
result of one or more events that occurred after the initial recognition of the asset and that loss event(s) had an impact on the estimated
future cash flows of the asset. Objective evidence that financial assets are impaired includes default or delinquency by a debtor and the
restructuring of an amount due to the CentralNic Group on terms that the CentralNic Group would not consider otherwise.
An impairment loss in respect of a financial asset measured at amortised cost, including other receivables, deposits, and
prepayments, is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate. Losses are
recognised in profit or loss and reflected in an allowance account against the amounts receivable.
When the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the
impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the
carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have
been had the impairment not been recognised.
(ii) Impairment of non-financial assets
The carrying values of non-financial assets, other than deferred tax assets, are reviewed at the end of each reporting period to
determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is
estimated. The recoverable amount of the assets is the higher of the assets’ fair value less cost to sell and their value-in-use,
which is measured by reference to discounted future cash flows.
An impairment loss is recognised if the carrying value of the asset exceeds its recoverable amount.
An impairment loss is recognised in profit or loss immediately.
In respect of assets other than goodwill, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the
previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of
amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately.
(h) Taxation
Taxation for the year comprises of current and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the
tax rates that have been enacted or substantively enacted at the end of the reporting period.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements.
Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the
acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business
combination costs or from the initial recognition of an asset or liability in a transaction which is not a business combination and at
the time of the transaction, affects neither accounting profit nor taxable profit. Notes to the consolidated
financial statements continued
40 CentralNic Group Plc Annual Report 2014
3. Summary of significant accounting policies continued
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent
that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses
and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting
period and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part
of the deferred tax assets to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised
or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when the deferred income taxes relate to the same taxation authority.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are
recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax
arising from a business combination is included in the resulting goodwill or excess of the acquirer’s interest in the net fair value of
the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs.
(i) Cash and cash equivalents
Cash and bank balances comprise of cash in hand, bank balances, deposits with financial institutions and short-term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(j) Employee benefits
Short-term employee benefits, including wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits
are accrued in the period in which the associated services are rendered by employees of the CentralNic Group.
(k) Share based payments
Employees (including Directors and Senior Executives) of the Group receive remuneration in the form of share-based payment
transactions, whereby these individuals render services as consideration for equity instruments (“equity-settled transactions”).
These individuals are granted share option rights approved by the Board which can only be settled in shares of the respective
companies that award the equity-settled transactions. Share options rights are also granted to these individuals by majority
shareholders over their shares held. No cash settled awards have been made or are planned.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the
performance and/or service conditions are fulfilled, ending on the date on which the relevant individuals become fully entitled to the
award (“vesting point”). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting
date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments
and value that will ultimately vest. The statement of comprehensive income charge for the year represents the movement in the
cumulative expense recognised as at the beginning and end of that period.
The fair value of share-based remuneration is determined at the date of grant and recognised as an expense in the statement of
comprehensive income on a straight line basis over the vesting period, taking account of the estimated number of shares that will
vest. The fair value is determined by use of Black Scholes model method.
(l) Provisions, contingent liabilities and contingent assets
Provisions are recognised if, as a result of a past event, the CentralNic Group has a present legal or constructive obligation, when
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a
reliable estimate of the amount can be made. Provisions are reviewed at the end of each financial reporting period and adjusted to
reflect the current best estimate. Where effect of the time value of money is material, the provision is the present value of the
estimated expenditure required to settle the obligation.
A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the
occurrence of one or more uncertain future events not wholly within the control of the CentralNic Group. It can also be a present
obligation arising from past events that is not recognised because it is not probable that outflow of economic resources will be
required or the amount of obligation cannot be measured reliably.
A contingent liability is not recognised in the financial statements but is disclosed in the notes to the financial statements. When a
change in the probability of a contingent outflow occurs so that the outflow is probable, a liability will be recognised as a provision. CentralNic Group Plc Annual Report 2014 41
3. Summary of significant accounting policies continued
A contingent asset is a probable asset that arises from past events and whose existence will be confirmed only by the occurrence or
non-occurrence of one or more uncertain events not wholly within the control of the CentralNic Group. The CentralNic Group does not
recognise contingent assets but discloses their existence where inflows of economic benefits are probable, but not virtually certain.
(m) Related parties
A party is considered to be related to the CentralNic Group if, the party:
i. directly, or indirectly through one or more intermediaries:
• controls, is controlled by, or is under common control with, the CentralNic Group (this includes parents, subsidiaries and
fellow subsidiaries);
• has an interest in the CentralNic Group that gives it significant influence over the entity; or
• has joint control over the CentralNic Group.
ii. is an associate of the CentralNic Group;
iii. is a joint venture in which the CentralNic Group is a venturer;
iv. is a member of the key management personnel of the CentralNic Group;
v. is a close member of the family of any individual referred to in (i) or (iv);
vi. is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity
resides with, directly or indirectly, any individual referred to in (iv) or (v); or
vii. is a post-employment benefit plan for the benefit of employees of the CentralNic Group, or of any entity that is a related party
of the entity.
Close members of the family of an individual are those family members who may be expected to influence, or be influenced by,
that individual in their dealings with the entity.
(n) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services
provided in the course of ordinary activities, net of discounts and sales related taxes.
Revenue from the sale of services is recognised when the amounts of revenue and cost can be measured reliably. In particular:
(i) Sale of registry services for domain names (“Registry Domain sales”)
Revenue from the provision of registry and similar services under contracts for the sale of domain names by registrars and re-sellers
reflect the period over which the underlying sales contract has been entered into by the registrar or re-seller, which can be for periods of
between one and ten years. Revenues attributable to future periods are deferred to future periods and included in ‘Deferred revenues’.
(ii) Sale of registrar services for domain names (“Registrar Domain sales”)
Revenue from the provision of registrar and similar services under contracts for the sale of domain names by registrants and
re-sellers reflect the period over which the underlying sales contract has been entered into by the registrant or re-seller, which can
be for periods of between one and ten years. Revenues attributable to future periods are deferred to future periods and included in
‘Deferred revenues’. These revenues are matched to deferred wholesale costs which cover the same period of the underlying sale.
(iii) Sale of enterprise services including premium domain names (“Enterprise including Premium Domain Name Sales”)
Revenue from enterprise services and premium domain name sales are recognised in profit and loss at the point of sale. Revenue
from the provision of computer software to a customer is recognised when the Group has delivered the related software and
completed all of the adaptions required by the customer for either the whole contract or for a specific milestone deliverable within
the contract. Where no adaptions are required revenue is recognised on delivery.
(iv) Sale of consultancy and other services (“Consultancy”)
Revenue from strategic consultancy and similar services is recognised in profit and loss in proportion to the stage of completion of
the assignment at the reporting date. The stage of completion is determined based on completion of work performed.
(o) Leases
Assets held under leases are classified as operating leases and are not recognised in the CentralNic Group’s statement of financial
position. Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease.
Lease incentives received are recognised as part of the total lease expense, over the term of the lease. Notes to the consolidated
financial statements continued
42 CentralNic Group Plc Annual Report 2014
4. Critical accounting judgments and key sources of
estimating uncertainty
In the application of the CentralNic Group’s accounting policies, which are described in note 3, the Directors are required to make
judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not apparent from other
sources. The estimates and assumptions are based on historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods
if the revision affects both current and future periods.
The following are the key assumptions concerning the future and other key sources of estimation uncertainty at the statement of
financial position date that have a significant risk of causing a significant adjustment to the carrying amounts of assets and liabilities
in the Financial statements:
Impairment testing
The recoverable amounts of individual non-financial assets are determined based on the higher of the value-in-use calculations
and the recoverable amount, or fair value less costs to sell. These calculations will require the use of estimates and assumptions.
It is reasonably possible that assumptions may change, which may impact the Directors’ estimates and may then require a material
adjustment to the carrying value of tangible and intangible assets.
The Directors review and test the carrying value of tangible and intangible assets when events or changes in circumstances
suggest that the carrying amount may not be recoverable. For the purposes of performing impairment tests, assets are grouped
at the lowest level for which identifiable cash flows are largely dependent of cash flows of other assets or liabilities. If there are
indications that impairment may have occurred, estimates will be prepared of expected future cash flows for each group of assets.
Expected future cash flows used to determine the value in use of tangible and intangible assets will be inherently uncertain and could
materially change over time. The carrying value of the Group’s tangible and intangible assets are disclosed in notes 13 and 14 respectively.
Estimation of useful life
The charge in respect of periodic amortisation and depreciation is derived after determining an estimate of an asset’s expected
useful life. The useful lives of the assets are determined by management at the time the asset is acquired and are reviewed
continually for appropriateness.
Valuation of intangible assets acquired
The customer list and software assets were acquired through the business combination outlined in note 23. The customer list is
amortised over ten years and the software over five years. The determination of the fair value of assets and liabilities including goodwill
arising on the acquisition of businesses, the acquisition of software technology and customer relationships, whether arising from separate
purchases or from the acquisition as part of business combinations, and development expenditure which is expected to generate future
economic benefits, are based, to a considerable extent, on management’s judgement. The fair value of these assets is determined by
discounting estimated future net cash flows generated by the asset where no active market for the assets exists. The use of different
assumptions for the expectations of future cash flows and the discount rate would change the valuation of the intangible assets.
Allocation of the purchase price affects the results of the Group as finite lived intangible assets are amortised, whereas indefinite lived
intangible assets, including goodwill, are not amortised and could result in differing amortisation charges based on the allocation to indefinite
lived and finite lived intangible assets. The useful life used to amortise intangible assets relates to the expected future performance of the
assets acquired and management’s estimate of the period over which economic benefit will be derived from the asset.
The estimated useful life principally reflects management’s view of the average economic life of each asset and is assessed by reference
to historical data and future expectations. Any reduction in the estimated useful life would lead to an increase in the amortisation charge. 
Goodwill also arose through the business combination outlined in note 23. The Group tests goodwill recognised through business
combinations annually for impairment using the method outlined above. CentralNic Group Plc Annual Report 2014 43
5. Segment analysis
CentralNic is an independent global domain name service provider. It provides registry, registrar and enterprise services and it is
the owner and registrant of a portfolio of domain names, which it uses as SLD domain extensions. Management reviews the
activities of the CentralNic Group in the segments disclosed below.
2013
                                                                                                                   Adjusted               Non-current                                                Non-current                      Current 
                                                                                  Revenue                     EBITDA                       assets           Current assets                     liabilities                     liabilities
                                                                                      £’000                        £’000                        £’000                        £’000                        £’000                        £’000
Registry Domain Sales                            2,587                1,079                2,691                5,245                   519                2,604
Registrar Domain Sales                                  –                    (63)                      –                       3                       –                       8
Enterprise including Premium
Domain Name Sales                                   66                     66                       –                       –                       –                       –
Consultancy and other services                  398                   410                       –                       –                       –                       –
Group overheads including
costs associated with public
company status                                            –                  (477)                      –                       –                       –                       –
                                                              3,051                1,015                2,691                5,248                   519                2,612
2014
                                                                                                                      Adjusted              Non-current                                                Non-current 
                                                                                    Revenue                     EBITDA                       assets         Current assets                   liabilities      Current liabilities
                                                                                         £’000                         £’000                         £’000                         £’000                         £’000                         £’000
Registry Domain Sales                            2,801                1,091                3,741                3,397                   570                4,235
Registrar Domain Sales                           1,550                    (19)               4,454                1,992                   227                1,652
Enterprise including Premium
Domain Name Sales                              1,612                1,500                        –                        –                        –                        –
Consultancy and other services                  104                   104                        –                        –                        –                        –
Group overheads including
costs associated with public
company status                                            –                  (952)                       –                        –                        –                        –
                                                              6,067                1,724                8,195                5,389                   797                5,887
6. Revenue
The CentralNic Group’s revenue is generated from the following geographical areas:
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Registry Domain Sales
UK                                                                                                                                                             935                      952
North America                                                                                                                                            840                      898
Europe                                                                                                                                                       483                      453
ROW                                                                                                                                                          543                      284
                                                                                                                                                               2,801                   2,587
Registrar Domain Sales
UK                                                                                                                                                               76                          –
North America                                                                                                                                            358                          –
Europe                                                                                                                                                       491                          –
ROW                                                                                                                                                          475                          –
Other revenues                                                                                                                                           150                          –
                                                                                                                                                               1,550                          – Notes to the consolidated
financial statements continued
44 CentralNic Group Plc Annual Report 2014
6. Revenue continued
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Enterprise including Premium Domain Name Sales
North America                                                                                                                                          1,612                        66
                                                                                                                                                               1,612                        66
Consultancy and other Services
UK                                                                                                                                                                 3                          2
North America                                                                                                                                              20                        17
ROW                                                                                                                                                            81                      379
                                                                                                                                                                  104                      398
Premium domain name trading was included within enterprise services in 2014, having previously been classified within registry
sales. Consultancy revenues by nature are subject to annual variation depending on customer demand.
The following table shows customers that represent 10% or more of the registry domain sales:
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Customer A                                                                                                                                                326                      490
Customer B                                                                                                                                                382                      487
Other customers                                                                                                                                      2,093                   1,610
                                                                                                                                                               2,801                   2,587
No single customer contributes greater than 10% or more of the registrar domain sales. The enterprise and premium domain name
sales were principally driven by premium domain name sales of £1,610,000 in December 2014 which were made to a single client.
7. Profit before taxation
The profit before taxation is stated after charging the following amounts.
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Employee benefit expense – wages and salaries                                                                                          775                      601
Employee benefit expense – social security                                                                                                   98                        66
Employee benefit expense – share payments                                                                                                33                        14
Staff Consultancy fees                                                                                                                                370                      241
Directors’ remuneration – fees and salaries                                                                                                  576                      220
Directors’ remuneration – share payments                                                                                                   189                        52
Operating Leases – land & buildings                                                                                                              42                        42
Fees payable to the Company’s auditor for the audit of Parent Company
and consolidated financial statements                                                                                                          40                        22
Net (gain)/loss on foreign currency translation                                                                                               (47)                       15
Depreciation and amortisation expense                                                                                                        538                      255
The Group auditors’ also received £75,000 in relation to the IPO which took place on the 2nd September 2013. This amount
is included in the share premium account, categorised as issue costs and therefore is not included in the profit for the period.
The 2014 staff consultancy fees of £370,000 included fees incurred as a result of the acquisition of the trade of Internet.bs Corp
totalling £86,000. CentralNic Group Plc Annual Report 2014 45
8. Employee information
The average number of persons employed by the Group (excluding Directors) during the year were 20 (2013: 14), analysed by
category, as follows:
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Management and finance                                                                                                                                1                          1
Technical                                                                                                                                                      10                          7
Sales and Marketing                                                                                                                                       5                          2
Administrative                                                                                                                                                 2                          2
Operations                                                                                                                                                     2                          2
Key management personnel
Total remuneration of key management personnel being the Directors and key senior personnel is £855,000 (2013: £745,000),
and is set out below in aggregate for each of the categories specified in IAS24, related party disclosures.
2014 2013
                                                                                                                           Senior key                                                                           Senior key 
                                                                                               Directors              personnel                       Total                Directors               personnel                       Total
                                                                                                     £’000                      £’000                      £’000                     £’000                     £’000                     £’000
Short-term benefits                                                558                   86                 644                591                  92                683
Share based payments expense                            190                   21                 211                  52                  10                  62
                                                                             748                 107                 855                643                102                745
9. Dividends
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Equity dividends paid during the year £nil (2013: 1.2 pence)                                                                             –                      638
Equity dividends proposed after the year end (not recognised as a liability)                                                        –                          –
The Directors do not propose a final dividend for the year, but it remains their intention to consider the payment of a dividend when
appropriate and commercially prudent.
10. Finance income
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Interest income on loans to related parties                                                                                                     18                          6
Interest income on loans to third parties                                                                                                           4                          –
Interest income on short-term bank deposits                                                                                                    1                          1
                                                                                                                                                                    23                          7 Notes to the consolidated
financial statements continued
46 CentralNic Group Plc Annual Report 2014
11. Income tax expense
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Current tax on profits for the year                                                                                                                 166                      137
Adjustments in respect of previous years                                                                                                         –                        33
Current Income Tax                                                                                                                                     166                      170
Deferred Income Tax                                                                                                                                    (10)                         1
Income tax expense                                                                                                                                    156                      171
A reconciliation of the current income tax expense applicable to the profit before taxation at the statutory tax rate to the current
income tax expense at the effective tax rate of CentralNic is as follows:
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Profit before taxation                                                                                                                                   520                      701
Tax calculated at domestic tax rates applicable to profits in the respective countries                                      112                      135
Tax effects of:
Expenses not deductible for tax purposes                                                                                                     51                          1
Capital allowance in excess of depreciation                                                                                                     3                          1
Adjustments in respect of previous years                                                                                                         –                        33
Current income tax                                                                                                                                     166                      170
The Company provides for income taxes on the basis of its income for financial reporting purposes, adjusted for items that are not
assessable or deductible for income tax purposes, in accordance with the regulations of domestic tax authorities.
The effective rate of tax for the year is 30.1% (2013: 24.4%), when excluding the impact of the non-cash share based payments
expense the effective rate of tax for the year is 21.0% (2013: 22.3%)
In the UK, the applicable statutory tax rate for 2014 is 21% (2013: 23%).
In the USA, federal taxes are due at 15% on the first US$50,000 of taxable income and 25% thereafter. Under California tax
legislation an additional 8.85% of state tax is due on taxable income.
12. Earnings per share
Earnings per share has been calculated by dividing the consolidated profit after taxation attributable to ordinary shareholders by
the weighted average number of ordinary shares in issue during the period.
In calculating earnings per share prior to the Group reconstruction on 9 August 2013 whereby the Company became the new
parent company of the CentralNic Group it is of limited significance to calculate earnings per share based on the historical equity
of the CentralNic Group.
Accordingly, a pro forma earnings per share has been included based on the relevant number of shares in CentralNic Group Plc
following the reorganisation on 9 August 2013 but prior to the issue of shares by the Company to raise new funds and the actual
shares in issue after that date. The calculation of earnings per share is based on the following earnings and number of shares.
Diluted earnings per share has been calculated on the same basis as above, except that the weighted average number of ordinary
shares that would be issued on the conversion of all the dilutive potential ordinary shares (arising from the Group’s share option
scheme and warrants) into ordinary shares has been added to the denominator. There are no changes to the profit (numerator)
as a result of the dilutive calculation. CentralNic Group Plc Annual Report 2014 47
12. Earnings per share continued
                                                                                                                                                                                                                        2014                             2013
Profit after tax attributable to owners (£’000)                                                                                                 364                      530
Weighted average number of shares:
Basic                                                                                                                                              60,047,493          52,814,446
Effect of dilutive potential ordinary shares                                                                                           5,328,727            5,328,727
Diluted                                                                                                                                            65,376,220          58,143,173
Earnings per share:
Basic (pence)                                                                                                                                            0.60                     1.00
Diluted (pence)                                                                                                                                          0.56                     0.91
13. Property, plant and equipment
                                                                                                                                                                           Computer                        Furniture 
                                                                                                                                                                          equipment                     and fittings                               Total
                                                                                                                                                                                 £’000                             £’000                             £’000
Cost
At January 2013                                                                                                             141                        31                      172
Additions                                                                                                                          46                          3                        49
At 31 December 2013                                                                                                   187                        34                      221
Additions                                                                                                                        124                          2                      126
Disposals                                                                                                                           –                          –                          –
At 31 December 2014                                                                                                   311                         36                       347
Accumulated depreciation
At 1 January 2013                                                                                                         122                        29                      151
Charge for the year                                                                                                           15                          1                        16
At 31 December 2013                                                                                                   137                        30                      167
Charge for the year                                                                                                           89                          1                        90
Disposals                                                                                                                           –                          –                          –
At 31 December 2014                                                                                                   226                         31                       257
Property, plant, and equipment, net
At 31 December 2014                                                                                                     85                           5                         90
At 31 December 2013                                                                                                     50                          4                        54
Depreciation of property, plant and equipment is included in administrative expenses in the combined and consolidated statement of
comprehensive income. Notes to the consolidated
financial statements continued
48 CentralNic Group Plc Annual Report 2014
14. Intangible assets
                                                                                                  Domain
                                                                                                    names                        Software                Customer List                        Goodwill                               Total
                                                                                                     £’000                             £’000                             £’000                             £’000                             £’000
Cost or deemed cost
At 1 January 2013                                              3,437                          –                          –                          –                   3,437
Additions                                                                 15                      206                          –                          –                      221
Exchange Differences                                               (5)                         –                          –                          –                         (5)
At 31 December 2013                                         3,447                      206                          –                          –                   3,653
Additions                                                                   3                      754                   2,548                   1,379                   4,684
Reclassification                                                     (300)                         –                          –                          –                     (300)
Exchange Differences                                              14                          –                          –                          –                        14
At 31 December 2014                                       3,164                       960                    2,548                    1,379                    8,051
Amortisation
At 1 January 2013                                              1,478                          –                          –                          –                   1,478
Charge for the year                                                239                          –                          –                          –                      239
Exchange Differences                                               (5)                         –                          –                          –                         (5)
At 31 December 2013                                        1,712                           –                           –                           –                    1,712
Charge for the year                                                222                        99                      127                          –                      448
Reclassification                                                     (240)                         –                          –                          –                     (240)
Exchange Differences                                              13                          –                          –                          –                        13
At 31 December 2014                                       1,707                         99                       127                           –                    1,933
Intangible assets, net
At 31 December 2014                                       1,457                       861                    2,421                    1,379                    6,118
At 31 December 2013                                        1,735                      206                          –                          –                   1,941
Amortisation of intangible assets is included in administrative expenses in the combined and consolidated statement of
comprehensive income.
Certain domain names previously held as intangible assets were reclassified to stock held for resale in the period.
Acquisition during the year
The customer list and £500,000 of software assets were acquired through the business combination outlined in note 23.
The customer list is amortised over ten years and the software amortised over five years.
Goodwill
The Group tests goodwill recognised through business combinations annually for impairment. Goodwill arose through the business
combination outlined in note 23.
The recoverable amount of goodwill of £1,378,697 at 31 December 2014, is determined based on a value in use calculation using
cash flow projections from financial budgets approved by senior management covering a five year period. Cash flow projections
beyond the five year timeframe are extrapolated by applying a flat growth rate in perpetuity. The pre-tax discount rate applied to the
cash flow projections is 10.0%. As a result of the analysis, management did not identify any impairment to the goodwill. CentralNic Group Plc Annual Report 2014 49
15. Deferred receivables
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Amounts due from shareholders                                                                                                                  711                      694
Deferred costs                                                                                                                                            205                          –
                                                                                                                                                                  916                      694
Deferred receivables represent amounts due from Jabella Group Limited, a shareholder during the period. Amounts due from
Jabella Group Limited were interest free until 31 August 2013, from which time the balance accrued interest at 2% above LIBOR
(2014: £17,502, 2013: £5,727). The loan was granted in August 2011 for a term of five years, the balance is currently £711,236.
The Directors consider the loan to be fully recoverable. The Directors consider that the fair value of this receivable is not materially
different from the carrying value.
16. Investments
                                                                                                                                                                                                                                                             £’000
At 31 December 2013                                                                                                                                                                2
Disposals                                                                                                                                                                                   (2)
Additions                                                                                                                                                                                997
At 31 December 2014                                                                                                                                                           997
During the year, the Company disposed of its 5% interest in DBS Mena, a company incorporated in the United Arab Emirates (UAE)
upon it’s de-registration as a registered company within the United Arab Emirates.
The Company acquired less than 20% of the following undertakings which are incorporated in the United Kingdom (UK):
Place of incorporation/                                                                                           Issued and paid-up/ 
Name establishment                           Principal activities                                                   registered capital                Effective interests 
Accent Media Ltd UK                               Domain registry operator                     Ordinary shares                    12%
The Company owns more than 50% of the following undertakings which are incorporated in the United Kingdom, USA and the
Commonwealth of The Bahamas:
Place of incorporation/                                                                                           Issued and paid-up/ 
Name establishment                           Principal activities                                                   registered capital                Effective interests 
CentralNic Limited England and Wales       Domain registry services provider        Ordinary shares                  100%
CentralNic USA Limited USA                             US sales office                                   Ordinary stock                    100%
GB.com Limited England and Wales       Dormant – holds domain name           Ordinary shares                  100%
Who Is Privacy Limited England and Wales       Dormant                                             Ordinary shares                  100%
TLD Registrar Solutions Limited England and Wales       Domain registrar services provider       Ordinary shares                  100%
Internet Domain Service Commonwealth of        Domain registrar services provider       Ordinary shares                  100%
BS Corp The Bahamas
Whois Privacy Corp Commonwealth of        Dormant                                             Ordinary shares                  100%
The Bahamas
Hoxton Domains Limited England and Wales       Domain registrar services provider       Ordinary shares                  100% Notes to the consolidated
financial statements continued
50 CentralNic Group Plc Annual Report 2014
17. Other receivables, deposits and prepayments
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Trade receivables                                                                                                                                        475                      206
Accrued revenue                                                                                                                                          52                          1
Stock held for resale                                                                                                                                     60                          –
Deferred costs                                                                                                                                         1,185                          –
Prepayments                                                                                                                                              101                        63
Supplier payments on account                                                                                                                    206                          –
Loan to third party                                                                                                                                       102                          –
Other receivables                                                                                                                                        152                        46
                                                                                                                                                               2,333                      316
No trade receivables were past due or impaired at 31 December 2014 (2013: nil). Deferred costs reflect the wholesale cost of
domain names in the Internet BS registrar business acquired during the year. See note 23.
Supplier payments on account reflect payments to domain name registries for use against future wholesale domain purchases
within the Internet BS registrar business.
18. Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents comprise the following:
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
CentralNic UK                                                                                                                                          2,310                   4,274
CentralNic USA                                                                                                                                          289                      656
TLD Registrar Solutions Ltd                                                                                                                           38                          2
Internet Domain Service BS Corp                                                                                                                419                          –
                                                                                                                                                               3,056                   4,932
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Amounts held on deposit
GBP                                                                                                                                                           693                   4,145
USD                                                                                                                                                        2,127                      726
EUR                                                                                                                                                           233                        61
Other                                                                                                                                                             3                          –
                                                                                                                                                               3,056                   4,932 CentralNic Group Plc Annual Report 2014 51
19. Share capital
The Company’s issued and fully paid share capital is as follows:
                                                                                                                                                                                                            Share capital              Share premium
                                                                                                                                                                              Number                             £’000                             £’000
At 1 January 2014                                                                                             59,090,909                        59                   3,485
Issued in connection with the acquisition of the trade and assets
of Internet.BS Corp on 16 June 2014 less share issue costs                               2,090,738                          2                   1,450
At 31 December 2014                                                                                          61,181,647                         61                    4,935
On 16 June 2014 the Company issued 2,090,738 new ordinary shares to Marco Rinaudo of 0.1 pence each at 70.5 pence per share.
A share premium was created on the issue of these shares totalling £1,471,880. Issue costs in relation to the shares were £21,568.
The Company has no authorised share capital.
20. Non-current other payables
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Deferred revenue                                                                                                                                        725                      457
                                                                                                                                                                  725                      457
21. Deferred tax
Deferred tax assets                                                                                                                                                                                                                   £’000
At 1 January 2013                                                                                                                                                                       –
Deferred tax on excess tax deduction arising on share options                                                                                                   74
At 31 December 2014                                                                                                                                                             74
Deferred tax liabilities                                                                                                                                                                                                              £’000
At 1 January 2013                                                                                                                                                                  107
Transfers in the period                                                                                                                                                              (45)
At 31 December 2013                                                                                                                                                               62
Charged to the income statement                                                                                                                                              10
At 31 December 2014                                                                                                                                                             72
22. Trade and other payables and accruals
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Accounts payable                                                                                                                                       319                      270
Accrued expenses                                                                                                                                      322                        99
Other taxes and social security                                                                                                                      74                        50
Deferred consideration                                                                                                                                837                      230
Contingent consideration                                                                                                                            322                          –
Deferred revenue                                                                                                                                     2,725                   1,438
Customer Payments on account                                                                                                              1,040                      324
Other liabilities                                                                                                                                              32                        16
                                                                                                                                                               5,671                   2,427 Notes to the consolidated
financial statements continued
52 CentralNic Group Plc Annual Report 2014
23. Business combinations
On 16 June 2014 the Group acquired the trade and assets of Internet.bs Corp a private company incorporated in the
Commonwealth of the Bahamas and specialising in the retailing of internet domain names.
The following table summarises the consideration to acquire the trade and assets of Internet.bs Corp and the fair value of the
assets and liabilities at the acquisition date in line with Group accounting policies.
Consideration                                                                                                                                                                                                                              £’000
Cash                                                                                                                                                                                   1,710
Equity instruments (2,090,738 ordinary shares)                                                                                                                     1,474
Deferred consideration                                                                                                                                                            837
Contingent consideration                                                                                                                                                         322
Adjustment for working capital                                                                                                                                                   (18)
Total consideration                                                                                                                                                             4,325
Fair value recognised on acquisition                                                                                                                                                                               £’000
Intangible assets – Customer list                                                                                                                                           2,548
Intangible assets – Software                                                                                                                                                    500
Trade receivables                                                                                                                                                                    214
Deferred costs                                                                                                                                                                     1,183
Cash                                                                                                                                                                                      129
                                                                                                                                                                                           4,574
Liabilities
Accruals                                                                                                                                                                                   30
Payments on account                                                                                                                                                             212
Deferred revenue                                                                                                                                                                 1,385
                                                                                                                                                                                           1,627
Total identifiable net assets at fair value                                                                                                                            2,947
Goodwill arising on acquisition                                                                                                                                              1,378
Purchase consideration                                                                                                                                                     4,325
The fair value of the 2,090,738 ordinary shares issued as part of the consideration paid to continue the trade and assets of
Internet.bs Corp was based on the published share price on 16th June 2014 which was 70.5p.
The deferred consideration is due for payment on the first anniversary of the acquisition date.
The contingent consideration is dependent on the operating profit in the first year post acquisition and is due for payment on the
first anniversary of the acquisition date. The fair value of the contingent consideration is based on the Directors’ assessment of the
likely operating profit for the year. CentralNic Group Plc Annual Report 2014 53
24. Related party disclosures
(a) Ultimate controlling party
The Company is not controlled by any one party.
CentralNic Group Plc has 100% ownership of CentralNic Limited, TLD Registrar Services Limited and Hoxton Domains Limited.
CentralNic Limited owns 100% of CentralNic USA, Whois Privacy Limited and GB.com Limited.
TLD Registrar Solutions Limited owns 100% of Internet Domain Service BS Corp and Whois Privacy Corp
(b) Related party transactions
(i) Shareholders
Balances outstanding with shareholders:
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Jabella Group Limited                                                                                                                                 711                      694
Amounts due from Jabella Group Limited were interest free until 31 August 2013, from which time the balance accrued interest at
2% above LIBOR (2014: £17,502, 2013: £5,727).
Transactions with two members of Erin Investments & Finance Limited:
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Operating lease payments                                                                                                                             42                        42
(ii) Non-Executive Directors
During the year CentralNic engaged with Schollmeyer and Rickert Rechtsanwaltsgesellschaft mBH, of which Thomas Rickert has
a controlling interest, to provide legal services in relation to the purchase of intangible assets and advise on potential acquisitions.
The fees for 2014 were £95,000 (2013: £Nil).
25. Commitments
Capital commitments
Capital expenditure contracted for at the end of the reporting period but not yet incurred is as follows:
                                                                                                                                                                                                                        2014                             2013
Property, plant and equipment                                                                                                                         –                        74
Intangible assets                                                                                                                                             –                        69
                                                                                                                                                                      –                      143
Operating lease commitments
At the end of each of the reporting periods, the minimum lease payments under non-cancellable leases are payable as follows:
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Less than one year                                                                                                                                       42                        42
Between one and five years                                                                                                                            –                        42
                                                                                                                                                                    42                        84
The Group leases office space located at 35-39 Moorgate, London, EC2R 6AR under an operating lease. The lease agreement was
entered into on 1st January 2010 for an initial term of 6 years with options to renew the lease. The Group leases equipment under
various operating leases. These leases typically run for periods from one month to five years. Notes to the consolidated
financial statements continued
54 CentralNic Group Plc Annual Report 2014
26. Share options and warrants
Share options
The share option scheme, which was adopted by CentralNic during 2013, was established to reward and incentivise the executive
management team and staff for delivering share price growth.
The share option scheme is administered by the Remuneration Committee.
There were 3,556,000 options granted during 2013, no options were granted in 2014. 5,000 options lapsed during the year,
none of the awarded options have been exercised to date.
A charge of £222,269 (2013: £66,447) has been recognised in the statement of comprehensive income for the year relating to
these options.
These fair values were calculated using the Black Scholes option pricing model. The inputs into the model were as follows:
                                                                                                                                                                                                           Share options                Share options  
                                                                                                                                                                                                                    granted                          granted 
                                                                                                                                                                                                            1 June 2013           14 October 2013
Options granted                                                                                                                                2,530,000            1,026,000
Stock price                                                                                                                                                 10p                      55p
Exercise price                                                                                                                                             10p                      57p
Interest rate                                                                                                                                                  5%                       5%
Volatility                                                                                                                                                     75%                     75%
Time to maturity                                                                                                                                   10 years               10 years
The expected volatility was determined with reference to similar entities trading on AIM.
Details of the share options outstanding at the year end are as follows:
31 Dec 2014 31 Dec 2013
                                                                                                                                       Number                           WAEP*                         Number                          WAEP*
Outstanding at 1 January                                                         3,556,000                       23p                          –                          –
Granted during year                                                                               –                           –            3,556,000                      23p
Expired during year                                                                                –                           –                          –                          –
Lapsed during year                                                                         5,000                       10p                          –                          –
Outstanding at 31 December                                                   3,551,000                       23p            3,556,000                      23p
Exercisable at 31 December                                                        968,895                       23p               378,639                      23p
* weighted average exercise price.
The weighted average remaining contractual life of the options outstanding at the statement of financial position date is 8.6 years.
Options are exercisable in accordance with the contracted vesting schedules. Options granted in June 2013 may be exercised
in respect of 1/12 of the Option Shares from 1 September 2013 and a further 1/12 of the Option Shares following the expiry of
each subsequent 3 month period. Options granted on the 14th October 2013 may be exercised 3 years after the date of grant.
Warrants
On 12 August 2013, CentralNic Group executed a warrant instrument to create and issue warrants to Zeus Capital to subscribe
for an aggregate of 1,772,727 ordinary shares. The warrants will expire six years after admission and were exercisable after the
first anniversary of admission (2nd September 2014) at the placing price of 55p. The ordinary shares to be allotted and issued on
the exercise of any or all of the warrants will rank for all dividends and other distributions declared after the date of the allotment of
such shares but not before such date and otherwise pari passu in all respects with the ordinary shares in issue on the date of
such exercise allotment. CentralNic Group Plc Annual Report 2014 55
26. Share options and warrants continued
These fair values were calculated using the Black Scholes warrant pricing model. The inputs into the model were as follows:
                                                                                                                                                                                                                                             Warrants issued
                                                                                                                                                                                                                                             12 August 2013
Warrants granted                                                                                                                                                          1,772,727
Stock price                                                                                                                                                                             55p
Exercise price                                                                                                                                                                         55p
Interest rate                                                                                                                                                                              5%
Volatility                                                                                                                                                                                  75%
Time to maturity                                                                                                                                                                  6 years
A charge of £675,409 was recognised in the share premium account in 2013.
27. Financial instruments
The CentralNic Group is exposed to market risk, credit risk and liquidity risk arising from financial instruments. The CentralNic
Group’s overall financial risk management policy focusses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the CentralNic Group’s financial performance. The Group does not trade in financial instruments.
(a) Financial risk management framework
The Directors’ risk management policies are established to identify and analyse the risks faced by the CentralNic Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits.
(i) Market risk
Foreign currency risk
The CentralNic Group is exposed to foreign currency risk on transactions and balances that are denominated in a currency other
than its functional currency, primarily the US$. Foreign currency risk is monitored closely on an on-going basis to ensure that the
net exposure is at an acceptable level.
The CentralNic Group’s exposure to foreign currency risk is minimal as it trades in predominately US Dollars, Euros and GB Pound
Sterling. Exposure to currency risk is negated by the CentralNic Group holding adequate reserves in these three currencies to
meet trading and provisioned obligations as the need arises.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The CentralNic Group’s exposure to interest rate risk arises mainly from interest-bearing financial assets and
liabilities. The Directors’ policy is to obtain the most favourable interest rates available.
As at each of 31 December 2013 and 2014, all of the CentralNic Group’s interest-bearing financial instruments bore interest at
fixed interest rates.
                                                                                                                                                                                                                                                              2014
                                                                                                                                                                                                                                                             £’000
Cash and bank balances                                                                                                                                                      3,056
Effect of interest rate change of 100 basis points                                                                                                                  +/- 30
Equity price risk
The CentralNic Group does not have any quoted investments as at each of 31 December 2013 and 2014 and as such does not
have significant exposure to equity price risk. Notes to the consolidated
financial statements continued
56 CentralNic Group Plc Annual Report 2014
27. Financial instruments continued
(ii) Credit risk
The CentralNic Group’s exposure to credit risk arises mainly from counterparty’s failure to meet its obligation to settle a financial
asset, primarily prepayments and other receivables. The Directors consider the CentralNic Group’s exposure to credit risk arising
from trade receivables to be minimal as the CentralNic Group is generally paid at the outset or in advance. Credit risk arising from
other receivables is controlled through monitoring procedures, including credit approvals and credit limits. For cash and bank
balances, the Directors minimise the CentralNic Group’s credit risk by dealing exclusively with banks and financial institution
counterparties with high credit ratings.
The carrying amounts of financial assets at the end of the reporting periods represent the maximum credit exposure.
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Deferred receivables                                                                                                                                   916                      694
Other receivables, deposits and prepayments                                                                                           2,333                      316
Cash and bank balances                                                                                                                         3,056                   4,932
                                                                                                                                                               6,305                   5,942
(iii) Liquidity risk
Liquidity risk is the risk that the CentralNic Group will encounter difficulty in settling its financial obligations that are settled with cash
or another financial asset. The Directors’ objective is to maintain, as much as possible, a level of its cash and bank balances
adequate enough to ensure that there will be sufficient liquidity to meet its liabilities when they fall due.
The following set forth the remaining contractual maturities of financial liabilities as at:
£’000                                                                                                                  Carrying amount                               Total                  Within 1 year                    1 – 5 years
31 December 2013
Trade and other payables and accruals                                            2,884                   2,884                   2,427                      457
                                                                                                      2,884                   2,884                   2,427                      457
£’000                                                                                                                    Carrying amount                               Total                 Within 1 year                     1 – 5 years
31 December 2014
Trade and other payables and accruals                                            6,396                    6,396                    5,671                       725
                                                                                                      6,396                    6,396                    5,671                       725
(b) Capital risk management
The Directors define capital as the total equity of CentralNic. The Directors’ objectives when managing capital are to safeguard
the CentralNic Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital
structure, the Directors may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares
or sell assets to reduce debt.
The Directors manage CentralNic’s capital based on debt-to-equity ratio. The debt-to-equity ratio is calculated as net debt divided
by total equity. Net debt is calculated as total liabilities less cash and cash equivalents. CentralNic Group Plc Annual Report 2014 57
27. Financial instruments continued
The debt-to-equity ratio of the CentralNic Group as at the end of each of the reporting periods was as follows:
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Total liabilities                                                                                                                                           6,684                   2,884
Less: cash and bank balances                                                                                                                (3,056)                 (4,932)
Net debt/(cash)                                                                                                                                        3,628                  (2,048)
Total equity                                                                                                                                              6,836                   4,808
Debt-to-equity ratio                                                                                                                                    0.53                       n/a
(c) Fair values of financial instruments
The carrying amounts of the financial assets and liabilities reported in the combined and consolidated financial statements
approximate their fair values.
2014 2013
£’000                                                                                                                Carrying amount                      Fair value            Carrying amount                       Fair value
Other receivables, deposits and prepayments                                  2,333                    2,333                      316                      316
Deferred receivables                                                                          916                       916                      694                      694
Cash and bank balances                                                                 3,056                    3,056                   4,932                   4,932
                                                                                                      6,305                    6,305                   5,942                   5,942
Trade and other payables and accruals                                            6,396                    6,396                   2,884                   2,884
                                                                                                      6,396                    6,396                   2,884                   2,884
(d) Fair value hierarchy
Financial instruments carried at fair value are analysed by the levels in the fair value hierarchy. The different levels are defined as follows:
Level 1: Fair value measurements are derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Fair value measurements are derived from inputs other than quoted prices included within level 1 that are observable
for the asset or liability, either directly or indirectly; and
Level 3: Fair value measurements derived from valuation techniques that include inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
As at 31 December 2013 and 2014, there were no financial instruments carried at fair values. 58 CentralNic Group Plc Annual Report 2014
Company balance sheet
as at 31 December 2014
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                   Note                             £’000                             £’000
ASSETS
Fixed assets
Investments                                                                                                                        6                      252                        50
Current assets
Other debtors, deposits and prepayments                                                                           7                   6,395                   4,045
                                                                                                                                                               6,395                   4,045
Total assets                                                                                                                                            6,647                   4,095
LIABILITIES
Current liabilities
Creditors – amounts falling due within one year                                                                  11                   1,305                        72
                                                                                                                                                               1,305                        72
Total liabilities                                                                                                                                        1,305                        72
Net assets                                                                                                                                              5,342                   4,023
CAPITAL AND RESERVES
Share capital                                                                                                                      8                        61                        59
Share premium                                                                                                                   9                   4,935                   3,485
Share based payments reserve                                                                                         12                      964                      742
Retained earnings                                                                                                             10                     (618)                    (263)
Shareholders funds                                                                                                                               5,342                   4,023
These financial statements were approved and authorised for issue by the Board of Director’s on 28 April 2015 and were
signed on it’s behalf by:
John Swingewood Chairman
Company Number: 08576358
The notes on pages 61 to 64 form an integral part of these financial statements. CentralNic Group Plc Annual Report 2014 59
Company statement
of capital and reserves
for the period ended 31 December 2014
                                                                                                                                    Share                     Share          Share based                Retained 
                                                                                                                                   capital                Premium               Payments                 earnings                       Total
                                                                                                                                    £’000                     £’000                     £’000                     £’000                     £’000
Balance at incorporation                                                                 50                    –                    –                    –                  50
Total comprehensive income for the year                                           –                    –                    –               (263)              (263)
Issue of new shares                                                                         9             4,991                    –                    –             5,000
Share issue costs                                                                             –            (1,506)                    –                    –            (1,506)
Share based payments                                                                     –                    –                742                    –                742
Balance as at 31 December 2013                                                59             3,485                742               (263)            4,023
Total comprehensive income for the year                                           –                    –                    –            (1,330)           (1,330)
Issue of new shares                                                                         2             1,472                    –                    –             1,474
Share issue costs                                                                             –                 (22)                    –                    –                 (22)
Share based payments                                                                     –                    –                222                    –                222
Dividend received                                                                             –                    –                    –                975                975
Balance as at 31 December 2014                                                61              4,935                 964                (618)             5,342
Share capital represents the nominal value of the Company’s cumulative issued share capital. Share premium represents the
cumulative excess of the fair value of consideration received for the issue of shares in excess of their nominal value less
attributable share issue costs and other permitted reductions. Retained profits represent the cumulative value of the profits not
distributed to shareholders, but retained to finance the future capital requirements of the Company. Share based payments
reserve represents the cumulative value of share based payments recognised through equity. Dividend received during the year
reflects a dividend declared by a subsidiary company.
The notes on pages 61 to 64 form an integral part of these financial statements. 60 CentralNic Group Plc Annual Report 2014
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Cash flow from operating activities
Loss before taxation                                                                                                                                (1,330)                    (263)
Adjustments for:
Depreciation of property, plant and equipment                                                                                                  –                          –
Amortisation of Intangible Assets                                                                                                                      –                          –
Share based payments                                                                                                                                   –                        66
                                                                                                                                                              (1,330)                     (197)
Operating profit before working capital changes
Increase in other debtors, deposits and prepayments                                                                               (2,330)                 (4,045)
Increase in other payables and accruals                                                                                                    2,186                        72
Net cash outflow from operating activities                                                                                          (1,474)                 (4,170)
Income tax paid                                                                                                                                              –                          –
Net cash outflow from operating activities                                                                                          (1,474)                 (4,170)
Capital expenditure and financial investment
Purchase of investments                                                                                                                                 –                       (50)
Net cash outflow from capital expenditure and financial investment                                                          –                       (50)
Financing
Proceeds from issuance of ordinary shares                                                                                               1,474                   4,220
Net cash inflow from financing                                                                                                              1,474                   4,220
Net increase/(decrease) in cash and cash equivalents                                                                                      –                          –
Cash and cash equivalents at beginning of the period                                                                                      –                          –
Cash and cash equivalents at end of the period                                                                                          –                          –
The notes on pages 61 to 64 form an integral part of these financial statements
Company cash flow statement
for the period ended 31 December 2014 CentralNic Group Plc Annual Report 2014 61
Notes to the Company
financial statements
for the period ended 31 December 2014
1. General information
Nature of operations
CentralNic Group Plc is the UK holding company of a group of companies which are engaged in the provision of independent
global domain name registry services. The Company was incorporated on 19 June 2013 to become the holding company of
the Group following a reorganisation which took place on 9 August 2013. The Company is registered in England and Wales.
Its registered office and principal place of business is 35-39 Moorgate, London, EC2R 6AR.
2. Basis of preparation
The financial statements have been prepared in accordance with the historical cost convention and in accordance with applicable
United Kingdom law and United Kingdom accounting standards. The principal accounting policies are described below. They have
all been applied consistently throughout the period.
3. Significant accounting policies
(a) Going concern
At 31 December 2014, the Company had net current assets of £5,090,000 with the main current asset being amounts owed from
its subsidiary TLD Registrar Solutions Limited amounting to £4,227,000. The Company has assessed its ongoing costs with cash
generated by its subsidiary to ensure that it can continue to settle its debts as they fall due.
The Directors have, after careful consideration of the factors set out above, concluded that it is appropriate to adopt the going
concern basis for the preparation of the financial statements and the financial statements do not include any adjustments that
would result if the going concern basis was not appropriate.
(b) Investments
Investments held as fixed assets are stated at cost less provision for impairment.
(c) Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax
rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where
transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred
at the balance sheet date. Timing differences are differences between the Company’s taxable profits and its results as stated in the
financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which
they are recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence,
it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying
timing differences can be deducted.
Deferred tax is not recognised when fixed assets are revalued unless by the balance sheet date there is a binding agreement to
sell the revalued assets and the gain or loss expected to arise on sale has been recognised in the financial statements. Neither is
deferred tax recognised when fixed assets are sold and it is more likely than not that the taxable gain will be rolled over, being
charged to tax only if and when the replacement assets are sold.
Taxation arising on disposal of a revalued asset is split between the profit and loss account and the statement of total recognised
gains and losses on the basis of the tax attributable to the gain or loss recognised in each statement. 62 CentralNic Group Plc Annual Report 2014
Notes to the Company
financial statements continued
4. Loss for the financial period
The Company has taken advantage of section 408 of the Companies Act 2006 and, consequently, a profit and loss account for
the Company alone has not been presented. The Company’s loss for the financial period was £1,330,000. The Company’s loss
for the financial year has been arrived at after charging auditor’s remuneration payable to Crowe Clark Whitehill LLP for audit
services to the Company of £39,758.
5. Employees and Directors’ remuneration
Staff costs incurred during the period by the Company were as follows:
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Non-executive Directors fees                                                                                                                       141                      165
Executive Directors                                                                                                                                     606                          –
                                                                                                                                                                  747                      165
The executive management team were remunerated by Centralnic Limited in 2013.
The average number of employees of the Company during the period was:
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                   Number                         Number
Directors and management                                                                                                                             2                          2
                                                                                                                                                                      2                          2
6. Investments
                                                                                                                                                                                                                                                             £’000
At 31 December 2013                                                                                                                                                              50
Additions                                                                                                                                                                                202
At 31 December 2014                                                                                                                                                           252 CentralNic Group Plc Annual Report 2014 63
6. Investments continued
The Company owns more than 20% of the following subsidiary undertakings which are incorporated in the United Kingdom,
USA and the Commonwealth of The Bahamas:
Place of incorporation/                                                                                           Issued and paid-up/ 
Name establishment                           Principal activities                                                   registered capital                Effective interests
CentralNic Limited England and Wales       Domain registry services provider        Ordinary shares                  100%
CentralNic USA Limited USA                             US sales office                                   Ordinary stock                    100%
GB.com Limited England and Wales       Dormant – holds domain name           Ordinary shares                  100%
Who Is Privacy Limited England and Wales       Dormant                                             Ordinary shares                  100%
TLD Registrar Solutions Limited England and Wales       Domain registrar services provider       Ordinary shares                  100%
Internet Domain Service Commonwealth of        Domain registrar services provider       Ordinary shares                  100%
BS Corp The Bahamas
Whois Privacy Corp Commonwealth of        Domain registrar services provider       Ordinary shares                  100%
The Bahamas
Hoxton Domains Limited England and Wales       Aftermarket domain services               Ordinary shares                  100%
On 9 August 2013, the CentralNic Group, previously headed by Centralnic Limited underwent a re organisation under which
CentralNic Limited’s shareholders in their entirety exchanged their shares for shares in CentralNic Group plc a newly formed
company, which then became the ultimate parent company of the Group.
7. Debtors
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Amounts owed by Group undertakings                                                                                                     6,324                   4,011
Other debtors                                                                                                                                               51                        34
Deferred tax asset                                                                                                                                        20                          –
                                                                                                                                                               6,395                   4,045
8. Share capital
Details of the Company’s share capital are set out in Note 19 to the consolidated financial statements.
9. Share premium account
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Balance bought forward                                                                                                                           3,485                          –
Premium on issue of new shares                                                                                                              1,472                   4,991
Share issue costs                                                                                                                                        (22)                 (1,506)
Balance carried forward                                                                                                                            4,935                   3,485 64 CentralNic Group Plc Annual Report 2014
10. Retained earnings
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Balance brought forward                                                                                                                            (263)                         –
Loss for the financial period                                                                                                                     (1,330)                    (263)
Dividend received                                                                                                                                       975                          –
Balance carried forward                                                                                                                             (618)                    (263)
11. Creditors: Amounts falling due within one year
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Trade creditors                                                                                                                                              44                          –
Accruals and deferred income                                                                                                                     102                        72
Deferred consideration                                                                                                                                837                          –
Contingent consideration                                                                                                                            322                          –
                                                                                                                                                               1,305                        72
12. Share based payments reserve
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Balance brought forward                                                                                                                             742                          –
Share based payments expense                                                                                                                 222                      742
Balance carried forward                                                                                                                              964                      742
13. Reconciliation of movements in shareholders’ funds
                                                                                                                                                                                                                        2014                             2013
                                                                                                                                                                                                                       £’000                             £’000
Loss for the financial period                                                                                                                     (1,330)                    (263)
Issue of new shares                                                                                                                                 1,474                   5,050
Share issue costs                                                                                                                                        (22)                 (1,506)
Share based payments                                                                                                                               222                      742
Dividend received                                                                                                                                       975                          –
Opening shareholders’ funds                                                                                                                    4,023                          –
Closing shareholders’ funds                                                                                                                     5,342                   4,023
Notes to the Company
financial statements continued CentralNic Group Plc Annual Report 2014 65
Shareholder information
Financial calendar
Annual General Meeting
The Annual General Meeting will be held on Thursday,
the 28th May 2015 at 10.00am at the offices of the
Company’s solicitors:
DWF LLP
20 Fenchurch Street
London EC3M 3AG
Announcements
• Half-year results for 2015 are expected in September 2015.
• Full year results for 2015 are expected in April 2016.
Dates are correct at the time of printing, but are subject
to change.
Directors
John Swingewood (Chairman)
Benjamin Crawford (Chief Executive Officer)
Glenn Hayward (Executive Director)
Robert Pooke (Executive Director)
Samuel Dayani (Non-Executive Director)
Thomas Rickert (Non-Executive Director)
Thomas Pridmore (Non-Executive Director)
Registered office
35-39 Moorgate
London EC2R 6AR
Company Secretary
Glenn Hayward
Company website
www.centralnic.com
Nominated Adviser and Broker
Zeus Capital Limited
82 King Street
Manchester M2 4WQ
23 Berkeley Square
Mayfair
London W1J 6HE
3 Brindleyplace
Birmingham B1 2JB
Joint Broker
Peel Hunt LLP
Moor House
120 London Wall
London EC2Y 5ET
Auditors
Crowe Clark Whitehill LLP
St Bride’s House
10 Salisbury Square
London EC4Y 8EH
Solicitors to the Company
DWF LLP
20 Fenchurch Street
London EC3M 3AG
Solicitors to the Nominated Adviser and Broker
DAC Beachcroft LLP
100 Fetter Lane
London EC4A 1BN
Financial PR
Abchurch Communications
125 Old Broad St
London EC2N 1AR
Bankers
HSBC Bank plc
89 Buckingham Palace Road
London SW1W 0QL 66 CentralNic Group Plc Annual Report 2014
Company Registrars
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Capita Asset Services is our registrar and they offer many services
to make managing your shareholding easier and more efficient.
Share portal
The Share Portal is a secure online site where you can manage
your shareholding quickly and easily. You can:
• View your holding and get an indicative valuation
• Change your address
• Arrange to have dividends paid into your bank account
• Request to receive shareholder communications by email
rather than post
• View your dividend payment history
• Make dividend payment choices
• Buy and sell shares and access a wealth of stock market
news and information
• Register your proxy voting instruction
• Download a stock transfer form.
To register for the Share Portal just visit www.capitashareportal.com.
All you need is your investor code, which can be found on your
share certificate or your dividend tax voucher.
Customer support centre
Alternatively, you can contact Capita’s Customer Support Centre
which is available to answer any queries you have in relation to
your shareholding:
By phone – UK – 0871 664 0300 (UK calls cost 10p per minute
plus network extras). From overseas – +44 20 8639 3399.
Lines are open 9.00am to 5.30pm, Monday to Friday, excluding
public holidays.
By email – shareholderenquiries@capita.co.uk
By post – Capita Asset Services, The Registry,
34 Beckenham Road, Beckenham, Kent, BR3 4TU.
Sign up to electronic communications
Help us to save paper and get your shareholder information
quickly and securely by signing up to receive your shareholder
communications by email.
Registering for electronic communications is very straightforward.
Just visit www.capitashareportal.com. All you need is your
investor code, which can be found on your share certificate or
your dividend tax voucher.
Donate your shares to charity
If you have only a small number of shares which are uneconomical
to sell you may wish to donate them to charity free of charge
through ShareGift (Registered Charity10528686). Find out more
at www.sharegift.org.uk or by telephoning 020 7930 3737.
Share fraud warning
Share fraud includes scams where investors are called out of
the blue and offered shares that often turn out to be worthless
or non-existent, or an inflated price for shares they own. These
calls come from fraudsters operating in ‘boiler rooms’ that are
mostly based abroad.
While high profits are promised, those who buy or sell shares in
this way usually lose their money.
The Financial Conduct Authority (FCA) has found most share
fraud victims are experienced investors who lose an average of
£20,000, with around £200m lost in the UK each year.
PROTECT YOURSELF
If you are offered unsolicited investment advice, discounted
shares, a premium price for shares you own, or free company or
research reports, you should take these steps before handing
over any money:
• Get the name of the person and organisation contacting you.
• Check the Financial Services Register at
http://www.fca.org.uk/ to ensure they are authorised.
• Use the details on the FCA Register to contact the firm.
• Call the FCA Consumer Helpline on 0800 111 6768 if there
are no contact details on the Register or you are told they are
out of date.
• Search our list of unauthorised firms and individuals to avoid
doing business with.
Shareholder information continued CentralNic Group Plc Annual Report 2014 67
REMEMBER: if it sounds too good to be true, it probably is!
If you use an unauthorised firm to buy or sell shares or other
investments, you will not have access to the Financial
Ombudsman Service or Financial Services Compensation
Scheme (FSCS) if things go wrong.
REPORT A SCAM
If you are approached about a share scam you should tell the FCA
using the share fraud reporting form at http://www.fca.org.uk/
scams, where you can find out about the latest investment scams.
You can also call the Consumer Helpline on 0800 111 6768.
If you have already paid money to share fraudsters you should
contact Action Fraud on 0300 123 2040.
Identity theft
Tips for protecting your shares in the Company:
• Ensure all your certificates are kept in a safe place or hold
your shares electronically in CREST via a nominee.
• Keep correspondence from us and Capita in a safe place and
destroy any unwanted correspondence by shredding.
• If you change address, inform Capita in writing or update your
address online via the shareholder portal. If you receive a letter
from Capita regarding a change of address but have not
moved, please contact them immediately.
• Consider having your dividend paid directly into your bank.
This will reduce the risk of the cheque being intercepted or
lost in the post. If you change your bank account, inform
Capita of the details of your new account. You can do this
by post or online via the shareholder portal.
• If you are buying or selling shares, only deal with brokers
registered and authorised to carry out that type of business.
• Be wary of phone calls or e-mails purporting to come from us
or Capita asking you to confirm personal details or details of
your investment in our shares. Neither we nor Capita will ever
ask you to provide information in this way. 68 CentralNic Group Plc Annual Report 2014
Top Level Domain or ‘TLD’
The suffix attached to internet domain names e.g., .com, .net
Second Level Domain or ‘SLD’
A domain that is directly below a top-level domain e.g. uk.com
Country Code Top Level Domain or ‘ccTLD’
An Internet top-level domain generally used or reserved for a
country, a sovereign state, or a dependent territory e.g., .uk, .jp
Domain Name System or ‘DNS’
A hierarchical distributed naming system for computers,
services, or any resource connected to the Internet or a
private network
Domain Name Registrar
An organisation or commercial entity that manages the
reservation of Internet domain names
Registry Service Provider
A company that runs the operations of a TLD on behalf of the
TLD owner or licensee. The registry service provider keeps the
master database and generates zone files to allow computers to
route Internet traffic using the DNS
The Internet Corporation for Assigned Names
and Numbers or ‘ICANN’
A non profit private organisation that was created to oversee a
number of Internet-related tasks previously performed directly on
behalf of the U.S. government
Registry Operator
An entity that maintains the database of domain names for a given
top-level domain and generates the zone files which convert
domain names to IP addresses. It is responsible for domain name
allocation and technically operates its top-level domain
Glossary CentralNic’s global business footprint
Business footprint
Designed and produced by fourthquarter.co.uk
Contents
Highlights 1
Introduction to CentralNic 2
CentralNic’s key advantages 4
Chairman’s statement 8
Chief Executive’s report 10
Strategic report 12
Chief Financial Officer’s report 15
Board of Directors 18
Directors’ report 20
Corporate governance 24
Remuneration report 27
Independent Auditors’ report 30
Financial statements 31
Shareholder information 65 35-39 Moorgate
London
EC2R 6AR
www.centralnic.com
Annual Report 2014
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CentralNic Group Plc Annual Report 2014