Team Internet (TIG) 2020年年度報告「AIM」.pdf

《Team Internet (TIG) 2020年年度報告「AIM」.pdf》由會員分享，可在線閱讀，更多相關《Team Internet (TIG) 2020年年度報告「AIM」.pdf（100頁珍藏版）》請在三個皮匠報告上搜索。

1、Building a better digital economyCentralNic Group PlcAnnual report 2020PurposeTo make the internet everybodysdomain.VisionTo make the extraordinary potential ofthe internet available to all.MissionTo provide tools to as many people as possible to realise their aspirations online.ContentsStrategic re

2、portOur highlights 01What we do 02Delivering value and growth 04Chairmans statement 06Market opportunity 07Our business model and strategy 08Chief Executive Officers report 10Environmental,social and governance 14Chief Financial Officers report 18Risks 22GovernanceBoard of Directors 26Corporate gove

3、rnance 28Audit Committee report 31Remuneration Committee report 32Directors report 35Financial statementsIndependent auditors report 39Consolidated statement of comprehensive income 44Consolidated statement of financial position 45Consolidated statement of changes in equity 46Consolidated statement

4、of cash flows 47Notes to the consolidated financialstatements 48Company statement of financial position 83Company statement of changes in equity 84Notes to the Company financial statements 85Particulars of subsidiaries andassociates 91 Additional informationShareholder information 94Glossary 96Find

5、out more at:Strategic reportGovernanceFinancial statementsAdditional information01CentralNic Group Plc|Annual report 2020+121%20202019109.2Our highlightsRecord organic growth in the face of the COVID-19 crisis.Financial highlightsRevenue growth (USD m)+9%20202019289.7265.9Net revenue/gross profit gr

6、owth(USD m)+78%2020201976.342.8Organic net revenue/gross profit growth(USD m)Adjusted EBITDA growth (USD m)+8%+71%202020202019201996.6241.230.689.517.9Organic adjusted EBITDA growth(USD m)Operating profit growth(USD m)+4%n.m.202020202019201935.60.434.1(2.8)Organic revenue growth(USD m)Net debt growt

7、h (USD m)+13%2020201985.075.0Full-year highlightsRecord organic growthin the face oftheCOVID-19crisisAll staff and systemsremained fully operationalwith nointerruption to thesupplychainsHealthy demand for our two largest segments,Indirect andMonetisationSuccessful placement of40millionsharesAcquisit

8、ion of Codewise for USD 36.0 millionPost year end highlightsSuccessful,oversubscribed bondplacementCompletion of SafeBrands acquisitionCompletion of acquisition of WandoInternet SolutionsRead more in the Chief Executive Officers report on pages 10 to 13Read more in the Chief Executive Officers repor

9、t on pages 10 to 13As CentralNic made one major acquisition in 2020 and four acquisitions in 2019,the Company also prepared a pro forma comparable financial summary including all businesses currently controlled by CentralNic(a definition of which is provided in note 3 to the consolidated financial s

10、tatements),toeffectively isolate organic growth.Throughout this report,figures qualified by organic refer to this pro forma financial summary.02CentralNic Group Plc|Annual report 2020What we doCentralNic has three reporting segments:the Indirect and Direct domain name sales segments,and the Monetisa

11、tion segment.DirectThe Direct segment includes the Groups enterprise businesses which service large corporations that view domain names as a form of intellectual property similar to trademarks.It also includes the Groups SMB and domain investor-focused retail businesses.Whilst the enterprise divisio

12、n was the one part of CentralNic where revenues were affected negatively by COVID-19 in 2020(as a number of clients postponed spending in 2020),theperformance of these enterprise customers has sincerecovered,returning the segment to growth.The SMB and domain investor-focused retail businesses grew d

13、uring 2020,but only enough to balance the decline experienced in the enterprise market.IndirectCentralNic Group is a world leader in its Indirect segment,which supplies domain names and other services to the largest and best known retailers of domains as well as a long tail of over 25,000 resellers.

14、The segment includes CentralNic Registry Services,theworlds premier distributor of new Top-Level Domains,and SK-NIC,operator of the official country code domain forSlovakia.The segment also includes the reseller business,which allows retailers to procure and resell virtually any domain name in the w

15、orld,through a single API,with a single invoiceand a single customer service number to call.MonetisationCentralNic entered into the exciting high-growth market of internet traffic monetisation at the very end of 2019,and in 2020 it represented approximately half of the Groups revenue.During 2020 aro

16、und USD 400 billion was spent by online marketers acquiring internet traffic,with demand growing atover 20%per year.CentralNics monetisation companies address that enormous demand with proprietary technology enabling the sale of domain name traffic,as well as traffic from websites and apps.USD 43.4

17、millionRevenue(1)USD 112.1 millionRevenue(1)USD 85.8 millionRevenue(1)USD 20.5 millionNet revenue/gross profit(1)USD 30.0 millionNet revenue/gross profit(1)USD 25.8 millionNet revenue/gross profit(1)2.3 millionDomains under management(1)23.0 millionDomains under management(1)26.5 millionDomains unde

18、r management(1)Strategic reportGovernanceFinancial statementsAdditional information03CentralNic Group Plc|Annual report 2020Uses of domain names and web servicesEmail and websites forbusinessOnline trademarks forbrandsInventory for domaininvestorsCorporate emails require a domain name.Large corporat

19、ions register thousands of domain names,requiring portfolio management.Approximately 100 million domain names are held by domain investors.Businesses use websites to win customers,and online businesses also take orders and provide services via their websites.Brands also require internet monitoring t

20、o protect their domains andtrademarks.Two business models:reselling domains at a profit and monetisation.How internet traffic monetisation worksBuying traffic (demand side)Selling traffic (supply side)Domain name monetisationBusinesses engage in online marketing to attract new customers to their web

21、sites.Internet properties monetise their traffic by selling it.These range from Google Search,Bing,YouTube,Facebook,and DailyMail.co.uk to millions of websites,blogs,etc.Domain names attract traffic from people seeking products and services,due to previous use for websites,or type-in traffic.50%of t

22、hat marketing spend goes through Google AdSense and 50%to other DSPs.That traffic can be monetised via Google AdSense or otherDSPs.(1)Revenue and net revenue/gross profit data for the year ended 31December 2020;Domains under management data as at 31December 2020.04CentralNic Group Plc|Annual report

23、2020Delivering value and growthCentralNic does business with almost every company in the domain industry globally,giving us an excellent pipeline of warm leads.Investment caseIn 2020 roughly 50/50 domain name sales and domain name monetisationGlobal consolidator in a highly fragmented market.Proven

24、ability to acquire and integrate attractive businesses at low costsRecurring revenues representing 99%of totalrevenue for FY 2020More than 45 million domains using at least one ofCentralNics platforms(12%of domains worldwide)Global business with hundreds of thousands ofdirect and indirect customers

25、in nearly every country inthe worldOver 100%cash conversion(pre-tax)virtually all annual subscriptions paid in advanceNew revenue streams provide significant upside potential related services such as hosting,cybersecurity and brand protectionStrategic reportGovernanceFinancial statementsAdditional i

26、nformation05CentralNic Group Plc|Annual report 2020Recent acquisition timelineAcquisition of SafeBrandsBrand protection and internet services with strong presence inFrench-speakingmarketsDivision:DirectAnnual revenue:USD 4.9 millionAdjusted EBITDA:BreakevenConsideration:USD 4.4 millionAcquisition of

27、 CodewiseMonetisation,including ofdomains held by domaininvestorsDivision:MonetisationAnnual revenue:USD 60.3 millionAdjusted EBITDA:USD 7.4 millionConsideration:USD 36.0 millionAcquisition of WandoSocial marketing,display advertising and SEMadvertisingDivision:MonetisationAnnual revenue:USD 5.6 mil

28、lionAdjusted EBITDA:USD 1.4 millionInitial consideration:USD 6.5 millionDecember 2019November 2020January 2021February 2021January 2021:Post balance sheet eventsAcquisition of TeamInternetMonetisation of traffic fordomain investorsDivision:Monetisation2019 revenue:USD 74.0 million2019 adjusted EBITD

29、A:USD 12.3 millionConsideration:USD 48.0 million06CentralNic Group Plc|Annual report 2020CentralNics results for 2020 evidence the resilience of the Groups businesses,even in the face of the COVID-19 economic crisis.CentralNic continues to take significant steps forward in its strategy to build a le

30、ading global domain name and web services provider.The Groups long-standing proactive focus on ensuring business continuity for itself and its customers has prepared it well for the challenges presented by COVID-19,including the movement of our global workforce to home working,and our services and s

31、upply chains were uninterrupted in meeting the increased demand our services experienced.Our two largest reporting segments,Monetisation and Indirect,enjoyed significant organic growth during 2020,through a combination of new client wins and increased business from existing customers,especially from

32、 new product offerings.While the mix of businesses evolved,margins remained resilient for each business line,and the Company continued to generate high levels of operating cash flow.The Group also made a significant earnings accretive acquisition during the year,Codewise,increasing the scale and res

33、iliency of our Monetisation business.Our equity raise in support of this acquisition was healthily oversubscribed,and I welcome the new Shareholders to our register.The Groups continued transformation is the result of enormous hard work from our executives and staff,and I thank them on behalf of the

34、 Board and the Shareholders for their efforts.In 2020 we invested in a new suite of shared functions,including finance,people,product and project management,and installed a common set of software tools to assist in bringing the Company together as an integrated whole.Further integration opportunitie

35、s lie ahead of us,as we seek to improve both our operating margins and our operating efficiencies.We continue to see exciting M&A opportunities matching our investment criteria,and indeed we started this year with two bolt-on acquisitions funded by an oversubscribed issue of our bonds,at an effectiv

36、e coupon rate of under 4%.Trading in Q1 thisyear,together with the Groups continued high percentage ofrecurring revenues,provide the Board with every confidence ofmeeting our expectations for 2021.Iain McDonald Chairman23 April 2021Chairmans statement“CentralNics results for 2020 evidence the resili

37、ence of the Groups businesses,even in the face of the COVID-19 economic crisis.”Iain McDonaldChairmanStrategic reportGovernanceFinancial statementsAdditional information07CentralNic Group Plc|Annual report 2020Market opportunityCentralNics organic growth is driven by theunderlying growth of the inte

38、rnet and thee-commerce sector.Macro driversInternet4.66 billionNumber of users:4.66billion (almost 60%ofglobalpopulation)320 million+320 million+new users expectedin 2021,annualised growth rate of c.7%319 millionGrowth rate:319 million in the last twelve monthsE-commerce18%18%of the global retail ec

39、onomyand risingUSD 4.28 trillionUSD 4.28 trillion market size in202027%Growth rate:27%CentralNics core marketsMonetisation of internet trafficUSD 400 billionMonetising internet traffic for websites to acquire new customers online is a USD400billion business21.6%Growth rate:21.6%100%100%cash conversi

40、onDomain names and web servicesUSD 30 billionDomain names and web services such as email services,websitebuilders ande-commerce softwareisaUSD 30billion business3%Growth rate:3%for domainnames100%100%cash conversionhttps:/ Group Plc|Annual report 2020Our business model and strategyCentralNic is rapi

41、dly building scale by acquiringpurerecurring revenue businesses toexpand its portfolio of internet services.Our strategyCentralNic is seeking to rapidly buildscale both through acquisitions and organic growth to maximise the potential of itshighrecurring revenue,high cash conversion business.Acquiri

42、ng pure recurring revenue businesses to bring talent,scale,geographic presence,technology andcustomers.Expanding portfolio of internet services todiversify revenue streams and provide cross-selling opportunities across huge customer base.Restructured in 2020 and invested heavily in new hires and sys

43、tems to drive organic growth and integrations.Our sources of competitive advantageComprehensive service offeringCentralNic is directly integrated with almost every Top-Level Domain registry in the world,as well as with providers of SSL certificates and a growing number of additional value-added serv

44、ices making us the one-stop-shop with optimal control of our supply chain.Our peopleCentralNic has an enormous depth of talent across the entirespectrum of domains and value-added services.Ourcustomers know that when they speak with a CentralNic team member,they are speaking with an expert.Operation

45、al structureA centralised mother ship handling finance,people,product,project management,integrations and IT,services CentralNics customer-specific divisions globally,allowing divisional management to focus on organic growth.Our technologyCentralNic is known for its excellent technology solutions su

46、pported by large in-house product,engineering and operations teams.Global perspectiveCentralNic takes full advantage of the global nature of the internet,winning customers in almost every country on earth,and tracking their buying habits to identify the growth markets in which to build critical mass

47、.Omni-channel platformCentralNic has a distribution platform serving each different type of customers domain name needs,as well as a growing list of value-added services.This means that CentralNic hasa home for virtually any domain name company on themarket.Acquisition intelligence and expertiseCent

48、ralNics extensive business dealings with most companies in the global domain business has led us to enjoyan outstanding track record of sourcing and securing high-quality acquisition targets at excellent value.Strategic reportGovernanceFinancial statementsAdditional information09CentralNic Group Plc

49、|Annual report 2020Creating value for stakeholdersCustomers SMBs Brands Governments Domain registries Domain resellers Domain name investors Online marketers Media buyersColleaguesCentralNic has a dedicated team of 650 expert employees and contractors,nearly 100 of whom have dedicated ten years or m

50、ore of their working life to us.InvestorsCentralNic enjoys the support of over 50 institutional investors in our equity and of several tens in our bond,aswell as an increasing retail following.Regulators and governmentsCentralNic includes a number of entities accredited by ICANN.It is also a service

51、 provider to governments around the world,assisting them with their domain name and digital economy initiatives.PartnersThe domain name industry is an ecosystem in which companies partner closely with each other to achieve shared objectives with mutual benefits.CommunitiesA truly global business wit

52、h customers in almost every country in the world,CentralNic is dedicated to building abetter,more equal,digital economy.Our capital allocation prioritiesCash flowCash conversion of the business isstrong as,for the majority of revenue streams,customers pay upfront,whereas suppliers are paidin arrears

53、.ReinvestmentThe Groups business is relatively asset light with focus on investment in new products and features,some of which may be capitalised in line withIAS 38:Intangible Assets.AcquisitionsAcquisitions present a superb opportunity to deploy excess cash flow.All acquisitions that the Group unde

54、rtakes are cash flow positive and yield immediate returns with resilience,in line with the core business.DividendThe Directors continuously observe the balance between the accretive opportunities that the Company can pursue and the capacity to return cash to Shareholders and will consider a maiden d

55、ividend at theappropriate time.10CentralNic Group Plc|Annual report 2020In 2020,a year of unprecedented interruption to the global economy,CentralNic generated as much revenue as in the five preceding years all added together.These outstanding results not only demonstrate that CentralNics business w

56、as easily able to transition to working from home,but also prove our ability to service growing demands from our customers.Meanwhile we again demonstrated the qualities required to achieve our longer-term goals:to source and complete transformative acquisitions,and integrate them successfully while

57、delivering record organic growth of 9%.Moreover,as we scale up rapidly,theunderlying qualities of high recurring revenues and high cash conversion,calculated at 115%on an adjusted basis,become increasinglymeaningful.Market and strategyCentralNic Group is a leading global vendor of online services in

58、two markets.Firstly,we sell subscriptions to domain names akeyinfrastructure component of the internet that is required for operating email and websites.Large portfolios of domain names are also held by companies for brand protection purposes and by domain investors,who obtain returns from domain na

59、mes by selling them at a profit and by monetising the traffic they generate.The size of the domain name market is estimated at around USD5billion with 3%growth,while the value-added services related to and bundled with domains(website builders,website hosting,email software,etc.)has estimated annual

60、 revenues of an additional USD 25 billion.Internet traffic monetisation is our second core activity.We entered this exciting high-growth market at the very end of 2019,and in 2020 it represented approximately half of our revenue.During 2020 around USD 400 billion was spent by online marketers acquir

61、ing internet traffic,with demand growing at over 20%per year.CentralNics monetisation companies address that enormous demand with proprietary technology enabling us to sell domain name traffic,as well as traffic from websites and apps.Both sides of our business are based on domain names,andtheyshare

62、 many characteristics including recurring revenues,100%cash conversion and extraordinary customer stickiness.Moreover,there are significant cross-selling opportunities between our two core activities,including introducing our monetisation customers(who own 20 million domains)to our domain sales serv

63、ices,and promoting our monetisation services to domain purchasers wishing to acquire customers to monetise their websites.The critical mass of CentralNic Groups technical and operations staff is concentrated in Germany and Poland,with regional staff in Australasia and the corporate headquarters loca

64、ted in the UK.From those centres,CentralNic services customers in almost every country in the world.In 2020,over 45 million domains touched one of CentralNics platforms,representing over 12%of all the domains in existence.Increasing the number of domains on our platforms through newcustomer acquisit

65、ion and cross-selling is one of CentralNics three core growth drivers.The second is launching new products to our existing customer base.And the last is acquiring smaller businesses in the domain name and internet services industry that match our own profile of recurring revenues,high cash conversio

66、n and strong customer stickiness.Chief Executive Officers report“As we scale up rapidly,the underlying qualities of high recurring revenues and high cash conversion,calculated at 115%on an adjusted basis,become increasingly meaningful.”Ben CrawfordChief Executive OfficerStrategic reportGovernanceFin

67、ancial statementsAdditional information11CentralNic Group Plc|Annual report 2020Monetisation segmentCentralNic Group became the worlds leading provider of domain name monetisation services by acquiring Team Internet in late December 2019,growing that business at a rate of 35%over 2020,and then acqui

68、ring the assets of a complementary business,Codewise,at the end of 2020.Our domain monetisation service providers use proprietary technology to make the traffic which flows to domain names accessible for online marketers to purchase.The traffic to these undeveloped domains comes predominantly from t

69、wo growing sources.Firstly,the ever-increasing number of domains that used to house websites and still receive visits from former customers and prospects clicking on links to the old sites.This is very high quality traffic for the right advertisers,and our software is able to analyse and determine t

70、he best match of advertisers to traffic.Secondly,domain name investors are able to drive traffic to their undeveloped domains using traffic arbitrage,by buying traffic at alower cost from website A than the amount they sell it for to advertiser B.CentralNics suite of tools(some patented)allowing tra

71、ffic arbitrage to flourish have driven that businesss organic growth by 35%in 2020.Each of our two monetisation companies uses a different software solution and supply chain,making our business the most robust in the market able to optimise between revenue sources,offer our customers unprecedented c

72、hoice,and hedge against any disruptions to one monetisation supply chain by managing a second supply chain to switch the affected traffic over to.Moreover,our monetisation businesses are unaffected by changes in search algorithms or changes to rules relating to cookies,asundeveloped domains do not a

73、ppear in search,and none ofourmonetisation businesses use cookies.Indirect segmentCentralNic Group is also a world leader in its Indirect segment,which grew 8%organically in 2020.This segment supplies domain names and other services to the largest and best known retailers of domains as well as a lon

74、g tail of over 25,000 resellers.Thesegment includes CentralNic Registry Services,the worlds premier distributor of new Top-Level Domains,which manages around the same number of domains as all our competitors combined,as well as SK-NIC,operator of the official country codedomain for Slovakia,home to

75、one of the fastest growing economies in Europe.The segment also includes our reseller business,which allows retailers to procure and resell virtually anydomain name in the world,through a single API,with a single invoice and a single customer service number to call.In addition todomain names,the Gro

76、up is starting to sell in-demand servicessuch as Microsoft Office 365 and AWS hosting,which the Directors expect will provide a meaningful contribution to organic growth in the future.Direct segmentThe Direct segment was the one part of CentralNic where revenues were affected negatively by COVID-19

77、in 2020.Ourenterprise businesses service large corporations that view domain names as a form of intellectual property similar to trademarks,which must be secured and protected.Over 1,000 corporate clients to date have entrusted their domain portfolio management to CentralNic Group,which includes For

78、tune 1000 companies and household brand names.A number of these postponed spending in 2020,particularly in Q1,as part of a wider cash retention strategy responsive to COVID-19.The performance of these enterprise customers has recovered since,returning the segment to growth.Our SMB and domain investo

79、r focused retail businesses grew during 2020,but only enough to balance the decline experienced in the enterprise market.Investment in reorganisationIn order to streamline the operations of the Group as a single company,CentralNics central hub of IT and corporate services received significant invest

80、ment in 2020.The Company selected and made significant progress in rolling out new Company-wide software tools including G-suite,SalesForce,Jira,Confluence,HiBob,Zendesk and Tableau.We significantly increased the size ofour shared functions,building out the teams in new products,finance,people,devel

81、opment,integrations,and a single procurement function for domains and other microservices,streamlining the internal supply chain.The operating businesses were also restructured into divisions based on customer type with a number of new leaders and other specialist staff added to drive organic growth

82、 to an all-time highof9%.12CentralNic Group Plc|Annual report 2020Chief Executive Officers report continuedOperational highlightsCentralNic Group experienced both acquisition-driven and organic growth in its Monetisation and Indirect divisions in 2020.Majorintegration tasks in 2020 notably included

83、the migration of the procurement functions of TPP Wholesale to the central domain name and value-added services engine,which included the largest ever migration of domains under one TLD between registrars,ofnearly 500,.au domain names.Significant progress was also made in exploring the optimal path

84、to integrating and centralising technical functions distributed across various acquiredcompanies.New product-driven growth was dominated by the patented SSL technology launched by our Team Internet division,which drove the 35%growth in that company in 2020.Other products launched from one platform t

85、o another in 2020 include domain back ordering a service from our Indirect segment which creates new inventory for our Monetisation business and registry lock a security product favoured by enterprise clients.Given the difficulties of switching suppliers in the domain industry,customers tend to be v

86、ery sticky,and client wins from other suppliers are relatively rare,as of course are losses of clients.Nonetheless,CentralNic Group has continued to win more customers away from its competitors with its focus on expert service,close collaboration with clients,and feature-rich,flexible and automated

87、technology.Significant customer wins in the Indirect segment include Jisc and Intercap,as well as registry service contracts for the TLDs.auto,.beauty,.build,.car,.cars,.cfd,.cyou,.hair,.makeup,.quest,.skin and.uno.Major client wins in the Direct segment in 2020 included Deutsche Telekom/T-Systems,B

88、auer Media,UNHCR,Ariston,Ferguson Plc,Argon Medical Devices Inc.,1300 FLOWERS,ANZBank and Westpac Banking.In the Monetisation business,notable new customer wins included Vodacom,the biggest carrier in South Africa,and Sovrn,a global player in e-commerce adtech.AcquisitionsCustomers are very sticky i

89、n the domain business given the high levels of automation and high switching costs,with transfers between providers amounting to a small proportion of all transactions.This customer stickiness,combined with the high value and quality of earnings of existing customer books,makes the domain industry a

90、 very attractive and relatively low risk industry in which to acquire businesses.CentralNic has won a reputation asa hugely efficient acquirer focused on value,earnings accretion,recurring revenues,excellent customer retention and high levels ofcash conversion.In total,five successful acquisitions c

91、ontributed to CentralNic Groups growth in 2020.CentralNic Groups Indirect segment enjoyed the full-year effect of its acquisitions of TPP Wholesale,made on 1 August 2019,and Hexonet,made on 7 August 2019.The Direct division enjoyed the full-year impact of the Ideegeo acquisition,also made on 7 Augus

92、t 2019.The Monetisation segment was effectively created on 24 December 2019 when the acquisition of Team Internet AG was completed,having its first material impact in 2020.The year also enjoyed two months of contribution from CentralNics acquisition of the Codewise businesses on 2 November 2020.One

93、of Team Internets closest competitors was Codewise,anadtech business based in Poland.It started with domain monetisation through its own demand side platform,but now offers a range of advertising formats.Based on the year to 30June2020,the deal valued Codewise at 0.6x historical sales(USD 60.3millio

94、n)and 4.9x adjusted EBITDA(USD 7.4 million).Thedeal was funded by way of a share placing,with CentralNic having placed 40 million shares at 75 pence per share,raising gross proceeds of GBP 30 million.The acquisition was highly complementary to the successful Team Internet acquisition,building Centra

95、lNics technology base and market share in domain monetisation,diversifying its client base and strengthening the Groups development capability and Senior Management team.In addition to the contribution these acquisitions have made to the continued growth of CentralNic Group,they also represent a pra

96、ctical demonstration of our teams ability to source and complete deals around the world and successfully integrate them.The Directors continue to build a pipeline of acquisition targets that fit the Groups criteria with a view to making further acquisitions in the coming years.As CentralNic Groups s

97、ector is proving resilient to business interruption,the Directors note the continued availability of attractive acquisition targets,which,coupled with the Groups proven ability to source,complete and integrate complex acquisitions around the world,provide an ongoing opportunity to build a sizeable g

98、lobal business to rival the largest industry players.Strategic reportGovernanceFinancial statementsAdditional information13CentralNic Group Plc|Annual report 2020Post year end and outlook Completion of the acquisition of SafeBrands,a French enterprise domain management and online brand protection pr

99、ovider,strengthening our Enterprise division within the Direct segment,for USD 3.7 million plus a deferred consideration of USD0.7million.Successful,oversubscribed placement of EUR 15 million(USD18.2 million approximately)of senior secured callable bonds at 104.5%of nominal value.Completion of the a

100、cquisition of Wando Internet Solutions forUSD 6.5 million plus an additional earnout of up to USD6.5million.The strong organic growth in 2020 demonstrates the Companys resilience despite the economic crisis,and ability toexecute on its accelerated buy and build strategy.New product launches and furt

101、her integration activities will support revenue growth and margins.The Companys successful consolidation strategy continues,with opportunities being continually assessed in what is a large,globally fragmented and growing market.To fund the above and future acquisitions,CentralNic Group successfully

102、sought permission to issue EUR 60 million in senior secured bonds and issued an initial EUR 15 million in bonds at an equivalent coupon rate of 3.6%.The bond,which matures in July2023,has a coupon of three-month EURIBOR(with a floor of0%)plus 7%p.a.,with quarterly interest payments.Pareto Securities

103、 acted as sole bookrunner for the bond issue.CentralNic Group was advised by Rothschild&Co in connection with the bond issue.The issue was oversubscribed and supported by a wide range of debt capital markets investors globally.On 9 January 2021,CentralNic acquired SafeBrands,aFrance-based award-winn

104、ing innovator and technology pioneer,fora total cash consideration of up to EUR 3.6 million(USD4.4million),representing 0.9x its FY2020 revenue.SafeBrands operated at approximately breakeven in FY2019 and generated EBITDA of EUR 0.2 million(USD 0.2 million)in FY2020.Outof the total consideration,EUR

105、 3.0 million(USD 3.7 million)waspaid upfront with the remaining EUR 0.6 million(USD0.7million)tobe paid subject to SafeBrands having metagreed FY2020 financialobjectives.SafeBrands is a leading French corporate registrar,with a stable and growing base of clients,including some of the leading French

106、brands.It offers registration management for all Top-Level Domains and a wide range of value-added services for domain management and brand protection,including secure hosting,DNSoptimisation and SSL management.SafeBrands talented R&D team has a history of innovation and has developed cutting-edge p

107、roprietary monitoring solutions used by global brands to find and take action against fraud and counterfeits.Itsmulti-language SaaS platform analyses millions of relevant results every day,backed up by an extensive team of IP experts.SafeBrands is therefore ideally positioned to take advantage of th

108、e brand protection,DNS and hosting markets which are all growing rapidly as COVID-19 has accelerated the digitisation of business.On 22 February 2021,CentralNic Group Plc announced that it had entered into a binding agreement to acquire Wando Internet Solutions GmbH(Wando)for an initial consideratio

109、n of EUR5.4million(c.USD 6.5 million).Based in Berlin,Germany,Wando is a technology company operating in the fields of social marketing,display advertising and SEM advertising.In FY2020,Wando generated unaudited revenue of EUR 4.9 million(c.USD 5.6 million)and unaudited EBITDA of EUR 1.2 million(c.U

110、SD 1.4 million).CentralNics distribution network is an important sales channel for Wando,representing more than half its revenue.Through a closer vertical integration,CentralNic expects to grow Wandos sales.Our pipeline of future deals remains strong,while our net debt level remains comfortable,part

111、icularly given the profitability and healthy cash flow from the existing CentralNic Group and the expected contribution from recent acquisitions.We have also brought on new staff,including a number of new senior managers,and systems to drive our organic growth,and we are confident in continuing our

112、trajectory towards joining the ranks of the global leaders in our industry.Ben Crawford Chief Executive Officer23 April 202114CentralNic Group Plc|Annual report 2020Section 172(1)statementThe Board recognises its responsibility to take into consideration the needs and concerns of all our stakeholder

113、s as part of our discussion and decision-making processes,and in this regard,wewelcome the fresh stance under section 172 of the UK Companies Act 2006(s.172)as part of the QCA Corporate Governance Code.The Directors have identified the Companys key stakeholders as its:Shareholders and investors,empl

114、oyees,customers,suppliers,regulators and governmental bodies,environment and the wider community.Building positive relations with these stakeholders,treating them well and with respect,is essential to the success of thebusiness.The Board considers the interests of the Groups employees and other stak

115、eholders,including the impact of its activities on the community,environment and the Groups reputation,when making decisions.The Board,acting fairly between members,and acting in good faith,considers what is most likely to promote the success of the Group for its Shareholders in the long term.The Gr

116、oups stakeholder engagement activities help to inform theBoards decisions.By thoroughly understanding our key stakeholder groups,we can factor their insights and concerns intoBoardroom discussions.Environmental,social and governanceThe Board takes into account environmental,social and governance(ESG

117、)issues raised by stakeholders in its decision-making process.Stakeholder engagementShareholders and investorsRelations with Shareholders are managed principally by the Chief Executive Officer,Chief Financial Officer and the Chairman,and meetings are regularly held with institutional investors and a

118、nalysts during the year.The Board receives regular updates on Shareholder and analyst sentiment and peer analysis.More information on Shareholder engagement can be found on page 30.EmployeesThe Company recognises that high levels of employee engagement lead to lower levels of attrition,higher levels

119、 of productivity and a more enjoyable work environment,where people are happier and are more likely to thrive.The Company regularly engages with its people in multiple ways,including through regularly scheduled town halls,by providing Company updates and through regular pulse engagement surveys.In p

120、articular during 2020,the Group carried out various surveys across all its divisions and functions allowing employees to express their views and opinions on a variety of matters including COVID-19,working remotely and our future way of working.Listening to our people has been extremely important as

121、we continue to grow the business and we fully intend to continue to undertake regular pulse surveys not just to better inform our decisions,but to also ensure we are proactively managing the business through more challenging times.CustomersThe Company engages with customers across the globe through

122、the dedicated customer support function.SuppliersDeveloping a strong relationship with our suppliers is key to the operational success of ourcompany.Regulators and governmentThe Group is subject to statutory reporting requirements and to rules and responsibilities prescribed by the London Stock Exch

123、ange.Compliance is maintained through the utilisation of recognised professional advisers,including the Companys nominated adviser,and the Board would not hesitate to seek input in this regard from external regulators if necessary.CommunitiesThe Board is committed to improving sustainability and hel

124、ping communities thriveby positively contributing both socially and economically.Strategic reportGovernanceFinancial statementsAdditional information15CentralNic Group Plc|Annual report 2020IntroductionRead more about:the Groups goals,strategy and business model in the strategicreport on pages 02 to

125、 09;how we manage risks on pages 22 to 25;and corporate governance on pages 28 to 30.We believe that the best way to influence positive change is by making a commitment to our key stakeholders who will hold us accountable.With this in mind,we will be adding a page dedicated to ESG to the website in

126、the coming months.The initiatives that we have undertaken and prioritised during the year are summarised in the following pages.Social Group ethicsCompany values,which incorporate the principles of corporate social responsibility and sustainability,guide the Groups relationships with its clients,emp

127、loyees and the communities and environment in which the Group operates.The Groups approach to sustainability addresses both its environmental and social impacts,supporting the Groups vision to remain an employer of choice,while meeting client demands for socially responsible partners.The Group respe

128、cts 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 Groups practice in the future.PeopleDiversityOur people are a key ele

129、ment in our success and the Company aims to attract,develop and retain talented people and to create a diverse and inclusive working environment,where everyone is accepted,valued and treated equally without discrimination.We are an equal opportunities company and ensure we recruit,develop,promote,su

130、pport and retain skilled and motivated people regardless of disability,race,religion or belief,sex,sexual orientation,gender identification,marital status or age.CentralNic has always prided itself on having a diverse team,positioned around the globe.The Company recognises that women are under-repre

131、sented intechnology companies and in the domain industry and is working to make meaningful change in this area and to support its female employees as well as to invest in their professional development and growth.CentralNic is creating a long-term and permanent path to gender equity within the Group

132、,creating an environment under which all employees have true equal access to opportunity and the tools to thrive in their careers.Inthe new year we will be introducing diversity training for all senior and middle management to further promote inclusivity,which will be led by our Chief People Officer

133、.WellbeingWellbeing is embedded in our culture.Unexpectedly,we faced unprecedented times with the COVID-19 global pandemic,andit was even more important for us to check in regularly withour people,put minds at ease and help them feel safe,both physically and mentally.During 2020 the Company has arra

134、nged many virtual events for its employees and physical activity was also encouraged,ranging from gentle lunchtime walks and stretches through to more strenuous activities and competitions.We know a focus on positive wellbeing is not just important during crisis points.Our priority remains to suppor

135、t wellbeing as a whole,whether it be physical,mental,financial or social.In2020 we globally rolled out an employee assistance programme,called Lifeworks,providing access to avast knowledge resource as well as confidential advice and support when really needed.We also added healthcare benefits and pr

136、ovided all our managers with wellbeing and mental healthtraining.Internet accessibility The Company is committed to offering internet services in developing countries,contributing to the United Nations Broadband Commissions objective of connecting the 50%of the world that is still offline with affor

137、dable internet.Whilst the internet itself adds a potential avenue through which fraudsters and other undesirables can operate,the Company has stringent policies relating to its position as an enabler of such traffic and at all times adheres to laws and regulations in each and every jurisdiction,incl

138、uding working with regulatory authorities at all times.TheGroup has also committed to a partnership with the Global Cyber Alliance on the Domain Trust initiative which provides registries and registrars with high-quality,large-scale sets of data on suspected criminal and malicious domains through wh

139、ich they can take further action,protecting their users.16CentralNic Group Plc|Annual report 2020Social continuedSK-NIC fundSK-NIC,part of the CentralNic Group and manager of the.SKTLD,committed itself via an agreement with the Slovak Government to provide 5%of its annual revenue to support the loca

140、l digital economy and internet community.Since SK-NIC became part of the CentralNic Group in 2017,EUR 500,000 has been provided in this way,supporting great projects like accessibility software for blind people on smartphones(Corvus),online suicide prevention assistance,a programme supporting girls

141、to work in the IT sector or facilitating training of teachers in technologies.Topics like Green IT or Online Community Support were among those within the project calls.Besides the agreement,SK-NIC directly supported other great initiatives like education and help in fighting online grooming,orcyber

142、security law curricula for major universities,provided the educative video series Academy of Virtual Slovakia and also led the initiative to lower all online services prices as a reaction to the COVID-19 pandemic.Global cybersecurity initiativesCentralNic Group closely co-operates with leading law e

143、nforcement agencies and security vendors on tackling global cybercrime,including taking down internet domains involved in illegal activities and sinkholing botnets operated by cybercriminals.As part of our initiative to help fight cybercrime and digitalfraud,CentralNic Group has established the prac

144、tice ofproactively scanning domains for illegitimate activities and abuse,performing over 68 million domain scans in 2020.GAY,the Top-Level Domain for the LGBTQ communityIn 2020,CentralNic helped create and currently provides backend service to.GAY,the Top-Level Domain dedicated to serving the globa

145、l LGBTQ community.GAYwas designed as asafer space where LGBTQ individualsand communities can connect online without fear,thanks to a set of strong anti-hatemeasures.World Economic ForumCentralNic is an active member of the leading international organisation for public-private co-operation,the World

146、EconomicForum(WEF),committed to improving the state ofthe worldby engaging business,political,academic and otherleaders ofsociety to shape global,regional,and industryagendas.CentralNic is a signatory and an active participant of the WEFs Partnering Against Corruption Initiative,the worlds leading b

147、usiness voice on anti-corruption and transparency,as well as the WEF Global Future Council on Transparency and Anti-corruption.We help shape the global anti-corruption agenda and tackle digital fraud together with business leaders,governments and academia.CentralNics executives have spoken and prese

148、nted at WEF CEO and government-level events in Geneva,New York,Tianjin,Dubai and other destinations around the world.DomainTrust initiativeIn 2020,CentralNic partnered with the Global Cyber Alliance(GCA),ISPs,banks and other organisations to launch DomainTrust,a sophisticated intelligence platform t

149、hat provides registries,registrars and cyber protection agencies withhigh-quality data on suspected malicious and criminal domains that are being used in phishing attempts,malware distribution,and botnet command and control(C&C)activities.This data provides them with the intelligence upon which they

150、 can take further action:investigation,suspension or disablement.Environmental,social and governance continuedStrategic reportGovernanceFinancial statementsAdditional information17CentralNic Group Plc|Annual report 2020Environmental Energy consumption reduction Streamlined Energy and Carbon Reportin

151、g(SECR)Under the Companies(Directors Report)and Limited Liability Partnerships(Energy and Carbon Report)Regulations 2018,weare mandated to disclose our UK energy use and associated greenhouse gas(GHG)emissions.Specifically,andas a minimum,weare required to report those GHG emissions relating to natu

152、ral gas,electricity and transport fuel,as well as an intensityratio,under the SECR regulations.Methodology CentralNic Group Plc appointed Carbon Footprint Ltd,a leading carbon and energy management company,to independently assess its GHG emissions in accordance with the UK Governments Environmental

153、Reporting Guidelines:Including Streamlined Energy and Carbon Reporting Guidance.The GHG emissions have been assessed following the ISO 14064-1:2018 standard and have used the 2020 emission conversion factors published by the Department for Environment,Food and Rural Affairs(Defra)and the Department

154、for Business,Energy&Industrial Strategy(BEIS).The assessment follows the location-based approach for assessing Scope 2 emissions from electricity usage.The financial control approach has been used.Results The table below summarises the GHG emissions for reporting year 1 January 2020 to 31 December 2

155、020.This is the first year CentralNic Group Plc has assessed its emissions.As 2020 has been a year of exceptional circumstances due to the COVID-19 pandemic forcing all our employees to work from home and halting travel across the Group,we realise that the GHG emissions below are not representative

156、of our normal yearly emissions.As such,we have asked Carbon Footprint Ltd to also assess 2019 emissions and provide a report so it can be used as a benchmark against which we will measure futureassessments.The table below shows only the SECR required elements for the UK operations.During 2020,Centra

157、lNic Group UK had no hire car travel or employee-owned business mileage.Element 2020(tCO2e)Direct emissions(Scope 1)0.00 Indirect emissions(Scope 2)Purchasedelectricity 13.66 Total tCO2e(Scope 1&2)13.66 Other indirect emissions(Scope 3)Transmission and distribution of electricity1.17 Total tCO2e(Sco

158、pe 3)1.17 Gross total tonnes of CO2e14.83 Intensity metric:Tonnes of CO2e per employee0.16 Intensity metric:Tonnes of CO2e per GBPmillionturnover0.14 Total energy consumption(kWh)58,579 Energy efficiencyAs this is the first year that we have undertaken a GHG emissions assessment to comply with SECR,

159、no energy efficiency actions have yet been taken.Some of our goals for 2021 are:sustainable procurement partnering with our supply chain to deliver sustainable solutions and source responsibly;waste and recycling reducing the waste generated by CentralNic and diverting waste from landfill through re

160、cycling and recovery;and electricity consumption conducting energy audits on the highest energy-consuming sites and investigate switching to renewable energy sources where feasible.Carbon neutrality Following the review conducted by Carbon Footprint Ltd on the GHG emissions of the Group,CentralNic d

161、ecided to offset these emissions by investing in VCS-certified clean energy projects.CentralNic is a certified Carbon Neutral Company.Tree plantation programmeIn late 2020,CentralNic began a programme to plant a tree for every domain name under management.CentralNic contributed funds in 2020 to a gl

162、obal tree plantation programme,where over 15,000 trees were planted through the help of Eden Reforestation Projects(EFP).In this effort CentralNic helped EFP in its mission to plant trees around the world in Ethiopia,Madagascar,Nepal,Haiti,Indonesia,Mozambique,Kenya and Central America.Australian bu

163、sh fire relief programmeIn January 2020,CentralNic Group launched an initiative in support of the Australian bush fire relief efforts,donating USD1from every.au domain registration for the month of February.Allproceeds were donated equally to the following three charities who are assisting with the

164、devastating bushfires across Australia:Australian Red Cross,Wires Wildlife Rescue and the Salvation Army Bushfire Appeal.18CentralNic Group Plc|Annual report 2020In the financial year 2020,the Group recorded overall year-on-year growth in revenues of 121%from USD 109.2 million to USD241.2million.Adj

165、usted EBITDA increased by 71%from USD17.9 million to USD 30.6 million.The lower adjusted EBITDA marginof 12.7%compared with 16.5%in the prior year and is dueto the different businessmix post the 2019 and 2020 acquisitions.This is best demonstrated by pro forma figures.Whilepro forma revenue increase

166、d by 9%from USD 265.9 million to USD 289.7 million,pro forma gross profit increased by 8%fromUSD 89.5 million to USD 96.6 million.The resulting marginaldecline in pro forma gross margin by 0.4%from 33.7%to33.3%isexplained by the Monetisation segment,which operates at slightly lower margins but has b

167、oasted higher organic growth thanthe other segments.Pro forma adjusted EBITDA increased by 4%from USD 34.1 million to USD 35.6 million.Theunder-proportional increase in proforma EBITDA is owed toinvestment in a pipeline of future products to sustain and further augment our improved growth rates whic

168、h,through operating leverage,should ultimately increase earnings.The attractive cash generative profile of the Group continued in2020 with net operating cash flow before tax of USD 22.7 million(2019:USD 18.6 million).Cash at the end of 2020 was USD28.7million(2019:USD26.2 million).In 2020,in view of

169、 the significance of the expansion into domain name monetisation,the Company amended its segment reporting.The Reseller segment,that combined the former Wholesale and Registry segments,is now referred to as Indirect,as it sells domain names and other digital subscriptions through anetwork of channel

170、 partners including the worlds leading web hosting companies.The Small Business and Corporate segments have been combined into the new Direct segment,that,as the name suggests,caters directly to the end user of such digital services.The new Monetisation segment includes Team Internet,acquired in Dec

171、ember 2019,and the Zeropark and Voluum businesses,acquired from Codewise in November 2020.For each segment,revenueand gross profit contributions to the total operating expenditure to operate the omni-platform shared services core arereported below,both on a reported basis as well as on a pro formaba

172、sis.Indirect segmentWhile the Company has not acquired additional reseller portals in2020,the segment still enjoyed a positive impact from the 2019acquisitions of Hexonet and TPP Wholesale.The Indirect segment now addresses over 25,000 customers with 26.5 million domain names under management.At the

173、 same time,CentralNic continued to develop its reseller key accounts with seven out of thetop ten customer accounts having increased their spend compared to 2019 by up to 63%.This has contributed to revenue in the Indirect segment increasing by 41%or USD25.1million,from USD60.7 million to USD 85.8 m

174、illion.Grossprofit for the segment increased by 32%from USD19.6million to USD25.8 million.Thedecrease in the gross margin from 32%to 30%is driven by the higher blended share of registrar business coming from the acquisitions as opposed to the near 100%gross margin registry business of the legacy Cen

175、tralNic Group business and is not indicative of declining prices.Chief Financial Officers report“CentralNics share price improved from a 54p average in 2019 to an 84p average in 2020,a56%increase.”Michael RiedlChief Financial OfficerStrategic reportGovernanceFinancial statementsAdditional informatio

176、n19CentralNic Group Plc|Annual report 2020Direct segmentThe Direct segment now addresses c.200,000 active customers owning c.2.3 million domain names and yielded revenue of USD43.4 million,a decrease of 7%over the USD 46.6 million recorded in 2019.Gross profit in 2020 was USD 20.5 million,adecrease

177、of 10%over the 2019 figure of USD 22.7 million.Thedecrease was largely due to the diminishing impact of the November 2018 change in terms and conditions,the reallocation ofthe data centre business to the Indirect business and the reallocation of the monetisation activities to the Monetisation segmen

178、t.The acquisition of Ideegeo contributed favourably to growth.On a pro forma basis,revenue was stable with USD44.3million in FY2019 and USD 44.4 million in FY2020.Monetisation segmentThe fastest growing segment of CentralNics business was Monetisation,which is for the first time presented as a separ

179、ate segment.Revenue in the Monetisation segment was USD112.1million with gross profit of USD 30.0 million and,on a pro forma basis,revenue increased strongly by USD 17.9 million,or13%,from USD 138.3 million to USD 156.2 million.It served c.10,000 customers on the Advertiser side,beingthose who want

180、traffic,and more than 5,000 customers on the Publisher side,being those who have traffic.The segments offering to the Advertisers comprises both demand side platforms to acquire traffic,but also subscriptions to analytics software to help advertisers measuring their marketing effectiveness.On behalf

181、 of thePublishers,the segment managed c.23 million domain names and other trafficsources.Excluding the acquisition of Codewise,revenue would have increased by USD 26.9 million,or 35%,from USD 76.5 million toUSD103.4 million.The contraction of Codewise revenue was dueto optimisation for gross profit

182、and was known at the time of acquisition.Going forward,management expects both businesses to contribute to growth.The strategy for the segment will evolve around automation,disintermediation and traffic quality.Earnings profileThe quality of the Groups earnings remains an important strategic priorit

183、y for CentralNic Group and its investors,as the Group increases the proportion of revenues derived from predictable sources.Today,virtually all of the Groups revenue comes from recurring services,and around half of it is also subscription based.Group overhead expenses excluding foreign exchange,depr

184、eciation,amortisation,impairment and non-core operating expenses increased 84%from USD 24.9 million to USD45.7million.Non-coreexpenses of USD 8.2 million includedUSD1.4 million acquisition expenses,USD 3.6 million integration expenses and USD 3.2 million other expenses(these primarily related to bus

185、iness reviews andrestructuring expenses).Other non-cash expenses included the acquired amortisation of intangible assets of USD 12.5 million(2019:USD 8.3 million).Theincrease reflects the full-year effect of scheduled amortisation for identified intangible assets of TPP,Hexonet,Ideegeo and TeamInter

186、net,as well as the acquisition ofthe Zeropark and Voluum businesses from Codewise.Adjusted EBITDA of USD 30.6 million(2019:USD 17.9 million)hasbeen derived from the operating profit of USD 0.4 million(2019:loss of USD2.8 million)after adjusting for the following items:a)depreciation ofUSD 2.1 millio

187、n(2019:USD 1.3 million);b)amortisation of intangible assets of USD 12.5 million(2019:USD8.3 million);c)non-core operating expenses of USD8.2million(2019:USD 7.4 million);d)foreign exchange losses of USD 2.1 million(2019:USD 0.8 million);e)immaterial amounts of associate income;and f)share-based paym

188、ent expense of USD5.1 million(2019:USD2.9 million).Adjusted diluted earnings per share were 10.16 cents(2019:8.97 cents)after consideration of non-recurring acquisition costs and acquired amortisation charges.Further details of the earnings per share calculations are provided innote 12 to the financ

189、ial statements.Key performance indicators 2020Revenue:USD 241.1m2019:USD 109.2mAdjusted EBITDA(1):USD 30.6m2019:USD 17.9mOperating profit:USD 0.4m2019:operating loss ofUSD(2.8)mAdjusted diluted EPS:10.16 cents2019:8.97 centsDiluted EPS:(4.28)cents2019:(3.72)centsCash balance 31 December 2020:USD 28.

190、7m2019:USD 26.2mNet debt(2)31 December 2020:USD 85.0m2019:USD 75.0mOrganic revenue:USD 289.7m2019:USD 265.9m(1)Subsidiary and associate earnings before interest,tax,depreciation,amortisation,non-cash charges and non-core operating expenses.(2)Includes gross cash,debt and prepaid finance costs.20Cent

191、ralNic Group Plc|Annual report 2020Cash flow and net cashThe cash flow statement for the Group includes two major themes:the entries related to the financing and completion of acquisitions and the results of the ongoing operations of the business,considering fluctuations in working capital.Net cash

192、flow from operating activities after tax was higher than the previous year atUSD 22.7 million(2019:USD 18.6 million).When adjusted for non-operating and one-off items,inboth years the net cash flow from operating activities was in line with expectations relative to adjusted EBITDA.Investing activiti

193、es were mainly related to the Codewise acquisition completed during the financial year.The net cash inflow totalled USD 1.4 million in 2020 as compared with USD 9.8 million in 2019.Other than acquisitions,for which further details on the fair value are provided in note 24 to the financial statements

194、,the Group hadrelatively limited capital expenditure.Excluding acquisitions,USD1.4 million of property,plant and equipment have been added.Further,USD 48.6 million of intangible assets have been acquired(including acquisitions).Excluding acquisitions,USD4.5million of tangible andintangible assets ha

195、ve been added,representing c.2%of Group revenue.In line with the appropriate treatment for translation of a foreign operation into the Groups presentational currency,both the tangible and intangible assets are translated at the closing rate,generating foreign exchange differences as presented in not

196、es 13 and 14 to the financial statements.Further details are provided in notes 13,14 and 16 to the financialstatements.Investor relationsThe Company has evolved its investor relations.On24June2020,it hosted a Capital Markets presentation via webcast.The purpose of the presentation was to provide fur

197、ther insights into the segmentation and key growth drivers in the domain name subscription market,an update regarding the ongoing integration ofTeam Internet,which CentralNic acquired in December 2019,andan overview ofthe Companys future product development and key strategicobjectives.Further,Centra

198、lNic has engaged Edison to produce in-depth and regular research on the Company which is available to everyone.Itishoped this research will raise the visibility of CentralNic and enable investors of all classes,in any country,to develop an improved understanding of the business.Edisons research is r

199、eadon a free-to-access basis by individuals and institutions across the globe.It has been accessed by more than 5,000 professional investment institutions since MiFID II was introduced and many other market participants including private investors,sellside,advisers and press.Edison only produces res

200、earch that falls under the minor non-monetary benefit definition in MiFID II.Augmented and accelerated financial reportingDuring the course of 2020,the Group augmented and accelerated its financial reporting.In particular,the Group started to include proforma figures in its interim report for the pe

201、riod ended 30June2020.These pro forma figures include all constituents ofthe Group for the entire reporting and comparative periods,regardless of the change of control date,and are also adjusted toeliminate the impacts of non-recurring or non-cash revenues,foreign exchange rate changes and changes t

202、o accounting standards.This pro forma reporting has been provided in order toallow the discerning reader to more accurately identify the impact of the Groups M&A activity.Further,the Group has undertaken to release quarterly interim reports,effective with theinterim report for the period ended 30 Se

203、ptember 2020.The Directors believe that a higher cadence of financial reporting isreasonable given the Groups fast-paced growth pattern and,forthe first time,this practice will be in effect for the full 2021 financial year.The Q1 2021 interim report is expected to be released on or around 1 June 202

204、1.Capital increaseOn 10 September 2020,the Group raised gross proceeds ofGBP 30 million through the successful private placing of 40,000,000 Placing Shares.The Placing Shares were placed at aprice of GBX 75 per Placing Share,representing a discount of c.6%to the lastclosing price and the placing was

205、 significantly oversubscribed.The net proceeds have been used to fund the consideration and fees in respect of the acquisition of the Zeropark and Voluum businesses including all material trade and assets pertaining thereto from Codewise.Zeus Capital and Stifel acted as joint bookrunners and joint b

206、rokers in connection with the placing.The Group had net assets of USD 117.1 million at 31December2020(2019:USD 77.0 million).Consideration sharesDuring the 2020 financial year,a total of 4,894,542 consideration shares were issued to the sellers of KeyDrive SA,an acquisition completed in 2018,and Hex

207、onet Group,an acquisition completed in 2019.On 6 August 2020,3,208,819shares were issued to satisfy EUR 2,971,000 of deferred consideration owed to the sellers of Hexonet Group,implying a value per share of GBX 83.68.On 2 November 2020,1,685,723shares were issued to satisfy USD 1,908,250 of earnout

208、consideration,implying a value per share of GBX 87.57.Upto USD 1,210,000 of earnouts may still become payable in shares,all of which relate to the acquisition of KeyDrive SA.Theconversion price will float with the share price.Chief Financial Officers report continuedStrategic reportGovernanceFinanci

209、al statementsAdditional information21CentralNic Group Plc|Annual report 2020Capital reductionThe capital reduction resolved by the AGM on 4 June 2020 was completed after its approval by the High Court and its registration by the Companies House effective 14 August 2020.Thecapital reduction increases

210、 the Companys distributable reserves and facilitates making future distributions to its Shareholders,includingthe payment of dividends.The capital reduction does notresult in any cash outflow nor does it impact the Companys profits.Thereis no change in the number of shares in issue or their nominal

211、value.No new share certificates are being issued because of the capital reduction.The capital reduction itself does not involve any distribution or repayment of capital or share premium by the Company and does not reduce the underlying net assets ofthe Company.Bond issue and loan refinancingOn 5 Feb

212、ruary 2020,the additional EUR 40 million bond issue announced on 24 December 2019 was admitted to trading on theOslo Stock Exchange under the same ISIN NO 0010856750 asthe bond issue dated 3 July 2019.A bondholder meeting held on 29 January 2021 approved theamendment to the bond terms disclosed in o

213、ur announcement on 15 January 2021.The Company successfully completed a EUR15 million(approximately USD 18 million)tap issue under theCompanys existing senior secured callable bonds listed on Oslo Brs.The tap issue was priced at 104.5%of par value and the total outstanding amount after the tap issue

214、 is EUR105million(approximately USD 126 million).The transaction was oversubscribed.The additional bonds will be issued under the bonds ordinary ISIN(NO0010856750)and listed on Oslo Brs under the ordinary ticker code(CNIC01).The Directors believe that given the cash conversion and recurring nature o

215、f the business,the use of debt instruments in the Groups financing mix allows for lower cost of capital and improved tax efficiency.The Group is comfortably below the leverage limits of the bond terms and conditions,which currently allow to raise up to4.0 xnet debt/EBITDA and to maintain a net debt/

216、EBITDA ratio lower than 6.The Directors however give guidance that the Company intends to maintain net debt/EBITDA within a corridor of 2x to 3x.The trading of the bond on the Oslo Stock Exchange and the recent tap issue imply a yield to maturity of around 5%,giving the Directors confidence in the C

217、ompanys ability to refinance at a lower coupon than what is currently in place.The Directors will observe the market and deliberate on refinancing options at the appropriate time.The Company has also been able to obtain a super senior revolving credit facility(SSRCF)of EUR 13 million and a letter of

218、 credit facility(LCF)of EUR 5.3 million with HSBC which substitutes the former facilities provided by Silicon Valley Bank.Further detail is provided in notes 23 and 28 to the financialstatements.Foreign exchangeForeign exchange losses were USD 2.1 million,after USD 0.8 million in 2019.Post the balan

219、ce sheet date,the foreign exchange evolutionhas been favourable for the Company and net debt would be c.USD 3.0 million lower by virtue of the weakened Euro,all other things being equal.The Company is in the process of procuring a hedging facility large enough to adequately immunise the Company agai

220、nst currency risk.Earnout and deferred considerationIn relation to GlobeHosting,the last payment of USD 0.5 million was made on 31 August 2020.The deferred consideration of USD3.5 million for the Hexonet Group was completely satisfied by the issuance of consideration shares.ForTeam Internet AG,thela

221、st payment of USD 1.0 million was made on 9 April 2021.Nofurther payments are due tothe sellers of these three businesses pursuant to the terms of the SPAs.SK-NIC met its performance target and therefore USD 1.6 million waspaid to the vendors on 15 July 2020.Further tranches of USD0.7million and USD

222、 1.1 million will become payable subject tothe achievement of performance criteria in 2022 and 2024 respectively.For KeyDrive,USD 2.2 million of earnout(USD 0.3million in cash and USD 1.9 million in shares)was paid on3November 2020.Up to USD 1.4 million of earnout may still beearned.In 2021,new defe

223、rred purchase price and earnout obligations have been entered into,namely USD 1.2 million and USD 6.5 million pertaining to SafeBrands and Wando respectively.Deferred consideration and earnout obligations are recorded on the balance sheet at their net present value,which may be lower than the maximu

224、m obligation,and are being trued up in line with the best knowledge of the Directors at each balance sheet date.Other post-completion obligationsFor the TPP Wholesale acquisition,a two-year migration programmehas been commissioned from the seller,who is a public ITservices business,to move the opera

225、tions out of the sellers ITinfrastructure into a cloud environment.The project cost was estimated at USD2million and is expected to be completed in Q3 2021.It is not warranted that the project can be completed on timeand in budget.For Team Internet and KeyDrive,severance and non-compete compensation

226、 for exited founders carries over into2021 for a total of c.USD 1.3 million.International tax complianceThe Group is undergoing an exercise to identify any potential tax obligations in jurisdictions beyond those in which its subsidiaries and itself are organised or operating from.This relates mostly

227、 to indirect taxes,such as Value Added Tax or General Sales Tax.TheDirectors do not expect that any additional provisions for suchrisk will need to be provided for.Significant accounting policies and critical accounting judgementsThe summary of the Groups significant accounting policies is set out i

228、n note 3 and the Groups critical accounting judgements are set out in note 4 to the financial statements.Michael Riedl Chief Financial Officer23 April 202122CentralNic Group Plc|Annual report 2020Group financial risk managementThe Directors review the financial risk management policy,noting that the

229、 Group is exposed to deposit risk,credit risk,market risk,foreign currency risk and other risks,including those arising from financial instruments.Further details of the financial risk management framework are provided in note 28 to the financial statements.The Groups finance function is responsible

230、 for managing investment and funding requirements including cash flow monitoring and projections.The cash flow projections are reviewed regularly by the Directors toensure the Group has sufficient liquidity at all times to meet its cash requirements and execute its business strategy.The Groups strat

231、egy is to finance its operations through the cash generated from operations and,where necessary,equity and debt finance,notably to support investing activities.The Groups financial instruments comprise cash and various items such as trade and deferred receivables.Change in riskIncreaseDecreaseNo cha

232、ngeRisksThe majority of the Groups risks have reduced or remain unchanged from the prior year with effective risk mitigation in place.RiskMitigationChangeDeposit riskDeposit risk is mitigated by the Directors setting a policy that the Group only places deposits with banks and financial institutions

233、with high creditratings.Credit riskThe Groups exposure to credit risk from trade receivables is relatively low,due to the fact that the business has traditionally dealt with customers who often pay at the point or sale or in advance.Where there are credit accounts,which is an increasing trend in the

234、 industry,particularly for the larger domain name registrars,receivables are controlled through credit limits and regular monitoring.Market riskThere is a risk that the market for domains for which the Group provides registry and registrar services may not increase as quickly as expected by the Dire

235、ctors.Also,the market for monetisation of domain names may alter its pace of growth.In either case,the Groups revenues could reduce below expectations with an impact on profitability.The risk is mitigated to a degree by operating multiple lines of business themselves exposed to many vertical and geo

236、graphical markets and segments,which are only loosely correlated.IT security riskIf 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

237、viruses,accidents,employee error or malfeasance,intentional misconduct by computer hackers and other disruptions can occur that could compromise the security of the Groups infrastructure or confidential information.The Group has created a resilient network infrastructure.Key platforms of the Group h

238、ave been certified under ISO 27001/2013 for data security,ISO 27017 for cloud security,ISO 27018 for cloud privacy,PCI DSS Level 1,and SOC 1,SOC 2 and SOC 3,as the case may be,thereby mitigating risk by adherence to international best practice.The Company conducts independent IT audits on new acquis

239、itions and from time to time on its existing businesses.Strategic reportGovernanceFinancial statementsAdditional information23CentralNic Group Plc|Annual report 2020RiskMitigationChangeForeign currency riskThe Directors note that the Group predominantly trades in USD,EUR,GBPand AUD,and considers the

240、 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 curren

241、cies are naturally hedged across the Groups business lines.Where this is not the case,consideration is given to the use of hedging instruments and,where available at reasonable terms and conditions,the Group has entered into hedging agreements,e.g.to cover the GBP overheads associated with its UK he

242、adquarters.TheGroup is actively pursuing options to also diminish thebalance sheet risk resulting from the EUR denominated bond.Brexit riskThe Directors give due consideration to other risk factors as they arise.Particular attention is attributed to the withdrawal of the United Kingdom(UK)from the E

243、uropean Union(EU),commonly referred to as Brexit.No material impact of Brexit on the day-to-day operations of the Group has been observed so far.Only a small fraction of the Groups trade is to UK customers or from UK subsidiaries to EU customers.COVID-19 riskTo date,CentralNic Group has not experien

244、ced interruptions in its services to customers or in its supply chain as a result of the COVID-19 pandemic,and the Company confirms that its current trading is in line with market expectations.CentralNic Groups business is expected to remain resilient.Its services are procured and delivered over the

245、 internet,and the majority of CentralNic Groups revenues are payments from existing subscribers and customers on rolling contracts.The Groups core product is the sale of domain names,which are core infrastructure that enable the functioning of email and websites the most important communication tool

246、s used between work colleagues working remotely and between companies and theircustomers.As providers of essential internet services,a number of CentralNic Group companies were well prepared for the current conditions,with business continuity plans already in place precisely for situations where sta

247、ff were unable to work from the office.CentralNic Group pre-emptively stopped travel,meetings and office working across its global locations in advance of formal Government directives and has been successful in protecting its staff from the spread COVID-19.These steps have enabled CentralNic Group t

248、o continue to run all services Company-wide without interruption and to utilise all staff productively via remote working.24CentralNic Group Plc|Annual report 2020RiskMitigationChangeSalary inflation riskThe Company is leveraging its presence in different countries through various time zones to attr

249、act the right talent where it is available at the right cost.Further,it is working on automation of repetitive processes.A good example is Team Internet AG,a highly automated and machine learning based business model that achieves c.USD 1.7 million annual revenue per employee,putting it into the sam

250、e league as major companies such as Google,Facebook or Netflix on the efficiency scale.Also,through its acquisition of Zeropark and Voluum,the Group has created another geographic hub in Krakow,Poland,further diminishing the dependency onspecific labour markets.Global tax complianceriskThe OECD,poli

251、cymakers,legislators and tax authorities promote a global tax system that is more adequately designed for a globally distributed and largely digitalised value chain.While the search for a global system continues,individual countries roll out new taxes,mostly indirect taxes,that also apply to non-res

252、ident service providers,creating tax liabilities not only in jurisdictions with strong nexus,such as a permanent establishment,but also with weak nexus,such as immaterial amounts of sales.The Group has implemented a process in which tax compliance obligations outside the country of residence are ide

253、ntified and addressed.The Group is monitoring developments in relation to EU State Aid investigations following the EU Commission opening a State Aid investigation into the Group Financing Exemption in the UKs Controlled Foreign Company regime in October 2017.In line with current UK tax law,the Grou

254、p applies this regime.Based on its current assessment,the Group does not consider any provision is required in relation to this issue.Regulatory riskThe Group monitors additional regulatory requirements relevant tothedomain industry made by national or supranational lawmakers,aswellas monitoring ong

255、oing policy developments by ICANN or the LondonStock Exchange(LSE)which may impact on GDPR compliance.Risks continuedChange in riskIncreaseDecreaseNo changeStrategic reportGovernanceFinancial statementsAdditional information25CentralNic Group Plc|Annual report 2020CentralNic specific risk mitigantsT

256、here are certain fact patterns which are commonly perceived as risks which the Directors believe do not constitute material risks to the Company,as follows:RiskDescriptionChannel partners The Group does not rely solely on its own outreach,reputation and distribution power,butalso strategically uses

257、channel partners to promote its unique capabilities.Throughitsdistribution partners,among them some of the most prominent technology companies in the world,CentralNic reaches c.2.4 million domain registrants and c.3 million advertisers for which it does not bear customer acquisition or customer serv

258、ice cost.Intent/contextual marketingBeing a believer in privacy rights,all monetisation services of the Group have been systematically built on intent or contextual marketing principles,not requiring the collection of personal data for retargeting purposes.The Group is hence prepared for a future wo

259、rld without third-party cookies.Search algorithmsMonetised domain names do not appear in the search indexes of major search engines.They source their traffic from so-called direct navigation traffic,i.e.users entering the domain name or clicking on a link to that domain name.Changes of search algori

260、thms have therefore no notable impact on the volume of traffic received.Financing costWhile the coupon on the Groups bonds is fixed,the price at which the bonds are issued may vary.For the latest tap issue,investors bid 104.5%of nominal value,which given the maturity,implies a yield to maturity and

261、hence financing cost to the Company of sub 5%.Through this mechanism,financing cost for new funds floats with the credit risk of the Group,which has materially improved over 2019 and 2020 as evidenced by the successful tap issue.The Companys strategic report is set out on pages 01 to 25 of the annua

262、l report.The strategic report outlines our performance against our strategic objectives,performance and financial position,as well as our outlookfor the future.Approved by the Board and signed on its behalf by:Iain McDonaldChairman23 April 202126CentralNic Group Plc|Annual report 2020Iain McDonald C

263、hairman (aged 50)Benjamin CrawfordChief Executive Officer(aged 55)Don Baladasan Group Managing Director(aged 47)Michael Riedl Chief Financial Officer(aged45)Iain McDonald is a global expertin technology and e-commerce,having had a strong track record in investing in early stage companies such as ASO

264、S,The Hut Group,EagleEye Solutions,Anatwine and Metapack.He is the founder of Belerion Capital,an investor andinvestment adviser in technology and e-commerce companies.Iain is also a non-executive director of variousof his investee companies,as well as other technology companies such as The Hut Grou

265、p and B.Previously,Iain was a top-ranked retail and e-commerce analyst and held positions in a number of UK investment banks.Iain graduated from the London School of Economics and Political Science(LSE),withaBSc in Economics&EconomicsHistory.Benjamin Crawford has led CentralNics growth for eleven ye

266、ars,from a small business turning over USD 3 million per year to its current run rate of USD 300 million.His former positions included Founding President of Louise Blouin Media,integrating eleven acquisitions in three countries and personally managed relationships with the Chinese Government;Managin

267、g Director of SportBusiness Group;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.Don Baladasan,a Chartered Management Accountant,has years of ex

268、perience as a Director of AIM listed companies.Over the years he has assisted both public and private businesses in restructuring,raising and managing several million pounds of equity and debt.Don has experience of integrating internationally acquired companies from a finance,governance and commerci

269、al perspective.Don founded Mataxis,a consultancy that specialises in advising and partnering fast growing entities.During this time Don has operated as COO and CFO for businesses that have undergone rapid transformation.Prior to this,Don was Head of Accounting Development at Stemcor,an international

270、 steel trader which at the time had operations in 46 countries.Donwas integral in the integration of acquired business through this period of rapid growth which saw turnover double to in excess of GBP 6 billion.Don initially studied Medicine at Guys Hospital before completing a BSc in Economics at C

271、ASS Business School.Hewas then awarded a place onthe Financial Times graduate scheme where he trained as a Chartered Management Accountant.Don has held various finance and operational roles in blue chip businesses such as Pearson,WPP and BUPA.Donwas CFO of CentralNic atthetime of its IPO on AIM.Mich

272、ael Riedl was Executive Vice President and CFO of KeyDrive S.A.from August 2011,overseeing the growth of the company over the next seven years.Prior to joining KeyDrive S.A.,Michael held managing positions in the private equity and ICT industries.He started his career with Roland Berger Strategy Con

273、sultants where he specialised in performance improvement programmes.Michael was Chief Restructuring Officer at Group Saint-Paul in Luxembourg from 2004 to 2007 before joining DZ Equity Partners,the private equity firm,in Frankfurt in 2007.In 2008,Michael joined BIP Investment Partners where he worke

274、d on private equity opportunities with a focus on buyouts until 2011.Michael holds a Bachelors degree in Computer Science from James Madison University,USA,a Master of Science degree in Business Administration from European Business School,Germany,and an LLM from Frankfurt School of Finance and Mana

275、gement.He is also a Chartered Management Accountant.Board of DirectorsGovernanceStrategic reportFinancial statementsAdditional information27CentralNic Group Plc|Annual report 2020Thomas Rickert Non-Executive Director(aged 51)Samuel DayaniNon-Executive Director(aged 43)Tom PridmoreNon-Executive Direc

276、tor(aged 49)Thomas Rickert is an attorney-at-law in Germany.Heisthe owner of Rickert Rechtsanwaltsgesellschaft mbH,a law firm based in Bonn,Germany.Thomas has extensive experience in the domain industry,working on domain disputes as well as advising registrars,registry service providers and registry

277、 operators both on contractual aswell as policy matters.Thomasisan expert speaker ondomain-related subjects both atthe national and international level.Thomas served on the Council of the Generic Names Supporting Organisation(GNSO),which is the body responsible for developing policy for generic doma

278、in names,for four years(2011-2015).Samuel Dayani is a partner at the Joseph Samuel Group,where he is responsible for managing the groups investments and business development in the real estate,medtech,energy&renewables,fashion and technology&telecoms sectors.Samuel was responsible for purchasing Cen

279、tralNic Group in 2003 and managing the restructuring of the business,building the management team and delivering an institutional grade business for its listing in 2013.Previously,Samuel was the Chief Operating Officer and later Managing Director of ViaVision Ltd,an interactive TV company on Sky,whe

280、n it was sold to Yoomedia Plc in 2004.Tom Pridmore is a Group Director and co-founder of Civitas InvestmentManagement,a leading real estate social impact investor,and has been involved in investment management for over 20 years,having originated,underwritten,financed and asset managed a wide range o

281、f property investments both in the UK and abroad.Tom is also a director and co-founder of Beaufort Capital Management,a UK debt investment manager,and was formerly a solicitor at Norton Rose Fulbright,specialising in corporate finance and investment funds.28CentralNic Group Plc|Annual report 2020Cor

282、porate governanceIntroductionThe Directors appreciate the value of good corporate governance and have,with effect from September 2018,adopted the QCA Corporate Governance Code(the Code).The Company takes stepsto ensure compliance by the Board and employees with the terms of the Code.The Board of Cen

283、tralNic Group Plc places governance and controls at the centre of its strategy.The Company has a dedicated Compliance Committee which meets monthly.The remit of the Compliance Committee is to ensure that all governance policies are administered,reviewed and complied with across the Group.Michael Rie

284、dl,the Chief Financial Officer of the Group,chairs this Committee and provides a conduit between the Board and the Committee.This ensures timely decisions and challenges are communicated to the Board.Board governance and policyAt year end,the Board comprised of a Non-Executive Chairman,three Executi

285、ve Directors and three Non-Executive Directors.OneExecutive Director and one Non-Executive Director retired after year end.The Board meets regularly to consider the business strategy,performance and the framework of internal controls.Toenable the Board to discharge its duties,all Directors receive a

286、ppropriate 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 regulatio

287、ns 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 Companys expense.In line with the requirements of the Companys Articles of Association,the Group has voluntarily chosen th

288、at two Directors will retire at the Annual General Meeting and,being eligible,will offer themselves for re-election.The majority of the Board is made up of independent Non-Executive Directors.We judged the Chairman to be independent at the time of his appointment and consider all otherNon-Executive

289、Directors to be independent under the termsof the Code.Throughout their period in office the Directors are continually updated on the Groups business,the industry,corporate social responsibility matters and other changes affecting the Group by written briefings and meetings with Senior Management.Th

290、eyarealso updated on changes to the legal and governance requirements of the Group,and upon themselves as Directors,onan ongoing and timely basis.Directors time commitmentWe set out the likely time commitment for each Non-Executive Director in their appointment letter.This is of course an estimate a

291、nd may change depending on the demands of the business.Weexpect Non-Executive Directors to devote to discharge their duties effectively and attend all meetings of the Board.The attendance of each Director at Board and committee meetingsduring the financial year ended 31December2020 issetout in the t

292、able below.Board performance evaluationA formal process of performance evaluation of the Board,itscommittees and its individual Directors takes place every year.Thereview is conducted internally and involves a combination of self-evaluation and one-to-one interviews with individual Board members to

293、seek objective feedback on the balance of skills,behaviours and effectiveness of the Board as a whole,the Chair and other Board members.The performance of the Board,itscommittees and its individual Directors is also continually monitored by the Chairman.The Board of CentralNic Group Plc places gover

294、nance and controls at the centre of its strategy.Attendance tableBoardAudit CommitteeRemuneration CommitteeNominations CommitteeIain McDonald 15/164/42/2Ben Crawford 16/16Donald Baladasan16/16Michael Riedl 16/16Alexander Siffrin until 1 April 20202/3Thomas Rickert16/164/43/32/2Samuel Dayani16/163/3M

295、ike Turner until 7 May 20205/52/2Tom Pridmore 13/164/43/32/2Attendance is expressed as the number of meetings attended/number eligible to attend.Directors attendance by invitation at meetings of committees of which they are not a member is not reflected in the above table.GovernanceStrategic reportF

296、inancial statementsAdditional information29CentralNic Group Plc|Annual report 2020The Remuneration and Nominations Committees co-ordinate on succession planning of the executive leadership team and make recommendations to the Board for the re-appointment of Non-Executive Directors if and when necess

297、ary.As the business has developed,the composition of the Board has been under constant review to ensure that it remains appropriate to the managerial requirements of the Group.In line with the requirements of the Companys Articles of Association,the Group has voluntarily chosen that two Directors wi

298、ll retire at the Annual General Meeting and,being eligible,will offer themselves for re-election.Board committeesThe Company has established Audit,Nominations and Remuneration Committees.The terms of reference for the three committees were reviewed during the year and are available for inspection on

299、 request from theCompany Secretary.Audit CommitteeThe Audit Committee has Thomas Rickert as its Chairman and othermembers of the Committee include Iain McDonald and Thomas Pridmore.The Chief Financial Officer is invited to and regularly does attend the Committee meetings,as does the ChiefExecutive O

300、fficer.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 Groups financial performance;reviewing significant accounting policies,a

301、reas of significant estimates and judgements 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,distribution and nature of the Company and

302、 the Group and its operations;reviewing the external auditor reports relating to the Companys accounting and internal control procedures;and overseeing the Boards relationship with the external auditor,including their continued independence and making recommendations to the Board on the selection of

303、 external auditors.The Audit Committee is required to meet at least twice a year.During the year the Committee met on four occasions.The appointment of the independent external auditor is approved by the Shareholders annually.The independent auditors audit of the financial statements is conducted in

304、 accordance with International Standards on Auditing(ISA(UK)issued by the Financial Reporting Council.It is noted that the external auditor also operates procedures designed to safeguard their objectivity and independence.After taking into account the size,distribution,current robust procedures and

305、controls,together with the nature of the Companyand the Group and its operations,the Audit Committee has concluded that an internal audit function is not presently required.The Audit Committee will re-evaluate this position on aregular basis.The Audit Committee reviews all fees related to non-audit

306、work,and the Committee reviews any material non-audit work prior to commencement.Details of auditor fees can be found in note 7 tothe financial statements.Remuneration CommitteeThe Groups Remuneration Committee is responsible,on behalf ofthe Board,for developing remuneration policy.Details of object

307、ives and policy are provided in the remuneration report onpages 32 to 34.The Remuneration Committee has Tom Pridmore as its Chairman and other members of the Committee include Samuel Dayani and Thomas Rickert.The primary responsibilities of the Committee,having due regard for the interests of Shareh

308、olders,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 E

309、xecutive Directors,Senior Management and other key senior employees under existing plans;determining the remainder of the remuneration packages(principally salaries,bonus and pension)for the Executive Directors,Senior Management and other senior employees,including any performance-related targets;re

310、viewing 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

311、 for any remuneration consultants engaged to advise the Committee.The Remuneration Committee was created in September 2013 and is required to meet at least twice a year.During 2020 the Committee met on three occasions.It is the Groups policy that Executive Directors service contracts contain at leas

312、t a three-month notice period.30CentralNic Group Plc|Annual report 2020Corporate governance continuedBoard committees continuedNominations CommitteeThe Groups Nominations Committee has the power and authority to carry out a selection process of candidates before proposing new appointments to the Boa

313、rd.The Nominations Committee has Iain McDonald as its Chairman and other members of the Committee include Thomas Rickert and TomPridmore.The Nominations Committee was created in September 2013 andis required to meet at least once a year.During 2020 the Committee met on two occasions.The Group has ad

314、opted a policy for key management personnel and other employee share dealings which is appropriate for an AIM-quoted Group.The Directors comply with Rule 21 of the AIM rules relating to Directors dealings and take reasonable steps to ensure compliance by the Groups applicable employees.The Executive

315、 and Non-Executive Directors service contracts areavailable for inspection by Shareholders on request to the Company Secretary.The Chairman and Non-Executive Directors do not participate inagenda items at any meeting when discussions in respect of matters relating to their own position take place.Ri

316、sk management and internal controlsThe Board has primary responsibility for establishing and maintaining the Groups financial and non-financial controls,as wellas identifying the major risks facing the Group.Internal control systems are designed to meet the particular needs of the Group and the risk

317、s 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 Groups affairs and have regular discussions to address op

318、erational matters,as well as considering the skill sets required in their teams to maintain the internal controlsrequired.Accounting proceduresThe financial processes and control systems are kept under regular review by the Executives with oversight from the Board,with a view to further evolution an

319、d improvement as the Groups activities expand.This includes the maintenance of and adherence to a Financial Procedures Board Memorandum which is reviewed andupdated periodically.Accounting procedures are managed on a day-to-day basis by thefinance team.Responsibility levels are set and agreed with t

320、heBoard,with authority delegated to appropriate responsible managers as well as the Executive.Segregation of duties is deployed to the degree this is practical and efficient,noting the size and geographic distribution of the Group.Monthly management accounts are reported to the Board,under IFRS(EU)w

321、ith the content aligned to the Groups 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

322、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 keptunder regular review during the year.Investment appraisal techniques,using discounted cash flow projectio

323、ns,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 identif

324、ying,evaluating and managing risks faced by the Group,andplaces emphasis on continuous process improvement.Corporate responsibility,the environment andhealth and safetyThe Group is committed to maintaining and promoting high standards of business integrity.Company values,which incorporate the princi

325、ples of corporate social responsibility and sustainability,guide the Groups relationships with its stakeholders including clients,employees and the communities and environment in which the Group operates.The Groups approach to sustainability addresses both its environmental and social impacts,suppor

326、ting the Groups vision toremain an employer of choice,while meeting client demands for socially responsible partners.More information on this is included in the ESG section of this annual report.The Group respects local laws and customs while supporting international laws and regulations.These polic

327、ies 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 Groups practice in the future.Communications with ShareholdersThe Board regards the importance of effective communication withShareholders as essential.Relatio

328、ns with Shareholders are managed principally by the Chief Executive Officer,Chief Financial Officer and the Chairman,and meetings are regularly held with institutional investors and analysts during the year.The Chairman,Chief Executive Officer,Chief Financial Officer and,if required,other Executive

329、and Non-Executive Directors make themselves available for meetings with major Shareholders either individually or collectively.The Groups Shareholders are invited toattend the Annual General Meeting at which the majority of Directors are present.The Groups Nominated Advisers and Joint Brokers also c

330、onvey Shareholder opinions to the Chairman and Chief Executive Officer,and these are discussed with the Board.The Groups website contains information on current business activities,including the annual and interim results.Annual General Meeting dateThe Annual General meeting will be convened in acco

331、rdance with the provisions of the Companies Act 2006.Although the date is subject to change as the Directors reserve the right to resolve to convene the AGM later depending on government guidance in respect of COVID-19,the Annual General Meeting is due to take place on Thursday,3 June 2021 at 10.00a

332、m.The proposed resolutions,together with proxy forms and this annual report,will be distributed to Shareholders on or around 7May 2021.GovernanceStrategic reportFinancial statementsAdditional information31CentralNic Group Plc|Annual report 2020The role of the Audit Committee and its members are outl

333、ined on page29.During the year the Audit Committee received and reviewed reports from the Chief Financial Officer,other members of management and the external auditor relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Group.The Non-Executive Chairman and Chief Financial Officer are invited to attend parts of meetings,with other senior