Team Internet (TIG) 2017年年度報告「AIM」.pdf

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1、35-39 MoorgateLondonEC2R 6ARCentralNic Group Plc Annual Report 2017Annual Report2017 adio.am .college .edu.fm .la .fans .com.se .reit .web.in .protection .xyz .tickets .art .com.de .rg.fm .ink .website .fm .ae.org .rest .feedback .design .host .gov.fm .store .security .cx .net.fm .theatre .pw .press

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7、 .us.org e net .tech .online .radio.am .college .edu.fm .la .fans .com.se .reit .web.in .protection .xyz .tickets .om .com.de .za.bz .org.fm .ink .website .fm .ae.org .rest .feedback .design .host .gov.fm .store .security .cx .net.fm .space .theatre .pw .press .wiki .site .com.fm .love .us.org .rent

8、 .bar .radio.fm .ine .radio.am .college .edu.fm .la .fans .ink .com.se .reit .web.in .protection .xyz .tickets .com.de .rg.fm .website .fm .ae.org .rest .feedback .design .host .gov.fm .store .radio.fm .security .cx .net.fm .art .space .bar .theatre .site .pw .press .wiki .com.fm .love .us.org .rent

9、 .tech .online .radio.am .college .edu.fm .la .fans .com.se .reit .web.in .protection .xyz .tickets .art .com.de .za.bz .org.fm .ink .website .fm .ae.org .rest .feedback .design .host .gov.fm .store .security .cx .net.fm .space .theatre .pw .press .wiki .site .com.fm .love .us.org .rent .bar .radio.

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11、 .college .edu.fm .la .fans .com.se .reit .web.in .protection .xyz .tickets .art .com.de .za.bz .org.fm .ink .website .fm .ae.org .rest .design .host .gov.fm .store .security .cx .net.fm .space .theatre .pw .press .wiki .site .com.fm .love .us.org .rent .bar .radio.fm .tech .online .radio.am .colleg

12、e .edu.fm .la .fans .ink .com.se .reit .web.in .protection .xyz .tickets .com.de .za.bz .org.fm .website .fm .ae.org .rest .feedback .design .host .gov.fm .store .radio.fm .security .cx .net.fm .art .space .bar .theatre .site .pw .press .wiki .love .us.org .rent .tech .online .radio.am .college .edu

13、.fm .la .fans .com.se .protection .xyz .tickets .art .com.de .za.bz .org.fm .ink .website .fm .ae.org .rest .feedback .design .host .gove .security .cx .net.fm .space .theatre .pw .press .wiki .site .com.fm .love .us.org .bar .radio.fm .tech .online .radio.am .college .edu.fm .la .fans .ink .com.se

14、.reit .web.in .protection .ets .com.de .za.bz .org.fm .website .fm .ae.org .rest .feedback .design .host .gov.fm .store .radio.fm .security .cx .net.fm .art .space .bar .theatre .site .pw .press .wiki .com.fm .love .us.org .rent .tech .online .radio.am .college .edu.fm .la .fans .com.se .reit .web.i

15、n .protection .xyz .tickets .art .za bz org fm ink mex com website cn com fm ae org rest .feedback .design .host .gov.fm .store .security .cx .net.fm Designed and produced byfourthquarterHighlights CentralNic Group Plc Annual Report 20171“”Financial highlights for 2017Revenue24.3mFY 2016:22.1mI am p

16、leased to report on another year of growthat CentralNic,as the Group took further steps in itsstrategy to build a diversified internet servicesbusiness of size and scale,through an acquisitiveroll-up programme which delivers high-levels ofrecurring revenues,quality of earnings andstrong cash generat

17、ion.Mike Turner,Chairman CentralNic is now the worlds fifth largestRegistry provider,managing 5.2 milliondomain names with 104 exclusiveRegistry contracts.Acquisition of SK-NIC,the managerof the exclusive country code top-leveldomain for Slovakia,for a maximum cashconsideration of 25.7m(22.6m).Reven

18、ue(10%),gross profit(28%),adjusted EBITDA(20%)and profit after tax(7%)all show a year-on-year improvement,a pleasing achievement for the Group.Don Baladasan joined the Board on24 July 2017 as Chief FinancialOfficer,bringing significant M&A andintegration experience.Exclusive wholesaler contract with

19、XYZ.com,owner of the.xyz Top-LevelDomain(“TLD”),renegotiated for aterm running until May 2032.CentralNic was recognised as the bestperforming company in the InfrastructureServices category of the MegabuyteQuoted25 awards.10%Gross profit9.8mFY 2016:7.7m28%Gross margin40%FY 2016:35%16%Adjusted EBITDA*

20、6.6mFY 2016:5.5m*Includes revenues from domain registrations,domain renewals,andother recurring revenues stated before deferrals.*Earnings before interest,tax,depreciation and amortisation,acquisitioncosts,exceptional items and non-cash charges.20%Profit after tax1.02mFY 2016:0.96m7%Recurring revenu

21、es*as apercentage of total revenue84%FY 2016:81%2%ContentsHighlights 1CentralNic Group at a glance 2CentralNic Divisions4Wholesale Division5Retail Division6Enterprise Division7Chairmans statement 8Chief Executives report10Strategic report13Chief Financial Officers report16Board of Directors 20Direct

22、ors report 22Corporate governance 26Remuneration report 29Independent Auditors report 32Financial statements 37Particulars of subsidiaries and associates 78Shareholder information 80Glossary 82Group Revenue 201622.1mGroup Revenue 201724.3mGroup EBITDA 20165.5mGroup EBITDA 20176.6m Business Footprint

23、Group HQWholesale OfficeRetail OfficeEnterprise Office CentralNic Group at a glance2 CentralNic Group Plc Annual Report 2017Our GroupCentralNic Group Plc(LSE:CNIC)(“CentralNic”)is a global leader in thedomain name industry.It sells domain names and website products to every type of internet user in

24、over 250 countries.With nearly100 people across the globe,CentralNic comprises 3 distinctdivisions:Wholesale,Retail and Enterprise.Our MarketsThe domain name industry touches anyone that operates a website.With an estimated 200 million live websites online in 2017 and double-digit growth year-on-yea

25、r,the domain name industry is active in everycountry with unrestricted internet access.Our StrategyTo build a business of size that delivers strong economies of scale through organic growth and by acquiring similar businesses,which demonstrate:high levels of recurring revenue quality of earnings str

26、ong cash conversion Wholesale DivisionRetail DivisionEnterprise DivisionGroup Recurring Revenue 201617.2mRecurring Revenue 201719.2mRecurring Revenue 201681.3%Recurring Revenue 201783.6%CentralNic Group Plc Annual Report 20173Wholesale DivisionWith proprietary technology underpinning over 100 domain

27、 registries,the division distributes domain names through an integrated networkof third party retailers to over 200 countries.Retail DivisionSells and managesdomain names andrelated services directlyto internet users in morethan 250 countries.Enterprise DivisionMarkets domain names and relatedproduc

28、ts,including domain portfoliomanagement,brand protection,consultancy services andsoftware licences tocorporations andglobal brands.CentralNic Divisions4 CentralNic Group Plc Annual Report 2017WholesaleEnterpriseRetail CentralNic Group Plc Annual Report 20175Wholesale Division.FM .PW .SKCOUNTRY CODE

29、TOP-LEVEL DOMAINSSECOND-LEVEL DOMAIN EXTENSIONSGENERIC TOP-LEVEL DOMAINSSPONSORED TOP-LEVEL DOMAINS“DOTBRAND”TOP-LEVEL DOMAINS.LA .CX .AMCOUNTRY CODE TOP-LEVEL DOMAINS(DISTRIBUTED VIA CENTRALNIC SOFTWARE).AE.ORG .BR.COM .CN.COM .CO.COM.CO.NL .CO.NO .COM.DE .COM.FM.COM.SE .DE.COM .EDU.FM .EU.COM.GB.N

30、ET .GOV.FM .GR.COM .HU.NET.IN.NET .JP.NET .JPN.COM .MEX.COM.NET.FM .NZ.BASKETBALL .ORG.FM .RADIO.AM.RADIO.FM .RU.COM .SA.COM .SE.NET.UK.COM .UK.NET .US.COM .US.ORG.WEB.IN .ZA.BZ .ZA.COM.ART .BAR .BASKETBALL .COLLEGE.DESIGN .FANS .FEEDBACK .FRL.FUN .GENT .HOST .INK.LOVE .OBSERVER .ONLINE .OOO.PRESS .

31、PROTECTION .REALTY .REIT.RENT .REST .SECURITY .SITE.SPACE .STORAGE .STORE .TECH.THEATRE .TICKETS .WEBSITE .WIKI.XYZ.ADAC .DELOITTE .DHL .EPOST.KPN .LIDL .LPL .LPLFINANCIAL.MEO .SAPO .SCHWARZ .SFR.SMART .STC .STCGROUP .VIVA.WME.COOP.CONTACT .FAN .FORUM .PID.RUGBYCentralNics Wholesale Division is a le

32、ading distributor ofregistries domain names,on an exclusive basis,throughretailers globally the only distributor with six of the top twenty new TLDs on its platform.The three most importantcontributing factors behind this achievement are the Divisionsleading technology platforms,its extensive range

33、of supportservices and its integrated network of global retailers.Every Top-Level Domain extension,such ,.org and.co.uk has an exclusive wholesaler(known as a“registry backend”).CentralNics registry backend supportsover 100 registries across all five categories of domain name extensions:Country Code

34、 Top Level Domain extensions(ccTLDs)such as.la,.cx and.fm;Generic Top-Level Domain extensions(gTLDs)like.xyz and.online;“Sponsored”Top-Level Domain extensions for a specific purpose such as.coop,the internet designation for cooperatives;“DotBrand”Top-Level Domain such as.stc for SaudiTelecom Corpora

35、tion,which uses CentralNics registryback-end platform to power domains not for sale but for the rights holders own use;Second-Level Domain extensions(SLDs)such ;CentralNics registry backend platform enables retailers around the world to sell an increasing range of internet domainnames and associated

36、 products.It also handles billing andcash collection on behalf of its registry clients which hold therights to the domains that CentralNic distributes.CentralNicalso supports its registry clients with value added servicessuch as policy advice and sales and marketing.CentralNicsregistry backend conti

37、nues to maintain an uptime whichconsistently exceeds the required standards set by industryregulator ICANN.CentralNics registry backend platform integrates with around1,500 retailers globally.Through them,the distribution channelreaches out to over 100,000 resellers.In recent years,Chinahas been one

38、 of CentralNics most buoyant markets.Thisreflects a business development and operational focus onChina that has positioned the Company to benefit from theunprecedented demand for domain names in that market.CentralNics DNS system,which powers the domains,is aglobal network of nameservers.With 60 loc

39、ations distributedaround the world,CentralNics DNS handles over 1 Billionqueries per day.The DNS assures the stability,security andresilience of all the domain names supported by CentralNic.This vital system has maintained its unblemished record of100%uptime for 21 consecutive years.Domain Extension

40、s exclusively using the CentralNicplatform in 2017NEW GENERIC TOP-LEVEL DOMAINS CONTRACTED BUT NOT LAUNCHEDWholesaleRevenue 20163.2mWholesaleRevenue 20174.7mWholesaleEBITDA 20161.2mWholesaleEBITDA 20172.1m%RecurringRevenue 201787.1%RecurringRevenue 201699.2%6 CentralNic Group Plc Annual Report 2017R

41、etail DivisionCentralNics Retail Division manages around 1 million domainnames and associated products.The division retails domainnames to customers in over 250 countries globally through its24 online retail brands and websites.The division boasts oneof the widest range of domain extensions offered

42、by retailers inthe industry.These domain extensions include around:In addition,the Retail Division supplies products associatedwith domain names such as website hosting and websitesecurity certificates.The divisions various brands addressdemand from many customer segments including:Retail customers

43、that purchase domain names andassociated products for non-business related websites.Small Medium Sized Businesses(SMBs)Self-servicesmall business customers that purchase several domainnames and associated products e.g.website hostingand SSL certificates typically for an online shop orinformational w

44、ebsite which gathers visitor information.Midcap Corporations Mid-sized businesses whichregister and maintain a portfolio of domain names andassociated products such as SSL Certificates.Resellers and Registrars Business customers that purchase domain names for resale to their owncustomers.Companies s

45、uch as IP law firms,webdesigners and website hosting companies are oftenresellers of domain names.Other ICANN Registrars also purchase domain names from CentralNic Retail in situations where they do not hold a directaccreditation with a registry.Domain Professionals Industry professionals thattrade

46、in domain names or purchase domain names on behalf of clients.CentralNic Retail Division brandsGlobal BrandsInstra is a Retail Division brand focused on self-serve midcap corporate customers and resellers.It provides a full suite of domain extensions as wellas corporate focused business products suc

47、h asDomain Trustee Services.It also offers dedicatedaccount management and expert support.Only Domains is an online brand focused on retailand self-serve small businesses globally.It providesa wide range of domain names at competitive pricesas well as associated products to help customersbuild and p

48、ublish websites.Internet.bs is focused on the SMB and internetprofessionals segments,such as hosting and web design companies.It provides a range ofpopular domain extensions at highly competitiveprices.Target customers typically require“trade”pricing and sophisticated tools for managing largedomain

49、name portfolios on behalf of third parties.Geographically focused retail brandsCentralNics geographically focused brandsspecialise in providing competitively priced regionaldomain names and associated products to internetusers within a specific geography.Domain extension focused retail brandsOther R

50、etail Division brands websites each specialisein marketing domains under a single Top-LevelDomain to a global audience.These brands also sellvalue-added products and services such as hosting,email and website builders.150country code TLDs(e.g.uk)250country code variants(e.g.co.uk)400generic TLDs()Re

51、tailRevenue 201614.3mRetailRevenue 201715.6mRetailEBITDA 20162.4mRetailEBITDA 20172.7m%RecurringRevenue 2017100%RecurringRevenue 201699.9%www.domains.barwww.domains.restwww.lawww.whatdomain.lawww.registrar.hoteleswww.store.artwww.join.lawwww.roar.basketballCustomer TypeCustomer TypeCustomer TypeCust

52、omer TypeCustomer Type CentralNic Group Plc Annual Report 20177Enterprise DivisionThe enterprise market is gaining in importance in the domainname industry,and CentralNic is addressing this market inseveral ways.DotBrandsCentralNic provides technical services to companies seekingtheir own“DotBrand”T

53、LDs.These are a newly introduced typeof Intellectual Property(“IP”)which allows brands and companynames to occupy the Top-Level of domain names previouslyrestricted to country codes and generic terms .Unliketrade marks,this new form of IP can be operated by a companyexclusively,globally and in perpe

54、tuity.Therefore,DotBrands haveattracted significant interest in the corporate sector.DotBrand clients which use CentralNics technical andconsulting services include Global 1000 companies such asSaudi Telecom Company,Etisalat and Kuwait Finance House.Corporate domain managementThrough its high-qualit

55、y workflow management platform for theregistration and management of domain names,CentralNicaddresses the domain management needs of corporateclients.The platform can be used as an in-house solution byenterprise clients,or as technology enabling corporations withlarge SME customer bases to monetise

56、those customers byselling them domain names.Some of the largest corporationsin the German-speaking markets,such as Telcos andpublishing houses,use CentralNics corporate domainmanagement platform.CentralNic has successfully startedintroducing it to other geographical and vertical markets.Premium Doma

57、in NamesLike many of its peers,CentralNic realises an enterpriserevenue stream from trading in premium domain names.Theseare particularly favoured by large companies for a number ofuses.They may correspond to a company brand name,theymay be easily memorable and marketable(like a two- domain or a com

58、mon word),or they may already benefitfrom internet traffic comprising potential customers.CentralNic trades in its own portfolio,with approximately56,500 premium domain names(with values ranging from asmall premium over normal retail pricing to seven figure sums).It also brokers premium domain sales

59、 for third parties inexchange for a commission.CentralNic is also a shareholder in and distributor of the.tickets TLD.This innovative new use of a top-level domain is intended to allow venues,artists,sports teams and otherrights holders to retail tickets direct to consumers,while givingconsumers the

60、 comfort of knowing that any website using a.tickets domain is legitimate.EnterpriseRevenue 20164.6mEnterpriseRevenue 20174.1mEnterpriseEBITDA 20162.8mEnterpriseEBITDA 20172.8m%RecurringRevenue 201615.3%RecurringRevenue 201719.8%I am pleased to report on a strong year of growth for CentralNic.The Gr

61、oup continued its strategy to build a diversified internetservices business of size and scale through an acquisitiveroll-up programme which delivers high-levels of recurringrevenues,quality of earnings and strong cash generation.In addition,revenue(10%),gross profit(28%),adjustedEBITDA(20%)and profi

62、t after tax(7%)all show year on yearincreases,a pleasing achievement for the Group.SK-NIC,the manager of the exclusive country code top-leveldomain for Slovakia,was acquired in mid-December 2017 fora maximum cash consideration of 25.7 million(22.6 million).The Board anticipates SK-NIC to be earnings

63、 enhancing in linewith expectations at the time of the acquisition,as well asproviding access to a new international market with sustainablegrowth characteristics,a high renewal rate of over 86%,andthe opportunity to leverage CentralNics existing expertise andbespoke technical platforms in the domai

64、n managementbusiness.The acquisition was funded by the Companys owncash reserves and a term loan and revolving credit facilitytotalling 18 million provided by Silicon Valley Bank,whichalso provides a 3 million overdraft facility.Significant growth was delivered in the Wholesale and RetailDivisions,w

65、hich contributed to an increase in recurring revenuesand an improvement in the quality of the Groups earnings.As part of that,the exclusive wholesaler contract with XYZ.com,owner of the.xyz Top-Level Domain(“TLD”),was renegotiated inSeptember 2017 for a term running until May 2032.CentralNicreceives

66、 a fixed minimum fee which may increase based on thevolume of.xyz domains managed.Whilst the Enterprise Division made a significant contribution tothe Groups profits in the year under review,its contributionthrough one-off domain name sales reduced when comparedto the prior year.In 2017,the Group so

67、ld portfolios of premiumdomain names valued at a total of 3.0 million(2016:3.7million).In line with the Groups strategy,whilst premium domainname trading is a profitable activity,premium domain namesales will be a decreasing proportion of revenues andcontribution going forward as the Company focuses

68、 onbuilding recurring revenue based business activities.PerformanceIn the year ended 31 December 2017,revenue rose by 10%to24.3 million(2016:22.1 million).This was driven by organicgrowth in the Wholesale Division,which grew by almost 50%,and also in the Retail Division which grew by almost 10%.Gros

69、sprofit increased by 28%to 9.8 million(2016:7.7 million)withgross margins ahead of the previous year in all divisions and,intotal 40%,(2016:35%),an increase of 16%.Despite adverseforeign exchange movements of 0.6 million,compared to apositive impact of 0.6 million in 2016,adjusted EBITDA was inline

70、with market expectations at 6.6 million(2016:5.5 million),representing an increase of 20%on the prior year.Profit aftertax increased by 7%to 1.02 million(2016:0.96 million).Chairmans statement8 CentralNic Group Plc Annual Report 2017Our vision is to join the ranks of world leaders in the industry,as

71、 new TLDs(which the Groupdistributes)expand to challenge the incumbentdominant domain name endings(.com etc)and emerging markets,like China,grow to rival the size of the North American andEuropean markets.Mike Turner ChairmanCash flow was positive during the year with year-end cashbalances of 10.9 m

72、illion(2016:9.9 million)and net debt(excluding prepaid costs)of 7.2m(2016:net cash 7.3m).During the year,CentralNic entered into a new facilityagreement with Silicon Valley Bank,which enabled theGroup to acquire SK-NIC and optimise its capital structureand gain access to funding for growth opportuni

73、ties.Diluted earnings per share increased by over 6%to 1.04p(2016:0.97p).StrategyThe Groups strategy remains to develop and operate scalablesoftware platforms by serving global markets with domainnames and related services.It continues to identify and exploithigh growth areas within the domain indus

74、try,retaining aleading role in new Top-Level Domains,servicing countrycode domains,and focusing on growth markets includingEastern Europe and Asia.The Group aims to win and retainwell-resourced clients with complementary objectives and tomake acquisitions which meet the clear strategic criteria ofbe

75、ing earnings accretive in the short term with a strongrecurring revenue base,high quality of earnings,and highcash conversion.Management and BoardAs part of the strategy to build a diversified business of sizeand scale,the management team was strengthened tosupport the Groups ambitions.In May 2017,S

76、arah Ryanjoined CentralNic as Group Corporate Development Director,following the previous years senior hires of Stuart Fuller andAndy Churley as Group Commercial Director and GroupMarketing Director respectively.The Board itself wasstrengthened further in July 2017 with the appointmentof Don Baladas

77、an as Chief Financial Officer,bringingconsiderable financial expertise in buy-and-build strategiesand risk management.In August 2017 Desleigh Jameson,who joined the Group inJanuary 2016 when it acquired Instra Corporation,steppeddown from the Board.The integration of Instras operations into the Grou

78、p was by that time complete following Desleighshard work in very quickly merging the highly successful Instrabusiness in to the ever-expanding CentralNic.I would like to thank all members of the CentralNic team fortheir professionalism and commitment to the ongoing growthand transformation of the bu

79、siness.It is thanks to our staff,toour clients and to our distribution channel partners,as well asto our shareholders,that the Group continues to maintain andenhance its industry-leading position.OutlookOur vision is to join the ranks of world leaders in the industry.CentralNic strives to achieve th

80、is by continuing to disruptexisting markets and by identifying and exploiting key growthmarkets around the world.Moreover,ongoing consolidationin the domain services industry presents step-changeacquisition opportunities for the Group to enter new marketsand broaden its service offerings.Trading for

81、 the first quarter of 2018 is encouraging and inlinewith expectations.CentralNic has continued to win new clientsincluding the distribution contract for.ooo TLD,owned by thebillion-dollar Mumbai-listed tech company Infibeam.In January2018 the Group replenished its premium domain tradinginventory by

82、acquiring a portfolio of domain names for a totalconsideration of 2.5 million.As reported in March 2018,discussions are taking placeregarding the potential combination of CentralNic andKeyDrive S.A.The combination of the two businesses hasstrong strategic logic and economies of scale.This represents

83、an opportunity to create a group with advanced technologyplatforms delivering significant recurring revenues for everymajor customer type within the industry.Although there can beno certainty that a transaction will occur,the discussions areproceeding well and the Board believes that the transaction

84、will take place in the third quarter of 2018.The Board believes that the opportunity to continue to build asizeable business to rival the largest industry players,using theGroups existing infrastructure to deliver economies of scaleboth financially and operationally,remains strong.The Groupsmanageme

85、nt team has proven its ability to deliver andintegrate substantial acquisitions and there is a plentifulpipeline of targets.The Directors are confident that the Groupwill continue to deliver on its strategic goals in 2018,to delivergrowth both organically and by expansion of the business andfurther

86、improve the percentage of recurring revenues and theGroups quality of earnings.Mike Turner Chairman30 May 2018 CentralNic Group Plc Annual Report 20179Chief Executives reportOverviewCentralNic continued to develop as an internet servicesbusiness of substantial scale that is highly cash generative an

87、dbuilt around a recurring revenue model.There are significantopportunities available for growth in the market,of which theCompany continues to take advantage.During the year,the Companys acquisition strategy continuedto target companies with a strong existing customer base anda high proportion of re

88、curring revenue,with a particular focuson businesses with exposure to high-growth and emergingmarkets.Building on the previous acquisitions of Internet.BSin the Bahamas(2014:US$7.5 million)and Instra Group inAustralia and New Zealand(2016:AU$38.0 million),the Groupacquired SK-NIC in December 2017 fo

89、r a maximum cashconsideration of 25.7 million.SK-NIC is the manager of theexclusive country code top-level domain for Slovakia,.sk andrealises the majority of its earnings through a recurring revenuestream from a substantial embedded customer base.SK-NIC offers significant growth potential,achievabl

90、ethrough the combination of the strongest domain productin the Slovak market and CentralNics specialist technical,sales and marketing expertise.CentralNic migrated.skonto its proprietary software in 2017 and strengthened thelocal management team to ensure that.sk achieves globalbest practice as a fo

91、undation for that nations growingdigital economy.Since its acquisition,the integration of SK-NIC has progressedaccording to plan.The.sk operation has been migratedonto a customised version of the CentralNic registry softwarein the Slovak language,and the management team inBratislava has been strengt

92、hened with the addition of a Headof Communications.Tasks that were outsourced to thevendors as part of the transition plan are being successfullymigrated in-house.Trading since the acquisition wascompleted is in line with expectations.In July,CentralNic was recognised as the best performingcompany i

93、n the Infrastructure Services category of theQuoted25 awards.This annual award,created by Megabuyte,acknowledges the top 25 performing technology companiesin the mid-tier of the London Stock Exchanges AIM market.ResultsCentralNic achieved revenues of 24.3 million,a 10%increase over 2016 revenues of

94、22.1 million,and AdjustedEBITDA of 6.6 million,a 20%increase on 2016s AdjustedEBITDA of 5.5 million.The profit after tax reflected a 7%increase at 1.02m(2016:0.96m).The Group continues to improve the quality of its earnings,increasing recurring revenues to 84%of total revenues.TheGroups global reven

95、ues also continued to grow,with over 37%of total revenues coming from outside the UK,North America,and Europe,reflecting a focus on high-growth emerging markets.10 CentralNic Group Plc Annual Report 2017Building on previous acquisitions of Internet.BSin the Bahamas and Instra Group in Australiaand N

96、ew Zealand,CentralNic has continued tosuccessfully execute its acquisition strategy.In 2017,CentralNic acquired SK-NIC,themanager of the exclusive country code top-leveldomain for Slovakia,We will continue to growthe company both organically and throughfurther acquisitions and remain entirely focuse

97、don expanding our global footprint in the domainand web services industry.Ben Crawford Chief Executive CentralNic Group Plc Annual Report 201711At the end of the year,the Group had cash balances of10.9 million(2016:9.9 million)with net debt(excludingprepaid costs)of 7.2m(2016:net cash 7.3m).During t

98、heyear,CentralNic entered into a new facility agreement withSilicon Valley Bank,which enabled the group to acquireSK-NIC and optimise its capital structure and gain accessto funding for growth opportunities.Operational reviewWholesale(Registry Services)Wholesale revenues grew 48%to 4.7 million(2016:

99、3.2million)and the Company maintained its position as a leadingwholesaler of domain names using new gTLDs,with 22.6%market share at the end of 2017.CentralNics WholesaleDivision is the only registry services provider to count six ofthe top 20 new gTLDs as clients(from around 1,200launched in total).

100、CentralNic has continued to be the world leader in winningnew clients in its Wholesale Division,including a contract tomanage 14 Top Level Domains from OpenRegistry,asubsidiary of KeyDrive Group.CentralNic manages 104domain extensions(gTLDs,ccTLDs and SLDs)overall,rankingas an impressive 5th globall

101、y.In September 2017,the Grouprenegotiated its exclusive wholesaler contract with.XYZ.com,the owner of the worlds leading new gTLD,.xyz,on a fixed feebasis until May 2032 with the potential to increase fees basedon the number of.xyz domains managed.RetailRetail revenues grew 9%to 15.6 million in 2017

102、(2016:14.3 million).The retail business serves three of the maincustomer groups for domain names and supporting services;small businesses,resellers and domain investmentprofessionals.One of the Retail Divisions objectives during2017 was to broaden the number of supporting products itcan provide to i

103、ts existing customer base.During the year,it added IT security products,web and email hosting,website construction and analysis products to its portfolioavailable to its existing and future customer base.The Retail Division increased the number of domain extensionsit provides and has continued to op

104、timise the costs associatedwith domain name provision and therefore increasedprofitability.This was in part achieved through an outsourcearrangement with the leading global reseller platform RRPProxy,a subsidiary of the KeyDrive Group.Considerablemanagement and technical resource has been dedicated

105、tothis project which,when completed,will result in CentralNicsretailers obtaining all their domains from a single supplier,ratherthan supporting hundreds of supplier relationships.EnterpriseRevenues from CentralNics Enterprise Division decreasedslightly in 2017,down to 4.1 million(2016:4.6 million),

106、reflecting the Groups strategy to decrease the proportion ofits overall revenues obtained through one-off premium domainname sales.The recurring revenue components of CentralNicsenterprise business continue to grow.With CentralNicsassistance,a number of corporate clients completed theICANN delegatio

107、n process in 2017 and have begun to preparetheir“DotBrand”Top Level Domains for use.Other corporateand government clients continue to licence CentralNic softwareand many also use the Groups fee-based support services todistribute domains,develop and implement their own policiesand to market and mana

108、ge their operations in-house.CentralNics premium domain name trading businessperformed well with revenues of 3.0 million achieved,reducedfrom 3.7 million the previous year.In line with the Groupsstrategy to focus on increasing its revenues in the recurringcategory,premium domain name sales will be a

109、 decreasingproportion of revenues and contribution going forward.Acquisitions:progressing CentralNics strategyMoving forward,CentralNic will continue to identifyacquisitions that will add scale and new market leadingtechnology platforms to serve its customers as well ascreating opportunities for sav

110、ings by eliminating duplicationin costs.The Group has established a robust foundation forfuture growth,is able to leverage a suite of world-classsoftware and services,has a large and experiencedmanagement team and significant staff resources able tosupport customers around the world.Infrastructure f

111、or growthPeopleDuring 2017,CentralNic made significant additions to itsBoard and management team to extend even further its abilityto execute our acquisitions-led growth strategy.In July,Don Baladasan joined the Board as Chief Financial Officer,bringing significant public company acquisition and int

112、egrationexperience.At senior management level the Company hadalready recruited Group Commercial Director Stuart Fullerand Group Marketing Director Andy Churley,from NetNames(formerly GroupNBT),to reinforce and build sales andmarketing operations.In May 2017,Sarah Ryan wasappointed Corporate Developm

113、ent Director to support theBoard in its M&A activities.Sarah was previously Director ofInternational M&A for LexisNexis and Thomson Financialand brings significant transaction experience including in theMiddle East,Russia,China,India,South Africa and Europe.Current market trendsIn December 2017,ther

114、e were approximately 332.4 milliondomain names under management globally.This represents agrowth of 3.1m domain names(0.9%)over 2016.Generic TopLevel Domains(gTLDs )had a combinedtotal of approximately 146 million domain names(2.9%growth)and all country code Top Level Domains(e.g.sk)accountedfor app

115、roximately 146 million domain names(2.4%growth).The top 20 new gTLDs(of which CentralNic manages six)account for 65%of all registrations in this category.Chief Executives report continuedPost year endIn January 2018,the Group replenished its premium domaintrading inventory for a total consideration

116、of 2.5 million,as astep towards ensuring that the company retains the capacityto continue to trade profitably in premium domain names asrequired.CentralNic also continued winning new clients,including the.ooo TLD,owned by billion-dollar Mumbai-listedtech company,Infibeam.In March 2018,due to industr

117、y speculation,CentralNicannounced that it was in advanced negotiations to merge witha leading operator of reseller and corporate platforms in thedomain industry,KeyDrive S.A.,a Luxembourg company.The combination of the two businesses has strong strategiclogic and economies of scale and represents an

118、 opportunityto create a group with competitive technology platformsdelivering significant recurring revenues for every majorcustomer type within the industry.Discussions are ongoingat the time of publication.OutlookCurrent trading is in line with expectations as the Groupcontinues to grow both organ

119、ically and through furtheracquisitions and remains entirely focused on expanding itsglobal footprint in the domain and web services industry.New products and services are added continually to servicecustomers.For example,the group plans to offer onlinesecurity and brand protection services to its co

120、rporate clients.Across all its business segments,new customer acquisitionremains a priority for the Group.Finally,we will continue to make earnings enhancingacquisitions to achieve further scale,additional capabilitiesand greater economies of scale.Ben Crawford Chief Executive30 May 201812 CentralNi

121、c Group Plc Annual Report 2017Strategic reportThe Company continues to win,retain and grow businessfrom well-resourced clients with complementary objectives.It also sources and executes acquisition transactions that meetthe Groups strategic criteria of being earnings accretive witha strong recurring

122、 revenue base,particularly revenues fromdomain registrations and their subsequent annual renewal.The Group has a culture derived from entrepreneurial roots.This helps underpin its strategy,with a Group-wide passionfor entering and competing profitably in new markets.CentralNics culture is characteri

123、sed by its focus on growthand recurring high-quality earnings,a global perspective,innovation,world-class technology,expert and flexible clientservices,and professional execution.The Group is able tomatch,and often exceed,the service levels offered by itslarger competitors.In turn,the organisation i

124、s transitioning from a smallersuccessful player into a global leader,within the domain nameindustry.The Group has established a robust infrastructurefor growth through developing and operating scalablesoftware platforms to serve global markets with domainnames and related services.This includes recr

125、uiting ahighly-experienced management team with complementaryskill-sets and significant staff resources able to supportcustomers around the world.CentralNics businesses support all stages in the domainname industry supply chain.The Groups Wholesale Divisionenables its domain registry customers to su

126、pply their domainsto an integrated distribution network of around 1,500 industryaccredited registrars(retailers),and through them,over100,000 resellers.CentralNic supplies its new Top LevelDomains to more accredited registrars than any of its peers,as well as operating billing and cash collection se

127、rvices.CentralNics retail platforms allow all types of internet usersto register domain names and purchase additional servicesrequired to deploy their websites and email.These platformsare presented to the buyers through a number of retailwebsites focused on different market segments andgeographies.

128、The Retail Division has been increasing thedomain inventory that it provides whilst optimizingprovisioning costs.Its enterprise platforms allow corporations and domaininvestors to manage and protect their valuable domain nameportfolios.CentralNics own businesses operate thesesoftware platforms and a

129、re offered to third parties on both aSoftware as a Service(“SaaS”)and a managed service basis.The same software platforms are also licensed to third parties,including governments,telecommunication companies andother enterprise clients,as well as TLD registries.Identifying and exploiting relativelyhi

130、gh-growth areas of the domain industryDemand in growth markets may be driven by supply fromnew inventory,such as the launch of a new domain extension,by a liberalisation of registration policies for a TLD,or bypromotional activities.CentralNics registrars take advantage of these opportunitiesin the

131、markets they serve,often delivering strong results.For instance,The Groups registrars are the highest sellers of.law domains for law firms and the second highest sellers of.ae domains for the United Arab Emirates.Growth opportunities also come from increased demandcaused by improvements in internet

132、access levels in emergingmarkets,emanating from the adoption of smart phones,broadband connectivity and governmental support for localdigital economic development.Here again,CentralNic isactively satisfying demand in these emerging markets.Winning and retaining well-resourced partnerswith complement

133、ary objectivesCentralNic excels in its ability to acquire and retain entrepreneurand corporate clients to enable its ongoing growth.For the Wholesale Division,CentralNic has sought out andwon contracts for over 50 new TLDs since listing.Thisinventory includes a range of domain extensions with differ

134、entbusiness strategies,including value-based mass marketgeneric domains such as.xyz and.website,industry-specificTLDs such as.tickets,and.bar.For country code marketextensions,CentralNic works with the local providers todevelop marketing,distribution and policy initiatives.Forexample,the country cod

135、e for Lao PDR(.LA)has beenrepurposed to address the alternative geographies of CentralNic Group Plc Annual Report 201713CentralNics strategy for continuing its growth is to increase its scale and scope ofoperations by developing and operating scalable software platforms to serve globalmarkets with d

136、omain names and related services.The Company specifically identifiesand develops areas of the domain industry with high-growth and/or high-marginpotential.This includes taking a leading role in disruptive initiatives such as newTop Level Domains(“TLDs”),selling country code domain extensions,taking

137、marketshare in emerging markets,and focusing on the enterprise sector.Strategic reportcontinuedLos Angeles and Latin America,while successfully retaining itscountrys national Internet identity.Similarly,.FM(the countrycode for Micronesia)has been retargeted to address the radiobroadcast and music st

138、reaming industries.CentralNic is activein developing a pipeline of new domain extensions to add toits Wholesale platform.In 2017,CentralNic continued to winnew clients in its Wholesale Division,including a contract tomanage 14 Top Level Domains from OpenRegistry.Group-wide,CentralNic deploys a numbe

139、r of online customeracquisition strategies,including search engine and userinterface optimisation,search engine marketing,and emailmarketing.The Group also employs a number of offlinemarketing mechanisms such as promotion at events andexhibitions,partnerships with registries and resellers,outboundac

140、tivity from its call centres and direct sales.CentralNic also excels in customer retention thanks to itsphilosophy of having a close collaboration with its clients and afocus on providing added value.For example,to bring morevalue to its clients,CentralNic offers expert advisers.Theseinclude sales,m

141、arketing,policy and technical developmentresources on a fee-for-service or revenue share model.TheGroups clients are also provided with business information totrack service provision.Financial performanceA review of the financial performance of the Group is providedin the Chief Financial Officers re

142、port on pages 16 to 19.Key Performance IndicatorsDetails of the Key Performance Indicators are provided onpage 16.Principal risks and uncertainties facing the GroupThe Directors have considered the principal risks anduncertainties facing the Group and the main ones areoutlined below.RegulatoryThe bu

143、sinesses of both registries and registrars are subject tothe legal and contractual environment,and to comply withICANN and country code policies.These are subject to change,which has the potential to influence business outcomes.CentralNic satisfies the technical and operational requirementsof ICANN

144、and other regulators and maintains an active voice inthe development of policy within the ICANN community.MarketThere is a risk that the market for domains for which the Groupprovides registry and registrar services may not increase asquickly as expected or that the new TLDs may not generatethe reve

145、nue levels anticipated by the Board.In either case,the Groups revenues could reduce belowexpectations with an impact on profitability.The risk is mitigated to a degree by operating multiple lines ofbusiness themselves exposed to many vertical markets andsegments,the majority of which have very littl

146、e reliance onnew TLDs.IT securityIf the Group does not prevent security breaches or becomessusceptible to cyber-attacks,it may be exposed to lawsuits,lose customers,suffer harm to its reputation,and incuradditional costs.Unauthorised access,computer viruses,accidents,employee error or malfeasance,in

147、tentionalmisconduct by computer“hackers”and other disruptions canoccur that could compromise the security of the Groupsinfrastructure or confidential information.The Group has created a resilient network infrastructure andDomain Name System server constellation,with failoversecondary systems to ensu

148、re critical registry functions aremaintained.The Wholesale business has been certified underISO 27001/2013 for data security,thereby mitigating risk byadherence to international best practice.Impact on societyThe Company has a positive impact on society by offeringinternet services in developing cou

149、ntries,contributing to theUnited Nations Broadband Commissions objective ofconnecting the 50%of the world that is still offline withaffordable internet.The Company can see little negative impact on society fromits activities.Whilst the internet itself adds a potential avenuethrough which fraudsters

150、and other undesirables can operate,the Company has stringent policies relating to its position asan enabler of such traffic and at all times adheres to laws andregulations in each and every jurisdiction,including workingwith regulatory authorities at all times.14 CentralNic Group Plc Annual Report 2

151、017Supplier riskA number of the key technical services used by the Group areoutsourced to key suppliers,thereby creating the potential forrisk in the case of the failure or loss of a supplier.In view ofthese risks,redundancies have been introduced between thesuppliers and internal resources,ensuring

152、 that no single pointof failure could result in the inability of CentralNic to meet itscontractual or compliance obligations.Currency riskThe Group reports its revenues and costs in British PoundsSterling,whilst some of these revenues and costs may arisein other currencies.Fluctuations in exchange r

153、ates mayadversely affect the Groups reported profits and make itsoverseas contracts relatively less valuable.CentralNic contracts are usually denominated in BritishPounds Sterling,US Dollars,Euros or Australian Dollars andthe Directors keep the currency exposure under regularreview.The Directors con

154、sider the use of hedging instrumentsin the event that currency exposure is considered a materialperformance risk.Dependence on key personnelThe Group has a small management team and the loss of anykey individual or the inability to attract appropriate personnelcould impact upon the Groups future per

155、formance.Incentivesand a performance culture remain an important focus to theachievement of the Groups objectives.Other risk factorsIn addition to the impact of the downturn of the worldseconomies,the Group may be adversely affected by otherchanges in economic,political,judicial,administrative,taxat

156、ionor other regulatory or other unforeseen matters.For example,the impact on the Group from the UK exiting the EuropeanUnion is to emerge and will be monitored and assessed overthe coming months and years.Director and employee genderAt the year-end the Board of Directors comprised of sevenmembers,al

157、l of whom are male,the Senior Management teamof eight was made up of five men and three women,and theoverall staff number of 92 contained 61 males and 31 females.This strategic report was approved by the Board of Directorson 30 May 2018 and signed on its behalf by:Mike Turner Chairman CentralNic Gro

158、up Plc Annual Report 201715Chief Financial Officers reportThe Groups continued focus on improving the quality of therevenue mix and earnings was highly successful with recurringrevenues rising to 84%of total revenue,compared to 81%in2016.The contribution from one-off premium sales wasreduced in line

159、 with the Boards strategy to focus on visibilityand quality of earnings.The growth in the revenue line flowed down to the AdjustedEBITDA,which increased by 20%to 6.6m(2016:5.5m).The overall Adjusted EBITDA Margin grew to 27%(2016:25%).Adjusted EBITDA is before share based paymentexpenses,acquisition

160、 deal fees and exceptional items.This growth in Adjusted EBITDA was despite adverse foreignexchange movements of 0.6 million,compared to apositive impact of 0.6 million in 2016.The attractive cash generative profile for the Group continuedin 2017 with the net operating cashflow,before tax andone-off

161、 deal costs,being 6.8m(2016:5.1m).Cash at theend of 2017 was 10.9m(2016:9.9m),an increase of10%with Net Debt(excluding prepaid costs)of 7.2m(2016:net cash 7.3m).In December 2017,the Group progressed its acquisitionstrategy with the completion of the acquisition for the countrycode of Slovakia,SK-NIC

162、.SK-NIC matched the characteristicsof our acquisition target profile,as a high quality,high marginand recurring revenue asset in a significant growth emergingmarket.We continue to seek acquisitions which addconsiderable high quality,high margin and recurringrevenues to the Group.The initial cash con

163、sideration of 20.3m(17.8m)to acquireSK-NIC was funded by loan-finance from Silicon Valley Bank(“SVB”)through a 12m term loan and a 6m revolving creditfacility.SVB also provided a 3m overdraft facility which hasnot been utilised.This transaction created a more balancedcapital structure which leverage

164、s the cash generative profilefor the Group,so this was deemed to be the most appropriatefunding route in order to achieve this.Key Performance Indicators 2017 Revenue 24.3m(2016:22.1m)Adjusted EBITDA*6.6m(2016:5.5m)Profit after taxation 1.02m(2016:0.96m)Cash Balance 31 Dec 2017 10.9m(2016:9.9m)Net D

165、ebt(excluding prepaid costs)31 Dec 2017 7.2m(2016:Net Cash 7.3m)*Excludes impact of share payment expense for the share options issued toDirectors and Employees and acquisition costs and exceptional itemsWholesale DivisionThe increase of revenue in the Wholesale Division was drivenpredominately by t

166、he.xyz and radix TLDs,along with registryconsultancy.SK-NIC contributed 0.3m of revenue,followingthe completion of its acquisition on 5 December 2017.Adjusted EBITDA for the Wholesale Division grew by 70%to2.1m(2016:1.2m).This included 0.2m contribution fromSK-NIC,representing an Adjusted EBITDA mar

167、gin for SK-NICof 79%.Excluding the contribution from SK-NIC,the like forlike Adjusted EBITDA for Wholesale grew by 51%to 1.9m(2016:1.2m)representing an adjusted EBITDA margin of42%(2016:39%).16 CentralNic Group Plc Annual Report 2017The Group showed overall year on year growthin revenue of 10%and Ad

168、justed EBITDA of 20%.Organic growth of 10%was achieved withrevenue growing to 24.3m(2016:22.1m).This was driven predominately by growth in theWholesale and Retail Divisions,which enjoyed48%and 9%year-on-year growth respectively.Don Baladasan Chief Financial Officer Retail DivisionRetail revenue cont

169、inues to be driven by the Instra Group,with smaller contributions from Internet.bs and the flagshipstores.All three Retail businesses showed year-on-yearrevenue growth with overall retail revenue growing by 9%to15.6m(2016:14.3m).Instra improved its year-on-year revenue to 11.4m(2016:10.3m).This was

170、achieved by selling high value domains,which benefit from higher margins,as well as cutting costs.The resulting improved margins flowed down to theAdjusted EBITDA line with Instra showing 20%growth to2.6m(2016:2.2m).Enterprise DivisionRevenue for the Enterprise Division was 4.1m(2016:4.6m).The reduc

171、tion was expected as the Group continued to moveaway from its reliance on the sale of Premium Domain names,to focus on improving quality of earnings by shifting the mixfrom these one-off sales to more predictable,recurring revenuestreams.Although revenue reduced for one-off premiumdomain sales,reven

172、ue increased from other EnterpriseDivision recurring revenue streams to 1.1m(2016:0.9m).Overall Adjusted EBITDA was 2.8m(2016:2.8m)withadjusted EBITDA margin of 70%(2016:60%).Revenue profileThe quality of the Groups earnings remains an importantstrategic priority for the Group and its investors,as w

173、e increasethe proportion of its revenues derived from predictable sources.This was one important factor in assessing the SK-NICacquisition,with all of SK-NICs revenues,earnings and cashflow derived from new registrations and renewals of domainnames.This,combined with the managements focus onrecurrin

174、g revenue streams,resulted in the proportion ofrecurring revenues increasing to 84%(2016:81%).AIM and corporate overheads,which have not been allocatedby division,were consistent with the prior year at 1.0m(2016:1.0m).Acquisition costs and exceptional items totaled 2.0m(2016:1.3m).The acquisition-re

175、lated costs,supporting theGroups acquisition programme,included a variety of dealcosts for SK-NIC and Key Drive Group.Finance costs include 0.3m of expenses for the term loanarrangement fees and associated legal costs related to theacquisition of SK-NIC.Other non-cash expenses included the amortisat

176、ion ofintangible assets,totaling 2.2m(2016:2.1m),reflecting thecharges for the Instra customer list,domain names andsoftware acquired.They also included depreciation and theshare based payments expense.In accordance with IFRS 2Share Based Payments,we have included a 0.5m chargefor Director and emplo

177、yee share options within administrativeexpenses(2016:0.6m).Further details can be found innote 28 to the financial statements.The Groups effective tax rate during the year was 25.4%(2016:17.5%),with the primary reason for the year-on-yearincrease being the disallowable nature of the higher acquisiti

178、onrelated costs incurred during the period.Basic earnings per share of 1.07 pence(2016:1.00 pence),reflected the improved Adjusted EBITDA in the business whichwere offset by non-recurring acquisition costs,amortisationcharges,exceptional items and non-cash charges.Dilutedearnings per share,at 1.04 p

179、ence(2016:0.97 pence),reflected the dilutive effect of the share options“in the money”at the average share price for the year.Further details of the earnings per share calculations areprovided in note 12 to the financial statements.PensionsThe Group created a defined contribution pension scheme inJu

180、ne 2016 in line with the new auto-enrolment provisions in theUK.In Australia,the Group operates a superannuation schemein line with statutory requirements,and the KiwiSaver schemein New Zealand,which is in line with the KiwiSaver Act 2006.The Group does not operate and has never operated anydefined

181、benefit schemes requiring actuarial valuations.DividendsIt remains the intention of the Group to generate incomereturns for investors in the future as part of a progressive andcommercially prudent dividend policy.However,due to thecontinued expansion opportunities presented by the sector,the Directo

182、rs do not propose a final dividend in 2017.Group statement of financial positionThe Group had net assets of 26.5m at 31 December 2017(2016:25.2m).This increase was driven by the retainedprofit for the year offset by downward movements onthe foreign exchange translation reserve,mainly due tomovements

183、 in AU$/GBP exchange rates.CentralNic Group Plc Annual Report 201717Chief Financial Officers report continuedCapital expenditure and investing activitiesThe most significant investment made during the year was theacquisition of SK-NIC,with further details of the acquisitionentries provided under Bus

184、iness Combinations in note 25 tothe financial statements.The total value of intangible assetsincludes 25.7m of intangibles relating to SK-NIC.In line with the appropriate treatment for translation of a foreignoperation into the Groups presentational currency,both thetangible and intangible assets ar

185、e translated at the closingrate,generating foreign exchange differences as presented innotes 13 and 14 to the financial statements.With the exception of goodwill,the Groups intangible assetsare amortised in line with the accounting policy.The carryingvalue of customer lists and goodwill are tested a

186、nnually forimpairment,while the Directors also consider other intangibleassets and investments for indications of impairment.Further details are provided in note 14 and 16 to thefinancial statements.Capital expenditure on tangible assets was 0.1m during theyear(2016:0.2m).Expenditure on plant and eq

187、uipment wasagain modest,reflecting the business model,which has arelatively low capital expenditure requirement.Intangible assetadditions totaled 0.4m(2016:0.4m),including the costs ofdevelopment activities satisfying the criteria detailed in note 3part to the financial statements.The slight increas

188、e related tocapitalised development activities in Instra and dnsXperts UG.Further details are provided in notes 13,14 and 25 to thefinancial statements.Cashflow and net cashThe cashflow statement for the Group includes two majorthemes:the entries related to the financing and completionof the SK-NIC

189、acquisition and the results of the ongoingoperations of the business,taking into account thefluctuations in working capital.Net cashflow from operating activities was higher than theprevious year at 3.7m(2016:3.3m).In both years,the netcashflow from operating activities was in line with expectations

190、relative to Adjusted EBITDA.2017 benefitted from favourableworking capital movements of 0.3m.Investing activities were mainly related to the SK-NICacquisition,which was completed in December 2017.The net cash outflow related to the SK-NIC acquisition totalled17.4m(net of cash acquired)in 2017 with a

191、 further 4.8mof deferred and contingent consideration due up to 2024,which was funded by additional SVB debt of 16.25m.Banking facilitiesA new facility agreement was entered into with SVB on29 August 2017,which was amended and restated on the30th November 2017 to support the SK-NIC acquisition on5 D

192、ecember 2017.This agreement refinanced the remaining principal of 1.75mdue under the original SVB facility agreement entered into forthe purposes of acquiring Instra in December 2015.The new SVB facilities comprises a 12m term loan,a 6mrevolving credit facility,and a 3m overdraft facility.The terman

193、d revolving credit facility were fully utilised at the end of theyear,the overdraft was unutilised.The principal terms of the debt facility include amortisation ofthe term loan over 5 years(2 million per annum)with a bulletpayment at the end of term.Interest repayments have also beensettled quarterl

194、y based at a margin above LIBOR.The debtfacility is secured over the material companies within the Group.Further detail is provided in note 24 of the financial statements.Scheduled quarterly repayments were made during the yearalong with the release of associated finance costs.Critical accounting po

195、liciesThe Summary of the Groups Significant Accounting Policiesis set out in note 3 to the Financial Statements.The Groups Revenue recognition policy may be summarised as:Revenue from the sale of services is recognised when theamounts of revenue and cost can be measured reliably;Domain sales are rec

196、ognised over the period to which theunderlying sales contract relates,which can be for periodsbetween one and ten years.Revenues attributable to futureperiods are deferred to future periods and are included in“Deferred Revenues”and in the case of the Retail business,the direct costs,associated with

197、domain name Retailrevenues,that are payable to wholesale suppliers of thedomains,are recognised in deferred costs;and Revenues from strategic consultancy and other similarservices are recognised in proportion to the stage ofcompletion of the work.The Group makes estimates and assumptions regarding t

198、hefuture,which are regularly evaluated including expectationsof the future that are considered reasonable given historicexperience and current circumstances.In the future,actualexperience may differ from these estimates and assumptions.18 CentralNic Group Plc Annual Report 2017The Board considers th

199、e carrying value of Intangible assets inparticular given the relative materiality to the Group.While theBoard acknowledges that estimates and assumptions couldhave a material impact on the carrying value of the intangibleassets,the Board has considered the potential for impairmentas well as the esti

200、mated useful lives of the assets and doesnot consider the carrying values to be impaired.Further detailsare provided in note 4 to the financial statements.Group financial risk managementThe Board reviews the financial risk management policy,noting that the Group is exposed to market risk,credit risk

201、and liquidity risk arising from financial instruments.Furtherdetails of the Financial Risk Management Framework isprovided in note 29 to the financial statements.The Groups finance function is responsible for managinginvestment and funding requirements including cashflowmonitoring and projections.Th

202、e cashflow projections arereviewed regularly by the Board to ensure the Group hassufficient liquidity at all times to meet its cash requirementsand execute its business strategy.The Groups strategy is to finance its operations through thecash generated from operations and where necessary,equityand d

203、ebt finance,notably to support investing activities.The Groups financial instruments comprise cash and variousitems such as trade and deferred receivables.The Grouphad 10.9m of cash at the year-end,with interest bearingfinancial assets bearing interest at fixed interest rates.Depositrisk is mitigate

204、d by the Directors setting policy that the Grouponly places deposits with banks and financial institutions withhigh credit ratings.The Groups exposure to credit risk from trade receivables isrelatively low,due to the fact that the business has traditionallydealt with customers who often pay at the p

205、oint or sale or inadvance.Where there are credit accounts,which is anincreasing trend in the industry particularly for the largerdomain name registrars,receivables are controlled throughcredit limits and regular monitoring.Foreign currency riskThe Board notes that the Group has predominantly traded

206、inUS Dollars,Euros,GB Sterling Pounds and Australian Dollars,and considers the exposure to foreign currency risk to beacceptable.The Group has held reserves in each of thesecurrencies to meet trading obligations as required.Thecurrency risk is actively monitored through a periodic review ofinflows a

207、nd outflows by currency,including an assessmentof the extent to which currencies are naturally hedged acrossthe Groups business lines.Where this is not the case,consideration is given to the use of hedging instruments.Don Baladasan Chief Financial Officer30 May 2018 CentralNic Group Plc Annual Repor

208、t 201719Board of Directors20 CentralNic Group Plc Annual Report 2017The Boards principal duties include the provision of entrepreneurial leadershipto the Group,setting strategy and overseeing business performance andcompliance;deploying good corporate governance commensurate with thesize and scope o

209、f the Groups activities.Mike Turner Chairman(aged 57)Mike has 30 years M&A experience in London and the US,advisingclients in technology,telecoms,advertising and marketing services,media,internet and e-commerce sectors.Benjamin Crawford Chief Executive Officer(aged 52)Ben is a specialist in global b

210、usiness and corporate developmentfor internet-related companies.Previous roles include FoundingPresident of Louise Blouin Media,where he integrated 11 acquisitionsin three countries.Don Baladasan Chief Financial Officer(aged 44)Don,a Chartered Management Accountant,is a highly experiencedquoted comp

211、any Finance Director.Since 2013,he has helpedraise 25m on AIM and integrated many acquisitions andreverse takeovers.Thomas Rickert Non-Executive Director(aged 48)Thomas is a domain industry legal expert working on disputes,as well as advising registrars,registry service providers andregistry operato

212、rs.Samuel Dayani Non-Executive Director(aged 41)Responsible for purchasing CentralNic in 2003,managing therestructuring and building a strong management team,ready forthe Groups AIM listing in 2013.Thomas Pridmore Non-Executive Director(aged 46)Tom is a director of the Investment Advisor of Civitas

213、Social HousingPLC,a real-estate investment trust.He has broad investment andcorporate finance experience.Iain McDonald Non-Executive Director(aged 47)Iain is a global expert in technology and e-commerce with a strongtrack record investing in early stage companies,including ASOS,The Hut Group and B.H

214、e was a top-ranked retailequities analyst.CentralNic Group Plc Annual Report 201721Directors reportPrincipal activitiesCentralNic Group Plc is the ultimate holding company of aGroup of companies.The principal activities of the Group are the provision of domainname Wholesale(registry),Retail(registra

215、r)and Enterpriseservices.A more comprehensive description of the Groupsactivities,performance,and likely developments are provided inthe Chairmans statement,the Chief Executives Report,theChief Financial Officers Report,the Corporate GovernanceReport and the Remuneration Report,which are incorporate

216、dby reference into this report.A list of the subsidiary undertakings is disclosed in theParticulars of Subsidiaries and Associates on pages 78 and 79of the Financial Statements.Financial instrumentsDetails of the use of financial instruments and financial riskmanagement are included in note 29 to th

217、e Financial Statements.Results and dividendsInformation on the results is provided in the ChairmansStatement and the Chief Financial Officers Report.It remains the intention of the Group to generate incomereturns for investors in the future as part of a progressive andcommercially prudent dividend p

218、olicy.However,due to thecontinued expansion opportunities presented by the sector,the Directors do not propose a final dividend in 2017.DirectorsThe Company was incorporated on 19 June 2013,with a viewto becoming the parent company of the Group after admissionto AIM.The admission was completed on 2

219、September 2013,and at this time the Board was expanded.In 2017 there were changes in Board members to reflect thedevelopment of the business.The Directors who served duringthe year were as follows:Executive DirectorsBenjamin Crawford(Chief Executive Officer)Glenn Hayward(Chief Financial Officer and

220、Company Secretary)resigned from the Board on 24 July 2017Desleigh Jameson(Executive Director)resigned from theBoard on 17 August 2017Donald Baladasan(Chief Financial Officer)appointed to theBoard on 24 July 2017Non-Executive DirectorsMike Turner(Non-Executive Chairman)Samuel DayaniThomas RickertThom

221、as PridmoreIain McDonaldThe biographical details of the Directors are provided on pages20 and 21 of this report.Two Directors will retire at the Companys Annual GeneralMeeting,and being eligible will offer themselves for re-election.The Directors and their interests in the shares in the GroupThe Dir

222、ectors of the Company,and their interests in theshares and share options of the Company,are shown in theRemuneration Report on pages 29 to 31 of this report.Transactions with any parties related to the Directors aredisclosed in note 26 to the Financial Statements.Post year endFurther details on post

223、 year end events are disclosed in theChief Executive Officers Report.Directors conflicts of interestEach Director is required,in accordance with the provisions ofthe Companies Act 2006,to declare any interests that may giverise to a conflict of interest with the Company on appointmentand subsequentl

224、y as they arise.Where such a conflict orpotential conflict arises,the Board is empowered under theCompanys Articles of Association to consider and authorisesuch conflicts as appropriate.Articles of AssociationThe Companys Articles of Association set out the Companysinternal regulation and cover such

225、 matters as the rights ofshareholders,the appointment and removal of Directors andthe conduct of Board and general meetings.A copy of the Companys Articles of Association is available on theGroups website(https:/ to the provisions of legislation,the Companys Articlesof Association and any directions

226、 given by resolutions of theshareholders,the Board may exercise all powers of theCompany and may delegate authorities to committees andmanagement as it sees fit.Details of the committees of theBoard and their activities are contained in the CorporateGovernance Report on pages 26 to 28 of this report

227、.The Directors are responsible for the maintenance and integrityof the corporate and financial information included on theCompanys website.Principal risks and uncertaintiesThe boards assessment of the principal risks and uncertainties,together with the mitigating factors are presented in the Strateg

228、icReport on pages 14 to 15.22 CentralNic Group Plc Annual Report 2017Substantial shareholdersIn addition to the Directors Interests disclosed in theRemuneration Report,the Company has been notified that thefollowing shareholders interests exceeded 3%of the Companysordinary share capital in issue at

229、30 April 2018:Ordinary shares PercentageErin investments 21,630,382 22.42%Kestrel Partners LLP 17,375,593 18.01%Living Bridge VC LLP 9,083,019 9.41%Schroder InvestmentManagement 7,509,131 7.78%Jabella 5,687,891 5.89%Cavendish AssetManagement 5,643,201 5.85%Herald InvestmentManagement Ltd 5,025,000 5

230、.21%Miton Asset Management Ltd 4,128,211 4.28%Natwest FIS Nominees 3,699,000 3.83%Estate of Antonio Lentino 3,047,042 3.16%No substantial shareholders have different voting rights to otherholders of the share capital of the Company.Corporate governanceThe Corporate Governance Report,on pages 26 to 2

231、8 isincorporated into this report by reference.Corporate responsibilityThe Board recognises its employment,environmental andhealth and safety responsibilities,and devotes appropriateresources towards monitoring and improving compliancewith existing standards.Management and staffCentralNics managemen

232、t team has been assembled to ensurethe Group has the number of people and range of skills requiredto deliver the business strategy and to support the expansion ofthe Group as it becomes an increasingly international business.The team is diverse and brings functional expertise across anumber of disci

233、plines including technical and operationaldelivery,finance,law,marketing and sales.While the business is managed under budgetary controls,theDirectors focus on ensuring there is succession planning inplace as is appropriate for a business of our size.Our staff and consultants represent a number of d

234、ifferentnationalities,and we are pleased by the gender diversity inour business.The executive leaders within the business recognise theimportance of engaging with employees and do so informallyon a day to day basis.We often use a cascade approach toemployee communications,with the heads of departmen

235、tsdisseminating appropriate information to their teams,includingthose situated in various locations around the world.While we do not believe that human rights issues are asignificant risk to our business currently,we are conscious thatas we expand into new international markets issues of humanrights

236、 may become more significant.The Directors keep allaspects of business development under review,and act withcaution and integrity to ensure all our activities and specificallybusiness development activities are respectful of human rights.Communication with employees is primarily through formaland in

237、formal meetings and through the use of the Groupsinformation systems This comprises regular communication ofinformation affecting our managers and their teams,to ensureall employees are kept up to date with issues affecting them.The Board recognises the importance of engaged employeesworking within

238、the Group and how they are vital to the futuresuccess of the business.However,given the size of the Groupand the specialist nature of its technical operations,there isdependency on a few key individuals and this is discussedfurther in the Strategic Report on page 15.The Group is committed to achievi

239、ng equal opportunities andto complying with anti-discrimination legislation.The Group iscommitted to offering employees and job applicants equal andfair opportunity to benefit from employment without regard totheir sex,sexual orientation,marital status,race,religion orbelief,age or disability.The Gr

240、oup has a policy of share participation for employeesacross the Group at all levels.Standards accreditationsCentralNics wholesale business is certified against ISO 27001(Information security management),ISO 9001(Qualitymanagement system)and ISO 22301(Business continuitymanagement)having achieved ISO

241、22301 accreditation during2016.These certifications are internationally recognised andprovide CentralNics stakeholders with additional levels ofassurance as to the technical integrity of the Groups IT system.CentralNic Group Plc Annual Report 201723Directors report continuedAnti-bribery and corrupti

242、on,anti-money launderingand sanctions complianceCentralNic conducts business ethically,maintains financial integrityand strives to behave responsibly in its business dealings.The Groups Directors and its senior management arecommitted to ensuring strict adherence to its anti-bribery andcorruption po

243、licy and compliance with anti-bribery andcorruption laws.The Group also maintains and ensuresadherence to its policies in relation to Anti-Money Launderingand Trade Sanctions and Embargoes,again to comply withrelevant laws across the relevant jurisdictions.All Directors,employees and consultants hav

244、e received trainingin maintaining the highest standards of professional conduct andare aware of the need to carry out business fairly,honestly andopenly.Clear lines of communication and responsibility are inplace to report any incidences or suspected incidences ofabuse to provide an effective,truste

245、d reporting mechanism.EnvironmentThe Group is committed to operating in an environmentallyresponsible manner.The Directors consider environmentalimpact when making decisions.The community,charitable and political donationsThe Directors consider the impact on the community whenmaking decisions.During

246、 the year charitable donations totallingnil were made(2016:300).The Group made no political donations during the year,eitherin the UK or overseas.Policy on the payment of creditorsThe Groups policy is to agree terms and conditions for itsbusiness transactions with suppliers and to endeavour to abide

247、by these terms and conditions,subject to the supplier meetingtheir obligations.No one supplier is considered to be essential to the businessof the Group.R&D activityThe Group undertakes research and development activities toenhance its competitive position in its chosen markets,drawingon skilled dev

248、elopment resource from across the Group.Health and safetyThe Directors and senior management are committed toproviding for the welfare,health and safety of the Groupsemployees and have procedures in place,including regularmonitoring by third party specialists,to ensure compliancewith its legal and c

249、ontractual obligations.Business continuityThe Group has built a resilient technology infrastructure,designed to provide data security and continuity of service.The Board recognises the ongoing importance of resilience tocyber threats and invests in primary and secondary data centresalong with a dist

250、ributed domain name server constellationoperated by the Group and third party providers.The Boardkeeps the infrastructure requirements under review and adopts acontinuous improvement approach to further investment,withinappropriate parameters,as business activities expand.Thetechnical provision,alon

251、gside customer support,is consideredone of the most significant aspects of Business Continuity.Statement of Directors responsibilities in respect ofthe Annual Report and the Financial StatementsThe Directors are responsible for preparing the Strategic Report,the Directors Report and the financial st

252、atements in accordancewith applicable law and regulations.Company law requires the Directors to prepare financialstatements for each financial year.Under that law the Directorshave elected to prepare the financial statements in accordancewith International Financial Reporting Standards(IFRSs)asadopt

253、ed by the EU and applicable law.Under company law the Directors must not approve the financialstatements unless they are satisfied that they give a true and fairview of the state of affairs of the company and the group and ofthe profit or loss of the group for that period.In preparing thesefinancial

254、 statements,the Directors are required to:select suitable accounting policies and then apply themconsistently;make judgments and accounting estimates that arereasonable and prudent;state whether applicable accounting standards have beenfollowed,subject to any material departures disclosed andexplain

255、ed in the financial statements;prepare the financial statements on the going concern basisunless it is inappropriate to presume that the company willcontinue in business.The Directors are responsible for keeping adequate accountingrecords that are sufficient to show and explain the companystransacti

256、ons and disclose with reasonable accuracy at any timethe financial position of the company and enable them to ensurethat the financial statements comply with the Companies Act2006.They are also responsible for safeguarding the assets ofthe company and hence for taking reasonable steps for theprevent

257、ion and detection of fraud and other irregularities.24 CentralNic Group Plc Annual Report 2017They are further responsible for ensuring that the Strategic Reportand the Report of the Directors and other information included inthe Annual Report and Financial Statements is prepared inaccordance with a

258、pplicable law in the United Kingdom.The maintenance and integrity of the CentralNic website is theresponsibility of the Directors;the work carried out by theauditors does not involve the consideration of these mattersand,accordingly,the auditors accept no responsibility for anychanges that may have

259、occurred in the accounts since theywere initially presented on the website.Legislation in the United Kingdom governing the preparation anddissemination of the accounts and the other information includedin annual reports may differ from legislation in other jurisdictions.Disclosure of audit informati

260、onThe Directors confirm that,as at the date of approval of thisannual report and these financial statements,so far as eachDirector is aware there is no relevant audit information of whichthe Companys auditor is unaware and that he or she has takenall the steps that he or she ought to have taken as a

261、 Director inorder to make himself or herself aware of any relevant auditinformation and to establish that the Companys auditor isaware of that information.Going concernThe Directors have in place procedures to review the forecastsand budgets for the coming year,which have been drawn upwith appropria

262、te regard for both the macroeconomicenvironment in which the Group operates and the particularcircumstances influencing the Domain Name industry and theGroup itself.These were prepared with reference to historic andcurrent industry knowledge,contracted trading activities andprospects that relate to

263、the future strategy of the Group.As aresult,at the time of approving the financial statements,theDirectors consider that the Company and the Group havesufficient resources to continue in operational existence for theforeseeable future and that it is appropriate to adopt the goingconcern basis in the

264、 preparation of the financial statements.As with all forecasts,the Directors cannot guarantee that thegoing concern basis will remain appropriate given the inherentuncertainty relating to future events.Principal areas ofUncertainty and Risks are highlighted on pages 14 and 15.AuditorsThe Companys in

265、dependent external auditors,Crowe ClarkWhitehill LLP,were initially appointed on 17 July 2013 and weremost recently reappointed at the Companys Annual GeneralMeeting of 7 June 2017.It is proposed by the Board they beput forward for reappointment as auditors and a resolutionconcerning their reappoint

266、ment will be proposed at theforthcoming AGM.Registered office35-39 Moorgate,London EC2R 6ARRegistered number:08576358Approved by the Board and signed on its behalf by:Mike Turner Chairman30 May 2018 CentralNic Group Plc Annual Report 201725Cautionary statementUnder the Companies Act 2006,a Companys

267、Directors are required to producea Strategic Report which contains,among other matters,a fair review by theDirectors of the Groups business,through a balanced and comprehensiveanalysis of the development and performance of the business of the Group andthe position of the Group at the year end,consis

268、tent with the size and complexityof the business.The Directors Report set out above,including the Chairmans Statement,theChief Executives Report,and the Chief Financial Officers Report incorporatedinto it by reference(together with the Directors Report),has been prepared onlyfor the shareholders of

269、the Company as a whole,and its sole purpose and useis to assist shareholders to exercise their governance rights.In particular,theDirectors Report has not been audited or otherwise independently verified.The Company and its Directors and employees are not responsible for anyother purpose or use or t

270、o any other person in relation to the Directors Report.The Directors Report contains indications of likely future developments andother forward-looking statements that are subject to risk factors associated with,among other things,the economic and business circumstances occurring fromtime to time in

271、 the countries,sectors and business segments in which theGroup operates.These factors include,but are not limited to,those discussed under PrincipalRisks and Uncertainties.These and other factors could adversely affect theGroups results,strategy and prospects.Forward-looking statements involverisks,

272、uncertainties and assumptions.They relate to events and/or depend oncircumstances in the future which could cause actual results and outcomes todiffer materially from those currently anticipated.No obligation is assumed toupdate any forward looking statements,whether as a result of new information,f

273、uture events or otherwise.Corporate governanceIntroductionThe Board of CentralNic Plc places governance and controls atthe centre of its strategy.CentralNic Plc has a dedicatedCompliance Committee which meets monthly.The remit of theCompliance Committee is to ensure that all governance policiesare a

274、dministered,reviewed and complied with across CentralNicPlc Group.Don Baladasan,the CFO of CentralNic Plc,chairsthis committee and provides a conduit between The Board andThe Compliance Committee.This ensures timely decisions andchallenges are communicated to The Board.In addition,a formalsummary re

275、port relating on the Compliance Committee isreported at Board meetings.CentralNic takes a multi-disciplinary approach to governance asit is not possible to have strong governance being driven by onedepartment due to departments interacting on day-to-dayoperations.The Compliance Committee has represe

276、ntation fromSales,Marketing,Technology,Operations,Legal and Financedepartments.By engaging with each department and teamleaders,CentralNic works to improve communication,transparency and accountability in compliance matters.CentralNic manages enforcement through well publicisedguidelines and policie

277、s.CentralNic views this approach as integral to having a compliantand robust governance structure.Governance in CentralNic isseen as a culture and is communicated to staff and embeddedin policies and procedures to ensure compliance.CentralNicuses legal,industry and political frameworks to create a c

278、ultureand infrastructure to attain strong governance and controls.CentralNic sees governance not only as compliance drivenrequirement but as an opportunity to gain commercial sustainabilityand advantage.Improved compliance can build customer trustby ensuring high standards of data processing and sec

279、uritystandards.With GDPR coming into force the measures put intoplace in the preceding years on data security,internal training,andexperience of implementing new procedures are engaged to meetthe changes required.This is done by placing all stakeholders atthe centre of governance policy and implemen

280、tation.CentralNic uses formalised frameworks and directives such asMAR,ISO standards and AIM regulations to help build andmaintain a compliant governance structure.Critical to thebusiness is the infrastructure and technology CentralNic usesto provide services.Robust business continuity and disasterr

281、ecovery plans are in place and tested on a regular basis.ITsecurity policies and operational controls are in place.CentralNiccontinues to engage,monitor and shape internet governance atICANN and other international forums,bodies and regulators.A key tenet of this compliance is to look not only at pr

282、oceduresbut also how technology and systems can drive and supportcompliance and manage risks appropriately.Board governance and policyThe Directors appreciate the value of good corporate governanceand have regard to the provisions of the Corporate GovernanceGuidelines for Smaller Quoted Companies,pu

283、blished from timeto time by the Quoted Companies Alliance,to the extent that theybelieve it is appropriate in light of the size,stage of developmentand resources of an AIM-quoted company.The Board comprises a Non-Executive Chairman,threeexecutive directors and four non-executive directors.The Boardm

284、eets regularly to consider the business strategy,performanceand the framework of internal controls.To enable the Board todischarge its duties,all Directors receive appropriate and timelyinformation.Briefing papers are distributed to all Directors inadvance of Board meetings.All Directors have access

285、 to theadvice and services of the Company Secretary,who isresponsible for ensuring that the Board procedures are followed,and that applicable rules and regulations are complied with.In addition,procedures are in place to enable the Directors toobtain independent professional advice in the furtheranc

286、e of theirduties,if necessary,at the Companys expense.In line with therequirements of the Companys Articles of Association,theGroup has voluntarily chosen that two Directors will retire at theAnnual General Meeting and being eligible,will offer themselvesfor re-election.Board CommitteesThe Company h

287、as established Audit,Nomination andRemuneration Committees.The terms of reference for the three committees were reviewedduring the year and are available for inspection on request fromthe Company Secretary.Audit CommitteeThe Audit Committee has Iain McDonald as Chairman and othermembers of the Commi

288、ttee include Mike Turner,Thomas Rickertand Thomas Pridmore.The Chief Financial Officer is invited toand regularly does attend the Committee meetings,as does theChief Executive Officer.The primary responsibilities of the Committee,having due regardfor the interests of Shareholders include:Monitoring

289、the integrity of the half yearly and annual financialstatements and formal announcements regarding the Groupsfinancial performance Reviewing significant accounting policies,areas of significantestimates and judgments and disclosures in financial reports Monitoring the quality and effectiveness of in

290、ternal controlprocedures and risk management systems Considering the requirement for Internal Audit,taking intoaccount the size,distribution and nature of the Companyand the Group and its operations26 CentralNic Group Plc Annual Report 2017 Reviewing the external auditor reports relating to theCompa

291、nys accounting and internal control procedures Overseeing the Boards relationship with the externalauditors,including their continued independence andmaking recommendations to the Board on the selectionof external auditors.The Audit Committee is required to meet at least twice a year.During the year

292、 the Committee met on three occasions.The appointment of the independent external auditor isapproved by the shareholders annually.The independentauditors audit of the financial statements is conducted inaccordance with International Standards on Auditing,ISA(UK and Ireland)issued by the Auditing Pra

293、ctices Board.It is noted that the external auditor also operates proceduresdesigned to safeguard their objectivity and independence.The Audit Committee reviews all fees related to non-audit work,and the committee reviews any material non-audit work priorto commencement.Details of auditor fees can be

294、 found innote 7 to the financial statements.Remuneration CommitteeThe Groups Remuneration Committee is responsible,on behalfof the Board,for developing remuneration policy.Details ofobjectives and policy are provided in the Remuneration Reporton pages 29 to 30.The Remuneration Committee has Tom Prid

295、more as its Chairmanand other members of the Committee include Mike Turner,Samuel Dayani and Thomas Rickert.The primary responsibilities of the Committee,having dueregard for the interests of Shareholders include:Determining and agreeing with the Board the remunerationpolicy for the Chairman of the

296、Board,the non-ExecutiveDirectors and the Executive Directors and other seniormanagers Reviewing the design of share incentive plans for approvalby the Board and determining the award policy to ExecutiveDirectors and personnel under existing plans Determining the remainder of the remuneration package

297、s(principally salaries,bonus and pension)for the ExecutiveDirectors and senior management including anyperformance-related targets Reviewing and noting remuneration trends across the Group Co-ordinating with the Nominations Committee in relation tothe remuneration to be offered to any new Executive

298、Director;and Taking responsibility for the selection criteria and if appropriateselecting,appointing and setting terms of reference for anyremuneration consultants engaged to advise the Committee.The Remuneration Committee was created in September 2013and is required to meet at least twice a year.Du

299、ring 2017 theCommittee met on four occasions.It is the Groups policy that Executive Directors servicecontracts contain at least a 3 month notice period.Nominations CommitteeThe Groups Nominations Committee has the power andauthority to carry out a selection process of candidates beforeproposing new

300、appointments to the Board.The Nominations Committee has Mike Turner as its Chairmanand other members of the Committee include Iain McDonald,Thomas Rickert and Tom Pridmore.The Nominations Committee was created in September 2013and is required to meet at least once a year.During 2017 theCommittee met

301、 on one occasion.The Group has adopted a policy for Directors and key employeeshare dealings which is appropriate for an AIM-quoted Group.The Directors comply with Rule 21 of the AIM rules relating toDirectors dealings and take reasonable steps to ensurecompliance by the Groups applicable employees.

302、The Executive and Non-Executive Directors service contractsare available for inspection by shareholders on request to theCompany Secretary.The Chairman and Non-Executive Directors do not participatein agenda items at any meeting when discussions in respect ofmatters relating to their own position ta

303、ke place.Risk management and internal controlsThe Board has primary responsibility for establishing andmaintaining the Groups financial and non-financial controls,as well as identifying the major risks facing the Group.Internal control systems are designed to meet the particularneeds of the Group an

304、d the risks to which it is exposed.By theirnature,internal controls can provide reasonable but not absoluteassurance against material misstatement or loss.The Executive Directors and Senior Management have specificresponsibilities for aspects of the Groups affairs and haveregular discussions to addr

305、ess operational matters,as well asconsidering the skill sets required in their teams to maintain theinternal controls required.Accounting proceduresThe financial processes and control systems are kept underregular review by the Executives with oversight from the Board,with a view to further evolutio

306、n and improvement as the Groupsactivities expand.This includes the maintenance of andadherence to a Financial Procedures Board Memorandumwhich is reviewed and updated periodically.CentralNic Group Plc Annual Report 201727Corporate governance continuedAccounting procedures are managed on a day to day

307、 basis bythe Finance team.Responsibility levels are set and agreed withthe Board,with authority delegated to appropriate responsiblemanagers as well as the Executive.Segregation of duties isdeployed to the degree this is practical and efficient,noting thesize and geographic distribution of the Group

308、.Monthly management accounts are reported to the Board,under IFRS(EU)with the content aligned to the Groupsmanagement information requirements.The Board reviews theaccounts in detail during each Board meeting and requestsfurther information as the need arises.Comparisons toapproved budgets and forec

309、asts are prepared with associatedcommentary provided.The Company prepares annual Budgets which are reviewed bythe Board.The Budgets are then updated during the year toprovide latest forecasts.Capital expenditure is regulated by the Budget process,and iskept under regular review during the year.Inves

310、tment appraisaltechniques,using discounted cashflow projections,aredeployed in relation to material investments and are reviewedby the Board as part of good governance such that materialtransactions that are significant in terms of their size or typeare only undertaken after Board review.The Board a

311、cknowledges that there are processes in place foridentifying,evaluating and managing risks faced by the Group,and places emphasis on continuous process improvement.Corporate responsibility,the environmentand health and safetyThe Group is committed to maintaining and promoting highstandards of busine

312、ss integrity.Company values,whichincorporate the principles of corporate social responsibilityand sustainability,guide the Groups relationships with itsstakeholders including clients,employees and thecommunities and environment in which the Group operates.The Groups approach to sustainability addres

313、ses both itsenvironmental and social impacts,supporting the Groups visionto remain an employer of choice,while meeting client demandsfor socially responsible partners.By way of example the Groupcompanies have arranged and promoted a number of ACE(Athletics,Community and Environmental)activities in t

314、he past.The Company is also certified by the Carbon Neutral Company.The Group respects local laws and customs while supportinginternational laws and regulations.These policies have beenintegral in the way Group companies have done business in thepast and will continue to play a central role in influ

315、encing theGroups practice in the future.Communications with shareholdersThe Board regards the importance of effective communicationwith shareholders as essential.Relations with shareholders aremanaged principally by the Chief Executive Officer,ChiefFinancial Officer and the Chairman,and meetings are

316、 regularlyheld with institutional investors and analysts during the year.The Chairman,Chief Executive Officer,the Chief Financial Officerand if required other Executive and Non-Executive Directorsmake themselves available for meetings with major shareholderseither individually or collectively.The Gr

317、oups shareholders areinvited to attend the AGM at which the majority of Directors arepresent.The Groups Nominated Advisors and Joint Brokersalso convey shareholder opinions to the Chairman and ChiefExecutive Officer and these are discussed with the Board.The Groups website contains information on cu

318、rrent businessactivities,including the annual and interim results.Annual General Meeting dateThe Annual General meeting will be convened in accordancewith the provisions of the Companies Act 2006.The AnnualGeneral Meeting will take place on 25 June 2018 at 10.00amat the offices of the Companys solic

319、itors:DWF LLP20 Fenchurch StreetLondonEC3M 3AGThe proposed resolutions together with proxy forms andthis annual report will be distributed to shareholders by the1 June 2018,if not before.28 CentralNic Group Plc Annual Report 2017Remuneration reportAs the Company is an AIM listed company,it is not re

320、quired topresent a Directors Remuneration report.However,the Boardhas chosen to do so in line with evolving best practice.Remuneration CommitteeThe membership of the Committee and the principal activitiesare detailed in the Corporate Governance section of the annualreport on page 27.Remuneration pol

321、icyThe Companys remuneration policy is focused on being able toattract,retain and incentivise management with the appropriateskills and expertise to realise the Groups strategic objectivesand align managements interests with those of shareholders.In particular the Remuneration Committee seeks to lin

322、k paymentto performance and as a result create a performance culturewithin the business.The Directors believe that it is important to properly motivate andreward key senior employees and executives and to do so in amanner that aligns their interests with the interests of theShareholders.The Director

323、s also recognise the importance ofensuring that all employees are engaged,incentivised andidentify closely with the profitability of the Company.Directors remunerationThe average number of staff employed by the Group is includedin note 8 to the financial statements.Disclosure of the remuneration for

324、 key management personnel,as required under IAS 24,is also detailed in note 8 to thefinancial statements.In terms of the remuneration of the Companys Directors,entriesto profit and loss included in the Statement of ComprehensiveIncome include:Included in the Directors emoluments above are the follow

325、ing;A charge of 7,000 in relation to Robert Pookes contractualnotice period which expired in February 2017(2016:67,000).There were no charges included in the year to the Companyand Group by Samuel Dayani(2016:45,000).There were no charges included in the year which wereinvoiced(2016:11,250)by Thomas

326、 Rickert.There were no charges included in the year to the Companyand Group by Ben Crawford FZE of which Ben Crawford hasa controlling interest(2016:66,272).A charge of 40,000 to the Company and Group by TaylorWessing LLP,a partnership where Mike Turner is a partner(2016:40,000).A charge of 234,000

327、in relation to Desleigh Jamesonscontractual notice period and redundancy compensation(2016:nil).A charge of 81,000 in relation to Glenn Haywardscontractual notice period(2016:nil).A charge of 96,000 in the year to the Company and Groupby Mataxis Ltd of which Donald Baladasan has a controllinginteres

328、t(2016:nil).Share optionsPrior to admission to AIM,CentralNic established both and anunapproved share option scheme and an Enterprise ManagementIncentive option scheme(EMI)under which certain key executivesand employees were invited to participate.These options wererolled over into the Company durin

329、g 2013.To reflect existing commitments,the options granted in June 2013for the unapproved option scheme and the EMI scheme vest in12 equal instalments at 3 month intervals following the Admission(so that the options have fully vested).The unapproved optionsgranted on 14 October 2013 vest 3 years aft

330、er the date of grant(so again these options have fully vested).Share-based Salaries&fees Bonus Pension payments 2017 2016 000 000 000 000 000 000Non-Executive DirectorsSamuel Dayani 45Thomas Rickert 56 50 106 101Tom Pridmore 51 50 101 106Mike Turner 40 123 163 152Iain McDonald 51 55 106 103Executive

331、 DirectorsRobert Pooke 7 7 67Ben Crawford 214 120 7 341 346Glenn Hayward 182 10 10 202 290Desleigh Jameson 321 4 29 354 213Donald Baladasan 96 96 1,018 120 21 317 1,476 1,423 CentralNic Group Plc Annual Report 201729Remuneration report continuedBen Crawford participates in both the June 2013 and Oct

332、ober2013 unapproved scheme,and Donald Baladasan participatesin the June 2013 unapproved scheme.Glenn Hayward(a former Director)participates in the EMIscheme,with options granted on 28 April 2015.The EMIoptions granted to Glenn Hayward vested on 10 February 2017.Desleigh Jameson(a former Director)par

333、ticipates in theunapproved scheme with the options granted in February2016 with a vesting date of 14 January 2019.Unapproved options were also issued to Non-ExecutiveDirectors during 2016.In the case of Mike Turner and IainMcDonald these options were issued with a vesting date tocoincide with the third anniversary of their appointments,namely15 September 2018 and 26 October 2018.There were alsofur