History

Structure

- Annual Reports

- Articles of Association

- Memorandum of Association
 

Authority

International Role

FAQ

Contents

• Review of the Year
• Technical Department & Customer Support
• Administration & Registration
• Working with Members
• International Developments & Looking to the Future
• Officers and Advisors
• Directors Report
• Statement of Directors Responsibilities
• Auditors Report
• Income & Expenditure
• Balance Sheet
• Notes to the Accounts

Nominet UK is the national Registry for all Internet Domain Names ending .uk.

Each country needs a central Registry to store the unique names used on the Internet and their associated numeric addresses. Nominet is a not-for-profit company limited by guarantee. Thus it has no shareholders, pays no dividends and its charges only cover its running costs.

Anyone or any organisation with an interest in the Internet may become a member. There are over 1,600 members who are mainly, but not exclusively, drawn from the Internet industry.

Review of the Year

The third year of its operation saw a number of landmark developments at Nominet UK and in the Internet world at large.

The year witnessed a number of significant trends within the Internet marketplace: a rapid growth in e-commerce, increasing Internet use by the public sector and service-led businesses, the introduction of free service provision coupled with the influx of new Internet Service Providers and the consolidation of established ones. It was also a year of closer involvement by government, including the announcement of the UK's first e-envoy, and, as ever, strong interest from consumers and the media.

The Domain Name registration fee for members was reduced on 1 September to £5 for two years, making this the third price reduction implemented by Nominet since its inception in 1996. Whether or not the fee reduction encouraged the influx of ISPs offering free Domain Names is debatable, but monthly Domain Name registrations reached an all time high of 120,000 by the end of September 1999. The total number of Domain Names in the Register Database stood at just over 480,000 by the end of September 1999, a 200 per cent increase from the previous year.

Rapidly growing demand for Domain Name registration and the consequent need to increase operational resources prompted Nominet to move to larger premises in Oxford in June 1999. This was achieved with the retention of all existing employees and allowed much-needed recruitment to proceed, resulting in an overall doubling of staff levels to a total of 34 by the end of the financial year. The purchase of the Sandford Gate offices enabled the company to convertsome of the liquid assets accumulated into fixed assets, with added long-term financial savings in rental costs.

The overall growth levels were reflected not only in registration figures but also in the membership of Nominet, which increased from 650 to over 1,600 at the time of writing.

Another landmark was the appointment of Lesley Cowley as Operations Director in April 1999. Her arrival has already yielded substantial benefits.

The Board confirmed their policy to maintain a fund capable of sustaining operations for at least one year and a suitable legal resource fund commensurate with the size of the Registry and the perceived risk. This is reflected in the retained reserves shown in the Company's balance sheet.

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Technical Department

The Technical department achieved an uninterrupted move of Nominet's systems to Sandford Gate and was able to take advantage of the new building's excellent specifications for data and telecommunications cabling.

Additional resource was brought in to provide internal technical support and maintenance and comprehensive plans were put in place to ensure year 2000 compliance for all Nominet systems.

A new dedicated WHOIS server was introduced in Spring 1999 to cope with query levels running at 4000 per day. The bespoke programme was designed, tested and implemented in house. Other developments included the installation of a new web server, the creation of secure web forms for the submission of Tag Holder and Membership applications and the implementation of programs and procedures for a new -cash with order- policy for direct Domain Name applications.

Work is continuing on re-engineering the Register Database so that the core functions of the Registry will be scalable well into the future.

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Customer Support

During the year, the department tripled in size to cater for the rise in enquiries resulting from substantial increases in registration volumes. New staff included three technical specialists whose arrival enhanced the departments ability to provide a quality service in dealing with enquiries of a technical nature.

The number of disputes handled, via Nominets Dispute Resolution Service, rose throughout the year to an average of 20 per month, even though disputes continued to constitute a small fraction of total registrations - less than 0.1 per cent.

Planned developments for the 1999 financial year include the introduction of an internal enquiry management system and further staff recruitment to ensure that demand is both met and anticipated.

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Administration

The substantial increase in numbers of new Nominet members and Tag Holders during the year gave rise to a doubling in size of the department to twelve staff, including the appointment of a membership administrator dedicated to serving the needs of new members.

Significant developments included the introduction of a mandatory pre-payment system for direct Domain Name applications from non-members, resulting in a decrease in such applications. A new internal management system has also contributed to operational efficiency and plans for the introduction of a new customer database and on-line payment system are in development.

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Registration

The department grew to encompass eight staff members by the end of the financial year. Initially, its work focused on issuing Domain Name Certificates, but during the year, comprehensive procedures for recording, checking and amending registration details, via the reply form mechanism, were established.

In the Spring of 1999, the introduction of a fully automated packing machine enhanced the efficiency of Certificate generation. The department also took over responsibility for dealing with Domain Name transfer requests made by Certificate holders.

The department is unique in that, by definition, it deals with Domain Name registrations on an individual basis. Its success in handling rapidly increasing registration volumes is therefore a major achievement. The next financial year will focus on the refinement of existing procedures and scaling up in anticipation of further major increases in registration volumes.

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Working with Members

The first meeting of Nominets Policy Advisory Board (PAB) took place in April 1999. Comprising eight elected members, members from five appointed organisations and two non-executive members of the Council of Management, (CoM) the PAB provides a central method of communication between the members, Steering Committee and Nominets CoM.

The role of the PAB is to make policy recommendations to the CoM; and issues under discussion during the year included guidelines for the creation of new Second Level Domains, the partnership between Nominet and its Tag Holders and revisions to the pricing structure.

Operations Director Lesley Cowley made member communications a top priority and met with a number of members throughout the year. During Autumn 1999, she announced plans for a series of open forum meetings at locations around the UK, with a view to improving member communications and providing a forum for airing and addressing their concerns.

Attendance at the 1999 AGM in July was low with only 70 members represented. The proposal, by several candidates standing for election as non-executive directors, to change Nominets not-for-profit status sparked some debate and also raised the issue in the minds of the Department of Trade and Industry. However, it failed to achieve any significant support.

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International Developments

Nominet continued to play an important role during the year in the development of Domain Name System policy on an international level, regularly represented at international fora by Managing Director Dr Willie Black.

The Internet Corporation for Assigned Names and Numbers (ICANN) was formally established in October 1998, along with three initial Support Organisations including the Domain Name Support Organisation (DNSO). The creation of new generic Top Level Domains (gTLDs) and the monopoly held by Network Solutions Inc were set as priority issues for the DNSO to address.

In April 1999, the World Intellectual Property Organisation (WIPO) published its final report on the Internet Domain Name Process for consideration by ICANN. The provision of reliable contact details by Domain Name applicants, the de-registration of untraceable Domain Names and the ring-fencing of famous names, brands and trademarks were among the key issues covered. ICANN agreed at its August 1999 meeting in Santiago to adopt a uniform dispute resolution policy in the gTLDs based on the WIPO recommendations. The publication by the Government Advisory Committee of discussion papers concerning government authority over the Internet naming system and ccTLD Registries also took place during the year.

Nominet is contributing to and monitoring policy development, both domestically and internationally.

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Looking to the Future

A number of developments designed to ensure continued progress in Nominets operational efficiency are underway, including the re-engineering of the Register Database and the introduction of new customer service systems.

Member communications will be a major priority for the year ahead, as will staff recruitment as Nominet seeks to meet the increasing demand which inevitably flows from the exponential growth of the Internet in the UK. Above all, Nominet has adopted a pro-active strategy for growth, designed to ensure that demand for Domain Name registrations is not only met but anticipated and planned for.

The Council of Management
2nd March 2000.

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Officers and Advisors

Nominet UK (limited by guarantee)

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Directors Report

The directors present their report and the audited financial statements for the year ended 30th September 1999.

Principal activity

The principal activity of the company is the registration and maintenance of all .uk Domain Names on the Internet.

Business review

The companys balance sheet as detailed on page 15 shows a satisfactory position of the members, funds amounting to £2,009,444. The Memorandum and Articles of Association of the company prohibits all distributions to the members. These funds are retained for continuation of ongoing operations and as a legal contingency fund.

Directors

The directors of the company during the year were as follows

Dr W Black
Mr A Bligh
Mr R Blokzijl
Mr K Mitchell
Mr I Pope
Mrs L Cowley (appointed 8th July 1999).

Surplus and appropriations

The results for the year are shown in the income and expenditure account on page 14.

Fixed assets

Changes in fixed assets during the year are set out in note 8 to the accounts.

Auditors

Wenn Townsend have agreed to offer themselves for re-appointment as auditors of the company.

On behalf of the board

Mrs L Cowley
Company Secretary
2nd March 2000.

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Statement of Directors Responsibilities

Company law requires the directors to prepare financial accounts for each financial year which give a true and fair view of the state of affairs of the company and of the surplus or deficit of the company for that period. In preparing those financial accounts, the directors are required to: select suitable accounting policies and apply them consistently make reasonable and prudent judgements and estimates prepare the financial accounts on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial accounts comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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Auditors Report

We have audited the financial statements in this report which have been prepared under the accounting policies set out.

Respective responsibilities of directors and auditors

As described on page 12, the companys directors are responsible for the preparation of financial statements. It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you.

Basis of Opinion

We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material mis-statement, whether caused by fraud or error or other irregularity. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion

In our opinion the financial statements give a true and fair view of the state of the companys affairs as at 30th September 1999 and of its surplus for the year then ended and have been properly prepared in accordance with the provisions of the Companies Act 1985 applicable to small companies.

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Income and Expenditure Account

Movements in reserves are shown in note 14.

None of the company's activities were acquired or discontinued during the above financial years.

There are no recognised gains and losses in 1999 or 1998 other than the surplus for the year.

Expenditure Breakdown: 000's

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Balance Sheet: for the year ending 30th September 1999

The financial statements have been prepared in accordance with the special provisions of part vii of the companies act 1985 relating to small companies.

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Notes to the Accounts

1. Accounting policies

   Basis of accounting

   The financial statements have been prepared under the historical cost accounting rules.

   Cash flow statement

   The company has taken advantage of the exemption from preparing a cash flow statement conferred by Financial Reporting Standard 1, on the grounds that it qualifies as a small company under the Companies Act 1985.

   Income

   Income represents net registration fees and membership subscriptions, excluding value added tax. Only subscriptions and fees relating to this accounting period are included as income of this accounting period, that part of subscriptions and fees which relate to future accounting periods is included in creditors as deferred income.

   Depreciation

   Depreciation of fixed assets is calculated to write off their cost or valuation less any residual value over their estimated useful lives as follows:

   Freehold land	nil
   Freehold Buildings	2% straight line
   Computers	33 1/3% straight line
   Equipment	20% straight line
   Fittings	20% straight line

   Leases and hire purchase contracts

   Rentals paid under operating leases are charged to income as incurred.

   Deferred taxation

   Deferred taxation is provided on the liability method in respect of the taxation effect of all timing differences to the extent that tax liabilities are likely to crystallise in the foreseeable future.

2. Income

   In the opinion of the directors, none of the income of the company is attributable to geographical markets outside the UK. (1998 nil).

3. Operating Surplus

   	1999	1998
   	£	£
   Operating Surplus is started after crediting:
   Net rental income	7 250	0
   and after charging:
   Auditor remuneration	4 000	3 100
   Operating leases - rent	42 687	34 828
   Loss on sale of assets	2 480	0
   Depreciation of tangible fixed assets (note 8)
   owned assets	175 207	68 292

   
    
4. Directors

   Directors' emoluments	97 910	65 500

   
    
5. Investment income

   Interest receivable	141 927	107 293

   
    
6. Interest payable

   Interest payable	0	1

   
    
7. Taxation

   	1999	1998
   	£	£
   Corporation tax 30.5% (1998 24.5%)	650 842	102 809
   Deferred taxation	45 127	14 320
   	695 969	117 129

   
    
8. Tangible fixed assets

   Cost or Valuation	Equipment	Computers	Fittings	Freehold land and buildings	Total
   At 1st Oct 1998	89 783	181 305	52 016	0	323 104
   Additions	73 298	330 682	193 822	2 367 135	2 964 937
   Disposals	(200)	2 642)	0	0	(2 842)
   At 30th Sept 1999	162 881	509 354	245 838	2 367 135	3 285 199
   Depreciation
   At 1st Oct 1998	10 401	75 112	11 925	0	97 438
   Charge for year	21 854	117 984	19 587	15 782	175 207
   Disposals	(103)	(293)	0	0	(342)
   At 30th Sept' 1999	32 152	192 857	31 512	15 782	272 303
   Net book value
   At 30th Sept 1999	130 729	316 488	214 326	2 351 353	3 012 896
   At 1st Oct 1998	79 382	106 139	40 091	0	225 666

   Included within freehold land and buildings is freehold land valued at £700 000 which is not subject to a charge for depreciation.

9. Debtors

   	1999	1998
   	£	£
   Amounts falling due within 1 year
   Trade debtors	2 688 992	1 142 801
   Pre payment	172 614	148 434
   	2 861 606	1 291 235

   
    
10. Current asset investments
     

    Short term bank deposits	3 354 436	2 707 162
    Rent deposit	9 988	9 988
    	3 364 424	2 717150

    
     
11. Creditors: amounts falling due within 1 year
     

    Trade creditors	159 212	114 953
    Other creditors	7 010 862	3 730 213
    	7 170 074	3 845 166

    
     
12. Provision for liabilities and charges
     

    	1999	Other Movements	Income & expenditure	1998
    Deferred Taxation	59 447	0	45 127	14 320

    
     
13. Income and expenditure

    	1999	1998
    	£	£
    At 1st Oct 1998	444 767	102 816
    Retained surplus for the year	1 564 677	341 951
    At 30th Sept 1999	2 009 444	444 767

    
     
14. Reconciliation of movements in members' funds
     

    At 1st Oct 1998	444 767	102 816
    Surplus for the year	1 564 677	341 951
    At 30th Sept 1999	2 009 444	444 767

    
     
15. Deferred taxation

    		1999		1998
    		£		£
    Corporation tax deferred by	Potential liability	Provision made	Potential liability	Provision made
    Capital allowances	59 447	59 447	14 320	14 320

    
     
16. Transaction involving directors companies
     

    	Owed at 30.09.99	Income	Owed at 01.10.98
    Dr W Black (CENTR)	7 250	7 250	0
    Mr A Bligh and Mr K Mitchell (London internet exchange Ltd)	0	776	0
    Mr I Pope (net names limited)	98 856	257 413	44 433

    The above transactions represent normal trading.

17. Guarantees and other financial commitments

    Financial commitments under non-cancellable operating leases will result in the following payments falling due:

    	Land and buildings	Land and buildings
    Expiring within two and five years	16 000	34 000

18. Company Status

    The company is limited by guarantee and each member's liability will not exceed £10. The number of members at 30th September 1999 was 1368.

19. Contingent liabilities

    Due to the nature of the company?s operations, there are disputes involving customers and others. At the date of these accounts the directors know of no disputes which will result in a significant liability. The directors consider that the company is adequately insured.

20. Approval of these accounts

    These accounts were approved by the directors at a meeting held on 2nd March 2000.