1

Annual report
and consolidated
financial statements
31 December 2020
JT Group Limited

PRIVATE & CONFIDENTIAL

TOGETHER
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Contents
Directors’ report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Directors’ statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Independent auditor’s report to the members of JT Group Limited . 7

Consolidated statement of profit or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Consolidated statement of comprehensive income . . . . . . . . . . . . . . . . 10

Consolidated balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Consolidated statement of changes in equity . . . . . . . . . . . . . . . . . . . . . . 12

Consolidated statement of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Notes to the financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

1. General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

2. Summary of significant accounting policies . . . . . . . . . . . . . . . . . . . . 14

3. Accounting estimates and judgements . . . . . . . . . . . . . . . . . . . . . . . . . 29

4. Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

5. Other income and expense items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

6. Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

7. Financial assets and financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . 39

8. Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

9. Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

10. Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

11. Deferred tax balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

12. Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

13. Employee benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

14. Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

15. Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

16. Financial risk management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

17. Capital management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

18. Acquisition of subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

19. Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

20. Interests in other entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

21. Events occurring after the reporting period . . . . . . . . . . . . . . . . . . . . . 67

22. Contingent liabilities and assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

23. Related party transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

24. Directors’ emoluments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

4

Directors’
report
The Directors present their report and consolidated financial impairment loss recognised against the Voice Trading customer
statements for the year ended 31 December 2020. receivables recognised in the balance sheet of ekit.com Inc.,
which could not be entirely offset by the good performance of
Incorporation the group’s core businesses.
JT Group Limited (the “company”) was incorporated in Jersey,
Channel Islands on 22 October 2002. Revenue
Revenue reduced by 13% (£25.0m) to £170.0m in 2020 compared
Principal activities to 2019. The ceased Voice Trading business reduced revenues
The principal activity of the company and its subsidiaries in 2020 by £40.8m. This was partially offset by strong growth in
(the “group”) is the supply of telecommunications services International and more moderate growth in the Channel
and equipment. Islands, despite reduced roaming revenues in all markets.

The principal place of the company’s business is Jersey, Gross Profit

Channel Islands. Gross Profit increased by 8% (£7.2m) to £98.6m in 2020 compared
to 2019 due to growth in higher margin products in International
Results and Channel Islands markets and partially offset due to a
The group is presenting its annual report which includes the reduction in low margin Voice Trading products.
group’s first set of financial statements reported under
International Financial Reporting Standards (IFRS). The Operating Profit
effective transition date to IFRS was 1 January 2018. Refer to Operating Profit decreased by £0.1m to a profit of £6.4m in 2020
note 2 for more information on the financial impact resulting compared to 2019. The increase in Gross Profit was offset by an
from the adoption on the group’s consolidated financial increase in operating expenses, mainly driven by additional
statements. The results are set out on pages 10 to 13. allowance for the Voice Trading receivables impairment loss.
 
2020 was a challenging year for JT Group, some of the group’s Profit from continuing operations
business lines suffered due to COVID-19 whilst others proved Profit from continuing operations decreased by £1.3m to a profit
robust and, in some cases, significantly exceeded expectations. of £0.9m in 2020 compared to 2019. Income tax expense
increased by £1.9m, driven by strong profits in the Channel
The group’s core business, which includes the Channel Islands Islands and an impairment of deferred tax assets previously
and International IoT businesses, have shown strong resilience recognised in the balance sheet of ekit.com Inc.
as telecommunication services have been in high demand
during the pandemic. Revenue and margin for these business Profit/(loss) for the year
areas have grown despite a significant decrease in roaming The profit/(loss) for the year decreased by £5.6m to a loss of
revenue from reduced travel. Relying on its full-fibre broadband £4.1m in 2020 compared to a profit of £1.5m in 2019. The increase
network in Jersey, JT was able to further support the community in gross profit was more than offset by the Voice Trading
during the ‘Stay at Home’ policy issued by the Government of receivables impairment loss included in operating expenses
Jersey by doubling the minimum available speed for all Jersey and the loss from discontinued operations from Worldstone’s
broadband customers from 500Mb/s to 1Gb/s, at no cost. JT also operational losses as well as the loss on its disposal.
provided free local landline calls to its customers during this
period and supported its more vulnerable customers by not Net Cashflow for the year
charging overages and suspending late payment charges. Net cash inflow from operating activities increased by £9.9m to
£39.0m in 2020 compared to 2019, underscoring the strong
In response to the Covid-19 outbreak, the group put in place performance of the group’s core activities. £13.3m was spent in
immediate measures to preserve cash, enhancing cost control investing activities (net of £2.6m proceeds from disposal of
and debt collection, focusing on priority projects and exiting Worldstone), a reduction of £6.9m compared to 2019. This strong
businesses that were higher risk and not expected to drive net cash inflow allowed the group to pay the 2019 final and
significant value to the group in the current economic climate. 2020 interim ordinary dividends of £4.1m (2019: £4.8m) and
This led to the sale of the Corporate Communications Holdings reduce borrowings by £12m, whilst maintaining available cash
(CCH) Group (“Worldstone Group” or “Worldstone”) and the at £10.6m as at 31 December 2020.
termination of the Voice Trading business. As a result of these
measures the group was able to improve its net cash position The Directors have approved the payment of a final ordinary
whilst maintaining dividend payments to the Shareholder. dividend for 2020 of £2.0m (2019: £2.2m). Further details on
dividends are included in note 17.
Despite the measures put in place and the improved net cash
position, the group suffered net losses for the year, mainly
caused by losses in Worldstone and the trade receivables
 5

Directors’
report (continued)
Going concern Changes in Directors and membership of the
The group’s business activities, together with the factors likely Board Committees
to affect its future development, performance and financial The Directors of the group for the financial year ended 31
position are described in the notes to the consolidated financial December 2020 are detailed in the above section titled “Directors”.
statements. Note 16 and 17 describes the group’s policies and
processes to manage its financial risk management objectives Directors’ interests
and capital, provides details of financial instruments and The Directors of the group had no interests, beneficial or
hedging activities and the group’s exposures to risks. otherwise, in the shares of the group.

Management has assessed the group’s financial stability and Insurance of Directors and officers
liquidity over the next 18 months from the reporting year end. The group maintains an insurance policy on behalf of all
Additional funding was secured in May 2020 through the Directors and officers of the group against liability arising from
accordion clause within the group’s existing Revolving Credit neglect, breach of duty and breach of trust in relation to their
Facility (“RCF”), resulting in a £50m facility. The group has a activities as Directors and officers of the group.
strong recurring revenue stream but expects inbound and
outbound roaming to continue to be impacted by the pandemic Independent auditor
with supply chain delays as a result of Covid-19 and Brexit KPMG LLP have indicated their willingness to continue in office
impacting equipment sales in the short term. A reasonably as auditor.
plausible downside scenario to 31 December 2022 has been
modelled and applies a reduction in revenue based on a risk By order of the board
assessment of revenue segments and an increased trade
receivables impairment loss The outcome of the downside
scenario provides sufficient headroom between forecasted net
borrowing requirements and available funding.

Extra steps to provide additional headroom, not yet factored H Narcy

into the model, include cost reductions in all cost lines within Director
operating profit and capital expenditure.

Consequently, the Directors are confident that the group and

company will have sufficient funds to continue to meet its
liabilities as they fall due for at least 12 months from the date
of approval of the financial statements and therefore have
prepared the financial statements on a going concern basis.

Directors
The executive and non-executive Directors of the group who
served during the year and subsequently are:

Non-executive
Phil Male
Sean Collins
Meriel Lenfestey
Joe Moynihan
Mark Shuttleworth appointed 1 September 2020
Angus Flett appointed 1 December 2020

Executive
Graeme Millar
Helene Narcy appointed as CFO on 27 April 2020
and as statutory director on 14 May 2020
John Kent retired as CFO on 27 April 2020
and as statutory director on 14 May 2020
6

Directors’
statement
Statement of Directors’ responsibilities The Directors are responsible for keeping proper accounting
The Directors are responsible for preparing the annual report records that disclose with reasonable accuracy at any time the
and the financial statements in accordance with applicable law financial position of the group and enable them to ensure that
and regulations. the financial statements comply with the Companies (Jersey)
Law 1991. They are responsible for such internal control as they
Company law requires the Directors to prepare financial determine is necessary to enable the preparation of financial
statements for each financial period. Under that law the statements that are free from material misstatement, whether
Directors have elected to prepare the financial statements in due to fraud or error, and have general responsibility for taking
accordance with International Financial Reporting Standards such steps as are reasonably open to them to safeguard the
(IFRS). The financial statements are required by law to give a assets of the company and to prevent and detect fraud and
true and fair view of the state of affairs of the group and of the other irregularities.
profit or loss of the group for that period. In preparing these
financial statements, the Directors are required to: The Directors are responsible for the maintenance and integrity
of the corporate and financial information included in the
• select suitable accounting policies and then apply group’s website. Legislation in Jersey governing the preparation
them consistently; and dissemination of financial statements may differ from
legislation in other jurisdictions.
• make judgements and estimates that are reasonable
and prudent; Responsibility statement of the Directors in respect
of the annual financial report
• state whether applicable accounting standards have been We confirm that, having taken into account all of the matters
followed, subject to any material departures disclosed and considered by the Board and those brought to its attention
explained in the financial statements; during the year; to the best of our knowledge, the annual
report and financial statements taken as a whole are fair,
• assess the company’s ability to continue as a going balanced and understandable and provide the information
concern, disclosing, as applicable, matters related to necessary for our shareholder to assess the company’s position
going concern; and and performance, business model and strategy.

• use the going concern basis of accounting unless they Review of risk management and internal
either intend to liquidate the company or to cease control systems
operations or have no realistic alternative but to do so. We confirm that we have carried out a review of the company’s
risk management and internal control systems. We are satisfied
that the systems are aligned with our strategic objectives.
 7

Independent auditor’s
report to the member of
JT Group Limited
Our opinion is unmodified • we consider that the Directors’ use of the going concern
We have audited the consolidated financial statements of JT basis of accounting in the preparation of the consolidated
Group Limited (the “Company”) and its subsidiaries (together, financial statements is appropriate; and
the “Group”), which comprise the consolidated balance sheet as
at 31 December 2020, the consolidated statements of profit or • we have not identified, and concur with the Directors’
loss, comprehensive income, changes in equity and cash flows assessment that there is not, a material uncertainty related
for the year then ended, and notes, comprising significant to events or conditions that, individually or collectively, may
accounting policies and other explanatory information. cast significant doubt on the Group and the Company’s
ability to continue as a going concern for the going
In our opinion, the accompanying consolidated concern period.
financial statements:
• give a true and fair view of the financial position of the However, as we cannot predict all future events or conditions
Group as at 31 December 2020, and of the Group’s financial and as subsequent events may result in outcomes that are
performance and cash flows for the year then ended; inconsistent with judgements that were reasonable at the time
they were made, the above conclusions are not a guarantee
• are prepared in accordance with International Financial that the Group and the Company will continue in operation.
Reporting Standards; and
Fraud and breaches of laws and regulations –
• have been properly prepared in accordance with the ability to detect
Companies (Jersey) Law, 1991.
Identifying and responding to risks of material
Basis for opinion misstatement due to fraud
We conducted our audit in accordance with International To identify risks of material misstatement due to fraud (“fraud
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. risks”) we assessed events or conditions that could indicate an
Our responsibilities are described below. We have fulfilled our incentive or pressure to commit fraud or provide an opportunity
ethical responsibilities under, and are independent of the to commit fraud. Our risk assessment procedures included:
Company and Group in accordance with, UK ethical require-
ments including FRC Ethical Standards. We believe that the • enquiring of management as to the Group’s policies and
audit evidence we have obtained is a sufficient and appropriate procedures to prevent and detect fraud as well as enquiring
basis for our opinion. whether management have knowledge of any actual,
suspected or alleged fraud;
Going concern
The Directors have prepared the consolidated financial • reading minutes of meetings of those charged with
statements on the going concern basis as they do not intend governance; and
to liquidate the Group or the Company or to cease their
operations, and as they have concluded that the Group and the • using analytical procedures to identify any unusual or
Company’s financial position means that this is realistic. unexpected relationships.
They have also concluded that there are no material
uncertainties that could have cast significant doubt over their As required by auditing standards, and taking into account
ability to continue as a going concern for at least a year from possible incentives or pressures to misstate performance and
the date of approval of the consolidated financial statements our overall knowledge of the control environment, we perform
(the “going concern period”). procedures to address the risk of management override of
controls and the risk of fraudulent revenue recognition,
In our evaluation of the Directors’ conclusions, we considered and the risk that management may be in a position to make
the inherent risks to the Group and the Company’s business inappropriate accounting entries. We did not identify any
model and analysed how those risks might affect the Group additional fraud risks.
and the Company’s financial resources or ability to continue
operations over the going concern period.
Our conclusions based on this work:
8

Independent auditor’s
report to the member of
JT Group Limited (continued)
We performed procedures including: most likely to have such an effect. Auditing standards limit the
required audit procedures to identify non-compliance with
• identifying journal entries and other adjustments to test these laws and regulations to inquiry of management and
based on risk criteria and comparing any identified entries inspection of regulatory and legal correspondence, if any.
to supporting documentation;
Therefore if a breach of operational regulations is not disclosed
• incorporating an element of unpredictability in our to us or evident from relevant correspondence, an audit will not
audit procedures; detect that breach.

• assessing the appropriateness of the accounting for Context of the ability of the audit to detect fraud or
significant transactions that are outside the Group’s normal breaches of law or regulation
course of business, or are otherwise unusual; Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
• considering the business processes and controls around the misstatements in the consolidated financial statements, even
implementation and testing of new tariffs and, the issuing though we have properly planned and performed our audit in
of customer goodwill credits and refunds; accordance with auditing standards. For example, the further
removed non-compliance with laws and regulations is from the
• documenting and testing controls in the revenue process events and transactions reflected in the consolidated financial
which give assurance over the existence and accuracy of statements, the less likely the inherently limited procedures
revenue recognition including within key Information and required by auditing standards would identify it.
Technology systems; and
In addition, as with any audit, there remains a higher risk of
• agreeing a substantive sample of usage back to invoices non-detection of fraud, as this may involve collusion, forgery,
and customer payments. intentional omissions, misrepresentations, or the override of
internal controls. Our audit procedures are designed to detect
Identifying and responding to risks of material material misstatement. We are not responsible for preventing
misstatement due to non-compliance with laws non-compliance or fraud and cannot be expected to detect
and regulations non-compliance with all laws and regulations.
We identified areas of laws and regulations that could reasonably
be expected to have a material effect on the consolidated Other information
financial statements from our general commercial and sector The Directors are responsible for the other information. The
experience and through discussion with management (as other information comprises the information included in the
required by auditing standards), and from inspection of the annual report but does not include the consolidated financial
Company’s regulatory and legal correspondence, and discussed statements and our auditor’s report thereon. Our opinion on
with management the policies and procedures regarding the consolidated financial statements does not cover the other
compliance with laws and regulations. information and we do not express an audit opinion or any
form of assurance conclusion thereon.
The Group is subject to laws and regulations that directly affect
the consolidated financial statements including financial In connection with our audit of the consolidated financial
reporting legislation and taxation legislation and we assessed statements, our responsibility is to read the other information
the extent of compliance with these laws and regulations as and, in doing so, consider whether the other information is
part of our procedures on the related financial statement items. materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit, or otherwise
The Group is subject to other laws and regulations where the appears to be materially misstated. If, based on the work we
consequences of non-compliance could have a material effect have performed, we conclude that there is a material
on amounts or disclosures in the consolidated financial misstatement of this other information, we are required to
statements, for instance through the imposition of fines or report that fact. We have nothing to report in this regard.
litigation or impacts on the Group and the Company’s ability to
operate. We identified regulatory compliance as being the area
 9

Independent auditor’s
report to the member of
JT Group Limited (continued)
We have nothing to report on other matters on The purpose of this report and restrictions on its
which we are required to report by exception use by persons other than the Company’s members,
We have nothing to report in respect of the following matters as a body
where the Companies (Jersey) Law 1991 requires us to report to This report is made solely to the Company’s members, as a
you if, in our opinion: body, in accordance with Article 113A of the Companies (Jersey)
Law 1991. Our audit work has been undertaken so that we
• adequate accounting records have not been kept by the might state to the Company’s members those matters we are
Company; or required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not
• returns adequate for our audit have not been received from accept or assume responsibility to anyone other than the
branches not visited by us; or Company and the Company’s members, as a body, for our audit
• the Company’s consolidated financial statements are not in work, for this report, or for the opinions we have formed.
agreement with the accounting records; or

• we have not received all the information and explanations

we require for our audit.

Respective responsibilities Robert Seale

For and on behalf of KPMG LLP, Senior Statutory Auditor
Directors’ responsibilities Chartered Accountants
As explained more fully in their statement set out on page 4, 15 Canada Square, London, E14 5GL
the Directors are responsible for: the preparation of the 31 March 2021
consolidated financial statements including being satisfied
that they give a true and fair view; such internal control as they
determine is necessary to enable the preparation of
consolidated financial statements that are free from material
misstatement, whether due to fraud or error; assessing the
Group and Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern;
and using the going concern basis of accounting unless they
either intend to liquidate the Group or the Company or to
cease operations, or have no realistic alternative but to do so.
 
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about
whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error,
and to issue our opinion in an auditor’s report. Reasonable
assurance is a high level of assurance, but does not guarantee
that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably
be expected to influence the economic decisions of users taken
on the basis of the consolidated financial statements.

A fuller description of our responsibilities is provided on the

FRC’s website at www.frc.org.uk/auditorsresponsibilities.
10

Consolidated statement of profit or loss

for the year ended 31 December 2020
2020 2019 2018

Notes £’000 £’000 £’000

Continuing operations

Revenue 4 169,937 194,946 239,280

Cost of sales (71,344) (103,566) (150,685)

Gross profit 98,593 91,380 88,595

Operating expenses 5 (92,551) (85,232) (79,728)

Other income 5 400 400 106

Operating profit 6,442 6,548 8,973

Gain on financial assets at fair value through profit or loss - - 105

Finance income 5 2 41 72

Finance costs 5 (1,700) (2,526) (2,388)

Profit before income tax 4,744 4,063 6,762

Income tax expense 6 (3,811) (1,878) (3,154)

Profit from continuing operations 933 2,185 3,608

Loss from discontinued operation 19 (5,070) (667) (847)

(Loss)/profit for the year (4,137) 1,518 2,761

Consolidated statement of comprehensive income

for the year ended 31 December 2020
Note 2020 2019 2018
£’000 £’000 £’000
(Loss)/profit for the year (4,137) 1,518 2,761

Other comprehensive income

Items that may not be reclassified to profit or loss
Remeasurement of post-employment benefit obligations 13 (58) (21) 8
Income tax relating to the above item 12 4 (2)
Items that may be reclassified to profit or loss
Foreign operations - foreign currency translation differences 15 73 (643) 772
Other comprehensive (loss)/income for the year, net of tax 27 (660) 778
Total comprehensive (loss)/income for the year (4,110) 858 3,539
Total comprehensive (loss)/income for the year attributable to: (4,110) 858 3,539
Owners of JT Group Limited (4,110) 858 3,539
Non-controlling interest - - -

Total comprehensive (loss)/income for the year attributable

(4,110) 858 3,539
to the owners of JT
Continuing operations 960 1,525 4,386
Discontinued operations 19 (5,070) (667) (847)

The notes on pages 14 to 68 form an integral part of the consolidated financial statements.
 11

Consolidated balance sheet

as at 31 December 2020
31 December 31 December 31 December 1 January
2020 2019 2018 2018
Notes £’000 £’000 £’000 £’000
Assets
Non-current assets
Property, plant and equipment 8 109,761 115,994 115,261 112,468
Right-of-use-assets 9 11,420 12,910 14,394 14,504
Intangible assets 10 17,614 19,164 24,223 20,156
Deferred tax assets 11 65 783 947 941
Contract cost asset 4 789 657 398 295
Contract assets 4 52 67 220 227
Investments accounted for using the equity method 20 - - - 611
Financial asset at fair value through profit or loss - - - 4,209
Total non-current assets 139,701 149,575 155,443 153,411

Current assets
Inventories 12 4,452 4,148 3,180 3,355
Trade receivables 7 26,252 36,081 37,739 34,853
Other receivables 7 3,216 8,337 6,036 6,500
Contract assets 4 146 348 295 163
Contract cost asset 4 715 579 430 341
Cash and equivalents (excluding bank overdrafts) 7 10,602 7,259 16,930 19,781
Total current assets 45,383 56,752 64,610 64,993

Total assets 185,084 206,327 220,053 218,404

LIABILITIES
Non-current liabilities
Borrowings 7 (32,500) (44,500) (51,000) (51,000)
2.5% Redeemable preference shares 7 (10,000) (10,000) (10,000) (10,000)
Lease liabilities 9 (9,474) (10,796) (12,235) (12,523)
Contract liabilities 4 (2,831) (2,418) (1,992) (2,071)
Other payables 6,7 (694) (1,094) (1,494) -
Deferred tax liabilities 11 (9,825) (10,184) (9,838) (9,321)
Employee benefit obligations 13 (741) (711) (708) (725)
Provisions 14 (4,278) (2,601) (2,275) (1,790)
Total non-current liabilities (70,343) (82,304) (89,542) (87,430)

Current liabilities
Trade and other payables 7 (31,876) (35,049) (36,560) (36,810)
Current tax liabilities 6 (2,752) (1,092) (2,230) (1,707)
Contract liabilities 4 (1,995) (1,478) (1,390) (1,120)
Lease liabilities 9 (2,197) (2,268) (2,278) (2,068)
Total current liabilities (38,820) (39,887) (42,458) (41,705)

Total liabilities (109,163) (122,191) (132,000) (129,135)

Net assets 75,921 84,136 88,053 89,269

EQUITY
Share capital and share premium 15 20,000 20,000 20,000 20,000
Retained earnings 15 56,206 64,494 67,768 69,756
Other reserves 15 (285) (358) 285 (487)

Total equity 75,921 84,136 88,053 89,269

The consolidated financial statements were approved by the board of Directors on 31 March 2021 and was signed on its behalf by:

H Narcy
Chief Financial Officer

The notes on pages 14 to 68 form an integral part of the consolidated financial statements.
12

Consolidated statement of changes in equity

for the year ended 31 December 2020

Share
capital and Other Retained Total
premium reserves earnings equity
Notes £’000 £’000 £’000 £’000

Balance at 1 January 2018 20,000 (487) 69,756 89,269

Profit for the period - - 2,761 2,761

Other comprehensive income - 772 6 778

Currency retranslation on foreign operations - - 35 35

20,000 285 72,558 92,843

Transactions with owners in their capacity as owners:

Dividends paid 17 - - (4,790) (4,790)

Balance at 31 December 2018 20,000 285 67,768 88,053

Balance at 1 January 2019 20,000 285 67,768 88,053

Profit for the period - - 1,518 1,518

Other comprehensive loss - (643) (17) (660)

Currency retranslation on foreign operations - - - -

20,000 (358) 69,269 88,911

Transactions with owners in their capacity as owners:

Dividends paid 17 - - (4,775) (4,775)

Balance at 31 December 2019 20,000 (358) 64,494 84,136

Balance at 1 January 2020 20,000 (358) 64,494 84,136

Loss for the period - - (4,137) (4,137)

Other comprehensive income/(loss) - 73 (46) 27

Currency retranslation on foreign operations - - - -

20,000 (285) 60,311 80,026

Transactions with owners in their capacity as owners:

Dividends paid 17 - - (4,105) (4,105)

Balance at 31 December 2020 20,000 (285) 56,206 75,921

The notes on pages 14 to 68 form an integral part of the consolidated financial statements.
 13

Consolidated statement of cash flows

for the year ended 31 December 2020
2020 2019 2018
Notes £’000 £’000 £’000
(Loss)/profit for the financial year from:

- Continuing operations 933 2,185 3,608

- Discontinued operations (5,070) (667) (847)

Adjustments for:
Tax on profits from continuing operations 6 3,811 1,919 3,107
Finance income 5 (2) (41) (72)
Finance cost 5 1,700 2,526 2,388
1,372 5,922 8,184

Amortisation of intangible assets 10 3,360 3,610 3,080

Impairment of goodwill 10 - 3,951 3,860
Depreciation of PPE 8 18,688 18,128 17,221
Depreciation of right-of-use assets 9 2,217 2,181 1,900
Loss on sale of subsidiary 19 1,818 - -
Loss on disposal of intangible assets 265 - 99
Loss/(gain) on disposal of PPE 24 (51) 7
Currency translation differences 200 237 800
27,944 33,978 35,151

Decrease/(increase) in inventories 12 (369) (968) 175

Decrease/(increase) in receivables 7 17,436 (362) (1,416)
(Decrease)/increase in trade payables 7 (4,785) (3,461) (2,488)
(Decrease)/increase in other payables 7 (3,138) (400) 964
Decrease/(increase) in contract assets 5 217 53 132
(Decrease)/increase in contract liabilities 5 930 514 191
Decrease/(increase) in contract cost assets 5 (268) (259) (103)

Cash generated from operations 37,967 29,095 32,606

Income taxes paid (2,151) (2,527) (2,692)

Net cash inflow from operating activities 35,816 26,568 29,914

Cash flows from investing activities

Purchases of intangible assets 10 (4,958) (2,054) (2,013)
Purchases of PPE 8 (10,529) (18,253) (19,849)
Proceeds from disposal of subsidiaries 2,591 - -
Purchase of subsidiary - - (6,070)
Disposal of PPE and intangible assets - 56 10
Disposal of investments - - 4,314
Interest received 1 42 72

Net cash outflow from investing activities (12,895) (20,209) (23,536)

Cash flows from financing activities

Drawdown from borrowings 7 3,500 24,500 -
Repayment of borrowings 7 (15,500) (31,000) -
Principal elements of lease payments 9 (2,211) (2,394) (2,124)
Dividends paid 17 (4,105) (4,775) (4,790)
Interest paid 6 (1,134) (2,214) (2,113)
Preference interest paid 6 (200) (200) (200)

Net cash outflow from financing activities (19,650) (16,083) (9,227)

Net increase/(decrease) in cash and cash equivalents 3,271 (9,724) (2,849)

Cash and cash equivalents at the beginning of the financial year 7,259 16,930 19,781
Effects of exchange rate changes on cash and cash equivalents 72 53 (2)

Cash and cash equivalents at end of year 10,602 7,259 16,930

The notes on pages 14 to 68 form an integral part of the consolidated financial statements.
14

Notes to the
financial statements
1. General information Historical cost convention
The consolidated financial statements of JT Group Limited The financial statements have been prepared on a historical
and its subsidiaries (the “group”) for the year ended 31 Decem- cost basis, except for the defined benefit pension plans – plan
ber 2020 were authorised for issue in accordance with a assets measured at fair value.
resolution of the Directors on 31 March 2021. First time adoption of IFRS
The group has its principal operations in Jersey. A list of For all periods up to and including the year ended 31 December
major subsidiaries is included in note 20. The group also 2019, the group prepared its financial statements in accordance
has operations in the UK, Australia, Denmark and the USA. with United Kingdom Accounting Standards, including Financial
JT Group Limited (the “company”) was incorporated in Jersey, Reporting Standard 102, ‘‘The Financial Reporting Standard
Channel Islands on 22 October 2002 and the address of its applicable in the United Kingdom and the Republic of Ireland’’
registered office is No. 1 The Forum, Grenville Street, St Helier, (‘‘FRS 102’’). The group’s effective date of transition to IFRS was
Jersey, Channel Islands, JE4 8PB. 1 January 2018. All impacted balances and transactions
accounted for within the comparative financial years ended
Going concern
31 December 2018 and 31 December 2019 were reviewed and
The group’s business activities, together with the factors likely adjusted accordingly to align with the requirements of IFRS.
to affect its future development, performance and financial These financial statements for the year ended 31 December
position are described in the notes to the consolidated financial 2020 are the first the group has prepared in accordance with
statements. Note 16 and 17 describes the group’s policies and IFRS. Refer to Note 2 for information on how the group adopted
processes to manage its financial risk management objectives IFRS from date of transition to the financial year ended 31
and capital, provides details of financial instruments and December 2019.
hedging activities and the group’s exposures to risks.
New standards and interpretations not yet adopted
Management has assessed the group’s financial stability and
Certain standards have been issued for early adoption but
liquidity over the next 18 months from the reporting year end.
is not yet effective for the current reporting period. These
Additional funding was secured in May 2020 through the
standards are not expected to have a material impact on
accordion clause within the group’s existing Revolving Credit
the group in future reporting periods.
Facility (“RCF”), resulting in a £50m facility. The group has a
strong recurring revenue stream but expects inbound and Principles of consolidation and equity accounting
outbound roaming to continue to be impacted by the pandemic Subsidiaries
with supply chain delays as a result of Covid-19 and Brexit
impacting equipment sales in the short term. A reasonably Subsidiaries are all entities (including structured entities) over
plausible downside scenario to 31 December 2022 has been which the group has control. The group controls an entity where
modelled and applies a reduction in revenue based on a risk the group is exposed to, or has rights to, variable returns from
assessment of revenue segments and an increased trade its involvement with the entity and has the ability to affect
receivable impairment loss The outcome of the downside those returns through its power to direct the activities of the
scenario provides sufficient headroom between forecasted entity. Subsidiaries are fully consolidated from the date on
net borrowing requirements and available funding. which control is transferred to the group. They are deconsolidated
from the date that control ceases.
Extra steps to provide additional headroom, not yet factored
into the model, include cost reductions in all cost lines within The acquisition method of accounting is used to account for
operating profit and capital expenditure. business combinations by the group. Refer to note 18 for more
information on the group’s acquisitions.
Consequently, the Directors are confident that the group and
company will have sufficient funds to continue to meet its Inter-company transactions, balances and unrealised gains
liabilities as they fall due for at least 12 months from the date of on transactions between group companies are eliminated.
approval of the financial statements and therefore have Unrealised losses are also eliminated unless the transaction
prepared the financial statements on a going concern basis. provides evidence of an impairment of the transferred asset.
Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by
2. Summary of significant accounting policies the group.
This note provides a summary of the significant accounting Non-controlling interests in the results and equity of subsidiaries
policies adopted in the preparation of these consolidated are shown separately in the consolidated statement of profit or
financial statements. These policies have been consistently loss, statement of comprehensive income, statement of
applied to all the years presented, unless otherwise stated. changes in equity and balance sheet respectively.
Basis of preparation Associates
Statement of compliance Associates are all entities over which the group has significant
influence but not control or joint control.
The consolidated financial statements of the JT Group Limited
have been prepared in accordance with International Financial This is generally the case where the group holds between 20%
Reporting Standards (IFRS) as issued by the International and 50% of the voting rights. Investments in associates are
Accounting Standards Board (IASB) and have been properly accounted for using the equity method of accounting (see note2
prepared in accordance with the Companies (Jersey) Law 1991. below), after initially being recognised at cost.
 15

Notes to the
financial statements (continued)
Equity method Translation and accounting of transactions and balances in a
foreign currency
Under the equity method of accounting, the investments are
initially recognised at cost and adjusted thereafter to recognise Foreign currency transactions are translated into the functional
the group’s share of the post-acquisition profits or losses of the currency using the exchange rates at the dates of the transactions.
investee in profit or loss, and the group’s share of movements At each period end, foreign currency monetary items are
in other comprehensive income of the investee in other translated using the closing rate. Non-monetary items measured
comprehensive income. Dividends received or receivable from at historical cost are translated using the exchange rate at the
associates and joint ventures are recognised as a reduction in date of the transaction and non-monetary items measured at
the carrying amount of the investment. fair value are measured using the exchange rate when fair
Where the group’s share of losses in an equity-accounted value was determined.
investment equals or exceeds its interest in the entity, including Foreign exchange gains and losses resulting from the settlement
any other unsecured long-term receivables, the group does not of transactions and from the translation at period end exchange
recognise further losses, unless it has incurred obligations or rates of monetary assets and liabilities denominated in foreign
made payments on behalf of the other entity. currencies are recognised in the profit and loss account.
Unrealised gains on transactions between the group and its Group companies
associates and joint ventures are eliminated to the extent of
the group’s interest in these entities. Unrealised losses are also The results and financial position of foreign operations (none of
eliminated unless the transaction provides evidence of an which has the currency of a hyperinflationary economy) that have
impairment of the asset transferred. Accounting policies of a functional currency different from the presentation currency
equity-accounted investees have been changed where necessary are translated into the presentation currency as follows:
to ensure consistency with the policies adopted by the group. • assets and liabilities for each balance sheet presented are
The carrying amount of equity-accounted investments is tested translated at the closing rate at the date of that balance sheet
for impairment in accordance with the policy described in note 2. • income and expenses for each statement of profit or loss and
Changes in ownership interests statement of comprehensive income are translated at
average exchange rates (unless this is not a reasonable
The group treats transactions with non-controlling interests approximation of the cumulative effect of the rates
that do not result in a loss of control as transactions with equity prevailing on the transaction dates, in which case income and
owners of the group. A change in ownership interest results in expenses are translated at the dates of the transactions), and
an adjustment between the carrying amounts of the controlling
and non-controlling interests to reflect their relative interests in • all resulting exchange differences are recognised in other
the subsidiary. Any difference between the amount of the comprehensive income.
adjustment to non-controlling interests and any consideration On consolidation, exchange differences arising from the
paid or received is recognised in a separate reserve within translation of any net investment in foreign entities, and of
equity attributable to owners of JT Group Limited. borrowings are recognised in other comprehensive income.
When the group ceases to consolidate or equity account for an When a foreign operation is sold or any borrowings forming
investment because of a loss of control, joint control or signifi- part of the net investment are repaid, the associated exchange
cant influence, any retained interest in the entity is measured to differences are reclassified to profit or loss, as part of the gain
its fair value, with the change in carrying amount recognised in or loss on sale.
profit or loss. This fair value becomes the initial carrying Goodwill and fair value adjustments arising on the acquisition
amount for the purposes of subsequently accounting for the of a foreign operation are treated as assets and liabilities of the
retained interest as an associate, joint venture or financial foreign operation and translated at the closing rate.
asset. In addition, any amounts previously recognised in other
Revenue recognition
comprehensive income in respect of that entity are accounted
for as if the group had directly disposed of the related assets or Revenue from contracts with customers falls under the scope of
liabilities. This may mean that amounts previously recognised IFRS 15.
in other comprehensive income are reclassified to profit or loss. At contract inception, the group identifies “performance
If the ownership interest in a joint venture or an associate is obligations”, being distinct goods and services promised to the
reduced but joint control or significant influence is retained, customer. Consideration is allocated to each performance
only a proportionate share of the amounts previously obligation in a contract based on their relative standalone
recognised in other comprehensive income are reclassified selling price, and revenue is recognised as performance
to profit or loss where appropriate. obligations are satisfied, net of returns, discounts and rebates
allowed by the group and sales taxes.
Foreign currency translation
The group derives revenues from:
Functional and presentation currency
Network services – fixed line, broadband, mobile and
Items included in the financial statements of each of the
private circuit services to residential and corporate customers.
group’s entities are measured using the currency of the primary
Revenue from;
economic environment in which the entity operates (‘the
functional currency’). The consolidated financial statements are • Fixed line, broadband and mobile subscription fees and
presented in Pounds sterling (GBP), which is JT Group Limited’s network usage (including revenues from interconnect traffic),
functional and presentation currency. is recognised over the period in which the service is provided.
16

Notes to the
financial statements (continued)
Any upfront installation services are deferred and recognised • Mobile number portability (routing) look-up services to
on a straight-line basis over the period of the contract and international customers, is recognised as an when the
any future expected renewals. Network usage is recognised individual look-up is delivered to the customer.
using a measure of progress that appropriately reflects Voice trading – buying and on-selling of bulk international
satisfaction of the performance obligation, normally based voice termination capacity to a variety of network operators
on usage (i.e. minutes or bytes of data), or by time
(i.e. monthly); and • Revenue from Voice services is recognised when voice traffic
is carried over the company’s own or third-party network
• Provision of private circuits is recognised evenly over the based on the prices negotiated with 3rd party supplier.
period to which the charge relates
Other – other minor revenue streams, including digital &
• Equipment sales - sale, rental and support of equipment advertising services, is recognised over the period the service
such as handsets, corporate phone systems and data is provided.
network equipment.
Products and services may be sold individually or as bundled
o Revenue from retail equipment sales, is recognised at the packages. In these cases, the group identifies the separate
point of sale; performance obligations and applies the corresponding
o Corporate equipment sales, net of rebates, discounts and revenue recognition policy as described above to each one.
similar commissions, is recognised at the point of sale; The total transaction price is then allocated to each distinct
performance obligation based on their respective stand-alone
o The rental and support contracts of corporate equipment
selling prices.
sales, is recognised evenly over the periods in which the
service is provided to the customer; and Some of the group’s contracts include multiple deliverables,
such as the sale of hardware and related installation and
• Revenue from professional services is recognised as revenue professional services. If the installation and professional
using a measure of progress. The revenue is recognised in services are not complex, could be performed by another
line with costs incurred which are used as a measure to the party and does not include an integration service they are
progress of the performance obligation accounted for as separate performance obligations. Where the
• Managed services – provision and management of data contracts include multiple performance obligations, the
centres, hosted, cloud and WAN transaction price will be allocated to each performance
obligation based on the relative stand-alone selling prices.
o Revenue from the managed service, maintenance and
Where these are not directly observable, they are estimated
support contracts of the data centres, hosted, cloud and
based on expected cost plus margin. If contracts include the
WAN services is recognised evenly over the periods in
installation of hardware, revenue for the hardware is recognised
which the service is provided to the customer.
at a point in time when the hardware is delivered, the legal title
On-Island Wholesale – fixed line, broadband and private circuit has passed, and the customer has accepted the hardware.
services to wholesale customers. Revenue from;
Contract assets are recognised where control of goods and
• The provision of fixed line, broadband services and private services has transferred to the customer before consideration is
circuits on-island at wholesale rate to other operators due, such as where handsets are provided at the beginning of a
(including revenues from network usage), is recognised over contract but paid for over the contract period, or where upfront
the period through which the service is provided and in line installation charges are deemed to be a distinct performance
with the recognition of the same services described in obligation. Contract assets are reclassified to trade receivables
network services above; and when JT obtains a right to receive payment for the asset, i.e.
• Network usage from inbound roaming customers, is once the customer is billed.
recognised as the service is provided to the customer. Contract liabilities are recognised where payment has been
received in respect of goods and services that has not yet been
International wholesale – Internet of Things (“IoT”) services, FPS,
delivered to the customer, such as for equipment or connection
bulk messaging and network sharing for international customers.
services received at the start of a contract that are not deemed
Revenue from;
to be separate performance obligation.
• The provision of SIMs to resellers to provide IoT SIM and data
In certain of the group’s contracts, the group incurs costs to
usage, is deferred and recognised on a straight-line basis
obtain a contract with a customer such as selling and
over the period of the contract and any future expected
marketing costs, bid and proposal costs, sales commissions,
renewals. Revenue from data usage through the use of IoT
and legal fees. Only incremental costs should be recognised as
sims, is recognised in the period that usage occurs and in line
assets. The group recognises incremental costs to obtain a
with measure of progress, usually bytes of data;
contract if the group expects these costs to be recoverable.
• The use of data lookups using application programming Incremental costs of obtaining a contract are those costs that
interfaces (“API”) used for fraud protection services, is the group would not have incurred if the contract had not been
recognised evenly over the period through which the service obtained (for example, sales commissions).
is provided to the customer. Customers are provided a fixed The group assesses the recoverability of the assets on a
number of data look-ups within a specific month with no contract-by-contract basis and includes estimates of expected
rollover’s into the following month; consideration from potential reviews and extensions. Costs of
• The delivery of bulk messaging to international customers, is obtaining a contract that is not incremental are expensed in
recognised when the individual message is delivered to the the period that the costs are incurred.
end customer; and
 17

Notes to the
financial statements (continued)
The group often incur costs to fulfil its obligations under a Current and deferred tax is recognised in profit or loss, except
contract once it is obtained, but before transferring goods or to the extent that it relates to items recognised in other
services to its customers. These costs are recognised as assets comprehensive income or directly in equity. In this case, the
when they relate directly to a contract (and can be specifically tax is also recognised in other comprehensive income or directly
identified), the costs generate or enhance resources of the in equity, respectively.
group that will be used in satisfying performance obligations in Leases
the future and the costs are expected to be recovered. Examples
of direct costs include direct labour and materials (such as IoT The group leases various offices, retail stores, network assets
sims) and other costs that are specifically charged to the and technical sites for masts, service distribution rooms and
customer under the contract. General and administrative cost data centres. Rental contracts are typically made for fixed
are not capitalised and are expensed in the period that the periods of 5-25 years but may have extension options as
costs are incurred. described below.

Income tax Contracts may contain both lease and non-lease components.
For leases of all asset classes for which the group is a lessee, it
The income tax expense or credit for the period is the tax has elected not to separate lease and non-lease components
payable on the current period’s taxable income, based on the and instead accounts for these as a single lease component.
applicable income tax rate for each jurisdiction, adjusted by
changes in deferred tax assets and liabilities attributable to Lease terms are negotiated on an individual basis and
temporary differences and to unused tax losses. contain a wide range of different terms and conditions. The
lease agreements do not impose any covenants other than
The current income tax charge is calculated on the basis of the the security interests in the leased assets that are held by
tax laws enacted or substantively enacted at the end of the the lessor. Leased assets may not be used as security for
reporting period in the countries where the company and its borrowing purposes.
subsidiaries and associates operate and generate taxable
income. Management periodically evaluates positions taken in Assets and liabilities arising from a lease are initially measured
tax returns with respect to situations in which applicable tax on a present value basis. Lease liabilities include the net
regulation is subject to interpretation. It establishes provisions, present value of the following lease payments:
where appropriate, on the basis of amounts expected to be • fixed payments (including in-substance fixed payments), less
paid to the tax authorities. any lease incentives receivable
Deferred income tax is provided in full, using the liability • variable lease payment that are based on an index or a
method, on temporary differences arising between the tax rate, initially measured using the index or rate as at the
bases of assets and liabilities and their carrying amounts in commencement date
the consolidated financial statements. However, deferred tax
• amounts expected to be payable by the group under residual
liabilities are not recognised if they arise from the initial
value guarantees
recognition of goodwill. Deferred income tax is also not
accounted for if it arises from initial recognition of an asset or • the exercise price of a purchase option if the group is
liability in a transaction other than a business combination reasonably certain to exercise that option, and payments of
that, at the time of the transaction, affects neither accounting penalties for terminating the lease, if the lease term reflects
nor taxable profit or loss. Deferred income tax is determined the group exercising that option.
using tax rates (and laws) that have been enacted or Lease payments to be made under reasonably certain extension
substantially enacted by the end of the reporting period and options are also included in the measurement of the liability.
are expected to apply when the related deferred income tax The lease payments are discounted using the interest rate
asset is realised or the deferred income tax liability is settled. implicit in the lease. If that rate cannot be readily determined,
Deferred tax assets are recognised only if it is probable that which is generally the case for leases in the group, the lessee’s
future taxable amounts will be available to utilise those incremental borrowing rate is used, being the rate that the
temporary differences and losses. individual lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value to the right-of-use
Deferred tax liabilities and assets are not recognised for
asset in a similar economic environment with similar terms,
temporary differences between the carrying amount and tax
security and conditions.
bases of investments in subsidiaries where the company is
not able to control the timing of the reversal of the temporary To determine the incremental borrowing rate, the group:
differences and it is probable that the differences will not • where possible, uses recent third-party financing received by
reverse in the foreseeable future. the individual lessee as a starting point, adjusted to reflect
Deferred tax assets and liabilities are offset where there is a changes in financing conditions since third party financing
legally enforceable right to offset current tax assets and was received
liabilities and where the deferred tax balances relate to the • uses a build-up approach that starts with a risk-free interest
same taxation authority. rate adjusted for credit risk for leases held by the leasing
Current tax assets and tax liabilities are offset where the entity in the group, which does not have recent third-party
entity has a legally enforceable right to offset and intends financing, and
either to settle on a net basis, or to realise the asset and • makes adjustments specific to the lease, e.g. term, country,
settle the liability simultaneously. currency and security.
18

Notes to the
financial statements (continued)
The group is exposed to potential future increases in variable Acquisition-related costs are expensed as incurred.
lease payments based on an index or rate, which are not The excess of the:
included in the lease liability until they take effect. When
adjustments to lease payments based on an index or rate take • consideration transferred,
effect, the lease liability is reassessed and adjusted against the • amount of any non-controlling interest in the
right-of-use asset. acquired entity, and
Lease payments are allocated between principal and finance • acquisition-date fair value of any previous equity interest
cost. The finance cost is charged to profit or loss over the lease in the acquired entity.
period so as to produce a constant periodic rate of interest on
Over fair value of the net identifiable assets acquired is
the remaining balance of the liability for each period.
recorded as goodwill. If those amounts are less than the fair
Right-of-use assets are measured at cost comprising the following: value of the net identifiable assets of the business acquired, the
• the amount of the initial measurement of lease liability difference is recognised directly in profit or loss as a bargain
purchase.
• any lease payments made at or before the commencement
date less any lease incentives received Where settlement of any part of cash consideration is deferred,
the amounts payable in the future are discounted to their
• any initial direct costs, and present value as at the date of exchange. The discount rate
• restoration costs. used is the entity’s incremental borrowing rate, being the rate
at which a similar borrowing could be obtained from an
Right-of-use assets are generally depreciated over the shorter
independent financier under comparable terms and conditions.
of the asset’s useful life and the lease term on a straight-line
basis. If the group is reasonably certain to exercise a purchase Contingent consideration is classified either as equity or a
option, the right-of-use asset is depreciated over the underlying financial liability. Amounts classified as a financial liability are
asset’s useful life. subsequently remeasured to fair value, with changes in fair
value recognised in profit or loss.
Payments associated with short-term leases and all leases of
low-value assets are recognised on a straight-line basis as an If the business combination is achieved in stages, the
expense in profit or loss. Short-term leases are leases with a acquisition date carrying value of the acquirer’s previously
lease term of 12 months or less. Low-value assets comprise IT held equity interest in the acquiree is remeasured to fair value
equipment and small items of office furniture. at the acquisition date. Any gains or losses arising from such
remeasurement are recognised in profit or loss.
Extension and termination options
Impairment of assets
Extension and termination options are included in a number of
leases for properties and technical sites across the group. Goodwill and intangible assets that have an indefinite useful
These are used to maximise operational flexibility in terms of life are not subject to amortisation and are tested annually
managing the assets used in the group’s operations. The for impairment, or more frequently if events or changes in
majority of extension and termination options held are circumstances indicate that they might be impaired. Other
exercisable only by both the group and the respective lessor. assets are tested for impairment whenever events or changes
See note 3 for the critical judgements which management has in circumstances indicate that the carrying amount may not
made in determining lease terms. be recoverable.
Business combinations An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount.
The acquisition method of accounting is used to account for
The recoverable amount is the higher of an asset’s fair value
all business combinations, regardless of whether equity
less costs of disposal and value in use. For the purposes of
instruments or other assets are acquired. The consideration
assessing impairment, assets are grouped at the lowest levels
transferred for the acquisition of a subsidiary comprises the:
for which there are separately identifiable cash inflows which
• fair values of the assets transferred are largely independent of the cash inflows from other assets or
• liabilities incurred to the former owners of the groups of assets (cash-generating units). Non-financial assets
acquired business other than goodwill that suffered an impairment are reviewed
for possible reversal of the impairment at the end of each
• equity interests issued by the group
reporting period.
• fair value of any asset or liability resulting from a contingent
Cash and cash equivalents
consideration arrangement, and
For the purpose of presentation in the statement of cash flows,
• fair value of any pre-existing equity interest in the subsidiary.
cash and cash equivalents includes cash on hand, deposits held
Identifiable assets acquired and liabilities and contingent at call with financial institutions, other short-term, highly liquid
liabilities assumed in a business combination are, with limited investments with original maturities of three months or less
exceptions, remeasured initially at their fair values at the that are readily convertible to known amounts of cash and
acquisition date. The group recognises any non-controlling which are subject to an insignificant risk of changes in value,
interest in the acquired entity on an acquisition-by-acquisition and bank overdrafts. Bank overdrafts are shown within
basis either at fair value or at the non-controlling interest’s borrowings in current liabilities in the balance sheet.
proportionate share of the acquired entity’s net identifiable assets.
 19

Notes to the
financial statements (continued)
Trade receivables Buildings
Trade receivables are recognised initially at the amount of Buildings include freehold and leasehold retail outlets
consideration that is unconditional, unless they contain and offices. Buildings are stated at cost less accumulated
significant financing components when they are recognised at depreciation and accumulated impairment losses.
fair value. They are subsequently measured at amortised cost Network equipment, fixtures and fittings and motor vehicles
using the effective interest method, less loss allowance.
Network equipment, fixtures and fittings and motor vehicles
Inventories are stated at cost less accumulated depreciation and accumulated
Inventories are stated at the lower of cost and net realisable impairment losses. The cost of network equipment includes all
value. Cost comprises direct materials, direct labour and an cable, ducting and transmission equipment extending from the
appropriate proportion of variable and fixed overhead main switching systems to the customers’ premises.
expenditure, the latter being allocated on the basis of normal Work in progress
operating capacity. Costs are assigned to individual items of
inventory on the basis of weighted average costs. Costs of Work in progress comprises capital projects which are under
purchased inventory are determined after deducting rebates and construction. Accrued and expended project labour and
discounts. Net realisable value is the estimated selling price in material costs are accounted for as capital work in progress.
the ordinary course of business less the estimated costs of Internal labour costs that were necessary and arising directly
completion and the estimated costs necessary to make the sale. from construction or acquisition of the asset are capitalised as
part of the project or asset to which they relate. Once completed,
Discontinued operations projects are capitalised as separately identifiable assets and
A discontinued operation is a component of the entity that has depreciated over their estimated useful economic lives.
been disposed of or is classified as held for sale and that The assets’ residual values and useful lives are reviewed, and
represents a separate major line of business or geographical adjusted if appropriate, at the end of each reporting period.
area of operations, is part of a single co-ordinated plan to
dispose of such a line of business or area of operations, or is a An asset’s carrying amount is written down immediately
subsidiary acquired exclusively with a view to resale. The results to its recoverable amount if the asset’s carrying amount is
of discontinued operations are presented separately in the greater than its estimated recoverable amount.
statement of profit or loss. Intangible assets
Property, plant and equipment Goodwill
All property, plant and equipment are stated at historical cost Goodwill on acquisitions of subsidiaries is included in
less depreciation. Historical cost includes expenditure that is intangible assets. Goodwill is not amortised but it is tested for
directly attributable to the acquisition of the items. Cost may impairment annually, or more frequently if events or changes
also include transfers from equity of any gains or losses on in circumstances indicate that it might be impaired, and is
qualifying cash flow hedges of foreign currency purchases of carried at cost less accumulated impairment losses. Gains and
property, plant and equipment. losses on the disposal of an entity include the carrying amount
Subsequent costs are included in the asset’s carrying amount or of goodwill relating to the entity sold.
recognised as a separate asset, as appropriate, only when Goodwill is allocated to cash-generating units for the purpose
it is probable that future economic benefits associated with of impairment testing. The allocation is made to those
the item will flow to the group and the cost of the item can be cash-generating units or groups of cash-generating units that
measured reliably. The carrying amount of any component are expected to benefit from the business combination in which
accounted for as a separate asset is derecognised when replaced. the goodwill arose. The units or groups of units are identified at
All other repairs and maintenance are charged to profit or loss the lowest level at which goodwill is monitored for internal
during the reporting period in which they are incurred. management purposes, being the operating segments.
Depreciation is calculated using the straight-line method to Trademarks, licences and customer contracts
allocate the cost of the assets, net of their residual values,
Separately acquired trademarks and licences are shown at
over their estimated useful lives or, in the case of leasehold
historical cost. Trademarks, licences and customer contracts
improvements and certain leased plant and equipment, the
acquired in a business combination are recognised at fair value
shorter of the lease term and estimated useful life as follows:
at the acquisition date. They have a finite useful life and are
Buildings and vehicles subsequently carried at cost less accumulated amortisation
Freehold buildings - 50 years and impairment losses.

Leasehold buildings - the term of the lease Software

Motor vehicles - 7 years Costs associated with maintaining software programmes are
recognised as an expense as incurred. Development costs that
Equipment, fixtures and fittings: are directly attributable to the design and testing of identifiable
Network infrastructure - 3-25 years and unique software products controlled by the group are
recognised as intangible assets where the following criteria are met:
Other* - 5-10 years
*This includes freehold and leasehold fixtures and fittings.
20

Notes to the
financial statements (continued)
• it is technically feasible to complete the software so that it Preference shares, which are mandatorily redeemable on
will be available for use a specific date, are classified as liabilities. The dividends on
these preference shares are recognised in profit or loss as
• management intends to complete the software and use
finance costs.
or sell it
Borrowings are removed from the balance sheet when the
• there is an ability to use or sell the software
obligation specified in the contract is discharged, cancelled or
• it can be demonstrated how the software will generate expired. The difference between the carrying amount of a
probable future economic benefits financial liability that has been extinguished or transferred to
• adequate technical, financial and other resources to another party and the consideration paid, including any
complete the development and to use or sell the software non- cash assets transferred or liabilities assumed, is
are available, and recognised in profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the group
• the expenditure attributable to the software during its
has an unconditional right to defer settlement of the liability
development can be reliably measured.
for at least 12 months after the reporting period.
Directly attributable costs that are capitalised as part of the
Borrowing costs
software include internal labour costs.
General and specific borrowing costs that are directly attributable
Capitalised development costs are recorded as intangible
to the acquisition, construction or production of a qualifying
assets and amortised from the point at which the asset is ready
asset are capitalised during the period of time that is required
for use.
to complete and prepare the asset for its intended use or sale.
Research and development Qualifying assets are assets that necessarily take a substantial
Research expenditure and development expenditure that do period of time to get ready for their intended use or sale.
not meet the criteria above are recognised as an expense as Investment income earned on the temporary investment of specific
incurred. Development costs previously recognised as an borrowings, pending their expenditure on qualifying assets, is
expense are not recognised as an asset in a subsequent period. deducted from the borrowing costs eligible for capitalisation.
Amortisation methods and periods Other borrowing costs are expensed in the period in which they
The group amortises intangible assets with a limited useful life, are incurred.
using the straight-line method over the following periods: Provisions
Websites and website development - 3–5 years Provisions are recognised when the group has a present legal
Software, software development or constructive obligation as a result of past events, it is
and software applications - 3–5 years probable that an outflow of resources will be required to settle
the obligation, and the amount can be reliably estimated.
Intellectual property rights - 5-8 years Provisions are not recognised for future operating losses.
The amortisation basis adopted for each class of intangible Where there are a number of similar obligations, the likelihood
assets above reflects the group’s expected pattern of that an outflow will be required in settlement is determined by
consumption of the economic benefit from those assets. considering the class of obligations as a whole. A provision is
Trade and other payables recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from Provisions are measured at the present value of management’s
suppliers. The amounts are unsecured and are usually paid best estimate of the expenditure required to settle the present
within 30 to 60 days of recognition. Trade and other payables obligation at the end of the reporting period. The discount rate
are presented as current liabilities unless payment used to determine the present value is a pre-tax rate that
is not due within 12 months after the reporting period. They reflects current market assessments of the time value of money
are recognised initially at their fair value and subsequently and the risks specific to the liability. The increase in the provision
measured at amortised cost using the effective interest method. due to the passage of time is recognised as interest expense.
Borrowings Refer to note 14 for more information on examples of specific
provisions recognised by the group.
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently Employee benefits
measured at amortised cost. Any difference between the Short-term obligations
proceeds (net of transaction costs) and the redemption amount
is recognised in profit or loss over the period of the borrowings Liabilities for wages and salaries, including non-monetary
using the effective interest method. Fees paid on the benefits, annual leave and accumulating sick leave that are
establishment of loan facilities are recognised as transaction expected to be settled wholly within 12 months after the end of
costs of the loan to the extent that it is probable that some or the period in which the employees render the related service
all of the facility will be drawn down. In this case, the fee is are recognised in respect of employees’ services up to the end
deferred until the draw-down occurs. To the extent there is no of the reporting period and are measured at the amounts
evidence that it is probable that some or all of the facility will expected to be paid when the liabilities are settled. The
be drawn down, the fee is capitalised as a prepayment for liabilities are presented as provisions within current liabilities in
liquidity services and amortised over the period of the facility to the balance sheet.
which it relates.
 21

Notes to the
financial statements (continued)
Other long-term employee benefit obligations Under the revised Terms of Admission there is insufficient
information available to use defined benefit accounting and,
The group also has liabilities for long service leave that are not
with effect from 1 October 2015, JT (Jersey) Limited has accounted
expected to be settled wholly within 12 months after the end of
for the scheme as if it was a defined contribution scheme.
the period in which the employees render the related service.
However, the scheme continues to be a defined benefit scheme.
These obligations are therefore measured as the present value
of expected future payments to be made in respect of the Termination benefits
number of service years provided by employees up to the end of Termination benefits are payable when employment is
the reporting period. terminated by the group before the normal retirement date, or
The obligations are presented as current liabilities in the when an employee accepts voluntary redundancy in exchange
balance sheet if the entity does not have an unconditional right for these benefits. The group recognises termination benefits at
to defer settlement for at least 12 months after the reporting the earlier of the following dates:
period, regardless of when the actual settlement (a) when the group can no longer withdraw the offer of those
is expected to occur. benefits; and
Post-employment obligations (b) when the entity recognises costs for a restructuring that is
The group operates various post-employment schemes, including within the scope of IAS 37 Provisions, Contingent Liabilities and
both defined benefit and defined contribution pension plans Contingent Assets (“IAS 37”) and involves the payment of
and post-employment medical plans. terminations benefits. In the case of an offer made to encourage
voluntary redundancy, the termination benefits are measured
Pension obligations
based on the number of employees expected to accept the
The liability or asset recognised in the balance sheet in respect offer. Benefits falling due more than 12 months after the end of
of defined benefit pension plans is the present value of the the reporting period are discounted to present value.
defined benefit obligation at the end of the reporting period
Contributed equity
less the fair value of plan assets. The defined benefit obligation
is calculated annually by independent actuaries using the Ordinary shares are classified as equity. Mandatorily redeemable
projected unit credit method. preference shares are classified as liabilities.
The present value of the defined benefit obligation is determined Incremental costs directly attributable to the issue of new shares
by discounting the estimated future cash outflows using or options are shown in equity as a deduction, net of tax, from
interest rates of high-quality corporate bonds that are the proceeds.
denominated in the currency in which the benefits will be paid, Dividends
and that have terms approximating to the terms of the related
obligation. In countries where there is no deep market in such Provision is made for the amount of any dividend declared,
bonds, the market rates on government bonds are used. being appropriately authorised and no longer at the discretion
of the entity, on or before the end of the reporting period but
The net interest cost is calculated by applying the discount not distributed at the end of the reporting period.
rate to the net balance of the defined benefit obligation and
the fair value of plan assets. This cost is included in employee Rounding of amounts
benefit expense in the statement of profit or loss. All amounts disclosed in the financial statements and notes
Remeasurement gains and losses arising from experience have been rounded off to the nearest thousand currency units
adjustments and changes in actuarial assumptions are unless otherwise stated.
recognised in the period in which they occur, directly in other First-time adoption of IFRS
comprehensive income. They are included in retained earnings
These financial statements, for the year ended 31 December
in the statement of changes in equity and in the balance sheet.
2020, are the first the group has prepared in accordance with
Changes in the present value of the defined benefit obligation IFRS. For periods up to and including the year ended 31 December
resulting from plan amendments or curtailments are recognised 2019, the group prepared its financial statements in accordance
immediately in profit or loss as past service costs. with United Kingdom Accounting Standards, including Financial
For defined contribution plans, the group pays contributions to Reporting Standard 102, ‘‘The Financial Reporting Standard
publicly or privately administered pension insurance plans on a applicable in the United Kingdom and the Republic of Ireland’’
mandatory, contractual or voluntary basis. The group has no (‘‘FRS 102’’).
further payment obligations once the contributions have been Accordingly, the group has prepared financial statements that
paid. The contributions are recognised as employee benefit comply with IFRS applicable as at 31 December 2020, together
expense when they are due. Prepaid contributions are recognised with the comparative period data for the years ended 31
as an asset to the extent that a cash refund or a reduction in December 2019 and 31 December 2018, as described in the
the future payments is available. summary of significant accounting policies. In preparing the
Treatment of Public Employees Contributory Retirement financial statements, the group’s opening statement of
Scheme (PECRS) from 1 October 2015 financial position was prepared as at 1 January 2018, the group’s
date of transition to IFRS. This note explains the principal
On 1 October 2015, JT (Jersey) Limited’s pension assets and adjustments made by the group in restating its FRS 102 financial
liabilities were moved out of the sub-fund and into the main statements, including the statement of financial position as at
scheme, administered by States of Jersey. This is considered 1 January 2018 and the financial statements as of, and for,
to be a multi-employer (benefit) plan as defined by IFRS. the years ended 31 December 2018 and 31 December 2019.
22

Notes to the
financial statements (continued)
Exemptions applied The group has applied the transitional provisions in IAS 23
Borrowing Costs and capitalises borrowing costs relating to all
IFRS 1 allows first-time adopters certain exemptions from the
qualifying assets after the date of transition. Similarly, the group
retrospective application of certain requirements under IFRS.
has not restated for borrowing costs capitalised under FRS 102
The group has applied the following exemptions:
on qualifying assets prior to the date of transition to IFRS.
• IFRS 3 Business Combinations has not been applied to either
The group has used the following transition provisions when
acquisitions of subsidiaries that are considered businesses
applying IFRS 15 retrospectively:
under IFRS, or acquisitions of interests in associates and joint
of the acquisition. After the date of the acquisition, • for completed contracts, the group has not restated
measurement is in accordance with IFRS. Assets and contracts that:
liabilities that do not qualify for recognition under IFRS are ­ - begin and end within the same annual reporting period; or
excluded from the opening IFRS statement of financial position.
The group did not recognise any assets or liabilities that were ­ - are completed contracts at 1 January 2018
not recognised under the FRS 102 or exclude any previously • for completed contracts that have variable consideration,
recognised amounts as a result of IFRS recognition requirements the group has used the transaction price at the date the
• IFRS 1 also requires that the FRS 102 carrying amount of contract was completed rather than estimating variable
goodwill must be used in the opening IFRS statement of consideration amounts in the comparative reporting periods
financial position (apart from adjustments for goodwill • for contracts that were modified before 1 January 2018, the
impairment and recognition or derecognition of intangible group has not retrospectively restated the contract for those
assets). In accordance with IFRS 1, the group has tested contract modifications. Instead, the group has reflected the
goodwill for impairment at the date of transition to IFRS. aggregate effect of all of the modifications that occurred
There was no impairment recognised on goodwill at before 1 January 2018 when:
1 January 2018
­ - identifying the satisfied and unsatisfied
• The group has not applied IAS 21 The Effects of Changes performance obligations;
in Foreign Exchange Rates retrospectively to fair value
­ - determining the transaction price; and
adjustments and goodwill from business combinations that
occurred before the date of transition to IFRS. Such fair value ­ - allocating the transaction price to the satisfied and
adjustments and goodwill are treated as assets and unsatisfied performance obligations
liabilities of the parent rather than as assets and liabilities • for all reporting periods presented before 1 January 2020, the
of the acquiree. group has not disclosed the amount of the transaction price
Therefore, those assets and liabilities are already allocated to the remaining performance obligations and an
expressed in the functional currency of the parent or explanation of when the group expects to recognise that
are non-monetary foreign currency items and no further amount as revenue.
translation differences occur. Estimates
The group assessed all contracts existing at 1 January 2018 to The estimates at 1 January 2018, 31 December 2018 and 31 December
determine whether a contract contains a lease based upon the 2019 are consistent with those made for the same dates in
conditions in place as at 1 January 2018. accordance with FRS 102 (after adjustments to reflect any
Lease liabilities were measured at the present value of the differences in accounting policies). The estimates used by the
remaining lease payments, discounted using the lessee’s group in accordance with IFRS reflect conditions at 1 January
incremental borrowing rate at 1 January 2018. Right-of-use 2018, the date of transition to IFRS and as at 31 December 2018
assets were measured at 1 January 2018 at either: and 31 December 2019.
• Its carrying amount as if IFRS 16 had been applied since the
commencement date of the lease, but discounted using the
lessee’s incremental borrowing rate at the date of transition to
IFRS; or
• An amount equal to the lease liability, adjusted by the
amount of any prepaid or accrued lease payments relating to
that lease recognised in the statement of financial position
immediately before the date of transition to IFRS.
The lease payments associated with leases for which the lease
term ends within 12 months of the date of transition to IFRS and
leases for which the underlying asset is of low value have been
recognised as an expense on either a straight-line basis over
the lease term or another systematic basis.
 23

Notes to the financial statements (continued)

Group reconciliation of equity as at 1 January 2018 (date of transition to IFRS)

Reclassifications and IFRS as at

FRS 102
remeasurements 1 January 2018

£’000 £’000 £’000

Assets
Non-current assets
Property, plant and equipment 112,468 - 112,468
Right-of -use assets - 14,504 14,504
Intangible assets 20,156 - 20,156
Deferred tax assets 941 - 941
Contract cost assets - 295 295
Contract assets - 227 227
Investments accounted for using the equity method 611 - 611
Financial asset at fair value through profit or loss 4,209 - 4,209
Total non-current assets 138,385 15,026 153,411

Current assets
Inventories 3,355 - 3,355
Trade receivables 35,482 (629) 34,853
Other receivables 6,500 - 6,500
Contract assets - 163 163
Contract cost assets - 341 341
Cash and cash equivalents (excluding bank overdrafts) 19,781 - 19,781
Total current assets 65,118 (125) 64,993
Total assets 203,503 14,901 218,404

LIABILITIES
Non-current liabilities

Borrowings (51,000) - (51,000)

2.5% Redeemable preference shares (10,000) - (10,000)
Lease liabilities - (12,523) (12,523)
Contract liabilities - (2,071) (2,071)
Deferred tax liabilities (9,238) (83) (9,321)
Employee benefit obligations (725) - (725)
Provisions (1,790) - (1,790)
Total non-current liabilities (72,753) (14,677) (87,430)

Current liabilities
Trade and other payables (36,810) - (36,810)
Current tax liabilities (2,153) 446 (1,707)
Contract liabilities - (1,120) (1,120)
Lease liabilities - (2,068) (2,068)
Total current liabilities (38,963) (2,742) (41,705)

Total liabilities (111,716) (17,419) (129,135)

Net assets 91,787 (2,518) 89,269

EQUITY
Share capital and share premium 20,000 - 20,000
Retained earnings 72,274 (2,518) 69,756
Other reserves (487) - (487)

Total equity 91,787 (2,518) 89,269

24

Notes to the financial statements (continued)

Group reconciliation of equity as at 31 December 2018

Reclassifications and IFRS as at

FRS 102
remeasurements 31 December 2018

£’000 £’000 £’000

Assets
Non-current assets
Property, plant and equipment 115,184 77 115,261
Right-of-use assets - 14,394 14,394
Intangible assets 23,735 488 24,223
Deferred tax assets 947 - 947
Contract cost assets - 398 398
Contract assets - 220 220
Total non-current assets 139,866 15,577 155,443

Current assets
Inventories 3,180 - 3,180
Other receivables 6,030 6 6,036
Contract assets - 295 295
Contract cost assets - 430 430
Trade receivables 38,433 (694) 37,739
Cash and cash equivalents (excluding bank overdrafts) 16,930 - 16,930
Total current assets 64,573 37 64,610
Total assets 204,439 15,614 220,053

LIABILITIES
Non-current liabilities

Borrowings (51,000) - (51,000)

2.5% Redeemable preference shares (10,000) - (10,000)
Lease liabilities - (12,235) (12,235)
Contract liabilities - (1,992) (1,992)
Other payables (1,494) - (1,494)
Deferred tax liabilities (9,726) (112) (9,838)
Employee benefit obligations (708) - (708)
Provisions (2,275) - (2,275)
Total non-current liabilities (75,203) (14,339) (89,542)

Current liabilities
Trade and other payables (36,560) - (36,560)
Current tax liabilities (2,624) 394 (2,230)
Contract liabilities - (1,390) (1,390)
Lease liabilities - (2,278) (2,278)
Provisions - - -
Total current liabilities (39,184) (3,274) (42,458)

Total liabilities (114,387) (17,613) (132,000)

Net assets 90,052 (1,999) 88,053

EQUITY
Share capital and share premium 20,000 - 20,000
Retained earnings 69,767 (1,999) 67,768
Other reserves 285 - 285

Total equity 90,052 (1,999) 88,053

 25

Notes to the financial statements (continued)

Group reconciliation of equity as at 31 December 2019

Reclassifications and IFRS as at

FRS 102
remeasurements 31 December 2019

£’000 £’000 £’000

Assets
Non-current assets
Property, plant and equipment 115,884 110 115,994
Right-of-use assets - 12,910 12,910
Intangible assets 17,767 1,397 19,164
Deferred tax assets 783 - 783
Contract cost assets - 657 657
Contract assets - 67 67
Total non-current assets 134,434 15,141 149,575

Current assets
Inventories 4,148 - 4,148
Other receivables 8,947 (610) 8,337
Contract assets - 348 348
Contract cost assets - 579 579
Trade receivables 36,081 - 36,081
Cash and cash equivalents (excluding bank overdrafts) 7,259 - 7,259
Total current assets 56,435 317 56,752
Total assets 190,869 15,458 206,327

LIABILITIES
Non-current liabilities

Borrowings (44,500) - (44,500)

2.5% Redeemable preference shares (10,000) - (10,000)
Lease liabilities - (10,796) (10,796)
Contract liabilities - (2,418) (2,418)
Other payables (1,094) - (1,094)
Deferred tax liabilities (10,078) (106) (10,184)
Employee benefit obligations (711) - (711)
Provisions (2,601) - (2,601)
Total non-current liabilities (68,984) (13,320) (82,304)

Current liabilities
Trade and other payables (35,049) - (35,049)
Current tax liabilities (1,433) 341 (1,092)
Contract liabilities - (1,478) (1,478)
Lease liabilities - (2,268) (2,268)
Provisions - - -
Total current liabilities (36,482) (3,405) (39,887)

Total liabilities (105,466) (16,725) (122,191)

Net assets 85,403 (1,267) 84,136

EQUITY
Share capital and share premium 20,000 - 20,000
Retained earnings 65,761 (1,267) 64,494
Other reserves (358) - (358)

Total equity 85,403 (1,267) 84,136

26

Notes to the financial statements (continued)

Group reconciliation of total comprehensive income for the
year ended 31 December 2018

Reclassifications and IFRS for the year ended

FRS 102
remeasurements 31 December 2018

£’000 £’000 £’000

Continuing operations
Revenue 239,340 (60) 239,280
Cost of sales (150,880) 195 (150,685)

Gross profit 88,460 135 88,595

Operating expenses (80,370) 4,502 (75,868)

Impairment - (3,860) (3,860)
Other income 106 - 106

Operating profit 8,196 777 8,973

Gain on financial assets at fair value through profit or loss 105 - 105
Finance income 72 - 72
Finance costs (2,211) (177) (2,388)

Profit before income tax 6,162 600 6,762

Income tax expense (3,073) (81) (3,154)

Profit from continuing operations 3,089 519 3,608
Profit/(Loss) from discontinued operation (attributable
(847) - (847)
to equity holders of the company)

Profit for the year 2,242 519 2,761

Other comprehensive income

Items that will not be reclassified to profit or loss

Remeasurements of post-employment benefit obligations 8 - 8
Income tax relating to these items (2) - (2)

Items that may be reclassified to profit or loss

Exchange differences on translation of foreign operations 772 - 772
Income tax relating to these items - - -
Other comprehensive income for the period, net of tax 772 - 772

Total comprehensive income for the year 3,014 519 3,533

Total comprehensive income for the year is attributable to:

Owners of JT Group Limited 3,014 519 3,533
Non-controlling interest - - -
3,014 519 3,533

Total comprehensive income for the year attributable

to owners of the JT Group Limited arises from:

Continuing operations 3,861 519 4,380

Discontinued operations (847) - (847)

3,014 519 3,533

 27

Notes to the financial statements (continued)

Group reconciliation of total comprehensive income for the
year ended 31 December 2019

Reclassifications and IFRS for the year ended

FRS 102
remeasurements 31 December 2019

£’000 £’000 £’000

Continuing operations
Revenue 195,556 (610) 194,946
Cost of sales (103,898) 332 (103,566)

Gross profit 91,658 (278) 91,380

Operating expenses (83,896) 2,615 (81,281)

Impairment (2,600) (1,351) (3,951)
Other income 400 - 400

Operating profit 5,562 986 6,548

Finance income 41 - 41
Finance costs (2,318) (208) (2,526)

Profit before income tax 3,285 778 4,063

Income tax expense (1,831) (47) (1,878)

Profit from continuing operations 1,454 731 2,185
Profit/(Loss) from discontinued operation (attributable to
(667) - (667)
equity holders of the company)

Profit for the year 787 731 1,518

Other comprehensive income

Items that will not be reclassified to profit or loss

Exchange differences on translation of foreign operations (644) 1 (643)
Income tax relating to these items - - -

Items that will not be reclassified to profit or loss

Remeasurement of post-employment benefit obligations (21) - (21)
Income tax relating to these items 4 - 4

Other comprehensive income for the period, net of tax (661) 1 (660)

Total comprehensive income for the year 126 732 858

Total comprehensive income for the year attributable to:

Owners of JT Group Limited 126 732 858

Non-controlling interests

126 732 858

Total comprehensive income for the year attributable to
owners of the JT Group Limited arises from:

Continuing operations 793 732 1,525

Discontinued operations (667) - (667)

126 732 858

28

Notes to the financial statements (continued)

Notes to the reconciliation of equity as at 1 January 2018 and 31 December 2019
and total comprehensive income for the year ended 31 December 2019

All amounts provided in the below note are presented Leases

in thousands. Under FRS 102, a lease is classified as a finance lease or an
Trade and other receivables operating lease. Operating lease payments are recognised as
an operating expense in the statement of profit or loss on a
The adoption of IFRS has fundamentally changed the group’s
straight-line basis over the lease term. Under IFRS, as explained
accounting for impairment losses for financial assets by
in note 2, a lessee applies a single recognition and measurement
replacing incurred loss approach under FRS 102 with a
approach for all leases, except for short-term leases and leases
forward-looking expected credit loss approach. IFRS requires
of low-value assets and recognises lease liabilities to make
the group to recognise an allowance for all debt instruments
lease payments and right-of-use assets representing the right
not held at fair value through profit or loss and contract assets.
to use the underlying assets.
At the date of transition to IFRS, the group recognised
additional impairment on its Trade receivables of £443 (31 At the date of transition to IFRS, the group applied the
December 2018: £30, 31 December 2019: (£300)), which resulted in transitional provision and measured lease liabilities at the
a decrease/(increase) in retained earnings by the same amount. present value of the remaining lease payments, discounted
Included within the group’s additional impairment is an using the lessee’s incremental borrowing rate at the date of
amount of £28 (31 December 2018: £2, 31 December 2019: £67) transition to IFRS. Right-of-use assets were measured at either:
relating to its contract assets. The total adjustment relating to • Its carrying amount as if IFRS 16 had been applied since the
IFRS 9 at the transition dated amounted to £471. commencement date of the lease, but discounted using the
In addition to the amounts recognised above, the group also lessee’s incremental borrowing rate at the date of transition
reclassified an amount of £158 (31 December 2018: £97, 31 December to IFRS; or
2019: £52 ) related to its prepayments into the group’s right-of- • An amount equal to the lease liability, adjusted by the
use assets on transition date. amount of any prepaid or accrued lease payments relating
Property, plant and equipment – borrowing costs to that lease recognised in the statement of financial position
immediately before the date of transition to IFRS.
Under IFRS, all directly attributable borrowing costs should be
capitalised. The group has applied the transitional provisions in As a result, on 1 January 2018, the group recognised an increase
IAS 23 Borrowing Costs and capitalised borrowing costs directly of £14,591 (31 December 2018: £14,513, 31 December 2019: £13,064)
attributable to the acquisition, construction or production of a of lease liabilities included under interest-bearing loans and
qualifying asset after the date of transition. Borrowing costs borrowings and £14,504 (31 December 2018: £14,394, 31 December
capitalised amounted to £77 in 2018 and £41 in 2019. These had 2019: £12,910) of right-of-use assets. The difference between
been expensed as incurred under FRS 102. lease liabilities and right-of-use assets has been recognised in
retained earnings.
Intangible assets – goodwill
Additionally, depreciation increased by £1,900 (included in
Under FRS 102 goodwill was amortised over its estimated useful
administrative expenses) and finance costs increased by £255
life and required an assessment for impairment be made
for the year ended 31 December 2018.
following impairment indicators. IFRS requires goodwill to be
annually tested for impairment. For the year ended 31 December 2019, depreciation increased by
£2,182 (included in operating expenses) and finance costs
Under FRS 102, the amortisation of goodwill amounted to
increased by £248.
£4,349 in 2018 and £2,260 in 2019. An impairment loss of
£2,600 was recognised in 2019. With the transition to IFRS, Contract assets and contract liabilities
the amortisation recognised in 2018 and 2019 was reversed, Under FRS 102, the group recognised trade receivables, even
following this the goodwill value was assessed at 31 December if the receipt of the total consideration was conditional on
2018 and 2019. The assessments resulted in an impairment successful completion of installation services. Under IFRS, any
recognised against the goodwill of £3,860 in 2018 and £1,351 earned consideration that is conditional should be recognised
in 2019. as a contract asset rather than a receivable. Therefore, at the
Deferred tax date of transition to IFRS, the group reclassified £636 (31
December 2018: £515, 31 December 2019: £415) from trade
The various transitional adjustments resulted in various
receivables to contract assets. Furthermore, at 1 January 2018,
temporary differences. According to the accounting policies in
the group recognised additional contract assets amounting to
note 2, the group has to recognise the tax effects of such
£636 (31 December 2018: £818, 31 December 2019: £1,236) relating
differences. Deferred tax adjustments are recognised in
to satisfied obligations to transfer goods or services to a
correlation to the underlying transaction either in retained
customer under IFRS, but not yet recognised as revenue under
earnings or a separate component of equity.
FRS 102.
 29

Notes to the
financial statements (continued)
Under FRS 102, the group recognised deferred revenue for an Impairment of non-financial assets
obligation to transfer goods or services to a customer for which Impairment exists when the carrying value of an asset or CGU
the entity has received consideration or the amount is due from exceeds its recoverable amount, which is the higher of its fair
the customer. Under IFRS, the obligation should be recognised value less costs of disposal and its value in use. The fair value
as a contract liability rather than deferred revenue. Therefore, less costs of disposal calculation is based on available data
at the date of transition to IFRS, the group reclassified £3,191 (31 from binding sales transactions, conducted at arm’s length, for
December 2018: £3,382, 31 December 2019: £3,897) from deferred similar assets or observable market prices less incremental
revenue to contract liabilities. Furthermore, at 1 January 2018, costs of disposing of the asset. The value in use calculation is
the group recognised additional contract liabilities amounting based on a DCF model. The cash flows are derived from the
to £3,191 (31 December 2018: £3,392, 31 December 2019: £3,897) budget for the next five years and do not include restructuring
relating to obligations to transfer goods or services to a activities that the group is not yet committed to or significant
customer not yet satisfied under IFRS, but recognised as future investments that will enhance the performance of the
revenue under FRS 102. assets of the CGU being tested. The recoverable amount is
Statement of cash flows sensitive to the discount rate used for the DCF model as well as
the expected future cash-inflows and the growth rate used for
Under FRS 102, a lease is classified as a finance lease or an
extrapolation purposes. These estimates are most relevant to
operating lease. Cash flows arising from operating lease
goodwill and other intangibles with indefinite useful lives
payments are classified as operating activities. Under IFRS, a
recognised by the group.
lessee generally applies a single recognition and measurement
approach for all leases and recognises lease liabilities. Cash The key assumptions used to determine the recoverable
flows arising from payments of principal portion of lease amount for the different CGUs, including a sensitivity analysis,
liabilities are classified as financing activities. Therefore, cash are disclosed and further explained in Note 10.
outflows from operating activities decreased by £2,026 and
cash outflows from financing activities increased by the same
amount for the year ended 31 December 2018, and £2,342 for the Fair values on acquisition of Neoconsult ApS
year 31 December 2019. and Nomad IP ApS
The fair value of the intangible asset acquired on the
step-acquisition of Neoconsult ApS and Nomad IP ApS involved
3. Accounting estimates and judgements the use of a valuation technique and estimation of future cash
The preparation of the group’s consolidated financial statements flows to be generated over a number of years. The key intangible
requires management to make judgements, estimates and asset acquired was determined to have an economic useful life
assumptions that affect the reported amounts of revenues, of eight years and a discounted cash flow model was used over
expenses, assets and liabilities, and the accompanying the same period to validate its indicative acquisition date fair
disclosures, and the disclosure of contingent liabilities. value. The estimation of the fair value required a combination
of assumptions including cashflow forecasts of the IoT business
Accounting estimates and assumptions
over 8 years applying a 12% discount rate on the discounted
The assumptions concerning the future and other sources of cashflow model.
estimation uncertainty at the reporting date are described
In addition, the deferred and contingent consideration payable
below. The group based its assumptions and estimates on
required estimation of the level of profitability of the business
information available when the consolidated financial state-
unit incorporating the acquired entities as well as an assessment
ments were prepared. Existing circumstances and assumptions
of performance on other agreed deliverables on each pre-agreed
about future developments, however, may change due to
date. As the deferred and contingent consideration are payable
market changes or circumstances arising that are beyond the
over a three-year period, the expected outflows were discounted
control of the group. Such changes are reflected in the assump-
to present value.
tions when they occur.
Useful lives of tangible and intangible assets
Development costs
The annual depreciation and amortisation charges for tangible
The group capitalises costs for product development projects.
assets are sensitive to the estimated lives allocated to each
Initial capitalisation of costs is based on management’s
type of asset. Lives are assessed annually and changed
judgement that technological and economic feasibility is
when necessary to reflect expected impact from changes in
confirmed, usually when a product development project has
technology, network investment plans and physical condition of
reached a defined milestone according to an established
the assets.
project management model. In determining the amounts to be
capitalised, management makes assumptions regarding the
expected future cash generation of the project, discount rates
to be applied and the expected period of benefits.
30

Notes to the
financial statements (continued)
The carrying value of intangible and tangible assets are Defined benefit pension schemes (TBPS scheme) and
disclosed in note 8 and note 10 and the useful lives applied to Long-Term Incentive Plan (LTIP)
the principal categories are disclosed in note 2 for tangible and The cost of the defined benefit pension plan and other employee
intangible assets respectively. obligations (e.g. the JT Long-Term Incentive Plan) and the
Provisions present value of the obligations are determined using actuarial
valuations. An actuarial valuation involves making various
Provision for expected credit losses (ECLs) of trade receivables
assumptions that may differ from actual developments in the
and contract assets
future. These include the determination of the discount rate,
The group uses a provision matrix to calculate ECLs for trade future salary increases, mortality rates and future pension
receivables and contract assets. The provision rates are based increases. Due to the complexities involved in the valuation and
on days past due for groupings of various customer segments its long-term nature, a defined benefit obligation is highly
that have similar loss patterns (i.e., by geography, product type, sensitive to changes in these assumptions. All assumptions are
and customer type). reviewed at each reporting date.
The provision matrix is initially based on the group’s historical For the defined benefit pension plan, the parameter most
observed default rates. The group will calibrate the matrix to subject to change is the discount rate. In determining the
adjust the historical credit loss experience with forward-looking appropriate discount rate, management considers the interest
information. For instance, if forecast economic conditions (i.e. rates of corporate bonds in currencies consistent with the
economic growth outlook and unemployment rate) are currencies of the post-employment benefit obligation and
expected to deteriorate over the next year which can lead to an extrapolated as needed along the yield curve to correspond
increased number of defaults, the historical default rates are with the expected term of the defined benefit obligation.
adjusted. At every reporting date, the historical observed The underlying bonds are further reviewed for quality. The
default rates are updated and changes in the forward-looking mortality rate is based on publicly available mortality tables
estimates are analysed. for the specific countries. Those mortality tables tend to change
The assessment of the correlation between historical observed only at intervals in response to demographic changes.
default rates, forecast economic conditions and ECLs is a For both the defined benefit pension plan and the LTIP, future
significant estimate. The amount of ECLs is sensitive to changes salary increases, and pension increases are based on expected
in circumstances and of forecast economic conditions. future inflation rates for the respective countries.
The group’s historical credit loss experience and forecast of
Further details about pension obligations are provided in note
economic conditions may also not be representative of
13. As at the financial reporting date, there were two employees
customer’s actual default in the future. The information about
on the TBPS scheme and employees on the LTIP scheme.
the ECLs on the group’s trade receivables and contract assets is
disclosed in notes 7 and 16. Current and deferred income tax
Other provisions The actual tax we paid on profits is determined according to
complex tax laws and regulations. Where the effect of these
Provisions are also made for asset retirement obligations,
laws is unclear, estimates are used in determining the liability
dilapidations and contingencies. These provisions require
for the tax to be paid on past profits which is recognised in the
management’s best estimate of the costs that will be incurred
financial statements. The Directors believe the estimates,
based on legislative and contractual requirements. In addition,
assumptions and judgements are reasonable, but this can
the timing of the cash flows and the discount rates used
involve complex issues which may take a number of years to
to establish net present value of the obligations require
resolve. The final determination of prior year liabilities could be
management’s judgement.
different from the estimates reflected in the financial
In respect of claims, litigation, disputes and regulatory matters statements and may result in the recognition of an additional
the group provides for anticipated costs where the outflow tax expense or tax credit in the income statement.
of resources is considered probable, and a reasonable estimate
Deferred tax assets and liabilities require management
can be made on the likely outcome. The ultimate liability
judgement in determining the amounts to be recognised. The
may vary from the amounts provided and will be dependent
group uses management’s expectations of future revenue
upon the eventual outcome of any settlement. The carrying
growth, operating costs and profit margins to determine the
value of provisions is disclosed in note 14.
extent to which future taxable profits will be generated against
which to consume the deferred tax assets.
The value of the group’s income tax assets and liabilities is
disclosed on the statement of financial position. The carrying
value of the group’s deferred tax assets and liabilities is
disclosed in note 12.
 31

Notes to the
financial statements (continued)
Inventory provision and impairment Key judgements
Provisions are made for inventory impairment. This provision In the process of applying the group’s accounting policies,
requires management’s best estimate based on the assess- management has made the following judgements, which have
ment of various factors relating to the inventory on hand at the the most significant effect on the amounts recognised in the
reporting date and historical experience. consolidated financial statements:
The value of the inventory impairment is offset against the Determining the lease term of contracts with renewal and
inventory balance on the statement of financial position. termination options
Contingent and deferred consideration The group determines the lease term as the non-cancellable
term of the lease, together with any periods covered by an
The group has entered into acquisitions with deferred
option to extend the lease if it is reasonably certain to be
consideration, including amounts which are contingent on
exercised, or any periods covered by an option to terminate the
future events, where future payments are dependent upon
lease, if it is reasonably certain not to be exercised.
the provision of future services. The group has recognised the
deferred consideration as part of the consideration transferred In determining the lease term, management considers all facts
on the assumption that all conditions related to the provision and circumstances that create an economic incentive to exercise
of future services will likely be satisfied. Refer to the business an extension option, or not exercise a termination option.
combinations accounting policy for more information on how Extension options (or periods after termination options) are
the group accounts for the deferred consideration. only included in the lease term if the lease is reasonably certain
to be extended (or not terminated).
Revenue recognition – Estimating stand-alone selling price For leases of buildings and technical sites, the following factors
are normally the most relevant:
Bundled products • If there are significant penalties to terminate (or not extend),
the group is typically reasonably certain to extend
Bundled products that combine different goods and services
(or not terminate)
are assessed to determine whether there are different distinct
performance obligations and hence necessary to separate the • If any leasehold improvements are expected to have a
different identifiable components and apply the corresponding significant remaining value, the group is typically reasonably
revenue recognition policy to each element. Total bundled certain to extend (or not terminate)
revenues, i.e. the total transaction price, are allocated among • Otherwise, the group considers other factors including
the identified elements based on their respective standalone historical lease durations and the costs and business
selling prices. disruption required to replace the leased asset.
Determining standalone selling prices for each identified The lease term is reassessed if an option is actually exercised
component requires estimates that are complex due to the (or not exercised) or the group becomes obliged to exercise
nature of the business. A change in estimates of standalone (or not exercise) it. The assessment of reasonable certainty is
selling prices could affect the apportionment of revenue only revised if a significant event or a significant change in
among the elements and, as a result, the timing of recognition circumstances occurs, which affects this assessment, and that
of revenues. is within the control of the lessee.
Leases - Estimating the incremental borrowing rate Long term multi-service agreements
The group cannot readily determine the interest rate implicit in Where the outcome of long-term multi-service agreements can
the lease, therefore, it uses its incremental borrowing rate (IBR) be estimated reliably, revenue and costs are recognised by
to measure lease liabilities. The IBR is the rate of interest that reference to the stage of completion of the contract activity at
the group would have to pay to borrow over a similar term, and the reporting date. This is normally measured by the proportion
with a similar security, the funds necessary to obtain an asset of that contract costs incurred for work performed to date bear to
a similar value to the right-of-use asset in a similar economic the estimated total contract costs, except where this would not
environment. The IBR therefore reflects what the group ‘would be representative of the stage of completion. Estimation of the
have to pay’, which requires estimation when no observable contract stage of completion requires management judgement.
rates are available (such as for subsidiaries that do not enter
into financing transactions) or when they need to be adjusted Estimates and judgements are continually evaluated. They
to reflect the terms and conditions of the lease (for example, are based on historical experience and other factors, including
when leases are not in the subsidiary’s functional currency). expectations of future events that may have a financial impact
The group estimates the IBR using observable inputs (such as on the entity and that are believed to be reasonable under
market interest rates) when available and is required to make the circumstances.
certain entity-specific estimates (such as the subsidiary’s
stand-alone credit rating).
32

Notes to the
financial statements (continued)
Gross versus net presentation
When the group sells goods or services as a principal, income
and payments to suppliers are reported on a gross basis in
revenue and cost of sales. If the group sells goods or services as
an agent, revenue and payments to suppliers are recorded in
revenue on a net basis, representing the margin earned. Whether
the group is considered to be the principal or an agent in the
transaction depends on analysis by management of both the
legal form and substance of the agreement between the group
and its business partners; such judgements impact the amount
of reported revenue and operating expenses but do not impact
reported assets, liabilities or cash flows.

4. Revenue
Disaggregation of revenue from contracts with customers
The presentation of revenue is disaggregated by segment. The
group derives revenue from the transfer of goods and services
in the following major product lines:
• Network services – fixed line, broadband, mobile and private
circuit services to residential and corporate customers
• Equipment sales – sale, rental and support of equipment
such as handsets, corporate phone systems and data
network equipment
• Managed services – fixed line, broadband and private circuit
services to wholesale customers
• On-island wholesale – roaming revenue from customers of
other networks and from network sharing
• International wholesale - IoT services, FPS, bulk messaging
and network sharing for international customers
• Voice trading – buying and on-selling of bulk international
voice termination capacity to a variety of network operators
• Other – other minor revenue streams, including digital
advertising services
Management have considered the disclosure requirements of
IFRS 15 and deems the below revenue segments appropriate;
• Channel Islands (being the group’s predominantly core
telecommunications business lines such as network services,
equipment sales and on-island wholesale provided to local
consumer and enterprise customers); and
• International (being predominantly made up of our non-core
telecommunications business lines such as international
wholesale and voice trading, the majority of which is
provided to customers outside of the Channel Islands)
 33

Notes to the
financial statements (continued)
2020 Channel Islands International Total

£’000 £’000 £’000

Network services 60,394 450 60,844

Equipment sales 14,978 10 14,988
Managed services 10,985 496 11,481
On-Island wholesale 11,266 - 11,266
International wholesale - 45,294 45,294
Voice trading - 25,147 25,147
Other 910 7 917

Total 98,533 71,404 169,937

2019 Channel Islands International Total

£’000 £’000 £’000

Network services 59,196 1,259 60,455

Equipment sales 12,770 - 12,770
Solution sales - - -
Managed services 10,847 422 11,269
On-Island wholesale 11,757 - 11,757
International wholesale - 32,617 32,617
Voice trading - 65,937 65,937
Other - 141 141

Total 94,570 100,376 194,946

2018 Channel Islands International Total

£’000 £’000 £’000

Network services 62,215 1,675 63,890

Equipment sales 13,044 - 13,044
Solution sales - - -
Managed services 9,605 156 9,761
On-Island wholesale 8,351 - 8,351
International wholesale - 25,135 25,135
Voice trading - 117,677 117,677
Other 1,396 26 1,422

Total 94,611 144,669 239,280

34

Notes to the
financial statements (continued)
Assets and liabilities related to contracts with customers
The group has recognised the following assets and liabilities related to contracts with customers:

31 December 31 December 31 December 1 January

2020 2019 2018 2018
£’000 £’000 £’000 £’000

Contract cost assets 1,504 1,236 828 636

Total contract costs assets 1,504 1,236 828 636

Contract assets 198 415 515 390

Total contract assets 198 415 515 390

Contract liabilities (4,826) (3,896) (3,382) (3,191)

Total contract liabilities (4,826) (3,896) (3,382) (3,191)

Revenue recognised in relation to contract liabilities

The following table shows how much of the revenue recognised in the current reporting period relates to carried-forward contract
liabilities and how much relates to performance obligations that were satisfied in a prior year:

31 December 31 December 31 December

2020 2019 2018
£’000 £’000 £’000

Balance at 1 January (3,896) (3,382) (3,191)

- Revenue recognised during year through profit/(loss) 2,027 1,837 1,360

- Unearned revenue credited to contract liabilities (2,957) (2,351) (1,551)

Balance at 31 December (4,826) (3,896) (3,382)

Contract assets recognised from contracts with customers

The table below provides a breakdown of the group’s contract assets at the end of each reporting period as well as the amortisation
relating to these balances during the reporting periods respectively.

31 December 31 December 31 December

2020 2019 2018
£’000 £’000 £’000

Balance at 1 January 415 515 390

- Amortisation recognised during the year (341) (363) (214)

- Unearned revenue credited to contract liabilities 128 263 339

Balance at 31 December 202 415 515

 35

Notes to the
financial statements (continued)
Assets recognised from costs to obtain and fulfil a contract
In addition to the contract balances disclosed above, the group has also recognised assets in relation to costs to fulfil a long-term
contract and costs to obtain contracts. This is presented as contract cost assets on the balance sheet.
Costs to obtain contract assets relate to commission fees paid to the group’s sale staff under a commission policy that was terminated
effective 31 December 2019. No additional costs have been recognised since the termination date of the policy. The group’s current
commission policies do not meet the capitalisation requirements under IFRS 15 and are expensed in the period incurred.
In addition to the above capitalised costs, the group also capitalised setup costs related to its IoT business as costs to fulfil its
customer contracts. The costs relate directly to the customer contracts, generate resources that will be used in satisfying the
contracts and are expected to be recovered and were therefore recognised as costs to fulfil a contract. All costs capitalised in 2020
relate to the IoT setup costs.

31 December 31 December 31 December

2020 2019 2018
£’000 £’000 £’000

Balance at 1 January 1,236 828 636

- Amortisation/impairment loss recognised as cost of providing

(749) (599) (441)
services during the year
- Additions recognised during year 1,017 1,007 633

Balance at 31 December 1,504 1,236 828

5. Other income and expense items

This note provides an explanation and/or breakdown of the items included in other income, operating expenses and finance
income and costs.

Other income
2020 2019 2018
Notes £’000 £’000 £’000

Service income 400 400 106

400 400 106

During 2018, the group sold its supply of its directory services business line to a 3rd party through a licensing arrangement and
continues to support this business through billing and other related services. The proceeds from this transaction and its ongoing
support services are recognised as other income.
36

Notes to the
financial statements (continued)
Breakdown of expenses
2020 2019 2018
Notes £’000 £’000 £’000

Employee benefits expense 32,764 34,736 34,528

Depreciation of PPE 8 18,688 18,128 17,221
Depreciation on right of use assets 9 2,217 2,181 1,900
Inventory charged as expense 10,117 10,163 9,471
Provision for and write-off of bad debt 6,015 87 759
Amortisation of intangible assets 10 3,360 3,610 3,080
Charged provisions/(released unused) 1,879 357 485
(Profit)/loss on disposal of tangible assets 24 (51) 7
(Profit)/loss on disposal of intangible assets - - 99
Impairment of goodwill 10 - 1,351 3,860
Impairment of inventory (94) 89 159
Other expenses 17,581 14,581 8,159
92,551 85,232 79,728

Finance income and costs

2020 2019 2018
Notes £’000 £’000 £’000

Finance income
Interest income 2 41 72
Finance income 2 41 72

Finance costs
Interest on revolving credit facility and private placement 1,216 1,945 1,858
Interest and finance charges paid/payable for lease liabilities 227 248 255
Interest on 2.5% preference shares 250 250 250
Other interest paid or payable (7) 104 85
Net finance costs from pension schemes 14 19 17
1,700 2,566 2,465

Amount capitalised as borrowing costs - (40) (77)

Finance costs expensed 1,700 2,526 2,388

Net finance costs 1,698 2,567 2,316

Capitalised borrowing costs

No borrowing costs were capitalised during 2020, and a capitalisation rate of 4.10% was used to capitalise borrowing costs in 2018
and 2019
 37

Notes to the
financial statements (continued)
6. Income tax expense
This note provides an analysis of the group’s income tax expense, and shows what amounts are recognised directly in equity and
how the tax expense is affected by non-assessable and non-deductible items. It also explains significant estimates made in relation
to the group’s tax position.
The main uncertainty is whether the group’s intra-group trading model would be accepted by a particular tax authority.
Management consider the probability of an outflow is low and as such no provision has been made.
Deciding whether to recognise deferred tax assets is judgemental. The group only recognise a deferred tax asset when we consider
it is probable that they can be recovered. In making this judgement the group consider evidence such as historical performance,
financial forecasts and future activities

Income tax expense

2020 2019 2018
£’000 £’000 £’000

Current Tax

Current tax on profits for the year 3,228 1,631 2,713

Adjustments for current tax of prior periods 16 (175) 2
Total current tax expense 3,244 1,456 2,715

Deferred income tax

Decrease/(increase) in deferred tax assets 700 101 37

(Decrease)/increase in deferred tax liabilities (133) 321 402
Total deferred tax expense/(benefit) 567 422 439

Income tax expense 3,811 1,878 3,154

Income tax expense is attributable to:

Profit from continuing operations 3,811 1,878 3,154

Profit from discontinued operation (39) 10 16
3,772 1,888 3,170
38

Notes to the
financial statements (continued)
Numerical reconciliation of income tax expense to prima facie tax payable

Income tax expense

2020 2019 2018
£’000 £’000 £’000

Profit from continuing operations before income tax expense 4,744 4,063 6,762
4,744 4,063 6,762

Tax at the standard tax rate of 20% (2019 - 20%, 2018 - 20%) 949 813 1,352

Tax effect of amounts which are not deductible (taxable)

in calculating taxable income:

Expenses not deductible for tax purposes 305 143 136

Non-qualifying depreciation 240 240 275
Subject to tax at 0% 220 660 1,142
Non taxable adjustment - - (24)
Write down of deferred tax asset 819 - -
Unrecognised deferred tax asset 1,303 14 -
Transfer pricing adjustment from discontinued operations - - 199
Other adjustments (55) 50 4

Subtotal 3,781 1,920 3,084

Adjustments for current tax of prior periods 30 (42) 70
Income tax expense 3,811 1,878 3,154

Tax losses
2020 2019 2018
£’000 £’000 £’000

Unused tax losses for which no deferred tax asset has been recognised 14,659 3,485 3,526
Potential tax benefit @30% 4,398 1,046 1,058
 39

Notes to the
financial statements (continued)
7. Financial assets and financial liabilities
This note provides information about the group’s financial instruments, including:

• an overview of all financial instruments held by the group

• specific information about each type of financial instrument
• accounting policies
• information about determining the fair value of the instruments, including judgements, estimates and the level of
uncertainty involved.

The group holds the following financial instruments:

2020 2019 2018
Notes £’000 £’000 £’000

Financial assets
Financial assets at amortised cost
Trade and other receivables 7 29,468 44,418 43,775
Cash and cash equivalents 7 10,602 7,259 16,930
40,070 51,677 60,705

Financial liabilities Notes

Financial liabilities at amortised cost
Trade and other payables 7 31,876 35,049 36,560
Borrowings 7 32,500 44,500 51,000
2.5% redeemable preference shares 7 10,000 10,000 10,000
Other payables 5 694 1,094 1,494
Lease liabilities 9 11,671 13,064 14,513
86,741 103,707 113,567

The group’s exposure to various risks associated with the financial instruments is discussed in note 16. The maximum exposure to
credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned above

(a) Trade receivables

31 December 31 December 31 December 1 January
2020 2019 2018 2018
£’000 £’000 £’000 £’000

Trade receivables from contracts with customers 32,560 36,768 39,154 35,877
Loss allowance (6,308) (687) (1,415) (1,024)
Trade receivables less loss allowance 26,252 36,081 37,739 34,853

Other receivables 3,216 9,558 6,036 6,500

Total trade and other receivables 29,468 45,639 43,775 41,353
40

Notes to the financial statements (continued)

Classification as trade receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are
generally due for settlement within 1 year and are therefore all classified as current. Trade receivables are recognised initially at the
amount of consideration that is unconditional, unless they contain significant financing components, when they are recognised at
fair value. The group holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures
them subsequently at amortised cost using the effective interest method.
Details about the group’s impairment policies and the calculation of the loss allowance are provided in note 16.
Fair values of trade receivables
Due to the short-term nature of the current receivables, their carrying amount is the same as their fair value.
Impairment and risk exposure
Information about the impairment of trade receivables and the group’s exposure to credit risk and foreign currency risk can be found
in note 16

(b) Cash and cash equivalents

2020 2019 2018
£’000 £’000 £’000

Current assets
Cash at bank and in hand 10,602 7,259 16,930
10,602 7,259 16,930

(c) Trade and other payables

2020 2019 2018
£’000 £’000 £’000

Current liabilities
Trade payables 9,718 15,442 15,083
Corporation tax payable 2,752 1,092 2,230
Accruals and deferred income 13,013 8,390 8,700
Other payables 9,839 12,311 14,271
35,322 37,235 40,284

Trade payables are unsecured and are usually paid within 1 year of recognition. The carrying amounts of trade and other payables
are considered to be the same as their fair values, due to their short-term nature.
 41

Notes to the financial statements (continued)

(d) Borrowings
2020 2019 2018
Current Non- Total Current Non- Total Current Non- Total
current current current
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Secured

Private placement (i) - 20,000 20,000 - 20,000 20,000 31,000 20,000 51,000
Total secured borrowings - 20,000 20,000 - 20,000 20,000 31,000 20,000 51,000

Unsecured

Revolving credit facility (ii) - 12,500 12,500 - 24,500 24,500 - 10,000 10,000
2.5% Redeemable preference shares (iii) - 10,000 10,000 - 10,000 10,000 10,000 10,000
Total unsecured borrowings - 22,500 22,500 - 34,500 34,500 - 10,000 10,000

Total borrowings - 42,500 42,500 - 54,500 54,500 31,000 30,000 61,000

(i) Private placement

JT Group Limited received £51m under a private placement facility during August of 2012. £31m has a term of 7 years and £20m has a
term of 10 years. The first tranche accrues interest at a rate of 3.86% per annum, the second of 4.48%. The group entered into the new
RCF above to cover the repayment requirements of the £31m tranche falling due on the 6th of September 2019 not otherwise met
from normal operating cash flows of the group.
(ii ) Revolving Credit Facility (RCF)
On 06 December 2018, the group entered into a multicurrency Revolving Credit Facility “RCF” with HSBC Bank Plc, Jersey Branch
(“HSBC”) and The Royal Bank of Scotland International Limited (“RBSI”) which provided access to a facility of £15m from HSBC and
£15m from Royal Bank of Scotland International (“RBSI”), which replaced its £5m (2017: £5m) RCF facility previously held with Barclays.
Additional funding through the accordion clause within the RCF, was secured in May 2020, which provides access to an additional
£20m from RBSI. The now £50m facility is interest-bearing and is redeemable 5 years from date of the facility agreement date or,
earlier in the event of default or non-compliance with specific terms and conditions as prescribed in the facility agreement. The RCF
is therefore presented as a non-current liability within the consolidated balance sheet.
On 06 December 2018, the group terminated the Barclays RCF facility which provided for an overdraft facility of £5m (2017: £5m).
The facility was interest-bearing and when drawn down.
(iii) Redeemable preference shares
The 2.5% redeemable preference shares were issued in three tranches during 2012. Interest accrues at 2.5% per annum. The repayment
date (along with other terms and conditions) may be assessed annually at the request of the holder of the preference shares and
will be based on a future date agreed with the holder of the preference shares. Accordingly, the preference shares have been
presented as non-current liabilities within the consolidated balance sheet.
Fair value
For the majority of the borrowings, the fair values are not materially different from their carrying amounts, since the interest payable
on those borrowings is close to current market rates.
Risk exposures
Details of the group’s exposure to risks arising from current and non-current borrowings are set out in note 16.
42

Notes to the
financial statements (continued)
8. Property, plant and equipment
Network Motor Work in
Buildings plant and vehicles progress Total
equipment
£’000 £’000 £’000 £’000 £’000
Non-current
At 1 January 2018

Cost 38,457 229,008 1,627 2,414 271,506

Accumulated depreciation and impairment (22,564) (135,537) (937) - (159,038)
Net book amount 15,893 93,471 690 2,414 112,468

Year ended 31 December 2018

Opening net book amount 15,893 93,471 690 2,414 112,468
Exchange differences 2 (47) - - (45)
Additions - through acquisition of subsidiary - 107 - - 107
Additions 10 805 - 19,540 20,355
Reclassifications to intangible assets - (303) - - (303)
Transfer from capital work in progress 1,178 18,815 - (19,993) -
Disposals (94) (6) - - (100)
Depreciation charge (2,101) (14,971) (149) - (17,221)
Closing net book amount 14,888 97,871 541 1,961 115,261

At 31 December 2018
Cost 38,057 247,661 1,627 1,962 289,307
Accumulated depreciation and impairment (23,169) (149,790) (1,087) - (174,046)
Net book amount 14,888 97,871 540 1,962 115,261

Year ended 31 December 2019

Cost 38,057 247,661 1,627 1,962 289,307
Accumulated depreciation and impairment (23,169) (149,790) (1,087) - (174,046)
Net book amount 14,888 97,871 540 1,962 115,261

Exchange differences 28 (25) - - 3

Additions - 427 - 18,433 18,860
Transfer from capital work in progress 855 14,346 - (15,201) -
Disposals (2) - - - (2)
Depreciation charge (1,812) (16,167) (149) - (18,128)
Closing net book amount 13,957 96,452 391 5,194 115,994

At 31 December 2019
Cost 38,940 262,409 1,627 5,194 308,170
Accumulated depreciation and impairment (24,983) (165,957) (1,236) - (192,176)
Net book amount 13,957 96,452 391 5,194 115,994

Year ended 31 December 2020

Cost 38,940 262,409 1,627 5,194 308,1707
Accumulated depreciation and impairment (24,983) (165,957) (1,236) - (192,176)
Opening net book amount 13,957 96,452 391 5,194 115,994

Exchange differences 7 (87) - - (80)

Additions - 21 - 13,234 13,255
Disposals - (720) - - (720)
Transfers 1,316 10,596 267 (12,179) -
Depreciation charge (1,437) (17,095) (156) - (18,688)
Closing net book amount 13,843 89,167 502 6,249 109,761
 43

Notes to the
financial statements (continued)
8. Property, plant and equipment (continued)
Network Motor Work in
Buildings plant and vehicles progress Total
equipment
£’000 £’000 £’000 £’000 £’000

At 31 December 2020
Cost 40,263 272,219 1,894 6,249 320,625
Accumulated depreciation and impairment (26,240) (183,052) (1,392) - (210,864)
Net book amount 13,843 89,167 502 6,249 109,761

9. Leases
This note provides information for leases where the group is a lessee and a lessor.
Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
2020 2019 2018
£’000 £’000 £’000

Right-of-use assets
Buildings 5,955 7,075 8,094
Technical sites 4,343 4,630 5,002
Network assets 1,102 1,177 1,267
Others 20 28 31
11,420 12,910 14,394

Lease liabilities
Current 2,197 2,268 2,278
Non-current 9,474 10,796 12,235
11,671 13,064 14,513
Additions to the right-of-use assets during the 2020 financial year were £722.
Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
2020 2019 2018
£’000 £’000 £’000

Depreciation charge of right-of-use assets

Buildings 1,118 1,125 915
Technical sites 761 761 770
Network assets 335 292 212
Others 3 3 3
2,217 2,181 1,900

Interest expense (included in finance cost) 227 248 255

Expense relating to short-term leases (included in cost of goods sold
71 130 50
and administrative expenses)

Expense relating to leases of low value assets that are not shown
111 132 128
above as short-term leases (included in administrative expenses)

The total cash outflow for leases in 2020 was £2.2m. During the year the group recognised an impairment loss of £0.36m in the
consolidated statement of profit or loss following the closure of one the group’s office buildings.
44

Notes to the
financial statements (continued)
10. Intangible assets

Capital
Development Website IP & IP work in
Goodwill costs purchased rights progress Total
£’000 £’000 £’000 £’000 £’000 £’000
Non-current assets
At 1 January 2018

Cost 37,824 21,887 153 - - 59,864

Accumulated amortisation and impairment (22,314) (17,246) (148) - - (39,708)
Net book amount 15,510 4,641 5 - - 20,156

Year ended 31 December 2018

Opening net book amount 15,510 4,641 5 - - 20,156

Reclassifications from tangible assets - 303 - - - 303
Reclassifications from goodwill to development costs - - - - - -
Additions - 118 8 - 1,887 2,013
Additions - through acquisition - - - 8,873 - 8,873
Transfer from capital work in progress - 1,856 31 - (1,887) -
Disposals - (103) - 2 - (101)
Exchange differences (65) (21) - 5 - (81)
Amortisation charge - (2,681) (4) (395) - (3,080)
Impairment charge for the year (3,860) - - - - (3,860)
Closing net book amount 11,585 4,113 40 8,485 - 24,223

At 31 December 2018

Cost 37,759 20,987 192 8,880 - 67,818

Accumulated amortisation and impairment (26,174) (16,874) (152) (395) - (43,595)
Net book amount 11,585 4,113 40 8,485 - 24,223

At 1 January 2019

Cost 37,759 20,987 192 8,880 - 67,818

Accumulated amortisation and impairment (26,174) (16,874) (152) (395) - (43,595)
Net book amount 11,585 4,113 40 8,485 - 24,223

Year ended 31 December 2019

Opening net book amount 11,585 4,113 40 8,485 - 24,223

Additions - - - 546 2,054 2,600
Transfer from capital work in progress - 573 - - (573) -
Disposals - - - - - -
Exchange differences - (64) - (34) - (98)
Amortisation charge - (2,448) (13) (1,149) - (3,610)
Impairment charge for the year (3,951) - - - - (3,951)
Closing net book amount 7,634 2,174 27 7,848 1,481 19,164

At 31 December 2019

Cost 37,759 21,496 192 9,426 1,481 70,354

Accumulated amortisation and impairment (30,125) (19,322) (165) (1,578) - (51,190)
Net book amount 7,634 2,174 27 7,848 1,481 19,164
 45

Notes to the
financial statements (continued)

Capital
Development Website IP & IP work in
Goodwill costs purchased rights progress Total
£’000 £’000 £’000 £’000 £’000 £’000
Non-current assets
At 1 January 2020

Cost 37,759 21,496 192 9,426 1,481 70,354

Accumulated amortisation and impairment (30,125) (19,322) (165) (1,578) - (51,190)
Net book amount 7,634 2,174 27 7,848 1,481 19,164

Year ended 31 December 2020

Opening net book amount 7,634 2,174 27 7,848 1,481 19,164

Additions - - - - 4,958 4,958
Transfer from capital work in progress - 3,391 - - (3,391) -
Disposals (3,371) 45 (2) - - (3,328)
Exchange differences - 191 - 54 (65) 180
Amortisation charge - (2,186) (10) (1,164) - (3,360)
Closing net book amount 4,263 3,615 15 6,738 2,983 17,614

At 31 December 2020

Cost 37,759 24,887 190 9,426 3,048 75,310

Accumulated amortisation and impairment (33,496) (21,272) (175) (2,688) (65) (57,696)
Net book amount 4,263 3,615 15 6,738 2,983 17,614

Impairment tests for goodwill

Goodwill is monitored by management at the level of the cash generating units identified in note 2.:

2020 2019 2018

£’000 £’000 £’000

Newtel 4,262 4,262 4,262

Worldstone - 2,862 7,323
Net book amount 4,262 7,124 11,585

Significant estimate: key assumptions used for value-in-use calculations

The group tests whether goodwill has suffered any impairment on an annual basis. For the 2020, 2019 and 2018 reporting periods,
the recoverable amount of the CGUs were determined based on calculations to assume an equity value which require the use
of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a
five-year period. Cash flows beyond the five-year period are determined through the use of a terminal multiple and discounted to
their present value.
46

Notes to the
financial statements (continued)
The following table sets out the key assumptions for those CGUs that have significant goodwill allocated to them:

2020 Newtel

EBITDA % -1%
Annual capital expenditure £1.5m
Terminal multiple 6
Pre-tax discount 10.20%

2019 Newtel Worldstone

EBITDA % -1% 1%
Annual capital expenditure £1.5m £0.05m
Terminal multiple 6 9
Pre-tax discount 10.20% 12%

2018 Newtel Worldstone

EBITDA % -1% 1%
Annual capital expenditure £1.5m £0.05m
Terminal multiple 6 8
Pre-tax discount 10.20% 12%

Management has determined the values assigned to each of the above key assumptions as follows:

Assumption Approach used to determining values

EBITDA Forecasted EBITDA takes into account expected growth/decline in
revenues, cost of sales and operating expenses based on past
performance and management’s expectations for the future.
Operating expenditures are forecasted based on the current structure
of the business

Annual capital expenditure Expected cash costs in the CGUs. This is based on the historical
experience of management.

Terminal multiple This the terminal multiple used to extrapolate cash flows beyond
the forcasted 5 year period. The multiples are consistent with the
telecommunications industry.

Pre-tax discount rate A Weighted Average Cost of Capital (WACC) is used to discount the
future cash flow to assume a present value, or an alternative rate
considered appropriate for the business and the environment and
market in which it operates.
 47

Notes to the
financial statements (continued)
Significant estimate – impairment charge
Worldstone
During the 2019 financial year, the group recognised an impairment charge of £3,951 which arose in the Worldstone CGU following a
difficult year in the UK retail market and uncertainties surrounding Brexit, exacerbated by COVID-19 since March 2020.
As at 31 December 2019, the recoverable amount of the entire CGU amounted to £5,503, representing the CGU’s value in use. There has
been no change in the underlying assets included within the CGU since the group’s previous assessment of the recoverable amount
in 2018.
Worldstone has been classified a separate CGU with 100% of the goodwill that arose on acquisition date being fully allocated to the CGU.
During the year, the group disposed of its 100% interest in Worldstone and related entities. On date of sale, the carrying value of the
goodwill was derecognised and include as part of the loss on sale of the subsidiary in the Consolidated statement of profit or loss.
For more information relating to the sale refer to note 19.

Significant estimate: impact of possible changes in key assumptions

Newtel
An impairment trigger would occur if EBITDA were to fall by more than 35% over the forecasted period in the valuation of the CGU.
No impairment has been recognised against the goodwill carried for Newtel in 2019 or 2018.

11. Deferred tax balances

Deferred tax assets

The balance comprises temporary differences attributable to:

2020 2019 2018
Notes £’000 £’000 £’000
Tax losses 65 783 947
Defined benefit pension obligation 148 142 142
Lease liabilities 62 38 27
Total deferred tax assets 275 963 1,116

Set-off of deferred tax liabilities pursuant to set-off provisions (210) (180) (169)
Net deferred tax assets 65 783 947

A deferred tax asset of £65 (2019: nil) has been recognised in respect of losses arising in JT Australasia Pty Ltd (the “Australian
company”), as we conclude that it is probable that the Australian company will generate taxable profits against which the
losses can be utilised. The Australian company’s income is derived from Australian Fraud Protection customers which commenced
in November 2020 and from acting as a cost centre for services supplied by Australian employees on an arm’s length basis to other
members of the group.
48

Notes to the
financial statements (continued)
Movements
Pension Lease
Loses obligation liabilities Other Total
£’000 £’000 £’000 £’000 £’000

At 1 January 2018
(Charged)/credited 941 145 17 - 1,103
-on acquisition 51 - - - 51
-to profit or loss (46) (1) 10 - (37)
-to other comprehensive income - (2) - - (2)
At 31 December 2018 947 142 27 - 1,116

At 1 January 2019 947 142 27 - 1,116

(Charged)/credited - - - - -
- to profit or loss (112) - 11 - (101)
-to other comprehensive income - - - - -
-other adjustments (52) - - - (52)
At 31 December 2019 783 142 38 - 963

At 1 January 2020

(Charged)/credited 783 142 38 - 963

-on profit or loss (718) (6) 24 - (700)
-to other comprehensive income - 12 - - 12
At 31 December 2020 65 148 62 - 275
 49

Notes to the
financial statements (continued)
Deferred tax liabilities

The balance comprises temporary differences attributable to:

2020 2019 2018
£’000 £’000 £’000

Property, plant and equipment 9,996 10,184 9,950

Other
Right-of-use assets 19 22 19
Other 20 158 38
Total other 39 180 57

Total deferred tax liabilities 10,035 10,364 10,007

Set-off of deferred tax liabilities pursuant to set-off provisions (210) (180) (169)

Net deferred tax liabilities 9,825 10,184 9,838

Movements
Property
and plant Right of use
equipment assets other Total
At 1 January 2018 9,411 16 55 9,482
Charged/(credited)
- new acquisitions 125 - - 125
- to profit or loss 414 3 (15) 402
- to other comprehensive income - - - -
At 31 December 2018 9,950 19 40 10,009
At 1 January 2019
Charged/(credited)
- to profit or loss 234 3 84 321
- discontinued operations - - 10 10
- to other comprehensive income - - 24 24

At 31 December 2019 10,184 22 158 10,364

At 1 January 2020
Charged/(credited)
- to profit or loss (130) (3) - (133)
- to other comprehensive income - - - -
Other adjustment (58) - (138) (196)
At 31 December 2020 9,996 19 20 10,035
50

Notes to the
financial statements (continued)
12. Inventories

2020 2019 2018

£’000 £’000 £’000
Current assets
Finished goods at cost 4,452 4,148 3,180
Total deferred tax assets 4,452 4,148 3,180

Inventories have been reduced by £104 (2019: £89 2018: £107) as a result of a write-down to net realisable value. This write-down was
recognised as an expense during the year ended 31 December 2020 and included in cost of sales in the Consolidated statement of
profit or loss.

Finished goods
Finished goods includes: Telecommunications Equipment, Network, Circuits, Internet and Mobile Handsets.
Assigning costs to inventories
The costs of individual items of inventory are determined using weighted average costs.
Amounts recognised in profit or loss
Inventories recognised as an expense during the year ended 31 December 2020 amounted to £10.2m (2019: £10.2m, 2018: £9.5m).
These were included in cost of sales.

13. Employee benefit obligations

Defined contribution pension plans
Most employees are members of the JT Group Limited Pension Plan, a defined contribution scheme administered by Alexander
Forbes. The plan receives fixed contributions from group companies at 10% of members’. The group’s legal or constructive obligation
for these plans is limited to the contributions. The expense recognised in the current period in relation to these contributions was
£1.09m (2019 – £0.9m, 2018 – £0.8m).
Defined benefit pension plans
The group operates three defined benefit pension plans, the Public Employees Contributory Retirement Scheme (“PECRS”),
two Telecommunications Board Pension Scheme (“TBPS”) and Public Employees’ Pension Scheme (PEPS).
Both plans are final salary pension plans, which provide benefits to members in the form of a guaranteed level of pension payable
for life. The level of benefits provided depends on members’ length of service and their salary in the final years leading up to
retirement. Pensions in payment are generally updated in line with the retail price index.
PECRS & PEPS
The PECRS is a defined benefit pension plan, providing retirement benefits based on final salary.
JT (Jersey) Limited participates in the PECRS as an Admitted Body under a Terms of Admission Document which sets out how the
contributions to and assets of the company’s notional Sub-Fund are to be determined.
With effect from 1 October 2015 the Terms of Admission were amended to remove the requirement for the Scheme’s Actuary to
monitor a ring-fenced Sub-Fund for the purpose of setting JT (Jersey) Limited’s contributions to the Scheme. Under the amended
terms JT (Jersey) Limited’s contributions will increase over a period to 2020 in accordance with a fixed schedule. Thereafter
contribution rates will be set in accordance with Jersey Law insofar as it applies to Admitted Bodies in the Scheme. Under the
revised Terms of Admission there is insufficient information available to use defined benefit accounting and, with effect from
1 October 2015, JT (Jersey) Limited has accounted for the Scheme as if it was a defined contribution scheme.
From 1st January 2019 most employees on the PECRS scheme moved to PEPS.
 51

Notes to the
financial statements (continued)
TBPS
TBPS is an unfunded plan where the group meets the benefit payment obligation as it falls due. The scheme holds a small cash
reserve but is otherwise unfunded with pensions payable on a pay as you go basis.
Responsibility for governance of the plans – including investment decisions and contributions schedules – lies jointly with the group
and the board of trustees. The board of trustees must be composed of representatives of the group and plan participants in
accordance with the plan’s regulations.
The TBPS is an unfunded scheme under which a defined benefit pension is payable to current pensioners.
The IFRS disclosure of the TBPS has been based on a valuation of the liabilities of the scheme as at 31 December 2020, 31 December
2019 and 31 December 2018 using the membership data at the accounting date. The present values of the defined benefit obligation
and the related current service cost were measured using the projected unit method. Employer contributions in 2021 are expected to
be £0.04m (2019: £0.04m 2018: £0.04m) to provide for the payment of benefits to pensioners.
Actuarial gains and losses have been recognised in the period in which they occur, (but outside the income statement), through
other comprehensive income (“OCI”).
The principal assumptions used by the independent qualified actuaries to calculate the liabilities under IFRS are set out below:
Balance sheet amounts
The amounts recognised in the balance sheet and the movements in the net defined benefit obligation over the year are as follows
Present value of obligation

2020 2019 2018

£’000 £’000 £’000
Balance at 1 January 714 711 738
Current service cost - - -
Past service - - -
Interest expense/(income) 13 19 17
Total amount recognised in profit or loss 13 19 17

Remeasurements
Acturial (gains) / losses due to the financial assumptions 44 47 -
Acturial (gains) / losses due to changes in demographic assumptions 12 (29) -
Acturial (gains) / losses due to liability experience 2 3 (8)
Total amount recognised in other comprehensive income 58 21 (8)

Contributions
Employers (38) (37) (36)

Payments from plan: - - -

Benefit payments - - -
Settlements - - -
Balance at 31 December 747 714 711

The net liability disclosed above relates to funded and unfunded plans as follows:
2020 2019 2018
£’000 £’000 £’000
Present value of funded obligations 747 714 711
Fair value of plan assets (6) (3) (3)
Funded status 741 711 708
Unrecognised asset due to the limit in paragraph 64 - - -
Total deficit of defined benefit pension plans 741 711 708

The split of the defined benefit obligation at the last valuation between the various categories of members is as follows:
• Actives 0%
• Deferreds 0%
• Pensioners 100%
52

Notes to the
financial statements (continued)
Post-employment benefits
Significant estimates: actuarial assumptions and sensitivity
The significant actuarial assumptions were as follows:

2020 2019 2018

Discount rate to scheme liabilities 1.3 1.9 2.7
Rate of increase to pensions 2.8 2.8 3.0
Jersey price inflation 2.8 2.8 3.0

Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and experience in
each territory. These assumptions translate into an average life expectancy in years for a pensioner retiring at age 75:

Post retirement mortality assumptions

Males

Standard SAPS 3 “All Lives” tables Standard SAPS 2 “All Lives” tables
Base table
(S2PMA) (S2PMA)

Scaling to above base table rates 105% 105%

CMI 2018 Projections CMI 2018 Projections
(Sk=7.0, A=0.5) and a (Sk=7.5, A=0.0) and a
Improvements to base table longterm rate of future longterm rate of future
improvements of 1.5% p.a. improvements of 1.5% p.a.

Future life time from age 75 13.4 13.2

Females

Standard SAPS 3 “All Lives” tables Standard SAPS 2 “All Lives” tables
Base table
(S2PMA) (S2PMA)

Scaling to above base table rates 105% 105%

CMI 2018 Projections CMI 2018 Projections
(Sk=7.0, A=0.5) and a (Sk=7.5, A=0.0) and a
Improvements to base table longterm rate of future longterm rate of future
improvements of 1.5% p.a. improvements of 1.5% p.a.

Future life time from age 75 13.4 13.2

 53

Notes to the
financial statements (continued)
The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:

Adjustment to the discount rate +0.1% p.a. Base figure -0.1% p.a.

Present value of total obligation (£K) 739 747 755

% Change in present value of total obligation -1.1% - 1.1%

Rate of increase to pension payment

Adjustment to pension increase rate +0.1% p.a. Base figure -0.1% p.a.

Present value of total obligation (£K) 739 747 755

% Change in present value of total obligation -1.1% - 1.1%

Post retirement mortality assumption

Adjustment to pension increase rate -1 year Base figure +1 year

Present value of total obligation (£K) 788 747 707

% Change in present value of total obligation 5.5% - -5.5%

*A rating of +1 year means that members are assured to follow the mortality pattern of the base table for an individual that is 1 year older than them.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice,
this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined
benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated
with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit
liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Balance sheet amounts

The major categories of plan assets are as follows:

Value at Value at Value at

(vii) Split of assets
31 December 2020 31 December 2019 31 December 2018

Equities 0 0 0

Property 0 0 0

Fixed interest Gilts 0 0 0

Corporate Bonds 0 0 0

Cash 6 6 3

Total 6 6 3
54

Notes to the
financial statements (continued)
Risk exposure
Through its defined benefit pension plans the group is exposed to a number of risks, the most significant of which are detailed
below:
Changes in bond yields A decrease in corporate bond yields will increase the value placed on the defined
benefit obligation for accounting purposes.
Inflation risks Pension liabilities are linked to price inflation. Higher inflation, or higher expectations of
future inflation, will lead to a higher defined benefit obligation.

Life expectancy The Scheme’s obligations are to provide benefits for the life of the beneficiaries following retirement,
so increases in life expectancy will result in an increase in the defined benefit obligation.

14. Provisions

2020 2019 2018

Non- Non- Non-
Current current Total Current current Total Current current Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Asset retirement obligations (i) - 1,989 1,989 - 1,708 1,708 - 1,617 1,617
Other provisions (ii) - 2,289 2,289 - 893 893 - 657 657

- 4,278 4,278 - 2,601 2,601 - 2,274 2,274

(i)Asset retirement obligations and dilapidations

Asset retirement obligations involves an estimate of the cost to dismantle equipment and restore network sites upon vacation and
the timing of the event.
Dilapidations involves an estimate of the cost to restore leased premises to their original condition at the end of the lease under
terms of the lease.
(ii) Other provisions
Other provisions consist of the group’s best estimate of the cost to settle litigation, disputes and regulatory matters across a range
of issues, including price, service, regulatory and contractual issues. When estimating the likely value of the provision, management
make key judgements, including in regard to interpreting local and UK regulations and past and current claims. The charge/credit for
the year represents the outcome of management’s reassessment of the estimates.
Movements in provisions
Movements in each class of provision during the financial year are set out below:
 55

Notes to the
financial statements (continued)

Asset
retirement Other
obligations provisions Total
31 December 2018 £’000 £’000 £’000
Carrying amount at start of year 1,516 274 1,790

Charged/(credited) to profit or loss

- additional provision recognised 101 - 101
- additional provisions recognised - 383 383
- unused amounts reversed - - -
- unwinding of discount - - -
Amounts used during the year - - -
Carrying amount at end of year 1,617 657 2,274

Asset
retirement Other
obligations provisions Total
31 December 2019 £’000 £’000 £’000
Carrying amount at start of year 1,617 657 2,274

Charged/(credited) to profit or loss

- additional provision recognised 90 295 385
- unused amounts reversed - (59) (59)
- unwinding of discount - - -
Amounts used during the year - - -
Carrying amount at end of year 1,707 893 2,600

Asset
retirement Other
obligations provisions Total
31 December 2020 £’000 £’000 £’000
Carrying amount at start of year 1,707 893 2,600

Additional provision charged to plant and equipment - - -

Charged/(credited) to profit or loss

- additional provision recognised 240 1,396 1,636
- unused amounts reversed - - -
- unwinding of discount 42 - 42
Amounts used during the year - - -
Carrying amount at end of year 1,989 2,289 4,278
56

Notes to the
financial statements (continued)
15. Equity
Share capital and share premium

2020 2019 2018 2020 2019 2018

Notes shares shares shares £’000 £’000 £’000

Ordinary shares
Fully paid 20000 20000 20000 20,000 20,000 20,000
Total share capital and share premium 20000 20000 20000 20,000 20,000 20,000

Movements in ordinary shares:

Number of Share
shares Par value premium Total
Notes (thousands) £’000 £’000 £’000
Details
Opening balance 1 January 2018 20000 20,000 - 20,000
Balance 31 December 2018 20000 20,000 - 20,000
Balance 31 December 2019 20000 20,000 - 20,000
Balance 31 December 2020 20000 20,000 - 20,000

Ordinary shares
Ordinary shares have a par value of £1. They entitle the holder to participate in dividends, and to share in the proceeds of winding up
the company in proportion to the number of and amounts paid on the shares held. The company does not have a limited amount of
authorised capital. At 31 December 2020 there were 20,000 ordinary shares fully paid up.
Other reserves
The following table shows a breakdown of the balance sheet line item ‘other reserves’ and the movements in these reserves during
the year. A description of the nature and purpose of each reserve is provided in the below table.
 57

Notes to the
financial statements (continued)

Foreign
currency Total other
translation reserves
£’000 £’000
At 1 January 2018 (487) (487)

Foreign operations - translation differences 772 772

Other comprehensive income 772 772

At 31 December 2018 285 285

At 1 January 2019 285 285

Foreign operations - translation differences (643) (643)

Other comprehensive income (643) (643)

At 31 December 2019 (358) (358)

At 1 January 2020 (358) (358)

Foreign operations - translation differences 73 73

Other comprehensive income 73 73

At 31 December 2020 (285) (285)

Nature and purpose of other reserves

Foreign currency translation
Exchange differences arising on translation of the long term foreign intercompany balances, including the results and financial
position of foreign operations, are recognised in other comprehensive income and accumulated in a separate component of equity.
The cumulative amount is reclassified to profit or loss when the net investment in the subsidiary is disposed.
58

Notes to the
financial statements (continued)
Retained earnings
Movements in retained earnings were as follows:

2020 2019 2018

£’000 £’000 £’000
Balance 1 January 64,494 67,768 69,756
Net (loss)/profit for the year (4,137) 1,518 2,761

Items of other comprehensive income recognised directly in

retained earnings

Remeasurements of post-employment benefit obligations (net of tax) (46) (17) 6

Transfers - - 35
Dividends (4,105) (4,775) (4,790)
Balance 31 December 56,206 64,494 67,768

Net debt reconciliation

This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.

2020 2019 2018

£’000 £’000 £’000
Net debt
Cash and cash equivalents 10,602 7,259 16,930
Borrowings (32,500) (44,500) (51,000)
Lease liabilities (11,671) (13,064) (14,513)

Net debt (33,569) (50,305) (48,583)

Cash and liquid investments 10,602 7,259 16,930

Gross debt - fixed interest rates (31,671) (33,064) (34,513)
Gross debt - fixed and variable interest rate components (12,500) (24,500) (31,000)

Net debt (33,569) (50,305) (48,583)

 59

Notes to the
financial statements (continued)

Liabilities from financing activities Other

Borrowings Leases Sub-total Cash Total

£’000 £’000 £’000 £’000 £’000

Net debt as at 1 January 2018 (51,000) (14,591) (65,591) 16,930 (48,661)

Cash flows - 2,124 2,124 - 2,124
Acquisitions - finance leases - (2,046) (2,046) - (2,046)
Foreign exchange adjustments - - - - -
Net debt as at 31 December 2018 (51,000) (14,513) (65,513) 16,930 (48,583)

Cash flows 6,500 2,394 8,894 (9,671) (777)

Acquisitions - finance leases - (945) (945) - (945)
Foreign exchange adjustments - - - - -
Net debt as at 31 December 2019 (44,500) (13,064) (57,564) 7,259 (50,305)

Cash flows 12,000 2,211 14,211 3,343 17,554

Acquisitions - finance leases - (818) (818) - (818)
Foreign exchange adjustments - - - - -
Net debt as at 31 December 2020 (32,500) (11,671) (44,171) 10,602 (33,569)

Movements in borrowings are the aggregate movement of draw downs and repayments as disclosed in the cash flow statement.

16. Financial risk management

This note explains the group’s exposure to financial risks and how these risks could affect the group’s future financial performance.
Current year profit and loss information has been included where relevant to add further context.

Risk Exposure arising from Measurement Management

Market risk - foreign exchange Future commercial Cash flow forecasting Accounts receivable and
transactions recognised sensitivity analysis payable matching Spot and
financial assets and liabilities forward FX transactions to
not denominated in GBP limit exposure

Market risk - interest rate Long-term borrowings at Sensitivity analysis Monitored but limited exposure
variable rates Cash flow forecasting as currently no long term
borrowings at variable rates

Credit risk Cash and cash equivalents, Debt level reporting Credit limits monitoring
trade receivables and contract
assets

Liquidity risk Borrowings and other Rolling cash flow forecasts Availability of committed
liabilities credit lines and borrowing
facilities
60

Notes to the
financial statements (continued)
The group’s financial risk management is predominantly controlled by a central treasury department (group treasury) under policies
approved by the board of Directors. Group treasury identifies, evaluates and hedges financial risks in close co-operation with the
group’s operating units. The board provides written principles for overall risk management.

Market risk - Foreign exchange risk

Exposure
The group’s exposure to foreign currency risk at the end of the reporting period, expressed in pounds sterling was as follows:

31 December 2020 31 December 2019 31 December 2018

USD EUR CAD USD EUR CAD USD EUR CAD

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Trade receivables 1,998 739 58 1,539 759 24 680 283 6

1,998 739 58 1,539 759 24 680 283 6

31 December 2020 31 December 2019 31 December 2018

USD EUR CAD USD EUR CAD USD EUR CAD

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Trade payables 702 255 - 2,200 1,393 - 1,973 121 -

702 255 - 2,200 1,393 - 1,973 121 -

The aggregate net foreign exchange gains/losses recognised in profit or loss were:

USD EUR CAD

£’000 £’000 £’000

Foreign exchange gains or losses (92) 27 (0.4)

 61

Notes to the
financial statements (continued)
Risk management
The group operates internationally and is exposed to foreign exchange risk, the US dollar, Euro, Canadian dollar, Australian dollar
and Danish Krone.
The group’s treasury department is responsible for reviewing, monitoring and management of the group’s risk management policies
in response to foreign currency exposure. The group’s overall strategy is to reduce, eliminate or mitigate foreign exchange risk and
related uncertainties. This is achieved through an ultimate objective to natural hedge exposures in payables against receivables
insofar as possible, and limit exposure by maintaining balances in currency to cover short term net payable demands in each currency.
The group measures its risk exposures by maintaining a 2 year rolling cash forecast and performs monthly reviews and
reforecasting of foreign currency cash flows. Where material committed exposures are identified, the risk and certainty around the
cashflows are assessed and appropriate actions taken to reduce risk in line with the foreign exchange policy, e.g. through financial
hedging instruments.

Price risk
The group has no price risk exposure for the year ended 31 December 2020.

Credit risk
Credit risk arises from cash and cash equivalents, contract assets and outstanding receivables.

Risk management
Credit risk is managed for the group through a ‘Know Your Customer’ (“KYC”) process which includes a credit check performed by an
independent 3rd party to ensure customer risks are understood and appropriate action taken before the customer is on-boarded.
Credit limits are applied in accordance with the assessed risk and where necessary deposits held on account until such time as
considered necessary to reduce an assumed assessed risk e.g. businesses with little or no payment or credit history.
It is mandatory for all new consumer customers to agree to pay through direct debit and any additional sales made to existing
account holders require an internal review of the customers payment history to mitigate the credit risk from our consumer business.

Impairment of financial assets

The group has two types of financial assets that are subject to the expected credit loss model:
• Trade receivables for sales of inventory and from the provision of telecommunication services
• Contract assets relating to contracts with customers
While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, any potential impairment losses are
deemed immaterial.

Trade receivables and contract assets

The group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance
for all trade receivables and contract assets.
To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk
characteristics and the days past due. The contract assets relate to unbilled work in progress and have substantially the same risk
characteristics as the trade receivables for the same types of contracts. The group has therefore concluded that the expected loss
rates for trade receivables are a reasonable approximation of the loss rates for the contract assets.
The expected loss rates are based on the payment profiles of sales over a period of 24 months before 31 December 2019 and the
corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and
forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The group
has identified the GDP and the unemployment rate of the countries in which it sells its goods and services to be the most relevant
factors, and accordingly adjusts the historical loss rates based on expected changes in these factors. In addition, reviews are
performed with the group’s debt collection team and management to ensure a reasonable loss rate is applied.
62

Notes to the
financial statements (continued)
On that basis, the loss allowance as at 31 December 2020, 31 December 2019 and 31 December 2018 was determined as follows for
both trade receivables and contract assets:

More than More than More than More than

Current 30 days 60 days 90 days 120 days Total
past due past due past due past due

31 December 2020

Expected loss rate 0.24% 0.30% 3.24% 5.67% 83.78%

Gross carrying amount - trade receivables 18,585 5,611 632 321 7,411 32,560
Gross carrying amount - contract assets 198 - - - - 198
Loss allowance 44 17 20 18 6,209 6,308

31 December 2019
Expected loss rate 0.53% 0.57% 2.25% 5.15% 7.01%
Gross carrying amount - trade receivables 22,985 4,920 1,580 483 6,800 36,768
Gross carrying amount - contract assets 415 - - - - 415
Loss allowance 121 28 36 25 477 687

31 December 2018
Expected loss rate 0.10% 0.55% 1.81% 6.43% 32.18%
Gross carrying amount - trade receivables 29,622 3,854 1,184 403 4,091 39,154
Gross carrying amount - contract assets 515 - - - - 515
Loss allowance 31 21 21 26 1,316 1,415

The loss allowances for trade receivables and contract assets as at 31 December reconcile to the opening loss allowances as follows:

2020 2019 2018

£’000 £’000 £’000
Opening loss allowance at 1 January 687 1,415 1,024
Increase in loan loss allowance recognised in profit or loss
6,015 291 1,008
during the year
Receivables written off during the year as uncollectable 422 290 221
Unused amount reversed (28) 728 396
Closing loss allowance 31 December 6,308 687 1,415

Trade receivables and contract assets are written off where there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the group,
and a failure to make contractual payments for a period of greater than 120 days past due.
Impairment losses on trade receivables and contract assets are presented as provision for and write-off of bad debts within
operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.
Significant estimates and judgements

Impairment of financial assets

The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The group uses
judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the group’s past history
and existing market conditions, as well as forward-looking estimates at the end of each reporting period. Details of the key
assumptions and inputs used are disclosed in the tables above.
 63

Notes to the
financial statements (continued)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash balances and ensuring the availability of funding through
an adequate amount of committed credit facilities to meet obligations when due and to close out market positions.
Management monitors rolling forecasts of the group’s liquidity reserve (comprising the undrawn borrowing facilities below) and
cash and cash equivalents (note 7) on the basis of expected cash flows.
This is generally carried out at group level. In addition, the group’s liquidity management policy involves projecting cash flows in
major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios and
managing current and planned debt financing.

Financing arrangements
The group had access to the following undrawn borrowing facilities at the end of the reporting period:

2020 2019 2018

Variable rate £’000 £’000 £’000

- Expiring beyond one year (RCF) 37,500 5,500 30,000

37,500 5,500 30,000

Refer to note 7 for more information relating to the above financial liabilities.

Maturities of financial liabilities

The tables below analyse the group’s financial liabilities into relevant maturity groupings based on their contractual maturities for
all non-derivative financial liabilities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying
balances as the impact of discounting is not significant.

Contractual maturities of financial Total Carrying amount

liabilities at 31 December 2020 less than 6 6-12 Between Between Over contractual (assets)/
months months 1-2 years 2-5 years 5 years cash flows (liabilities)
Non-Derivatives
Trade payables and other payables 35,322 - - - - 35,322 35,322
Borrowings 541 541 21,102 12,598 - 34,783 32,500
2.5% preference shares 100 100 400 600 10,000 11,200 10,000
Lease liabilities 1,151 1,151 3,635 4,233 2,468 12,638 11,670
Total Non-Derivatives 37,114 1,792 25,137 17,431 12,468 93,943 89,492

Contractual maturities of financial

liabilities at 31 December 2019

Non-Derivatives
Trade payables and other payables 37,235 - - - - 37,235 37,235
Borrowings 633 633 1,286 44,552 - 44,500 44,500
2.5% preference shares 100 100 200 200 10,000 10,600 10,000
Lease liabilities 1,184 1,184 4,243 5,277 3,118 15,007 13,064
Total Non-Derivatives 39,152 1,917 5,729 50,029 13,118 107,342 104,799

Contractual maturities of financial

liabilities at 31 December 2018

Non-Derivatives
Trade payables and other payables 40,284 - - - - 40,284 40,284
Borrowings 1,046 32,046 996 21,992 - 56,080 51,000
2.5% preference shares 100 100 200 200 10,000 10,600 10,000
Lease liabilities 1,199 1,199 4,671 6,148 4,187 17,406 14,514
Total Non-Derivatives 42,629 33,345 5,867 28,340 14,187 124,370 115,798
64

Notes to the
financial statements (continued)
17. Capital management
Risk management
The group’s primary objective when managing capital is to maintain sufficient equity to ensure stability and provide a return for our
shareholder, the Government of Jersey, while allowing access to necessary funding when required.
Under the terms of the borrowing facilities of the group’s RCF and private placements as described in note 7, the group is required to
meet certain financial covenants which impose capital requirements. The group has complied with these requirements throughout
the year, and continues to meet its requirements on all covenants.

2020 2019 2018

£’000 £’000 £’000
(i) Ordinary shares
Final dividend for the previous year end of 0.1095 pence
2,190 2,525 2,395
(2019 - 0.1125 pence, 2018 - 0.1198 pence) per fully paid

Interim dividend for the current year end of 0.9575 pence

1,915 2,250 2,395
(2019 - 0.1263 pence, 2018 - 0.1198 pence) per fully paid
4,105 4,775 4,790

Dividends not recognised at the end of the reporting period

In addition to the above dividends, since year end the Directors have recommended the payment of a final dividend of 9.853 pence
per fully paid ordinary share (2019: 1.095 pence, 2018: 1.125 pence). The aggregate amount of the proposed dividend expected to
be paid by 31 July 2021 out of retained earnings at 31 December 2020, but not recognised as a liability at year end, is £1.97m (2019:
£2.19m, 2018: £2.53m).

18. Acquisition of subsidiary

On 17 August 2018, the group through Jersey Telecom (UK) Limited, which already had a 20% interest in NeoConsult ApS and Nomad
IP ApS (the “entities”), completed the acquisition of a further 80% equity interest, thus obtaining full control. The transaction was
completed for a consideration of £9.3m made up of a cash and a guaranteed and performance related deferred consideration
component, payable over 3 years. The entities’ results were consolidated in the group’s income statement from 17 August 2018.

19. Discontinued operation

During the year the group sold its shareholding in Corporate Communications Holding Limited and its associated subsidiaries
(“Worldstone”). The entities were sold on 30 October 2020 and is reported as a discontinued operation in the current year’s financial
statements. Worldstone was previously not classified as held-for-sale or as a discontinued operation. The comparative consolidated
statement of profit or loss and other comprehensive income has been represented to show the discontinued operation separately
from continuing operations.
Financial performance and cash flow information
The financial performance and cash flow information presented are for year ended 30 October 2020 and the years ended
31 December 2019 and 31 December 2018.
 65

Notes to the
financial statements (continued)

2020 2019 2018

£’000 £’000 £’000

Revenue 4,982 10,453 11,154

Cost of sales (3,253) (5,188) (5,102)
1,729 5,265 6,052
Operating expenses (5,020) (5,911) (6,883)
Loss before income tax (3,291) (646) (831)

Income tax (credit) / expense 39 (21) (16)

Loss after income tax of discontinued operation (3,252) (667) (847)

Loss on sale of the subsidiary after income tax (1,818) - -

Loss from discounted operation (5,070) (667) (847)

Net cash outflow from operating activities (3,190) (667) (847)

Net cash inflow from investing activities 2,591 - -
Net decrease in cash generated by the subsidiary (599) (667) (847)

The loss on sale of subsidiary amounting to £1,818 is presented in discontinued operations net of related income tax. The carrying
amounts of assets and liabilities as at the date of sale (30 October 2020) were:
2020
£’000
Consideration received or receivable
- Cash 2,591
Total disposal consideration 2,591

Carrying amount of net assets sold 4,409

Loss on sale of subsidiary 1,818

2020 2019 2018

£’000 £’000 £’000

Property, plant and equipment 403 681 663

Trade and other receivables 2,486 3,242 6,501
Inventory 28 28 28
Cash 233 778 1,071
Total assets 3,150 4,729 8,263

Trade and other creditors (1,603) (2,234) (5,830)

Deferred tax liabilities - (58) (48)
Provisions - (87) (87)
Total liabilities (1,603) (2,379) (5,965)

Goodwill 2,862 6,814 8,752

Net assets 4,409 9,164 11,050
66

Notes to the
financial statements (continued)
20. Interests in other entities
Subsidiaries
The group’s subsidiaries at 31 December 2020 are set out below. Unless otherwise stated, they have share capital consisting solely
of ordinary shares that are held directly by the group, and the proportion of ownership interests held equals the voting rights held
by the group. The country of incorporation or registration is also their principal place of business.

Place of
business/ Ownership interest
country of Ownership interest held by non-
Name of entity incorporation held by the group controlling interest Principal activities

2020 2019 2018 2020 2019 2018

% % % % % %

Jersey, Provision of
JT (Jersey) Limited 100 100 100 0 0 0
Channel Islands telecommunication services

Guernsey, Provision of
JT (Guernsey) Limited 100 100 100 0 0 0
Channel Islands telecommunication services

JT (Global) Limited (previously

Holding company for
Jersey Telecom UK Limited, change United Kingdom 100 100 100 0 0 0
eKit.com Inc
effective 21 December 2020)

Jersey, Provision of
JT (International) Limited 100 100 100 0 0 0
Channel Islands telecommunication services

Gigabit Field Force Limited Jersey, Provision of

100 100 100 0 0 0
(dissolved 25 February 2020) Channel Islands telecommunication services

United States Low cost roaming solutions to

eKit.com Inc 100 100 100 0 0 0
of America business and other travellers

Low cost roaming solutions to

eKit.com Pty Australia 100 100 100 0 0 0
business and other travellers

Low cost roaming solutions to

eKit.com Limited United Kingdom 100 100 100 0 0 0
business and other travellers

Supply of telecommunications
JT (Australasia) Pty Limited Australia 100 100 100 0 0 0
services and equipment

Development, consultancy,
education, production, sales
JT Denmark ApS Denmark 100 100 100 0 0 0
and investment in IT-services
and products

JT USA Inc United States Provision of IoT services

100 100 100 0 0 0
(incorporated 25 February 2020) of America primarily to the US

JT (IOT) Limited Jersey,

100 100 100 0 0 0 Provision of IoT services
(incorporated 9 December 2020) Channel Islands

JT IOT UK Limited
United Kingdom 100 100 100 0 0 0 Provision of IoT services
(incorporated 24 December 2020)
 67

Notes to the
financial statements (continued)
Interests in associates and joint ventures
In October 2016, the group acquired a 20% equity interest in NeoConsult ApS and Nomad IP ApS (the “entities”), unlisted Denmark
based IT and software services companies. The total purchase consideration, including transaction costs was £0.8m. The unamortised
portion of the goodwill was included in the investment in associate undertaking’s carrying amount. The group’s proportionate share
of the net results of the associate amounted to £0.03m for the year ended 31 December 2018 and was recognised in the consolidated
statement of profit or loss.
On 17 August 2018, the group completed a step acquisition transaction by acquiring the remaining 80% equity of the entities,
obtaining full control effective from that date, and combining the two entities into JT Denmark ApS. For more information on the
acquisition refer to note 18.
As at 31 December 2020, the group held no interest associates or joint ventures.

21. Events occurring after the reporting period

A final dividend for the year was approved for recommendation to the shareholders, note 17.
Other than as disclosed above, there have been no other subsequent events that require any adjustment or further disclosure since
the statement of financial position date.

22. Contingent liabilities and contingent assets

Contingent liabilities
The group has no contingent liabilities as at 31 December 2020.
The group had a contingent liability at 31 December 2019 in respect of a pending litigation, the decision for which was reached in
June 2020, in favour of the group. Details of the position taken in the prior year financial statements are set out below.
During 2016, a tri-party contract was signed between JT Jersey Limited (“JT”), a supplier and a customer. JT was intermediary to this
arrangement whereby it purchased voice minutes from the supplier and sold these at a margin to the customer. During 2017, the
customer failed to pay JT a cumulative debt of $2.1m (£1.7m) and in JT’s view, in line with the agreed contract, JT were not obliged to
pay the supplier for the cost of the voice minutes supplied for $2.1m (£1.7m). The supplier commenced formal arbitrage during 2019
claiming JT is liable for the $2.1m (£1.7m).
The matter was being considered by the courts at the time of signing the prior year financial statements and at the time management
considered it to be probable that the judgment would be in JT Jersey’s favour and had therefore not recognised a provision in
relation to this claim for the potential undiscounted amount of the total payments that the group could be required to make, if
there was an adverse decision related to the lawsuit, was estimated to be approximately £2.13m, which included an estimate of
legal fees of £0.43m to cover the legal costs of the plaintiff.

23. Related party transactions

Subsidiaries
Interests in subsidiaries are set out in note 20.
Key management personnel compensations
Key management includes the Directors and members of senior management. The compensation paid or payable to key
management for employee services is shown below:

2020 2019 2018

£’000 £’000 £’000

Salaries and other short term benefits 2,234 2,851 2,372

Post-employment benefits 152 101 83
2,386 2,952 2,455
68

Notes to the
financial statements (continued)

Transactions with other related parties

The following transactions and balances relating to the States of Jersey departments are reflected in the financial statements.

2020 2019 2018

£’000 £’000 £’000

Transactions
Revenue 6,418 4,902 3,977
Operating expenses 512 535 524
Preference shares interest 250 250 250
Equity dividends paid 4,105 4,775 4,790

Outstanding balances arising from sales/purchases of goods and services

The following balances are outstanding at the end of the reporting period in relation to transactions with the States
of Jersey departments:

2020 2019 2018

£’000 £’000 £’000

Balances
Trade receivables 1,092 679 633
Loss allowance (6) (6) (14)
Trade receivables less loss allowance 1,086 673 619

Trade payables - 60 20

Loans to/from related parties

2020 2019 2018
£’000 £’000 £’000

Beginning of the year 10,000 10,000 10,000

Amounts advanced - - -
Amounts repaid - - -
Interest charged (net of tax) 200 200 200
Interest paid (net of tax) (200) (200) (200)
10,000 10,000 10,000

Loans to related parties is comprised of the preference shares issued by the group’s shareholder. Refer to note 7 (c) for more
information on the terms and conditions relating to the preference shares.
 69

24. Directors emoluments

Basic
Salary/Fees Bonuses Total 2020 Total 2019 Total 2018
Executive Directors
Graeme Millar 261 - 261 383 407
Hélène Narcy 113 - 113 - -
John Kent 81 - 81 287 284

Non executive Directors

Phil Male 57 - 57 56 42
Sean Collins 36 - 36 36 31
Meriel Lenfestey 33 - 33 32 28
Joe Moynihan 31 - 31 30 18
Mark Shuttleworth 11 - 11 - -
Angus Flett 3 - 3 - -
626 - 626 824 810

During the year the company made pension contributions of £0.04m (2019: £0.04m 2018: £0.03m) in respect of Mr Millar, and £0.01m
in respect of the period for which Mrs Narcy was a director.
70

Notes
 71

Notes
72

Stay in Touch
JTsocial JTHelp

JT Group Limited

JTsocial JTHelp JT_Business

JTsocial

PO Box 53, No1 The Forum, Grenville Street,

St Helier Jersey, JE4 8PB

www.jtglobal.com
Facts and figures correct at time of publication. April 2021.