JT Group Limited: Annual Report and Audited Financial Statements 31 December 2015 and Annual Review 2015/2016.

PRIVATE AND CONFIDENTIAL

Annual Report and Audited Financial Statements

31 December 2015

JT Group Limited

R.64/2016

Report of the  Directors'  of JT Group  Income  Comprehensive  Statement of  Changes in  Cash Flow  Financial

2 Annual Report and Financial Statements 31 December 2015 Directors Responsibilities Limited Statement Income Financial Position Equiry Statement Statements 1

Contents Report of the Directors

01  Report of the Directors  The directors present their report and audited financial  **Pension scheme reorganisation

02  Statement of Directors' Responsibilities  statements. During 2015 a change to the arrangements under the Public

Employees Contributory Retirement Scheme ("PECRS") was 03  Independent Auditor's Report to the Members of JT Group Limited Incorporation

agreed with the States of Jersey. The group's pension assets 04  Consolidated Income Statement JT Group Limited (the "company" or the "group") was  and liabilities were transferred out of the sub-fund into the

04  Consolidated Statement 2 of Comprehensive Income incorporated in Jersey, Channel Islands on 22 October 2002. main scheme, administered by the States of Jersey, with

effect from 1 October 2015. As the group was no longer able 05  Consolidated Statement of Financial Position Principal activities to identify its share of the underlying position and

06 Consolidated Statement of Changes in Equity The principal activity of the company and its subsidiaries is  performance of the plan with sufficient reliability to measure 07  Consolidated Cash Flow Statement  the supply of telecommunication services and equipment. its share of assets and liabilities of the scheme, the change in

the arrangement constituted a "change in accounting

08  Notes to the Financial Statements The principal place of business is Jersey, Channel Islands. estimate". The impact of the change resulted in a write down of the deficit held at the date of change to nil, resulting in a

Results and going concern net increase to profit on ordinary activities before taxation of The results are set out on pages 4 to 7. £10.94m. This has been presented as a pension scheme

reorganisation within the income statement.

The group made an operating profit before an exceptional

item** of £10.2m (2014 restated*: £10.9m). This reduction is  Directors

mainly due to an increase in depreciation of £1.8m (2014

The executive and non-executive directors of the group who restated*: (£2.2m)). Revenue has grown to £191.6m (2014:

served during the year and subsequently are:

£152.4m). At the year end the group's total assets exceeded

its total liabilities by £90.6m (2014 restated*: £81.7m). Non-executive

John B Stares

Management have prepared a budget for 2016, projecting  Phil Male

cashflows and results for the year based on the strategies  Colin Tucker

being followed by the group. The budget demonstrates the  Sean Collins

group's ability to continue as a going concern. Kevin Keen

Meriel Lenfestey (appointed 3 March 2016)

The 2014 final and 2015 interim and special dividends of

£4.1m were paid during 2015 (2014: £1.6m). Further details  Executive

are included in note 7. Graeme Millar

John Kent

The directors have approved the payment of a final dividend

for 2015 of £0.96m. Directors' interests

*Transition to FRS 102 The directors of the group had no interests, beneficial or

otherwise, in the shares of the group.

The group transitioned from its previous accounting

framework, old UK GAAP, to FRS 102 "The Financial  Insurance of directors and officers Reporting Standards applicable in the UK and Republic of

Ireland" ("FRS"), effective from 1 January 2014. This  The group maintains an insurance policy on behalf of all transition from old UK GAAP was mandatory. The group's  directors and officers of the group against liability arising financial statements have been prepared in accordance with  from neglect, breach of duty and breach of trust in relation to FRS 102 and the comparative results and opening statement  their activities as directors and officers of the group.

of financial position at 1 January 2014 have been restated,  Independent auditor

where appropriate. The impact of the transition on the profit

before tax for the year ended 2014 was a decrease in profits  Deloitte LLP has indicated its willingness to continue in office of £3.4m and a reduction to net assets of £2.7m. Note 25  as auditor.

provides further details of the transition.

By order of the board

Prior period adjustment to restate opening balances

Daragh J McDermott The comparative opening balance of the equity reserve has

Company Secretary been restated to correct a prior period error which resulted

Date: 18 May 2016 from a miscalculation of deferred revenue in the financial

statements of a subsidiary entity, ekit.com Inc. The impact of

the adjustment to 2014 was a reduction of £0.24m to the

opening equity reserve balance, a reduction of £0.01m to the

translation reserve and a reduction in net assets of £0.25m.

Refer to note 25 for further details.

Report of the  Directors'  of JT Group  Income  Comprehensive  Statement of  Changes in  Cash Flow  Financial

2 Annual Report and Financial Statements 31 December 2015 Directors Responsibilities Limited Statement Income Financial Position Equiry Statement Statements 3

Statement of Directors' Responsibilities Independent Auditor's Report to the Members of JT Group Limited

The directors are responsible for preparing the annual  We have audited the consolidated nancial statements of JT report and the nancial statements in accordance with  Group Limited for the year ended 31 December 2015, which applicable law and regulations. comprise the consolidated Income Statement, the

consolidated Statement of Comprehensive Income, the Company law requires the directors to prepare nancial  consolidated Statement of Financial Position, the consolidated statements for each nancial period. Under that law the  Statement of Changes in Equity, the consolidated Cash Flow directors have elected to prepare the nancial statements  Statement and the related notes 1 to 26. The nancial

in accordance with United Kingdom Generally Accepted  reporting framework that has been applied in their Accounting Practice, (United Kingdom Accounting  preparation is applicable law and United Kingdom Accounting Standards and applicable law), including FRS 102  Standards (United Kingdom Generally Accepted Accounting "The Financial Reporting Standards applicable in the UK  Practice), including FRS 102 "The Financial Reporting

and Republic of Ireland". The nancial statements are  Standards applicable in the UK and Republic of Ireland". required by law to give a true and fair view of the state of

affairs of the group and of the pro t of the group for that  This report is made solely to the company's members, as a period. In preparing these nancial statements, the  body, in accordance with Article 113A of the Companies directors are required to: (Jersey) Law 1991. Our audit work has been undertaken so

that we might state to the company's members those matters

• select suitable accounting policies and then apply  we are required to state to them in an auditor's report and for them consistently; no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than

• make judgements and estimates that are reasonable the company and the company's members as a body, for our and prudent; audit work, for this report, or for the opinions we have formed.

• state whether applicable UK Accounting Standards have  Respective responsibilities of directors

been followed, subject to any material departures  and auditor

disclosed and explained in the nancial statements; and

As explained more fully in the statement of directors' responsibilities, the directors are responsible for the

• prepare the nancial statements on a going concern

preparation of the nancial statements and for being satis ed basis unless it is inappropriate to presume that the group

that they give a true and fair view. Our responsibility is to will continue in business.

audit and express an opinion on the nancial statements in

accordance with applicable law and International Standards The directors are responsible for keeping proper accounting

on Auditing (UK and Ireland). Those standards require us to records that disclose with reasonable accuracy at any time

comply with the Auditing Practices Board's Ethical Standards the nancial position of the group and enable them to

for Auditors.

ensure that the nancial statements comply with the

Companies (Jersey) Law 1991. They are also responsible  Scope of the audit of the nancial statements for safeguarding the assets of the group and hence for

taking reasonable steps for the prevention and detection of  An audit involves obtaining evidence about the amounts and fraud and other irregularities. disclosures in the nancial statements sufficient to give

reasonable assurance that the nancial statements are free The directors are responsible for the maintenance and  from material misstatement, whether caused by fraud or integrity of the corporate and nancial information included  error. This includes an assessment of: whether the

on the group's website. Legislation in Jersey governing the  accounting policies are appropriate to the group's preparation and dissemination of nancial statements may  circumstances and have been consistently applied and

differ from legislation in other jurisdictions. adequately disclosed; the reasonableness of signi cant

accounting estimates made by the directors; and the overall presentation of the nancial statements. In addition, we read all the nancial and non- nancial information in the annual report to identify material inconsistencies with the audited

 nancial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on nancial statements

In our opinion the nancial statements:

• give a true and fair view of the state of the group's affairs as at 31 December 2015 and of the group's pro t for the  year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been properly prepared in accordance with the Companies (Jersey) Law 1991.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies (Jersey) Law 1991 requires us to report to you if, in our opinion:

• proper accounting records have not been kept by the parent company; or

• the nancial statements are not in agreement with the accounting records and returns; or

• we have not received all the information and explanations we require for our audit.

Gregory Branch BSc FCA

for and on behalf of Deloitte LLP Chartered Accountants

St Helier

Jersey

18 May 2016

Report of the  Directors'  of JT Group  ConsolidatIncome ed  Comprehensive  Statement of  Changes in  Cash Flow  Financial

4 Annual Report and Financial Statements 31 December 2015 Directors Responsibilities Limited Income StatStatementement Income Financial Position Equiry Statement Statements 5

Consolidated Income Statement Consolidated Statement of Financial Position

for the year ended 31 December 2015 at 31 December 2015

2014 2014 2015 £'000 2015 £'000

Note £'000 Restated Note £'000 Restated

Continuing operations Fixed assets

Revenue 191,647 152,414 Intangible assets 8 25,201 29,827 Cost of sales (101,583) (65,331) Property, plant and equipment 9 108,977 107,811

Investments – 5 Gross profit 90,064 87,083

Deferred tax asset 6(c) 1,672 3,122 Operating expenses (79,860) (76,223)

135,850 140,765 Operating pro t before an exceptional item 10,204 10,860

Exceptional item - Pension scheme reorganisation 18 10,937 – Current assets

Inventories 10 8,536 12,473 Operating profit after an exceptional item 21,141 10,860 Receivables due within one year 11 36,753 39,677

Finance income and similar income 4 16 66 Receivables due after one year 11 949 1,069 Finance costs and similar charges 5 (3,113) (2,975) Cash at bank and in hand 10,756 8,741

Profit on ordinary activities before taxation  18,044 7,951 56,994 61,960 Tax on pro t on ordinary activities 6 (5,648) (2,522)

Payables: amounts falling due within one year 12 (31,319) (41,255) Pro t on ordinary activities after taxation 12,396 5,429

Net current assets 25,675 20,705 The impact of the restatement on adoption of FRS 102 for the year ended 31 December 2014 is explained in note 25.

Total assets less current liabilities 161,525 161,470

Payables: amounts falling due after more than one year 13 (51,000) (51,636)

Deferred tax liability 6(c) (7,442) (5,561) Consolidated Statement of Comprehensive Income Provision for other liabilities 15 (1,678) (2,238)

for the year ended 31 December 2015

Post-employment bene ts 18 (773) (10,305) 2.5% Redeemable preference shares 14 (10,000) (10,000)

2014

Total non-current liabilities (70,893) (79,740) 2015 £'000

Note £'000 Restated

Net assets 90,632 81,730

Profit for the nancial year   12,396 Currency translation difference 528 Remeasurements of net defined benefit obligations 18 151 Total tax on components of other comprehensive income (30) Other comprehensive income for the year, net of tax 649 Total comprehensive income for the year 13,045

Profits for the year attributable to

– Owners of the parent 12,396

– Non-controlling interest – 12,396 Total comprehensive income attributable to

– Owners of the parent 13,045

– Non-controlling interest 24 – 13,045 The impact of the restatement on adoption of FRS 102 for the year ended 31 December 2014 is explained

5,429

Capital and reserves

83

Share capital 17 20,000 20,000 420 Equity reserve 71,054 62,119

(83) Currency translation reserve (422) (389) 420 Equity attributable to owners of the parent 90,632 81,730

5,849

Non-controlling interest 24 – –

Total equity 90,632 81,730 5,429

– The impact of the restatement on adoption of FRS 102 for the year ended 31 December 2014 and from the prior period

5,429 adjustment is explained in note 25.

The financial statements were approved by the board of directors on 18 May 2016 and were signed on its behalf by: 5,849

–

5,849 G Millar J Kent

Chief Executive Officer Chief Financial Officer

in note 25. on 18 May 2016 on 18 May 2016

Auditor's Report  Consolidated  ConsConsolidatolidated ed

JT Group Limited Statement of  to the members  Consolidated  Statement of  Consolidated  StatStatement ofement of  ConsConsolidatolidated ed Notes to the

Report of the  Directors'  of JT Group  Income  Comprehensive  Statement of  Changes in Changes in Cash Flow Cash Flow  Financial

6 Annual Report and Financial Statements 31 December 2015 Directors Responsibilities Limited Statement Income Financial Position EEquirquityy StatStatementement Statements 7

Consolidated Statement of Changes in Equity Consolidated Cash Flow Statement

at 31 December 2015 for the year ended 31 December 2015

Called up

share Equity capital reserve

Note £'000 £'000 Balance at 1 January 2014 (restated FRS 102) 20,000 58,380

Prior period adjustment 25 - (235)

20,000 58,145 Profit for the year (restated) – 5,429 Other comprehensive income for the year (restated) – 420

Total comprehensive income for the year – 5,849 Transfers – (255) Dividends 7 – (1,620)

Total transactions with owners recognised directly in equity – (3,974) Balance as at 31 December 2014 (restated) 20,000 62,119

Balance at 1 January 2015  20,000 62,119 Profit for the year – 12,396 Other comprehensive income for the year – 649 Total comprehensive income for the year – 13,045 Transfers – – Dividends 7 – (4,110)

Total transactions with owners recognised directly in equity – 8,935 Balance as at 31 December 2015 20,000 71,054

The impact of the restatement on adoption of FRS 102 for the year ended 31 December 2014 and from a pr adjustment is explained in note 25.

Currency

Translation

reserve Note

£'000

Pro t for the nancial year

(575)

Adjustment for:

(11)

Tax on pro t on ordinary activities

(586)

Finance income and similar income

–

Finance costs and similar charges

–

Amortisation of intangible assets 8

– Depreciation of property, plant and equipment 9

197 Loss on disposal of property, plant and equipment

– Provision for bad debts and bad debt write off

Inventory impairment

–

Net (utilisation) / charge for provisions

(389)  Pro t on sale of investments

Gain on pension scheme reorganisation

(389)

Currency translation difference

–

– Decrease / (Increase) in inventories

– Decrease in receivables

(33) Decrease in payables

Cash ow generated from operating activities

(33) Taxation paid

(422) Pension contributions

Cash ow from investing activities

ior period

Purchases of intangible assets

Purchases of property, plant and equipment

Dividend income

Sale of investments

Finance income received

Net cash used in investing activities

Cash ow from nancing activities

Dividends paid

Borrowings

Interest paid

Preference dividend paid

Net cash used in nancing activities

Net increase in cash and cash equivalents

Cash at bank and in hand at beginning of the year

Effect of foreign exchange rate changes

Cash at bank and in hand at end of year

2014 2015 £'000 £'000 Restated

12,396 5,429

5,648 2,522

(16) (66) 3,113 2,975

4,858 4,910 18,193 16,442

153 183 1,360 613 86 123 (279) 386

(57) –

(10,937) – 631 83

3,851 (4,794) 1,700 18,648 (1,705) (9,893)

38,995 37,561 (2,129) (2,509)

(633) (851)

(145) (221) (23,936) (21,917)

– 3

62 –

– 4

(24,019) (22,131)

(4,110) (1,620) (3,642) (4,615) (2,214) (2,384) (200) (200)

(10,166) (8,819) 2,048 3,251 8,741 5,304

(33) 186

10,756 8,741

The impact of the restatement on adoption of FRS 102 for the year ended 31 December 2014 is explained in note 25.

Notes to the Financial Statements  Notes to the Financial Statements (continued)

1. Accounting policies 1. Accounting policies (continued)

The principal accounting policies applied in the preparation of these consolidated nancial statements are set out below.  Revenue (continued)

These policies have been consistently applied to all the years presented.  •  Broadband rentals and usage charges. Rentals are recognised evenly over the period to which the charge relates, whilst

usage charges are recognised when the service is rendered.

General information and basis of accounting

The consolidated nancial statements are prepared under the historical cost convention, as modi ed by the recognition of  •  Private circuit rentals, which are recognised evenly over the period to which the charge relates.

certain nancial assets and liabilities measured at fair value and in accordance with Companies ( Jersey ) Law 1991 and with

Financial Reporting Standards (FRS 102) issued by the Financial Reporting Council. •  Inbound roaming revenue, earned from other mobile operators whose customers roam onto the group's network, and

outbound roaming revenue earned from certain customers roaming outside their domestic covering area, are recognised Under Article 105 (11) of the Companies (Jersey) Law 1991 the directors of a holding company need not prepare separate  based upon usage and are included in mobile service revenue.

accounts (i.e. company only accounts) if consolidated accounts for the company are prepared, unless required to do so by

the members of the company by ordinary resolution. The members of the company have not passed a resolution requiring  •  Subscription fees, which are recognised evenly throughout the periods to which they relate.

separate accounts and, in the directors' opinion, the company meets the de nition of a holding company. As permitted by the

law, the directors have elected not to prepare separate accounts. •  Retail equipment sales, which are recognised at the point of sale.

The prior year nancial statements were restated for material adjustments on adoption of FRS 102 and a prior period  •  Corporate equipment sales, net of rebates, discounts and similar commissions, which are recognised at the point of sale. adjustment. For more information see note 25. Connection fees are recognised upon delivery to the customer or activation by the customer, as appropriate.

Basis of consolidation

• The provision of other services, including maintenance and support service contracts, which are recognised evenly over

The group nancial statements consolidate the nancial statements of the company and its subsidiary undertakings as at 31  the periods in which the service is provided to the customer.

December each year. Any subsidiary undertakings or associates sold or acquired during the year are included up to, or from,

the dates of change of control or change of signi cant in uence respectively.  •  Bundled products, which are allocated between the separate elements and the appropriate recognition policy is applied to

each element as described above.

Business combinations are accounted for under the purchase method. Where necessary, adjustments are made to the

 nancial statements of subsidiaries to bring the accounting policies used by the subsidiaries in line with those used by the  •  Signi cant long term contracts, where the outcome of the contract can be estimated reliably. Revenue and costs are group. All intra-group balances, income and expenses are eliminated on consolidation. In accordance with section 35 of FRS  recognised by reference to the stage of completion of the contract activity at the statement of nancial position date.

102 "Transition to FRS 102", section 19 of FRS 102 "Business Combinations and Goodwill" has not been applied in these

 nancial statements in respect of business combinations affected prior to the date of transition. More information can be

Taxation

found in note 25 of these nancial statements.

Current tax, including income tax in Jersey and foreign tax, is provided at amounts expected to be paid (or recovered) using The functional currency of the group is considered to be pound sterling ("GBP"), because that is the currency of the primary  the tax rates and laws that have been enacted or substantively enacted by the statement of nancial position date.

economic environment in which the group operates. The consolidated nancial statements are also presented in GBP. Foreign

operations are included in accordance to the policies set out below. Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of

 nancial position date where transactions or events that result in an obligation to pay more tax in the future or a right to pay JT Group Limited going concern less tax in the future have occurred at the statement of nancial position date. Timing differences are differences between The directors of the group believe the group has sufficient resources to meet its obligations as they fall due and will continue  the group's taxable pro ts and its results as stated in the nancial statements that arise from the inclusion of gains and losses in operation in the foreseeable future. The consolidated nancial statements have been prepared on a going concern basis.  in tax assessments in periods different from those in which they are recognised in the nancial statements.

Management have prepared a budget for 2016, projecting cash ows and results for the year based on the strategies being  Unrelieved tax losses and other deferred tax assets are recognised only to the extent that, on the basis of all available followed by the group. The budget demonstrates the group's ability to continue as a going concern. evidence, it can be regarded as more likely than not that there will be suitable taxable pro ts from which the future reversal of

the underlying timing differences can be deducted.

Revenue

Revenue comprises the value of network usage revenues, subscription fees, roaming income, equipment sales, directory income and income from maintenance and support services. Revenue is stated net of taxes and trade discounts.

The group derives revenues from:

• Fixed monthly access charges and network usage (including revenues from incoming and outgoing traffic). Call revenues are recognised at the time the call is made over the network, whilst rentals are recognised evenly over the period to which the charges relate.

• Mobile telecommunications services earned from usage of the mobile network by the group's customers, subscription fees and interconnect revenue. Post-paid customers are billed in arrears based on usage and usage revenue is recognised when the service is rendered. Revenue for prepaid customers is recorded as deferred revenue prior to commencement of services and is recognised as the prepaid services are rendered.

40069_JT_32pp_Financial_Statement_2015.indd 8-9

When the amount that can be deducted for tax for an asset (other than goodwill) that is recognised in a business combination is less (more) than the value at which it is recognised, a deferred tax liability (asset) is recognised for the additional tax that will be paid (avoided) in respect of that difference. Similarly, a deferred tax asset (liability) is recognised for the additional tax that will be avoided (paid) because of a difference between the value at which a liability is recognised and the amount that will be assessed for tax. The amount attributed to goodwill is adjusted by the amount of deferred tax recognised.

Deferred tax liabilities are recognised for timing differences arising from investments in subsidiaries and associates, except where the group is able to control the reversal of the timing difference and it is probable that it will not reverse in the foreseeable future.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the statement of nancial position date that are expected to apply to the reversal of the timing difference. Deferred tax relating to property, plant and equipment measured using the revaluation model and investment property is measured using the tax rates and allowances that apply to sale of the asset.

07/06/2016 10:52

1. Accounting policies (continued) 1. Accounting policies (continued)

Taxation (continued) Intangible assets – other intangible assets

Other intangible assets consist of internally-developed intangible assets with a readily ascertainable market value such as Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the  software development costs.

resulting current or deferred tax expense or income is presented in the same component of comprehensive income or

equity as the transaction or other event that resulted in the tax expense or income.  The costs of materials, licenses, consultants, payroll and payroll-related costs for employees incurred in developing internal

software are capitalised as intangible assets once technological feasibility is attained and the costs incurred are in connection Current tax assets and liabilities are offset only when there is a legally enforceable right to set off the amounts and the group  with upgrades and enhancements to internally-developed software that result in additional functionality.

intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Capitalised software costs are amortised using the straight-line method over the estimated useful life of the software, typically Deferred tax assets and liabilities are offset only if: a) the group has a legally enforceable right to set off current tax assets  three years.

against current tax liabilities; and b) the deferred tax assets and deferred tax liabilities relate to income taxes levied by the

same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current  Impairment of assets

tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in  Assets, other than those measured at fair value, are assessed for indicators of impairment at each statement of financial which signi cant amounts of deferred tax liabilities or assets are expected to be settled or recovered. position date. If there is objective evidence of impairment, an impairment loss is recognised in the income statement as

described below.

Property, plant and equipment

Non- nancial assets

Property, plant and equipment ("PPE") are stated at cost net of depreciation and any impairment. Assets held under nance

leases are stated at the net present value of the minimum lease payments due at the inception of the lease. An asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial

recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher Capital work in progress comprises capital projects which are under construction. Accrued and expended project labour  of its fair value less costs to sell and its value in use. If it is not possible to estimate the recoverable amount of the individual and material costs are accounted for as capital work in progress. Internal labour costs that were necessary and arising  asset the group estimates the recoverable amount of the cash-generating units ("CGUs") to which the asset belongs.

directly from construction or acquisition of the asset are capitalised as part of the project or asset to which they relate. Once

The recoverable amount of goodwill is derived from measurement of the present value of the future cash ows of the CGUs of completed, projects are capitalised as separately identi able assets and depreciated over their estimated useful economic

which the goodwill is a part. Any impairment loss in respect of a CGU is allocated rst to the goodwill attached to that CGU, lives.

and then to other assets within that CGU on a pro-rata basis.

The cost of network plant and equipment includes all cable, ducting and transmission equipment extending from the main

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An switching systems to the customers' premises.

impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a Depreciation revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment

occurs in respect of a CGU, the reversal is applied rst to the assets (other than goodwill) of the CGU on a pro-rata basis and The costs of PPE, less estimated residual value, are written off over their estimated useful economic lives on a straight-line  then to any goodwill allocated to that CGU.

basis as follows:

Financial assets

Freehold buildings  -  50 years For nancial assets carried at amortised cost, the Leasehold buildings  -  the term of the lease amount and the present value of estimated future ca Motor vehicles  -  7 years

Equipment xtures and ttings: For nancial assets carried at cost less impairmen Network infrastructure  -  3-25 years and the best estimate of the amount that would be r Other*  -  5-10 years

Where indicators exist for a decrease in impairment *This includes freehold and leasehold xtures and  ttings. after the impairment was recognised, the prior impa

on an individual impaired nancial asset to the ex Intangible assets - goodwill amount higher than the carrying value had no impair

amount of an impairment is the difference between the asset's carrying

sh ows, discounted at the nancial asset's original effective interest rate.

t, the impairment loss is the difference between the asset's carrying amount

eceived for the asset if it were to be sold at the reporting date.

 loss, and the decrease can be related objectively to an event occurring irment loss is tested to determine reversal. An impairment loss is reversed

tent that the revised recoverable value does not lead to a revised carrying ment been recognised.

Goodwill arising on the acquisition of subsidiary undertakings and businesses represents any excess of the consideration

given over the fair value of the identi able assets and liabilities acquired. Goodwill is capitalised and amortised on a straight  Finance and operating leases

line basis over its useful economic life, which is assessed by each asset and varies from 5 to 10 years. Amortisation charges  At inception the group assesses agreements that transfer the right to use assets. The assessment considers whether the are recognised in the income statement. arrangement is, or contains, a lease based on the substance of the arrangement.

1. Finance leased assets

Leases of assets that transfer substantially all the risks and rewards incidental to ownership are classi ed as nance leases. Finance leases are capitalised at commencement of the lease as assets at the fair value of the leased asset or, if lower, the

present value of the minimum lease payments calculated using the interest rate implicit in the lease. Where the implicit rate cannot be determined the group's incremental borrowing rate is used. Incremental direct costs, incurred in negotiating and arranging the lease, are included in the cost of the asset.

1. Accounting policies (continued) 1. Accounting policies (continued)

Finance and operating leases (continued) Employee benefits (continued)

Assets are depreciated over the shorter of the lease term and the estimated useful life of the asset. Assets are assessed for  The net interest cost is calculated by applying the discount rate to the net balance of the de ned bene t obligation and the impairment at each reporting date. fair value of plan assets. This net interest cost on the de ned liability is charged to the income statement within nance costs.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited The capital element of lease obligations is recorded as a liability on inception of the arrangement. Lease payments are  to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net apportioned between capital repayment and nance charge, using the effective interest rate method, to produce a constant  interest, are disclosed as Remeasurement of net de ned benefit liability'.

rate of charge on the balance of the capital repayments outstanding.

De ned bene t schemes are funded, with the assets of the schemes held separately from those of the group, in separate

2. Operating leased assets trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial Leases that do not transfer all the risks and rewards of ownership are classi ed as operating leases. Payments under  basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a high quality operating leases are charged to the income statement on a straight-line basis over the period of the lease. corporate bond of equivalent currency and term to the scheme liabilities. The resulting de ned bene t asset or liability, net of the related deferred tax, is presented within long term provisions in the statement of nancial position.

Finance and operating leases

3. Lease incentives

Incentives received to enter into a nance lease r present value of minimum lease payments.

Incentives received to enter into an operating leas straight-line basis over the period of the lease.

For defined contribution schemes the amount charged

contributions payable in the year. Differences betw

shown as either accruals or prepayments on the stat educe the fair value of the asset and are included in the calculation of

Treatment of PECRS from 1 October 2015

e are credited to the income statement, to reduce the lease expense, on a  On 1 October 2015, JT (Jersey) Limited's pension as

scheme, administered by States of Jersey. This is c

to the income statement in respect of pension costs is the

een contributions payable in the year and contributions actually paid are

ement of nancial position.

sets and liabilities were moved out of the sub-fund and into the main onsidered to be a multi-employer (bene t) plan as de ned by FRS 102.

The group has taken advantage of the exemption in respect of lease incentives on leases in existence on the date of  Under the revised Terms of Admission there is insufficient information available to use de ned bene t accounting and, with transition to FRS 102 (1 January 2014) and continues to credit such lease incentives to the income statement over the  effect from 1 October 2015, JT (Jersey) Limited has accounted for the scheme as if it was a de ned contribution scheme. period to the rst review date on which the rent is adjusted to market rates. However, the scheme continues to be a de ned bene  t scheme.

Inventories Pension scheme reorganisation Inventories are valued at the lower of cost and net realisable value, and accounted for on a weighted average cost basis.  Treatment of PECRS on 1 October 2015

Provisions are made for obsolete, slow moving or defective items where appropriate.

The transaction, which resulted in the transfer of the pension assets and liabilities into the main scheme and a resulting Foreign currencies change in accounting of the scheme from a de ned bene t to de ned contribution scheme, is considered a change in Transactions denominated in foreign currencies are translated into pound sterling at the exchange rate ruling when the  accounting estimate on 1 October 2015. This resulted in the release of the de ned bene t liability, the group held on the transaction was entered into. Monetary assets and liabilities denominated in foreign currencies are translated into pound  statement of nancial position from its previous accounting basis, down to nil as at 31 December 2015.

sterling at the exchange rate ruling at the statement of nancial position date. Realised gains and losses on foreign currency

This has been presented as a pension scheme reorganisation within the income statement.

transactions are dealt with in the income statement. Gains and losses in the translation of foreign subsidiaries on

consolidation are included in other comprehensive income as currency translation difference and accumulated in the  Financial instruments

currency translation reserve in the statement of changes in equity. Financial assets and nancial liabilities are recognised when the group becomes party to the contractual provision of the instrument.

Provisions for other liabilities and charges Financial liabilities and equity instruments are classi ed according to the substance of the contractual arrangements entered into. Provisions are recognised when the group has a present legal or constructive obligation as a result of past events and it is  An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities. probable that an out ow of resources will be required to settle the obligation and the amount can be reliably estimated.

Onerous lease provisions are measured at the lower of cost to ful l or exit the contract. (i) Financial assets

Basic nancial assets, including trade and other receivables, cash and bank balances and investments in commercial paper, Asset retirement obligations and dilapidations are recognised as provisions as a result of the legal obligation for  are initially recognised at transaction price, unless the arrangement constitutes a nancing transaction, where the transaction decommissioning costs on mobile site and property leases. These provisions are recognised through the statement of  is measured at the present value of the future receipts discounted at a market rate of interest.

 nancial position.

Such assets are subsequently carried at amortised cost using the effective interest method.

Employee bene ts

(ii) Financial liabilities

For de ned bene t plans, the amounts charged to operating pro t are the current service costs and gains and losses on

Basic nancial liabilities, including trade and other payables, bank loans, loans from fellow group companies and preference settlements and curtailments. They are included as part of the staff costs. Past service costs are recognised immediately

shares that are classi ed as debt, are initially recognised at transaction price, unless the arrangement constitutes a financing in the income statement.

transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

1. Accounting policies (continued) 2. Critical accounting estimates and key judgements

Financial instruments (continued) The preparation of nancial statements in conformity with FRS 102 requires the use of accounting estimates and

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is  assumptions. It also requires management to exercise judgement in the process of applying the group's accounting policies. probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs.  We continually evaluate our estimates, assumptions and judgements based on available information and experience. The To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised  areas involving a higher degree of judgment or complexity are explained below.

as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Goodwill

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from  The group considers whether goodwill is impaired when an impairment indicator arises. This requires an estimation of the suppliers. Trade payable are classi ed as current liabilities if payment is due within one year or less. If not, they are presented future cash ows from the cash generating units ("CGUs") to which the goodwill is attributed and the selection of appropriate as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised  discount rates in order to calculate the net present value of those cash flows.

cost using the effective interest method.

The carrying value of goodwill is disclosed in note 8. Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic nancial instruments.

Useful lives of goodwill

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently  Estimating the useful life of goodwill requires the exercise of judgement. Factors such as a change in the business, length of re-measured at their fair value. Changes in the fair value of derivatives are recognised in the income statement in nance  customer contracts, technological advancement and changes in market prices can indicate that the useful life has changed costs or nance income as appropriate, unless they are included in a hedging arrangement. The timing of release into the  since the most recent reporting date.

income statement depends on the type of hedge arrangement.

Financial liabilities are derecognised when the lia cancelled or expires.

In the current period there were immaterial derivat

Cost of sales

Cost of sales are accounted for on an accruals basi

bility is extinguished, that is when the contractua

ives amounting to £nil (2014: £6k).

s.

The remeasurement of goodwill on transition to FRS 102 is explained within note 25. l obligation is discharged,

Defined bene t pension schemes

TBPS as at 31 December 2015 and PECRS up to 30 September 2015

The group has obligations to pay pension bene ts to certain employees. The cost of these bene ts and the present value of the obligation depend on a number of factors, including; life expectancy, salary increases, asset valuations and in ation. The assumptions re ect historical experience and current trends.

Operating expenses

Operating expenses are accounted for on an accruals basis.

Finance income and similar income

Finance income and similar income is accounted for on an accruals basis.

Finance costs and similar charges

Finance costs and similar charges are accounted for on an accruals basis.

Investments

Investments are held at cost less any impairment losses. Investment costs include acquisition costs an directly associated with the acquisition.

Prior period adjustment to restate opening balances

The comparative opening balance of the equity reserve has been restated to correct a prior period adju for details.

Further details are contained in note 18. Long term contracts

Where the outcome of long term contracts can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the statement of nancial position date. This is normally measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion. Estimation of the contract stage of completion requires management judgement.

Provision for doubtful debts

d transaction costs  The group provides services to consumer and business customers, mainly on credit terms. Certain debts due to the group

will not be recovered through default of a small number of customers. Estimates based on historical experience are used in determining the level of debts we believe will not be collected.

stment. See note 25  The value of the provision for doubtful debts is offset against trade receivables due within one year on the statement of

 nancial position.

Provisions and contingent liabilities

As disclosed in note 15 the group's provisions principally arise from asset retirement obligations as a result of the legal obligation for decommissioning costs on mobile site and property leases.

In respect of claims and litigation the group provides for anticipated costs where the out ow of resources is considered probable and a reasonable estimate can be made on the likely outcome. The ultimate liability may vary from the amounts provided and will be dependant upon the eventual outcome of any settlement.

2. Critical accounting estimates and key judgements (continued) 4. Finance income and similar income

2015 2014 Useful lives of property, plant and equipment and intangible assets

£'000 £'000 The annual depreciation and amortisation charges for property, plant and equipment and intangible assets are sensitive to  Restated

the estimated lives allocated to each type of asset. Lives are assessed annually and changed when necessary to reflect

Finance income and other similar income 16 66 expected impact from changes in technology, network investment plans (eg Gigabit programme) and physical condition of

the assets.  5. Finance costs and similar charges

The carrying value of property, plant, equipment and intangible assets are disclosed in note 8 and 9 respectively. The useful

2015 2014 lives applied to the principal categories are disclosed on pages 10-11.

£'000 £'000 Current and deferred income tax Restated

The actual tax we pay on our pro ts is determined according to complex tax laws and regulations. Where the effect of these  2.5% preference dividends (gross) 250 250 laws is unclear, we use estimates in determining the liability for the tax to be paid on our past pro  ts which we recognise in  Interest on bank loan and other short term borrowings 349 259

our nancial statements. We believe the estimates, assumptions and judgements are reasonable but this can involve  Interest on private placement 2,142 2,142 complex issues which may take a number of years to resolve. The nal determination of prior year liabilities could be different

Net nance costs from pension schemes 265 324 from the estimates re ected in the nancial statements and may result in the recognition of an additional tax expense or tax

credit in the income statement.  Other interest payable 107 –

3,113 2,975 Deferred tax assets and liabilities require management judgement in determining the amounts to be recognised. The group  Refer to note 14 for details of the above financing facilities.

uses management's expectations of future revenue growth, operating costs and pro t margins to determine the extent to

which future taxable pro ts will be generated against which to consume the deferred tax assets. The nance costs associated with the private placement nancing facility have been included within liabilities and are

expensed over the period of the private placement.

The value of the group's income tax assets and liabilities is disclosed on the statement of nancial position. The carrying

value of the group's deferred tax assets and liabilities is disclosed in note 6. 6. Tax

1. Analysis of tax charge in the year 2015 2014

3. Operating pro t £'000 £'000 2015 2014 Restated

£'000 £'000 Current tax

Note Restated

Current tax 2,088 1,957 Operating pro t is stated after charging: Adjustment in respect of prior periods 185 (478)

Wages and salaries 31,887 29,803 Total current tax 2,273 1,479 Social security costs 1,756 1,545 Deferred tax

Total staff costs 33,643 31,348 Timing differences 3,208 884 Amounts capitalised (2,680) (2,826) Adjustment in respect of prior periods 167 159 Staff costs charged to income statement 30,963 28,522 Total deferred tax 3,375 1,043

Loss on disposals of property, plant and equipment 153 183 Total tax on pro t on ordinary activities 5,648 2,522 Operating leases charge for the year – land and buildings 1,531 1,592

The impact of the restatement on adoption of FRS 102 for the year ended 31 December 2014 and from a prior period Depreciation 9 18,193 16,442 adjustment is explained in note 25.

Amortisation of goodwill 8 4,652 4,652

Amortisation of intangibles 8 206 258

Provision for and write off of bad debts  1,360 613

Cost of inventory recognised as an expense 12,028 12,964

Impairment of inventory  86 123

6. Tax (continued) 7. Dividends on equity shares

2. Factors affecting the tax charge

The tax charged for the period is different than the standard rate of income tax. The differences are explained below:

2015 2014 £'000 £'000 Restated

Pro t on ordinary activities before taxation 18,044 7,951 Profit on ordinary activities multiplied by the standard rate of income

3,609 1,590 tax of 20%

Effects of:

Pro ts on sale of investments (11) – Expenses not deductible for tax purposes 321 148 Non-qualifying depreciation 317 268 Utilisation of losses – – Subject to tax at 0% 1,251 985 Losses not utilised (224) 143 Prior year adjustment 352 (319) Pro ts taxed at rates other than 20% – (46) Other tax adjustments 33 (247)

5,648 2,522

3. Provisions for liabilities and charges – deferred taxation

The amounts recognised as distributions to equity holders in the year are:

2015 2014 £'000 £'000

Equity

Final dividend for the previous year end of 2.61p (2014: 1.86p) per ordinary share 522 372 Interim dividend for the current year of 5.94p (2014: 6.24p) per ordinary share 1,188 1,248 Special dividend for the current year of 12p (2014: nil ) per ordinary share 2,400 –

4,110 1,620 The group's redeemable preference shares are included in the statement of nancial position as a liability and accordingly

the dividends payable on them are included in nance costs and similar charges.

A nal dividend of £0.96m (4.78p per share) (2014: £0.52m (2.61p per share)) has been approved for payment post year end.

8. Intangible assets

Goodwill Other Intangibles Total £'000 £'000 £'000

Cost

At 1 January 2015  39,042 999 40,041 Additions - 145 145 Foreign currency translation adjustment 147 (113) 34 At 31 December 2015 39,189 1,031 40,220

2015 2014

Amortisation

£'000 £'000

Restated At 1 January 2015 (9,465) (749) (10,214) Charge for the year (4,652) (206) (4,858)

Recognised deferred tax asset

Foreign currency translation adjustment - 53 53 Accelerated capital allowances (7,533) (6,330) At 31 December 2015 (14,117) (902) (15,019)

Losses 1,976 2,121

De ned bene t pension de cit 155 2,061 Net book value

Other (368) (291) At 31 December 2014 (restated) 29,577 250 29,827 Total deferred tax liability provided (5,770) (2,439) At 31 December 2015 25,072 129 25,201

Deferred tax asset 1,672 3,122 The impact of the restatement on adoption of FRS 102 for the year ended 31 December 2014 is explained in note 25. Deferred tax liability (7,442) (5,561)

The remaining useful economic lives for the goodwill held for Newtel and Corporate Communications Holdings Limited,

Net deferred tax liability provided (5,770) (2,439) acquired in 2010 and 2012 respectively, are both 8 years at the statement of nancial position date. Management considers

the remaining lives to be appropriate for these entities as they operate in sustainable markets with customers on long term The impact of the restatement on adoption of FRS 102 for the year ended 31 December 2014 and from a prior period  contracts.

adjustment is explained in note 25.

There are no individually material other intangibles assets. Other intangibles are amortised over 3 to 10 years.

9. Property, plant and equipment 11. Receivables (continued)

Network plant and

Buildings equipment £'000 £'000

Cost

At 1 January 2015  32,430 227,393 Additions 563 301 Disposals (447) (27,548) Transfer from capital work in progress 804 23,802 Foreign currency translation adjustment - (38) At 31 December 2015 33,350 223,910

Depreciation

At 1 January 2015  (17,081) (141,725) Charge for the year (1,974) (16,156) Disposals 355 27,487 Foreign currency translation adjustment - (5) At 31 December 2015 18,700 130,399

Net book value

At 31 December 2014 (restated) 15,349 85,668 At 31 December 2015 14,650 93,511

10. Inventories

Capital

Motor work in

vehicles progress Total £'000 £'000 £'000

688 6,782 267,293

- 18,691 19,555

(92) - (28,086) 727 (25,333) -

- - (38)

1,324 140 258,724

(676) - (159,482)

(63) - (18,193)

91 - 27,933

- - 5

648 - 149,747

12 6,782 107,811

676 140 108,977

2015 2014 £'000 £'000

Provision for bad debts 2015 2014 £'000 £'000

At 1st January 1,415 1,043 Charge to the income statement 364 372 At 31 December 1,779 1,415

12. Payables: amounts falling due within one year

2015 2014 £'000 £'000

Borrowings 665 3,755 Trade payables 8,702 10,462 Corporation tax 1,693 1,518 Deferred revenue 10,781 11,248 Other payables and accruals 9,478 14,272

31,319 41,255

13. Payables: amounts falling due after more than one year

2015 2014 £'000 £'000 Restated

Amounts falling due between one and ve years

Private placement  31,000 31,000 USD borrowings due after one year - 630 Derivative nancial instruments - 6

31,000 31,636

Finished products 8,420 12,306 Amounts falling due after more than ve years

Work in progress 116 167 Private placement  20,000 20,000 8,536 12,473 Total payables falling due after more than one year 51,000 51,636

Inventories of nished products include £4.5m (2014: £8.7m), to be used in capital work in progress on property, plant and  Other payables have been restated on transition to FRS 102. Forward currency contracts that were previously held equipment. off-statement of nancial position are now recognised at their fair value. Refer to note 25 for further information.

11. Receivables 14. Loans and other borrowings

2015 2014 2015 2014 Receivables due within one year  £'000 £'000 £'000 £'000

Trade receivables (net of provision for bad debts) 30,987 34,471 Short term overdraft facility ("RCF") - 3,000 Prepayments and accrued income 5,766 5,206 USD borrowings 665 1,385

36,753 39,677 Private placement  51,000 51,000 2.5% redeemable preference shares 10,000 10,000

2015 2014 61,665 65,385

Receivables due after one year £'000 £'000

Trade receivables 949 1,069

14. Loans and other borrowings (continued)  18. Post-employment bene ts

As at 31 December 2015, there was no amount owing for the Revolving Credit Facility ("RCF") held by JT Group Limited  2014 (2014: £3m). The RCF provides for an overdraft facility of £15m. The facility is interest-bearing with a term of 3 years, which  £2'000150 £'000

has been extended for a further 1 year. The balance is repayable on demand and classi ed as a current liability.  Restated

An interest-bearing loan of USD 2m, repayable over 24 months, was provided to the group in 2013. Post-employment bene ts 773 10,305

JT Group Limited received £51m under a private placement facility during 2012. £31m has a term of 7 years and £20m has  Most employees of JT (Jersey) Limited are members of the Public Employees Contributory Retirement Scheme ("PECRS"). a term of 10 years. Both loans accrue interest on an annual basis at an interest rate of 3.86% and 4.48% for each respective  A small number are members of the Telecommunications Board Pension Scheme ("TBPS") and the JT Group Limited tranche. Pension Plan.

The 2.5% redeemable preference shares were issued in three tranches during 2012. Interest accrues at 2.5% per annum.  JT Group Limited Pension Plan The amount is repayable on demand.

The JT Group Limited Pension Plan is a de ned contribution scheme administered by Alexander Forbes. The employer

15. Other provisions for liabilities and charges currently pays contributions at 10% of members' salary. Regular employer contributions to the pension plan in 2016 are expected to be £0.39m (2014: £0.32m).

2015 2014

£'000 £'000 PECRS

At 1 January 2,238 254 The PECRS is a de ned bene t pension plan, providing retirement bene ts based on nal salary.

(Utilised) / charged to the income statement (279) 386

Asset retirement obligations  (281) 1,598 Amendment to the Terms of Admission effective from 1 October 2015

At 31 December 1,678 2,238 JT (Jersey) Limited participates in the PECRS as an Admitted Body under a Terms of Admission Document which sets out The closing balance of provisions is made up of amounts for asset retirement obligations of £1.4m (2014: £2m), annual  how the contributions to and assets of the company's notional Sub-Fund are to be determined.

leave of £0.2m (2014: £0.1m) and other provisions for legal and long term service of £0.1m (2014: £0.1m).

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.

16. Financial instruments Under the amended terms JT (Jersey) Limited's contributions will increase over a period to 2020 in accordance with a

 xed schedule. Thereafter contribution rates will be set in accordance with Jersey Law insofar as it applies to Admitted Note 2015 2014 Bodies in the Scheme. Under the revised Terms of Admission there is insufficient information available to use de ned

£'000 £'000 bene t accounting and, with effect from 1 October 2015, JT (Jersey) Limited has accounted for the Scheme as if it was a Financial liabilities at fair value through pro t and loss de ned contribution scheme.

- Derivative nancial instruments 13 - (6)

The change in accounting has necessitated a release of the net liability of £10.94m, on 30 September 2015, into the

- (6) income statement as a pension scheme reorganisation. The associated deferred tax on the pension liability is £2.19m.

Financial liabilities measured at amortised cost Employer contributions made to the pension plan from 1 October 2015 to 31 December 2015 were £0.19m.

- Private placement 14 (51,000) (51,000)

- USD Loan and short term overdraft facilities 14 (665) (4,385) Up to 30 September 2015

(51,665) (55,385) The latest actuarial valuation of the PECRS took place on 31 December 2013. Following the latest actuarial valuation JT

(Jersey) Limited pays contributions of 7.07% (2014: 7.07%) of PECRS members' pensionable salaries.

17. Share capital and reserves

Additional employer contributions will be required if there are any enhancements to bene ts due to redundancies or 2015 2014 augmentations during the year.

£'000 £'000

Authorised, issued and fully paid up Actuarial gains and losses have been recognised in the period in which they occured, (but outside income statement),

through other comprehensive income ("OCI").

Ordinary shares at £1 each – equity 20,000 20,000

Ordinary shares carry a voting right of one vote for each share held.

The equity reserve represents cumulative comprehensive income, including unrealised gains or losses on foreign exchange, net of equity dividends paid and other adjustments on post-employment bene t schemes.

The translation reserve arises on consolidation, where the consolidation of subsidiaries with a functional currency that is not GBP results in a difference that is recognised through other comprehensive income.

18. Post-employment bene ts (continued)  18. Post-employment bene ts (continued)

PECRS (continued) PECRS (continued)

Up to 30 September 2015 (continued) Up to 30 September 2015 (continued)

The scheme was accounted for as a de ned bene t scheme up to 30 September 2015. The principal assumptions used by  Post retirement mortality assumptions (continued) 30 September  31 December  31 December the independent quali ed actuaries to calculate the liabilities under FRS 102 are set out below: 2015 2014 2013

Main nancial assumptions (PECRS)

Before retirement

Jersey in ation rate

Rate of general long-term increase in salaries Rate of increase to pensions in deferment Discount rate for scheme liabilities

After retirement

Jersey in ation rate

Rate of increase to pensions in payment Discount rate for scheme liabilities

Females

30 September 31 December 31 December

2015 2014 2013 Base table Standard SAPS 2  Standard SAPS 2  Standard SAPS

"All Lives" tables  "All Lives" tables  All Amounts

% pa % pa % pa

(S2PMA) (S2PMA) (S1PMA) Rating to above base table * (years) 0 0 0

3.00 3.00 3.65 Scaling to above base table rates 100% 100% 100%

4.00 3.70 4.35 Improvements to base table CMI 2013 with a  CMI 2013 with a  CMI 2010 with a

long term rate of  long term rate of  long term rate of

3.00 3.00 3.50 improvement of  improvement of  improvement of

3.65 3.45 4.40 1.5% p.a. 1.5% p.a. 1.25% p.a Assumed Retirement Age (ARA) 63 63 62

3.10 3.05 3.70 Future lifetime from ARA 26.6 26.5 27.6

3.10 3.05 3.55 (currently aged ARA)

6.60 4.55 5.45 Future lifetime from ARA 28.8 28.7 29.3 (currently aged 45)

The demographic assumptions used by the independent quali ed actuaries for both PECRS were:

Post retirement mortality assumptions  30 September  31 December 2015 2014

*A rating of x years means that members of the scheme are assumed to follow the mortality pattern of the base table for an 31 December  individual x years older than them. The ratings shown apply to normal health retirements.

2013

Males

Base table Standard SAPS 2 "All Lives" tables

(S2PMA) Rating to above base table * (years) 0

Scaling to above base table rates 100% Improvements to base table CMI 2013 with a

long term rate of improvement of 1.5% p.a.

Assumed Retirement Age (ARA) 63 Future lifetime from ARA 24.6 (currently aged ARA)

Future lifetime from ARA 26.6 (currently aged 45)

Standard SAPS 2  Standard SAPS "All Lives" tables  All Amounts (S2PMA) (S1PMA)

0 0

100% 100% CMI 2013 with a  CMI 2010 with a long term rate of  long term rate of improvement of  improvement of 1.5% p.a. 1.25% p.a

63 62 24.5 25.3

5. 27.0

18. Post-employment bene ts (continued)  18. Post-employment bene ts (continued)

PECRS (continued)

Commutation  30 September 2015

Each member assumed to exchange 21% of their pension entitlements.

Split of assets  Value at 30 September

2015 (£'000)

Equities 28,193 Property 5,129 Fixed Interest Gilts – Index-Linked Gilts – Corporate Bonds 7,351 Other 2,714 Total 43,387 Note: Values are shown at bid value.

Reconciliation of funded status to statement of nancial position

Value at 30 September

2015 (£'000)

Fair value of scheme assets 43,387 Present value of scheme liabilities (54,324) Liability recognised on the statement of nancial position (10,937)

Analysis of income statement charge

Current service cost*

Past service cost

Net nance costs

Expense recognised in income statement

*Allowance for administration expenses included in 2015 current service cost: £0.05m

PECRS (continued)

31 December 2014 Changes to the present value of the scheme liabilities during the year

Each member assumed to exchange  Period ended Year ended 21% of their pension entitlements. 30 September 31 December

2015 2014 Value at Value at (£'000) (£'000)

31 December 31 December

Opening de ned bene t obligation 51,132 45,664 2014 2013

(£'000) (£'000) Current service cost 1,924 2,375 30,538 31,244 Interest on the scheme liabilities 1,322 1,982 4,215 2,684 Contributions by scheme participants 445 591

– – Actuarial (gains) / losses on scheme liabilities* (369) 1,341

– – Net bene ts paid out (130) (1,933)

4,384 2,752 Past service cost – 1,112 2,505 2,025 Net increase in liabilities from disposals / acquisitions – – 41,642 38,705 Curtailments – –

Settlements – – Closing de ned bene t obligation 54,324 51,132 *includes changes to the actuarial assumptions.

Value at Value at

31 December 31 December

Changes to the fair value of scheme assets during the year

2014 2013

(£'000) (£'000) Period ended Year ended

30 September 31 December 41,642 38,705

2015 2014 (£'000) (51,132) (45,664) (£'000) Restated

(9,490) (6,959) Opening fair value of scheme assets 41,642 38,705 Interest on the scheme assets 1,085 1,693

Actuarial gains / (losses) on scheme assets (248) 1,781

Period ended Year ended

30 September 31 December  Contributions by the employer 593 805 2015 2014 Contributions by scheme participants 445 591

(£'000) (£'000)

Net bene ts paid out (130) (1,933) 1,924 2,375

Net increase in assets from disposals / acquisitions – –

– 1,112

Settlements – – 237 289

Closing fair value of scheme assets 43,387 41,642 2,161 3,776

Actual return on scheme assets

Period ended Year ended 30 September 31 December

2015 2014 (£'000) (£'000)

Interest on the scheme assets 1,085 1,693 Actuarial (loss) / gain on scheme assets (248) 1,781 Actual return on scheme assets 837 3,474

18. Post-employment bene ts (continued)  18. Post-employment bene ts (continued)

PECRS (continued)

Analysis of amounts recognised in other comprehensive income ("OCI")

Period ended Year ended 30 September 31 December

2015 2014 (£'000) (£'000)

Total actuarial gains  121 440 Total gain in OCI 121 440

History of experience gains and losses

Period ended Year ended 30 September 31 December

2015 2014 (£'000) (£'000)

Experience (losses) / gains on scheme assets (248) 1,781 Experience gains on scheme liabilities* 633 1,176

*This item consists of (losses) / gains in respect of liability experience only, and excludes any change in liabilities in respect of changes to the actuarial assumptions used. This history can be built up over time and need not be constructed retrospectively (and once complete will show the current period and previous four periods).

TBPS (continued)

The demographic assumptions used by the independent quali ed actuaries for TBPS were:

Post retirement mortality assumptions  31 December  31 December  31 December 2015 2014 2013

Males

Base table Standard SAPS 2  Standard SAPS 2  Standard SAPS "All Lives" tables  "All Lives" tables  All Amounts

(S2PMA) (S2PMA) (S1PMA)

Rating to above base table * (years) 0 0 0 Scaling to above base table rates 100% 100% 100%

Improvements to base table CMI 2013 with a  CMI 2013 with a  CMI 2010 with a

long term rate of  long term rate of  long term rate of improvement of  improvement of  improvement of 1.5% p.a. 1.5% p.a. 1.25% p.a

Assumed Retirement Age (ARA) 63 63 62 Future lifetime from ARA 24.6 24.5 25.3 (Currently aged ARA)

Females Telecommunications Board Pension Scheme (TBPS)

Base table

The disclosures below have been prepared for JT (Jersey) Limited in relation to bene ts payable from the

Telecommunications Board Pension Scheme ("TBPS"). Rating to above base table * (years)

Scaling to above base table rates The TBPS is an unfunded scheme under which a de ned bene t pension is payable to current pensioners.

Improvements to base table

The FRS 102 disclosure of the TBPS has been based on a valuation of the liabilities of the scheme as at 31 December 2014

and 31 December 2015 using the membership data at the accounting date. The present values of the de ned bene t

obligation and the related current service cost were measured using the projected unit method. Employer contributions in

2016 are expected to be £0.04m to provide for the payment of bene ts to pensioners. Assumed Retirement Age (ARA)

Future lifetime from ARA

Actuarial gains and losses have been recognised in the period in which they occur, (but outside the income statement),  (Currently aged ARA)

through other comprehensive income ("OCI").

The principal assumptions used by the independent quali ed actuaries to calculate the liabilities under FRS 102 *A rating of x years means that members of the sche are set out below: individual x years older than them. The ratings sho

Main nancial assumptions

Standard SAPS 2  Standard SAPS 2  Standard SAPS "All Lives" tables  "All Lives" tables  All Amounts (S2PMA) (S2PMA) (S1PMA)

0 0 0

100% 100% 100% CMI 2013 with a  CMI 2013 with a  CMI 2010 with a long term rate of  long term rate of  long term rate of improvement of  improvement of  improvement of 1.5% p.a. 1.5% p.a. 1.25% p.a

63 63 62

6. 26.5 27.6

me are assumed to follow the mortality pattern of the base table for an wn apply to normal health retirements.

31 December 31 December 31 December

2015 2014 2013 Commutation

(% p.a.) (% p.a.) (% p.a.) 31 December 2015 31 December 2014 Each member assumed to exchange  Each member assumed to exchange

Jersey price in ation 3.00 3.00 3.65 21% of their pension entitlements. 21% of their pension entitlements. Rate of increase to pensions in deferment 3.00 3.00 3.65

Discount rate for scheme liabilities 3.70 3.45 4.40

18. Post-employment bene ts (continued)  18. Post-employment bene ts (continued)

 TBPS (continued) TBPS (continued)

Split of assets  Value at Value at Value at Changes to the present value of the scheme liabilities during the year

31 December  31 December 31 December Year ended Year ended 2015 2014 2013 31 December 31 December

(£'000) (£'000) (£'000) 2015 2014

Other 6 8 4 (£'000) (£'000) Total 6 8 4 Opening de ned bene t obligation 823 810 Note: Values are shown at bid value. Current service cost – –

Interest on the scheme liabilities 28 35 Reconciliation of funded status to statement of nancial position

Contributions by scheme participants – – Value at Value at Value at

31 December  31 December 31 December Actuarial (gains) / losses on scheme liabilities* (30) 20 2015 2014 2013 Net bene ts paid out (42) (42)

(£'000) (£'000) (£'000)

Past service cost – – Fair value of scheme assets 6 8 4

Net increase in liabilities from disposals / acquisitions – – Present value of scheme liabilities (779) (823) (810)

Curtailments – – Liability recognised on the statement of nancial position (773) (815) (806)

Settlements – – Analysis of income statement charge Closing de ned bene t obligation 779 823

Year ended Year ended *includes changes to the actuarial assumptions.

31 December 31 December

2015 2014 Changes to the fair value of scheme assets during the year

(£'000) (£'000) Year ended Year ended Net nance costs 28 35 31 December 31 December Expense recognised in income statement 28 35 2015 2014

(£'000) (£'000)

Opening fair value of scheme assets 8 4 Interest on the scheme assets – – Actuarial gains / (losses) on scheme assets – – Contributions by the employer 40 46 Contributions by scheme participants – – Net bene ts paid out (42) (42) Net increase in assets from disposals / acquisitions – – Settlements – – Closing fair value of scheme assets 6 8

Actual return on scheme assets

Year ended Year ended 31 December 31 December

2015 2014 (£'000) (£'000)

Interest on the scheme assets - - Actuarial (loss) / gain on scheme assets - - Actual return on scheme assets - -

18. Post-employment bene ts (continued)  20. Related party transactions

TBPS (continued) Under the terms of FRS 102, section 33 "Related Party Disclosures", the States of Jersey is considered to be a related party of

the group. All commercial transactions between the parties are undertaken in the normal course of business.

Analysis of amounts recognised in other comprehensive income ("OCI")

Year ended Year ended The following transactions and balances relating to the States of Jersey departments are re ected in the nancial statements. 31 December 31 December

2015 2014 2015 2014 (£'000) (£'000) (£'000) (£'000)

Total actuarial gains/(losses)  30 (20) Revenue 3,762 3,448 Total gains/(losses) in OCI 30 (20) Trade receivables 625 1,027

Operating expenses 483 545 History of experience gains and losses

Year ended Year ended Trade payables 7 29 31 December 31 December Preference shares interest  250 250

2015 2014 Preference shares payable 10,000 10,000 (£'000) (£'000)

Equity dividends paid 4,110 1,620 Experience gains/(losses) on scheme assets – –

Experience gains/(losses) on scheme liabilities* 7 – Key management includes the directors and members of senior management. The compensation paid or payable to key

management for employee services is shown below:

*This item consists of (losses) / gains in respect of liability experience only, and excludes any change in liabilities in

respect of changes to the actuarial assumptions used. This history can be built up over time and need not be constructed  2015 2014 retrospectively (and once complete will show the current period and previous four periods). (£'000) (£'000)

Summary Salaries and other short term bene ts 2,116 1,569 Reconciliation of pension to statement of nancial position Post-employment bene ts 61 51

2,177 1,620 2015 2014

(£'000) (£'000)

21. Directors' emoluments

Opening balance  (10,305) (7,765)

(Loss)/gain recognised through the income statement: Total

- PECRS (1,568) (2,971) BasFeice Ssa2la0r1y5/ Bon2u0s1e5s T2o0t1a5l 2014 £' 000

- TBPS 12 11 £' 000 £' 000 £' 000

Actuarial (loss)/gain recognised in OCI: Executive Directors

- PECRS 121 440 Graeme Millar 215 136 351 258

- TBPS 30 (20) John Kent 185 71 256 200 (11,710) (10,305) Non-Executive Directors

Pension scheme reorganisation 10,937 – John Stares 40 – 40 40 Closing balance (773) (10,305) Colin Tucker 25 – 25 25 Phil Male 25 – 25 25

19. Ultimate and immediate controlling party Sean Collins 25 – 25 21 Kevin Keen 25 – 25 10

The ultimate controlling party of JT Group Limited is the States of Jersey.

Total 540 207 747 579 During the year the company made pension contributions of £15k (2014: £10k) in respect of Mr. Millar .

22. Capital and other commitments 23. Principal subsidiary undertakings (continued)

2015 2014

(£'000) (£'000) Subsidiary undertaking Place of incorporation Trading/Non-trading Principal activity

Holding company for Capital expenditure committed and contracted 2,556 11,440 Corporate Communications

Corporate Communications Capital expenditure approved but not yet contracted 2,171 4,970 (Holdings) Ltd United Kingdom Non-trading

(Holdings) Ltd group (100% directly owned)

4,727 16,410 subsidiaries

Worldstone Group Ltd

The group has the following future minimum lease payments under non-cancellable operating leases for each of the  (100% indirectly owned  Provision of communications following periods. through Corporate  United Kingdom Trading consultancy and

2015 2014 Communications outsourcing services (£'000) (£'000) (Holdings) Ltd)

Expiry date JT (Global) Limited (formerly

Not later than one year 2,209 2,162 Corporate Communications  Provision of communications

(Europe) Ltd ) (100%

Later than one year and not later than ve years  8,178 8,124 indirectly owned through  United Kingdom Trading consultancy and

outsourcing service.

Later than ve years 9,321 10,997 Corporate Communications

19,708 21,283 (Holdings) Ltd)

23. Principal subsidiary undertakings Worldstone, Inc (100%

Provision of communications indirectly owned through

United States Trading consultancy and

JT Group Limited has investments in the following subsidiaries, which principally affected the pro ts and net assets of the group. Corporate Communications

outsourcing services

(Holdings) Ltd)

Subsidiary undertaking Place of incorporation Trading/Non-trading Principal activity

24. Non-controlling interest

JT (Jersey) Limited Provision of

Jersey, Channel Islands Trading 2015 2014 (100% directly owned) telecommunication services

(£'000) (£'000) JT (Guernsey) Limited Provision of

Guernsey, Channel Islands Trading

(100% directly owned) telecommunication services At 1 January – 255 Jersey Telecom UK Limited Holding company for eKit. Loss on ordinary activities after taxation – –

United Kingdom Non-trading

(100% directly owned) com Inc Equity minority interests loss transferred to reserves – (255) eKit.com Inc At 31 December – –

Low cost roaming solutions

(100% indirectly owned

United States Trading to business and other

through Jersey Telecom UK  The minority interest shareholders held 24.99% (2014: 24.99%) of the shares in Donate Limited at the year end. In 2014,

travellers

Limited) the transfer of the minority interest losses was made to the reserve as the decision to wind down Donate Limited was made

during the year and all losses in the entity relate to JT Group Limited. Donate Limited was dissolved on 19 January 2016. eKit.com Pty Ltd Low cost roaming solutions

(100% indirectly owned  Australia Trading to business and other

through eKit.com Inc) travellers

eKit.com UK Ltd Low cost roaming solutions

(100% indirectly owned  United Kingdom Trading to business and other

through eKit.com Inc) travellers

25. Transition to FRS 102 25. Transition to FRS 102 (continued)

This is the rst year that the group has presented its results under FRS 102. The last nancial statements prepared under

Consolidated Statement of Financial Position

the previous UK GAAP were for the year ended 31 December 2014. The date of transition to FRS 102 was 1 January 2014,

effective 1 January 2015. Set out below are the changes in accounting policies which reconcile pro t for the nancial year  At 31 December 2014

ended 31 December 2014 and the total equity as at 1 January 2014 and 31 December 2014 between old UK GAAP as  Note Old UK GAAP

previously reported and FRS 102. corrected for

As  prior period  FRS 102 Consolidated Income Statement  previously  Prior period adjustment Effect of (as for the year ended 31 December 2014 stated adjustment (as restated) transition restated)

£'000 £'000 £'000 £'000 £'000

As previously Effect of FRS 102 Note Stated Transition (as restated)

£'000 £'000 £'000

Revenue 152,414 – 152,414 Cost of sales (65,331) – (65,331) Gross pro t 87,083 – 87,083 Other operating expenses A, C (73,408) (2,815) (76,223) Operating pro t 13,675 (2,815) 10,860 Finance income and similar income B, C 545 (479) 66 Finance costs and similar charges C (2,651) (324) (2,975) Pro t on ordinary activities before taxation  11,569 (3,618) 7,951 Tax on pro t on ordinary activities C (2,712) 190 (2,522) Pro t on ordinary activities after taxation 8,857 (3,428) 5,429 Non-controlling interests – – – Pro t for the nancial year 8,857 (3,428) 5,429 The effect of the prior year period adjustment in 2014 (£0.04m) was immaterial and has been adjusted to 2013.

Fixed assets

Intangible assets A 32,510 – 32,510 (2,683) 29,827 Property, plant and equipment 107,811 – 107,811 – 107,811 Investments 5 – 5 – 5 Deferred tax asset E 452 609 1,061 2,061 3,122

140,778 609 141,387 (622) 140,765

Current assets

Inventories 12,473 – 12,473 – 12,473 Receivables due within one year 39,677 – 39,677 – 39,677 Receivables due after one year 1,069 – 1,069 – 1,069 Cash at bank and in hand 8,741 – 8,741 – 8,741

61,960 – 61,960 – 61,960

Payables: amounts falling due

E (40,400) (855) (41,255) – (41,255) within one year

Net assets 21,560 (855) 20,705 – 20,705

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2014 Total assets less current liabilities 162,338 (246) 162,092 (622) 161,470

Payables: amounts falling due after

As previously Effect of FRS 102 B (51,630) – (51,630) (6) (51,636) Note Stated Transition (as restated) more than one year

£'000 £'000 £'000 Deferred tax liability (5,561) – (5,561) – (5,561)

Provisions for other liabilities (2,238) – (2,238) – (2,238)

Pro t for the nancial year 8,857 (3,428) 5,429

Post-employment bene ts (8,244) – (8,244) (2,061) (10,305) Currency translation difference 83 – 83

2.5% Redeemable preference shares (10,000) – (10,000) – (10,000) Remeasurements of net de ned bene t obligation C (535) 955 420

Total tax on components of other comprehensive  Net assets 84,665 (246) 84,419 (2,689) 81,730

C 107 (190) (83)

income

Capital and reserves

Onetht eorf tcaoxmprehensive income for the year, (345) 765 420 Share capital 20,000 – 20,000 – 20,000

Equity reserve 65,043 (235) 64,808 (2,689) 62,119 Total comprehensive income for the year 8,512 (2,663) 5,849

Translation reserve (378) (11) (11) – (389) Total pro t attributable to

Equity attributable to owners

- Owners of the parent 8,857 (3,428) 5,429 84,665 (246) 84,419 (2,689) 81,730

of the parent

- Non-controlling interest – – –

8,857 (3,428) 5,429 Non-controlling interest – – – – – Total comprehensive income attributable to Total equity 84,665 (246) 84,419 (2,689) 81,730

- Owners of the parent 8,512 (2,663) 5,849

- Non-controlling interest – – –

8,512 (2,663) 5,849

25. Transition to FRS 102 (continued) 25. Transition to FRS 102 (continued)

Consolidated Statement of Changes in Equity At 31 December 2014

Note

D – Cash ow statement

The group's cash ow statement re ects the presentation requirements of FRS 102, which is different to that prepared under FRS 1 and the impacts of changes in the income statement and the statement of nancial position for the prior

Total  Old UK GAAP  period. In addition, the cash ow statement reconciles to cash and cash equivalents whereas under previous UK GAAP the reserves  corrected for  cash ow statement reconciled to cash. Cash and cash equivalents are de ned in FRS 102 as cash on hand and demand

as  prior period  FRS 102 deposits and short term highly liquid investments that are readily convertible to known amounts of cash and that are subject previously  Prior period adjustment Effect of (as  to an in-signi cant risk of changes in value' whereas cash is de ned in FRS 1 as cash in hand and deposits repayable on

stated adjustment (as restated) transition restated)

demand with any qualifying institution, less overdrafts from any qualifying institution repayable on demand'.

£'000 £'000 £'000 £'000 £'000

Balance at 1 January 2014  B,E Pro t for the year

Other comprehensive income for the year

Total comprehensive income for the year

Movement in translation reserve Transfers

Dividends

Balance at 31 December 2014

77,831 (246) 77,585 (26) 8,857 – 8,857 (3,428)

(345) – (345) 765 8,512 – 8,512 (2,663)

197 – 197 –

(255) – (255) – (1,620) – (1,620) –

84,665 (246) 84,419 (2,689)

E – Prior period adjustment to restate opening balances

77,559

The comparative opening balance of the equity reserve has been restated to correct a prior period error which resulted from 5,429 a miscalculation of deferred revenue in the nancial statements of a subsidiary entity, ekit.com Inc. The impact of the

adjustment to 2014 was a reduction of £0.24m to the opening equity reserve balance, a reduction of £0.01m to the

420

translation reserve and a reduction in net assets of £0.25m, being the net of an increase in deferred income of £0.86m offset 5,849 by an increase in the deferred tax asset of £0.61m.

26. Subsequent events

197

(255) There have been no subsequent events that require any adjustment or further disclosure since the statement of nancial

position date.

(1,620)

81,730

A – Reassessment of the useful economic life of Goodwill

Estimating the useful life of goodwill requires the exercise of judgement. Factors such as a change in the business, technological advancement and changes in market prices can indicate that the useful life has changed since the most recent annual reporting date. On transition to FRS 102, management reviewed all useful economic lives from the default 20 year life adopted by the group under old UK GAAP. In accordance with section 10 of FRS 102, the revision is accounted for as a change in accounting estimate. The original estimate of the useful life is revised, the unamortised cost is written off over the revised remaining useful life. The incremental amortisation charges arise from the reduction of the goodwill related to ekit from 20 to 5 years, Corporate Communications (Holdings) Limited from 20 to 10 years and Newtel from 20 to 10 years. As at 1 January 2014, the net book values were £10.4m, £15.4m and £7.3m respectively.

B – Derivative nancial instruments

FRS 102 requires derivative nancial instruments to be recognised at fair value. Previously under UK GAAP the group did not recognise these instruments in the nancial statements. Prior to the transition the group's policy was to enter into forward currency contracts to cover speci c foreign currency payments and receipts to reduce the exposure to  uctuations in foreign exchange. On transition to FRS 102, the group has fair valued these derivative instruments. The opening statement of nancial position recognised a £26k liability, being the fair value gain for the year ended 31 December 2014 and a £6k liability as at 31 December 2014. The group has adopted a policy to apply hedge accounting derivative instruments but did not put the documentation in place to apply this for the derivatives in place at the date of adoption given their size.

C – De ned bene t scheme

Under old UK GAAP the group recognised an expected return on de ned bene t plan assets in the income statement. Under FRS 102 a net interest expense, based on the net de ned bene t liability, is recognised in the income statement. There has been no change in the de ned bene t liability at either 1 January 2014 or 31 December 2014. The effect of the change has been to reduce the credit to the income statement in the year to 31 December 2014 by £0.77m net of tax and increase the credit in other comprehensive income by the same amount. As there was a net nance income for the year ended 31 December 2014 under old UK GAAP which is now a nance cost there is a reclassi cation of £0.5m between

 nance income and nance cost.

PIONEERING TECHNOLOGY

Annual Review 2015/2016

es correct at time of publication. June 2016.

04 Chairman's Foreword

06 CEO's Business Review

10 Fibre: Superior Connectivity in the Channel Islands

12  4G: The Channel Islands Fastest Network

14 A Fair Deal on a Better Network

16 Powering a Digital Economy

18 Global Growth: Delivering Local Investment

20 Building a Digital Legacy: Supporting Our Community

22 Developing Our People: To Delight Our Customers

Welcome to the most  24 Performance Review connected island in the world 26 Board of Directors

28 Corporate Governance

Whether you're relocating your home or business to Jersey, we're here to

support you. With over 120 years experience delivering communication solutions 32 Directors' Report

in the Channel Islands, JT's team will take care of all your needs.

From our superfand landline sast 4G mobile network, tervices, we'll help o ouryou get connect island-wide fibred.e broadband  34 Financial Summary

40 Notes to the Financial Summary

CHAIRMAN'S FOREWORD

There's a key phrase at JT which is very relevant when looking back both on our work during 2015, but also forward in the years to come: always enabling.'

That's exactly how we see the purpose of our business; both for the Channel Islands, and for our growing international customer base, which as

well as being important in its own right, is essential for funding our work at home.

John Stares Chairman

40068_JT_Annual_Report_A4_2016.indd 6-7

While within the telecommunications industry  I believe this is in no small part down to the

we are classified as a "Tier 1 firm", and now the  quality and reliability of our network, in addition biggest digital business in the Channel Islands, to our pricing, which remains very competitive. to ensure our continued success, we need to  Particularly once you take into account the fact continue to grow. You'll see a visual on this page  that we continue to invest £1.2m every year to which shows the acquisitions made by the provide a discounted tariff for those Jersey

JT Group in the last seven years, all of which  residents over 65 who were on the Prime Talk have helped us to build a substantial  scheme before June 2015, something which

JT exists to enable people and businesses to  international customer base.  isn't on offer elsewhere.

be connected. Whether that's via our mobile  We will continue to look carefully for the right  The team at JT has worked hard for their services, landlines or broadband, or by using acquisitions in the coming years – on that note, success in 2015, and I'm proud of what they have our SIM cards to connect vital personal medical  I must quickly reference the potential deal with  achieved. Whether it is for local residents, equipment, such as heart sensors, to remote  Bharti-Airtel.  companies or international customers, we will monitors, through what's known as machine-to- continue with our key philosophy of, always

machine technology, JT plays a vital role in  While the proposed merger with Bharti-Airtel  there, always on, always enabling.'

keeping them, and our customers, connected.  across the Channel Islands (with Bharti-Airtel

You can see more about how JT is powering also taking a stake in JT) is no longer under

vital services like these on page 16.  consideration, we remain interested in the

Guernsey Airtel business at the right price, as

Our business success relies on this ability to  it is a good example of the sort of acquisition  

enable customers to live their lives (both socially  that forms part of our strategic growth path.  

and at work) supported with the connectivity  That growth path is critical to us being able to  

that they now rely on, every day.  continue to fund investment in the reliable,  

high-speed/capacity networks which are  

Tfoulrlonwin glattoe roiunr t fihnisa rnecpiaolr pt)e2r0fo1r5mwaansc ea (stthreo ndge tails  enjoyed by Channel Island residents and  

year which saw an increase in both overall  companies, and which deliver the world-class  John Stares

communications quality and resilience

rheevaeltnhuyedaivnidd egnrdo sbsa pckro tfiot o,eunr aubltliimnga tues o two ndeerlsiv, ethr ea  underpinning our core financial services  Chairman

people of Jersey.  industries, and nascent digital sectors. Dated: June 2016

I'd like to finish with a phrase I used in the

     foreword to last year's Annual Review – I said

that the opening up of the landline market in

    the Channel Islands represented an opportunity

for us. Well, looking back on that significant

   change, I'm pleased to say it is an opportunity

which JT has seized; our market share in this

sector has held up very well indeed in Jersey,

Much of the revenue increase was from our  while increasing in Guernsey.

wholesale trading business, not expected to

continue at this level. Gross profits grew. Higher

depreciation arising from our capital spend

programme led to a small reduction in operating

profit from £10.9m to £10.2m. Our results also

benefited from a one-off non-cash accounting

credit of £10.9m. Since 2009, the acquisitions made

I(ta wnda sthaolssoe tohfe t hyee arer ignu wla htoicr h C oICurR oAw) nsusgugrveesytesd  by JT Group have contributed £114m that we were doing much better in terms of  towards revenue.

satisfying our customers, which is perhaps the

most important measure of all.

I'd also like to draw out two major network

achievements; firstly, we completed the Channel  Revenue earned by these acquisitions Islands' first 4G network, with customer

feedback already suggesting it is the best on  in 2015 represents 28% of the overall offer in terms of quality and coverage.  growth in annual revenue versus 2009.

Secondly, we connected more than half of Jersey's broadband customers to super-fast, fibre-optic cabling, a major milestone in this exceptionally important project for the Island's future social and economic well-being.

I would like to take this opportunity to thank every member of the JT team for their energy,  talent and commitment, which all came together  to deliver those excellent results. We will be  using that successful performance to continue  to grow the business; growth is vital for JT's  future, as in the global telecommunications  industry, we are what's known as sub-scale.'  

07/06/2016 11:27

CEO'S BUSINESS REVIEW

Starting with our flagship Gigabit Isles' project, "2015 saw the

aths te hwe corlhda inrt bteermlosw sofhtohew sp, Jerecersnety iags ne oof w 3homrd iesn  Customers completion and

wcoitmh e sbrouacdh a lbanodn g wconany iecn a fted e t w so J hT o Frit ybreea. Wrse've  THEN AND NOW activation of the

(anfodr e7xtahm inp 2le0, 1w4e), wweitrh ne ino 2w m1stoproe tsihtiaon 5n in4 2% o009f  new £12m 4G mobile Jweorrslde -yc'sla bssrofiabdrbe sanedr vc iucse – stom oe ors n r , fiec be ri e bvin rg o t ah da bt  and  1a5s oyef Jarusnae 2go0J1T6 whae sd 4e4r,7v4ic2e ocuvsetr 1 momer isll  ia on n d  network across

witnoif lrbl baesne treaufivct at fuirlraoebmnle t eincno aeos vs lal ca tr iy uv  sefo t dor imoguietr ar wsl s, cheo rrl eve ai  ccteoinsmg t.mMhuoe nreit y  customers worldwide. 1m the Channel Islands" on that later.

In Guernsey, we have invested £7m in laying

50km of fibre optic cabling in and around St Peter  Staying with the connectivity' theme, 2015 saw Port, which has aided us thus far to connect 42  the completion of our £12m 4G mobile network

government sites, such as schools and the  44,742  across the Channel Islands. Effectively, that has Graeme Millar hospital, and so delivering a real benefit to the  made broadband for your mobile' a reality

CEO community; local residents are also starting to  and the feedback we are getting from customers access this super-fast' broadband network too. 2000 2016 in terms of the quality and coverage of the new

network is exceptional.

JboT iuccs s a cainseiosnso,amallnpyd,lessxtoe, apitnb'sd haucskieg, fah punldtroos  fietaelekh,eoswtofcakr  54% "More than half of JT

we have actually come. of Jersey's broadband  customers' mobile data

customers are now on fibre

Ios'td lnreai tkwee togryo dd: wo thichhait ns corwit, bicay fl t oo c ouusrsbinug osinn ess  usage is watching video"

CONNECTIVITY'

It is now easily possible to sit at home, on

the bus or on the beach streaming video on your mobile using JT's 4G network (more than half of the mobile data usage for JT customers is for watching video), an experience which customers would have found frustrating, or impossible, just a few months earlier.

However, as our Chairman points out in his

In the last 6 years we have increased 18 places and now sit 3rd in the world's top table  foreword to this document, JT must also grow for percentage of households with fixed broadband connected to fibre. by connecting customers internationally, not