the Members of JT Group Limited

Directors' responsibilities statement

JT Group Limited Directors' report

JT Group Limited

Independent auditor's report to the Members of JT Group Limited For the year ended 31 December 2021

For the year ended 31 December 2022

We have nothing to report on other matters on which we are required to report by exception

The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

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:

Our opinion is unmodified

• adequate accounting records have not been kept by the Company; or

• the Company's consolidated financial statements are not in agreement with the accounting records; or

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

We have audited the consolidated financial statements of JT Group Limited (the “Company”) and its subsidiaries (together, the "Group"), which comprise the consolidated balance sheet as at 31 December 2021, the consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising significant accounting policies and other explanatory information.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards ("IFRS"). Under Jersey company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the profit or loss of the Group for that year.

Respective responsibilities

In our opinion, the accompanying consolidated financial statements:

In preparing these financial statements, the Directors are required to:

Directors’ responsibilities

● select suitable accounting policies and then apply them consistently;

● make judgements and accounting estimates that are reasonable and prudent;

• give a true and fair view of the financial position of the Group as at 31 December 2021, and of the Group’s financial performance and cash flows for the year then ended;

• are prepared in accordance with International Financial Reporting Standards; and

● state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

● assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

Basis for opinion

● use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations or have no realistic alternative but to do so.

As explained more fully in their statement set out on page 36, the directors are responsible for: the preparation of the consolidated financial statements including being satisfied that they give a true and fair view; such internal control as they determine is necessar y to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities

The Directors confirm they have complied with all the above requirements in preparing the financial statements.

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Company and Group in accordance with, UK ethical requirements including FRC Ethical Standards. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.

Going concern

The directors have prepared the consolidated financial statements on the going concern basis as they do not intend to liquidate the Group or the Company or to cease their operations, and as they have concluded that the Group and the Company's financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the consolidated financial statements (the “going concern period").

A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with the Companies (Jersey) Law 1991. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

The purpose of this report and restrictions on its use by persons other than the Company’s members, as a body

In our evaluation of the directors' conclusions, we considered the inherent risks to the Group and the Company's business model and analysed how those risks might affect the Group and the Company's financial resources or ability to continue operations over the going concern period.

Our conclusions based on this work:

The Directors are responsible for the maintenance and integrity of the corporate and financial information included in the Group’s website. Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

This report is made solely to the Company’s members, as a body, in accordance with Article 113A of the Companies (Jersey) Law 1991. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

• we consider that the directors' use of the going concern basis of accounting in the preparation of the consolidated financial statements is appropriate; and

Responsibility statement of the Directors in respect of the annual financial report

• we have not identified, and concur with the directors' assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Group and the Company's ability to continue as a going concern for the going concern period.

We confirm that, having taken into account all of the matters considered by the Board and those brought to its attention during the year; to the best of our knowledge, the annual report and financial statements taken as a whole are fair, balanced and understandable and provide the information necessary for our shareholder to assess the Group position and performance, business model and strategy.

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group and the Company will continue in operation.

Review of risk management and internal control systems

Andrew Quinn

Fraud and breaches of laws and regulations – ability to detect

We confirm that we have carried out a review of the Group’s risk management and internal control systems. We are satisfied that the systems are aligned with our strategic objectives.

For and on behalf of KPMG Channel Islands Limited

Identifying and responding to risks of material misstatement due to fraud

Chartered Accountants

To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

Jersey

• enquiring of management as to the Group’s policies and procedures to prevent and detect fraud as well as enquiring whether management have knowledge of any actual, suspected or alleged fraud;

• reading minutes of meetings of those charged with governance; and

• using analytical procedures to identify any unusual or unexpected relationships.

29 March 2023

As required by auditing standards, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make inappropriate accounting entries. On this audit we do not believe there is a fraud risk related to revenue recognition because the Group’s revenue streams are simple in nature with respect to accounting policy choice, and are easily verifiable to external data sources or agreements with little or no requirement for estimation from management. We did not identify any additional fraud risks.

JT Group Limited

Consolidated statement of profit or loss For the year ended 31 December 2022

The Annual Report and Consolidated Financial Statements were approved and authorised for issue by the Board of Directors on 29 March 2023 and was signed on its behalf by:

H Narcy Chief Financial Officer

29 March 2023

JT Group Limited

Consolidated statement of changes in equity For the year ended 31 December 2022

JT Group Limited

Consolidated statement of cash flows For the year ended 31 December 2022

JT Group Limited

Notes to the consolidated financial statements For the year ended 31 December 2022

1. General information

The consolidated financial statements of JT Group Limited (the "Company") and its subsidiaries (the “Group”) for the year ended 31 December 2022 were authorised for issue in accordance with a resolution of the Directors on 29 March 2023.

The Group has its principal operations in Jersey. The Group also has operations in Australia, Guernsey, the UK, and the USA. A list of major subsidiaries is included in note 34.

The Company was incorporated in Jersey, Channel Islands on 22 October 2002 and the address of its registered office is No. 1 The Forum, Grenville Street, St Helier, Jersey, Channel Islands, JE4 8PB.

Going concern

The Group’s business activities, together with the factors likely to affect its future development, performance and financial position are described in the notes to the consolidated financial statements. Note 30 describes the Group’s policies and processes on financial risk management objectives and capital, provides details of financial instruments and Group’s exposures to risks.

Management has assessed the Group’s financial stability and liquidity over the next 18 months from the reporting year end. The investment in 5G and expected dividend payments have been considered. In addition to the existing £50 million Revolving Credit Facility, the Group has a strong recurring revenue stream and expects inbound and outbound roaming to continue to recover to normal levels following the pandemic. The decrease in cash held as at year end is as a result of the Group investing in a portfolio of securities during the year. The loss making position for the year is due to the fair value adjustment of these investments as a result of market movements and the Group is profit making before these adjustments. A reasonably plausible downside scenario to 31 December 2024 has been modelled and applies a reduction in revenue based on a risk assessment of revenue segments and an increased trade receivables impairment loss. The outcome of the downside scenario provides sufficient headroom between forecasted net borrowing requirements and available funding.

Consequently, the Directors are confident that the Group and Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.

2. Summary of significant accounting policies

This note provides a summary of the significant accounting policies adopted in the preparation of these consolidated financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.

New or amended Accounting Standards and Interpretations adopted

(i) New standards, amendments and interpretations issued effective as of 1 January 2022:

Description Effective Date

Amendments to IFRS 3 Business Combinations

2018-2022 Annual Improvements and Onerous Contracts

IAS 16: Property Plant and Equipment: Proceeds before Intended Use

1 January 2022

1 January 2022

1 January 2022

The Directors have considered the impact of the new standards, amendments and interpretations and do not consider there to be a significant impact from these newly effective standards, amendments and interpretations.

(ii) Standards not yet effective, but available for early adoption

Description Effective date

Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors

1 January 2023

Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement

2: Disclosure of Accounting policies

Amendments to IAS 12 Income Taxes

Amendments to IFRS 17 Insurance contracts

Amendments to IFRS 4 Insurance Contracts

Amendments to IAS 1 Presentation of Financial Statements: Amendments regarding the classification of liabilities

1 January 2023

1 January 2023

1 January 2023

1 January 2023

1 January 2024

JT Group Limited

Notes to the consolidated financial statements

For the year ended 31 December 2022

2. Summary of significant accounting policies (continued)

The Directors have considered the new standards, amendments and interpretations as detailed in the above table and do not plan to early adopt these standards. The Directors anticipate that the adoption of these standards or interpretations will have no material impact on the financial statements of the Group.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Basis of preparation

Statement of compliance

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the IASB and have been properly prepared in accordance with the Companies (Jersey) Law 1991.

Historical cost convention

The financial statements have been prepared on a historical cost basis net of expected credit losses or impairment (as applicable), except for the revaluation of certain financial instruments and defined benefit pension plans – plan assets that are measured at fair value at the end of each reporting period, and inventory that is held at the lower of historical cost and net realisable value, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Critical accounting estimates

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3.

Principles of consolidation and equity accounting

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of JT Group Limited as at 31 December 2022 and the results of all subsidiaries for the year then ended.

Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Group.

Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated balance sheet respectively.

Changes in ownership interests

When the Group ceases to consolidate an investment because of a loss of control, joint control or significant influence, any retained interest in the entity is measured to its fair value, with the change in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.

JT Group Limited

Notes to the consolidated financial statements

For the year ended 31 December 2022

2. Summary of significant accounting policies (continued)

Foreign currency translation

Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Pounds sterling (GBP), which is the Group’s functional and presentation currency.

Translation and accounting of transactions and balances in a foreign currency

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.

At each period end, foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of profit and loss.

Group companies

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

● assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet,

● income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and

● all resulting exchange differences are recognised in other income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings are recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

Revenue recognition

Revenue from contracts with customers falls under the scope of IFRS 15.

At contract inception, the Group identifies “performance obligations”, being distinct goods and services promised to the customer. Consideration is allocated to each performance obligation in a contract based on their relative standalone selling price, and revenue is recognised as performance obligations are satisfied, net of returns, discounts and rebates allowed by the Group and sales taxes.

JT Group Limited

Notes to the consolidated financial statements

For the year ended 31 December 2022

2. Summary of significant accounting policies (continued)

The Group derives revenue from:

Network services – fixed line, broadband, mobile and private circuit services to residential and corporate customers. Revenue from:

● Fixed line, broadband and mobile subscription fees and network usage (including revenues from interconnect traffic), is recognised over the period in which the service is provided. Any upfront installation services are treated as deferred income and recognised on a straight-line basis over the period of the contract and any future expected renewals. Network usage is recognised using a measure of progress that appropriately reflects satisfaction of the performance obligation, normally based on usage (i.e. minutes or bytes of data), or by time (i.e. monthly);

● Provision of private circuits is recognised evenly over the period to which the charge relates;

Equipment sales - sale rental and support of equipment such as handsets, corporate phone systems and data network equipment:

○ Revenue from retail equipment sales, is recognised at the point of sale;

○ Corporate equipment sales, net of rebates, discounts and similar commissions, is recognised at the point of sale;

○ The rental and support contracts of corporate equipment sales, is recognised evenly over the periods in which the service is provided to the customer;

Managed services – provision and management of data centres, hosted, cloud and WAN.

○ Revenue from the managed service, maintenance and support contracts of the data centres, hosted, cloud and WAN services is recognised evenly over the periods in which the service is provided to the customer.

On-Island Wholesale – fixed line, broadband and private circuit services to wholesale customers. Revenue from:

● The provision of fixed line, broadband services and private circuits on-island at wholesale rate to other operators (including revenues from network usage), is recognised over the period through which the service is provided and in line with the recognition of the same services described in network services above; and

● Network usage from inbound roaming customers, is recognised as the service is provided to the customer.

International wholesale – Internet of Things (“IoT”) services, Fraud Protection Services ("FPS"), bulk messaging and network sharing for international customers. Revenue from:

● The provision of SIMs to resellers to provide IoT SIM and data usage, is deferred and recognised on a straight-line basis over the period of the contract and any future expected renewals. Revenue from data usage through the use of IoT sims, is recognised i n the period that usage occurs and in line with measure of progress, usually bytes of data;

● The use of data lookups using application programming interfaces (“API”) used for FPS, is recognised evenly over the period through which the service is provided to the customer. Customers are provided a fixed number of data look-ups within a specific month with no rollover’s into the following month;

● The delivery of bulk messaging to international customers, is recognised when the individual message is delivered to the end customer; and

● Mobile number portability (routing) look-up services to international customers, is recognised as an when the individual look-up is delivered to the customer.

Other – other minor revenue streams, including digital & advertising services, is recognised over the period the service is provided.

Products and services may be sold individually or as bundled packages. In these cases, the Group identifies the separate performance obligations and applies the corresponding revenue recognition policy as described above to each one. The total transaction price is then allocated to each distinct performance obligation based on their respective stand-alone selling prices.

JT Group Limited

Notes to the consolidated financial statements

For the year ended 31 December 2022

2. Summary of significant accounting policies (continued)

Some of the Group’s contracts include multiple deliverables, such as the sale of hardware and related installation and professional services. If the installation and professional services are not complex, could be performed by another party and does not include an integration service they are accounted for as separate performance obligations. Where the contracts include multiple performance obligations, the transaction price will be allocated to each performance obligation based on the relative stand-alone selling prices. Where these are not directly observable, they are estimated based on expected cost plus margin. If contracts include the installation of hardware, revenue for the hardware is recognised at a point in time when the hardware is delivered, the legal title has passed, and the customer has accepted the hardware.

Contract assets are recognised where control of goods and services has transferred to the customer before consideration is due, such as where handsets are provided at the beginning of a contract but paid for over the contract period, or where upfront installation charges are deemed to be a distinct performance obligation. Contract assets are reclassified to trade receivables when Group obtains a right to receive payment for the asset, i.e. once the customer is billed.

Contract liabilities are recognised where payment has been received in respect of goods and services that has not yet been delivered to the customer, such as for equipment or connection services received at the start of a contract that are not deemed to be separate performance obligation.

In certain contracts, the Group incurs costs to obtain a contract with a customer such as selling and marketing costs, bid and proposal costs, sales commissions, and legal fees. Only incremental costs are recognised as assets. The Group recognises incremental costs to obtain a contract if the Group expects these costs to be recoverable. Incremental costs of obtaining a contract are those costs that the Group would not have incurred if the contract had not been obtained (for example, sales commissions).

The Group assesses the recoverability of the assets on a contract-by-contract basis and includes estimates of expected consideration from potential reviews and extensions. Costs of obtaining a contract that is not incremental are expensed in the period that the costs are incurred.

The Group often incur costs to fulfil its obligations under a contract once it is obtained, but before transferring goods or services to its customers. These costs are recognised as assets when they relate directly to a contract (and can be specifically identified), the costs generate or enhance resources of the Group that will be used in satisfying performance obligations in the future and the costs are expected to be recovered. Examples of direct costs include direct labour and materials and other costs that are specifically charged to the customer under the contract. General and administrative cost are not capitalised and are expensed in the period that the costs are incurred.

Interest income

Interest income is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

● the gross carrying amount of the financial asset; or

● the amortised cost of the financial liability

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become creditimpaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.