REG - Jersey Electricity - Half-year Report
17/05/2023 14:45
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RNS Number : 7703Z Jersey Electricity PLC 17 May 2023
Jersey Electricity plc
Interim Report
for the six months ended 31
March 2023
The Board approved at a meeting on 17 May 2023 the Interim Management Report
for the six months ended 31 March 2023 and declared an interim dividend of
8.00p compared to 7.60p for 2022. The dividend will be paid on 20 June 2023 to
those shareholders registered in the records of the Company at the close of
business on 2 June 2023.
The Interim Management Report is attached and will be available to the public
on the Company's website www.jec.co.uk/investors
(http://www.jec.co.uk/investors) .
The Interim Management Report for 2023 has not been audited, or reviewed, by
our external auditors, nor have the results for the equivalent period in 2022.
The results for the year ended 30 September 2022 were extracted from the
statutory accounts. The auditor has reported on those accounts and their
report was unmodified.
M.P. Magee
A. Welsby
Finance Director
Company Secretary
Direct telephone number: 01534 505201
Direct telephone number: 01534 505250
Email: mmagee@jec.co.uk
Email: awelsby@jec.co.uk
17 May 2023
The Powerhouse,
PO Box 45,
Queens Road,
St Helier,
Jersey JE4 8NY
Directors' Statement
Financial Summary
6 months 6 months
2023 2022
Electricity Sales in kWh 355.7m 359.4m
Revenue £69.4m £65.0m
Profit before tax *£10.3m £7.0m
Earnings per share 26.23p 17.78p
Final dividend paid per ordinary share 10.80p 10.20p
Proposed interim dividend per ordinary share 8.00p 7.60p
* The underlying profit for 2023 was £8.1m when the rebate from RTE and
ex-gratia award for pensions in service are excluded, as described in the
narrative below.
Energy - turmoil in markets
In our 2022 Annual Report we highlighted that the turmoil that beset energy
markets had intensified further due to the conflict between Russia and
Ukraine, and that Jersey Electricity was not immune to those challenges.
However, despite those challenges we have shown resilience, and largely
protected our customers from the material rise in retail prices seen
elsewhere, without the need for any Government intervention/subsidy. We
continue to monitor developments on both volatility, and security of supply,
in energy markets. Europe experienced relatively benign weather over the
winter, relatively good production from the French nuclear fleet, and much
lower gas usage in the EU industrial sector which, when combined, have
resulted in healthier than expected gas storage levels. There are however
sensitivities, such as the lack of snow and rain in the last 6 months
impacting predictions for the availability of hydro power during the remainder
of this year. This, combined with the uncertain timing of a resolution to the
Ukraine conflict, mean volatility in European energy markets looks set to
continue. We have strong relationships with our French partners, EDF (as
supplier) and RTE (as network operator) that span nearly 40 years and the
Company benefits from legal and contractual arrangements which cover imported
electricity supplies to the end of 2027.
Hedging of electricity and foreign exchange, and customer tariffs
We continue to focus on delivering secure, low-carbon electricity supplies and
our goal is to maintain relative stability in customer tariffs, despite
volatility in both European wholesale electricity and foreign exchange
markets. This is however extremely challenging in the current climate. Our
electricity purchases are materially, but not fully, price capped for the
calendar years 2023 and 2024. We also have around one third of our expected
2025-27 requirements hedged at largely fixed prices. As these are
contractually denominated in the Euro, we also enter into forward foreign
currency contracts, on a three-year rolling basis, to reduce the volatility of
our cost base, and to aid tariff planning. In January 2023 we implemented a 5%
rise in customer tariffs and do not anticipate further rises during the
remainder of 2023. However, we are planning forward, and considering options
for 2024 and beyond, as we come out of our current advantageous hedged
position and are faced with higher market prices.
Even with the rises implemented to date, the tariffs payable by our customers
continue to benchmark well against other jurisdictions. Domestic customers
in Jersey currently pay around half what equivalent customers pay in the UK
for their electricity. Other UK Islands are implementing material rises in
customer tariffs with the Isle of Man having instigated a 25% increase on 1
April 2023, and a further 25% rise from 1 July 2023. Guernsey Electricity has
also applied to raise tariffs by 14.25% from 1 July 2023, subject to
regulatory approval.
Overall trading performance in the 6 months to 31 March
Group revenue, at £69.4m, was 6.7% higher for the first half of 2023 compared
with £65.0m for the same period last year mainly due to a rise in both Energy
and Retail revenue. Profit before tax was £10.3m but included an unexpected
receipt of £3.6m which has been classified as 'Rebate of past energy costs -
non-recurring item' for disclosure purposes within gross profit in these
financial statements. This was a rebate from the French network operator (RTE)
in respect of payments made in 2022 which they were instructed to return to us
in early 2023 as part of a regulatory decision due to volatility in the energy
marketplace during 2022. In addition, a non-cash cost of £1.4m for an
ex-gratia award for pensions in service was granted. If these two items were
excluded the underlying profit before tax was £8.1m compared to £7.0m in
2022. Cost of sales, excluding the rebate of past energy costs, at £46.5m was
£3.6m higher than last year with the rise in wholesale energy costs, and
increased levels of importation from the local Energy from Waste plant, which
was out of service for much of the comparative period last year, being the
main factors. Operating expenses at £16.1m were £1.7m higher than last year
due mainly to higher non-cash pension costs and general inflationary
pressures. The taxation charge in the period of £2.2m was £0.7m higher than
last year due mainly to the unexpected rebate from RTE. Earnings per share, at
26.23p, were above the 17.78p in 2022 due to higher profits. Net cash on the
balance sheet, which comprises borrowings less cash and cash equivalents, at
31 March 2023, was £16.8m compared with £13.1m at this time last year (and
£17.4m of net cash at our last year end on 30 September 2022).
Energy performance
Unit sales of electricity fell marginally by 1% from 359.4m to 355.7m kWh,
compared with the same period last year. Revenue in our Energy business at
£54.8m was £4.0m higher than in 2022 with the year-on-year increase being
largely attributable to a 5% tariff rise in both July 2022 and January 2023.
Operating profit, excluding the £3.6m RTE rebate, and the non-cash cost of
£1.4m for an ex-gratia award for pensions in service, at £6.5m was £0.6m
higher than the corresponding period last year due to the increased revenue
offset by increased wholesale import prices, higher volumes of electricity
received from the local Energy from Waste plant, recruitment of new employees,
and other inflationary pressures. We imported 96% of our on-island requirement
from France and 4% from the Energy from Waste plant, owned by the Government
of Jersey. Only 0.4% (just over 1m units) of electricity was generated in
Jersey using our traditional oil-fired plant (which is run during testing
regimes) and our solar generation. These importation and generation levels
were materially consistent with the same period last year, albeit the imports
from the Energy from Waste plant were back to a more historical levels, as
last year maintenance work was performed for an extended time in that period.
Non-Energy performance
Year-on-year revenue in our Powerhouse retail business, increased by 5% to
£10.0m (2022: £9.5m) but profits were maintained at around the same level at
£0.7m. Profit from our Property portfolio at £0.8m was £0.1m higher than in
2022 due to a combination of higher rental and slightly lower maintenance
costs. JEBS, our building services unit, saw external revenue fall marginally
to £1.7m, with profitability at a breakeven level. Our remaining business
units produced profits of £0.2m compared to £0.3m in 2022.
Liquidity and cashflow
A net cash outflow of £0.6m was experienced in the period (2022: £0.0m) post
the continued investment in infrastructure of £4.5m (2022: £6.0m). The net
cash figure of £13.1m at 31 March 2022 moved to a net cash figure of £16.8m
at 31 March 2023 (£17.4m at 30 September 2022). Net cash consists of cash and
cash equivalents of £46.8m offset by £30.0m of long-term debt.
Pension scheme
The defined benefit pension scheme surplus (without deduction of deferred tax)
on our balance sheet at 31 March 2023 stood at £30.1m, compared with a
surplus of £26.4m at 30 September 2022 (and a surplus of £22.0m at 31 March
2022). Since the last financial year end, scheme liabilities have increased by
approximately £5m to £91m. This rise was primarily due to a decrease of the
discount rate assumptions from 5.2% at the last financial year end to 4.7% at
31 March 2023 associated with a fall in UK AA corporate bond yields in the
interim. Assets in the Scheme rose by around £8m to £121m. Unlike most UK
schemes, the Jersey Electricity pension scheme is not funded to pay mandatory
annual rises on retirement. The Pension Scheme Trustees asked the Company to
consider the granting of a 3% rise to pensions in service in light of the
level of the surplus and the impact of current high levels of inflation on the
pensioner community. This was agreed by the Board in March. The capital cost
of this award was £1.4m and the cash will be paid by the Scheme, rather than
the Company, but generated a £1.4m charge against our Income Statement. This
is reflected in the half-year surplus figure of £30.1m. The defined benefit
scheme has been closed to new members since 2013 and the next triennial
valuation of the scheme, as at 31 December 2024, will be carried out in 2025.
Dividends
Your Board proposes to pay an interim net dividend for 2023 of 8.0p (2022:
7.60p). As stated in previous years, we aim to deliver sustained real growth
each year over the medium-term. The final dividend for 2022 of 10.80p, paid in
late March in respect of the last financial year, was an increase of 5% on the
previous year.
Risk and outlook
The principal risks and uncertainties identified in our last Annual Report,
issued in December 2022, have not materially altered in the interim period. As
highlighted earlier in this report, there is continued volatility in energy
markets. This continues to be closely monitored by the Board as it adds
unpredictability into the price we will pay for any unhedged elements of our
future electricity costs. Your Board is satisfied that Jersey Electricity plc
has sufficient resources to continue in operation for the foreseeable future,
a period of not less than 12 months from the date of approval of this report.
Accordingly, we continue to adopt the going concern basis in preparing the
condensed financial statements.
Responsibility statement
We confirm to the best of our knowledge:
(a) the condensed set of financial statements has been prepared in
accordance with IAS 34 'Interim Financial Reporting';
(b) the Interim Directors Statement includes a fair review of the
information required by the Disclosure and Transparency Rule DTR 4.2.7R
(indication of important events during the first six months and description of
principal risks and uncertainties for the remaining six months of the year);
and
(c) the Interim Directors Statement includes a fair review of the
information required by the Disclosure and Transparency Rule DTR 4.2.8R
(disclosure of related party transactions and changes therein); and
(d) this half yearly interim report looks at certain forward-looking
statements with respect to the operations, performance, and financial
condition of the Group. By their nature, these statements involve uncertainty
since future events and circumstances can cause results and developments to
differ materially from those anticipated. The forward-looking statements
reflect knowledge and information available at the date of preparation of this
half yearly financial report and the Company undertakes no obligation to
update these forward-looking statements. Nothing in this half yearly financial
report should be construed as a profit forecast.
Investor timetable for 2023
2 June Record date for interim ordinary
dividend
20 June Interim ordinary dividend for year
ending
30 September 2023
3 July Payment date for preference share
dividends
20 December Announcement of full year results
C.J. AMBLER - Chief Executive M.P. MAGEE - Finance Director
17 May 2023
Condensed Consolidated Income Statement (Unaudited)
Six months Six months Year
ended ended ended
31 March 31 March 30 September
Note 2023 2022 2022
£000 £000 £000
Revenue 2 69,378 64,995 117,421
Cost of sales (46,459) (42,859) (77,242)
Rebate of past energy costs - non-recurring item 3,593 - -
Gross profit 26,512 22,136 40,179
Revaluation of investment properties - - 1,020
Operating expenses (16,146) (14,412) (29,293)
Group operating profit 2 10,366 7,724 11,906
Finance income 706 10 218
Finance costs (767) (764) (1,523)
Profit from operations before taxation 10,305 6,970 10,601
Taxation 3 (2,208) (1,464) (2,135)
Profit from operations after taxation 8,097 5,506 8,466
Attributable to:
Owners of the Company 8,037 5,448 8,326
Non-controlling interests 60 58 140
Profit for the period/year attributable to the equity holders of the parent 8,097 5,506 8,466
Company
Earnings per share
- basic and diluted 26.23p 17.78p 27.17p
Condensed Consolidated Statement of Comprehensive Income (Unaudited)
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2023 2022 2022
£000 £000 £000
Profit for the period/year 8,097 5,506 8,466
Items that will not be reclassified subsequently to profit or loss:
Actuarial gain on defined benefit scheme 4,307 3,805 8,976
Income tax relating to items not reclassified (861) (761) (1,795)
3,446 3,044 7,181
Items that may be reclassified subsequently to profit or loss:
Fair value (loss)/gain on cash flow hedges (2,013) (118) 4,815
Income tax relating to items that may be reclassified 403 24 (963)
(1,610) (94) 3,852
Total comprehensive income for the period/year 9,933 8,456 19,499
Attributable to:
Owners of the Company 9,873 8,398 19,359
Non-controlling interests 60 58 140
9,933 8,456 19,499
Condensed Consolidated Balance Sheet (Unaudited)
As at As at As at
31 March 31 March 30 September
Note 2023 2022 2022
£000 £000 £000
Non-current assets
Intangible assets 654 790 967
Property, plant and equipment 215,329 216,138 216,235
Right of use assets 3,259 3,301 3,280
Investment properties 28,830 27,810 28,830
Trade and other receivables 300 303 300
Retirement benefit surplus 30,130 21,991 26,434
Derivative financial instruments 6 916 79 2,640
Other investments 5 5 5
Total non-current assets 279,423 270,417 278,691
Current assets
Inventories 9,454 6,907 7,173
Trade and other receivables 28,035 23,375 19,934
Derivative financial instruments 148 - 483
Cash and cash equivalents 46,795 43,110 47,397
Total current assets 84,432 73,392 74,987
Total assets 363,855 343,809 353,678
Current liabilities
Trade and other payables 22,799 19,558 21,043
Lease liabilities 81 73 69
Derivative financial instruments 6 110 677 330
Current tax liabilities 3,328 2,613 2,088
Total current liabilities 26,318 22,921 23,530
Net current assets 58,114 50,471 51,457
Non-current liabilities
Trade and other payables 25,390 24,762 25,162
Lease liabilities 3,212 3,247 3,251
Retirement benefit deficit - 575 -
Derivative financial instruments 6 174 1,542 -
Financial liabilities - preference shares 235 235 235
Borrowings 30,000 30,000 30,000
Deferred tax liabilities 32,508 30,353 32,126
Total non-current liabilities 91,519 90,139 90,744
Total liabilities 117,837 113,060 114,304
Net assets 246,018 230,749 239,374
Equity
Share capital 1,532 1,532 1,532
Revaluation reserve 5,270 5,270 5,270
ESOP reserve (18) (58) (38)
Other reserves 624 (1,712) 2,234
Retained earnings 238,406 225,545 230,232
Equity attributable to the owners of the Company 245,814 230,577 239,230
Minority interest 204 172 144
Total equity 246,018 230,749 239,374
Condensed Consolidated Statement of Changes in Equity (Unaudited)
Share Revaluation ESOP Other Retained Total
Capital reserve reserve reserves Earnings reserves
£000 £000 £000 £000 £000 £000
At 1 October 2022 1,532 5,270 (38) 2,234 230,232 239,230
Total recognised income and expense for the period - - - - 8,037 8,037
Amortisation of employee share scheme - - 20 - - 20
Movement on hedges (net of tax) - - - (1,610) - (1,610)
Actuarial gain on defined benefit scheme (net of tax) - - - - 3,446 3,446
Equity dividends - - - - (3,309) (3,309)
As at 31 March 2023 1,532 5,270 (18) 624 238,406 245,814
At 1 October 2021 1,532 5,270 (79) (1,618) 220,178 225,283
Total recognised income and expense for the period - - - - 5,448 5,448
Funding of employee share option scheme - - 21 - - 21
Movement on hedges (net of tax) - - - (94) - (94)
Actuarial gain on defined benefit scheme (net of tax) - - - - 3,044 3,044
Equity dividends - - - - (3,125) (3,125)
As at 31 March 2022 1,532 5,270 (58) (1,712) 225,545 230,577
At 1 October 2021 1,532 5,270 (79) (1,618) 220,178 225,283
Total recognised income and expense for the period - - - - 8,326 8,326
Amortisation of employee share scheme - - 41 - - 41
Movement on hedges (net of tax) - - - 3,852 - 3,852
Actuarial gain on defined benefit scheme (net of tax) - - - - 7,181 7,181
Equity dividends - - - - (5,453) (5,453)
At 30 September 2022 1,532 5,270 (38) 2,234 230,232 239,230
*'Other reserves' represents the foreign currency hedging reserve.
Condensed Consolidated Cash Flow Statement (Unaudited)
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2023 2022 2022
£000 £000 £000
Cash flows from operating activities
Operating profit 10,366 7,724 11,906
Adjustments to add back/(deduct) non-cash items and items disclosed elsewhere
on the CFS:
Depreciation and amortisation charges 5,741 5,525 11,904
Share-based reward charges 20 21 41
Gain on revaluation of investment property - - (1,020)
Pension operating charge less contributions paid 612 462 1,303
Deemed interest on hire purchase arrangements - - 50
(Profit)/loss on sale of property, plant and equipment (1) (1) (7)
Operating cash flows before movement in working capital 16,738 13,731 23,367
Working capital adjustments:
(Increase)/decrease in inventories (2,281) 2 (257)
Increase in receivables (8,101) (5,370) (1,926)
Increase in payables 2,136 3,127 444
Net movement in working capital (8,246) (2,241) 2,261
Interest paid (763) (760) (1,514)
Preference dividends paid (4) (4) (9)
Income taxes paid (1,045) (1,510) (3,020)
Net cash flows from operating activities 6,680 9,216 21,085
Cash flows from investing activities
Purchase of property, plant and equipment (4,541) (6,041) (11,001)
Investment in intangible assets (68) - (319)
Deposit interest received 706 10 168
Net proceeds from disposal of fixed assets 1 1 7
Net cash flows used in investing activities (3,902) (6,030) (11,145)
Cash flows from financing activities
Equity dividends paid (3,309) (3,125) (5,453)
Dividends paid to non-controlling interest - (45) (154)
Repayment of lease liabilities (72) (35) (72)
Net cash flows used in financing activities (3,381) (3,205) (5,679)
Net (decrease)/increase in cash and cash equivalents (603) (19) 4,261
Cash and cash equivalents at the beginning of the year 47,397 43,136 43,136
Effect of foreign exchange rate changes 1 (7) -
Cash and cash equivalents at the end of the period 46,795 43,110 47,397
Of the £46.8m cash and cash equivalents at 31 March 2023, £37.0m (30
September 2022: £35.0m) is on fixed term deposits with an average of 74 days
remaining (30 September 2022: 45 days)
A presentational amendment has been made to "interest paid" in operating
activities and "Repayment of lease liabilities" in financing activities. For
the year ended 30 September 2022, this has increased interest paid by
£134,000 and made the same decrease to repayment of lease activities. For the
six months ended 31 March 2022, this has increased interest paid by £68,000
and made the same decrease to repayment of lease activities.
1 Accounting policies
Basis of preparation
The interim accounts for the six months ended 31 March 2023 have
been prepared on the basis of the accounting policies set out in the 30
September 2022 annual report and accounts using accounting policies consistent
with International Financial Reporting Standards (IFRS) as adopted by the EU
and in accordance with IAS 34 'Interim Financial Reporting'. There have been
no changes to accounting standards during the current financial period that
has impacted the disclosures in these financial statements and the full year
financial statements that will be prepared for 30 September 2023.
Jersey Electricity plc has considerable financial resources and,
consequently, the directors believe that the Group is well placed to manage
its business risks successfully despite the current uncertain economic
outlook. The directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable
future. Thus, they continue to adopt the going concern basis of accounting in
preparing the annual financial statements.
2 Revenue and profit
The contributions of the various activities of the Group to
turnover and profit are listed below:
Six months ended Six months ended Year ended
31 March 2023 31 March 2022 30 September 2022
External Internal Total External Internal Total External Internal Total
£000 £000 £000 £000 £000 £000 £000 £000 £000
Revenue
Energy 54,833 46 54,879 50,782 49 50,831 89,683 100 89,783
Retail 9,955 35 9,990 9,504 21 9,525 3,365 780 4,145
Building Services 1,684 343 2,027 1,795 252 2,047 18,695 41 18,736
Property 1,226 320 1,546 1,159 320 1,479 2,345 639 2,984
Other* 1,680 264 1,944 1,755 387 2,142 3,333 625 3,958
69,378 1,008 70,386 64,995 1,029 66,024 117,421 2,185 119,606
Inter-segment elimination (1,008) (1,029) (2,185)
Operating profit 69,378 64,995 117,421
Energy profit before rebate 5,061 5,943 7,502
Rebate to cost of sales 3,593 - -
Energy profit including rebate 8,654 5,943 7,502
Retail 672 661 1,174
Building Services 27 103 266
Property 788 717 1,436
Other* 225 300 508
Operating profit before property revaluation/sale 10,366 7,724 10,866
Gain on revaluation of investment properties - - 1,020
Operating profit 10,366 7,724 11,906
*Other segment includes Jersey Energy, Jendev (both divisions) and Jersey Deep
Freeze Limited, the Group's sole subsidiary.
Materially, all the Groups operations are conducted within the Channel
Islands. All transfers between divisions are on an arm's length basis.
Revenues disclosed by the business segments above are recognised both on a
point in time and over time basis. The treatment of revenue recognition in
accordance with IFRS 15 is detailed in the 30 September 2022 annual report.
3 Taxation
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2023 2022 2022
£000 £000 £000
Current income tax 2,132 1,431 2,088
Deferred income tax 76 33 47
Total income tax 2,208 1,464 2,135
For the period ended 31 March 2023 and subsequent periods, the Company is
taxable at the rate applicable to utility companies in Jersey of 20%. (2022:
20%).
4 Dividends paid and proposed
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2023 2022 2022
Dividends per share
Paid 10.80p 10.20p 17.80p
Proposed 8.00p 7.60p 10.80p
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2023 2022 2022
£000 £000 £000
Distribution to equity holders and by subsidiaries in the period 3,309 3,125 5,454
The distribution to equity holders in respect of the final dividend for 2022
of £3,309,120 (10.20p net of tax per share) was paid on 23 March 2023.
The Directors have declared an interim dividend of 8.00p per share, net of tax
(2022: 7.60p) for the six months ended 31 March 2023 to shareholders on the
register at the close of business on 2 June 2023. This dividend was approved
by the Board on 17 May 2023 and has not been included as a liability at 31
March 2023.
5 Pensions
In consultation with the independent actuaries to the scheme, the
valuation of the pension scheme assets and liabilities has been updated to
reflect current market discount rates, current market values of investments
and actual investment returns applicable under IAS 19 'Employee Benefits', and
also consideration has been given as to whether there have been any other
events that would significantly affect the pension liabilities.
The Pension Scheme Trustees asked the Company to consider the
granting of a 3% rise to pensions in service in light of the level of the
surplus and the impact of current high levels of inflation on the pensioner
community. This was approved by the Board in March 2023 and the capital cost
of this award was £1.4m. The cash will be paid by the Scheme, rather than the
Company, but generated a £1.4m charge against our Income Statement.
6 Financial Instruments
The Group held the following derivative contracts,
classified as level 2 financial instruments at 31 March 2023.
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2023 2022 2022
Fair value of currency hedges £000 £000 £000
Derivative assets
Less than one year 148 - 483
Greater than one year 916 79 2,640
Derivative liabilities
Less than one year (110) (677) (330)
Greater than one year (174) (1,542) -
Total net assets/liabilities 780 (2,140) 2,793
All financial instruments for which fair value is recognised or disclosed are
categorised within the fair value hierarchy. This hierarchy is based on the
underlying assumptions used to determine the fair value measurement as a whole
and is categorised as follows:
Level 1 financial instruments are those with values that are immediately
comparable to quoted (unadjusted) market prices in active markets for
identical assets or liabilities.
Level 2 financial instruments are those with values that are determined using
valuation techniques for which the basic assumptions used to calculate fair
value are directly or indirectly observable (such as readily available market
prices).
Level 3 financial instruments are shown at values that are determined by
assumptions that are not based on observable market data (unobservable
inputs).
The derivative contracts for foreign currency shown above are classified as
level 2 financial instruments and are valued based on using a discounted cash
flow valuation technique. Future cash flows are estimated based on forward
exchange rates (from observable forward exchange rates at the end of the
reporting period) and contract forward rates, discounted at a rate that
reflects the credit risk of various counterparties.
7 Related Party Transactions
The Government of Jersey (the "Government") treats the Company as a
strategic investment. Whilst it holds the majority voting rights in the
Company, the Government does not view the Company as being under its control
and as such, it is not consolidated within the Government accounts. The
Government is understood by the Directors to have significant influence but
not control of the Company.
The Company has elected to take advantage of the disclosure
exemptions available in IAS 24, paragraphs 25 and 26. All transactions are
undertaken on an arms-length basis in the ordinary course of business.
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