Jersey Electricity Plc Annual Report 2020

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FY2020 Annual Report · Jersey Electricity Plc

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DRIVING CHANGE FOR A
ZERO-CARBON FUTURE
REPORT AND ACCOUNTS 2020

The Powerhouse, PO Box 45

Queens Road, St Helier JE4 8NY

Tel 01534 505460

Fax 01534 505565

email jec@jec.co.uk

www.jec.co.uk

Printed on paper from

a sustainable source.

KEY ACHIEVEMENTS 2020

JERSEY ELECTRICITY KPIs

Revenue (£m)

Profit before tax (£m)

Ordinary dividend paid per share (p)

Unit sales of electricity (m)

Lost time accidents

Return on energy assets (%)

Customer minutes lost

CO2 level (gCO2e/kWh)

Customer service score

Employee engagement score

2020

111.7

14.8

16.1

619

6.8

8.3

2019

110.7

14.8

15.3

627

6.8

7.8

Detail on why these items are viewed as key indicators of performance
is contained in the relevant sections within the Annual Report.

Financial Calendar

4 January 2021

Preference share dividend

19 February 2021

Record date for final dividend

4 March 2021

Annual General Meeting

25 March 2021

Final dividend for year ended 30 September 2020

13 May 2021

Interim Management Statement – six months to 31 March 2021

4 June 2021

Record date for interim ordinary dividend

25 June 2021

Interim dividend for year ending 30 September 2021

1 July 2021

Preference share dividend

15 December 2021

Preliminary announcement of full year results

Annual General Meeting

The Annual General Meeting will be held at the Powerhouse, Queens Road, St. Helier, Jersey on Thursday 4 March 2021 at 12:30pm.

Details of the resolutions to be proposed are contained in the Notice convening the Meeting.

Press releases and up-to-date information on the Company can be found on the Company’s website (www.jec.co.uk).

109

REVENUES AND PROFITS

ENERGY GROWTH AND SOLUTIONS

• Group revenues up 1% to £111.7m

• 619 million units of electricity sold

• Group pre-tax profits maintained at £14.8m

• 51,522 customers on supply, an increase of 419

SUPPLY SECURITY

• Only five Customer Minutes Lost (CMLs)

• Best performance for 10 years

•

Powerhouse.je turnover up 17% to £17.8m, profits
up 31% to £1.2m

SMARTSWITCH

• £10m Smart Meter roll-out completed

• 4,100 Pay As You Go customers converted

•

Pay As You Go online payment portal
developed and trialled

PEAK DEMAND

• 141MW recorded on 4 December 2019

•

Below last year’s 150MW and record 178MW
in 2018

CUSTOMER SERVICE

• UK Customer Satisfaction Index score of 77

• Just one point down on last year

• Within top quartile of UK utilities

•

Over 1,000 customers switched to discounted space
and water heating tariffs

Record number of domestic fuel switches from gas
and oil

NEW TRANSFORMERS

•

Preparatory works on a £4m project to install
a 90/33kV transformer at La Collette completed
with delivery in November 2020

•

Detailed planning on £4m project for new 90/11kV
transformer at Queen’s Road commenced

HEALTH AND SAFETY

•

One minor RIDDOR Lost Time Accident (LTA)

•

2.5% rise planned for April 2020 postponed

•

Executive Leadership Team (ELT) attended
Institute of Safety and Health (IOSH) Leading Safely
Course.

AFFORDABILITY

• No tariff rise in this financial year

to 1 October 2020 due to COVID-19

• Only third rise in six years

•

EU15 average standard tariff 17% higher,

UK Ofgem default maximum 27% higher

PEOPLE

rating to 8.3

•

81% response rate to employee survey and increased

•

Diversity and Inclusion Strategy implemented

•

Two female employees join Senior Leadership Team

•

Culture and Engagement Forum established

with Board representation

•

Mental Health First Aiders increased to 11

ELECTRIC TRANSPORT

•

Extended public charging network by 30 to 53

charging points

chargers

• 16 times more reliable than UK average

•

Installed two more public Pay As You Go 50kW rapid

RENEWABLES

•

Installed Jersey’s first Solar Hub combining 53kWp

solar PV array and two 22kW EV charge points

•

25-year lease agreement to install 255kWp array on

farm warehouse to generate 270,000 units a year

•

835 pure electric vehicles now registered in Jersey

•

Over 1,200 hybrid vehicles registered

ENVIRONMENT

•

Delivered power at a carbon intensity level of 24g

•

25-year lease agreement to install 553kWp array on

CO2e /kWh

Jersey Dairy – largest in Channel Islands

– to generate over half a million units a year

•

Around one tenth of UK grid carbon levels

•

90% less carbon than local gas and heating oil

REVENUES AND PROFITS

ENERGY GROWTH AND SOLUTIONS

• Group revenues up 1% to £111.7m

• 619 million units of electricity sold

• Group pre-tax profits maintained at £14.8m

• 51,522 customers on supply, an increase of 419

•

Powerhouse.je turnover up 17% to £17.8m, profits

•

Over 1,000 customers switched to discounted space

up 31% to £1.2m

and water heating tariffs

SUPPLY SECURITY

• Only five Customer Minutes Lost (CMLs)

• Best performance for 10 years

• 16 times more reliable than UK average

•

Record number of domestic fuel switches from gas

RENEWABLES

and oil

•

Installed Jersey’s first Solar Hub combining 53kWp
solar PV array and two 22kW EV charge points

25-year lease agreement to install 255kWp array on
farm warehouse to generate 270,000 units a year

25-year lease agreement to install 553kWp array on
Jersey Dairy – largest in Channel Islands
– to generate over half a million units a year

AFFORDABILITY

• No tariff rise in this financial year

•

2.5% rise planned for April 2020 postponed
to 1 October 2020 due to COVID-19

• UK Customer Satisfaction Index score of 77

Institute of Safety and Health (IOSH) Leading Safely

• Only third rise in six years

•

EU15 average standard tariff 17% higher,
UK Ofgem default maximum 27% higher

SMARTSWITCH

• £10m Smart Meter roll-out completed

• 4,100 Pay As You Go customers converted

•

Pay As You Go online payment portal

developed and trialled

PEAK DEMAND

• 141MW recorded on 4 December 2019

•

Below last year’s 150MW and record 178MW

in 2018

CUSTOMER SERVICE

• Just one point down on last year

• Within top quartile of UK utilities

NEW TRANSFORMERS

•

Preparatory works on a £4m project to install

a 90/33kV transformer at La Collette completed

with delivery in November 2020

•

Detailed planning on £4m project for new 90/11kV

transformer at Queen’s Road commenced

HEALTH AND SAFETY

•

One minor RIDDOR Lost Time Accident (LTA)

•

Executive Leadership Team (ELT) attended

Course.

ELECTRIC TRANSPORT

•

Extended public charging network by 30 to 53
charging points

Installed two more public Pay As You Go 50kW rapid
chargers

•

835 pure electric vehicles now registered in Jersey

•

Over 1,200 hybrid vehicles registered

ENVIRONMENT

•

Delivered power at a carbon intensity level of 24g
CO2e /kWh

•

Around one tenth of UK grid carbon levels

•

90% less carbon than local gas and heating oil

PEOPLE

•

81% response rate to employee survey and increased
rating to 8.3

•

Diversity and Inclusion Strategy implemented

•

Two female employees join Senior Leadership Team

•

Culture and Engagement Forum established
with Board representation

•

Mental Health First Aiders increased to 11

CONTENTS

DIRECTORS, OFFICERS AND
PROFESSIONAL ADVISERS

CHAIRMAN'S STATEMENT

CHIEF EXECUTIVE'S REVIEW

COVID-19 RESPONSE

GROUP PURPOSE

CLIMATE EMERGENCY

ENERGY GROWTH

MAINTAINING AFFORDABLE ELECTRICITY
AND PRICE STABILITY

ENSURING SECURITY AND RELIABILITY
OF SUPPLY

GENERATION AND TRANSMISSION

DISTRIBUTION

SMARTSWITCH

CUSTOMER SERVICE STANDARDS

COMMERCIAL

POWERHOUSE.JE AND JENDEV

JERSEY ENERGY

PROPERTY AND JEBS

HEALTH AND SAFETY

OUR PEOPLE

SUSTAINABILITY IN THE COMMUNITY

OUTLOOK

FINANCIAL REVIEW

GOVERNANCE

FINANCIAL STATEMENTS

NON-EXECUTIVE DIRECTORS
Phil Austin MBE, FCIB, FCMI (Chairman)
Aaron Le Cornu BSc, ACA
Alan Bryce MSc, CEng, FIET
Wendy Dorman BA, ACA
Tony Taylor BSc
Peter Simon MA, MBA (Distinction)
Amanda Astall BA (Hons)

EXECUTIVE DIRECTORS
Christopher Ambler BA, MEng, CDipAF, CEng, MIMechE, MBA
(Chief Executive)
Martin Magee CA (Finance)

SECRETARY
Lisa Floris LLB (Hons)

REGISTERED OFFICE
Queen’s Road, St. Helier, Jersey

PLACE OF INCORPORATION
Both Jersey Electricity plc (‘the Company’) and Jersey Deep
Freeze Limited (together ‘the Group’) are incorporated in Jersey.

AUDITORS
PricewaterhouseCoopers CI LLP, 37 Esplanade, St Helier, Jersey,
JE1 4XA

BANKERS
Royal Bank of Scotland International Limited,
71 Bath Street, St. Helier, Jersey

BROKERS
Canaccord Genuity Wealth Management,
PO Box 3, 37 The Esplanade, St. Helier, Jersey

REGISTRAR
Computershare Investor Services (Jersey) Limited,
13 Castle Street, St. Helier, Jersey

CHAIRMAN'S STATEMENT

Dear Shareholders

When we entered the year, we would not have imagined

that the world could be so impacted by a virus. As I write,

countries across the globe are battling COVID-19 and both

lives and economies are being hugely disrupted, with tragic

consequences. Even now, the world is far from through it.

Strong response to COVID-19

Though unprecedented, a critical service provider like Jersey

Electricity should be prepared for such events. I am pleased

to report that we were well prepared.

The Company has a well-tested contingency plan and had

been closely monitoring the COVID-19 situation since the

beginning of January, formally invoking its Business Continuity

Plan in April. Throughout the crisis, we have taken rigorous

steps to keep our people and the community safe, as well

as maintaining continuity of electricity supplies and other

essential services on which the Island so depends.

The response of the whole workforce has been exceptional

and I’d particularly like to thank those who went out every

day in the field, or into their place of work, to ensure that we

continued to keep our organisation functioning and able to

power homes, businesses and Government throughout this

difficult period. Through our ongoing investment in technology,

our people were able to successfully migrate to home working,

such that overall productivity and performance levels have

been remarkably unaffected.

As well as focusing on core services, we took immediate

action to lessen any financial hardship of customers by

deferring our 2.5% tariff rise by six months, at a cost of around

£1m. We also adopted a more flexible approach to electricity

customers and investment property tenants. Measures included

a more sympathetic debt collection process and suspension of

service terminations, and we worked closely with Government

and charities to establish new processes to support vulnerable

customers.

Given Jersey Electricity’s scale and role, we offered the full

strength of the Company in support of the community by

providing, without charge and on a fast-track basis, new

infrastructure, plumbing and electrical services for Jersey’s

Nightingale Hospital, including professional services support.

In addition, Jersey Electricity has fulfilled all its own contractual

obligations and has not taken advantage of any forms of

Government furlough or other financial support schemes.

Leaders in clean energy

Last year we communicated our new Vision ‘to enable life’s

essentials and inspire a zero-carbon future’. Whilst we

continue to flesh out how we can best support the Island to

deliver carbon neutrality, the COVID-19 pandemic has only

re-emphasised the importance of this Vision to the Company

and to the Island as a whole. There now seems to be a clear

and widespread recognition of the climate issue and, crucially,

a real appetite to take action. We have made considerable

progress during the year transforming this Vision into tangible

work streams including, for example, conducting a larger

scale assessment of what investment is required to facilitate

carbon neutrality by 2030. It is now well understood that our

grid is substantially decarbonised and the only way Jersey

can materially reduce its carbon emissions is by switching

from high-carbon fossil fuels to low carbon imported or locally

generated electricity.

Resilient performance

Despite the challenges of COVID-19, the Company’s financial

performance has been remarkably resilient. Revenue for

2019/20 was £111.7m, 1% higher than last financial year.

Electricity unit sales initially fell 13% in the immediacy of

lockdown, but largely recovered and for the full year were

619 million units, only 1% lower than those in the 2018/19

financial year.

Profit before tax was unchanged from the prior year at a level

of £14.8m, with the cost impact of the deferred tariff being

completely offset by outperformance in other areas, most

notably our Powerhouse retail business, which saw profits

increase by almost one third from £0.9m to £1.2m. The Board

has therefore recommended a final dividend for the year of

9.70p, a 5% increase on the previous year, and payable on

25 March 2021.

Our core objective remains to deliver an affordable, secure

and sustainable supply of electricity now and long into the

future – and our performance this year, across all our key

metrics, reflects real success.

Governance

In July 2018, The Financial Reporting Council published the

revised UK Corporate Governance Code. During the year,

the Board reviewed and embraced the changes recommended,

particularly the increased emphasis on company culture and

values, diversity and inclusion, and workforce and stakeholder

engagement.

CHAIRMAN'S STATEMENT

Dear Shareholders

When we entered the year, we would not have imagined
that the world could be so impacted by a virus. As I write,
countries across the globe are battling COVID-19 and both
lives and economies are being hugely disrupted, with tragic
consequences. Even now, the world is far from through it.

Strong response to COVID-19
Though unprecedented, a critical service provider like Jersey
Electricity should be prepared for such events. I am pleased
to report that we were well prepared.

The Company has a well-tested contingency plan and had
been closely monitoring the COVID-19 situation since the
beginning of January, formally invoking its Business Continuity
Plan in April. Throughout the crisis, we have taken rigorous
steps to keep our people and the community safe, as well
as maintaining continuity of electricity supplies and other
essential services on which the Island so depends.

The response of the whole workforce has been exceptional
and I’d particularly like to thank those who went out every
day in the field, or into their place of work, to ensure that we
continued to keep our organisation functioning and able to
power homes, businesses and Government throughout this
difficult period. Through our ongoing investment in technology,
our people were able to successfully migrate to home working,
such that overall productivity and performance levels have
been remarkably unaffected.

As well as focusing on core services, we took immediate
action to lessen any financial hardship of customers by
deferring our 2.5% tariff rise by six months, at a cost of around
£1m. We also adopted a more flexible approach to electricity
customers and investment property tenants. Measures included
a more sympathetic debt collection process and suspension of
service terminations, and we worked closely with Government
and charities to establish new processes to support vulnerable
customers.

Given Jersey Electricity’s scale and role, we offered the full
strength of the Company in support of the community by
providing, without charge and on a fast-track basis, new
infrastructure, plumbing and electrical services for Jersey’s
Nightingale Hospital, including professional services support.
In addition, Jersey Electricity has fulfilled all its own contractual
obligations and has not taken advantage of any forms of
Government furlough or other financial support schemes.

Leaders in clean energy
Last year we communicated our new Vision ‘to enable life’s
essentials and inspire a zero-carbon future’. Whilst we
continue to flesh out how we can best support the Island to
deliver carbon neutrality, the COVID-19 pandemic has only
re-emphasised the importance of this Vision to the Company
and to the Island as a whole. There now seems to be a clear
and widespread recognition of the climate issue and, crucially,
a real appetite to take action. We have made considerable
progress during the year transforming this Vision into tangible
work streams including, for example, conducting a larger
scale assessment of what investment is required to facilitate
carbon neutrality by 2030. It is now well understood that our
grid is substantially decarbonised and the only way Jersey
can materially reduce its carbon emissions is by switching
from high-carbon fossil fuels to low carbon imported or locally
generated electricity.

Resilient performance
Despite the challenges of COVID-19, the Company’s financial
performance has been remarkably resilient. Revenue for
2019/20 was £111.7m, 1% higher than last financial year.
Electricity unit sales initially fell 13% in the immediacy of
lockdown, but largely recovered and for the full year were
619 million units, only 1% lower than those in the 2018/19
financial year.

Profit before tax was unchanged from the prior year at a level
of £14.8m, with the cost impact of the deferred tariff being
completely offset by outperformance in other areas, most
notably our Powerhouse retail business, which saw profits
increase by almost one third from £0.9m to £1.2m. The Board
has therefore recommended a final dividend for the year of
9.70p, a 5% increase on the previous year, and payable on
25 March 2021.

Our core objective remains to deliver an affordable, secure
and sustainable supply of electricity now and long into the
future – and our performance this year, across all our key
metrics, reflects real success.

Governance
In July 2018, The Financial Reporting Council published the
revised UK Corporate Governance Code. During the year,
the Board reviewed and embraced the changes recommended,
particularly the increased emphasis on company culture and
values, diversity and inclusion, and workforce and stakeholder
engagement.

Further aspects of the Company’s governance are covered
later in the report, commencing on page 52.

A force for good
On behalf of the Board, I’d like to end by expressing my
thanks to the whole workforce who have shown great
resilience, courage and flexibility in finding solutions to
problems, and in many cases opportunities, out of this
challenging situation and helping to deliver such a strong
performance.

I’d also like to thank the Board for their hard work and
commitment during the year – and you, our shareholders for
your continued support. The next few years remain a critical
period for Jersey Electricity and a huge opportunity for Jersey.
Our destination is a zero-carbon future and one in which
Jersey Electricity, through the roll-out of its strategy, can be
a real force for good.

17 December 2020

Much of the Board’s work is carried out through its three
sub-committees; the Nominations Committee, the Audit & Risk
Committee and the Remuneration Committee. The composition
and Terms of Reference of those committees have been
reviewed and refreshed, in accordance with the new Code’s
principles and provisions. A summary of the Committees’
activities is contained in their separate reports on pages 61,
64 and 67 respectively.

In the year ahead, the Board has identified the following areas
for its continued attention;

• stakeholder engagement
• review of business model
• workforce diversity
• culture and engagement
• business efficiency and innovation
• risk and emerging risk

As in 2019, the Board has undertaken a rigorous self-
assessment of its performance during the last 12 months.
In 2021, the triennial, external assessment will be carried
out by an independent third party.

Aaron Le Cornu, our Senior Independent Director and Chairman
of the Remuneration Committee, joined the Board in 2011 and
will be stepping down at the AGM in March 2021. In line with
our succession plan, we are delighted to welcome Amanda
Astall, who joined the Board with effect from 1 July 2020.

In May, Peter Routier retired as Company Secretary after 34
years’ service. Peter’s breadth of knowledge and experience
will be greatly missed, but we are delighted that Lisa Floris,
a qualified lawyer with extensive knowledge of corporate
governance, joined as his successor.

“Throughout the
crisis, we have taken
rigorous steps to keep
our people and the
community safe”

CHIEF EXECUTIVE’S REVIEW

In an unprecedented year for everyone and a turbulent one for the
business, I am pleased to report a solid set of results in financial and
operational terms, and across our key strategic programmes. Despite
the challenges the COVID-19 pandemic presented, Group revenue
at £111.7m was 1% higher than last year and profit before tax was
maintained at £14.8m being at the same level as 2019.

The lockdown in the second half of the financial year impacted unit
sales, albeit levels recovered to be down only 1% at 619 million units
compared with 627 million last year. Peak demand for the year was
141MW, well below last year’s 150MW and our record of 178MW
from 2018. Energy revenues at £85.1m were 2% lower than the £87m
achieved in 2019 but profit, at £12.3m, remained on a par with last
year. We had no tariff rise in this financial year, having postponed the
2.5% rise planned for 1 April 2020 by six months to 1 October 2020
to help customers experiencing economic uncertainly due to COVID-19.
At a cost to the business of around £1m, this was one of several
measures we took to help our community during the crisis albeit the
reduction was offset by financial outperformance elsewhere.

“ I am particularly
proud of the
way our people
stepped up to
the challenge
of COVID”

Our Retail business, the Powerhouse, was forced to temporarily
close its doors for a period, however, flexibility in the business
model and our strong online presence, aided this business
during the crisis and it ‘bounced back’ extremely well, taking
advantage of new opportunities. Profits increased by 31%
from £0.9m in 2019 to £1.2m, on increased revenue of
£17.8m, up 17% from £15.2m.

Revenue in our Property business at £2.3m was the same level
at last year and profits of £1.3m were £0.4m down largely
due to accelerated depreciation on certain services assets. Our
investment property portfolio moved up in value by £0.5m to
£21.8m due primarily to the growth in the value of residential
properties. Despite the lockdown, revenue from JEBS, our
building services business, increased from £3.3m to £3.8m
year on year and moved the business unit into profit. Our other
business units (Jersey Energy, Jendev and Jersey Deep Freeze)
produced combined profits of £0.8m, up £0.2m on last year.

It is a mark of the resilience of our assets and flexibility of our
people that despite the restrictions imposed by COVID-19, we
not only achieved our highest supply reliability performance
since 2008 – just five Customer Minutes Lost* – we also
progressed several infrastructure projects, critical to future
reliability. Our Engineers also played a vital role in the pro-
bono provision of services for the construction of the 180-bed,
COVID-19 emergency Nightingale Wing of the General
Hospital.

Significantly, we completed our SmartSwitch Smart Meter
rollout programme, making Jersey the first jurisdiction in the
British Isles to be fully smart enabled. To give our pre-payment
customers even more convenience, we have partnered
Payzone and CityPay to develop Payzone’s first online payment
portal which we expect to launch before the end of 2020. Our
customer and digital teams are also close to launching a new
Jersey Electricity app and a more user-friendly website.

Electric transport and fuel switching continue to be areas of
focus for growth. Despite activities being severely curtailed by
the lockdown, we made good progress in both. In partnership
with local businesses, we have installed an additional 30
public electric vehicle (EV) charge spaces in the financial year,
bringing the total to 53, and we exceeded last year’s fuel
switching performance by switching 225 domestic premises
(2019:186) from oil or gas to electric heating.

We put customers at the heart of our business and I am
therefore pleased that we achieved the very good result of
77 in our second year participating in the UK Customer
Satisfaction Index (UKCSI), the UK’s most extensive cross-
section customer benchmarking study. This is just one point
down on last year and within the top quartile of utilities in
the UK.

Equally, through our Employee Value Proposition, we want
all our people to feel proud to work for an organisation that
has such a key role in the community, and we want them to
be engaged with and passionate about helping us achieve
our Vision. Wellbeing emerged as a key driver of employee
engagement in our 2018 and 2019 surveys and was never
more important than during the COVID-19 lockdown during
which half our workforce continued to work out in the field

and their normal place of work. To measure the effectiveness
of our response during the crisis, we launched a survey during
April with questions related specifically to our handling of the
pandemic. The results were positive, showing an improvement
in employee engagement overall from 7.8 (September 2019)
to 8.3 (May 2020).

Maintaining the right culture within Jersey Electricity remains
a key priority. Employee surveys, people development and
continued focus on safety are key to delivering this objective.
Furthermore, we have created a Culture and Engagement
Forum and are implementing our newly-established Diversity
and Inclusion strategy to ensure our workforce is truly
representative of the Island community we serve.

Despite COVID, we know climate change remains the biggest
threat to mankind and our Vision is to inspire a zero-carbon
future. We therefore fully support the Government of Jersey’s
ambitions to make the Island carbon neutral by 2030. This
year, we delivered power to customers at a carbon intensity
of 24g CO2e/kWh – our joint lowest level ever. We also
recognise the appetite for local renewables within our
community. Following the 81kWp solar PV array we installed
on our Power Station last year, we opened Jersey’s first Solar
Hub on our Powerhouse car park, combining a 53kWp array
on a carport and two 22kW EV charge bays. By year-end we
had signed two 25-year lease agreements with partners to
install large arrays on two commercial rooftops, one of which
at a capacity of 553kWp, is more than twice as large as the
next biggest solar array in the Channel Islands.

Carbon sequestration will also have a role on our journey
to zero-carbon and environmental renewal, and we see our
support for the re-forestation of Mourier Valley in the North
of the Island as a positive carbon reduction and community
initiative. In partnership with Jersey Water, we are funding
and have begun planting 6,000 trees over 20 acres with the
National Trust for Jersey and Jersey Trees for Life. We are keen
to do more in the community next year and have announced
our support for all 12 Parishes to plant carbon-absorbing
micro-forests.

I am proud of the way our people reacted and adapted during
this challenging year to deliver the performance we have. I
am particularly proud of the way our people stepped up to
the challenge of COVID; how they have maintained services,
found solutions to problems and even identified opportunities.
As employers we stepped up to keep our people safe and
they, in turn, stepped up to support our customers, each other
and their families.

* Customer Minutes Lost (CMLs) represents the total supply interruption time
in minutes experienced by our customers averaged across all customers
connected to the network in a year.

COVID-19 RESPONSE

The COVID-19 pandemic presented unprecedented challenges to our business. Our focus, however, remained unchanged: the health and safety of our people, our customers and the general public, and maintaining reliable services. I am therefore immensely proud of our performance. Our people and business systems demonstrated resilience and agility to cope with a fast-moving situation. We have weathered the initial storm. We have kept our people and customers safe. We have served and sought to reassure our community in multiple ways throughout the most uncertain times — not least by our part in the construction of the Nightingale Wing of the General Hospital — while also managing to progress important strategic infrastructure projects. Early planning and communicationsWe began assessing the potential consequences of the pandemic for the business and our services in early January. By February, we already had a rhythm to our interactions and as the situation escalated, we invoked our Business Continuity Plan to ensure the continuation of our core services of keeping the Island supplied with electricity and attending to any loss of supplies. Importantly, we had regular dialogue about the Business Continuity Plans of our French suppliers EDF and the French transmission network operators Réseau de Transport d’Électricité (RTE), on whom we rely for 95% of our power, as well as other service providers.We followed the advice of the Government of Jersey and the World Health Organisation. Daily meetings between the Executive Leadership Team and senior departmental heads reviewed the status of our preparedness, putting in place mitigating actions where appropriate. As the situation developed, we issued guidelines to all employees to ensure our response was appropriate in dealing with COVID-19 as it escalated in Jersey. This meant we had already drawn up extensive formal plans before the stay-at-home order in March.Our Procurement Team worked to acquire the personal protection equipment (PPE) necessary to ensure the safety of our frontline people and those customers they may have contact with while attending an emergency repair or other issue at a premise where someone was self-isolating. We reviewed all our operations to enable employees involved in critical activities to work securely and remotely from their homes. Procedures for working in sensitive locations were re-written and in some cases shared outside the Company to promote safest practice. We split essential service teams, such as engineers and Customer Care, across our two sites and, in some cases, in separate teams and with home-working to avoid cross-infection of critical personnel. We re-deployed people where necessary to assist other parts of the business. For example, when our Powerhouse retail store closed its doors on 26 March, many employees moved into logistics as the online business increased during the lockdown. Similarly, JEBS engineers who could no longer 6

work inside homes helped with Powerhouse deliveries, and a member of the administration team was seconded to the Government of Jersey to assist with the procurement of medical supplies at the height of the pandemic. We also deployed some members of our Energy Solutions team to help Finance with debt management and relief. Part of an extensive IT operation was the acceleration of our roll-out of Microsoft Teams. This enabled dedicated communication channels to allow continuation of multiple work streams and teams, while also keeping all our people updated with the latest and relevant COVID-19 information wherever they were based.We also quickly produced COVID-19 external communications for traditional and social media to reassure our customers of our ability to maintain essential services, while adhering to government guidelines, and to advise them how to contact us according to the urgency of their enquiry.Support for our communityWith many Islanders facing job losses and businesses forced to close, even if temporarily, we introduced a range of measures to help mitigate the impact of Coronavirus on the community.In March, the Board decided to defer the 2.5% tariff rise due to take effect on 1 April 2020 by six months to 1 October 2020 at a cost to the Company of £1m. We also immediately suspended disconnection for non-payment.We accelerated the final stage of our Smart Meter roll out to enable Jersey’s 4,100 Pay As You Go (PAYG) key meter users to top up their electricity meters remotely without leaving their homes if self-isolating. We prioritised PAYG customers on our Extra Care Register, and worked with government agencies, charities and parishes to identify other vulnerable customers to ensure we continued to prioritise those customers. We also deployed advisers with portable top-up machines to enable key top-ups at customers’ homes.We again partnered charities to help the neediest by developing an emergency charge card for those seeking charitable help with electricity payments. Employees from Finance, Customer Care, Communications, Internal Audit, Energy Solutions and our in-house billing provider Jendev collaborated to quickly devise a unique pre-paid card which charities distributed on a needs basis for people to redeem against their energy costs.8

Nightingale WingI am immensely proud of the commitment and professionalism demonstrated by all of our teams involved in the Nightingale Wing, the 180-bed field hospital built in just four weeks to cope with the pandemic. From the moment the project was announced, we offered to provide our services without charge in what was not only a vital project for the Government but the whole Jersey community.Our engineers worked with government officials and developers on supply capacity options at all sites being considered. Once Millbrook had been chosen, our Construction Engineers arrived on site on 11 April to provide a temporary power supply for the build. We provided a portable generator, and our team worked throughout Easter, building the substation kiosk, laying cable circuits and making the connections to the generator to provide the site with the correct supply.At the same time, our Planning Engineers were hard at work with architects and site Construction Engineers on the power systems of the hospital itself. We agreed to fast-track and build an 11kV/450V substation to provide eight 400-Amp services for oxygen provision, HVAC (heating, ventilation and air-conditioning), critical services, power and lighting and other essential services for staff. In addition to the power supply works, Heating Engineers from our Building Services, 8

JEBS, worked on the hospital’s internal functions. Those not involved in the Nightingale Wing continued to carry out essential maintenance and network reinforcement across the Island to maintain supplies when much of the rest of the community was locked down at home. They have done a remarkable job while adhering to COVID-19 guidelines on social distancing and working safely to protect the public and themselves as the Island moved through the levels and restrictions eased.In May, we created a Return To Work Task Force to make all our workplaces COVID-19 secure. The Task Force, led by the Head of HR Operations, conducted detailed Risk Assessments of all sites and implemented appropriate measures. All workplaces had to enable one-metre physical distancing, the provision of hand sanitisation and limiting the number of people in various areas. We procured additional PPE for field-based operations and those entering customer premises.We aligned our position to the Government’s Safe Exit Framework and were able to react swiftly when it confirmed changes in restriction levels. The move to Level One signalled our Return To Work Plan and we declared all Jersey Electricity sites COVID-19 safe and open for business from 10 August.GROUP PURPOSE

S T

C U

Providing Islanders with affordable, secure and sustainable energy continues to
be our primary long-term objective. Our Vision is to ‘enable life’s essentials and
inspire a zero-carbon future’ – helping Jersey achieve its carbon neutrality aims.

We recognise we can only achieve this if we work together as one Island in
partnership with the Government, community, customers and other partners.
Together, we believe we can build a pathway to a greener, cleaner and
sustainable future now we have a virtually completely decarbonised energy
platform that is capable of meeting so much more of the Island’s energy needs.

Our Vision consists of seven key themes that define what we need to have in
place to reach our Vision.

In turn these are backed by strategies setting out how we mean to achieve it.
These include:

• Converting domestic and commercial energy use to value-for-money,

low-carbon electric solutions

• Developing local renewable energy and electric transportation solutions
• Providing integrated services and solutions ‘beyond the meter’
• Applying technology and digital solutions internally and externally

SIBILI

RESP

CELLENCE

L I T

R E L I A B I

L IFESTYLE

We aim to enhance the
lifestyle of Islanders and
power the economy
by providing innovative,
low carbon energy
services and
solutions.

S T

C U

We put customers at the
heart of our business, giving
them choice, control, and
value-for-money in a transparent
and trusted way.

We aim to be the partner
of choice for the Government
of Jersey and the Island’s
parishes, supporting all their
energy needs.

We aim to be leaders
in the application of
technology, enhancing
efficiencies, unlocking
new services, and digitally
enabling our employees
and our customers.

O
G
Y

We provide fair
returns to our investors
over the medium to
long term.

I
N
V
E
S
T
O
R
S

We listen to our customers
and seek to understand
and respond to their needs,
treating them the way we
would wish to be treated,
with respect and honesty.

O
C
U
S

Our Vision is to
‘enable life’s essentials
and inspire a zero-carbon future’

VISION
& VALUES

Our Values are key to our culture and
describe the behaviours we always
expect of each other:

T
N
E
M
N
O
R
I
V
N
E

We support
the Government’s carbon
neutrality objectives by growing
electricity’s share of the energy
market, reducing carbon
emissions, helping to conserve
resources and protect the
environment.

We aim to be an employer
of choice in Jersey,
where employees are
engaged, supported, and
developed.

E
L

P
O

Y
T
E
F
A
S

We do everything safely
and responsibly or
not at all – nothing is more
important than the safety
of the public, our customers,
and our people.

We value diversity and
respect and value our
colleagues as individuals and
we believe we are stronger as a
team, leading to better solutions
and a more enjoyable and
rewarding work life.

We accept responsibility
for everything we do,
safeguarding the natural
environment and the local
community, as well as the
interests of all our customers
and people.

Y
T

SIBILI

N
O

RESP

We continuously strive
to work in a way that is
both innovative and simple
to deliver cost effective
solutions.

We are trustworthy,
dependable, and reliable,
delivering on our commitments
and always there when our
customers need us.

CELLENCE

L I T

R E L I A B I

CLIMATE EMERGENCY

The UN’s Intergovernmental Panel on Climate Change
(IPCC) published its 1.5-degree report in 2018, outlining
the consequences on ecosystems and human life of failing
to limit global warming to 1.5 degrees above pre-industrial
levels. The report also outlined the short time frame in
which the world must achieve this; global greenhouse gas
emissions need to reach net zero by 2050 in order to have
a 50% chance. Campaigners, particularly among the young,
around the globe, and hard-hitting TV documentaries have
dramatically increased the profile of the climate emergency,
with the 2020s dubbed ‘the decade of action’. At time of
writing, over 100 countries and 1,000 businesses, collectively
now covering 49% of global GDP, have set bold net-zero by
2050 ambitions, or earlier. This sets the context for Jersey’s
ambition for carbon neutrality by 2030, 20 years earlier.

Climate change and related measures and policies
introduced to combat it, present businesses with many
challenges which could affect their financial performance
by impacting the value of assets and future profits. The
Taskforce on Climate-related Financial Disclosures (TCFD)
seeks more transparency from companies on the risks and
opportunities they face, either directly or indirectly, due to
the climate emergency and the transition to net-zero. This
is to help investors judge which companies are most at risk
and how they have prepared. TCFD climate disclosures
are already made by much of the UK energy sector. It is
widely anticipated that UK premium listed companies will be
required to disclose in line with the TCFD recommendations
on a ‘comply or explain’ basis, sometime in 2021. Jersey
Electricity supports these climate disclosures and intends to
comply as far as possible.

Protecting the environment and reducing carbon emissions
have been at the heart of everything we do at Jersey
Electricity long before climate change and biodiversity
loss became the crisis we see today. Our Board took the
forward-thinking decision in the mid-Seventies to turn away
from on-Island generation using heavy gas-oil and approved
investment in our first undersea supply cable that connected
Jersey to supplies of low carbon electricity from the European
grid. Not without controversy at the time as this electricity
was mainly nuclear in origin, this decision
has proved both bold and insightful.
Subsequent investments in further
interconnectors in 2000,

2014 and 2016 have given Jersey a clean, reliable
energy platform that is credited with helping the Island
reduce its overall emissions by over 40% since 1990,
and this is despite a 60% increase in the consumption
of electricity over that same period. Over the life of
Jersey Electricity’s investments in submarine connections,
the Island has avoided around 11 million tonnes of
carbon emissions with its associated reduction in
particulate emissions – reducing damage to both the
environment and health.

But we intend to go much further. Our Vision today
is to inspire a zero-carbon future and we want to
encourage a low carbon economic recovery and
transition post-COVID-19.

This transition to zero-carbon is not just a responsible
action for us to take. As the Island’s sole electricity
supplier, this also presents a significant business
opportunity. It is also, of course, not without risk and
our focus is to mitigate those risks, whilst seizing the
opportunities carbon neutrality presents. Our Company
is already involved in several workstreams to investigate
the implications of a carbon-neutral Jersey and we have
mapped various scenarios including for a 2030 and
2040 carbon-neutral target.

Although delivery of carbon neutrality by 2030 will
be an enormous challenge for Jersey, we believe
carbon reduction could be achieved in Jersey faster
and more cost effectively than many other countries.
Our well-invested, low-carbon electricity platform is a
key enabler of a zero-carbon future, with significant
spare capacity but we stand ready to invest further.
Conversion of all domestic and commercial premises,
as well as road transport to electric solutions, will result
in a significant increase in peak demand from typical
levels of around 160MW as well as a significant
increase in the energy demand from current levels of
around 620 million units.

Meeting this whilst maintaining resilience will require
increased investment but, importantly, we believe we
can do this without driving a significant increase in
electricity prices. This is because a higher volume of units
distributed across the network, will lead to higher capital
and operational efficiencies and much of this benefit can
either be transferred to customers in the form of lower
prices or be ploughed back into further investment.

It is possible that Jersey Electricity’s strong position in
the energy sector may lead to increased scrutiny and
the possibility of regulation. In the event this were to
happen, this could become a significant management
distraction, lead to higher costs and also hamper
subsequent investment. We expect that any such costs
may well need to be recovered from customers in the
form of higher prices.

Although the Company’s current position is strong, a
revised Government policy may also result in a rapid
increase in demand. This may make optimised capital
investment decisions difficult, with new technologies
not sufficiently mature to provide a more cost-effective
alternative.

We seek to mitigate the net-zero transition risks, whether
arising from enhanced regulations, Government climate
strategies or as a result of technological changes, by
closely monitoring future Government policy and by
senior management developing strategies in response as
well as tracking market trends in emerging technologies
and deploying them where cost-effective and
practicable. We see demand-side management, vehicle-
to-grid discharging (V2G), distributed and utility-scale
renewable generation and electricity storage – all of
which we are currently trialling – becoming mainstream,
and our key focus is how we apply these technologies to
make them cost effective.

In terms of physical risks, we have seen around the world
how power generation, transmission and distribution, is
vulnerable to climate change and disaster events. Natural
shocks and climate change were responsible for 37% of
power outages in Europe between 2000 and 2017, as
well as 44% in the US during the same period.

We mitigate physical risk to Jersey Electricity by investing
in and operating to a Security of Supply Standard; we
build resilience through supply diversity; we put in place
comprehensive insurance where we can cost effectively do
so; and where we are unable to design out risks to zero,
we put in place operational and maintenance procedures
and business continuity plans. We test the latter regularly
under various scenarios. As a small Island, the longer-term
physical risk from climate change is more likely due to rising
sea levels. The Government has already acted by drafting
a Shoreline Management Plan, which models the impact of
seawater flooding and sets a range of policies to manage
different parts of the Island’s coast over the next 100 years.

As a business, we consider flood risk when siting major
infrastructure. The strategic hub of our 90kV network and
connection point for our Normandie 3 supply cable, South
Hill Switching Station, is sited high on Mount Bingham. Our
latest primary substation, St Helier West, is raised above
St Aubin’s Bay. Western Primary is on high ground by the
airport in St Peter, while Rue des Pres Primary, which serves
the East of the Island, is a considerable distance inland.

Our Powerhouse headquarters and Queen’s Road
Primary Substation that houses our emergency gas turbine
generators are also on an elevated part of St Helier with
good separation from other generators sited at La Collette
Power Station. Archirondel, the termination point for both
Normandie1 and Normandie 2, though on the coast,
is adequately defended from the sea, and Normandie
3 beaches at Longbeach in Grouville Bay and routed
underground to South Hill Switching Station in St Helier.

“We believe carbon reduction could be achieved in Jersey faster and more cost effectively than many other countries”UK ELECTRICITY

233g

CO2E / KWH*

JERSEY LPG

241g

CO2E / KWH**

JERSEY
HEATING OIL

298g

CO2E / KWH**

We support the Government of Jersey’s ambitions to make
the Island carbon neutral by 2030 following its declaration
of a climate emergency in May last year and subsequent
publication of its Carbon Neutral Strategy. We therefore look
forward to playing our part in the 2021 Citizens’ Assembly
designed to understand public opinion and debate how the
Island can best achieve zero-carbon.

We believe that only by working together as a community
can Jersey achieve the ambitious carbon-reduction targets in
the desired timeframe. Jersey is fortunate in that it already
has a well-invested grid with access to significant volumes
of clean, virtually decarbonised electricity. A third of the
electricity we distribute is already from renewable hydro
sources in France, and we are now introducing locally-
generated solar power into the energy mix.

This year we delivered power to customers at a carbon
intensity of 24g CO2e/kWh. This continues to be around
one-tenth of the emissions of the UK’s electricity system,
which is now 233g CO2e*, local gas (241g CO2e /
kWh **), and local heating oil (298g CO2e / kWh**).

Our importation strategy helped the Island achieve over a
40% reduction in emissions between 1990 and 2017. The
primary way the Island will decarbonise its energy system
further is to displace fossil fuels with either imported grid
electricity or locally generated renewables. Further use
of low carbon electricity, coupled with energy-efficiency
technologies and carbon sequestration could, therefore, see

Jersey go further and faster than many jurisdictions on the
road to carbon neutrality.

Two areas that need hard and fast action are heating and
road transport. A third of the Island’s emissions arise from
heating residential, commercial and public sector buildings
using fossil fuels, while road transport accounts for another
third. We have been working in these areas for many
years, fuel-switching domestic and commercial premises
and installing electric vehicle (EV) charging infrastructure to
encourage the uptake of electric transport.

As well as offering a free energy-saving advice service in
customers’ homes, we have also been searching for new
technology that will help customers save more energy. In
January, we partnered with Voltalis, a European leader in
residential load management, to trial its smart heating, hot
water system and EV charging control.

The Voltalis system suspends the operation of energy-
intensive heaters or water heaters for just a few minutes with
little or no impact in temperature or comfort levels. These
short interventions added together over the year, however,
result in significant savings in energy and running costs.
Voltalis would also enable us to better control demand on our
network at Super Peak times.

This year, we became the first company outside the UK to
trial one of the latest domestic vehicle-to-grid (V2G) chargers
that enable EV owners to sell excess energy stored in their car
batteries back on to the grid. UK utility OVO, in partnership

*Department for Business, Energy and Industrial Strategy Greenhouse Gas Reporting - Conversion Factors 2020
**Building Bye-Laws (Jersey) Technical Guidance Document 11.1B 2016

JERSEYELECTRICITY24gCO2E / KWHwith Nissan, installed the first 6kW V2G domestic charger as
recently as December 2019. Working with OVO’s technology
partner, Indra Renewable Technologies, we installed four
of the chargers to trial on our own EVs at La Collette Power
Station. If the trial is successful, we hope to make the bi-
directional chargers widely available in Jersey.

We have continued our own energy efficiency and
carbon-reduction programme. Removal of heavy fuel oil
and associated heating units at the Power Station and
replacement lighting in the Generation Hall have resulted in
the removal of around 90 tonnes of CO2e a year. Energy
efficiency measures, such as replacement lighting, air

conditioning and hand driers at the Powerhouse retail store
and administration offices, have saved a further 18 tonnes
of CO2e a year. As a business, we have reduced energy
consumption and we strive to improve carbon and cost
efficiencies still further.

Carbon sequestration will also have a role on our journey to
zero-carbon, and although these initiatives sequester small
amounts of carbon, we see our support for the re-forestation
of Mourier Valley in the North of the Island and our plans
for Parish micro-forests as very important carbon reduction
initiatives that enhance understanding and engagement on
climate change and the environment within the community.

Renewables
We are already the leading distributor of renewable
electricity using imported hydro power from France,
however, we are aiming to be at the forefront of locally
generated renewables and have continued our expansion
into on-Island solar PV generation. Although local solar
is unlikely to result in further carbon reductions in Jersey’s
electricity, there is a great appetite in the community for on-
Island renewables, and it sits comfortably alongside our low
carbon imported power.

While local renewables cost more than imported power,
we are working with partners to find ways to reduce costs
and make local generation competitive with imported
renewables, which already account for a third of Jersey’s
electricity requirements.

Following the 81kWp array we installed on the roofs of
our Power Station last year, we have opened Jersey’s first
Solar Hub on our Powerhouse car park. This combines a
53kWp array on a specially-built carport and two 22kW
EV charging bays.

In partnership with a local farmer, we signed a 25-year
lease to install and operate the largest solar PV array in the
Channel Islands on a warehouse roof at Woodside Farm,
Trinity. Work on the 1,311-square-metre, 255kWp array
began in September. Once operational in November it is
expected to generate over 270,000 units a year.

By year-end, Jersey’s Royal Court had also granted us a
25-lease for an even larger array in partnership with Jersey
Dairy. This 2,500 square-metre, 553kWp array is expected
to generate more than half a million units a year - enough
to power almost 70 Jersey homes using an average 7,300
kWhs a year.

We seek to engage with other partners to accelerate the
use of solar PV with a meaningful large-scale ground-based
scheme. Longer-term, we are keen to work with government
and other partners to enable inward capital investment
which would see the development of a larger offshore wind
scheme. We are re-examining work we conducted five years
ago to assess changes in the viability of local offshore wind,
which could potentially serve local electricity needs and
possibly lead to an export arrangement back into Europe.

ENERGY GROWTH

Units sales, at 619 million, were 1.3% down on last year
due to the impact of the COVID-19 lockdown. The year’s
peak demand, which at 141MW was below the previous
year’s 150MW and our record of 178MW. Lockdowns and
weather apart, unit sales remain under downward pressure
through energy efficiency. While we continue to actively offer
customers free energy efficiency advice, we seek to counter
its impact by encouraging fuel switching from gas and oil
in both the domestic and commercial markets. We also
continue to promote the uptake of electric transport, which
we have long viewed as a big potential market for growth.

The Government of Jersey’s ambition for carbon neutrality by
2030 and publication at the start of this year of its Carbon
Neutral Strategy to achieve this, align with our Vision
to ‘inspire a zero-carbon future’ and present substantial
opportunity for future growth.

The Carbon Neutral Strategy includes proposals for:

• Investment in sustainable transport
• A reduction in government building emissions
• Energy efficiency minimum standards for rented

properties

• Incentives to transition to electric heating
• Support for businesses to reduce emissions

We now look forward to the recommendations of the
Citizens’ Assembly on carbon neutrality postponed from
this year, and currently scheduled to begin in March 2021.
The Assembly, in which we expect to play an active part,
will report to the Government and the States Assembly on
what ambition the community feels is appropriate to deliver
carbon neutrality in Jersey as well as views on how this can
best be achieved.

Energy Solutions
Energy Solutions is the team dedicated to growth by
developing propositions and new services and by promoting
renewable technologies, such as heat pumps, and induction
cooking that encourage fuel switching in both domestic and
commercial markets.

Despite its activities being severely curtailed by the lockdown
and lead up to it, the team exceeded last year’s performance
by fuel switching 225 domestic premises (2019:186). Over
1,000 customers joined one of our lower cost, off-peak
heating tariffs with the most significant increase – 743 – in
those joining our uninterrupted, 24-hour Economy 20 Plus
(E20+) Tariff made possible by the introduction of Smart
Meters.

Having focused on a smoother, faster customer journey
through the fuel switch process last year, we have now
simplified the available finance options that help customers
spread the cost of fuel switching.

Our ‘Smarter Living’ energy hub and customer information
centre within the Powerhouse retail area continues to support
the work of the Solutions team. ‘Smarter Living’ is staffed by
trained energy advisers and promotes low-carbon electric
heating solutions and Smart home technology. The area
helps customers gain a better understanding of how today’s
latest low-carbon, energy-saving technologies would work in
their own homes.

The team has also had success in the all-important
commercial sector where heat pumps are now the solution
of choice in many situations for heating and cooling. The
team has assisted the conversion of 10 commercial kitchens
to all-electric, including energy-efficient induction cooking.
They worked successfully with government to find a suitable
all-electric solution for the new Les Quennevais School.
Although many public buildings continue to be heated by oil,
they present an important potential future growth and carbon
reduction opportunity on Jersey’s journey to zero-carbon.

The Government is presently considering licence applications
from medicinal cannabis growers. This industry is another
possible growth area, given the scale of the climate-
controlled facilities required, and the team has already held
discussions with growers about all-electric propositions for
these plants.

Total customers

51,522
+419

Total
customers on
discounted tariffs

19,994
+1,034

Total
customers on E20+

2,532
+743

Electric transportation
With road transport accounting for a third of Jersey’s total
emissions, we have long considered it an area for significant
emissions reduction and growth for the business as the Island
seeks to decarbonise. Though uptake has taken time, it is
now beginning to accelerate, and we have seen the most
significant year-on-year rise in electric vehicle registrations.
At year-end, there were 835 all-electric vehicles registered in
Jersey, up by 263 from last year.* Pure electric cars were up
204 to 578 and pure electric commercial vans rose by 30
to 141. Electric motorcycles are also gaining in popularity,
almost doubling to 68. Hybrid vehicles have increased by
over 200 to 1,209.

To keep pace with this rise and give confidence to those
considering moving to electric transport, we have continued
our investment in public EV charging infrastructure under
our Evolve brand. We have also supported the Island’s first
privately owned electric mobility club EVie by providing
Jersey’s first on-street chargers for its electric hire car fleet.

In partnership with local businesses such as the Channel
Islands Co-Operative Society (CICS), Sandpiper CI and
the Jersey Development Company, we have installed an
additional 30 charge spaces in the financial year. This
brings the total to 53. We had hoped to have achieved more
by the end of September 2020, but the pandemic lockdown
impacted deliveries of charger units from the UK.

Despite the impact of lockdown, we completed the following
installations in this financial year:

Nov 19 CICS Grand Marché St Peter

Dec 19 CICS En Route St Peter

Jan 20 St Aubin

Feb 20 St Brelade’s Bay

Feb 20 First Tower

June 20 Longbeach

June 20 Red Houses

July 20 Waterfront

Aug 20 St Saviour

Sept 20 Georgetown Iceland

Sept 20 Powerhouse Solar Hub

Sept 20 St Ouen

Sept 20 St Clement Marks & Spencer

1 Rapid

4 +2 EVie

To prepare the Island and our network for a future in
which electric transport will play an increasing role, we
collaborated with 30 EV owners to trial some of the most
advanced home chargers.

One system on trial uses an app that allows drivers to select
the amount of charge they need and the time they need it
by – for example, 90% charge by 7am. The smart element
of the charger ensures customers get the charge they need,
while also prioritising our preferred charge times when

demand on the network is low. This maximises network
efficiency and means customers can save money.

This is just one demand-side management technology we are
trialling that could have a role in our future operations as
load growth continues on the road to carbon neutrality

578

CARS

141

VANS

MOTORCYCLES

WORKS TRUCKS

* Figures supplied by DVS as of 30 September 2020

PRICE STABILITY AND AFFORDABILITY

Delivering secure, low-carbon supplies while maintaining
affordable tariffs and price stability for our customers
continues to be a key focus. We deferred our planned
below-inflation rise of 2.5%, due to be implemented on 1
April 2020, by six months to help customers experiencing
economic uncertainty and those forced to spend more time
in their homes due to the Coronavirus pandemic. Therefore,
we had no tariff increases during this last financial year as
this rise was deferred to 1 October 2020. It is only our third
price increase in six years and will add around 50p per
week to the average domestic bill.

Our tariffs continue to benchmark well against other
jurisdictions. The standard tariff is 23% higher in Guernsey,
17% higher in the Isle of Man and the EU15 countries’
average. The UK price cap set by Ofgen (the UK Regulator)
is 27% above our standard tariff.

We imported 95% of the electricity requirements of Jersey
from Europe this year. We jointly purchased this power with
Guernsey Electricity from EDF in France as overseen by the
Channel Islands Electricity Grid, our joint venture. We have
been importing electricity from Europe since 1984, and we
extended our latest ten-year power purchase agreement
with EDF, which commenced in 2013, by a further five
years during 2017 to 2027. EDF has also assured us that
whatever the final terms of the UK’s exit from the EU are, this
will not affect our existing supply agreement since Jersey is

already operating outside the EU and UK. This agreement
combines a fixed price component with a market-related
mechanism that allows us to lock in some price certainty
over a rolling three-year period. The goal is to provide our
customers with a market-based price but with a degree of
certainty in a volatile energy marketplace. Our electricity
purchases are materially, albeit not fully, hedged for the
period 2021-23.

We also enter forward currency contracts to reduce exposure
and to aid tariff planning. The average Euro/Sterling rate
underpinning our electricity purchases during the financial
year, because of the hedging programme, was 1.13 €/£
which was very similar to the applicable spot rate during this
financial year and in 2019.

Just under 20,000 (19,994) customers now benefit from
our range of lower-cost heating tariffs that provide electricity
for about a third of the price of our general rate for
approved space and water heating fed on a dedicated
supply. During the year, 743 customers joined our 24-
hour uninterrupted heating tariff Economy 20 Plus (E20+)
that supports our fuel switching strategy. We were able to
introduce this popular tariff in 2016 off the back
of our Smart Meter installation programme SmartSwitch.
We completed the project this year following the change-out
of 4,100 Pay As You Go Key Meters to remote charging
Smart Liberty Meters.

JERSEY CUSTOMER
MINUTES LOST (CMLs)

80*

AVERAGE UK ELECTRICITY
DISTRIBUTER CMLs IN 2018-2019

ENSURING SECURITY
AND RELIABILITY OF SUPPLY

Security of supply is crucial to the day-to-day wellbeing and
comfort of Islanders and Jersey’s multi-billion-pound economy.
Providing the certainty of electricity supplies in a world of
uncertainty is paramount.

We currently provide a third of the Island’s energy
needs. This will increase as Jersey transitions to carbon
neutrality, making supply reliability more essential to give
the community, businesses and government confidence in
achieving its net-zero aims.

We measure supply reliability in Customer Minutes Lost
(CMLs) which is the established industry measure in use
around the world. This represents the total supply interruption
time in minutes experienced by each customer on average in
a year. This year our CMLs were just five, our lowest for 10
years, which continues to compare very favourably with the
UK where distributors averaged 80 CMLs in 2018-19.*

To achieve this consistently good record (the previous
two years we had six CMLs) we focus on ensuring our
infrastructure is securely designed, well maintained and that
our employees are trained to respond to adverse events
quickly if they do occur.

We work to an ‘adapted N minus 1 standard’ for our
Transmission system. This broadly means we seek to maintain
supplies to all customers even if we suffer a significant
system asset failure (see right). Whilst we strive to minimise
the risk of any asset failures, we seek to ensure we are
well prepared to repair and restore services as quickly as
possible in the event of a failure.

Paramount to ensuring supply security, however, is having
enough capacity to meet demand. Our three supply links to

France have now been successfully operating together for
four years, giving us an importation capacity of 202MW.
This is well in excess of our record peak demand of
178MW recorded in March 2018. We also operate these
interconnectors in the most secure configuration so that if one
were to develop a fault, the load would seamlessly switch to
the other two.

We also ensure our on-Island Distribution Network is well
invested. An example of this is our latest £17m St Helier West
Primary Substation which has been operating since December
2018, ensuring security to around 80% of customer supplies
in St Helier that were previously under stress. This is being
supplemented by the creation of additional capacity at La
Collette and Queen’s Road over the next two years to give
additional resilience within St Helier and to the Parishes.

We also maintain and regularly test generation assets at
La Collette Power Station and Queen’s Road as added
security in the unlikely event of disruption to our imports.

Jersey Electricity’s system is designed to meet an ‘adapted
N minus1 security standard’ as follows:

•
•

•

A one-in-eight year winter peak demand
All normal load in the event of the loss on the
single largest interconnector with France (N minus 1)
plus a simultaneous failure of the largest:
o Diesel generator; and
o Gas turbine
75% of peak winter load for 48 hours from
on-Island generation (no simultaneous loss
of on-Island capacity)

• No coincidence of the above

*Source: Ofgem

Generation
Although around one third of the electricity consumed in
Jersey continued to come from renewable hydro sources in
France, this is the first year we have commercial roof scale
locally-generated solar power in our energy mix following
our installations at our La Collette Power Station and Solar
Hub on our Powerhouse car park. Further larger arrays
were under construction or in planning at year end.

Imports from EDF accounted for 95% of our electricity
requirements this year (614GWh). We generated only
0.2% on-Island at La Collette Power Station (1GWh) - our
lowest ever. The remaining 5% of supplies (33GWh) came
from the Government-run Energy from Waste (EfW) Plant.
Another mild winter saw peak demand down to 141MW
recorded on 4 December 2019, well below last year’s
150MW and our record of 178MW of March 2018.

Transmission
We continue to maintain La Collette Power Station and
generating assets at Queen’s Road, for emergency back-up.
The Energy team has this year progressed projects to install
new transformers at both sites - 90/33kV at La Collette and
90/11kV at Queen’s Road.

Contractors installed ducting for cable connections from our
90kV South Hill Switching Station, which is the connection
point for our Normandie 3 interconnector, to La Collette
Power Station in Spring during the lockdown. During this
time, we modified the plinth, originally installed for the
EDF1 transformer in 1984, to accommodate the new unit.

The 75 MVA transformer, has been factory tested by Tironi
in Modena, Italy, and will be delivered in November, 2020.
We have also placed contracts for 90kV and 33kV cabling
along with those for the protection and control elements of
the project. These are expected to be delivered and installed
before the end of Q1 2021.

This project will improve the resilience of our on-Island
network and by increasing capacity it removes the need for
support from local generation should certain existing assets
fail. It also facilitates the retirement of ageing 33kV cables
between La Collette and Queen’s Road.

We have also commenced detailed planning on a £4m
project for a new 90/11kV transformer at Queen’s Road
where our two emergency fast-start gas turbines, with a joint
capacity of 47MW, are housed. We expect to tender this
work during 2021. This project will relieve the load on the
existing 33/11kV transformer at Queen’s Road and again
allow for the decommissioning of 33kV cables between La
Collette and Queen’s Road.

We have also started a £0.5m programme to replace
ageing protection systems on the existing transformers at
both sites. The first project will see the replacement of the
protection on the existing La Collette 90/33kV transformer
No.1 and reactor. We will then proceed to replace the
Queen’s Road 90/33kV transformer protection. Although
we replaced some of this equipment as part of the
Normandie 1 interconnector project in 2016, much of
the original protection dates from 2000 and is becoming
unreliable, with manufacturer support withdrawn.

1 GWh
JE LOCALLY
GENERATED

33 GWh
GENERATED BY
EFW PLANT

614 GWh

IMPORTED FROM EDF
HYDRO 36% NUCLEAR 64%

ELECTRICITY SOURCES
2019/2020 IN %

YEAR

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

2.5%

20.7%

14.9%

1.4%

2.9%

1.5%

0.2%

0.3%

0.2%

EfW

5.2%

3.9%

4.9%

4.6%

5.5%

5.8%

4.9%

5.6%

5.1%

-0.1%

-0.5%

+0.6%

Import

92.3%

75.4%

80.2%

94.0%

91.6%

92.0%

94.9%

94.1%

94.7%

Distribution
An important milestone for the Company and Island as a
whole this year was the completion of our £10m Island-wide
Smart Meter roll-out SmartSwitch. We have installed the
latest technology allowing the remote reading of meters in
around 51,000 premises, making Jersey the first jurisdiction
in the British Isles to complete such a programme.

The final phase of this six-year programme was the
replacement of 4,100 Pay As You Go (PAYG) key meters.
Commencing in February following a successful trial among
150 social housing tenants, we accelerated the PAYG
programme with the onset of the COVID-19 pandemic.
Abiding by stringent safety protocols, our Metering
Technicians continued this essential work throughout the
lockdown to help vulnerable customers forced to self-isolate.
The meters’ remote charging capabilities mean customers
can top up over the phone or family and friends can top up
for them.

We removed the ageing key charging terminals that we
can no longer support, from retail outlets at the end of
September. At year end, we were also close to finalising
an online PAYG payment scheme that will bring even more
convenience for customers.

The completion of SmartSwitch is the foundation for the
transformation of our energy system that will bring more
control, comfort and convenience for customers and help
Jersey on its journey to becoming zero-carbon. Smart
Meters are a precursor to a Smart Grid and the increasing
digitalisation of energy systems and home energy solutions,
facilitating the integration of local renewables, micro-
generation and time-of-use tariffs. Smart Meters have
already brought benefits to customers.

Including:

• An end to the inconvenience of meter readers calling
• The elimination of around 8,000 estimated readings

every year

• An end to pro-rata billing when tariffs change
• Bills on the same date each quarter, giving four equal

billing periods

• Swift and remote change of tenancy with on-demand

reads

• Rapid and remote change of tariffs
• More information on energy use

SmartSwitch was a complex project, both technically and
logistically. It involved the sourcing and manufacture of
meters specifically designed to work with our low-carbon
heating tariffs, the use of Powerline Carrier communication
technology (PLCs) to transfer data, an internal fibre network
and Wide Area Networks which, when combined, make
the biggest connected network in Jersey outside the telecoms
industry. I am very grateful for all the teams that have
brought this ground-breaking programme to a successful
conclusion. We are now in the latter stages of developing
an app that will enable customers to access and use the
data Smart Meters collect to help them better manage their
energy use and costs better than ever before.

51,000

smart meters
INSTALLED

Our biggest and most important on-Island infrastructure
project for many years, was the £17m St Helier West
Primary Substation. Though operational since December
2018 this year we completed the landscaping, that
includes a public viewing platform looking out across
St Aubin’s Bay, and re-opened all the public walkways.

This year we
installed around
27km of new
cable, six new
substations
and 724 new
services.

We also refurbished
14 substations
and maintained
131 substations
and 7km
of overhead
line.

Substations on the
network now number

CUSTOMER SERVICE STANDARDS

Customer expectations have greatly increased in recent years, in part, accelerated
by social media and technology – two areas in which we have invested significantly
this year. Customers not only expect us to meet the challenges of the energy trilemma
by providing affordable, secure and sustainable energy, they also want smart, digital
solutions giving them choice and control – as well as an ability to engage with and
influence service providers.

As an essential service provider holding a monopoly position in a small offshore
jurisdiction, maintaining a high level of customer service and meeting customers’
expectations – now and into the future – is crucial to our reputation and standing in
the community. It has been especially important this year as we sought to reassure
customers through the uncertainty of the pandemic.

Customer Focus is one of our six core Values and central to our Vision. We are
committed to improving the customer experience right across the business. We have
continued to invest in this area following the appointments last financial year of a
Head of Customer Experience and Communications and a Head of Digital Technology.

While we expect technological innovation and digitalisation in the power sector to
transform how electricity is generated, distributed, used and paid for in coming years,
we also intend to ensure our customers reap the benefits of better services enabled by
new, smarter technology, especially around control and comfort.

At the end of this financial year we have greatly expanded our social media presence
to enhance our relationships with customers. Work is also well advanced on a new,
more customer-focused website, with the emphasis on smoother, swifter customer
journeys, a new Jersey Electricity app and a new online payment portal for our 4,100
Pay As You Go customers who are now already benefiting from the completion this
year of our SmartSwitch Smart Meter roll-out programme.

In 2018 we became a member of the UK’s The Institute of Customer Service (ICS).
This body provides organisations with an understanding of their current level of
customer service via regular surveys and requires them to demonstrate a commitment
to improving it.

The Institute also conducts the UK’s most extensive cross-section
customer benchmarking study, the UK Customer Satisfaction
Index (UKCSI). This comprises 26 metrics of customer
experience, measures customer interaction channel usage
and satisfaction, complaint drivers and complaint handling.
Using almost 4,000 randomly chosen participants from our
customer database, the UKCSI has enabled us to benchmark
ourselves against UK utilities and national leaders in other
sectors for the second time this year. It also allows us to identify
our strengths, weaknesses and track our improvements.

“ The result puts us
in the top quartile
of UK utilities”

I am therefore very pleased to report that we achieved a very good result for the
second year, scoring 77 in the UKCSI, just one point down on last year and within
the top quartile of utilities in the UK, where results are broadly static, and on par with
the ‘all sector’ average. Only Bulb and Octopus Energy scored higher in the power
utility sector.

UK CUSTOMER SATISFACTION INDEX (UKCSI)

UK ALL-SECTOR AVERAGE

UTILITIES

JERSEY ELECTRICITY

77.0

72.6

77.0

Set against ALL UK UTILITIES, Jersey Electricity would sit in 6th Position.

How the UKCSI works
The UKCSI score is an average of an organisation’s customer satisfaction scores,
weighted by importance based on customer priorities’ research. These priorities
are divided into five:

• Experience: Measures the quality of customers’ experiences with us
• Complaints: Extent to which customers perceive that we genuinely care about
them and build the experience and customer journeys around customers’ needs
• Customer Ethos: Extent to which customers perceive that organisations genuinely
care about customers and build the experience around their customers’ needs
• Emotional Connection: Measures the extent to which we engender feelings of

trust and reassurance

• Ethics: Measures our reputation, openness and transparency and the extent to

which we are deemed to ‘do the right thing’

These are then broken down into further priority elements such as:

• Ease of dealing with an issue
• Competence of staff
• Billing
• Helpfulness of staff
• Product/service reliability
• Complaint handling

Although some scores were fractionally down on last year, we are
pleased to see a marked improvement on ‘complaint handling’ as we
identified this as an area for improvement last year. Our Customer
Care Team reached out to all other departments with the result that
managers identified ways to improve complaint handling in their
areas. By using our existing Customer Relationship Management
(CRM) platform, Customer Care Advisers increasingly focused
their efforts on ensuring that all CRM cases were acknowledged
and resolved to the pre-defined standard and that cases were not
closed without confirming they were resolved. Customer Care
also notifies hot-desk administrators from each
department when cases go near their last
escalation level, which has helped with
the ‘speed of resolving a complaint’.

We have also utilised the Institute’s
training provision, with 36 Retail and
Customer Care staff undertaking its
First Impressions course, which also
covered complaint handling, in 2019,
and two Retail Managers completing
a Complaint Handling Masterclass in
London this year.

EASE OF DEALING WITH AN ISSUE

COMPETENCE OF STAFF

BILLING

HELPFULNESS OF STAFF

PRODUCT/SERVICE RELIABILITY

OUTCOME OF COMPLAINT

HANDLING OF COMPLAINT

ATTITUDE OF STAFF

SPEED OF RESOLVING COMPLAINT

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

81
80

82
80

83
83

82
81

83
82

58
38

60
37

70
48

61
41

Our Powerhouse store and online retail business
powerhouse.je had a remarkable year, greatly
outperforming prior years with an exceptional financial
performance. This was also one of marked turbulence
having to temporarily close its doors due to COVID-19.
Our strong online presence and flexibility of employees
in shifting from ‘bricks and mortar’ to online and logistics
meant this business quickly moved to a solely ecommerce
model and continued to trade during the crisis, ‘bouncing
back’ strongly when restrictions were lifted.

Profits increased by 31% from £0.9m in 2019 to £1.2m, on increased
revenue of £17.8m, up 17% from £15.2m.

All core products categories - TVs, white goods, computing - grew
year-on-year and newer categories such as smart home technology and
e-mobility continued to develop. Electric bike sales saw significant growth
this year and we plan to develop the category by adding more products
and services.

Closure during lockdown enabled us to pivot to complete some
planned refurbishment projects quicker than would normally have
been possible. These included a new floor that unifies the store,
and various new displays including a central e-mobility stand.

The Powerhouse has an ambition to be recognised as one of
the best independent electrical retailers in the British Isles. The
team was rewarded this year by winning three awards: PC
Retail (Best Independent Retailer), Innovative Electrical Retail
(Best Superstore Showroom) and the individual award (Best
Young Gun) for top new salesperson.

Training continues to be important as we strive to differentiate
ourselves from both on-Island and UK online competition. After
seeing the benefit of a group of Retail staff undertaking the Institute
of Customer Service’s First Impressions course last year, two Retail
Managers this year completed the Institute’s Complaint Handling
Masterclass in London.

As our team of in-house digital solutions specialists,
Jendev has been developing and supporting
Jersey Electricity’s business systems since 1998. In
addition to being an important internal resource,
Jendev has a strong history of delivering solutions
to several external clients in the utility industry.

Jendev is focused on supporting Jersey Electricity
in delivering its digital objectives to power efficient
business processes and improved customer
experiences. The team develops, implements and
supports solutions in all areas of the business,
delivering a mix of standard and bespoke systems.
Jendev also continues to implement and develop
their flagship billing product, Jenworks.

Whilst Jendev continues to support a diverse
group of clients, its primary focus continues to be
in support of Jersey Electricity’s digital projects. In
particular this year was the final Pay As You Go
phase of SmartSwitch. The team continues to build
on its expertise in the Microsoft Dynamics suite of
business solutions and beyond, experience that
can subsequently be leveraged across third party
clients.

Having this highly skilled team within the
Group allows us to manage change effectively,
responding quickly to new business challenges
and opportunities as they emerge. The Jendev
team continues to broaden their digital skillset,
investing in knowledge of emerging technologies
and methodologies to ensure we are well placed
to deliver the latest innovations in the utility industry
space.

Jersey Energy was established 26 years ago to promote energy
and environmental solutions in building design and energy
related services. Jersey Energy and Guernsey-based, Channel
Design Consultants, provide premium environmental and
building services advisory, design and project management
services to end user clients, architects, the Government of Jersey
and States of Guernsey, Parish Halls and private developers.

The seven-strong skilled team collaborates with planners,
architects, builders and developers in the design process that
balances environmental and commercial considerations to
deliver high performance buildings, both in the domestic and
commercial sectors. With the Government of Jersey’s carbon
neutrality target of 2030 (2050 in Guernsey) energy efficiency
and carbon reduction increasingly feature in the latest Building
Regulations and Jersey Energy’s services are much in demand.

Although the year began as normal with a good revenue stream
from existing and new projects, the closure of construction sites
due to COVID-19 impacted operations in April and May. All the
Jersey Energy team continued to work from home and they used
any non-productive periods to focus on industry and in-house
training to ensure the team maintains the highest standards
and its engineers are up to date with the latest regulations and
technical requirements.

As COVID-19 restrictions eased, the construction industry slowly
returned to an element of normality. Work resumed with physical
distancing measures in place. The majority of Jersey Energy’s
project meetings and communications continue to be carried out
through remote virtual arrangements setup during lockdown. This
has had the added benefit of reducing travel and associated
costs.

Jersey Energy have provided much support to the Solutions
team’s ‘Road To 75’ project to expand Jersey electric vehicle
(EV) public charging network to 75 by the end of 2020.
Though delivery of the chargers was temporarily held up due to
lockdown, the two teams progressed much groundworks during
the restrictions, enabling the rapid completion of a further 30
charge points once deliveries resumed, bringing the total at year
end to 53.

Property
Our Property portfolio includes a B&Q store and Medical Centre situated
on our Powerhouse retail and administration office site at Queen’s
Road as well as 29 private houses and flats that are rented on the open
market. Commercial tenants leasing parts of the Powerhouse building are
SportsDirect, which shares the ground floor with our own retail business
Powerhouse.je, and telecoms operator Sure, which occupies the middle
floor. We also lease mobile aerial sites and fibre optics to telecoms
operators.

Revenue, at £2.3m, was at the same level as last year despite initial
concerns that rental flows could be impacted by COVID-19. Profit, at
£1.3m, excluding the impact of investment property revaluation, was
£0.4m lower than last year due mainly to accelerated depreciation on air
conditioning plant that was replaced during this year.

Our investment property portfolio moved up in value by £0.5m to
£21.8m based on advice from our external consultants who review the
position annually, due primarily to the growth in the value of residential
properties despite COVID-19 challenges.

Building Services (JEBS)

JEBS, our building services business, has undergone a major restructuring
programme and 2020 was the first year of this transition. The team refocused
from former core activities of electrical and mechanical installations within
construction and the installation and maintenance of refrigeration for the
food retail sector, to activities that more closely support other business teams
delivering our Group Vision, in particular Energy Solutions, Customer Care
and Metering.

The result is the new streamlined more strategically focused JEBS achieved
its best performance in recent years. It moved from a small loss last year into
profit on increased revenue of £3.8m up from £3.3m.

The team helped Energy Solutions to deliver a record number of domestic
fuel switches and 30 new electric vehicle charging points, while its amenity
lighting team continued the supply, installation and maintenance of LED
lighting columns across the Island.

The team also rose to challenges the pandemic presented. With their own
activities greatly curtailed, JEBS assisted many other areas of the business,
such as retail, with the delivery and installation of domestic appliances
for vulnerable customers and supporting the Energy Division with essential
maintenance duties at La Collette Power Station.

JEBS also provided the services of six mechanical engineers, at no cost, to
assist with the installation of the plumbing services at the newly constructed
Nightingale Wing of Jersey General Hospital. In addition, a member of the
administration team was seconded to the Government of Jersey to assist with
the procurement of medical supplies at the height of the pandemic.

2016

2017

2018

2019

2020

LOST TIME ACCIDENTS (RIDDOR)

RIDDOR (Reporting of Injuries, Diseases and
Dangerous Occurrence Regulations) is the UK standard
for reporting Accidents and Near Misses. In the UK,
an LTA is defined as an accident that results in the
injured person being away from work or unable to do
their normal work for more than seven days. Jersey
Electricity applies the more stringent standard of more
than three days away from normal work. This enables
us to benchmark against other peer group entities and
allows us better oversight of risk trends.

HEALTH AND SAFETY

The safety of our employees, contractors and the public – all our
customers – is our most important priority. In this unprecedented
challenging year, I am pleased that we have weathered the
initial COVID-19 storm well and kept our people and customers
safe.

The very nature of our core activities of electricity generation,
transmission and distribution can be extremely hazardous
activities if they are not appropriately managed. We, therefore,
have a vigorous Occupational Health and Safety Management
System (OHSMS), in place and a very constructive and
open Health, Safety and Environment (HSE) culture. Safety
Representatives support our dedicated HSE team throughout the
business and do much to create a distinctive and constructive
culture for safe working among colleagues, contractors and the
public.

Commitment to HSE in any organisation must come from the
top, led by the Board and Executive Leadership Team (ELT),
down to the people on the shop floor. This year that commitment
was reinforced by all five ELT members and the Head of Digital
Technology attending an Institute of Safety and Health (IOSH)
Leading Safely Course. This course is designed to equip leaders
and senior managers with the skills and knowledge necessary to
safeguard their employees and business units through accredited
health and safety practices. The course led to the implementation
of personal action plans off the back of the course.

Board members also attended a presentation by health and
safety specialists Coppolo and Coyde containing leading
guidance issued jointly by the Institute of Directors (IoD) and
the UK’s Health and Safety Commission to reinforce their
health and safety responsibilities in Jersey Electricity.

We have a good record on HSE as evidenced
by our two awards of the British Safety
Council’s Sword of Honour in 2013 and
2019. Our approach to HSE follows a
‘risk-based’ process. We address new and
revised legislation and adapt to operational
environments. We ensure all employees are
fully competent in the work we ask them to
do and, importantly, that they recognise their
own limits of competency. We also expect
them to proactively identify hazards through
regular risk assessments and take action
to mitigate the risks associated with those
hazards in their day-to-day work.

We invest heavily in HSE training. Not unsurprisingly,
however, our HSE training hours were severely curtailed
during March through to September due to the restrictive
COVID-19 measures. To mitigate this, the HSE team
increased the number of Toolbox Talks and provided
additional information to minimise COVID-19 risks and other
HSE issues such as home working, display screen equipment
assessments and the correct fitting and use of face masks
and other PPE.

We are now seeing an increase in training levels as external
HSE training providers resume courses under strict controls
to ensure they comply with continuing government guidance
related to the pandemic.

Jersey Electricity also recognises the importance of good
mental as well as physical health. Our HSE Team, working
with Human Resources (HR) and our team of 11 Mental
Health First Aiders were especially vigilant during the
lockdown ready to help colleagues suffering anxiety or other
signs of mental stress during these difficult times. Wellbeing
Wednesday Microsoft Teams calls to keep everyone in touch
proved very popular until our employees were able to return
to their regular places of work.

Externally, and as the Island’s respected authority on
electricity and energy, we have continued to work closely
with the Health and Safety Inspectorate (HSI) and Jersey
Construction Council (JeCC) to reinforce key safety messages
to the community at large. Following several incidents
involving third party contractors working dangerously around
our services, we held a comprehensive safety campaign
aimed explicitly at local builders and agricultural workers.

The reason for the latter is that we believe the use of
aluminium pipes for irrigation purposes is becoming more
common, and farming machinery, such as tractors and
harvesters, is getting bigger, increasing the risk of equipment
and machinery coming into contact with our overhead lines.

Going forward, our HSE Team will continue its focus on
proactive measures such as more detailed safety plans, more
site inspections and incident investigation and reporting
procedures. Work in these areas is already reflected in the
Company experiencing just one, minor RIDDOR Lost Time
Accident this year which although disappointing, was neither
major nor a result of any breach in procedures.

My thanks go to everyone for their vigilance in creating
such a safety-conscious culture and the rigorous approach
to dealing with the COVID crisis that has kept the business
functioning but doing so safely.

2016

2017

DAYS LOST
(RIDDOR)

2018

2019

2020

Safety is one of our six core values:
‘We do everything safely and responsibly or not at all – nothing is more
important than the safety of the public, our customers and our staff’.

70647OUR PEOPLE

Our people are unquestionably our greatest asset and this has
never been better exemplified than this year of the COVID-19
pandemic. Our entire workforce remained active in their roles
focusing on our customers. Everyone rose to the challenges
and adapted quickly to new working practices, demonstrating
fantastic teamwork and flexibility. For our part, like many
businesses, our people’s health, safety and wellbeing was
paramount throughout.

We reacted quickly, ensuring that we supported our people,
helping them to work remotely from home or safely on site
using the latest technology and PPE, with health and wellbeing
a priority. We instigated Wellbeing Wednesday conference
calls to connect remote workers and made our people aware
of our employee assistance programme, Unum, offering 24-
hour confidential help and advice.

COVID-SPECIFIC
EMPLOYEE
ENGAGEMENT
SURVEY RESULT
May 2020

8.3+0.5 Improvement

since September 2019

To measure the effectiveness of our people-focused
interventions, we launched a COVID-specific engagement
survey during April. The results were very positive, showing
an improvement in employee engagement overall from 7.8
(September 2019) to 8.3 (May 2020). Questions related
specifically to our handling of the pandemic and tested
employee opinion on drivers such as wellbeing, recognition
and loyalty. This engagement level puts Jersey Electricity in
the top 5% of Energy and Utility companies using the same
survey provider. We also conducted a year-on-year audit
of our annual appraisals, a process which we take very
seriously and invest much time and effort. It too, revealed an
improvement in quality.

All our people practices are designed to support one or more
of our Vision people goals and they are to be an ‘Employer
of choice’, a ‘Great Place to Work’ and a ‘High Performing
Organisation’. To achieve these goals we have done much
this year to promote our Employee Value Proposition not only
to attract the best new talent, but equally to engage, develop
and retain the talent we have.

We want to be diverse and inclusive and celebrate
individuality while working as ‘one team’ across all
departments. Our cultural change programme instigated
in 2018 focuses on creating an innovative, integrated
organisation where people feel valued and inspired to
perform at their best.

To do this, we believe employees have to be feel physically and
mentally well and we continue to invest in employee wellbeing
which we saw as a key driver of employee engagement
in our 2018 and 2019 employee surveys. We have a
Wellbeing Group of a cross section of employees to discuss
and promote wellbeing. We have conducted further Mental
Health Awareness training courses open to all employees and
have increased our team of Mental Health First Aiders from
three to 11 since last year. This team serves as a first point of
contact for employees in need of help and support.

EMPLOYEES
CELEBRATED
21 YEARS SERVICE

YEARS

AVERAGE LENGTH
OF SERVICE

YEARS

AVERAGE
EMPLOYEE AGE

To test our Employee Value Proposition externally in the
community, we carried out further research by hosting a
series of focus groups. The results gave us insight into the
perceptions of the Company in the local market and led
to a series of initiatives to present Jersey Electricity as an
‘Employer of Choice’. This activity included liaison with
schools and local skills development initiatives, a new
careers section of our website, and a review of recruitment
advertising campaigns to ensure gender balance.

In January, we became industry partners in the UK-wide
Primary Engineer programme, aimed at working with
local schools to generate interest in STEM subjects. The ‘If
you were an Engineer, what would you do?’ competition
was launched to ask school pupils to produce a design
which solves an everyday issue. Jersey Electricity provided
several Engineers at the event to help develop ideas and
judge entries. Though the competition was curtailed due
to COVID-19, feedback from schools at the launch was
extremely positive and we look forward to participating
again in 2021.

At the higher end of the age range, we have supported a
student of Mechanical and Electrical Engineering from Bristol
University on a work experience programme during which
he designed and installed a small hydro-powered generator
for an exhibition in an ancient water mill. He complemented
this by making a video to run on a display solely powered
by his generator.

Through Primary Engineer, other education initiatives and
targeted recruitment campaigns, we hope to develop our
Employer Value Proposition going forward. This also means
developing our Diversity and Inclusion credentials.

We set out our intent to establish more inclusive people
practices last year, beginning with training at Board
level conducted by Inclusive Employers, and are now
implementing our newly-established Diversity and Inclusion
strategy. All our Senior Managers and anyone involved in
recruitment this year undertook Unconscious Bias Training.
This is designed to provide people with the tools to adjust
automatic patterns of thinking and subsequently eliminate
discriminatory behaviours particulalry in recruitment or
promotion processes.

Many of our new starters have improved diversity at
all levels. Two female employees joined our Senior
Leadership Team, and we welcomed employees with
diverse characteristics into customer-facing roles, helping us
provide a workforce that is truly representative of the island
community we serve.

To raise awareness of Diversity and Inclusion internally and
externally we have established a Culture and Engagement
Forum and have a calendar of events to promote and
celebrate our differences and what they bring. In March,
we marked International Women’s Day with a lunch and
talk by a local female entrepreneur and author about
her experiences as a businesswoman. In September, we
recognised Jersey Pride month. As we progress into the
new financial year, we will continue to raise awareness of
inclusivity through focused events and campaigns.

Despite the pandemic, HR activities continued, with nine
new starters onboarded during lockdown and able to work
effectively immediately as we embraced the use of new
technologies. The team also implemented effective return-
to-work strategies from the beginning of August and the
business was functioning normally at year end.

SUSTAINABILITY IN THE COMMUNITY

Being a trusted partner in our community requires
supporting our Island in many ways beyond delivering our
core business activities. We have traditionally focused that
support on charities, organisations and other beneficiaries
in Jersey that concentrate their activities on health,
education and the environment.

COVID-19 restrictions have this year, regrettably, caused
the cancellation of many charitable fundraising events
to which we have lent our support over the years either
corporately or by the participation of individual employees.
We have, nevertheless, continued our support where
we could. For example, the donation of an electric bike
enabled the charity Brightly to raise £15,000 to help
care-experienced youngsters in an online raffle when its
Family Fun Day had to be called off. We also provided
Family Nursing and Home Care with our usual sponsorship
funding when its Colour Festival had to be cancelled. To
provide reassurance to some charities, we have pledged
our continued support next year in the hope that their
events will go-ahead.

Despite COVID-19, we have been able to deepen our
relationship with our long-term partner, the National Trust

for Jersey, whose small team does much to protect the
environment and preserve Jersey’s countryside. The charity
shares our Vision for a zero-carbon future for Jersey.

At the end of last year, we announced two significant
sponsorships aimed at protecting the environment and
encouraging a zero-carbon Island. In partnership with
Jersey Water, we are funding and physically helping to
re-forest 20 acres of Mourier Valley in the North of Jersey
by planting 6,000 trees over three years. Working with
the Trust and Jersey Trees for Life, volunteers from Jersey
Electricity and Jersey Water planted the first of over 600
trees during two volunteer days in December 2019 and
January 2020. In September 2020, we returned to clear
bracken in readiness for the next phase of planting in
January and February 2021.

It is the most significant tree-planting programme the Trust
has ever undertaken and covers 10 parcels of land owned
variously by Jersey Water, Trust, The Crown and the
Jersey Government. We believe this project is a small but
symbolically important step on Jersey’s journey to zero-
carbon and will provide our community with the sense
that we are ‘out of the starting blocks’ and already taking
action on the ground.

Under the banner ‘We Have the Power’, the programme aims to
raise awareness of the causes of climate change and the small
and largescale carbon reduction steps needed to curb it. As well
as conducting a series of school assemblies, we have helped to
make the Trust’s historic Le Moulin de Quétivel a learning centre
for climate change education events with an exhibition and
demonstration hydroelectric generator, powered by the mill’s water
wheel, and connected to a video display.

We also again sponsored the Trust’s #LoveNature Festival, which
this year was successfully conducted virtually.

We continue to partner the Jersey Evening Post’s ecoJersey
initiative and have again supported the newspaper’s Pride of
Jersey Environmentalist Award which has attracted a record 14
nominations from the public in this its sixth year.

Despite being restricted in the number and type of charity events
our employees have been able to participate in this year, their
Monthly Staff Charity Draw has continued to raise funds for
employee-nominated charities through donations paid directly from
salaries. This year’s nominated charities to benefit were: MacMillan
Cancer Support (Jersey) Ltd, Channel Islands Air Search (CIAS),
The Mission to Seafarers (Jersey Branch), Healing Waves, Guide
Dogs for the Blind, Diabetes Jersey, Age Concern, Jersey Cancer
Relief, Neil Hussey Heart Charity, Brooke Hospital for Animals,
Autism Jersey and Friends of Special Care Baby Unit (SCBU).

We sincerely hope Jersey’s charities return to their normal level of
fundraising activities next year to help them continue their valuable
work.

We are also supporting the Trust’s important
Education Programme by sponsoring its full-
time Education Officer for the next three years.
Around 3,500 children a year engage with
the programme which involves a wide range
of activities that complement schools’ science
curricula and encourage children to ‘reconnect
with nature’. The focus of the new programme
will be on biodiversity loss, recognising the
causes and impacts of its loss and how to
prevent this.

AAWWAARRDDSS

OUTLOOK

It is widely recognised more than ever that all our futures
depend on finding solutions to address climate change. If
anything, the COVID-19 crisis has created a new impetus
within the community for taking action. We believe the
Company remains well positioned to help facilitate the
Island’s transition to a carbon-neutral future and we
are actively supporting an economic stimulus-led green
recovery.

The Government of Jersey has responded well to the
COVID-19 crisis, but has nevertheless been distracted by it.
This inevitably, but unfortunately, led to the deferral of the
planned Citizen’s Assembly on Climate Change from mid-
2020 to an expected March 2021. The Citizen’s Assembly
is a key event for Jersey Electricity and is intended to be
an opportunity for the community to discuss the targets and
approach to delivering carbon neutrality and present its
conclusions to the States Assembly.

We have already been assisting the Government by
exploring how the Island and the grid needs to change –
and defining where further investment is needed – to enable
carbon neutrality by 2030. It is clear that a low-carbon and
sustainable Jersey should not solely be considered a cost to
be borne, but can also be a source of differentiation for all
sectors of Jersey’s economy in a world that is increasingly
focused on environment, social and governance-related
matters.

Jersey has a very well invested ‘zero-carbon platform’ that
has significant spare capacity. It is clear to many that the
only way that Jersey can rapidly and meaningfully reduce
carbon emissions further is by displacing fossil fuels with low-
carbon alternatives, whether using dependable grid nuclear
and imported renewables, or local renewables. We believe
our grid could be a key component of an integrated solution
compatible with the development of local renewables that
could enhance supply and economic diversity as well as
mitigate our dependency on imported resources.

This year, we have continued to allocate resources around
‘no regrets’ opportunities to facilitate this, including pump
priming the local renewables sector, such as roof-based solar
PV, as well as investing in fuel switching, smart metering and
electric vehicle charging infrastructure. We have also greatly
built out our technology, digital and data capabilities as this
is critical to a new, low-carbon energy system and value
creation for consumers.

We also seek to integrate our activities more effectively
across the Jersey Electricity Group in a way that leverages
broad capabilities and drives the creation of new, more
innovative solutions for customers, for example, by using
the strengths of our Powerhouse retail site, JEBS our Building
Services business and our advisory businesses to better
effect. We are seeking to shift our focus from being an
‘electric utility supplier’ to an ‘integrated energy partner’
focused on the development of viable new energy solutions
and services for customers beyond the meter, and nurturing
new energy relationships with new business models.

Our conviction and confidence in our strategy is strong, but
our position is not without risk. We have a strong contract
with EDF and RTE, our French partners, which was extended
by five years to clear us through Brexit, but international
energy and foreign exchange markets remain volatile. A
higher focus on supply dependence and sovereignty will
lead to a more intense examination of cost and efficiencies
as well as risks in the supply chain. There also remains a risk
that regulation and/ or competition may be imposed on the
electricity market. This may be done with the best intentions,
but may well lead to increased costs, reduced investment and
reduced scale in the business, leading to higher electricity
prices to customers, weaker services and reduced innovation.

Our best response to this is clear – to know and understand
the needs and wants of our customers and serve them better
than ever and in the absence of any external competition,
act as though Jersey Electricity is its own competitor, by
continuing to innovate products and services, offering new
value-for-money solutions and constantly bettering what we
do for customers. If we can demonstrate and deliver on this,
the future for Jersey Electricity remains an exciting one with
real growth and opportunity.

FINANCIAL REVIEW

Group Financial Results

largely due to lower depreciation charges. In the financial year

we imported 95% of our requirements from France (2019: 94%)

Key Financial Information

2020

2019

and generated 0.2% of our electricity on island from our solar and

£111.7m £110.7m

diesel plant (2019: 0.3%). The remaining 5% (2019: 6%) of our

Revenue

Profit before tax

Earnings per share

£14.8m

37.94p

38.42p

Dividend paid per share

16.05p

15.25p

Final proposed dividend per share

9.70p

9.25p

Net cash / (debt)

£5.5m

£(5.1)m

Group revenue for the year to 30 September 2020 at
£111.7m was 1% higher than in the previous financial year.

Energy revenues at £85.1m were 2% lower than the £87.0m

achieved in 2019. Lower unit sales of electricity, linked to the

COVID-19 crisis, combined with the sale of heavy fuel oil to

Guernsey Electricity last year were the main reasons for the

reduction. Revenue in the Powerhouse retail business increased

17% from £15.2m in 2019 to £17.8m. The business had a

strong first half, but was impacted when the shop was forced

to close due to COVID-19, but then recovered well, helped by

the strong online offering. Revenue in the Property business at

£2.3m was at the same level as last year despite initial concerns

that rental flows could be impacted by COVID-19. Revenue from

electricity was purchased from the local Energy from Waste plant.

A planned 2.5% tariff rise from 1 April 2020 was postponed to
1 October 2020 to provide some further assistance to our

customers in light of the COVID-19 pandemic.

The £1.3m profit in our Property division, excluding the impact

of investment property revaluation, was £0.4m lower than last

year due mainly to accelerated depreciation on air conditioning

plant that was replaced during this year. Our investment property

portfolio moved up in value by £0.5m to £21.8m based on advice

from our external consultants who review the position annually,

due primarily to the growth in the value of residential properties

despite the wider COVID-19 challenges.

Our Powerhouse retail business saw profits rise by 31% from

£0.9m to £1.2m in a turbulent year where flexibility in the

business model, due to our strong on-line presence, aided this

business during the COVID-19 crisis. The business was also

helped by our customers appearing to have more spending

power, due to less travel taking place, with some sales lines seeing

material growth – such as electric bikes.

JEBS, our building services business, increased from £3.3m in

JEBS, our building services unit positively moved to a profit of

2019 to £3.8m. Revenue in our other businesses at £2.7m, was

£0.2m against a £0.1m loss in 2019 as a result of an increase in

marginally lower than in 2019.

revenue, and a move to higher margin work.

Cost of sales at £69.7m was £0.4m higher than last year with
the increased revenue level in the Powerhouse Retail business

Our other business units (Jersey Energy, Jendev, Jersey Deep

Freeze and fibre optic lease rentals) produced increased profits of

being offset by a lower volume of imported units of electricity in

£0.8m being £0.2m above last year.

2020 and the costs associated with the sale of heavy fuel oil to

Guernsey Electricity last year.

Other income was recognised during the previous year arising
from the receipt of a £0.8m rebate for a subsea cable repair.

The net interest cost in 2020 was £1.4m being £0.1m higher
than in 2019 due to the implementation of IFRS 16 (‘Leases’). The
taxation charge at £3.1m was marginally higher than the level
in 2019.

Operating expenses at £26.4m were £0.4m lower than
2019 primarily due to the pension cost in 2019 being £0.6m

Group basic and diluted earnings per share, at 37.94p,
compared to 38.42p in 2019 due to profitability being similar in

higher than in 2020.

both years.

Profit before tax for the year to 30 September 2020, at
£14.8m, was maintained at the same level as 2019 despite the

challenges of COVID-19.

Profits in our Energy business at £12.3m were at the same level

as 2019. Unit sales volumes decreased from 627m to 619m

kilowatt hours with the impact of COVID-19 in the second half of

the financial year being the main reason. However, revenue from

electricity sales was £0.8m higher due to the sales mix, with an

increase in usage in domestic premises more than offsetting the

fall in the commercial sector. In 2019, Energy had a £1m profit

from the sale of heavy fuel oil, being a ‘one-off’ transaction.

During this year overhead costs were £0.9m lower than in 2019

Dividends paid in the year, net of tax, rose by 5%, from 15.25p
in 2019 to 16.05p in 2020. The proposed final dividend for this

year is 9.70p, a 5% rise on the previous year. Dividend cover, at

2.4 times, was marginally lower than the comparable 2.5 times

in 2019.

Ordinary Dividends

2020 2019

Dividend paid

- final for previous year

9.25p 8.80p

- interim for current year 6.80p 6.45p

Dividend proposed - final for current year

9.70p 9.25p

FINANCIAL REVIEW

Net cash inflow from operating activities at £26.9m
was £0.8m lower than in 2019. Capital expenditure, at
£11.2m was £2.7m lower than £13.9m last year as there was
material spend in 2019 in completing the St Helier West primary
sub-station. Dividends paid were £5.0m compared to £4.7m in
2019. The resultant position was that net cash at the year-end
was £5.5m, being £30.0m of borrowings offset by £35.5m of
cash and cash equivalents, which was £10.6m more positive
than last year.

Cash Flows

Summary cash flow data

2020

2019

Net cash inflow from
operating activities

Capital expenditure
and financial investment

£26.9m

£27.7m

£(11.1)m

£(13.8)m

Deposit interest received

£0.1m

Repayment of lease liabilities

£(0.2)m

Dividends

£(5.0)m

£(4.7)m

Decrease in net debt

£10.6m

£9.2m

Impact of new accounting
standard

IFRS 16 was adopted from 1 October 2019, applying the
“modified retrospective” approach whereby comparative figures
are not restated. In adopting this approach, the results for the
year to 30 September 2020 are not directly comparable with
those reported in the prior year under the previous applicable
accounting standard IAS 17 “Leases”.

This adoption has resulted in an increase in Group operating
profit of £86k, (a £189k reduction in rent expense has been
partially offset by an increase of £103k in depreciation). Finance
costs have increased by £131k, resulting in a decrease in profit
from operations before taxation of £45k. At 30 September 2020
the net value of right of use assets under IFRS 16 totalled £2.9m
with a corresponding lease liability of £2.9m. Whilst there is no
impact on total cash and cash equivalents, there has been a
reclassification of lease payments resulting in a deterioration of
net cash flows arising from financing activities, whilst there is a
corresponding increase in net cash flows from operating activities.

Treasury matters and hedging
policies

Operating within policies approved by the Board and overseen
by the Finance Director, the treasury function manages liquidity,
funding, investment and risk from volatility in foreign exchange
and counterparty credit risk.

As a substantial proportion of the cost base relates to the
importation of power from Europe, which is contractually
denominated in Euro, the Company enters into forward currency
contracts to reduce exposure and as a tool to aid tariff planning.
The average Euro/Sterling rate underpinning our electricity

purchases during the financial year, as a result of the hedging
programme, was 1.13 €/£. The average applicable spot
rate during this financial year was 1.14€/£ against 1.13€/£
during the 2019 financial year. In addition, we also materially
hedge any foreign exchange exposure attributable to capital
expenditure once planning consent, and firm pricing, is known
and the commitment made to proceed with the project.

Interest rate exposure is an area of potential risk but is managed
by the £30m of private placement monies received in July 2014
having a fixed coupon and represents all of our borrowings at
present.

The Group may be exposed to credit-related loss in the event of
non-performance by counterparties in respect of cash and cash
equivalents and derivative financial instruments. However, such
potential non-performance is monitored despite the high credit
ratings (investment grade and above) of the established financial
institutions with which we transact. We also employ a policy of
diversification through use of a number of counterparties.

In the 2020 financial year Jersey Electricity imported 95% of
the electricity requirements of Jersey from Europe. It jointly
purchased this power, with Guernsey Electricity, through the
Channel Islands Electricity Grid, from EDF in France. The supply
contract allows power prices to be fixed in Euros in advance
of decisions being made on customer tariffs. We have been
importing electricity from Europe since 1984 and our latest ten
year power purchase agreement with EDF, which commenced
in 2013, was extended by a further five years during 2017 to
2027. This combines a fixed price component with the ability to
price fix future purchases over a rolling three-year period based
on a market related mechanism linked to the EEX European
Futures Exchange. The goal is to provide our customers with a
market based price but with a degree of certainty in a volatile
energy marketplace. A Risk Management Committee exists,
consisting of members from Jersey Electricity, Guernsey Electricity
and an independent energy market adviser and follows
guidelines approved by the Board.

Defined benefit pension scheme
arrangements

As at 30 September 2020 the scheme surplus, under IAS 19
“Employee Benefits”, was £5.9m, net of deferred tax, compared
with a surplus of £8.3m at 30 September 2019. Assets rose 1%
from £154.7m to £156.6m in the same period. However liabilities
increased 4% from £144.2m to £149.3m since the last year end
with the discount rate assumption, which heavily influences the
calculation of liabilities, falling from 1.9% in 2019 to 1.6% in
2020 to reflect sentiments in prevailing financial markets.

Our defined benefits pension scheme is an area of risk that
continues to require careful monitoring as it is driven largely
by movements in financial markets and materially impacted by
relatively small movements in the underlying actuarial assumptions.
If the discount rate applied to the liabilities had been 0.5% lower
than the 1.6% assumed under IAS 19 for 2020, the net surplus of
£5.9m would have moved to a deficit of £5.5m. Alternatively if the
discount rate had been 0.5% higher the net surplus would have
increased to £16.2m. In a bid to mitigate the impact of movements
in interest rates and inflation the trustees of the scheme have

adopted a Liability Driven Investment (LDI) approach which seeks
to reduce the risk that asset and liability values change at different
rates, or move in different directions. The proportion of scheme
assets in LDI/UK Gilts products moved proportionately from 30% at
the last year end, to 37% at 30 September 2020.

The most recent triennial actuarial valuation, as at 31 December
2018 showed a surplus of £3.7m. Unlike most UK schemes, the
Jersey Electricity pension scheme is not funded to pay mandatory
annual rises on retirement. The Pension Scheme Trustees, and the
Company, agreed an ex-gratia award be made to pensioners
in light of the surplus. The capital cost of this agreed 2.25% rise
to pensions in service at 31 December 2018 was £1.1m and
was paid by the scheme in the previous financial year. The cash
funding rate by Jersey Electricity for future service is 20.6% of
pensionable salaries and employees contribute an additional 6%
to the pension scheme. The actuarial valuation recommended an
increase to 25.4% but it was also agreed that around £1.2m of
the surplus be used to maintain the existing funding rate for the 3
years until the next triennial valuation. The final salary scheme was
closed to new members in 2013, with new employees, since that
time, being offered defined contribution pension arrangements.
The next triennial actuarial valuation of the defined benefit scheme
will have an effective date of 31 December 2021.

Returns to shareholders

62% of the ordinary share capital of the Company is owned by
the Government of Jersey with the remaining 38% held by around
600 shareholders via a full listing on the London Stock Exchange.
Of the holders of listed shares, Huntress (CI) Nominees Limited
owns 5.2m (45%) of our ‘A’ Ordinary shares representing 17%
of our overall Ordinary shares and around 5% of voting rights.
This nominee company is held within the broker firm Ravenscroft
which has placed our stock with a number of private clients, and a
fund, residing largely in the Channel Islands. During the year the
ordinary dividend paid increased by 5% from 15.25p net of tax to
16.05p. The proposed final dividend for 2020, at 9.70p, is a 5%
increase on last year and consistent with the underlying dividend
pattern in recent years and with our stated policy to aim to deliver
sustained real growth in the medium-term. The chart below shows
the evolution of the ordinary dividend payments over the last 15
years (excluding additional special dividends) that have risen from
4.80p to 16.05p.

Dividend paid per ordinary share 2005 to 2020

e
r
a
h
s

r
e
p
e
c
n
e
p

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

The share price at 30 September 2020 was £4.82 against £4.45
at the 2019 year end. This gives a market capitalisation of
£148m at 30 September 2020 compared with a balance sheet
net assets position of around £206m. However, the illiquidity of
our shares, due mainly to having one large majority shareholder,
combined with an overall small number in circulation, constrains

the ability of the management team to influence the share price.
We use Edison (an investment research firm) to produce regular
research on our performance to aid the understanding of our
value proposition to a wider body of potential investors in the
quest to improve our longer-term liquidity. The chart below shows
the trending of our listed share price over the last 15 years that
has risen from £2.22 to £4.82.

‘A’ Ordinary share price movements 2005 - 2020

e
r
a
h
s

r
e
p
£

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Our largest shareholder, the Government of Jersey, also owns
holdings in other utilities in Jersey. It holds 100% of JT Group,
Ports of Jersey, Andium Homes and Jersey Post, as well as
around 75% of Jersey Water. The total direct cash return to the
Government of Jersey from Jersey Electricity in the last year was
£11.4m (2019: £10.6m). The increase was due to a higher level
of dividend and corporation tax paid.

Ordinary dividend

2020

2019

£3.1m

£2.9m

Goods and Services Tax (GST)

£4.7m

£4.5m

Corporation tax

£2.7m

£2.3m

Social Security - employers contribution

£0.9m

£11.4m £10.6m

The Company regularly communicates with its largest shareholders
and details of discussions, including any concerns are reported
to the Board. The Chairman meets twice a year with the Treasury
function within the Government of Jersey, ensuring there is a
direct communication between the non-Executives and our largest
shareholder.

Group Risk Management
Understanding and managing our risks is front of mind in
everything we do. It helps us meet our strategic and operational
objectives, whilst enabling us to make informed business
decisions, in the best interest of our customers, the Group and
our shareholders. It is an evolving framework as we continue to
improve and enhance our risk management processes.

Board responsibilities

The Board has primary responsibility for the overall approach to
risk management and the internal control framework and fulfils
their role by:

• setting and regular review of the risk appetite statement by

determining the type of risk the Group is prepared to accept
whilst achieving strategic objectives;

FINANCIAL REVIEW

• ensuring the risk management and internal control systems

Protection) are responsible for assessing whether the front-line

identify the principal risks faced by the Group

controls are properly designed, in place, and operating as

• undertaking robust assessment of the principal risks and agree

intended.

how they should be managed

• Third Line – The Internal Audit function provides comprehensive

The Board has delegated responsibility for overseeing and
assessing the effectiveness of the Group’s system of internal controls
and risk management to the Audit and Risk Committee. In support
of this responsibility, the Audit and Risk Committee receives regular
updates on the risk management processes as well as updates on
the risk management activities undertaken within the business.

The Board recognises that the system of risk management is
designed to manage, rather than eliminate, the Group’s exposure
to business risks, and can only provide reasonable assurance and
not absolute assurance against material misstatement or loss.

Identifying our principal risks and uncertainties

Our risk management process incorporates both top down and
bottom up elements when identifying, challenging and evaluating
risk. We begin with collating input from all business units on their
most significant risks, having regard to their own priorities. This is

consolidated into a Group view which is presented to our senior

assurance based on the highest level of independence

and objectivity on the effectiveness of governance, risk

management, and internal controls.

Strengthening our risk management framework

We have implemented several initiatives in relation to our risk

management framework, which have continued to drive an uplift in

our risk management maturity; including:

• updating the way our risks are categorised. The new approach

allows us to consider risks by strategic objective and by division.

• updating the risk registers to include more details around

preventative, detective and other corrective action in place to

manage / mitigate our risks; and

• strengthening the manner in which we monitor and track our

assessment of key risks relative to our risk appetite statements.

Key improvements to risk management which are in progress

leaders to add their own input on strategic, functional and emerging

include:

risks. The proposed principal risks, including mitigation strategies,

• enhancing the approach to assessing the impact of emerging

are then reviewed, challenged and agreed by the Executive

Leadership Team, Audit and Risk Committee and the Board.

Risk appetite

risks

• understanding the interdependencies of our principal risks and

analysing the potential impact of any correlation between these

Risk appetite is the nature and extent of risk that Jersey Electricity is

risks

willing to accept in relation to the pursuit of its objectives. We look

• improving the way we collect and treat early signals in

at risk appetite from the context of severity of the consequences

the internal and external environment by establishing and

should the risk materialise, any relevant internal or external factors

monitoring key risk indicators

influencing the risk, and the status of management actions to

mitigate or control the risk. A scale is used to help determine the

limit of appetite for each risk, recognising that risk appetite will

change over time.

Both management and the Audit and Risk Committee are

responsible for the development, communication and oversight of

the risk appetite framework. In addition, the Internal Audit function

supports the oversight of the framework through monitoring

activities to assess the consistent application and adherence with

the risk appetite.

The Audit and Risk Committee regularly revisit and review the risk

appetite in relation to how operations within the business may have

changed. Further, each year, the Board review the principal risks

facing the Company and approve the risk appetite.

Managing our risk

Our risk management framework is underpinned by the ‘three

lines of defence’ accountability model, which comprises the

following:

• First Line – Executive Leadership Team and senior managers are

responsible for identifying, assessing and managing the risks
for the systems and processes under their responsibility.

• Second Line – The Risk Management team and other second

• further enhancing our risk processes reflecting lessons learnt from
the COVID-19 pandemic to be better prepared in the future.

The table on the next page summarises the Group’s principal risks

and how they are managed. The principal risks are considered

by the Board to be the most significant risks that could materially
affect the Group’s financial condition, ongoing performance and

future strategy. The risks listed do not comprise all risks faced by

the Group and are not set out in any order of priority. Additional

risks not presently known to management, or currently deemed to

be less material, may also have an adverse effect on the business.

Coronavirus (COVID-19) impact to our principal risks

The outbreak of COVID-19, which began to impact Jersey from

mid-March 2020, resulted in an increased focus on the mitigation

of a number of our existing principal risks.

We instigated our business continuity plan with the initial primary

focus being on the health and welfare of our people and our

customers.

We maintained high levels of productivity throughout the crisis to

date with around one third of the workforce remaining in their

normal place of work performing critical operational and customer

care roles, and two thirds successfully working from home (using

existing IT platforms that were quickly modified to accommodate

line functions (e.g. Health and Safety, Environment, and Data

the locational change).

Our critical teams were split, and segregated, to provide resilience

us to better understand our exposure to reduced revenue, the

if COVID-19 had resulted in rising illness levels. We also sought

management of cash and the monitoring of potential bad debts.

to mitigate the risk of customer service issues by deferring our

planned 2.5% tariff rise from April to October 2020, suspended

customer disconnections for non-payment of bills and extending

payment periods.

To effectively understand, and respond to the impact of the

coronavirus on our operations and strategy, we have updated our

principal risks to include descriptions of the threats and response

action taken to ensure our principal risks remain within our risk

The increased use of trending data throughout the period allowed

appetite and tolerance.

Summary of our principal risks

Political and regulatory environment

Risk movement: Increasing

Risk Description

How we manage the risk

COVID 19 threats and response

Unfavourable political and regulatory
change - Not acting in line with ‘expectations
of behaviours’ of a monopoly utility resulting in
the introduction of sector specific regulation with
the attendant cost of compliance and impact on
public relations.

This risk also includes legislative changes
or developments which cause a significant
change to the operation of, or prospects for, the
business.

• Find the correct balance associated with being a
key service provider on an Island but recognising
our responsibilities to a wide number of
stakeholders.

• Ensure transparency of objectives and regular

communication with key stakeholders.

• Benchmark ourselves against comparable Key

Performance Indicators with other jurisdictions (e.g.
Tariffs, Customer Minutes Lost, CO2 emissions,
Lost Time Accidents).

• Monitor political and legislative developments (e.g.

the Government’s Energy Plan).

• Analyse opportunities and threats to enable us to

respond effectively.

Threat - Potential down-turn in economy or increased
taxes will reduce disposable income and possibly
reduce revenue.

Response - Monitoring ongoing political and
regulatory developments related to the pandemic.

Protecting personal data - Failure to
comply with laws and regulations could result
in fines/penalties (“the Data Protection Law”)
(£10m or 10% of turnover), highly publicised
investigations, enforced actions and/or
regulatory censorship.

• Data protection policies and procedures.
• Group wide training and induction for new staff.
• Establishment of the Information Governance

Committee.

• Ongoing compliance programme (review of data

library and monitoring of retention and destruction
schedules).

Threat - Remote working and changes in processes to
enable ongoing services during COVID 19 may increase
the likelihood of staff unintentionally releasing data or
bypassing security controls.

Response - IT security protocols enhanced as part of the
roll out of Office 365. Change management controls in
place to oversee any significant changes to processes.

Financial

Risk Description

Strategy and market disruptions - The
energy market is facing a growth in disruptive
technologies and calls for renewable energy by
the public. Further, consumer energy demand
may reduce due to energy efficient products or
significantly increase due to initiatives such as the
Government of Jersey zero carbon plans.

Revenues - Reduction in unit sales of electricity
due to, for example, energy efficiency and the
corresponding impact on the competitiveness of
electricity in the heating marketplace.

Market volatilities and affordable energy
- A significant proportion of our profitability
and price competitiveness is dependent upon
our ability to manage exposure to increasingly
volatile power and foreign exchange markets.

Pension liabilities - Volatility of markets
impacting our Defined Benefit Pension Scheme
position e.g. liabilities increase due to market
conditions or demographic changes and/or
investments underperform.

How we manage the risk

COVID 19 threats and response

Risk movement: Stable

• The Director of Operations is busy with a

programme to Protect the Business Model i.e.
(Vision 2020 - new long-term strategic growth
model to address potential disruptions in the
energy market).

• A dedicated team work on initiatives in these areas
- including EV (establishing 75 stations on island,
solar power and other renewable options).

• There are also longer-term implications on load growth

of widespread take up of solar panel technology
combined with battery storage systems for homes and
businesses (or similar renewable technologies).

• The prime defence against falling volumes is to

migrate existing customers who use gas/oil as their
primary heating source to all-electric solutions.
• A dedicated team work on initiatives in this area.
• Scenario and sensitivity analysis as part of our

long-term budgeting process.

• Power and foreign exchange are hedged in

accordance with the agreed strategies which are
reviewed and approved by the Board on a periodic
basis.

• The Board regularly monitors the latest position
regarding the Scheme and the impact that it is
having on the Company.

• The Trustees implemented an LDI strategy to

reduce the exposure to movements in the value of
pension liabilities.

• The Defined Benefit scheme was closed to new

members in 2013.

• A triennial valuation formally reports on performance.

Threat – Network grid not able to support load
growth due to high volume switch to electric heating
and significant increase in peak demands of our
customers.

Response – Roll out of smart meters (project is now
complete/smart chargers for EVs is being trialled).
Continuous monitoring in customer demand / switch
rates.

Threat – Business consumers, in particular hospitality, are
expected to reduce demand, which will be partially offset
by an increase in domestic demand during lockdown.

Response: Stress testing, usage modelling and monitoring
of key indicators regarding reduction in load.

Threat: Market reactions to the pandemic could
include movements in the value of sterling and other
financial instruments.

Response: Continuous monitoring and assessments
of market movements and impact to operating costs.

Threat: Market reactions to the pandemic could
impact the value of the investments or scale of
liabilities of the pension fund.

Response: Built in risk protection strategy of market
movements within the DB pension scheme (LDI
strategy).

FINANCIAL REVIEW

People

Risk Description

Establishing a robust and capable
workforce - If the Company is unable
to achieve performance targets, maintain
operations or provide adequate levels of
customer service due to capability and capacity
limits within the workforce.

Operational

Risk Description

Reliable and secure energy supply -
Failure of ageing metering infrastructure.

This risk also includes the unsuccessful delivery
of our major projects resulting in inability
to achieve overall project objectives and/or
additional costs or delays.

How we manage the risk

COVID 19 threats and response

• Long-range HR Strategy to attract and recruit new

talent to enable planning for the future.

• Frameworks in place to embed succession planning

Threat - Availability of staff for critical roles due
to social distancing rules and remote working may
impact productivity and maintaining operations.

Risk movement: Stable

throughout the group.

• Extensive networks have been built including access to
UK (Utility) skills to enable best practice development.

• Building skills resistance through training and

development programmes.

• Continually strive to build diversity across all types of

role and all levels within our business.

• Graduate and apprentice schemes, and ambassadors
that work with schools and education institutes to
encourage the younger generation to pursue STEM
careers.

Response - Cross training staff to help in non-
technical roles. Continuous monitoring of staff
wellbeing and productivity. Potential areas with skill
shortages have been addressed and mitigated.
Succession planning enacted where needed.

How we manage the risk

COVID 19 threats and response

Risk movement: Stable

Threat - Supply chain interruption due to delays to
the receipt of products and equipment required to
maintain the grid infrastructure, plants and assets.

Response - Strategic spares and inventory
management. Maintenance and repair program
on going.

• The EDF and RTE contracts are key to the continuity

of supply of electricity to Jersey. We maintain a strong
relationship with the network operators and engage
in ongoing dialogue to understand any developments
that might impact security of supply.

• A strong cable repair capability and a programme of

maintenance exists to optimise the life of assets.
• Exploring potential options in the renewables space
that would result in less dependence on importation.
• The completion of Smart Switch project has resulted in
a smarter more modern metering solution replacing
legacy systems, thus reducing this risk.

• Regular project progress updates issued to both
management and the Board, including plans to
address any issues.

Business Continuity - Failure and/or
unavailability of significant plant and/or
importation assets which cause disruption to
our operations which may result in a loss of
electricity supplies to customers.

Health and Safety - There is a level of
inherent health and safety risk due to the
nature of the activities we undertake. Failure to
manage these risks effectively could result in
death or injury, regulatory action or litigation.

Environment - Substantial and long-term
environmental damage is caused as a direct
result of JE processes, services and business
activities.

Cyber threat and Information Security
risk - Due to the nature of our business, we
recognise that our critical infrastructure and
IT systems may be a potential target for cyber
threats.

• Three subsea cables to France via different routes
provide resiliency with regards supply importation
cables.

• On-Island back-up generation in the event of service

Threat - The impact of the pandemic increases
the risk of the group not being able to meet its
operational obligations to maintain the continuity of
electricity supply.

disruption on importation from France.

• Use of a comprehensive business continuity planning

process including periodic testing under various
scenario exercises.

• A proactive safety culture has been nurtured

throughout the organisation supported by a safety
management structure, Safety Representatives,
programmes of site inspections, regular training and
induction training.

• Performance measures are explicitly presented as a

separate agenda item at each Board meeting.

• British Safety Council audits on our health and safety

performance every three years.

• A Health and Safety team sets standards and monitors

performance against those standards.

Response - Business continuity plans enacted.
Regular communications with EDF and RTE.

Threat - Concerns regarding the health and well
being of our staff, customers, suppliers, partners
and the general public, as a result of the pandemic.

Response - Proactively sourcing PPE, updated
safety procedures, mental health calls and support,
engagement survey during lockdown (focus on
wellbeing), on-going site inspections.

• Environment policies and procedures in place.
• Surveys and inspections of sites, assets, and materials.
• British Safety Council audits on environmental

performance every three years.

• Commitment to supporting government environmental
objectives, through renewable energy (solar power)
and providing charging outlets for EVs.

Threat - Concerns that environment site inspections
or monitoring program may be reduced or put
on hold due to social distancing and other H&S
obligations.

Response - Ongoing site inspections and
environment surveys, where safe to do so.

• We continue to use industry best practices as part of

our cyber security policies, processes and technologies.
• Cyber awareness training has been carried out with all
staff with access to corporate IT systems and there is a
programme of follow-up monitoring and training.
• Disaster recovery procedures are incorporated within
our business continuity arrangements and periodic
external reviews are undertaken.

• Core applications are only accessible through a secure

portal that require three factor authentications.

Threat - Instances of phishing emails and cyber-
attack increasing due to criminals taking advantage
of the general public’s lack of focus on IT security
due to pandemic distractions. Further, increase in IT
vulnerabilities due to remote working.

Response - Advanced security controls embedded
within desktop computers provided for remote
working. Enhanced IT security protocols and access
controls applied to Office 365.

Emerging risk and unquantifiable threats
As with all businesses, we face a number of uncertainties where
an emerging threat may potentially impact us in the longer term.
Where there is insufficient information available to understand the
likely scale, impact or velocity of the risk, we have classified these
threats as emerging risks and added them to a watch list.

Due to the nature of emerging risks, we are not able to fully define
a mitigation plan until we have a better understanding of the
threat and impact to Jersey Electricity, however processes have
been established to help identify and monitor these threats as they
become material or the impact becomes quantifiable.

Through broad dialogues involving different and appropriate
stakeholders, we have created a watchlist of emerging risks
which are reviewed and assessed on a regular basis by both
management and the Audit and Risk Committee. Some examples
of these risk include:

UK’s departure from the EU (Brexit)

Emerging risk description: We continue to maintain a watching
brief on Brexit developments. Although Jersey is not in the EU, the
UK decision to exit has created uncertainty for the Island. The most
material individual trading relationship we have is our electricity
importation arrangements with EDF and RTE in France.

Managing the risk:
• We have received confirmation that our long-term contractual
agreements, which have been in place for 35 years, would not
be affected.

• We extended the current supply arrangements with EDF by
a further five years to the end of 2027. Foreign exchange
considerations are also a risk, but as referred to on page 46,
we continue to hedge on an on-going basis.

• In addition, we have examined our supply chain, and existing
contractual arrangements, for all our business units and have
proactively engaged with the Jersey Government to ensure any
concerns we have are voiced and understood.

• Uncertainty remains on what a ‘no deal’ situation might mean

to supply chain arrangements and as mitigation we now hold a
higher stock level of items felt essential to our business units.

Climate change

Emerging risk description: There is clear evidence that global
temperatures are rising rapidly and that climate change poses a
number of risks. Given the wide range of outcomes, it is difficult
to predict the exact impact of global warming, however we are
planning well into the future to understand what changes are likely
to be experienced in Jersey. It is likely that climate change will bring
about changes to both the weather (such as storms and heatwaves)
and regulatory obligations (new or strengthened carbon neutrality
commitments).

Managing the risk:

• We continue to monitor political and legislative developments
and assess the opportunities and threats to enable us to
respond effectively.

• JE participation and involvement in the development and

implementation of the States’ Energy Plan.

• Monitor political and legislative developments (e.g. Carbon

Neutrality by 2030) and analyse the opportunities and threats to
enable us to respond effectively.

• As part of the Government’s Energy Plan, an Energy Partnership
was formed (ministerial energy executive and multi-stakeholder
energy forum, including JE). This partnership is responsible for
monitoring the progress of all the associated work streams for
implementation of the plan.

Viability Statement
In accordance with provision 31 of the 2018 revision of the Code,
the Directors have assessed the prospect of the Company over a
longer period than the 12 months required by the ‘Going Concern’
provision. As disclosed last year, the Board conducted this review
for a period of five years, selected because annually a refreshment
of the Five-Year Plan is performed with the latest version presented
to the Board in September 2020. This included an assessment of
how COVID-19 related risks might potentially impact matters on a
longer-term basis.

This document considers our forecast investment, hedging
policy for electricity procurement and linked foreign exchange
requirements, debt levels and other anticipated costs, and the
resultant impact on likely customer tariff evolution. In addition,
material sensitivities to this base case are considered. We have a
strong balance sheet with net assets of over £200m supported by
£30m of long-term debt funding which expires in 2034 and 2039.

Stress testing of the cost base of our Energy business was
performed to establish the impact of material movements in both
foreign exchange and wholesale electricity prices. A reduction in
the volume of unit sales of electricity through, for example, energy
efficiency is being mitigated by switching existing customers, who
use gas/oil as their primary heating source, to all-electric solutions.
A dedicated team work on initiatives in this area. However, as we
employ a ‘user pays’ model the Board has comfort on the longer
term consequences of a reduction in the volume of electricity sales,
a permanent weakening in Sterling, or a material rise in European
wholesale power prices (albeit we continue to strive to deliver price
stability for our customer base).

Based on the results of this analysis, and on the basis that the
fundamental regulatory and statutory framework of the market in
which the Company operates does not substantially change, the
Directors have a reasonable expectation that the Company will be
able to continue to operate, and meet its liabilities as they fall due,
over the five-year period of their assessment through to 2025.

In making this statement the Directors have considered the
resilience of the Company taking into account its current position,
its principal risks and the control measures in place to mitigate
each of them. In particular, the Directors recognise the significance
of the strong Jersey Electricity plc balance sheet, and committed
lending facilities, that will be available in most circumstances.

GOVERNANCE

Board of Directors

Phil Austin MBE

Chris Ambler

Tenure on Board

Appointed 12 May 2016 and
Chairman from 28 February 2019

Appointed as CEO 1 October 2008

Committee Memberships

Nominations Committee

Remuneration Committee

Experience

Financial services background and
board level experience across a wide
range of listed and private companies

Chartered Engineer in various
leadership and general management
roles in blue chip multinationals

Strategy consultancy experience MBA
(INSEAD)

Broad experience across global utility,
chemicals and industrial sectors

Relevant Skills

Extensive experience in leadership
and management

Deep understanding of governance
standards and requirements

Good communication skills

Leadership and management

Strategy development

M&A and corporate finance

External Appointments

Chairman of Octopus Renewables
Infrastructure Trust plc

Non-Executive Director of Apax
Global Alpha Ltd

Non-Executive Director of Blackstone/
GSO Debt Funds (Europe) Ltd

Non-Executive Director of Foresight
Solar Fund Ltd

Non-Executive Director of City
Merchants High Yield Trust Ltd

Non-Executive Director of Ravenscroft
Cash Management Ltd

Martin Magee

Aaron Le Cornu

Alan Bryce

Appointed as Finance Director 8 April
2002

Appointed 1 January 2011
and Senior Independent Director
3 March 2016

Appointed 17 December 2015

Remuneration Committee (Chairman)

Nominations Committee (Chairman)

Audit and Risk Committee

Chartered Accountant

Broad experience across a number
of senior finance roles in UK listed plcs,
including utilities

Financial services and consultancy
background

Board level experience across private
equity and Fintech

Extensive board level experience in
electricity generation, and transmission
and distribution in the UK and USA

Non-executive experience in water
industry and wind farm development

Wide range of roles in corporate
strategy, M&A and utility regulation

Strong financial analysis and planning
skills

Commercial bias

Strong background in transactional
activity

Extensive financial skills

Business leadership and governance

Corporate finance experience

Broad range of management
and leadership experience

Chartered engineer with extensive
knowledge of the utility industry

Asset and operational risk management

Chairman of Aberdeen Standard
Capital Offshore Strategy Fund Ltd

Non-Executive Director of Jersey Post
International Ltd

Non-Executive Director of Northern
Ireland Electricity Networks Ltd

Board of Directors

Wendy Dorman

Tony Taylor

Tenure on Board

Appointed 14 July 2016

Appointed 21 September 2017

Committee Memberships

Audit and Risk Committee (Chairman)

Remuneration Committee

Nominations Committee

Experience

Chartered Accountant with audit
and tax experience

Senior management roles in leading
global advertising agencies

Leadership positions including Head
of Tax for PwC Channel Islands and
company Non-Executive Director roles
with audit chair experience for listed
companies

Relevant Skills

Leadership and management

Strategic planning

Infrastructure investment

Customer experience

Accountancy, audit and taxation

Stakeholder engagement

Marketing and communications

External Appointments

Non-Executive Director of 3i
Infrastructure plc

Non-Executive Director of Jersey Milk
Marketing Board

Non-Executive Director of New City
High Yield Fund Limited

Non-Executive Director of Jersey Sport

Peter Simon

Amanda Astall

Appointed 28 February 2019

Appointed 1 June 2020

Audit and Risk Committee

Remuneration Committee

Executive leadership across strategy
and M&A advisory, financial services,
energy supply, in-home services, and
smart home consumer technology

Executive leadership experience as
Chair and Managing Director of global
management consultancy Accenture
UK/Ireland plc

Extensive experience of chairing
Audit and Risk committees across UK
Government and listed companies

UK retail and SME energy services and
supply markets

Digital and cyber skills developed
through work with CPNI and NCSC

Digital and data-led business
transformation

Familiarity with UK and US GAAP
accounting

Growth and scale-up business strategy

Preparation/approval of UK government
and company accounts internationally,
including USA and South Africa

Non-Executive Director of EnergyUK

Non-Executive Director of Paragon ID

Non-Executive Director of Standard
Bank Offshore Group Ltd

Non-Executive Director of VFS Global
AG

GOVERNANCE

Directors’ Report
for the year ended 30 September 2020

The Directors present their annual report and the audited financial statements of Jersey Electricity plc (“the Company”) and Jersey Deep

Freeze Limited (together “the Group”) for the year ended 30 September 2020.

Principal activities
The Company is the sole supplier of electricity in Jersey. It is involved in the generation and distribution of electricity and jointly operates

the Channel Islands Electricity Grid System with Guernsey Electricity Limited importing power for both islands. It also engages in retailing,

property management, building services and has other business interests, including software development and consulting.

Section 172(1) statement
Section 172(1) statement Provision 5 of the Code states that, in the context of how the Board understands the view of key stakeholders,

the Board should describe in the Annual Report how the matters set out in section 172 of the Companies Act 2006 have been considered

in Board discussions and decision making. As a Jersey incorporated company, the Board is not subject to section 172. Nevertheless, as a

matter of good governance, the Board has set out how they deliver against these duties where appropriate. The Board of Jersey Electricity

plc considers that they have acted in good faith and in a manner which they believe is likely to promote the continued success of the

Company, for the benefit of all its stakeholders as a whole. In addition to its shareholders, the Board engages with Government, local

Parishes, suppliers, customers, employees and pensioners. Our Vision is to ‘enable life’s essentials and inspire a zero-carbon future’ which

is aligned to a key goal of the Island to achieve carbon neutrality. In addition to pursuing organic and inorganic growth, strategic focus

is on building a sustainable business, product development, customer service, investing in the development of new technology and in our

workforce. The Board aims to ensure that our employees work in a safe environment, receive appropriate training and are sufficiently

rewarded for their efforts.

Dividends
The Directors have declared and paid, and now recommend the following dividends in respect of the year ended 30 September 2020:

Preference dividends

5% Cumulative Participating Preference Shares at 6.5%

3.5% Cumulative Non-Participating Preference Shares at 3.5%

Ordinary dividends

Ordinary and ‘A’ Ordinary Shares

2020

5,200

3,773

8,973

2019

5,200

3,773

8,973

Interim paid at 6.80p net of tax for the year ended 30 September 2020 (2019: 6.45p net of tax)

Final proposed at 9.70p net of tax for the year ended 30 September 2020 (2019: 9.25p net of tax)

2,083,520

2,972,080

5,055,600

1,975,641

2,834,200

4,809,841

Re-election of directors
Since 2018 all Directors seek re-election annually at each AGM.

Directors’ and officers’ insurance
During the year the Company maintained liability insurance for its Directors and Officers.

Policy on payment of creditors
It is Group policy, in respect of all of its suppliers, to settle the terms of payment when agreeing each transaction, to ensure that suppliers are

made aware of the terms of payment and to abide by those terms. The number of creditor days in relation to trade creditors outstanding at

the year end was 10 days (2019: 9 days).

Directors’ Report
for the year ended 30 September 2020

Substantial shareholdings
As at 17 December 2020 the Company has been notified of the following holdings of voting rights of 5% or more in its issued share capital:

Equity

Ordinary Shares

The Government of Jersey hold all of the Ordinary shares which amounts to 62% of the ordinary share capital and represents 86.4% of the

total voting rights. This is held as a strategic investment in their balance sheet and not consolidated.

‘A’ Ordinary Shares

‘A’ Ordinary shares entitle the holder to 1 vote for every 100 shares held whereas the Ordinary shares carry voting rights of 1 vote for every

20 shares held.

Huntress (CI) Nominees Limited is the largest shareholder of our listed shares and hold 5,210,461 ‘A’ Ordinary shares which represent 5%

of the total voting rights. It is understood that the underlying owners of these shares are substantially private investors based in the Channel

Islands.

Auditor
A resolution to re-appoint PricewaterhouseCoopers CI LLP as auditor will be proposed at the next Annual General Meeting.

BY ORDER OF THE BOARD

L. FLORIS

Secretary

17 December 2020

GOVERNANCE

Corporate Governance

Corporate Governance
The Directors are committed to maintaining a high standard of Corporate Governance in accordance with The UK Corporate Governance

Code 2018 (“the Code”), as incorporated within The Listing Rules, issued by the Financial Conduct Authority. The Listing Rules require the

Company to set out how it has applied the main principles of the Code and to explain any instances of non-compliance. In accordance with

Listing Rule (“LR”) 9.8.4 R, the agreement related to ‘Independent business’ required by LR 9.2.2A (2) (a) R has been entered into with the

Government of Jersey, with effect from 17 November 2014. The company has complied with the independence provisions included in the

agreement during this financial year and believes the controlling shareholder is also compliant. The other applicable information required by

LR 9.8.4 R (5)/(6) is disclosed in external appointments.

The Directors have reviewed, and applied, the latest UK Corporate Governance Code applicable to accounting periods beginning on or after

1 January 2019, together with the supporting Guidance on Board Effectiveness and applied it within these financial statements.

The Code is available at www.frc.org.uk.

Statement of Compliance
At the time of signing off the 2020 Annual Report the Board considers that it has complied with the Code.

The Board
The Board provides effective leadership and currently comprises seven non-Executive and two Executive Directors. They are collectively

responsible for the long-term success of the Company and bring together a balance of skills, experience, independence and knowledge.

The Chairman and the Chief Executive Officer roles are divided with the former being appointed by the Directors from amongst their number.

Aaron Le Cornu is the Senior Independent Director.

Independence
The non-Executive Directors serving at the balance sheet date were Wendy Dorman, Amanda Astall, Aaron Le Cornu, Alan Bryce, Phil Austin,

Tony Taylor and Peter Simon and they were all considered independent. Aaron Le Cornu, who has served on the Board since January 2011

is retiring from the Board at the 2021 AGM. The Board determined he remained independent, despite serving for more than 9 years. In

making this determination, the Board took into account his breadth of experience, his financial independence and his other business interests.

On appointment to the Board the required time commitment is established and any significant changes to time commitments are notified

to the Board. An induction process is in place for all newly appointed Directors. The Board is responsible to the Company’s shareholders

for the proper management of the Company. It meets regularly to set and monitor strategy, review trading performance, perform a robust

assessment of the principal risks that could threaten the business model, future performance, solvency or liquidity (see Principal Risks section

on pages 49 and 50), examine business plans and capital and revenue budgets, formulate policy on key issues and review the reporting

to shareholders. Board papers are circulated, with reasonable notice, prior to each meeting in order to facilitate informed discussion of the

matters at hand. Members of the Board hold meetings with major shareholders to develop an understanding of the views they have about

Jersey Electricity.

Corporate Governance

The following table sets out the number of meetings (including Committee meetings) held during the year under review and the number of

meetings attended by each Director.

Board Audit and Risk Remuneration Nominations

No of meetings

C.J. Ambler

A. Astell

P.J. Austin

A.A. Bryce

W.J. Dorman

A.D. Le Cornu

M.P. Magee

P. Simon

T. Taylor

* attendees by invitation

Performance Evaluation
The effectiveness of the Board is vital to the success of the Company. An external evaluation took place during 2018 using The Trusted

Advisors Partnership Ltd, an external recruitment consultancy firm which has no direct connection with the Company, the findings of which

were reviewed and actions implemented. During 2019 and 2020 internal evaluations, including those of Board sub-Committees’, were

co-ordinated by the Chairman. As the policy is to have an external review every 3 years, the next one will take place in 2021. In addition, the

non-Executive Directors meet at least twice a year, without the Executive Directors being present, with an explicit topic being the performance

of the Executive Directors. Finally, the Senior Independent Director meets the other non-Executive Directors once a year to discuss the

performance of the Chairman (without his presence).

Workforce Engagement
During the current year, a workforce engagement and culture forum was established with representatives from across the Company.

The Chairman of the Remuneration Committee attended this forum which provided an opportunity to gain first hand feedback from the

workforce.

In addition, the maintenance of the right culture within Jersey Electricity remains a priority. The use of staff surveys to collect data, the

promotion of people development (through our ‘Living Leader’ and ‘How To’ programs) and a continued focus on the safety of both our staff

and customers are key tools in the delivery of this objective.

The key procedures which the Board has established to provide effective controls are:

Board Reports
Key strategic decisions are taken at Board meetings following due debate and with the benefit of Board papers circulated beforehand. The
risks associated with such decisions are a primary consideration in the information presented and discussed by the Board who are responsible

for determining the nature and extent of the risk it is willing to take to achieve the strategic objectives. Prior to significant investment decisions

being taken, due diligence investigations include the review of business plans by the Board.

Management Structure
Responsibility for operating the systems of internal control is delegated to management.

There are also specific matters reserved for decision by the Board; and these have been formally documented and a summary of the key

types of decision made by the Board is as follows:

• Strategy and Management including:

Approval of the Company’s long-term objectives and commercial strategy.

Approval of the annual operating and capital expenditure budgets and any subsequent material changes to them.

• Changes in structure and capital of the Company

• Financial reporting and controls including:

Approval of the Annual Report and Financial Statements.

Declaration of the interim dividend and recommendation of the final dividend.

GOVERNANCE

Corporate Governance

• Internal controls/Risk Management

Reviewing the effectiveness of the Company’s internal control and risk management systems. An external review of the risk management

process is conducted every three years.

• Approval of contracts

Including material contracts, investments, capital expenditure and bank borrowings.

• Board membership and other appointments

Approval of changes to the structure, size and composition of the Board and key Committees, following recommendations from the

Nominations Committee. A Board Charter detailing the matters reserved and the roles and responsibilities of the officers of the Company

is available on our website (www.jec.co.uk).

• Remuneration

Determining the remuneration policy for the directors and other senior management, following recommendations from the Remuneration

Committee.

• Corporate governance matters

Undertaking a formal and rigorous annual evaluation of its own performance, that of its Committees and individual Directors. Review of

the Company’s overall corporate governance arrangements.

• Approval of key Company policies

These include policies on health and safety, share dealing and gender diversity.

Internal Audit/Risk Management
There is a permanent internal audit function involved in a continuous structured review of the Company’s systems and processes, both

financial and non-financial. Internal Audit manage the process of strategic and operational risk reviews and facilitate risk review workshops

with departmental managers. The Head of Internal Audit has direct access to the Audit and Risk Committee Chairman and also attends Audit

and Risk Committee meetings, at which risk based internal audit plans are discussed and approved.

Personnel
The Company ensures that personnel are able to execute their duties in a competent and professional manner through its commitment to

staff training, regular staff appraisals and organisational structure.

Budgetary Control
Detailed phased budgets are prepared at profit centre level. These budgets are approved by the Board, which receives sufficiently detailed

financial data to monitor the performance of the Company with explanations of any material variances.

Audit and Risk Committee
The Audit and Risk Committee reviews the effectiveness of the internal control and risk management processes throughout the accounting

period as outlined above. In addition, it conducts “deep dive” reviews on specific identified risks to test assumptions on the substance of

such risks and their mitigation. More detail on the Group’s principal risks, and how they are managed, is provided in the Financial Review

within this Annual Report (see the Principal Risks section on pages 49 and 50). The Audit and Risk Committee also reviews and monitors the

independence of the external auditors and the non-audit services provided to the Group.

Stakeholder Engagement
The Company maintains an active dialogue with its largest shareholders and meetings between Government of Jersey (which owns 62%

of our Ordinary share capital) include both the non-Executive Chairman as well as the Chief Executive. The primary responsibility for

relationship matters with listed shareholders lies with the Finance Director who reports to each Board meeting on investor relations. Jersey

Electricity also has a number of other important stakeholders including Government, the local Parishes, suppliers, customers, employees and

pensioners and a presentation was provided to the Board in May 2020 on how such relationships are managed and can be improved.

Nominations Committee Report

On behalf of the Board, I am pleased to report on the work of the Nominations Committee for the financial year ended 30 September 2020.

Membership
In compliance with the Code, the Committee comprises a majority of independent Non-Executive directors, the Chairman of the Board

and the CEO. It is supported, when required, by the Human Resources Director and the Company Secretary. There were no changes to the

membership during the reporting period, and the Committee met twice formally. Membership and attendance at meetings is shown below.

Meetings Attended

Attendance

Alan Bryce (Chair)

Phil Austin

Chris Ambler

Wendy Dorman

Tony Taylor

100%

Key Focus
In fulfilling its duties, summarised in this report, the Committee has been particularly active on continuing to strengthen the skills and diversity

in the Board Room, to ensure that we have the right ones to deliver JE’s strategy and vision. During the year, this has been advanced through

the appointment on 1 June 2020 of Amanda Astall as Non-Executive Director and the annual review of ELT succession. In addition, the

Committee has focused on supporting the leadership of the Diversity and Inclusion (D&I) agenda at Board level, and on supporting and

monitoring progress across the organisation.

Appointments
In line with our Board succession plan, our Senior Independent Director and Chair of the Remuneration Committee, Aaron Le Cornu is

planning to retire at the AGM in 2021.

The recruitment of Amanda Astall, followed an extensive search conducted by island-based consultant Kendrick Rose. The decision to engage

Kendrick Rose in September 2019 was based on a successful track record with similar appointments, knowledge of the island market, and

independence, this being their first engagement with JE. Against a detailed role description, agreed with the Committee, over forty potential

candidates were identified. These were all reviewed by the Committee in December, with input from Kendrick Rose, and candidates were

interviewed in February by the whole Committee. The successful candidate then also met with the other board members.

Amanda brings new skills and diversity to the Board, in particular in the application of technology and digital to deliver transformational

change, knowledge of IT and cyber, engaging with island stakeholders, and corporate governance gained across a range of public and

private organisations. An induction program was arranged, including meetings with the CEO, Finance Director, Operations Director, and HR

Director, and visits to key business locations.

Succession
The Board is now well balanced in terms of relevant specialist skills mix and tenure, with an improving gender balance, as shown in Table 1.

Succession plans for senior management roles are appropriate, taking into account the need for some specialist skills that are in short supply

on island, and the benefits of appointing from both in-house and externally, based on merit, including contribution to diversity.

GOVERNANCE

Nominations Committee Report

Board Evaluation
The Committee works with the Chairman of the Board to lead the annual Board evaluation process. Our policy is to carry out an externally

facilitated evaluation every three years and an internal one in other years. Our cycle is to carry out the evaluation of both the Board’s

and Committees’ performance using a detailed questionnaire issued in July, which each director completes before a 1:1 meeting with the

Chairman in September. The process ensures a two way dialogue which includes confirming that directors continue to be able to commit

the required time to their duties, and that full opportunity is taken to optimise their contribution to the work of the Board and its Committees.

The evaluation is discussed by the Board in December when actions are agreed. Actions taken forward in the period included the focus on

Diversity and Inclusion, described below, and adopting a more formalised process to determine strategic Areas of Focus for the Board. The

areas identified are in the Chairman’s Report on page 3. In November, the Senior Independent Director carried out a separate evaluation of

the Chairman of the Board, which included garnering input from directors by questionnaire, followed up by separate discussions with each

Board member and feedback subsequently provided to the Chairman. The evaluation confirmed the Board was particularly welcoming of

the positive changes introduced by the Chairman, since taking on the role in February 2019, including more discussion of strategy and an

enhanced focus on governance.

Table 1: Board Mix of Specialist Skills, Tenure and Gender

Specialist skills

Board Governance

Engineering

Digital and Cyber

Finance and Accounting

Strategy, M&A

Customers and marketing

Energy and renewables

Gender

Male

Female

Tenure

>1 year

1-4 years

4-7 years

7-9 years

>9 years

*The CEO and Finance Director are included in this figure.

Duties of the Committee
The Terms of Reference for the Committee and the Terms of the Appointment of non-Executive Directors are available on our website (www.

jec.co.uk). A summary of the Committee’s key duties, which include a new one on D&I, adopted this year is:

• To review regularly the structure, size, balance and overall composition of the Board, and to make recommendations with regard to any

changes, with due regard to the skills needed for the future.

• To give full consideration to the pipeline of succession at Board level and Executive Leadership Team level, and to lead the process for any

appointments to the Board.

• To support the annual Board evaluation process and to make recommendations arising, including the annual reappointment of NEDs;

and

• To support the Board in its leadership of Company culture, in particular in pursuit of greater Diversity and Inclusion.

Diversity and Inclusion
The Committee recognises that we will benefit from greater levels of diversity both at Board level and in the Company as a whole, particularly

in respect of gender-balance. The composition of our employees by gender is presented below:

Male

Female

Company

First Line Reports

Senior leadership team

79%

84%

88%

Executive leadership team 100%

Board

78%

21%

16%

12%

22%

Nominations Committee Report

During the year, the Board has considered how it can best lead and support Diversity and Inclusion (D&I). We have a very committed and stable

workforce which makes it important to address D&I at three levels:

• Set a clear vision and policies for what D&I means, including realistic targets.

• Raise awareness, support and measure behavioural change in the organisation.

• Establish D&I friendly policies and outreach to attract into the Company, and retain, diverse candidates.

The Committee engaged Inclusive Employers, which JE has now joined, to run a workshop for directors and to inform changes we can make to

decision-making in the Board and Committees, to address D&I.

The Committee worked with the Human Resources Director to bring a series of recommendations to the Board in July. In particular, we adopted

a vision which embraces, all our staff understanding the need for a more diverse and inclusive workforce, driving a good balance of people with

protected characteristics in leadership roles, family-friendly policies, and best practice in recruitment. As part of director awareness, all Board

members undertook Unconscious Bias training. A practical process change we have made at the Board is to introduce D&I Impact Assessments,

which will accompany future strategic options and decision papers.

More broadly, the Business is driving its D&I strategy through the four strands of Workforce Culture, Hiring, Schools Engagement, and Performance

and Data. A change programme in Leadership culture has been underway in recent years, including the investment in “Living Leaders”, which has

provided a sound foundation for taking D&I agenda forward. To track organisational progress, the Board now monitors a number of recognised

diversity KPIs, mainly focused on recruitment processes, retention and progression of employees with D&I characteristics, and reach of D&I friendly

policies. It is also introducing an “Inclusion Maturity Model” to measure how well D&I is becoming embedded in the business culture.

Finally, the Board appointed a new “board apprentice”, our second, in September and she will be attending Board meetings during 2020/21.

By providing this opportunity to gain experience of a plc Board, we are looking to support the pipeline, of female candidates in particular, for future

board positions in organisations and companies across the Jersey Economy.

On behalf of the Committee

A. BRYCE
Chairman
17 December 2020

GOVERNANCE

Audit and Risk Committee Report

Committee purpose
The purpose of the Committee is to support the Board with its responsibilities in relation to financial reporting, risk management and internal

controls.

Membership and meetings
I took on the role of Audit and Risk Committee Chair in March 2019, replacing Aaron Le Cornu. Aaron remains on the Committee, together

with Alan Bryce and Peter Simon. Amanda Astall, our new non-Executive also joined the Committee in June 2020. I would like to thank all

Committee members for their support over the year.

Committee members bring a wealth of experience gained in commerce, private practice and other non-Executive roles as well as extensive

experience of the utility sector and technological innovation and change. Full biographies of all members are provided on pages 52 to 55.

The meetings provide a forum for discussions with both Company staff and the external auditor. Meetings are also attended, by invitation,

by the Chief Executive Officer, the Finance Director, the Financial Controller, the Company Secretary, and members of both the external audit

and internal audit teams. The Committee members are all non-Executive Directors.

The Committee met four times in the last financial year.

The role of the Committee
The key responsibilities of the Committee are to:

• Monitor the integrity of the financial statements and to report to the Board on key judgements and significant issues contained therein

• Oversee the independence, effectiveness and remuneration of the external auditor

• Review and challenge the effectiveness of the Company’s internal controls and risk management processes

• Monitor compliance with the UK Corporate Governance Code

• Monitor principal and emerging risks and the robustness of the risk management framework

• Ensure the effectiveness of the internal audit function

As part of the review of the annual and interim financial statements, the Committee reviews the likely significant issues and in particular any

critical accounting judgements identified by both the Company and discussed with the external auditor, which are disclosed in Note 2 to the

Financial Statements (Critical Accounting Judgements and key sources of estimation uncertainty). Comprehensive position papers on each

key area are produced by the Finance team at both the half and full year. Some of the areas are recurring items such as revenue recognition,

impairment of assets, retirement benefit obligations and hedge accounting. In addition, provisioning for bad debts received focus due to the

COVID-19 crisis. The Committee reviews any year-on-year changes in methodology for reasonableness, and assesses the impact of any new

accounting policies.

The Committee is also responsible for monitoring the controls which are in force (including financial, operational and compliance controls

and risk management procedures) to ensure the integrity of the financial information reported to stakeholders. The Committee considers
reports from the internal and external auditors and from management and provides comment on salient issues to the Board. During the year

the Committee held a Risk and Governance session to which the whole Board was invited. The session focussed on principle and emerging

risks, the impact of COVID 19, and compliance with the 2018 Corporate Governance Code. In addition, the Committee regularly reviews the

scope and results of the work undertaken by both the internal and external auditors. The Terms of Reference for the Audit and Risk Committee

are available on our website (www.jec.co.uk).

Whistleblowing policy
The Committee is responsible for reviewing the Company’s Whistleblowing policy and management’s response to any concerns raised

through this channel. A revised policy, renamed Speak Up Policy, was approved by the Committee in May 2020.

External auditors
A tender process for the external audit was carried out in 2015 and Deloitte were successful in retaining the engagement. This year it was

decided to retender the external audit and the retender process was carried out in early 2020. Three firms were invited to tender, of which

two presented their proposal for the audit to the Committee. Following the process, as recommended by the Committee to the Board,

PricewaterhouseCoopers CI LLP (PwC) replaced Deloitte as our auditor.

Audit and Risk Committee Report

The Committee will continue to keep under review all aspects of the relationship with the external auditor and will initiate its next tender process at

what is deemed an appropriate time taking into consideration the period since the last tender. Non-audit services are reviewed on a case by case

basis. As disclosed in Note 6 to the Financial Statements, no non-audit services were provided by PwC, or Deloitte prior to their resignation, in the

year. The effectiveness of the external auditor is considered on an ongoing basis driven primarily by discussions with the external auditor and finance

team on the maintenance of audit quality, and a meeting each January to discuss learnings from the audit process that has just been completed for

the prior year. The surety of auditor independence was received from PwC during the tender process and again during the audit process.

The Committee has approved the external auditor’s remuneration and terms of engagement and is fully satisfied with the performance, objectivity,

quality of challenge and independence of the external auditor.

Fair, balanced and understandable
On behalf of the Board, the Committee considered whether the 2020 annual report and financial statements taken as a whole are fair, balanced and

understandable, and whether the disclosures are appropriate. The Committee reviewed the Group’s procedures around the preparation, review and

challenge of the report and the consistency of the narrative sections within the financial statements and the use of alternative performance measures

and associated disclosures. The Committee also considers any potential inconsistencies raised by the external auditor.

Following its review, the Committee is satisfied that the annual report is fair, balanced and understandable, and provides the information necessary

for shareholders and other stakeholders to assess the Company’s position and performance, business model and strategy, and has advised the Board

accordingly.

Internal Control
The Board is responsible for establishing and maintaining the Company’s system of internal control and for the management of risk. Internal control

systems are designed to meet the particular needs of the business and the risks to which it is exposed, and by their nature can provide reasonable but

not absolute assurance against material misstatement or loss. This process has been in place throughout the year up to the date of approval of the

financial statements and is in accordance with The UK Corporate Governance Code.

Committee members have regular meetings with Internal Audit to evaluate both performance, and any impediments that might exist, which would

constrain their work. The Committee also approve the plan of work for the Internal Audit function in advance of the following year. In addition,

independent reviews are undertaken on a regular basis. Throughout the year, the majority of the internal audit reviews were undertaken by BDO or

other specialist third party providers on an outsourced basis, directed by our in-house team. The review of reports provided by Internal Audit and the

monitoring of action points relating to findings provides the Committee and the Board with comfort over the functioning of internal controls.

The COVID-19 pandemic and associated restrictions imposed in Jersey and France necessitated a change in working practices during the year, as

well as negatively impacting our business and household customer base. The risks associated with COVID-19, and corresponding risk management

controls put in place, were monitored by the Board and the programme of Internal Audit reviews was modified to include testing of the Company’s

response to the crisis.

During the year the Committee reported to the Board on how it has carried out its responsibilities and highlighted key matters arising at each Board

meeting. All recommendations of the Committee were accepted by the Board.

On behalf of the Committee

W. DORMAN

Chairman

17 December 2020

GOVERNANCE

Statement of Directors’ Responsibilities

Directors’ Responsibilities for the Financial Statements
The Directors are responsible for preparing the Annual Report, Directors’ Remuneration Report and the Financial Statements in accordance

with applicable law and regulations.

Company Law requires the Directors to prepare Financial Statements for each financial year. The Directors are required by the IAS Regulation

to prepare the Group Financial Statements under IFRS as adopted by the European Union. The Financial Statements are also required by

Company Law to give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

International Accounting Standard 1 requires that Financial Statements present fairly for each financial year the Group’s financial position,

financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in

accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting

Standards Board’s ‘Framework for the preparation and presentation of financial statements’. In virtually all circumstances, a fair presentation

will be achieved by compliance with all applicable IFRS. However, Directors are also required to:

• properly select and apply accounting policies;

• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable

information;

• provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users to understand the

impact of particular transactions, other events and conditions on the entity’s financial position and financial performance; and

• make an assessment of the Company’s ability to continue as a going concern.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position

of the Company and enable them to ensure that the financial statements comply with the Companies (Jersey) Law 1991. They are also

responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and

other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s

website. Legislation in Jersey and in the United Kingdom governing the preparation and dissemination of Financial Statements may differ

from legislation in other jurisdictions.

The Directors consider that the Group has adequate resources to continue in operational existence for the foreseeable future. The Financial

Statements are therefore prepared on a going concern basis. Further details of the Group’s going concern review are provided in note 1 of

the financial statements on page 81.

Having taken advice from the Audit and Risk Committee, the Board considers the annual report and financial statements, taken as a

whole, to be fair, balanced and understandable and that it provides the information necessary for shareholders to assess the Company’s

performance, business model and strategy.

Responsibility Statement
We confirm that to the best of our knowledge:

• the financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the European Union,

give a true and fair view of the assets, liabilities, financial position and profit of the Company and the undertakings included in the

consolidation taken as a whole; and

• the management report includes a fair review of the development and performance of the business and the position of the Company and

the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that

they face.

By order of the Board

C.J. AMBLER

Chief Executive Officer

17 December 2020

M.P. MAGEE

Finance Director

17 December 2020

Remuneration Committee Report

On behalf of the Board, I am pleased to present the Remuneration Committee’s (the Committee) report for the financial year ended

30 September 2020. I would like to thank the other Committee members for their valuable help during the last year, being Phil Austin,

Tony Taylor, Peter Simon and Amanda Astall, our new non-Executive Director, who joined during this year.

The Chairman of the Board, Phil Austin, was appointed to the Committee.

The terms of reference for the Committee have been updated during the course of this year, and approved by the Board, and these are

available on the Company’s website (www.jec.co.uk). As part of this exercise, we carefully considered the 2018 changes to the UK Corporate

Governance Code, which seeks to broaden the role of the Committee.

Four Committee meetings took place during the last financial year with 100% attendance by all Committee members.

Remuneration Policy
In line with the authority delegated by the Board, the Committee sets the Company’s Remuneration Policy and is responsible for determining

the remuneration terms and conditions of employment for the Executive Directors. The Committee also reviews the remuneration for the

broader senior management team and the general pay policy for the wider workforce to ensure there is a degree of alignment across the

organisation.

The Committee’s key considerations in reviewing Executive Directors’ remuneration includes alignment with the strategic objectives and

the extent to which remuneration will attract, motivate and retain the talent needed to achieve the long-term success of the Company. The

Committee aims to set remuneration packages for the Executive Directors that reflect the market for comparable roles and fairly reward them

for their contribution to the overall performance of the Company. Remuneration packages comprise basic salary and benefits together with

a performance related annual bonus. Benefits for Executive Directors principally consist of membership of the pension scheme, a car or car

allowance, private health care and a subsidised loan to assist with housing.

The salary and benefits for the Executive team are reviewed by the Committee each November. In recent years, we commissioned a third

party provider to undertake a comprehensive review of the competitor landscape to benchmark the remuneration for our Executive Directors

and to advise on the design of the Executive bonus scheme. This benchmarking made reference to comparable companies in the UK/EU, as

this is considered the relevant labour market for the skills required. The Committee also makes use of locally focussed benchmarking data.

During the year, the Committee approved salary increases of 3% for the Executive Directors. These increases were in line with the increases

awarded to the wider employee population.

Variable component of Executive remuneration
The Executive annual bonus is designed to promote the long-term success of Jersey Electricity and progress on delivering the vision and

strategy. The bonus payable to the Executive Directors is performance related, taking account of delivery against both corporate and
personal objectives which are agreed by the Remuneration Committee, using a Corporate Scorecard framework, and approved by the

Board, before the start of the financial year. This structure is also shared across the wider management team to ensure alignment of

understanding regarding priorities and covers the core measures of client service/satisfaction, employee engagement, health and safety,

financial performance and delivery on key strategic objectives. For example, during the year to September 2020, key strategic objectives in

the Corporate Scorecard included delivering renewable projects and enhancing the stakeholder management programme. Consideration

was also given to the effectiveness of the contingency planning that was implemented during the COVID-19 crisis.

Each Executive Director has a maximum cap on their total variable pay. These maximum total variable awards are payable for outstanding

performance only. The bonus scheme was amended in 2019 to allow the Committee the discretion to defer up to 50% of the award for a

period of two years, with the ultimate pay-out linked to movements in the listed share price in the period before vesting. The bonuses paid

to the Executive Directors, as shown in the table below, exclude a 35% deferment of the total bonus for two years until November 2021. The

deferred amounts were £47,250 and £29,750 for C.J Ambler and M.P. Magee respectively set when the share price was £4.40. The deferred

element of the bonus is subject to malus and clawback provisions.

GOVERNANCE

Remuneration Committee Report

The remuneration paid, or estimated to be payable, to Directors for the year ended 30 September 2020 was as follows:

Bonus

awarded in

Basic awarded and

salary/fees

paid in year

year and

deferred

Benefits

in kind

Total

2019

2020

(Re-stated)

249,985

198,901

87,750

55,250

47,250

29,750

15,542

13,015

400,527

296,916

382,992

286,151

43,000

28,500

28,000

8,333

27,000

28,500

23,000

1,850

638

1,850

44,850

37,345

30,350

31,745

29,850

28,503

8,971

28,850

29,159

30,350

16,356

24,850

24,745

19,207

EXECUTIVE DIRECTORS

C.J. Ambler

M.P. Magee

NON-EXECUTIVE DIRECTORS

P.J. Austin

A.A. Bryce

W.J. Dorman

A.E. Astall (appointed 1 June 2020)

A.D. Le Cornu

P.M. Simon (appointed 28 February 2019)

A.H. Taylor

G.J. Grime (retired 28 February 2019)

Total

635,219

143,000

77,000

40,295

895,514

856,203

Service Contracts
The Executive Directors’ service contracts provide for a notice period of six months and they are put forward for annual re-election at each

Annual General Meeting (AGM). The non-Executive Directors’ service contracts have no unexpired term at the time of election, or re-election,

at the AGM.

Pension Benefits
Set out below are details of the pension benefits to which each of the Directors is entitled. These pensions are restricted to the scheme in

which the Director has earned benefits during service as a Director, but include benefits under the scheme for service both before and after

becoming a Director, including any service transferred into the scheme from a previous employment.

Increase

in accrued
pension
during the year1

Accrued

pension at
30.9.20202

Transfer

value at
30.9.20203

Transfer

value at
30.9.20193

Directors’

contributions
during year

Increase

in transfer value
less Directors
contributions4

C.J. Ambler
M.P. Magee5

£5,924

£6,176

£64,208

£100,859

£1,407,203

£2,453,132

£1,229,610

£2,325,393

-6
£11,934

£177,593

£115,805

Notes
1. The increase in accrued pension during the year represents the additional accrued pension entitlement at the year end compared to the previous year end. The employer cash

contributions during the year were £66,496 and £40,974 for C.J. Ambler and M.P. Magee respectively.

2. The pension entitlement shown is that which would be paid annually on retirement at age 60, based on service at the year end.

3. The transfer values have been calculated using the basis and method appropriate at each accounting date. It is assumed that the deferred pension commences from the earliest age at

which the member can receive an unreduced pension. The transfer values include any accrued Additional Voluntary Contributions (AVC) pensions.

4. The increase in transfer value over the year is after deduction of contributions made by the Director during the year.

5. Along with all other Scheme members, Directors have the option to pay AVC’s to the Scheme to purchase additional final salary benefits. AVC’s paid by the Directors during the year

were nil.

6. As highlighted in the table above, it was agreed by the Board at the time of Chris Ambler’s appointment that he would participate in a non-contributory version of the Defined Benefit

Pension scheme.

Remuneration Committee Report

Response to the COVID-19 crisis
Throughout the pandemic we have been very focussed on providing stability and security for our workforce through this difficult period by

adapting our ways of working to keep our people as safe as possible while continuing to provide full business continuity. I am pleased to say

that we have not made any redundancies or furloughed any of our employees or taken any other form of Government COVID-19 support.

In recognition for the hard work of our employees during this challenging period, 265 employees were awarded 100 shares, subject to the

normal three year vesting period. We also continue to pay our planned annual bonus for this year to our employees which will be awarded in

December 2020.

Share Schemes
At the 2011 AGM approval was granted to launch an all-employee share scheme. To date, 4 tranches of shares have been issued to

employees with total shares of 300 having vested and the last tranche of 100 shares issued during this financial year being due to vest in

September 2023. There are no other share-based incentives such as option schemes or long-term incentive plans operated by the Company.

However, the Committee has the discretion to defer up to 50% of the performance bonus to Executive Directors for a period of two years with

the ultimate pay-out linked to movements in the listed share price in the period before vesting.

Workforce engagement
Under the most recent changes to the UK Corporate Governance Code, committees are required to disclose more details on workforce

engagement and wider remuneration considerations. As detailed elsewhere in the Annual Report, the Company has conducted employee

surveys for a number of years which provide very valuable data on employee engagement across a number of factors, including

remuneration. Employee engagement is a key aspect of the Corporate Scorecard. In addition, each year the Committee is provided with a

paper setting out details of all employee pay and workforce policies across the Company. The discussions on this topic provide us with helpful

insights for framing executive pay considerations.

During the current year, a workforce engagement and culture forum has also been established with representatives from across the

Company. I was pleased to be able to attend this forum which provided an ideal opportunity to gain first hand feedback from the workforce.

In the course of these discussions, it was clear that employees valued the support and flexibility provided during the COVID-19 crisis.

Non-Executive Directors’ Remuneration
The remuneration of the non-Executive directors is determined by the Executive directors, with the assistance of independent advice

concerning comparable organisations and appointments and also taking into account the particular Committees in which they are involved.

As with Executive Director pay, Mercer were used to provide such advice. A small premium was paid in the financial year to those who

chaired Committees (Audit & Risk: £5,000; Nomination/Remuneration: £2,000) and to those who were members of the Audit & Risk

Committee (£2,000) for additional responsibility, and to Directors based off-Island (£3,000) for travelling time. Alan Bryce and Peter Simon,

who receive the travelling time allowance, voluntarily waived half of this annual allowance in the context they were unable to travel to Jersey

due to COVID-19 for a period of time in this financial year.

External Appointments
The Company encourages Executive Directors to broaden their experience by accepting non-Executive appointments to companies or other

organisations outside the Group. Such appointments are subject to prior approval by the Board, having taken into consideration the expected

time commitments, and the Board also determines the extent to which any fees may be retained by the Director. At the balance sheet date

the external appointments held by Executive Directors, excluding those directly connected with their employment by the Company, were as

follows:

C.J. Ambler

Foresight Solar Fund Ltd and Apax Global Alpha Ltd

The total non-Executive Director fees for such appointments were £100,000 of which £80,000 was retained by the individual, and the

remainder paid to the Company.

M.P. Magee

Aberdeen Standard Capital Offshore Strategy Fund Ltd and Jersey Post International Ltd

The total non-Executive Director fees for such appointments was £37,917 of which £30,334 was retained by the individual, and the

remainder paid to the Company.

GOVERNANCE

Remuneration Committee Report

Directors’ Loans
At the time of hiring the Executive Directors, and bringing them over to live in Jersey, the Company provided secured loans to assist them with

the purchase of a residential property on the island. Since then, substantial repayments have been made by the Executive Directors and the

balances on such loans were:

C.J. Ambler

M.P. Magee

30.9.2020

£300,000

30.9.2019

£300,000

£79,071

Directors’ Share Interests
The Directors’ beneficial interests in the shares of the Company at 30 September 2020 were:

5% and 3.5%

‘A’ Ordinary Shares

Preference Shares

2020

2019

2020

2019

7,620

13,800

5,000

4,500

3,500

5,000

2,210

7,620

13,800

5,000

4,500

3,500

5,000

2,210

960

41,630

960

C.J. Ambler*

M.P. Magee*

P.J. Austin

A.A. Bryce

W.J. Dorman

A.H. Taylor

P.M. Simon

*Both C.J. Ambler and M.P. Magee have a beneficial interest in a further 100 ‘A’ Ordinary Shares that are due to vest in September 2023.

There have been no other changes in the interests set out above between 30 September 2020 and 17 December 2020.

This Annual Report on remuneration is approved by the Board and signed on its behalf by

A. LE CORNU
Chairman

17 December 2020

GOVERNANCE

Independent Auditor’s Report
to the Shareholders of Jersey Electricity plc

Report on the audit of the consolidated financial statements

Our opinion
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of Jersey Electricity plc
(the “company”) and its subsidiary (together “the group”) as at 30 September 2020, and of their consolidated financial performance and
their consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the
European Union and have been properly prepared in accordance with the requirements of the Companies (Jersey) Law 1991.

What we have audited
The group’s consolidated financial statements comprise:

• the consolidated balance sheet as at 30 September 2020;
• the consolidated income statement for the year then ended;
• the consolidated statement of comprehensive income for the year then ended;
• the consolidated statement of changes in equity for the year then ended;
• the consolidated statement of cash flows for the year then ended; and
• the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence
We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements of the group, as required by the Crown Dependencies’ Audit Rules and Guidance. We have fulfilled our other ethical
responsibilities in accordance with these requirements.

Our audit approach

Overview

Materiality
• Overall group materiality was £740,000 which represents 5% of profit from operations before taxation.

Materiality

Audit scope
• PwC were appointed as auditors in May 2020. We conducted our audit work in Jersey.

Audit
Scope

Key Audit
Matters

• We tailored the scope of our audit taking into account the operations of the group, the accounting processes

and controls, and the industry in which the group operates.

• The group is based solely in Jersey and the consolidated financial statements are a consolidation of the

company and Jersey Deep Freeze Limited, a subsidiary which also operates in Jersey.

• We have audited the consolidated financial statements of the company and its subsidiary (which does not

require an audit itself).

Key audit matters
• Recognition of energy and retail revenue.

• Assessment of pension assumptions applied in the valuation of defined benefit obligation.

• Assessment by the Board of Directors of the company of the impact of COVID-19.

GOVERNANCE

Independent Auditor’s Report
to the Shareholders of Jersey Electricity plc

Audit scope
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated financial
statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting
estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also
addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence
of bias that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial
statements as a whole, taking into account the structure of the group, the accounting processes and controls, and the industry in which the
group operates.

Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the
consolidated financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They 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.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality
for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to
determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate on the consolidated financial statements as a whole.

Overall group materiality

£740,000.

How we determined it

5% of profit from operations before taxation.

Rationale for the materiality benchmark

We believe that group profit from operations before taxation is the most appropriate
benchmark because this is the key metric of interest to members. It is also a generally
accepted measure used for companies in this industry.

We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above £37,000, as well
as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

Independent Auditor’s Report
to the Shareholders of Jersey Electricity plc

Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial
statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter

How our audit addressed the Key audit matter

Recognition of energy and retail revenue
Refer to note 1 (Accounting policies), and note 3 to the financial
statements.

We obtained an understanding and evaluated the overall control
environment around the recognition of revenue from energy and
retail.

The group recognised £85.1m of energy revenue (2019: £84.3m)
and £17.8m of retail revenue (2019: £15.2m).

Our approach to revenue from the energy segment was based on
a data analytics approach as follows:

Revenue from the energy segment comprises charges for the
consumption of electricity by customers and service connections.

We reviewed the IT General Controls surrounding the smart
meters, billing and general ledger systems.

Revenue from the retail segment is derived from the sale of
consumer products in the company’s “Powerhouse” store and online.

Energy and retail revenue are material to the financial statements
and revenue recognition was identified as a significant risk in the
audit plan we presented to the Audit and Risk Committee.

Assessment of pension assumptions applied in the valuation of
defined benefit obligation
Refer to note 1 (Accounting policies), note 2 (Critical accounting
judgements and key sources of estimation uncertainty), and note 17
to the financial statements.

The group has a defined benefit pension plan that was recognised
as a net surplus of £7.3m at the year-end (2019: £10.4m). This
comprises estimated plan liabilities of £149.3m (2019: £144.2m)
and plan assets of £156.6m (2019: £154.7m).

The valuation of the plan liabilities requires significant levels of
judgement and technical expertise including the use of actuarial
assessment to support the directors in selecting appropriate
assumptions. Changes in a number of key financial and
demographic assumptions (including discount rates, salaries
increase, inflation, and mortality rates) can have a material impact
on the calculation of the pension obligation.

We traced data from the meter reading system to the general
ledger system and reviewed the related interfaces ensuring this was
completely and accurately transferred.

We applied approved tariff rates to the readings from the general
ledger system and recalculated the expected revenue. We
reconciled the expected revenue to the invoices raised to customers
from the general ledger system.

For the retail segment, we performed a margin analysis on the
data obtained from the general ledger system to ensure that there
is a predictable relationship between cost of sales and revenue. To
gain comfort on the cost of sales balances, we performed tests of
detail of a sample of expenses to supporting documentation.

For both energy and retail revenue, we matched revenue from
the general ledger system to receipts in the bank statement using
data analytics. Through this process, we traced the balance sheet
movements to the transactions recorded in the income statement.

We investigated unmatched items and performed tests of detail
on them, and ensured they tied through to other asset accounts or
were offset against other liability accounts (e.g customer deposits).

Other than the reclassification of deferred income amortisation
from Operating expenses to Revenue, no matters were identified
that required reporting to those charged with governance.

We obtained an understanding and evaluated the overall control
environment around the defined benefit obligation. The group
used an independent qualified actuary to assess the defined benefit
obligation at year end.

We used our own actuarial experts to evaluate the assumptions
made in relation to the valuation of the scheme liabilities.

We benchmarked the various assumptions used and compared
them to our internally developed benchmarks; considered the
consistency and appropriateness of methodology and assumptions
applied compared to the prior year end and the most recent
actuarial valuation.

We tested the completeness and accuracy of the retirement benefit
obligation disclosures.

We confirmed that the group’s actuarial experts are qualified,
appropriately affiliated to third party industry bodies, and are
independent of the group.

No items were identified that required reporting to those charged
with governance.

GOVERNANCE

Independent Auditor’s Report
to the Shareholders of Jersey Electricity plc

Key audit matter

How our audit addressed the Key audit matter

Assessment by the Board of Directors of the company of the impact
of COVID-19

Refer to Chairman’s Statement and the Chief Executive’s Review
The COVID-19 pandemic commenced before the financial year
end, impacting the financial results of the company for the year and
is expected to continue to impact the company for the remainder of
the next financial year, albeit the severity of the impact is expected to
reduce over time.

In order to conclude that it is appropriate for the financial statements
to be drawn up on a going concern basis and on the viability of
the company, management have performed a detailed, bottom-up
analysis of the impact of COVID-19. This includes its impact on
revenue, including expected credit losses, cash flows, loan covenants
and actions that management might take to mitigate any negative
impacts.

In doing so, management have made estimates and judgments
that are critical to the assessment of the company’s liquidity and
consideration of future covenant compliance. The results of the
severe but plausible downside modelling on liquidity and covenants
have led the directors to conclude there is no material uncertainty
regarding the company’s ability to operate as a going concern.

Disclosure of the risk to the company of COVID-19 and
management’s conclusions on going concern and viability have
been included within the relevant sections of the Annual Report.

We assessed management’s COVID-19 impact including base and
worst case cash flow scenarios, and agreed key input assessments
back to board approved revenue budgets. In doing so, we
considered the historical accuracy of the budgeting process to
assess the reliability of the data.

We considered the adequacy of expected credit losses and
obtained an understanding of the mitigating actions identified
by management. We reviewed the methodology for calculating
these provisions. The current year calculation has been produced
by applying a methodology consistent with the prior years, which
calculates a “regular provision” and then applying an additional
adjustment to reflect the additional risks arising from the impact on
the economic environment arising from COVID-19.

We have challenged these assumptions based on our
understanding of the business and our knowledge of the industry.

In conjunction with the above we have reviewed management’s
analysis of both liquidity and loan covenant compliance to satisfy
ourselves that no covenant breaches are anticipated over the
period of assessment.

In relation to covenant compliance we have assessed the stress
testing performed on management’s base case model and
considered to what extent sufficient headroom exists to absorb any
further downside risk after considering the impact of mitigating
actions.

Based on our procedures and the information available at the
time of the Board’s approval of the financial statements, we have
not identified any matters to report with respect to the Board’s
consideration and disclosure of the impact of COVID-19 on
the current and future operations of the group, albeit we also
acknowledge that the situation continues to evolve.

Other information
The directors are responsible for the other information. The other information comprises all the information included in the Report and
Accounts 2020 (the “Annual Report”) but does not include the consolidated financial statements and our auditor’s report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and,
in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the consolidated financial statements
The directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance
with International Financial Reporting Standards as adopted by the European Union, the requirements of Jersey Law and for such internal
control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the directors are responsible for assessing the group’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 the directors
either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so.

Independent Auditor’s Report
to the Shareholders of Jersey Electricity plc

Auditor’s responsibilities for the audit of the consolidated financial statements
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 an auditor’s report that includes our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted in accordance with ISAs 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 these consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit.
We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by

the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group’s ability to continue as a
going concern over a period of at least twelve months from the date of approval of the financial statements. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the

consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to
express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the
group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of
the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication.

Use of this report

This independent auditor’s report, including the opinions, has been prepared for and only for the members as a body in accordance
with Article 113A of the Companies (Jersey) Law 1991 and for no other purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.

GOVERNANCE

Independent Auditor’s Report
to the Shareholders of Jersey Electricity plc

Report on other legal and regulatory requirements

Company Law exception reporting
Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion:

• we have not received all the information and explanations we require for our audit;
• proper accounting records have not been kept; or
• the consolidated financial statements are not in agreement with the accounting records.

We have no exceptions to report arising from this responsibility.

Listing Rules of the Financial Conduct Authority (FCA)
We have nothing material to add or draw attention to in respect of the following matters which we have reviewed based on the requirements of
the Listing Rules of the FCA:

• The directors’ confirmation that they have carried out a robust assessment of the principal and emerging risks facing the group, including a
description of the principal risks, what procedures are in place to identify emerging risks, and an explanation of how those risks are being
managed or mitigated.

• The directors’ explanation as to how they have assessed the prospects of the group, over what period they have done so and why they

consider that period to be appropriate, and their statement as to whether they have a reasonable expectation that the group will be able to
continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.

We have nothing to report having performed a review of the directors’ statement that they have carried out a robust assessment of the
principal and emerging risks facing the group and the directors’ statement in relation to the longer-term viability of the group. Our review
was substantially less in scope than an audit and only consisted of making inquiries and considering the directors’ process supporting their
statements; checking that the statements are in alignment with the relevant provisions of the UK Corporate Governance Code (the “Code”);
and considering whether the statements are consistent with the knowledge and understanding of the group and its environment obtained in the
course of the audit.

Additionally, we have nothing to report in respect of our responsibility to report when:

• The directors’ statement relating to Going Concern in accordance with Listing Rule 9.8.6R(3) is materially inconsistent with our knowledge

obtained in the audit.

• The statement given by the directors that they consider the Annual Report taken as a whole to be fair, balanced and understandable,

and provides the information necessary for the members to assess the group’s position and performance, business model and strategy is
materially inconsistent with our knowledge of the group obtained in the course of performing our audit.

• The section of the Annual Report describing the work of the Audit and Risk Committee does not appropriately address matters

communicated by us to the Audit and Risk Committee.

• The directors’ statement relating to the company’s compliance with the Code does not properly disclose a departure from a relevant

provision of the Code specified, under the Listing Rules, for review by the auditors.

LISA McCLURE
for and on behalf of
PricewaterhouseCoopers CI LLP
Chartered Accountants and Recognized Auditor
Jersey, Channel Islands
18 December 2020

FINANCIAL STATEMENTS

Consolidated Income Statement
for the year ended 30 September 2020

In 2020 the Directors have made a classification change in relation to the amortisation of deferred infrastructure charges. In order to present the results in a consistent format, the
Directors have reclassified the prior year reported results, increasing both Operating expenses and Revenue by £415k, with no impact to Group operating profit.

Consolidated Statement of Comprehensive Income
for the year ended 30 September 2020

All results in the year have been derived from continuing operations.
The notes on pages 81 to 107 form an integral part of these accounts. The independent auditor’s report is on pages 71 to 76.

Note 2020 2019 £000 £000Revenue 3 111,747 110,709Cost of sales (69,695) (69,282)Gross profit 42,052 41,427Other income - 750Revaluation of investment properties 11 515 689Operating expenses 4 (26,360) (26,784)Group operating profit 3 16,207 16,082Finance income 139 103Finance costs (1,516) (1,365)Profit from operations before taxation 14,830 14,820Taxation 7 (3,090) (2,969)Profit from operations after taxation 11,740 11,851Attributable to: Owners of the Company 11,624 11,773Non-controlling interests 19 116 78 11,740 11,851Earnings per share - basic and diluted 9 37.94p 38.42p Note 2020 2019 £000 £000Profit for the year 11,740 11,851Items that will not be reclassified subsequently to profit or loss: Actuarial (loss)/gain on defined benefit scheme 17 (1,663) 7,643Income tax relating to items not reclassified 7 333 (1,529) (1,330) 6,114Items that may be reclassified subsequently to profit or loss: Fair value gain/(loss) on cash flow hedges 22 1,290 (3,007)Income tax relating to items that may be reclassified 7 (258) 601 1,032 (2,406)Total comprehensive income for the year 11,442 15,559Attributable to: Owners of the Company 11,326 15,481Non-controlling interests 116 78 11,442 15,559FINANCIAL STATEMENTS

Consolidated Balance Sheet
as at 30 September 2020

Approved by the Board on 17 December 2020

P.J. AUSTIN

Director

M.P. MAGEE

Director

The notes on pages 81 to 107 form an integral part of these accounts. The independent auditor’s report is on pages 71 to 76.

Note 2020 2019 £000 £000Non-current assets Intangible assets 10 479 683Property, plant and equipment 11 217,936 217,046Right of use assets 11 2,899 -Investment properties 11 21,755 21,240Trade and other receivables 14 300 383Retirement benefit surplus 17 7,315 10,417Derivative financial instruments 22 277 208Investments 12 5 5Total non-current assets 250,966 249,982Current assets Inventories 13 6,028 6,018Trade and other receivables 14 16,645 17,995Derivative financial instruments 22 960 197Cash and cash equivalents 35,520 24,915Total current assets 59,153 49,125Total assets 310,119 299,107LiabilitiesTrade and other payables 15 18,193 17,320Current tax liabilities 7 2,742 2,714Lease liabilities 16 65 -Derivative financial instruments 22 143 298Total current liabilities 21,143 20,332Net current assets 38,010 28,793Non-current liabilities Trade and other payables 15 22,714 21,757Lease liabilities 16 2,879 -Derivative financial instruments 22 - 303Financial liabilities - preference shares 18 235 235Borrowings 16 30,000 30,000Deferred tax liabilities 7 27,209 26,936Total non-current liabilities 83,037 79,231Total liabilities 104,180 99,563Net assets 205,939 199,544EquityShare capital 18 1,532 1,532Revaluation reserve 5,270 5,270ESOP reserve (120) (45)Other reserves 875 (157)Retained earnings 198,259 192,882Equity attributable to the owners of the Company 205,816 199,482Non-controlling interests 19 123 62Total equity 205,939 199,544

Consolidated Statement of Changes in Equity
for the year ended 30 September 2020

Note

Share Revaluation
reserve
capital

ESOP
reserve

*Other
reserves

Retained
earnings

Total

£000

At 1 October 2019

1,532

5,270

(157)

192,882

199,482

Total recognised income and expense for the year

Funding of employee share option scheme

Amortisation of employee share option scheme

Unrealised gain on hedges (net of tax)

Actuarial loss on defined benefit scheme (net of tax)

Equity dividends

At 30 September 2020

At 1 October 2018

Total recognised income and expense for the year
Funding of employee share option scheme

Amortisation of employee share option scheme

Unrealised loss on hedges (net of tax)

Actuarial gain on defined benefit scheme (net of tax)

Equity dividends

At 30 September 2019

*’Other reserves’ represents the foreign currency hedging reserve.

(45)

(78)

1,032

11,624

(78)

1,032

(1,330)

(4,917)

(1,330)

(4,917)

1,532

5,270

(120)

875

198,259

205,816

1,532

5,270

-
-

(41)

-
(20)

2,249

179,666

188,676

-
-

(2,406)

11,773
-

6,114

(4,671)

11,773
(20)

(2,406)

6,114

(4,671)

1,532

5,270

(45)

(157)

192,882

199,482

The notes on pages 81 to 107 form an integral part of these accounts. The independent auditor’s report is on pages 71 to 76.

FINANCIAL STATEMENTS

Consolidated Statement of Cash Flows
for the year ended 30 September 2020

IAS 7 ‘ Statement of Cash Flows’ requires the explanation of both cash and non-cash movements in assets and liabilities relating to financing activities. Note 16 shows there have been

no movements in borrowings during the year. Therefore no additional disclosure has been applied.

Of the £35.5m cash and cash equivalents at 30 September 2020, £20.0m (2019: £21.0m) is on fixed term deposits with an average of 52 days remaining (2019: 66 days).

In 2020 the Directors have made a presentational change in relation to deposit interest received, presenting this within investing activities, in compliance with IAS 7 “Statement of Cash

Flows”. In the prior year deposit interest received was presented within financing activities. In order to present the consolidated cash flow statement in a consistent format, the Directors

have reclassified prior year’s deposit interest received of £103k. This adjustment has had no impact on the 2019 reported net increase in cash and cash equivalents.

The notes on pages 81 to 107 form an integral part of these accounts. The independent auditor’s report is on pages 71 to 76.

2020 2019 £000 £000Cash flows from operating activitiesOperating profit 16,207 16,082Depreciation and amortisation charges 11,424 11,604Share-based reward charges 3 16Gain on revaluation of investment property (515) (689)Pension operating charge less contributions paid 1,439 1,977Profit on sale of fixed assets (24) (2)Operating cash flows before movement in working capital 28,534 28,988Working capital adjustments: (Increase)/decrease in inventories (10) 1,074 Decrease/(increase) in trade and other receivables 1,433 (2,675) Increase in trade and other payables 1,071 4,023Net movement in working capital 2,494 2,422Interest paid (1,376) (1,356)Preference dividends paid (9) (9)Income taxes paid (2,714) (2,300)Net cash flows from operating activities 26,929 27,745Cash flows from investing activitiesPurchase of property, plant and equipment (10,922) (13,850)Investment in intangible assets (337) (90)Deposit interest received 139 103Net proceeds from disposal of fixed assets 24 2Net cash flows used in investing activities (11,096) (13,835)Cash flows from financing activitiesEquity dividends paid (4,917) (4,671)Dividends paid to non-controlling interest (55) (69)Purchase of shares for employee benefit trust (78) -Repayment of lease liabilities (189) -Net cash flows used in financing activities (5,239) (4,740)Net increase in cash and cash equivalents 10,594 9,170Cash and cash equivalents at beginning of year 24,915 15,735Effect of foreign exchange rate changes 11 10Cash and cash equivalents at end of year 35,520 24,915Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

1 Accounting policies
Basis of preparation

The Group’s accounting policies as applied for the year ended 30 September 2020 are based on all International Financial Reporting

Standards (IFRS) issued by the International Accounting Standards Board (IASB) and which have been adopted by the EU, including

International Accounting Standards (IAS) and interpretations issued by the International Financial Reporting Interpretations Committee

(IFRIC). The principal accounting policies which have been applied consistently are:

Basis of accounting

The consolidated financial statements have been prepared under the historic cost convention as modified by the revaluation of investment

properties and derivative financial instruments.

Basis of consolidation

The Group’s consolidated financial information for the year ended 30 September 2020 comprises the Company and its subsidiary.

The subsidiary is an entity over which the Group has the power to govern the financial and operating policies, accompanying a

shareholding that confers more than half of the voting rights.

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein.

Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling

interest’s share of changes in equity since the date of the combination.

The consolidated financial information includes the Group’s share of the post-tax results and net assets under IFRS of the jointly controlled

entity using the equity method of accounting. Equity accounting is a method of accounting by which an equity investment is initially

recorded at cost and subsequently adjusted to reflect the investor’s share of the net profit or loss of the investee. Jointly controlled entities

are those entities over which the Group has joint control with one or more other parties and over which there has to be unanimous

consent by all parties to the strategic, financial and operating decisions.

Under Article 105 (11) of the Companies (Jersey) Law 1991 (“the Law”), the Directors of a holding company need not prepare separate

financial statements 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 had not passed a resolution requiring separate financial statements and, in the

opinion of the Directors, the Company meets the definition of a holding company as set out in the Law. As permitted by the Law, the

Directors have elected not to prepare separate financial statements.

Going Concern

The Group’s business activities, together with the factors likely to affect its future development, performance and position are set out in the

Chairman’s Statement (see pages 2 to 3). The financial position of the Group, its cash flow and its liquidity position are described in the

Financial Review (see pages 45 to 51). In addition, note 22 to the financial statements includes the Group’s objectives, policies and processes

for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures

to risks. The Group has considerable financial resources together with a large number of customers both corporate and individual. As a

consequence, the Directors believe that the Group is well placed to manage its business risks successfully including the impact of COVID-19.

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable

future. For this reason, they continue to adopt the going concern basis in preparing the financial statements and in making the viability

statement on page 51.

Foreign currencies

The functional and presentation currency of the Group is Pounds sterling. Transactions in currencies other than sterling are recorded at

the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are

denominated in foreign currencies are translated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair

value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined.

Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Gains and losses arising on

translation are included in net profit or loss for the year.

FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

Revenue

The Group recognises revenue from the following services:

i) Energy supply

Energy sales revenue is recognised on the basis of energy supplied during the period. Revenue for energy supply is therefore

accounted for on a “over time” basis and includes an estimated assessment of energy supplied to customers. This is between the

date of the last meter reading and the balance sheet date, using historical consumption patterns.

Service connections revenue is derived from the provision of a connection to an existing mains cable, laying required infrastructure

to the boundary of a customer’s property and connecting to their domestic supply. Management considers that the combination of

these activities comprise a distinct performance obligation to the customer. Service connection income is recognised at the point in

time that the service is complete.

Capital contributions arise where charges are made to a developer when the Group provides a first-time supply for a property/

properties. These charges cover the immediate infrastructure requirements as well as future investment needed to meet the extra

demands which new connections put on existing network infrastructure. Management considers that the obligation to invest in the

network is highly interrelated with the ongoing and future obligation to provide electricity supply services, particularly to maintain

continuous supplies into the future. The investment in the network from the infrastructure charges enables the Group to continue

providing value to the customer through the supply of electricity. The associated asset arises from the investment in the network and

therefore the Group recognises infrastructure income through revenue on a straight line basis over the life of the associated asset.

Deferred infrastructure charges are initially recorded within deferred income.

ii) Retail

Revenue resulting from the sales of goods within our retail business is recognised on sale to the customer at that point in time,

as this is the point at which the company recognises the transfer of risks and rewards. Retail additionally sells service contracts

to customers where the obligations to the customer are recognised as revenue on a monthly basis for the duration of the service

contract.

The Group has applied the practical expedient available in IFRS 15 (paragraph 63) and has not made an adjustment for any

impacts of financing since this is not significant and the customer will typically pay for the goods within one year or less.

iii) Building Services

Revenue within JEBS, our contracting and building services business, is recognised as the service is provided. As such JEBS

recognises the revenue over time as an appropriate amount each month end, driven by the stage of completion for each contract

(usually assessed by reference to costs incurred against budget to date).

iv) Property

Rental income is accrued on a monthly basis by reference to the agreements entered. Where applicable, contingent rental revenue

is also recognised based on historic levels and in accordance with IFRS 16.

v) Other

Other income is recognised as the service is provided or on receipt of payment as appropriate. Other income also includes

indefeasible rights of use (IRU) sales. With the connection of the Channel Islands Electricity Grid Limited (CIEG) telecom network

between Jersey, France and Guernsey, the Group has the ability to sell dark fibre to other telecom network operators seeking to

extend their own networks through IRU agreements. Income from IRUs where an IRU agreement does not transfer substantially all

the risks and benefits of ownership to the buyer or is deemed not to extend for substantially all of the assets’ expected useful lives, is

recognised on a straight-line basis over the life of the agreement, even when the payments are not received on such a basis. Where

agreements extend for substantially all of the assets’ expected useful lives and transfer substantially all the risks and benefits of

ownership to the buyer, the resulting profit/(loss) is recognised in the consolidated income statement as a gain/(loss) on disposal of

fixed assets.

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

Revenue continued

Income in Jendev arises from both ongoing support contracts as well as implementation contracts and small ad-hoc development.

Across these revenue streams are elements that relate to both point in time and over time delivery of service to customers. With

ongoing support contracts the obligation is to provide user support for the specified business systems for a time period and the

transaction price is an annualised rate invoiced every six or 12 months. The contract provided that Jendev be on call should support

be required, therefore the performance obligation is the time period over which this is provided. The revenue is recognised as

the obligation is satisfied, each month recognising 1/12th of the annual rate as we have provided support over that period. With

implementation contracts Jendev is deemed to be creating or enhancing an asset that the customer controls as the asset is being

enhanced or created. As such revenue is recognised over time at an appropriate amount each month end, driven by the stage of

completion for each contract. This can be assessed by completions of milestone obligations or by reference to development costs

incurred.

Jersey Deep Freeze is a 51% (2019: 51%) controlled subsidiary. Revenues are derived from two workstreams. Firstly, service

contracts where the obligation is satisfied over time and the customer is invoiced and revenue recognised as such, on a monthly

basis. Secondly, provision of goods (refrigeration equipment) which is invoiced and revenue recognised at a point in time, upon

delivery of the equipment to the customer.

Taxation

The tax expense represents the sum of tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the

year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are

taxable or deductible in other years and it further excludes items that are never taxable or deductible.

Deferred tax is the tax expected to be payable or recoverable on the difference between the carrying amounts of assets and liabilities in

the balance sheet and the corresponding tax bases used in the computation of taxable profits, and is accounted for using the balance

sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised

to the extent that it is probable that future taxable profit will be available against which deductible temporary differences can be utilised.

Deferred tax is calculated at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised,

on a non-discounted basis, and is recorded in the income statement, except where it relates to items recorded to equity via other

comprehensive income, in which case the deferred tax is also dealt with in that statement.

Intangible assets

The costs of acquired computer software are capitalised on the basis of the costs incurred to acquire and bring to use the specific software

and are amortised over their useful lives. Costs directly associated with the development of computer software programmes that will

generate economic benefits over a period in excess of one year are capitalised and amortised over their estimated useful lives. Costs

include employee costs relating to software development and an appropriate proportion of directly attributable overheads. Amortisation is

charged on a straight-line basis over its expected useful life which is estimated to be up to four years.

Property, plant and equipment

In accordance with IAS 16 costs are capitalised where it is probable that future economic benefits associated with the asset being

purchased or constructed will flow to the entity; and the cost of the asset can be measured reliably.

For assets under construction, all costs incurred which are directly attributable to bringing the asset to a point of commissionable

use, including direct materials and direct labour costs are capitalised once an executive decision has been taken to proceed with the

construction of the asset.

Property, plant and equipment excludes investment property and is stated at cost less accumulated depreciation and impairment losses,

if any. Assets are depreciated on the straight-line method to their expected residual values over their estimated useful lives from the year

following acquisition. Property, plant and equipment include capitalised employee, interest and other costs that are directly attributable to

construction of these assets. Property, plant and equipment under the course of construction is not depreciated and is carried at cost less

impairment.

FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

Property, plant and equipment continued

Depreciation is charged as follows:

Buildings

Interlinks

up to 50 years

up to 30 years

Plant, mains cables and services

up to 60 years

Fixtures and fittings

Computer equipment

Vehicles

up to 15 years

up to 4 years

up to 10 years

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the

carrying amount of the asset and is recognised in the consolidated income statement.

Customer contributions in respect of additions to plant are treated as deferred income within non-current liabilities and released to the

income statement over the estimated operational lives of the related assets.

Impairment of tangible and intangible assets

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether

there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the

asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable

amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

When a reasonable and consistent basis of allocation can be identified, assets are also allocated to individual cash-generating units, or

otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be

identified.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash

flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of

money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the

asset (or cash-generating unit) is reduced to its recoverable amount.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised

estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been

determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment

loss is recognised immediately in the consolidated income statement, unless the relevant asset is carried at a revalued amount, in which

case the reversal of the impairment loss is rated as a revaluation increase.

Investment properties

Investment properties are stated at fair value at the balance sheet date. Gains or losses arising from changes in the fair value of

investment properties are included in the consolidated income statement for the period in which they arise. The Group’s policy on freehold
properties is to classify it as an investment property both when the property is held for capital appreciation or rental purposes and when it

is fully occupied by external tenants.

Investment in joint venture

The results and assets and liabilities of the joint venture are incorporated using the equity method. Investment in the joint venture is

therefore carried in the consolidated balance sheet at cost as adjusted by changes in the Group’s share of net assets, less any impairment.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour

and overheads that have been incurred in bringing the inventories to their location and condition at year end. Cost is calculated using

the weighted average method with the exception of fuel oil which is calculated using the first-in first-out method. Net realisable value

represents the estimated selling price.

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

Financial instruments

Cash and cash equivalents

Cash and cash equivalents comprise cash and short-term deposits with a maturity of three months or less.

Short-term investments

Short-term investments comprise cash deposits which have a maturity greater than three months at the time of inception.

Trade and other receivables

Trade receivables are initially recognised at invoice value and do not carry any interest and are reduced by appropriate allowances for

estimated irrecoverable amounts.

The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance

for all trade receivables. The Group’s assessment for calculating expected credit losses is made by reference to its historical collection

experience, including comparisons of the relative age of the individual balance and the consideration of the actual write-off history.

The provisioning rates applied in the calculation are reviewed on an annual basis to reflect the latest historical collection performance

data and management’s expectation of future performance and industry trends. Furthermore, where the Group has assessed a known

risk of recoverability relating to known customers these balances are provided for in full.

Trade and other payables

Trade and other payables are initially recognised at invoice value and are not interest bearing and are subsequently stated at their

amortised cost. Amortised cost is considered by the Directors to be equivalent to invoiced value.

Borrowings

Borrowings are measured at amortised cost using the effective interest method. Interest expense is recognised by applying the effective

interest rate.

Derivative financial instruments

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently re-measured to

their fair value at each balance sheet date. Changes in the fair value of derivative financial instruments which are designated as highly

effective hedges of future cash flows are recognised directly in other comprehensive income and any ineffective portion is recognised

immediately in the consolidated income statement. When hedges mature that do not result in the recognition of an asset or a liability,

amounts deferred in other comprehensive income are recognised in the consolidated income statement in the same period in which the

hedged item affects net profit or loss.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the

consolidated income statement as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for

hedge accounting. Until that time, any cumulative gain or loss on the hedging instrument recognised in other comprehensive income is

kept in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or
loss that has been recognised in other comprehensive income is transferred to the consolidated income statement.

Following the adoption of IFRS 9 and as permitted by this standard, the Group has elected to continue to apply the hedge accounting

requirements of IAS 39. This policy choice will be periodically reviewed to consider any changes in our risk management activities.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily

take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the

assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings

pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are

recognised in the consolidated income statement in the period in which they occurred.

Dividends
Dividends are recorded in the Group’s financial statements in the period in which they are approved by the Company’s shareholders.

Interim dividends are recorded in the period in which they are paid.

FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

Share capital

Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as liabilities. Incremental costs directly

attributable to the issue of new shares or options are shown as a deduction, net of tax, from the proceeds.

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and where it is

probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can

be made of the amount of the obligation. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best

estimate.

Retirement benefits

The Company provides pensions through both a defined contributions scheme and a defined benefit scheme. In the latter the cost of

providing benefits is determined using the projected unit credit method, with full actuarial valuations being carried out at a minimum every

three years. Actuarial gains and losses are recognised in full, directly in retained earnings in the period in which they occur and are shown

in the statement of comprehensive income. The net figure derived from the current service cost element of the pension charge, the expected

return on pension scheme assets and interest on pension scheme liabilities, including past service cost, is deducted in arriving at operating

profit. Retirement benefits recorded in the balance sheet represent the net financial position of the Group’s defined benefit pension scheme.

Share-based payments

Equity-settled share-based payments to employees and others providing similar services are measured at fair value of the equity

instruments at the grant date. The fair value excludes the effect of non-market-based vesting conditions. Details regarding the

determination of the fair value of equity-settled share-based transactions are not separately disclosed due to their immaterial value.

The fair value determined at the grant date of the equity-settled share-based payments is expensed over the vesting period, based on the

Group’s estimate of equity instruments that will eventually vest. At each balance sheet date, the Group revises its estimate of the number

of equity instruments expected to vest as a result of the effect of non market-based vesting conditions. The impact of the revision of the

original estimates, if any, is recognised in the income statement such that the cumulative expense reflects the revised estimate, with a

corresponding adjustment to equity reserves.

Accounting developments

In preparing these Consolidated Financial Statements, the Group has applied all relevant IFRS, IAS and Interpretations issued by the IFRIC

which have been adopted by the EU as of the date of approval of these Consolidated Financial Statements. The following new accounting

standards, amendments to existing accounting standards and/or interpretations of existing accounting standards are mandatory for the

current period and have been adopted by the Group. All other new standards, amendments to existing standards and new interpretations

that are mandatory for the current year have no bearing on the operating activities and disclosures of the Group and consequently have

not been listed. The Group has not adopted any new standards or interpretations that are not mandatory.

Standards effective in current period

IFRS 16 ‘Leases’ has been endorsed by the EU and became effective from 1 October 2019 for the Group and replaces IAS 17 ‘Leases’ and

sets out the principles for the recognition, measurement, presentation and disclosure of leases. This adoption requires a lessee to recognise

assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value.

For the purposes of the transition when applying IFRS 16, the Group has adopted the modified retrospective approach, including the

application of the following practical expedients:

• Reliance on the previous identification of a lease (under the previous IAS 17 standard) for all contracts that existed on the date of initial

application;

• Reliance on previous assessments (under IAS 37) on whether leases are onerous rather than performing an impairment review;

• The application of a single discount rate to a portfolio of leases with similar characteristics;

• Exclusion of initial direct costs from the measurement of the right-of-use assets at the date of initial application;

• The measurement of the lease liability as at 1st October 2019 and the creation of an equal value right of use asset as at that date

(where accrual and prepayment adjustments are not material).

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

Standards effective in current period continued

Furthermore, the Group has applied the exemptions within the standard whereby both leases with a contractual duration of 12 months or

less and leases for assets which are deemed low value will continue to be expensed to the income statement over the remainder of the lease

term.

Where the Group is lessor of freehold properties, these leases have been determined to be operating leases in accordance with the substance

of such lease transactions. The accounting for these leases does not change following the adoption of IFRS 16 with lease revenue being

recognised on a straight-line basis.

Where break and/or extension clauses exist, the Group has considered that where an internal decision has been made to break or extend

the lease agreement, that decision shall be applied in determining the appropriate lease term. Where an internal decision has not been

made, and where the non-cancellable element of the lease term has longer than five years remaining, it is considered that any clauses will

not be triggered as any decision beyond that date is not reasonably certain. For all leases with less than five years remaining, an assessment

is made at each reporting period on a lease-by-lease basis on whether the clause is reasonably certain to be triggered. Reassessment of

break and/or extension judgements made in prior periods could result in recalculation of the lease liability and adjustments to associated

balances.

The current lease charges have been used to establish a present value of the lease liabilities existing as at 1st October 2019. For the purposes

of discounting, the Group has made use of the practical expedient in selecting the interest rate used. Given the portfolio of leases materially

relate to long term leases of land for the Group’s Energy division it has been determined that the rate of 4.47% on the £30m borrowings

from Pricoa, which is considered to be incremental rate of borrowing for the Group, is used in the calculation of the lease liability.

On transition to IFRS 16 the Group recognised £2.9m right of use assets with directly corresponding lease liabilities.

The differences between the operating lease commitments under IAS 17 at 30 September 2019 and the lease liability recognised under IFRS

16 at 1 October 2019 relating to the same contracts are explained below:

The Group has two covenants with its lenders, neither of which will be materially impacted by IFRS 16.

IFRS 16 will have no accounting impact where the Group acts as a lessor (relevant to the Group’s property portfolio).

There are no other new standards or interpretations effective for the year ended 30 September 2020, in addition to the above, which are

considered to have a material impact on the Consolidated Financial Statements of the Group.

Standards in issue not yet effective

The following standard has been issued but not yet adopted by the Group within these financial statements, because application is not yet

mandatory or because adoption by the EU remains outstanding at this point in time:

IFRS 17 ‘Insurance Contracts’ is effective from 1 January 2023 (1 October 2023 to the Group) and is subject to EU endorsement. IFRS 17

“Insurance contracts” was issued in May 2017, replaces IFRS 4 “Insurance Contracts” and sets out the requirements that a company should

apply in reporting information about insurance contracts it issues and reinsurance contracts it holds. It is not expected that this standard will

have any impact on the Group.

In addition to IFRS 17 there are a number of other interpretations, amendments and annual improvement project recommendations that

have been issued but not yet adopted by the Group because application is not yet mandatory or because adoption by the EU remains

outstanding at this point in time. These are not anticipated to have a material impact on the Group’s consolidated financial statements.

Lease liabilities reconciliation: £000Operating lease commitments as at 30 September 2019 13,477Recognition exemption for short term and low value leases on date of transition (787)Lease term adjustments and other reconciling items (net) (5,683)Non-discounted lease liability under IFRS 16 7,007Discount effect (4,106)Lease liability recognised on 1 October 2019 2,901

FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

2 Critical Accounting Judgements and key sources of estimation uncertainty

In the application of the Group’s accounting policies, which are described in note 1, the Directors are required to make judgements,

estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The

estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual

results may differ from these estimates.

The estimates and underlying assumptions are monitored on an ongoing basis. Changes to accounting estimates are recognised in the

period in which an estimate is revised if the modification affects only that period (or also in future periods if applicable).

Critical accounting judgements

The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that the directors

have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised

in financial statements.

i Hedge accounting

The Group utilises currency derivatives to hedge a proportion of its future purchases of electricity from France which currently extend to

the next three calendar years as well as for any foreign currency denominated capital contracts. Judgement is applied in establishing

the quantum of these future foreign exchange commitments as the volume and price of imported electricity vary annually. All such

currency derivatives are fair valued, based on market values of equivalent instruments at the balance sheet date.

ii Decommissioning

A judgement has been made that the Company does not meet the recognition criteria (set out in IAS 37 Provisions) as it does not

have any set obligation to decommission any of our material assets but a risk exists that costs may be incurred in the future. The assets

concerned are our power station at La Collette, which is leasehold with a current end date of 2056, and our subsea interconnectors to

France and Guernsey. None of the assets have a definitive planning or legal obligation to decommission at the end of life but obligations

could develop over time, for example, for environmental reasons. There are varying external opinions as to whether subsea cables should

be left in place, or removed, at the end of their useful life as over time the interconnector asset becomes part of the marine infrastructure.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation and uncertainty at the reporting date that may have a

significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are disclosed

below.

Retirement benefit obligations

The Group provides pensions through a defined benefits scheme for a number of its employees which is accounted for in accordance

with IAS 19 ‘Employee Benefits’. The benefit obligation is discounted at a rate set by reference to market yields at the end of the

reporting period on high quality corporate bonds. Significant judgement is required when setting the criteria for bonds to be included

in the population from which the yield curve is derived. The most significant criteria considered for the selection of bonds include the

issue size of the corporate bonds, quality of the bonds and the identification of outliers which are excluded. The discount rate used in
2020 was 1.6% and in 2019 was 1.9%.

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

3 Business segments

The business segments below are those reported to the Group’s Chief Executive for the purposes of resource allocation and performance

assessment:

2020 2020 2020 2019 2019 2019 External Internal Total External Internal Total £000 £000 £000 £000 £000 £000RevenueEnergy - arising in the course of ordinary business 85,140 122 85,262 84,322 126 84,448 - arising from the sale of heavy fuel oil - - - 2,723 - 2,723Building Services 3,767 1,027 4,794 3,286 809 4,095Retail 17,825 60 17,885 15,199 59 15,258Property 2,266 645 2,911 2,262 612 2,874Other* 2,749 891 3,640 2,917 898 3,815 111,747 2,745 114,492 110,709 2,504 113,213Intergroup elimination (2,745) (2,504)Revenue 111,747 110,709Operating profit Energy 12,257 12,281Building Services 216 (79)Retail 1,176 895Property 1,270 1,679Other 773 617 15,692 15,393Revaluation of investment properties 515 689Operating profit 16,207 16,082Finance income 139 103Finance costs (1,516) (1,365)Profit from operations before taxation 14,830 14,820Taxation (3,090) (2,969)Profit from operations after taxation 11,740 11,851Attributable to: Owners of the Company 11,624 11,773Non-controlling interests 116 78 11,740 11,851*Other segment includes Jersey Energy, Jendev and Jersey Deep Freeze Limited.Materially, all the Group’s operations are conducted within the Channel Islands. All transfers between divisions are on an arms-length basis.Revaluation of investment properties is shown separately from Property operating profit as income.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 for each of these business segments in note 1 to these financial statements.In 2020 the Directors have made a classification change in relation to the amortisation of deferred infrastructure charges. In order to present the results in a consistent format, the Directors have reclassified the prior year reported results, increasing both Operating expenses and Revenue by £415k, with no impact to Group operating profit.
FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

4 Operating expenses

5 Directors and employees
Detailed information in respect of Directors’ shareholdings and emoluments, pensions and benefits is given in the Remuneration

Committee Report on pages 67 to 70. The number of persons (full time equivalents) employed by the Group (including non-Executive

Directors) at 30 September was as follows:

The aggregate payroll costs of these persons were as follows:

2020 2019 £000 £000Distribution costs 12,343 11,306Administration expenses 14,017 15,478 26,360 26,784In 2020 the Directors have made a classification change in relation to the amortisation of deferred infrastructure charges. In order to present the results in a consistent format, the Directors have reclassified the prior year reported results, increasing both Operating expenses and Revenue by £415k, with no impact to Group operating profit. 2020 2019 Number NumberEnergy 199 188Other businesses 97 94Trainees 9 11 305 293 2020 2019 £000 £000Wages and salaries 17,441 16,109Social security costs 941 914Pension (note 17)** 3,163 3,756 21,545 20,779Capitalised manpower costs* (1,868) (1,911) 19,677 18,868* Capitalised manpower costs are included in note 11 under categories ‘Mains cables and services’, ‘Fixtures, fittings, vehicles’ etc. and ‘Interlinks’.** The pension costs above relate to the defined benefit pension scheme. The contributions recognised as an expense relating to the defined contribution scheme are included within wages and salaries and amount to £397,000 (2019: £454,000).Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

6 Group operating profit
Operating profit is after charging/(crediting):

Fees payable to Group auditor

Auditor’s remuneration for audit services

Auditor’s remuneration for non-audit services

Other operating charges

Operating lease charges

Depreciation of property, plant, equipment and right-of-use assets

Amortisation of intangible assets

Maintenance and repairs

Marketing costs

Movement in expected credit losses

Administration costs

2020

£000

242

10,833

541

1,768

618

381

1,383

2019

£000

140

246

11,259

345

2,298

802

(72)

2,313

The adoption of IFRS 16 on 1 October 2019 has resulted in a significant reduction in operating lease charges. Only leases with a

duration of less than 12 months or leases for assets that are deemed ‘low value’ continue to be expensed to the consolidated income

statement on a straight-line basis over the lease term.

7 Taxation

Current tax:

Jersey Income Tax - ordinary activities

Total current tax

Deferred tax:

Current year

Total tax on profit on ordinary activities

2020

£000

2,742

2019

£000

2,714

348

255

3,090

2,969

The differences between the total tax charge shown above and the amount calculated by applying the standard rate of Jersey Income Tax
to the profit before tax is as follows:

Profit from ordinary activities before tax

Tax on profit on ordinary activities at standard income tax rate of 20% (2019: 20%)

Effects of:

Expenses not deductible for tax purposes

Income not taxable for tax purposes

Non-qualifying depreciation

Group current tax charge for year

2020

£000

14,830

2,966

(214)

333

3,090

2019

£000

14,820

2,964

(1)

(221)

227

2,969

FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

7 Taxation (continued)
Deferred Tax

The following outlines the major deferred tax assets/liabilities recognised by the Group and Company:

Deferred tax movements in the year

The Company is taxed solely in Jersey as it has no legal presence in any other jurisdiction. The applicable rate of income tax for utility

companies in Jersey is 20%, whilst the applicable rate for companies in general, such as Jersey Deep Freeze Limited is 0%. There are no

current indications, political or otherwise, that these rates are expected to change in the foreseeable future. The effective tax rate on pre-

tax profits is 21% (2019: 21%) due to the manner in which capital allowances are applied in place of depreciation expenses which are

included in the pre-tax profit figure. As the tax liability rests with the Government of Jersey, the right to offset assets and liabilities allows

the balance sheet to show the net deferred tax liability position.

There is no tax impact on the Group arising from the proposed dividend shown in note 8.

8 Dividends paid and proposed

Equity:

The proposed dividend is subject to approval at the forthcoming AGM and has not been included as liabilities in these financial

statements. These dividends are shown net of 20% tax.

Dividends paid out to non-controlling interests in relation to Jersey Deep Freeze Limited are disclosed in note 19.

Per Share In Total 2020 2019 2020 2019 pence pence £000 £000Ordinary and ‘A’ Ordinary:Dividend paid final for previous year 9.25 8.80 2,834 2,695 interim for current year 6.80 6.45 2,083 1,976 16.05 15.25 4,917 4,671Dividend proposed final for current year 9.70 9.25 2,972 2,834 Group and Company 2020 2019 £000 £000Accelerated capital allowances 25,527 24,892Derivative financial instruments 219 (39)Pensions 1,463 2,083Provisions for deferred tax 27,209 26,936 Group and Company 2020 2019 £000 £000At 1 October 26,936 25,753Charged to profit and loss account 348 255Charged to statement of comprehensive income (75) 928At 30 September 27,209 26,936
Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

9 Earnings per Ordinary share

Earnings per Ordinary and ‘A’ Ordinary share (basic and diluted) of 37.94p (2019: 38.42p) are calculated on the Group profit, after taxation, of

£11,624,000 (2019: £11,773,000), and on the 30,640,000 (2019: 30,640,000) Ordinary and ‘A’ Ordinary shares in issue during the financial

year and at 30 September 2020. There are no share options in issue nor any changes to the employee share option scheme and therefore there

is no difference between basic and diluted earnings per share.

10 Intangible assets

Cost as at 1 October 2019

Additions

Disposals

At 30 September 2020

Amortisation

At 1 October 2019

Charge for the year

Disposals

At 30 September 2020

Net book value

At 30 September 2020

Cost as at 1 October 2018

Additions

At 30 September 2019

Amortisation

At 1 October 2018

Charge for the year

At 30 September 2019

Net book value

At 30 September 2019

Computer Software

£000

1,656

337

(175)

1,818

973

541

(175)

1,339

479

Computer Software

£000

1,566

1,656

628

345

973

683

The above amortisation charges are included within operating expenses in the consolidated income statement.

The gross carrying amount of intangible assets at net book value of zero at 30 September 2020 was £80k. The average remaining useful life

of intangible assets is 3 years.

FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

11 Property, plant, equipment, right-of-use assets and investment properties

Freehold land Leasehold

Mains

cables and

Fixtures,

fittings,

Right-of-use

Investment

and buildings

buildings

Plant

services vehicles etc.

Interlinks

Total

assets properties*

£000

Cost or valuation
At 1 October 2019
Recognition on adoption of IFRS 16
Expenditure/lease additions
Modification/revaluation
Disposals
At 30 September 2020

Depreciation
At 1 October 2019
Charge for the year
Disposals
At 30 September 2020

Net book value at
30 September 2020

34,461 16,990 108,577
-
4,273
-
(280)
36,467 16,990 112,570

-
2,006
-
-

-
-
-
-

94,189
-
3,350
-
-
97,539

23,096 98,007 375,320
-
-
175 11,677
1,873
-
-
(2,051)
(2,331)
22,918 98,182 384,666

-
-

10,092
1,096
-
11,188

7,283 66,353
2,812
(280)
7,650 68,885

367
-

32,931
1,371
-
34,302

11,403 30,212 158,274
3,138 10,780
1,996
(2,044)
(2,324)
11,355 33,350 166,730

-
2,901
25
76
-
3,002

-
103
-
103

21,240
-
-
515
-
21,755

-
-
-
-

25,279

9,340 43,685

63,237

11,563 64,832 217,936

2,899

21,755

Freehold land Leasehold

Mains

cables and

Fixtures,

fittings,

and buildings

buildings

Plant

services vehicles etc.

Interlinks

Total

£000

Investment

properties*

£000

30,998 17,048 105,173
3,101
303
-
-
34,461 16,990 108,577

3,535
(72)
-
-

-
-
-
(58)

91,369
3,142
(322)
-
-
94,189

22,014 97,218 363,820
789 13,243
2,676
(91)
-
-
-
(1,594)
(1,652)
23,096 98,007 375,320

-
-
-

9,568
514
10
-
10,092

6,934 62,244
4,011
98
-
7,283 66,353

407
-
(58)

31,730
1,309
(108)
-
32,931

11,205 26,986 148,667
3,226 11,259
1,792
-
-
(1,594)
(1,652)
11,403 30,212 158,274

-
-

20,460
-
91
689
-
21,240

-
-
-
-
-

24,369

9,707 42,224

61,258

11,693 67,795 217,046

21,240

Cost or valuation
At 1 October 2018
Expenditure
Reclassification**
Revaluation
Disposals
At 30 September 2019

Depreciation
At 1 October 2018
Charge for the year
Reclassification
Disposals
At 30 September 2019

Net book value at
30 September 2019

**In the prior year, items reclassified related to Land and Buildings elements of the West of St Helier Substation. There was no depreciation
charge against these during 2019 as the assets were under construction.

*Investment properties

The B&Q lease is a fully-repairing lease with a 48 year term from May 2000 and a tenant-only break option on the 23rd anniversary.

The Medical Centre lease is an internal repairing lease with a 30 year term from May 2005 and break options at 15, 20 and 25 year

anniversaries.

Commercial properties have been valued on the basis of a yield between 7.5% and 8.75% before deductions for acquisition costs. The

Directors consider the assumptions and sensitivities in those assumptions would unlikely result in a material difference in valuation. If

residential properties were valued 5% below or above the level assumed this would amount to a differential of £0.5m whilst the same

variance for commercial properties would result in a movement in valuation of around £1m. The residential properties comprise 29 units
which are let out on licences or leases with terms no greater than one year. The minimum lease payments receivable are detailed in note 21.

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

11 Property, plant, equipment, right-of-use assets and investment properties (continued)

a No depreciation is charged on freehold land. Depreciation is included in operating costs in the consolidated income statement.

b The investment properties were valued as at 30 September 2020 by independent professionally qualified valuers who hold a recognised
relevant professional qualification and are based in Jersey so have knowledge of our location. At each financial year-end the finance
department verifies major inputs to the independent valuation report, assesses property valuation movements when compared to the
prior year valuation report and holds discussions with the independent valuer. Changes in Level 2 and 3 fair values are analysed at
each reporting year end and movements are explained. As at the valuation date, we consider that we can attach less weight to previous
market evidence for comparison purposes, to inform opinions of value. Indeed, the current response to COVID-19 means that we are
faced with an unprecedented set of circumstances. The valuations for the non-residential investment properties, are therefore reported
on the basis of ‘material valuation uncertainty’ per VPS 3 and VGPA 10 of the RICS Red Book – Global. Consequently, less certainty –
and higher degree of caution – should be attached to our valuation than would normally be the case. For the avoidance of doubt, the
inclusion of ‘material valuation uncertainty’ declaration above does not mean that the valuations cannot be relied upon. Rather, the
phrase is used to be clear and transparent with all parties, in a professional manner that – in the current extraordinary circumstances
– less certainty can be attached to the valuation than would otherwise be the case. The material uncertainty clause is to serve as a
precaution and does not invalidate the valuation. In accordance with IAS40 investment properties are not depreciated.

The rental income arising from the properties during the year was £1,440k (2019: £1,419k) with maintenance and repair cost of
£85k (2019: £81k). Under the terms of the lease arrangements with residential tenants, the Company is obliged to keep the rented
premises in a good state of condition and repair. The Company is obliged to keep the Medical Centre wind and water tight and
structurally sound, whilst no obligations exist to the Company with regards to the B&Q lease which is fully repairing.

c The Group figures are tabled together with fixtures, fittings and vehicles for our subsidiary of £48k (2019: £39k) at cost and a net

book value of £8k (2019: zero).

d The gross carrying amount of tangible assets still in use at net book value of zero at 30 September 2020 was £60.0m (2019: £58.3m).

e The Group leases land and buildings as part of its Energy business. Following the adoption of IFRS 16 during the financial year, this
has resulted in the creation of right of use assets as disclosed in note 1. During the year an additional lease was signed for offices
of Jersey Energy whilst a rental increase on one area of land resulted in a modification to the opening lease asset balance and
corresponding liability. In addition to the depreciation expense relating to right of use assets of £103k, the finance costs included in the
consolidated income statement arising from the lease liability was £131k. The Group’s financial commitments to short term and low
value operating leases is shown in note 20. The maturity analysis of lease liabilities is presented in note 16.

12 Other investments

Principal group investments

The Company has investments in the following subsidiary undertaking and joint arrangement which principally affected the profits or net

assets of the Group.

Joint arrangement:

Country of
incorporation or
principal business
address

Principal
activity

Shareholding

%
Holding

Financial
Year End

Channel Islands Electricity Grid Limited

Jersey

Association with

5,000 Ordinary

30 November

Subsidiary undertaking:

Jersey Deep Freeze Limited

Jersey

Sale and

51 Ordinary

30 September

Guernsey Electricity

Limited

maintenance
of refrigeration and

catering equipment

2020 2019 £000 £000Joint arrangement 5 5

FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

12 Other investments (continued)

Channel Islands Electricity Grid Limited (CIEG)

The joint arrangement between the Company and Guernsey Electricity Limited for the installation of a second interconnector system

between France, Jersey and Guernsey required a control point through which the interconnector project manager could communicate

and also, to be the customer which Électricité de France (EDF) would invoice for their energy sales. CIEG, a company jointly owned and

managed on a 50/50 basis by the Company and Guernsey Electricity Limited, was established in July 1998 to deal with these aspects and

also to manage the way in which the second interconnector would be operated. In May 2013, Jersey and Guernsey Electricity signed an

agreement to share the cost and capacity of the Normandie 3 project. It also provided for cost and capacity sharing of the Normandie 1

project as a replacement of the original EDF1 interconnector between Jersey and France that failed in June 2012.

The Company’s interest in CIEG is accounted for as a joint arrangement under IFRS 11 ‘Joint arrangements’ and included in these

financial statements. CIEG has a reporting period end of 30 November based on the Company inception date.

Jersey Deep Freeze Limited

The Company owns 51% (2019: 51%) of the issued ordinary share capital of Jersey Deep Freeze Limited, a Jersey company whose principal
business is the sale and maintenance of refrigeration equipment to commercial businesses.

The results are consolidated into these Group financial statements, as the Group is considered to exert control under IFRS 10. Jersey Deep

Freeze Limited has a reporting period end of 30 September.

13 Inventories

The amounts attributed to the different categories are as follows:

14 Trade and other receivables

Unbilled revenues included within trade and other receivables in the balance sheet relating to such customers at 30 September 2020

amounted to £5.6m (2019: £5.6m).

The secured loans include loans to Directors and to a shareholder in the subsidiary Jersey Deep Freeze Limited. See the Remuneration

Committee Report on page 70 in the Report of the Directors for disclosure of the Directors’ loans.

The fair value of trade and other receivables is considered by the Directors to be equivalent to its carrying value.

2020 2019 £000 £000Fuel oil 2,206 2,378Commercial stocks and work in progress 2,854 2,818Generation, distribution spares and sundry 968 822 6,028 6,018During the year £14.1m (2019: £12.5m) was recognised directly in cost of sales in respect of inventories sold or used in operations or production. 2020 2019 £000 £000Amounts receivable within one year:Trade receivables (includes unbilled units) 15,025 15,865Prepayments and other receivables 1,620 2,130 16,645 17,995Amounts receivable after more than one year:Secured loan accounts 300 383
Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

15 Trade and other payables

16 Borrowings

The long-term funding via a private placement is in place with Pricoa Capital Group (an affiliate of Prudential Financial, Inc) and £30m of

finance drawn on 17 July 2014. This consists of:

a £15m for 20 years at a fixed rate coupon of 4.41%

b £15m for 25 years at a fixed rate coupon of 4.52%

This facility includes externally imposed capital requirements. The financial covenants require a net debt to regulated asset value ratio to be

calculated bi-annually not greater than 50% and an EBITDA to borrowings cost ratio not less than 4%, as defined in the loan agreement.

The Group continues to meet these covenants.

Lease liabilities

IFRS 16 was adopted during the year under a ‘Modified Retrospective’ approach, whereby comparative figures are not restated. Instead,

the cumulative effect of initially applying IFRS 16 has been recognised as an adjustment to the opening balance of retained earnings as at 1

October 2019. See note 1 for further detail on adoption of IFRS 16. Amounts charged under lease arrangements are detailed within note 6,

and right of use assets recognised under lease arrangements are detailed within note 11.

2020 2019 £000 £000Amounts falling due within one year:Trade payables 1,948 1,669Other payables including taxation and social security 8,458 8,028Accruals 7,340 7,039Deferred income 447 584 18,193 17,320Amounts falling due after more than one year:Accruals 183 209Deferred income 22,531 21,548 22,714 21,757The fair value of trade and other payables is considered by the Directors to be equivalent to its carrying value. 2020 2019 £000 £000Unsecured borrowing at amortised costLoan obtained from private placement 30,000 30,000In addition the above borrowings are supplemented by an unsecured five year £10m revolving credit facility (RCF) from the Royal Bank of Scotland International Limited (RBSI) which provides flexibility as the timing of further planned capital expenditure is variable. This was renewed for a further five year period in July 2019.This facility bears the same externally imposed capital requirements as detailed above. A one year £2m overdraft facility also exists with RBSI. Neither RBSI Facility was drawn at 30 September 2020.The fair value of the loan obtained from private placement at 30 September 2020 is considered to be £38.3m (2019: £39.3m). 2020 £000At 1 October 2019Lease liability recognised on adoption of IFRS 16 2,901Additions during the year 363Unwind of discount (131)Repayment in the year (189)As at 30 September 2020 2,944
FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

16 Borrowings (continued)

As discussed in note 1, the weighted average incremental borrowing rate applied to lease liabilities during the year was 4.47%. The Group has

additional committed payments under short-term and low value leases of £2k at 30 September 2020. The maturity of future lease liabilities are

as follows:

17 Pensions

The Company sponsors a funded defined benefit pension plan for qualifying Jersey Electricity employees. The plan is administered by
a separate board of Trustees which is legally separate from the Company. The Trustees are composed of representatives of both the
employer and employees, plus an independent trustee. The Trustees are required by law to act in the interest of all relevant beneficiaries
and are responsible for the investment policy with regard to the assets plus the day-to-day administration of the benefits.

Under the plan, employees are entitled to annual pensions on retirement at age 65 of one-sixtieth or one-eightieth (depending on category
of membership) of final pensionable salary for each year of service. Pensionable salary is broadly defined as the best successive 12 months’
salary in the past three years. Benefits are also payable on death and following other events such as withdrawing from active service.

No other post-retirement benefits are provided by the Scheme to these employees.

Profile of the Scheme
The defined benefit obligation includes benefits for current employees, former employees and current pensioners.

Broadly, about 50% of the liabilities are attributable to current employees, 10% to former employees and 40% to current pensioners.

The Scheme duration is an indicator of the weighted-average time until benefit payments are made. For the Scheme as a whole, the
duration is around 17 years reflecting the approximate split of the defined benefit obligation.

Funding requirements
The last funding valuation of the Scheme was carried out by a qualified actuary as at 31 December 2018 and showed a surplus of £3.7m. In
Jersey there are no legal or regulatory requirements governing pension schemes and therefore no imposed minimum funding requirement.
The next funding valuation is due no later than 31 December 2021 at which the funding level of the Scheme will be reviewed. The Company
pays contributions of 20.6% (26.6% for non-contributory members) of pensionable salaries (including 1% in respect of expenses) with
contributory members paying a further 6% of pensionable salaries.

The actuaries had recommended that the Company contribution rate rise to 25.4% but it was agreed by the Trustees that around £1.2m of the
surplus as at 31 December 2018 be utilised to maintain the contribution rate at 20.6%. This will be reviewed again at the next triennial valuation.

Risks associated with the Scheme
The Scheme exposes the Company to a number of risks, the most significant of which are:

Asset volatility

The liabilities are calculated using a discount rate set with reference to corporate bond yields; if assets underperform this yield, this will
create a deficit. The Scheme holds a significant proportion of growth assets (equities) which, though expected to outperform corporate
bonds in the long-term, create volatility and risk in the short-term. The allocation to growth assets is monitored to ensure it remains
appropriate given the Scheme’s long term objectives.

Changes in bond yields
A decrease in corporate bond yields will increase the value placed on the Scheme’s liabilities for accounting purposes, although this will

be partially offset by an increase in the value of the Scheme’s bond holdings.

Inflation risk

A proportion of the Scheme’s benefit obligations are linked to inflation, and higher inflation will lead to higher liabilities. The majority of the
assets are either unaffected by or only loosely correlated with inflation, meaning that an increase in inflation will also increase the deficit.

Life expectancy
The majority of the Scheme’s obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an
increase in the liabilities.

2020 £000Payable within one year 195After one year but within five years 763After five years 6,160 7,118Less: future finance charge (4,174)Present value of lease obligations 2,944

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

17 Pensions (continued)

Risk management
The Company and Trustees have agreed a long-term strategy for reducing investment risk as and when appropriate. This includes an
asset-liability matching policy which aims to reduce the volatility of the funding level of the Scheme by investing in assets that perform in
line with the liabilities of the Scheme.

The Trustees insure certain benefits which are payable on death before retirement.

Reporting at 30 September 2020
The results of the latest funding valuation at 31 December 2018 have been adjusted to the balance sheet date taking account of experience
over the period since 31 December 2018, changes in the market conditions, and differences in the financial and demographic assumptions.
The present value of the defined benefit obligation and the related current service cost, were measured using the Projected Unit Credit Method.

The principal assumptions used by the independent qualified actuaries to calculate the liabilities under IAS 19 are set out below:

The Scheme assets are invested in the following asset classes, each of which have a quoted market value:

Main financial assumptions: 2020 2019 % pa % paInflation 2.9 3.1Rate of general increase in salaries - short term (year 1) 3.0 3.8 - long term (year 2 onwards) 3.9 4.1Pension increases in payment - short term (year 1) - 2.3 - long term (year 2 onwards) - -Pension increases in payment for pensions purchased with AVCs 2.9 3.1Discount rate for scheme liabilities 1.6 1.9The financial assumptions reflect the nature and term of the Scheme’s liabilities. Value at 30 Value at 30 September September 2020 2019 £000 £000LDI/UK Gilts 58,280 46,088Equities 44,584 46,361Diversified Growth Funds 53,652 62,005Cash and Commitments 122 198 156,638 154,652 30 September 2020 30 September 2019Post-retirement mortality assumption - base tableSAPS “S2” tables with scaling factors of 90% for males and femalesSAPS “S2” tables with scaling factors of 90% for males and femalesPost-retirement mortality assumption - future improvementsCMI 2018 projections (A = 0.0%, Sk = 7.0) with long-term improvement rate of 1.25% p.a. for males and femalesCMI 2018 projections with long-term improvement rate of 1.25% p.a. for males and femalesLife expectancy for male currently aged 6027.026.9Life expectancy for female currently aged 6029.028.9Life expectancy at 60 for male currently aged 4028.528.4Life expectancy at 60 for female currently aged 4030.630.5Cash commutationMembers assumed to exchange 15% of their pension for a cash lump sum at retirementMembers assumed to exchange 15% of their pension for a cash lump sum at retirement

FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

17 Pensions (continued)

The amounts recognised in the balance sheet and comprehensive income are set out below:

Reconciliation of funded status to balance sheet:

Breakdown of amounts recognised in profit and loss
and other comprehensive income

Operating cost
Service costs:

Current service cost

Past service cost (including curtailments)

Administration expenses

Financing cost

Interest on net defined benefit asset

Total pension expense recognised in profit and loss

Remeasurements in OCI:

Return on plan assets in excess of that recognised in net interest

Actuarial losses due to changes in financial assumptions

Actuarial gains due to changes in demographic assumptions

Actuarial gains due to liability experience

Total amount recognised in OCI

Total debit/credit recognised in profit and loss and OCI

Changes to the present value of the defined
benefit obligation during the year

Opening defined benefit obligation

Current service cost

Interest expense on scheme liabilities
Contributions by scheme participants

Actuarial losses on scheme liabilities arising from changes in financial assumptions

Actuarial gains due to changes in demographic assumptions

Actuarial gains on scheme liabilities arising from experience

Net benefits paid out

Past service costs (including curtailments)

Closing defined benefit obligation

Changes to the fair value of Scheme assets during the year

Opening fair value of Scheme assets

Interest income on Scheme assets

Remeasurement gains on scheme assets

Contributions by the employer

Contributions by scheme participants

Net benefits paid out

Administration costs incurred

Closing fair value of scheme assets

100

2020

£000

2019

£000

3,030

344

(211)

3,163

(3,766)

6,107

(678)

1,663

2,532

1,080

303

(159)

3,756

(18,449)

22,385

(6,428)

(5,151)

(7,643)

4,826

(3,887)

2020

£000

2019

£000

144,235

131,412

3,030

2,686
501

6,107

(678)

(6,558)

2,532

3,738
514

22,385

(6,428)

(5,151)

(5,847)

1,080

149,323

144,235

2020

£000

2019

£000

154,652

136,163

2,897

3,766

1,724

501

(6,558)

(344)

3,897

18,449

1,779

514

(5,847)

(303)

156,638

154,652

2020 2019 £000 £000Fair value of Scheme assets 156,638 154,652Present value of funded defined benefit obligations (149,323) (144,235)Funded Status and asset recognised on the balance sheet 7,315 10,417Related deferred tax liability (1,463) (2,083)Net pension asset 5,852 8,334

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

17 Pensions (continued)

Actual return on scheme assets

Interest income on scheme assets

Remeasurement gain on scheme assets

Actual return on scheme assets

Analysis of amounts recognised in comprehensive income (SoCI)

2020

£000

2,897

3,766

6,663

2020

£000

2019

£000

3,897

18,449

22,346

2019

£000

Total remeasurement (losses)/gains in other comprehensive income

(1,663)

7,643

Discount rate sensitivity

To show sensitivity of the results to the choice of discount rate, we have set out below the balance sheet and profit and loss impact of

adopting a discount rate of 0.5% p.a. lower or higher than the current assumption.

18 Share capital

‘A’ Ordinary shares 5p each (2019: 5p each)

Ordinary shares 5p each (2019: 5p each)

5% Cumulative participating preference shares £1 each

3.5% Cumulative non-participating preference shares £1 each

Authorised Issued and fully paid
2020

2020

Authorised
2019

Issued and fully paid
2019

£000

1,250

1,500

2,750

100

150

250

£000

582

950

1,532

100

135

235

£000

1,250

1,500

2,750

100

150

250

£000

582

950

1,532

100

135

235

Equity shares

‘A’ Ordinary shares entitle the holder to 1 vote for every 100 shares held whereas the Ordinary shares carry voting rights of 1 vote for

every 20 shares held. At 30 September 2020 there were 11,640,000 ‘A’ Ordinary and 19,000,000 Ordinary shares in issue.

Preference shares

Preference shares are classified as financial liabilities under IFRS. Dividends paid to preference shareholders in the year were £9,000

(2019: £9,000) and are recorded in finance costs in the consolidated income statement. 5% preference shares carry voting rights of 1

vote per 5 shares and 3.5% preference shares carry voting rights of 1 vote per 10 shares.

ESOP reserve

The Jersey Electricity Employee Benefit Trust was established on 24 May 2012 when the Company introduced a new employee share

scheme for eligible employees of the Group based on a three year vesting period. As at 30 September 2020, 72,700 shares have been

awarded to employees who met the three year vesting period requirements. The Trust currently holds 26,600 shares which will vest in

August 2023. The shares have been purchased in instalments since the inception of the Trust at an average of £4.64 per share. The Trust

was funded by way of an interest free loan and for accounting purposes is seen as an extension of the Group.

101

Following a 0.5% p.a. decrease in the discount rate Change New valuePension expense for the following year 692 4,025DBO at 30 September 2020 14,233 (163,556) Following a 0.5% p.a. increase in the discount rate Change New valuePension expense for the following year (758) 2,575DBO at 30 September 2020 (12,883) (136,440)

FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

19 Non-controlling interests

Equity

20 Financial commitments

21 Leasing
Operating leases with tenants

The Group leases out all its investment properties and certain other freehold properties under operating leases. The future aggregate

minimum rentals receivable under non-cancellable operating leases are as follows:

102

2020 2019 £000 £000At 1 October 62 53Share of profit on ordinary activities after taxation 116 78Dividends paid (55) (69)At 30 September 123 62Non-controlling interests represent 49% (2019: 49%) ownership of the issued ordinary share capital of Jersey Deep Freeze Limited. 2020 2019 £000 £000No later than 1 year 1,799 1,755Later than 1 year and no later than 2 years 1,654 1,557Later than 2 years and no later than 3 years 1,224 1,557Later than 3 years and no later than 4 years 369 1,187Later than 4 years and no later than 5 years 369 327Later than 5 years 1,440 1,468 6,855 7,851 2020 2019 £000 £000a Five year capital expenditure approved by the directors:Contracted 6,610 1,485Not contracted* 67,146 67,790 73,756 69,275*Although this sum is approved it is still subject to formal business cases being reviewed in due course.b Future minimum lease payments under non-cancellable operating leases are as follows:Lease payments under operating leases recognised as an expense in the year 1 246Payable within one year 1 235After one year but within five years 1 776 After five years - 12,466 2 13,477 The adoption of IFRS 16 on 1 October 2019 has resulted in a significant reduction in operating lease charges. Only leases with a duration of less than 12 months or leases for assets that are deemed ‘low value’ continue to be expensed to the consolidated income statement on a straight line basis over the lease term.
Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

22 Derivatives and financial instruments and their risk management
Categories of financial instruments

The carrying values of the financial assets and liabilities of the Group are as follows:

The primary financial risk faced by the Group is foreign exchange exposure as the largest single cost in the consolidated income statement is

the importation of electricity from Europe that is denominated in Euros.

The Group’s currency exposure at 30 September 2020, taking into account the effect of forward contracts placed to manage such exposures,

was £2.6m (2019: £2.5m) being the translated Euro liability due for imports made in September but payable in October.

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 to readily available market prices); and

Level 3 financial instruments are shown at values that are determined by assumptions that are not based on observable market data

(unobservable inputs).

103

Financial assets 2020 2019 £000 £000Fair value through other comprehensive incomeDerivative financial instruments 1,237 405Amortised costSecured loan accounts 300 383Trade and other receivables (excluding prepayments) 15,025 15,865Cash and cash equivalents 35,520 24,915 50,845 41,163 Financial liabilities 2020 2019 £000 £000Fair value through other comprehensive incomeDerivative financial instruments 143 601 143 601Amortised costBorrowings 30,000 30,000Trade and other payables 10,406 9,697Preference shares 235 235 40,641 39,932
FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

22 Derivatives and financial instruments and their risk management (continued)
Categories of financial instruments continued

The derivative contracts for foreign currency shown above are classified as level 2 financial instruments and are valued 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 contracted forward rates, discounted at a rate that reflects the credit risk of various counterparties.

Foreign exchange risk

The Group utilises currency derivatives to hedge the payment of a proportion of its future purchases of power from France which currently extend

to the next three calendar years.

Due to the nature of the Euro denominated purchases being largely underpinned by contracted amounts the Group has accurate expectations of

the values and timings of future liabilities, reducing the risk of exposure to hedge ineffectiveness which could only arise if units imported were to

vary by more than 20% from established patterns.

Foreign exchange hedging instruments are contracted to mature as the liabilities fall due and so minimise any timing or other uncertainties of

future cash flows.

Currency derivatives

At the balance sheet date, the total notional amount of outstanding forward foreign exchange contracts that the Group has committed are

as below:

Forward foreign exchange contracts

At 30 September 2020, the fair value of the Group’s currency derivatives is estimated to be a net asset of approximately £1.1m over

the next three years (2019: £0.2m liability). The fair value of currency derivatives that are designated and effective as cash flow hedges

amount to an asset of £1.1m (2019: £0.2m liability) and these amounts have been deferred in equity. Given the limited exposure to

foreign exchange rate risk at the year end no sensitivity analysis has been presented.

The fair value of currency derivatives that are designated and ineffective as cash flow hedges amount to £nil (2019: £nil). In the current

period amounts of £1.3m were debited (2019: £3.0m credit) to equity and £1.3m credit (2019: £3.0m debit) recycled to the consolidated

income statement. Gains and losses on the derivatives are recycled through the consolidated income statement at the time the purchase

of power is recognised.

Fair value of currency hedges

Commodity risk

Power purchases
The Group has power purchase agreements with EDF in France. As at 30 September 2020, the import prices, but not volumes, have
been substantially fixed for 2021. The Group entered into a 10 year framework agreement with EDF on 1 January 2013 which has
a commitment to procure around 35% of expected volume requirements at known prices. During 2017 this agreement was extended
a further 5 years to 2027. The remainder of the requirement will be decided by a market pricing mechanism, but with no volume
commitment, with a goal to deliver a degree of stability in tariff pricing to our customers.

The Company has the ability to generate power as an alternative to importation if this was viewed to be commercially and
environmentally acceptable.

104

2020 2019 £000 £000Derivative assetsLess than one year 960 197Greater than one year 277 208Derivative liabilitiesLess than one year (143) (298)Greater than one year - (303)Total net assets/(liabilities) 1,094 (196) 2020 2019 £000 £000Less than one year - operational expenditure 34,473 32,295Less than one year - capital expenditure - -Greater than one year and less than three years 45,360 45,567 79,833 77,862Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

22 Derivatives and financial instruments and their risk management (continued)

Credit risk

The Group’s principal financial assets are cash and cash equivalents, short-term investments and trade and other receivables. The Group’s

credit risk is primarily attributable to its trade and other receivables. The amounts presented in the consolidated balance sheet are net of

allowances for expected credit losses which are set out below. The trade and other receivables at 30 September 2020 outside agreed credit

terms are as follows:

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings
assigned by international credit-rating agencies. The Group monitors its credit exposure to its counterparties via their credit ratings and
through its treasury policy, thereby limiting its exposure to any one party to ensure that they are within Board approved limits and that there
are no significant concentrations of credit risk.

For trading related receivables, the credit worthiness and financial strength of customers is assessed at inception and on an ongoing basis.
Payment terms are set in accordance with industry standards. The Group will enhance credit protection, when appropriate, taking into
consideration the Group’s exposure to the customer, by requesting securities such as deposits, moving customers to pay as you go meters to
manage credit risk and implementing payment plans for customers in arrears.

The Group has no other significant concentration of credit risk. Exposure is spread over a large number of counterparties and customers with
a maximum credit exposure of £33.3m (2019: £36.1m).

Expected credit losses provision
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which assesses if a material expectation exists
for lifetime expected loss allowances against all trade receivables based on historic realised write-downs. Where specific customers are
viewed to be at risk of default due to known or expected economic circumstances, their receivable balances at the balance sheet date are
provided for in full.

An explanation of the Group’s assessment for calculating expected credit losses and balance write-offs is detailed in note 1.

An expected credit losses provision is recorded against assets which are past due but for which no individual provision is made. This is
calculated based on historical experience of levels of recovery.

Movements in the expected credit losses were as follows:

Ageing of impaired receivables is as follows:

105

2020 2019 £000 £000Less than 30 days 925 944Greater than 30 days 154 268Greater than 60 days 149 152Greater than 90 days 757 30 1,985 1,394 2020 2019 £000 £000At 1 October 122 225Charge for expected credit losses - included within operating costs 381 72Amounts written back (27) (175)At 30 September 476 122 2020 2019 £000 £0000 - 30 days 269 9331 - 60 days 151 261 - 90 days 5 5Greater than 90 days 51 22 476 122FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

22 Derivatives and financial instruments and their risk management (continued)

Capital management
Strong capital management is an integral part of the directors’ strategy to achieve the Group’s stated objectives. The capital managed
by the Group consists of borrowings, cash and cash equivalents and equity of the Group. The Directors review financial capital KPI’s on
a monthly basis. The £30m private placement drawn down in July 2014 provides long-term funding to the Group supplemented by a
five year £10m revolving credit facility. Liquid funds are managed on a daily basis and placed on short-term deposits maturing to meet
liabilities when they fall due. The Group is subject to externally imposed capital requirements in respect of the borrowing facilities detailed
in note 16. The Group has complied with these requirements throughout the year.

Liquidity risk
The Group maintains a strong liquidity position and manages the liquidity profile of its assets, liabilities and commitments so that
cashflows are appropriately balanced and all financial obligations are met when due.

Maturity of financial liabilities at 30 September

Financial liabilities shown above include interest payments due on the £30m private placement.

Borrowing facilities
The Group had undrawn borrowing facilities at 30 September 2020 of £12.0m (2019: £12.0m) in respect of which all conditions
precedent had been met. The overdraft facility of £2.0m is annually renewable, and the Revolving Credit Facility was renewed in July
2019 for a further five years.

Maturity of financial assets and liabilities
The financial assets of the Group comprise deposits placed with banks which all expire in less than one year. The maturity profile of the
Group’s financial assets and liabilities at 30 September was as follows:

Maturity of financial assets at 30 September

Interest rate risk
Interest rate exposure on the £30m of private placements borrowing is managed by having fixed coupons.

106

2020 2019 £000 £000Less than 3 months: cash and cash equivalents and short-term investments 30,520 19,915Greater than 3 months: short-term investments 5,000 5,000 2020 2019 £000 £000Less than one year 19,741 18,958More than one year and less than five years 31,186 27,653More than five years 46,785 48,125 97,712 94,736Notes to the Consolidated Financial Statements
for the year ended 30 September 2020

23 Ultimate controlling party and 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 course of ordinary business.

Energy from Waste Plant

An Energy from Waste plant was commissioned in Jersey during 2011. Jersey Electricity signed a 25 year agreement in 2008 to purchase
electricity produced at the plant by the Government and to share existing facilities with the Energy from Waste plant. This gives rise to the
most significant value transactions with the Government during the year with the value of electricity purchased from the facility during the
year being £1.5m (2019: £1.5m) whilst the value of services provided to the plant was £0.4m (2019: £0.4m).

Remuneration of key management personnel

The remuneration of key management personnel of the Group (which is defined as the Executive and non-Executive Directors) is set out
below. Further information about the remuneration of individual Directors is provided in the Remuneration Report on pages 67 to 70.

107

2020 2019 £000 £000Short-term employee benefits 697 617Post-employment benefits 184 177Non-Executive Director’s benefits 198 187 1,079 981Five Year Group Summary (unaudited)

Financial Statements

Income Statement (£m)

Revenue
Operating profit
Profit before tax

Profit before tax (pre-exceptional items)

Profit after tax

Dividends paid (£m)

Balance Sheets (£m)

Property, plant and equipment

Net current assets

Non-current liabilities

Net assets

Financial Ratios and Statistics

Earnings per ordinary share (pence)

Earnings per ordinary share (pre-exceptional costs) (pence)

Gross dividend paid per ordinary share (pence)

Net dividend paid per ordinary share (pence)

Dividend cover (times)

Dividend cover (pre-exceptional costs) (times)

Cash at bank/(net debt) (£m)

Capital expenditure (£m)

Electricity Statistics

Units sold (m)

% movement

% of units imported

% of units generated

% of units from Energy from Waste plant

Maximum demand (megawatts)

Number of customers

Customer minutes lost

Average price per kilowatt hour sold (pence)

Manpower Statistics (full time equivalents)

Energy

Other

Trainees

Total

Units sold per energy employee (000’s)

Number of customers per energy employee

2020

2019

2018

2017

2016

111.7
16.2

14.8

11.7

4.9

217.9

37.8

(83.0)

205.9

37.9

20.1

16.1

2.4

5.5

12.0

619

-1.2%

94.7%

0.2%

5.1%

141

110.7
16.1

14.8

11.9

4.7

217.0

28.8

(79.2)

199.5

38.4

19.1

15.3

2.5

(5.1)

13.3

627

-1.1%

94.1%

0.3%

5.6%

150

105.9
16.7

15.3

12.2

4.4

215.2

22.7

(76.4)

188.7

39.5

18.1

14.5

2.7

(14.3)

14.3

634

2.1%

94.9%

0.2%

4.9%

178

102.1
14.7

13.5

10.6

4.2

211.9

18.2

(78.5)

176.3

34.6

17.3

13.8

2.5

(21.9)

14.4

621

-0.6%

92.6%

1.5%

5.8%

154

103.4
15.9

14.8

13.1

11.6

4.0

209.2

9.8

(81.8)

164.1

37.7

33.3

16.4

13.1

2.9

2.5

(29.0)

31.6

625

-0.3%

91.6%

2.9%

5.5%

149

51,522

51,103

50,561

49,894

49,532

13.6p

199

305

3,112

259

13.3p

188

293

3,336

272

12.9p

186

102

302

3,411

272

12.9p

201

116

326

3,091

248

12.8p

203

114

327

3,079

244

In 2020 the Directors have made a classification change in relation to the amortisation of deferred infrastructure charges. In order to present the results in a consistent format, the Directors have

reclassified the prior year reported results, increasing both Operating expenses and Revenue by £415k, with no impact to Group operating profit.

108

Financial Calendar

4 January 2021

Preference share dividend

19 February 2021

Record date for final dividend

4 March 2021

Annual General Meeting

25 March 2021

Final dividend for year ended 30 September 2020

13 May 2021

Interim Management Statement – six months to 31 March 2021

4 June 2021

Record date for interim ordinary dividend

25 June 2021

Interim dividend for year ending 30 September 2021

1 July 2021

Preference share dividend

15 December 2021

Preliminary announcement of full year results

Annual General Meeting
The Annual General Meeting will be held at the Powerhouse, Queens Road, St. Helier, Jersey on Thursday 4 March 2021 at 12:30pm.

Details of the resolutions to be proposed are contained in the Notice convening the Meeting.

Press releases and up-to-date information on the Company can be found on the Company’s website (www.jec.co.uk).

109

DRIVING CHANGE FOR A

ZERO-CARBON FUTURE

REPORT AND ACCOUNTS 2020

The Powerhouse, PO Box 45
Queens Road, St Helier JE4 8NY
Tel 01534 505460
Fax 01534 505565
email jec@jec.co.uk
www.jec.co.uk

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a sustainable source.