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| Name | Symbol | Market | Type |
|---|---|---|---|
| Moyle2.9376%33 | LSE:84WR | London | Bond |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 194.6887 | 0 | 00:00:00 |
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TIDM84WR
RNS Number : 6227O
Moyle Interconnector (Financing)PLC
01 July 2010
Moyle Interconnector (Financing) plc
Annual report
for the year ended 31 March 2010
Annual report for the year ended 31 March 2010
Pages
Directors and advisers
1
Operating and financial review
2 - 9
Directors' report
10 - 11
Independent auditors' report
12 - 13
Group statement of comprehensive income
14
Group and parent company balance sheets
15
Group and parent company cash flow statements
16
Notes to the financial statements
17 - 36
Directors and advisers
Directors
Felicity Huston
Patrick Larkin Executive Director
Gerard McIlroy Executive Director
Company secretary
Gerard McIlroy
Registered office
First Floor
The Arena Building
85 Ormeau Road
Belfast
BT7 1SH
Principal place of business
First Floor
The Arena Building
85 Ormeau Road
Belfast
BT7 1SH
Solicitors
Arthur Cox Northern Ireland
Capital House
3 Upper Queen Street
Belfast
BT1 6PU
Bankers
+-------------------------------------+
| Barclays Bank plc |
+-------------------------------------+
| Donegall House |
+-------------------------------------+
| Donegall Square North |
+-------------------------------------+
| Belfast |
+-------------------------------------+
| BT1 5LU |
+-------------------------------------+
Statutory auditors
PricewaterhouseCoopers LLP
Statutory Auditors and Chartered Accountants
Waterfront Plaza
8 Laganbank Road
Belfast
BT1 3LR
Operating and financial review for the year ended 31 March 2010
Business description
The Group ("Moyle") was formed to own and operate the Moyle Interconnector. The
Moyle Interconnector, which was acquired in April 2003 and was funded by a bond
issue of GBP135m over a term of 30 years, provides 500 MW of electricity
transmission capacity between Northern Ireland and Scotland.
Moyle's principal stakeholders are the energy consumers of Northern Ireland and
the financiers of its bond. Its business is to provide a safe, reliable and
efficient transmission service to the electricity systems of Northern Ireland
and in particular to the traders in electricity between the markets of Ireland
and Great Britain. Moyle aims to maximise value to its stakeholders through the
provision of these services.
Moyle manages the Moyle Interconnector on behalf of energy consumers with all
the benefits of the low cost of capital and operational efficiencies being
returned to energy consumers. In addition, proactive and coordinated management
of the Moyle Interconnector has meant that further opportunities for operational
savings have been identified and captured. The quality of the service provided
to our customers is determined by the performance of the Moyle Interconnector in
delivering high availability electricity transmission to electricity traders and
to the electricity systems of Northern Ireland.
Revenue is earned from sale of the transmission capacity of the Moyle
Interconnector, on contracts ranging from one month to three years, sold in
monthly and annual auctions. In the event that revenues from capacity auctions
are not sufficient to cover costs then the shortfall is collected from Northern
Ireland electricity customers via the system operator. It is this security of
revenue that has allowed Moyle to achieve such a low cost of borrowing. Moyle is
pleased that no such call on Northern Ireland customers has been made to date.
The Moyle Interconnector provides a physical capability of transporting 500
megawatts in either direction between Scotland and Northern Ireland. Moyle's
connection agreements limit the trading capacity to 450 megawatts into Northern
Ireland and 80 megawatts into Scotland. All of this capacity is made available
to market traders.
Additionally the Moyle Interconnector provides a facility for the transmission
system operators at either end to rely on each other for system support,
balancing and reserve.
External market environment
The revenue of the Moyle Interconnector is significantly affected by the
difference in wholesale power prices in GB and Ireland.
In Ireland the market ("SEM") is a gross mandatory pool where all generation
taken is paid the half hourly marginal price. Generators, by licence, are
obliged to bid only their marginal costs and a separate capacity payment is paid
for generation capacity made available. Most participants own both generation
and demand and are consequently hedged against the volatility of the market.
In Britain the market, known as BETTA, is a bilateral market where generators
and suppliers contract with each other to match generation and demand. A pool
type balancing market exists to reconcile differences in supply and demand.
Power prices in both markets have fallen in line with the drop in wholesale gas
and coal prices from the summer 2008 highs. Recession in both markets has caused
a significant drop in demand for electricity. The BETTA market price by design
is more sensitive to changes in demand than the SEM price. Consequently during
2009/10 reasonable arbitrage has existed between the market prices favouring
flows into the SEM and as a result demand for Moyle capacity and electricity
transfer across Moyle has been high. This has been a significant change from
2008/09 when prices actually favoured flows into GB.
Operating and financial review (continued)
External market environment (continued)
Significant fossil fuelled plant (gas) and renewable generation is under
development in the island of Ireland and the island appears on track to meet 40%
renewables by 2020. This is at a time when the strong demand growth in the
Republic of Ireland has reversed. ESB's 420MW combined cycle gas turbine
("CCGT") and BGE's 445MW CCGT, both in Cork are due to be fully commissioned in
the coming months. 405MW of open cycle gas turbine plant and 100MW of waste to
energy plant is also due for connection over next four years. ESB divested
1014MW of old generation plant to Endesa, the Spanish utility, in 2008. Endesa
have indicated that they intend to keep the plant operational to end of winter
2011/12 and they intend to repower the sites with new gas fired generation. A
number of other developers have announced their intention to build new CCGT
plant. Scottish and Southern Energy (SSE) have established themselves in the
Irish market and indeed have stated their intention to enter the domestic
market. SSE has applied for generation licences both North and South.
Approximately 2 GW of wind generation is also expected to be built over the next
5 years. If the planned level of generation is built then prices are likely to
fall significantly in a market which uses system marginal price to set prices.
The regulatory authorities are currently modelling such a position with a view
to introducing changes to the market structure. Without changes it is difficult
to see how all the new fossil fired plant will be able to achieve a sustainable
level of income. However there may be export opportunities for the renewable
generation and indeed CCGT generation, which may help interconnector businesses.
EU energy legislation continues apace and the third package of reform is making
its way through the legislative process. Support for renewables, opening and
integrating markets and unbundling continue to be priorities. Legal requirements
are set for interconnectors between member states. Moyle does not fall into this
category, however in many aspects it already operates in line with the
requirements of the legislation.
Eirgrid is progressing the East West interconnector and it is expected to be
completed by 2013. This new interconnector will offer the same service as Moyle
and access arrangements will have to be compatible to allow for competition.
Eirgrid's Interconnector is expected to cost EUR600m, significantly more than
Moyle. It will be linked to a point on the GB system that favours exports to GB
rather than imports compared to Moyle.
Other interconnectors between GB and Ireland and between Ireland and France are
also under consideration however there are no firm plans for construction as
yet. A planning application has also been submitted for a second interconnector
between NI and ROI which is due in 2012. Due to the SEM this interconnector will
become part of the island of Ireland transmission network and not operate as an
interconnector between two markets. However its construction will mean that
Northern Ireland can physically rely more on RoI for security of supply which
will lessen the dependence on existing NI supplies such as Moyle.
While Moyle is technically capable of transferring 500MW in either direction it
is currently limited by its connection agreements to 450MW import to N Ireland
and 80MW export to Scotland. Moyle must pay a fixed annual fee (TNUoS) for this
80MW export capability to National Grid of circa GBP0.9m. Over the coming years
and due to increasing wind generation on the island, we expect increased demand
for export capacity and discussions are ongoing with stakeholders on the
benefits, timing and costs of accessing increased export capacity from National
Grid.
Generation on the island of Ireland is dominated by ESB, Viridian and their
subsidiaries, through either direct ownership of power stations or long term
contracts for other generators' output. Private equity firm Arcapita continues
to own Viridian. In the prior year Arcapita offered to sell the non-regulated
Viridian businesses but after a lengthy process the sale was cancelled. In Q2
2010 Viridian announced that it was negotiating the sale of its Transmission and
Distribution business to ESB.
To accommodate significant planned wind generation in the GB and Ireland markets
major investment will be required in the transmission systems. The transmission
system investment and charges for its use are the subject of ongoing
consideration in both markets.
Operating and financial review for the year ended 31 March 2010 (continued)
Future developments
Scottish wind generation
Two large wind farms in Scotland are planned to connect to the transmission line
feeding the Moyle interconnector by October 2010. The actual connection process
involves outages on the line, which will also disconnect the interconnector.
Currently Moyle is the only party connected to the transmission line and at the
time of construction agreed that its point of common coupling to the national
grid would be the remote end of the line. When the wind farms connect this point
of common coupling will move closer to the interconnector to at least the point
of connection of the wind farms. The point of common coupling is the point at
which Moyle must comply with the requirements of the grid code regarding power
quality. It is more difficult for Moyle to comply when it is connected via a
shorter transmission line to its common coupling point. To attain compliance
Moyle intends to fit static var compensation equipment at its convertor station.
New generation in Ireland
Over the next few years a number of external developments are likely to impact
on the Moyle business. New more efficient gas fired generating plant is being
commissioned on the island of Ireland along with significant levels of wind
generation. The result should be to lower the average system marginal price in
Ireland. Consequently this is likely to erode the average arbitrage value with
GB prices and reduce the revenue Moyle can earn from selling its capacity.
Reducing arbitrage coupled with increasing bond repayments and a new
interconnector means that over the next few years Moyle is not expected to cover
its cashflow requirements through capacity sales and therefore shortfall
collections from Northern Ireland electricity customers are more likely. In
order to mitigate the position Moyle will continue to work with the Regulatory
Authorities to ensure that the full value of interconnection is accessible by
the market, and that Moyle can access a share of that value.
Security of supply services and capacity payments
Increasing levels of wind generation is likely to mean that interconnection will
play a much greater role in security of supply by providing back up supplies
when wind power falls and exporting power when an excess of wind generation
exists. Under the existing SEM market rules interconnector users are prevented
from changing their transfer amounts after gate closure (20 to 44 hours ahead of
real time). Any trades after gate closure are between the system operators and
tend not to be competitively priced compared to market prices. Moyle has argued
for some time that such a position actually prevents the market from availing of
the full benefits of interconnection. Moyle believes that interconnector users
should be permitted to offer to provide power after gate closure in a similar
way to generators and in doing so should be paid capacity payments in a similar
way to generators (for capacity offered and not power provided). The SEM
regulatory authorities are interested to improve the use of interconnectors
within the market and have initiated a number of work streams with fixed
deliverables and timeframes to improve the situation. The work streams include a
review of the capacity payment mechanism, introducing intraday trading for
interconnectors, introducing further granularity in the capacity products
offered on interconnectors, improving the liquidity of the SEM day ahead market
for contracts for difference and examining options to more closely integrate the
SEM with neighbouring markets.
East West Interconnector
Eirgrid under direction from the Republic of Ireland's regulator "CER" is
developing a 500 megawatt high voltage direct current interconnector between
Ireland and Wales to be operational in 2013. The interconnector will provide a
broadly equivalent service to that of Moyle and will have to comply with EU
legislation regarding interconnectors. Moyle believes that at that point there
is likely to be an oversupply of interconnector capacity, particularly as
limited arbitrage is expected between BETTA and SEM. Moyle's revenues from
capacity auctions are expected to suffer as a result and market forces will
dictate that Moyle's capacity would be offered on similar terms to the new
interconnector.
Existing and potentially future EU congestion management principles for
interconnectors will be applied to the East West Interconnector and Moyle will
be under increasing pressure to adopt such principles. The principles do not
address the provision of an adequate revenue stream to Interconnector owners but
assume that its "costs" are covered through a socialised charge on all users. At
that time Moyle expects that it will have to rely more on a revenue stream from
its TNUoS collection process than from its capacity sales.
Forward-looking statements
The Chairman's Statement and Operating and Financial Review in the annual report
of Mutual Energy Limited contain forward-looking statements. Due to the inherent
uncertainties including both economic and business risk factors underlying such
forward-looking information, the actual results of operations, financial
position and liquidity may differ materially from those expressed or implied by
these forward-looking statements.
Operating and financial review for the year ended 31 March 2010 (continued)
Performance during the Year
Environment and Safety
The Group continues to put a high value on the safety of its operations and to
recognise the importance of minimising the impact of its activities on the
environment, both locally and in the global context.
Moyle has delivered highly reliable energy transmission services to their
customers without lost time accidents or public safety incidents. The group
continues to maintain regular contact with the landowners through whose land its
cables pass, to ensure that any land issues are addressed and that no works by
others are taking place in the vicinity of its installations.
Moyle safety rules have been developed from those of Northern Ireland
Electricity, ESB International and Siemens to achieve safety from the system in
carrying out its maintenance activities.
The Group is committed to environmental performance, with no breach of any
environmental licence or permit recorded in the year.
Operating company performance
Revenue and Profitability
Moyle capacity was sold to electricity traders throughout 2009/10 in annual and
monthly auctions. The capacity products offered resulted in contracted capacity
being satisfactory in volume terms, at 100% (east-west) (2009: 76%) and 42%
(west-east) (2009: 80%) of available transmission capacity. Long term capacity
auctions in the calendar year of 2009 realised some GBP10.5m sales revenue for
2009/10 and future years. This compares with the long term capacity auctions in
the 2008 calendar year, which realised GBP3.5m for 2008/9 and future years.
Additional revenue was earned from capacity sales to the system operators in
Ireland, both for system reserve and for inter-system trading between Northern
Ireland and Great Britain. The overall effect was that annual revenue, at
GBP18m, showed a decrease on 2009 (GBP20.5m).
The directors consider that the performance of the Moyle group is shown by its
earnings before interest, taxation, depreciation and amortisation (EBITDA) of
GBP13.6m (2009: GBP15.1m). The group made an operating profit of GBP9.9m (2009:
GBP11.5m).
Operational Performance
In the year to 31 March 2010 Moyle achieved 96.5% availability. 3.14% of the
unavailability was due a scheduled outage by Scottish Power to connect wind
farms to the line supplying Moyle in Scotland. Underlying Moyle availability was
similar to that achieved in year ending 31 March 2009 (99.5% availability). The
technical adviser's availability prediction was 97.9%. A total of 16 forced
outage events occurred during the year, accounting for 0.36% unavailability. Of
these six events occurred on 30th - 31st March 2010 when a severe ice storm hit
the NI system and caused voltage dips which in turn tripped the interconnector.
As the NI system was in a state of fluctuating voltage, safety protocols ensured
the Moyle Interconnector tripped to protect the system.
During the year approximately 2.3 terrawatthours (0.8TWh 2008/09) of power was
imported across Moyle into Northern Ireland with 0.005 terrawatthours (0.2TWh
2008/09) physically exported.
The submarine and underground cable system again performed without incident.
The necessary bi-annual converter station maintenance was carried out during the
Scottish Power line outage in October 2009 so that the overall downtime was
minimised. The opportunity was also taken to bring forward and carry out circuit
breaker maintenance at the Scotland converter station and thereby improve
downtime in future years. Further remedial work programmes on the converter
station equipment have been carried out during the year and are planned for
2010. These are aimed at eliminating the small number of defects that became
evident during the early years of operation, so that the current excellent
availability is expected to continue into the future.
The availability of the Moyle assets in the year to 31 March 2010 was once again
essential to the security of electricity supply in Ireland. For periods, the
adequacy of the electricity systems throughout Ireland depended on the
generation capacity delivered to them by the Moyle Interconnector from the
electricity system of Great Britain. In March 2010 Moyle recorded its highest
ever level of imports in a single month with 247.6GWh of power being imported to
Ireland. This exceeded the previous highest ever monthly transfer of 234.6GWh
which was recorded in January 2010.
Moyle operated throughout the year with no lost time injuries or environmental
incidents.
Operating and financial review for the year ended 31 March 2010 (continued)
Consumers' Returns and Receipts and employee matters
As a mutual energy company working for consumers, the directors continue to
consider it appropriate to report here any returns made to or receipts from the
energy consumers of Northern Ireland.
Continuing the trend of the previous year, Moyle set aside GBP12.9m (2009:
GBP11.9m) at year end as a further contribution from its accumulated operating
surplus towards lower electricity prices in Northern Ireland in the coming year.
In consequence, in 2010/11 there will again be no cash call on electricity
consumers under Moyle's collection agency agreement with the System Operator for
Northern Ireland ("SONI"). When the 2003 re-financing arrangements were put in
place, it was anticipated that such cash calls would be required but in practice
the company's performance has been such that this has not happened to date.
At the 2010 year end GBP1.159m was transferred to the cash reserve held in
Moyle's Distributions Account from the main operating bank account to help cover
the anticipated cash deficit in 2010/11. (2009: GBP2.2m transferred from the
Moyle's Distributions Account).
The Company is committed to maintaining a high quality and committed workforce.
As such the company employs a personal performance evaluation system with
assessment of targets and training needs to encourage performance. Remuneration
is linked to performance throughout the organisation.
Key performance indicators (KPI's)
The directors have identified four groups of KPI's chosen to reflect what is
important to our stakeholders.
The Group's main business continues to be in the operation of regulated
debt-financed infrastructure assets. This business generates cash and is
structured to meet the requirements of its financiers and to minimise costs to
consumers. By its nature, it is not necessarily profitable in its early years.
While the Group strives towards profitability, its contribution to the energy
consumers of Northern Ireland is best measured by its cash returns to or
receipts from consumers.
Consumer financial benefit KPIs
The electricity consumers of Northern Ireland underwrite any revenue shortfalls
incurred by Moyle and the Group's surpluses are used on their behalf. The
relevant KPIs therefore measure cash:
· reinvested in the business to avoid directly charging consumers for the
provision of the Moyle Interconnector asset; and
· transferred to Moyle's Distributions Account or disbursed on consumers'
behalf.
Operational performance KPI's
The quality of service to our direct customers is determined by the performance
of our assets, of which the principal measure is the availability of
transmission capacity. As availability should be at or close to 100%, the KPI
is expressed as its inverse, unavailability. Moyle measures its unavailability
in accordance with the international standard reporting protocol for the
performance of High Voltage Direct Current (HVDC) links published by CIGRÉ (the
international conference of electricity transmission networks), against the
independent estimate of 2.1% made by the technical advisers to its financiers.
Financial KPI's
In addition to compliance with the respective financing covenants, the principal
requirements of the financiers are the maintenance of Annual Debt Service Cover
Ratios (ADSCR) of greater than 1.15. These calculations are based upon specific
methodologies outlined in the relevant collateral deeds with the information
sourced from the Group's management accounts.
Corporate responsibility KPI's
The Group's contribution to society is focused on the safe and efficient
operation of vital infrastructure in a cost efficient manner. Cost efficiency
impacts upon the ability to return cash to customers (consumer benefit KPI's)
and on the financial performance. Safe and efficient operation is measured with
reference to the operational performance KPI's and the corporate responsibility
KPI's. These aim to measure both the absolute performance (availability) and the
environmental and safety impact of achieving this performance (corporate
responsibility).
Operating and financial review for the year ended 31 March 2010 (continued)
Key performance indicators (KPI's) (continued)
KPI table 1
+----------------------------------------------------+----------+-----------+
| | 2010 | 2009 |
+----------------------------------------------------+----------+-----------+
| Consumer benefits | | |
+----------------------------------------------------+----------+-----------+
| Cash reinvested | GBP12.9m | GBP11.9m |
+----------------------------------------------------+----------+-----------+
| Cash transferred to/(from) Moyle Distributions | GBP1.2m | (GBP2.1m) |
| Account | | |
+----------------------------------------------------+----------+-----------+
| Moyle Distributions Account disbursements | GBP0m | GBP10m |
+----------------------------------------------------+----------+-----------+
| | | |
+----------------------------------------------------+----------+-----------+
| Moyle Cash reinvested |
| The Moyle Interconnector can charge consumers for the benefit of the |
| interconnector through their electricity bill, in a similar way that |
| other electricity infrastructure is charged. However, as a mutual |
| company operating for the benefit of consumers, the company has chosen |
| to meet its forecasted costs through using its cash reserves. The KPI |
| is the cash actually transferred into the current account to avoid |
| making a charge on consumers. |
| |
| To date the Moyle business has never made a charge to consumers, |
| always setting aside cash to avoid a charge. |
| |
| Moyle cash retained |
| Whereas the KPI of Moyle cash reinvested reflects the income from one |
| year being set aside to prevent a charge in the following year, this |
| KPI shows the cash accumulating in/or being applied from the |
| distributions account. |
| |
| The benefits of these investments will return between 2013 and 2022. |
| |
| |
| The balance on the distributions account as at 31 March 2010 was |
| GBP26.2m. |
| |
+---------------------------------------------------------------------------+
| KPI table 2 | | |
+----------------------------------------------------+----------+-----------+
| | 2010 | 2009 |
+----------------------------------------------------+----------+-----------+
| Operational Performance | | |
+----------------------------------------------------+----------+-----------+
| Unavailability - Moyle | 3.5% | 0.5% |
+----------------------------------------------------+----------+-----------+
| Average unavilability | 1.0% | 0.6% |
+----------------------------------------------------+----------+-----------+
| | | |
+----------------------------------------------------+----------+-----------+
Availability is the key measure of operating performance. Availability in the
electricity business is calculated as the number of hours unavailable x number
of MW unavailable / Total plant capacity under connection agreements x 8760
hours.
The unavailability in 2010 includes 3.14% attributable to Scottish Power outages
on the line supplying the interconnector.
Average availability KPI measures the cumulative average performance of the
plant. This is compared to the long run forecast of 2.1% provided by the
technical advisors to the financiers. The KPI is calculated by adding the
unavailability for each year and dividing by the number of years.
The rise in 2010 is mainly a result of the outages on the Scottish Power line
supplying the interconnector.
+-------------------------------------------------+----+----------+------------+
| KPI table 3 | | |
+-------------------------------------------------+---------------+------------+
| | 2010 | 2009 |
+-------------------------------------------------+---------------+------------+
| Financial performance | | |
+-------------------------------------------------+---------------+------------+
| ADSCR - Moyle | 2.64 | 2.51 |
+-------------------------------------------------+---------------+------------+
| |
| The Annual Debt Service Cover Ratios are calculated in accordance with the |
| terms of the bonds for each operational company. |
| |
| The basis of calculation is Available Cash / Debt Service in the next 12 |
| months. |
| |
| In each case Available Cash = the difference between income and expenses |
| in the period + cash in designated bank accounts, where cash in the |
| designated bank accounts is limited to 1x Debt service. |
| |
| |
+------------------------------------------------------------------------------+
| | | |
| | | |
| Operating and financial review for the year ended 31 | | |
| March 2010 (continued) | | |
| | | |
| Key performance indicators (KPI's) (continued) | | |
| | | |
| KPI table 4 | | |
+------------------------------------------------------+----------+------------+
| | 2010 | 2009 |
+------------------------------------------------------+----------+------------+
| Corporate Responsibility | | |
+------------------------------------------------------+----------+------------+
| Lost time and reportable accidents | 0 | 0 |
+------------------------------------------------------+----------+------------+
| Electricity consumption at convertor stations | 2,656mwh | 2,455 mwh |
+------------------------------------------------------+----------+------------+
| | | |
+------------------------------------------------------+----------+------------+
| | | | |
+-------------------------------------------------+----+----------+------------+
Financial position and financial management
Revenue, profitability and reserves
Group revenue in the period to 31 March 2010 was GBP18.0m (2009: GBP20.5m).
Group operating profit before interest and tax was GBP9.9m (2009: GBP11.5m).
After accounting for debt service, Moyle made an after-tax profit of GBP7.3m
(2009: GBP2.1m).
The Moyle group was cash generative during the year. The Group is required to
hold high levels of cash reserves as conditions of their financing arrangements.
Moyle held operating cash reserves of GBP53.1m, which includes the GBP12.9m
retained to cover expected operating deficits in the current year, so as to
avoid making a cash call on electricity consumers. Moyle's Distributions
Account held GBP26.2m at year end. These funds are available for use for the
benefit of electricity consumers in Northern Ireland in consultation with the
Utility Regulator.
Debt Service and Liquidity
Under their respective financing documents, the ongoing ability of all the core
regulated business to meet its debt service obligations is measured by the ADSCR
at the level of the licence holding entity. For the year under review, the
ADSCRs, calculated by comparing the actual cash flows with the debt service
payments which they funded in accordance with the methodology dictated by the
financing agreement, were 2.64 against a required figure of 1.15 for Moyle.
The Group has low liquidity risk due to its strong cash flows and the reserve
accounts and liquidity facilities required by its financing documents. The
required reserve accounts were fully funded and liquidity facilities were in
place throughout the year for Moyle.
Treasury
The Group's only borrowings are those of its operating subsidiary - the Index
Linked Guaranteed Secured Bonds 2033 issued by Moyle Interconnector (Financing)
plc. The purpose of this arrangement is to manage the index risk arising from
the Group's sources of long-term finance.
The Group's treasury policies, determined by the terms of its long-term bond
financing, are aimed at minimising the risks associated with the Group's
financial assets and liabilities. Where the Group provides its transmission
services on deferred terms to parties who do not hold an appropriate credit
rating, security cover is required. The cash reserves of the Group are held in
interest-bearing accounts or invested in fixed term deposits of up to one year
spread across a panel of approved banks and financial institutions having high
credit ratings.
Interest received for the period was GBP2.3m (2009: GBP3.6m).
Operating and financial review for the year ended 31 March 2010 (continued)
Resources and Relationships
The business of the Group has been stable throughout the year and the directors
continue to believe that the debt-financed and outsourced model is appropriate
to that business. The directors consider that the management arrangements,
together with the Group's relationships with its professional advisers and
appropriate insurance arrangements continue to be robust against management
contingencies and effective in succession terms.
The Group holds significant cash resources on its balance sheet. The directors
continue to seek investment opportunities which will ensure that these resources
will be used in ways which are in the long-term interests of the energy
consumers of Northern Ireland, with a risk profile which is appropriate to the
nature of the Group.
For most of its business activities, the Group relies on its network of
professional advisers and contractors. While ensuring that contracts are at
market rates, the Group aims to build relatively long-term relationships of the
order of five years.
During the year, the Group ensured compliance with the terms of the financing of
its regulated subsidiaries and continued to maintain good relations with the
respective bond financiers, represented by Assured Guaranty (Europe) Limited as
controlling creditor and the Bank of New York Mellon as trustee.
Moyle Interconnector Ltd, the operating company of the Group, is regulated under
the terms of their electricity transmission licence and the directions issued by
the Utility Regulator under the licence. The Group aims to work closely with the
Utility Regulator to build a long-term co-operative relationship in the interest
of consumers and, to this end, meets regularly with the Utility Regulator at
various levels.
The operation of the Moyle Interconnector and the administration of capacity
auctions are contracted to SONI under the Operating and Agency Agreement. The
long term maintenance agreement for Moyle's converter stations was renewed with
Siemens plc towards the end of 2006 and ESBI was re-appointed as the Moyle
Maintenance Manager from April 2008; both contracts are for a period of five
years.
Currently Moyle considers that it is in its best interest to use highly
qualified operations and maintenance contractors rather than trying to establish
its own in-house capability. This policy is consistent with the concept of
mutualisation which is primarily to reduce the cost of capital within the
businesses not to replicate the operations and maintenance skills of established
incumbents.
Moyle operates in both the SEM and BETTA markets and consequently keeps up
regular contact with the main companies, forums and bodies within the industry.
Regular meetings are held with its customers to try to ensure that their
expectations regarding the type and quantity of capacity on offer are satisfied.
Moyle's customers are electricity suppliers and traders in the Irish and GB
markets, such as SSE Energy Supply Ltd, Scottish Power Energy Management Ltd,
Bord Gais Eireann and Viridian Energy Supply Ltd.
Directors' report for the year ended 31 March 2010
The directors present their report and the audited financial statements for the
year ended 31 March 2010.
Principal activity, review of the business and key performance indicators
The group's principal activity during the year was the financing and operation
through its subsidiary undertaking of the Moyle Interconnector which links the
electricity transmission systems of Northern Ireland and Scotland. It is the
intention of the directors to continue to maintain the efficient and effective
operation of the interconnector. The Operating and Financial Review on pages 2
to 9 of these financial statements provides a review of the business, future
developments and its key performance indicators for the Moyle Interconnector
(Financing) plc group and is therefore incorporated into this report by cross
reference.
Results and dividends
The group's profit for the year is GBP7,325,000 (2009: GBP2,067,000). The
directors do not recommend the payment of a dividend (2009: GBPnil).
Directors
The directors who served the group during the year were:
Alan McClure (Resigned 29 September 2009)
Felicity Huston
Damian McAteer (Resigned 29 September 2009)
William Cargo (Resigned 1 January 2010)
Patrick Larkin
Gerard McIlroy (Appointed 1 January 2010)
Financial risk management
Please refer to note 1 to these financial statements for a description of the
financial risks that the group faces and how it addresses those risks.
Political and charitable donations
No political or charitable donations have been made during the year (2009:
GBPnil).
Payment of suppliers
The group's procurement policy is to source equipment, goods and services from a
wide range of suppliers in accordance with commercial practices based on
fairness and transparency.
The group recognises the important role that suppliers play in its business and
works to ensure that payments are made to them in accordance with agreed
contract terms.
The group had trade payable days of 12 days at 31 March 2010 (2009: 19 days).
The group intends to continue to meet the payment terms contained in its
agreements with suppliers.
Directors' report for the year ended 31 March 2010 (continued)
Statement of directors' responsibilities
The directors are responsible for preparing the Annual 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. Under that law the directors have prepared the group and parent
company financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union. Under company law
the directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
group and the company and of the profit or loss of the group for that period.
In preparing these financial statements, the directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and prudent;
· state whether applicable IFRSs as adopted by the European Union have been
followed, subject to any material departures disclosed and explained in the
financial statements; and
· prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the company's transactions and disclose with
reasonable accuracy at any time the financial position of the company and the
group and enable them to ensure that the financial statements comply with the
Companies Act 2006 and, as regards the group financial statements, Article 4 of
the IAS Regulation. They are also responsible for safeguarding the assets of the
company and the group 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 company's
website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
Statement of disclosure of information to auditors
So far as each of the directors in office at the date of approval of these
financial statements is aware:
· there is no relevant audit information of which the group and parent
company's auditors are unaware; and
· they have taken all the steps that they ought to have taken as directors
in order to make themselves aware of any relevant audit information and to
establish that the group and parent company's auditors are aware of that
information.
Independent auditors
PricewaterhouseCoopers LLP have indicated their willingness to continue in
office, and a resolution concerning their reappointment will be proposed at the
Annual General Meeting.
By order of the Board
Gerard McIlroy
Company secretary
23 June 2010
Independent auditors' report to the members of Moyle Interconnector (Financing)
plc
We have audited the group and parent company financial statements ("financial
statements") of Moyle Interconnector (Financing) plc for the year ended 31 March
2010 which comprise the group statement of comprehensive income, the group and
parent company balance sheets, the group and parent company cash flow statements
and the related notes. The financial reporting framework that has been applied
in their preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union and, as regards the parent
company financial statements, as applied in accordance with the provisions of
the Companies Act 2006.
Respective responsibilities of directors and auditors
As explained more fully in the Directors' Responsibilities Statement set out on
page 11, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit the financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's Ethical
Standards for Auditors.
This report, including the opinions, has been prepared for and only for the
company's members as a body in accordance with Chapter 3 of Part 16 of the
Companies Act 2006 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.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are
appropriate to the group's and the parent company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the directors; and the overall presentation of the
financial statements.
Opinion on financial statements
In our opinion:
· the financial statements give a true and fair view of the state of the
group's and of the parent company's affairs as at 31 March 2010 and of the
group's profit and group's and parent company's cash flows for the year then
ended;
· the group financial statements have been properly prepared in accordance
with IFRSs as adopted by the European Union;
· the parent company financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union and as applied in
accordance with the provisions of the Companies Act 2006; and
· the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006 and, as regards the group financial
statements, Article 4 of the lAS Regulation.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report for the financial
year for which the financial statements are prepared is consistent with the
financial statements.
Independent auditors' report to the members of Moyle Interconnector (Financing)
plc (continued)
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not visited
by us; or
· the parent company financial statements are not in agreement with the
accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are not
made; or
· we have not received all the information and explanations we require for
our audit
Kevin MacAllister (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Belfast
30 June 2010
Group statement of comprehensive income for the year ended 31 March 2010
+----------------+--------+---------+----------+
| | | 2010 | 2009 |
+----------------+--------+---------+----------+
| | Notes | GBP'000 | GBP'000 |
+----------------+--------+---------+----------+
| Revenue | | 18,045 | 20,463 |
| - | | | |
| continuing | | | |
| operations | | | |
+----------------+--------+---------+----------+
| Operating | 2 | (8,136) | (9,012) |
| costs | | | |
+----------------+--------+---------+----------+
| Earnings | | 13,615 | 15,134 |
| before | | | |
| depreciation | | | |
| and | | | |
| amortisation | | | |
| of | | | |
| intangible | | | |
| assets | | | |
+----------------+--------+---------+----------+
| Amortisation | | (1,661) | (1,661) |
| of | | | |
| intangible | | | |
| assets | | | |
+----------------+--------+---------+----------+
| Depreciation | | (2,045) | (2,022) |
| (net of | | | |
| amortisation | | | |
| of | | | |
| government | | | |
| grants) | | | |
+----------------+--------+---------+----------+
| Operating | | 9,909 | 11,451 |
| profit | | | |
+----------------+--------+---------+----------+
| Finance | 4 | 2,879 | 3,601 |
| income | | | |
+----------------+--------+---------+----------+
| Finance | 4 | (2,526) | (12,188) |
| costs | | | |
+----------------+--------+---------+----------+
| Finance | 4 | 353 | (8,587) |
| income/(costs) | | | |
| - net | | | |
+----------------+--------+---------+----------+
| Profit | | 10,262 | 2,864 |
| before | | | |
| income | | | |
| tax | | | |
+----------------+--------+---------+----------+
| Income | 5 | (2,937) | (797) |
| tax | | | |
| charge | | | |
+----------------+--------+---------+----------+
| Profit | 14 | 7,325 | 2,067 |
| for | | | |
| the | | | |
| year | | | |
+----------------+--------+---------+----------+
The notes on pages 17 to 36 are an integral part of these group financial
statements.
Group and parent company balance sheets as at 31 March 2010
+-------------+--------+---------+---------+---------+---------+
| | | Group | |
| | | | Company |
+-------------+--------+-------------------+-------------------+
| | | 2010 | 2009 | 2010 | 2009 |
+-------------+--------+---------+---------+---------+---------+
| | Notes | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------+--------+---------+---------+---------+---------+
| Assets | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Non | | | | | |
| current | | | | | |
| assets | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Property, | 7 | 103,202 | 106,571 | - | - |
| plant and | | | | | |
| equipment | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Intangible | 8 | 44,850 | 46,511 | - | - |
| assets | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Investment | 9 | - | - | 20,950 | 20,950 |
| in | | | | | |
| subsidiary | | | | | |
| undertaking | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Trade | 10 | 22,886 | 21,846 | 102,940 | 109,647 |
| and | | | | | |
| other | | | | | |
| receivables | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Deferred | 17 | - | 615 | - | - |
| income | | | | | |
| tax | | | | | |
| assets | | | | | |
+-------------+--------+---------+---------+---------+---------+
| | | 170,938 | 175,543 | 123,890 | 130,597 |
+-------------+--------+---------+---------+---------+---------+
| Current | | | | | |
| assets | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Trade | 11 | 4,853 | 2,843 | 5,324 | 4,689 |
| and | | | | | |
| other | | | | | |
| receivables | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Cash | 12 | 53,147 | 49,961 | 86 | 111 |
| and | | | | | |
| cash | | | | | |
| equivalents | | | | | |
+-------------+--------+---------+---------+---------+---------+
| | | 58,000 | 52,804 | 5,410 | 4,800 |
+-------------+--------+---------+---------+---------+---------+
| Total | | 228,938 | 228,347 | 129,300 | 135,397 |
| assets | | | | | |
+-------------+--------+---------+---------+---------+---------+
| | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Equity | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Ordinary | 13 | 50 | 50 | 50 | 50 |
| shares | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Retained | 14 | 30,359 | 23,034 | (222) | (202) |
| earnings | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Total | | 30,409 | 23,084 | (172) | (152) |
| equity | | | | | |
+-------------+--------+---------+---------+---------+---------+
| | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Liabilities | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Non | | | | | |
| current | | | | | |
| liabilities | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Borrowings | 15 | 120,764 | 128,793 | 120,764 | 128,793 |
+-------------+--------+---------+---------+---------+---------+
| Provisions | 16 | 2,536 | 3,106 | - | - |
+-------------+--------+---------+---------+---------+---------+
| Deferred | 17 | 19,281 | 19,172 | - | - |
| income | | | | | |
| tax | | | | | |
| liabilities | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Government | 18 | 39,731 | 41,055 | - | - |
| grant | | | | | |
+-------------+--------+---------+---------+---------+---------+
| | | 182,312 | 192,126 | 120,764 | 128,793 |
+-------------+--------+---------+---------+---------+---------+
| Current | | | | | |
| liabilities | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Trade | 19 | 7,935 | 6,642 | 2,550 | 1,585 |
| and | | | | | |
| other | | | | | |
| payables | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Income | | 800 | - | - | - |
| tax | | | | | |
| liabilities | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Borrowings | 15 | 6,158 | 5,171 | 6,158 | 5,171 |
+-------------+--------+---------+---------+---------+---------+
| Government | 18 | 1,324 | 1,324 | - | - |
| grant | | | | | |
+-------------+--------+---------+---------+---------+---------+
| | | 16,217 | 13,137 | 8,708 | 6,756 |
+-------------+--------+---------+---------+---------+---------+
| Total | | 198,529 | 205,263 | 129,472 | 135,549 |
| liabilities | | | | | |
+-------------+--------+---------+---------+---------+---------+
| Total | | 228,938 | 228,347 | 129,300 | 135,397 |
| equity | | | | | |
| and | | | | | |
| liabilities | | | | | |
+-------------+--------+---------+---------+---------+---------+
The notes on pages 17 to 36 are an integral part of these group financial
statements.
The group financial statements on pages 14 to 36 were authorised for issue by
the Board of Directors on 23 June 2010 and were signed on its behalf by:
+-------------------------------------+-------------------------------------+
| Patrick Larkin | Felicity Huston |
+-------------------------------------+-------------------------------------+
| Director | Director |
+-------------------------------------+-------------------------------------+
Moyle Interconnector (Financing) plc
Registered number:
NI 045625
Group and parent company cash flow statements for the year
ended 31 March 2010
+---------------+--------+---------+----------+---------+---------+
| | | Group | Company |
+---------------+--------+--------------------+-------------------+
| | | 2010 | 2009 | 2010 | 2009 |
+---------------+--------+---------+----------+---------+---------+
| | Notes | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+--------+---------+----------+---------+---------+
| Cash | | | | | |
| flows | | | | | |
| from | | | | | |
| operating | | | | | |
| activities | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Profit/(loss) | | 9,909 | 11,451 | (20) | (24) |
| before income | | | | | |
| tax and | | | | | |
| finance costs | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Adjustments | | | | | |
| for: | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Depreciation | | 3,369 | 3,346 | - | - |
| of property, | | | | | |
| plant and | | | | | |
| equipment | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Amortisation | | (1,324) | (1,324) | - | - |
| of | | | | | |
| government | | | | | |
| grant | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Amortisation | | 1,661 | 1,661 | - | - |
| on | | | | | |
| intangible | | | | | |
| assets | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Movement | | (2,101) | 1,828 | - | 109 |
| in trade | | | | | |
| and | | | | | |
| other | | | | | |
| receivables | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Movement | | 1,713 | 646 | 229 | (480) |
| in trade | | | | | |
| and | | | | | |
| other | | | | | |
| payables | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Income | | (486) | (362) | - | - |
| tax | | | | | |
| liabilities | | | | | |
| paid | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Net | | 12,741 | 17,246 | 209 | (395) |
| cash | | | | | |
| generated | | | | | |
| from/(used | | | | | |
| in) | | | | | |
| operating | | | | | |
| activities | | | | | |
+---------------+--------+---------+----------+---------+---------+
| | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Cash | | | | | |
| flows | | | | | |
| from | | | | | |
| investing | | | | | |
| activities | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Interest | | - | 2,280 | 2,455 | 5,781 |
| received | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Repayment | | - | - | 6,817 | 4,183 |
| of loans | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Purchase | | - | (1) | - | - |
| of | | | | | |
| property, | | | | | |
| plant and | | | | | |
| equipment | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Net | | - | 2,279 | 9,272 | 9,964 |
| cash | | | | | |
| generated | | | | | |
| from | | | | | |
| investing | | | | | |
| activities | | | | | |
+---------------+--------+---------+----------+---------+---------+
| | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Cash | | | | | |
| flows | | | | | |
| from | | | | | |
| financing | | | | | |
| activities | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Interest | | (4,272) | (4,693) | (4,223) | (4,693) |
| paid | | | | | |
| (including | | | | | |
| borrowing | | | | | |
| fees) | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Advances | | - | (10,000) | - | - |
| to | | | | | |
| related | | | | | |
| parties | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Repayment | | (5,283) | (4,770) | (5,283) | (4,770) |
| of | | | | | |
| borrowings | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Net | | (9,555) | (19,463) | (9,506) | (9,463) |
| cash | | | | | |
| used | | | | | |
| in | | | | | |
| financing | | | | | |
| activities | | | | | |
+---------------+--------+---------+----------+---------+---------+
| | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Movement | | 3,186 | 62 | (25) | 106 |
| in cash | | | | | |
| and cash | | | | | |
| equivalents | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Cash | 12 | 49,961 | 49,899 | 111 | 5 |
| and | | | | | |
| cash | | | | | |
| equivalents | | | | | |
| at the | | | | | |
| beginning | | | | | |
| of the year | | | | | |
+---------------+--------+---------+----------+---------+---------+
| Cash | 12 | 53,147 | 49,961 | 86 | 111 |
| and | | | | | |
| cash | | | | | |
| equivalents | | | | | |
| at the end | | | | | |
| of the year | | | | | |
+---------------+--------+---------+----------+---------+---------+
The notes on pages17 to 36 are an integral part of these group financial
statements.
Notes to the financial statements for the year ended 31 March 2010
General information
The group's principal activity during the year was the financing and operation
(through its subsidiary undertaking) of the Moyle Interconnector which links the
electricity transmission systems of Northern Ireland and Scotland. The company
is incorporated and domiciled in Northern Ireland.
The financial statements are presented in Sterling and all values are rounded to
the nearest thousand pounds (GBP'000) except when otherwise indicated. All of
the group and company's assets and liabilities are denominated in Sterling.
These financial statements were authorised for issue by the Board of Directors
on 23 June 2010 and were signed on their behalf by Patrick Larkin and Felicity
Huston. The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
The consolidated financial statements of Moyle Interconnector (Financing) plc
have been prepared in accordance with International Financial Reporting
Standards as adopted by the European Union, IFRIC Interpretations and the
Companies Act 2006 applicable to companies reporting under IFRS. The
consolidated financial statements have been prepared under the historical cost
convention. The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the group's
accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the
consolidated financial statements are disclosed on page 24.
Standards, amendments and interpretations effective in the year ended 31 March
2010 and that are relevant to the group and parent company
The following standards, amendments and interpretations to published standards
are effective for the year ended 31 March 2010 and are relevant to the group's
or parent company's operations:
· IAS 1 Revised - This revised standard requires entities to prepare a
statement of comprehensive income. All non-owner changes in equity are required
to be shown in a performance statement, but entities can choose whether to
present one performance statement (the statement of comprehensive income) or two
statements (the income statement and statement of comprehensive income). Owner
changes in equity are shown in a statement of changes in equity. In addition,
entities making restatements or reclassifications of comparative information are
required to present a restated balance sheet as at the beginning of the
comparative period in addition to the current requirement to present balance
sheets at the end of the current period and comparative period;
· IFRS 8 - This standard replaces IAS 14 and aligns segment reporting with
the requirements of the US standard SFAS 131, 'Disclosures about segments of an
enterprise and related information'. This new standard uses a 'management
approach', under which segment information is presented on the same basis as
that used for internal reporting purposes; and
· Amendment to IFRS 7 - This amendment forms part of the IASB's response to
the financial crisis and addresses the G20 conclusions aimed at improving
transparency and enhancing accounting guidance. The amendment increases the
disclosure requirements about fair value measurement and reinforces existing
principles for disclosure about liquidity risk. The amendment introduces a
three-level hierarchy for fair value measurement disclosure and requires some
specific quantitative disclosures for financial instruments in the lowest level
in the hierarchy. In addition, the amendment clarifies and enhances existing
requirements for the disclosure of liquidity risk primarily requiring a separate
liquidity risk analysis for derivative and non-derivative financial liabilities.
Notes to the financial statements for the year ended 31 March 2010
Standards, amendments and interpretations effective in the year ended 31 March
2010 and that are not relevant to the group and parent company
The following standards, amendments and interpretations to published standards
are effective for the year ended 31 March 2010 but they are not relevant to the
group's or parent company's operations:
+------------------+
| International |
| Accounting |
| Standards |
| (IAS/IFRSs) |
+------------------+
| |
+------------------+
| |
| IAS 32 |
| (A) |
| Amendment |
| to |
| financial |
| instruments: |
| presentation |
+------------------+
| |
| IAS 23 |
| (R) |
| Borrowing |
| costs |
| (revised) |
+------------------+
| |
| IAS |
| 32/IFRS |
| 7 (A) |
| Amendment |
| to |
| financial |
| instruments: |
| reclassification |
+------------------+
| |
| IFRIC |
| 9/IAS |
| 39 (A) |
| Amendment |
| to |
| financial |
| instruments: |
| embedded |
| derivatives |
+------------------+
| |
| IFRS 1 |
| Amendment |
| to first |
| time |
| adoption |
| of IFRS |
+------------------+
| |
| IFRS 2 |
| Amendment |
| to share |
| based |
| payments: |
| vesting |
| conditions |
+------------------+
| |
+------------------+
| International |
| Financial |
| Reporting |
| Interpretation |
| Committee |
| (IFRICs) |
+------------------+
| |
+------------------+
| |
| IFRIC |
| 12 |
| Service |
| concession |
| arrangements |
| IFRIC 13 |
| Customer |
| loyalty |
| programmes |
+------------------+
| |
| IFRIC |
| 15 |
| Agreements |
| for the |
| construction |
| of real |
| estate |
+------------------+
| |
| IFRIC |
| 16 |
| Hedges |
| of a |
| net |
| investment |
| in a |
| foreign |
| investment |
| |
+------------------+
Standards, amendments and interpretations to existing standards that are not yet
effective and have not been early adopted
During the year, the IASB and IFRIC have issued the following accounting
standards and interpretations with an effective date after the date of these
financial statements (i.e. applicable to accounting periods beginning on or
after the effective date). The directors do not anticipate that the adoption of
these standards and interpretations will have a material impact on the group's
financial statements in the period of initial application:
+----------------+-----------+
| |Effective |
| | date |
+----------------+-----------+
| International | |
| Accounting | |
| Standards | |
| (IAS/IFRSs) | |
+----------------+-----------+
| | |
+----------------+-----------+
| | 1 July |
| IAS 24 | 2009 |
| (A) | (*) |
| Amendment | |
| to | |
| Related | |
| party | |
| disclosures | |
+----------------+-----------+
| | 1 July |
| IAS 27 | 2009 |
| (R) | |
| Consolidated | |
| and separate | |
| financial | |
| statements | |
| (revised) | |
+----------------+-----------+
| | 1 |
| IFRS 9 | January |
| Financial | 2009 |
| instruments | (*) |
+----------------+-----------+
| | 1 |
| IAS 32 | February |
| (A) | 2010 |
| Amendment | |
| to | |
| financial | |
| instruments: | |
| presentation | |
| on | |
| classification | |
| of rights | |
| issues | |
+----------------+-----------+
| | 1 July |
| IAS 39 | 2009 |
| (A) | (*) |
| Amendment | |
| to | |
| financial | |
| instruments: | |
| eligible | |
| hedged items | |
+----------------+-----------+
| | 1 |
| IFRS 2 | January |
| (A) | 2010 |
| Amendment | |
| to share | |
| based | |
| payments: | |
| group | |
| cash-settled | |
| transactions | |
+----------------+-----------+
| | 1 July |
| IFRS 3 | 2009 |
| (R) | |
| Business | |
| combinations | |
| (Revised) | |
+----------------+-----------+
| International | |
| Financial | |
| Reporting | |
| Interpretation | |
| Committee | |
| (IFRICs) | |
+----------------+-----------+
| | |
+----------------+-----------+
| | 1 |
| IFRIC | January |
| 14 (A) | 2011 |
| Amendment | |
| to IAS 19 | |
+----------------+-----------+
| | 1 July |
| IFRIC | 2009 |
| 17 | |
| Distributions | |
| of non cash | |
| assets to | |
| owners | |
+----------------+-----------+
| | 31 |
| IFRIC | October |
| 18 | 2009 |
| Transfer | |
| of | |
| assets | |
| from | |
| customers | |
+----------------+-----------+
| | 1 July |
| IFRIC | 2010 |
| 19 | (*) |
| Extinguishing | |
| financial | |
| liabilities | |
| with equity | |
| instruments | |
+----------------+-----------+
(*) not yet adopted by the European Union.
Notes to the financial statements for the year ended 31 March 2010
Basis of consolidation
The group financial statements consolidate the financial statements of Moyle
Interconnector (Financing) plc and its subsidiary undertaking drawn up to 31
March 2010. Subsidiaries are entities that are directly or indirectly
controlled by the group. Control exists where the group has the power to govern
the financial and operating policies of the entity so as to obtain benefits from
its activities. In assessing control, potential voting rights that are currently
exercisable or convertible are taken into account.
The purchase method of accounting is used to account for the acquisition of
subsidiaries by the group. The cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange, plus costs directly attributable to the
acquisition. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their
fair values at the acquisition date, irrespective of the extent of any minority
interest. The excess of the cost of acquisition over the fair value of the
group's share of the identifiable net assets acquired is recorded as goodwill.
If the cost of acquisition is less than the fair value of the net assets of the
subsidiary acquired, the difference is recognised directly in the income
statement.
Inter-company transactions, balances and unrealised gains on transactions
between group companies are eliminated. Unrealised losses are also eliminated
but considered an impairment indicator of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the group.
Segment reporting
The group has one business segment, the selling of capacity on the Moyle
Interconnector for the transmission of electricity between Scotland and Northern
Ireland and one geographical segment, the United Kingdom. Accordingly segment
reporting is not deemed to be applicable.
Revenue
Revenue comprises the fair value of the consideration received or receivable
from the sale of capacity and ancillary services on the Moyle Interconnector for
the transmission of electricity between Northern Ireland and Scotland. All
revenue is generated within the United Kingdom and is shown net of value-added
tax, returns, rebates and discounts and after eliminating sales within the
group. Revenue is recognised over the period for which the capacity and
ancillary services are provided, using a straight line basis over the term of
the agreement. The group recognises revenue when the amount of revenue can be
reliably measured and it is probable that future economic benefits will flow to
the entity.
Intangible assets
Acquired licences are shown at historical cost. Licences have a finite useful
life and are carried at cost less accumulated amortisation. Amortisation is
calculated using the straight-line method to allocate the cost of licences over
their estimated useful lives. The estimated remaining useful economic life of
the licence is 27 years.
Property, plant and equipment
Property, plant and equipment is stated at cost less depreciation and
accumulated impairment losses. The initial cost of an asset comprises cost plus
any costs directly attributable to bringing the asset into operation and an
estimate of any decommissioning costs. Subsequent costs are included in the
asset's carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will
flow to the group and the cost of the item can be measured reliably. The
carrying amount of the replaced part is derecognised. All other repairs and
maintenance are charged to the income statement during the financial period in
which they are incurred.
The charge for depreciation is calculated so as to write off the depreciable
amount of assets over their estimated useful economic lives on a straight line
basis. The lives of each major class of depreciable asset are as follows:
Interconnector
40 years
Control equipment 20
years
Office equipment 3 years
Notes to the financial statements for the year ended 31 March 2010
Property, plant and equipment (continued)
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at each balance sheet date.
An asset's carrying amount is written down immediately to its recoverable amount
if the asset's carrying amount is greater than its estimated recoverable amount.
An asset is derecognised upon disposal or when no future economic benefit is
expected to arise from the asset.
Impairment of non-financial assets
The group assesses at each reporting date whether there is an indication that an
asset may be impaired. If any such indication exists, or when annual impairment
testing for an asset is required, the group makes an estimate of the asset's
recoverable amount. An asset's recoverable amount is the higher of an asset's
or cash-generating unit's fair value less costs to sell and its value in use and
is determined for an individual asset. Where the carrying amount of an asset
exceeds its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. 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. Impairment losses of continuing operations are
recognised in the income statement in those expense categories consistent with
the function of the impaired asset.
Investments
Investments are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method.
Classification of financial instruments
The group classifies its financial assets as loans and receivables. The
classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at
initial recognition.
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are included
in current assets, except for maturities greater than 12 months after the end of
the reporting period. These are classified as non-current assets. The group's
loans and receivables comprise 'trade and other receivables' and cash and cash
equivalents in the balance sheet.
Loans and receivables (financial instruments)
(a) Trade and other receivables
Trade and other receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method,
less provision for impairment. A provision for impairment of trade and other
receivables is established when there is objective evidence that the group will
not be able to collect all amounts due according to the original terms of the
receivables. Significant financial difficulties of the debtor, probability that
the debtor will enter bankruptcy or financial reorganisation, and default or
delinquency in payments are considered indicators that the trade and other
receivable is impaired. The amount of the provision is the difference between
the asset's carrying amount and the present value of estimated future cash
flows, discounted at the original effective interest rate. The carrying amount
of the asset is reduced through the use of an allowance account, and the amount
of the loss is recognised in the income statement within 'operating costs'. When
a trade and other receivable is uncollectible, it is written off against the
allowance account for trade receivables. Subsequent recoveries of amounts
previously written off are credited against 'operating costs' in the income
statement.
Trade and other receivables with a maturity of more than twelve months from the
balance sheet date are shown as non-current trade and other receivables.
Notes to the financial statements for the year ended 31 March 2010
1 Accounting policies, financial risk management & critical accounting
estimates/judgements (continued)
Loans and receivables (financial instruments) (continued)
(b) Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with
banks, other short-term highly liquid investments with original maturities of
three months or less.
Impairment of financial assets
The group assesses at the end of each reporting period whether there is
objective evidence that a financial asset or group of financial assets is
impaired. A financial asset or a group of financial assets is impaired and
impairment losses are incurred only if there is objective evidence of impairment
as a result of one or more events that occurred after the initial recognition of
the asset (a 'loss event') and that loss event (or events) has an impact on the
estimated future cash flows of the financial asset or group of financial assets
that can be reliably estimated.
The criteria that the group uses to determine that there is objective evidence
of an impairment loss include:
· significant financial difficulty of the issuer or obligor;
· a breach of contract, such as a default or delinquency in interest or
principal payments;
· the group, for economic or legal reasons relating to the borrower's
financial difficulty, granting to the borrower a concession that the lender
would not otherwise consider;
· it becomes probable that the borrower will enter bankruptcy or other
financial reorganisation;
· the disappearance of an active market for that financial asset because
of financial difficulties; or
· observable data indicating that there is a measurable decrease in the
estimated future cash flows from a portfolio of financial assets since the
initial recognition of those assets, although the decrease cannot yet be
identified with the individual financial assets in the portfolio, including i)
adverse changes in the payment status of borrowers in the portfolio; and ii)
national or local economic conditions that correlate with defaults on the assets
in the portfolio.
The group first assesses whether objective evidence of impairment exists. The
amount of the loss is measured as the difference between the asset's carrying
amount and the present value of estimated future cash flows (excluding future
credit losses that have not been incurred) discounted at the financial asset's
original effective interest rate. The carrying amount of the asset is reduced
and the amount of the loss is recognised in the consolidated income statement.
If a loan or held-to-maturity investment has a variable interest rate, the
discount rate for measuring any impairment loss is the current effective
interest rate determined under the contract. As a practical expedient, the group
may measure impairment on the basis of an instrument's fair value using an
observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the
decrease can be related objectively to an event occurring after the impairment
was recognised (such as an improvement in the debtor's credit rating), the
reversal of the previously recognised impairment loss is recognised in the
consolidated income statement.
Ordinary shares
Ordinary shares are classified as equity.
Other financial liabilities at amortised cost (financial instruments)
(a) Borrowings
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently stated at amortised cost; any difference
between the proceeds (net of transaction costs) and the redemption value is
recognised in the income statement over the period of the borrowings using the
effective interest method.
Borrowings are classified as current liabilities unless the group has an
unconditional right to defer settlement of the liability for at least 12 months
after the balance sheet date.
Notes to the financial statements for the year ended 31 March 2010
1 Accounting policies, financial risk management & critical accounting
estimates/judgements (continued)
Other financial liabilities at amortised cost (financial instruments)
(continued)
(b) Trade and other payables
Trade and other payables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method.
Decommissioning provision
Decommissioning costs are provided at the present value of the expenditures
expected to settle the obligation, using estimated cash flows based on current
prices. The unwinding of the decommissioning provision is included within the
income statement. The estimated future costs of the decommissioning obligations
are regularly reviewed and adjusted as appropriate for new circumstances or
changes in law or technology. The decommissioning costs have been capitalised
within property, plant and equipment and depreciated in line with group policy.
Income tax and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is
recognised in the income statement.
Current income tax assets and liabilities are measured at the amount expected to
be recovered from or paid to the taxation authorities, based on tax rates and
laws that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. However,
the deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither an accounting
nor a taxable profit or loss. Deferred income tax is determined using tax rates
(and laws) that have been enacted or substantially enacted by the balance sheet
date and are expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that
future taxable profit will be available against which the temporary differences
can be utilised.
Deferred income tax is provided on temporary differences arising on investments
in subsidiaries, except where the timing of the reversal of the temporary
difference is controlled by the group and it is probable that the temporary
difference will not reverse in the foreseeable future.
Income tax is charged or credited directly to equity if it relates to items that
are credited or charged to equity. Otherwise income tax is recognised in the
income statement.
Government grants
Grants from the government are recognised at their fair value where there is a
reasonable assurance that the grant will be received and the group will comply
with all attached conditions.
Government grants relating to costs are deferred and recognised in the income
statement over the period necessary to match them with the costs they are
intended to compensate.
Government grants relating to property, plant and equipment are included in non
current liabilities as deferred government grants and are credited to the income
statement on a straight line basis over the expected useful economic lives of
the related assets.
Operating lease commitments
Leases in which a significant portion of the risks and rewards of ownership are
retained by the lessor are classified as operating leases. Payments made under
operating leases (net of any incentives received from the lessor) are charged to
the income statement on a straight-line basis over the period of the lease.
Notes to the financial statements for the year ended 31 March 2010
1 Accounting policies, financial risk management & critical accounting
estimates/judgements (continued)
Pensions and other post-retirement benefits
The group operates a defined contribution pension plan for certain directors of
the group. Contributions are recognised in the income statement in the period
in which they become payable.
Foreign currency translation
Foreign currency transactions are translated into the functional currency using
the exchange rates prevailing at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement.
Financial risk management
Financial risk factors
The group operates the interconnector which links the electricity transmission
systems of Northern Ireland and Scotland under a licence agreement with the
Northern Ireland Authority for Utility Regulation. The group earns its revenue
from the sale of capacity on this interconnector through periodic auctions. In
the event that the group does not earn sufficient revenues to cover its
operating expenses, interest on borrowings and repayment of borrowings, the
group's licence allows the group to make a call on its customers for any
shortfall. Accordingly the group has limited financial risk.
The group's interest rate risk arises from its long term borrowings. These
borrowings are index linked to the Retail Price Index and expose the company to
interest rate cash flow risk. A change in the Retail Price Index by 1 basis
point would have increased finance costs during the year by GBP1,405,000.
The group does not need to actively manage its exposure to interest rate cash
flow risk as a result of its licence agreement mentioned in the preceding
paragraph. The group issued its long term borrowings to refinance its
transmission assets at the lowest possible rates in order to reduce the costs of
transmission to the consumers of Northern Ireland.
The group has limited exposure to credit risk as its customers are high profile
electricity suppliers, who provide designated levels of security by way of
parent company guarantees or letters of credit. The group's trade and other
receivables are not impaired or past due and management does not expect any
losses from non-performance by its customers.
As a result of the option under the group's licence agreement to call on
customers in the event of any liquidity shortfall the group has limited
liquidity risk. The Group also retains significant cash reserves and a liquidity
facility with an A - rated bank to manage any short term liquidity risk. The
undiscounted contractual maturity profile of the group's borrowings is shown in
note 22.
Capital risk management
The group has no obligation to increase members' funds as the company's ultimate
parent undertaking is a company limited by guarantee. The company's management
of its borrowings and credit risk is referred to in the preceding paragraphs.
Notes to the financial statements for the year ended 31 March 2010
1 Accounting policies, financial risk management & critical accounting
estimates/judgements (continued)
Fair value estimation
Effective 1 January 2009, the group adopted the amendment to IFRS 7 for
financial instruments that are measured in the balance sheet at fair value, this
requires disclosure of fair value measurements by level of the following fair
value measurement hierarchy:
· Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1);
· Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices) (level 2); and
· Inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs) (level 3).
The group's financial instruments fair valued (for disclosure purposes only)
under level 2 are the group's loans and receivables and the group's borrowings.
The fair value of these financial instruments is determined by discounting
future cash flows using a suitable discount rate. These discount rates are
based on Bank of England UK gilt yield curve data for a term that is similar to
the financial instrument.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
The group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results. The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying value of assets and liabilities within the
next financial year are discussed below:
The group assesses the useful economic life of assets on an annual basis. The
remaining useful economic life of the interconnector was determined as
approximately 33 years at the beginning of the year. If the remaining useful
economic life had been assessed at 34 years depreciation would have decreased by
GBP93,000 and if the remaining useful economic life had been assessed at 32
years depreciation would have increased by GBP99,000.
The decommissioning provision has been estimated at current prices and has
therefore been increased to decommissioning date by an inflation factor of
4.21%. The decommissioning provision has been discounted using a rate of 4.47%.
The effect of changing the discount rate and inflation factor on the
decommissioning provision is disclosed in the table below.
+----------------------------------------------------+----------------------+
| | Increase/(decrease) |
| | in provision |
+----------------------------------------------------+----------------------+
| | GBP'000 |
+----------------------------------------------------+----------------------+
| Increase in inflation factor by 1% | 908 |
+----------------------------------------------------+----------------------+
| Decrease in inflation factor by 1% | (674) |
+----------------------------------------------------+----------------------+
| Increase in discount rate by 1% | 667 |
+----------------------------------------------------+----------------------+
| Decrease in discount rate by 1% | (915) |
+----------------------------------------------------+----------------------+
Notes to the financial statements for the year ended 31 March 2010
+--------------+---------+---------+
| | 2010 | 2009 |
+--------------+---------+---------+
| Group | GBP'000 | GBP'000 |
+--------------+---------+---------+
| Employee | 190 | 204 |
| benefit | | |
| expense | | |
| (note 3) | | |
+--------------+---------+---------+
| Depreciation | 3,706 | 3,683 |
| and | | |
| amortisation | | |
| (net of | | |
| amortisation | | |
| of | | |
| government | | |
| grants) | | |
+--------------+---------+---------+
| Operating | 94 | 95 |
| lease | | |
| payments | | |
+--------------+---------+---------+
| Fees | | |
| payable | 17 | 15 |
| to the | | |
| company's | | |
| auditor | | |
| in | | |
| respect | | |
| of the | | |
| audit of | | |
| the | | |
| financial | | |
| statements | | |
+--------------+---------+---------+
| Other | 4,129 | 5,015 |
| expenses | | |
+--------------+---------+---------+
| Total | 8,136 | 9,012 |
| operating | | |
| costs | | |
+--------------+---------+---------+
+----------+---------+---------+
| | 2010 | 2009 |
+----------+---------+---------+
| Group | GBP'000 | GBP'000 |
+----------+---------+---------+
| Wages | 159 | 167 |
| and | | |
| salaries | | |
+----------+---------+---------+
| Social | 20 | 26 |
| security | | |
| costs | | |
+----------+---------+---------+
| Pension | 11 | 11 |
| costs | | |
+----------+---------+---------+
| | 190 | 204 |
+----------+---------+---------+
The average monthly number of employees during the year (comprising only
directors holding contracts of service with the Group) was 1 (2009: 1).
+---------------+---------+---------+
| | 2010 | 2009 |
+---------------+---------+---------+
| | GBP'000 | GBP'000 |
+---------------+---------+---------+
| Directors' | | |
| emoluments | | |
+---------------+---------+---------+
| Aggregate | 159 | 167 |
| emoluments | | |
+---------------+---------+---------+
| Contributions | 13 | 11 |
| paid to | | |
| defined | | |
| contribution | | |
| pension | | |
| scheme | | |
+---------------+---------+---------+
| | 172 | 178 |
+---------------+---------+---------+
| | | |
+---------------+---------+---------+
| | Number | Number |
+---------------+---------+---------+
| Members | 1 | 1 |
| of | | |
| defined | | |
| contribution | | |
| pension | | |
| scheme | | |
+---------------+---------+---------+
Directors' emoluments represent the remuneration of the group's executive
director, Patrick Larkin. The remaining directors of the company received
GBP295,000 (2009: GBP155,000) for their services to the Mutual Energy group of
companies. The directors do not believe that it is practicable to apportion this
amount between their services as directors of the company and their services as
directors of other group companies.
Company
The company had no employee benefits expense during the year (2009: GBPnil).
Notes to the financial statements for the year ended 31 March 2010
+-----------------+---------+---------+
| | 2010 | 2009 |
+-----------------+---------+---------+
| Group | GBP'000 | GBP'000 |
+-----------------+---------+---------+
| Interest | | |
| expense: | | |
+-----------------+---------+---------+
| Borrowings | 2,526 | 11,417 |
| (including | | |
| borrowing | | |
| fees) | | |
+-----------------+---------+---------+
| Movement | - | 771 |
| of | | |
| discount | | |
| on | | |
| decommissioning | | |
| provision | | |
+-----------------+---------+---------+
| Finance | 2,526 | 12,188 |
| costs | | |
+-----------------+---------+---------+
| Interest | | |
| income: | | |
+-----------------+---------+---------+
| Short-term | (1,287) | (2,844) |
| bank | | |
| deposits | | |
+-----------------+---------+---------+
| Amounts | (1,021) | (757) |
| owed by | | |
| related | | |
| parties | | |
+-----------------+---------+---------+
| Movement | (571) | - |
| of | | |
| discount | | |
| on | | |
| decommissioning | | |
| provision | | |
+-----------------+---------+---------+
| Finance | (2,879) | (3,601) |
| income | | |
+-----------------+---------+---------+
| Finance | (353) | 8,587 |
| (income)/costs | | |
| - net | | |
+-----------------+---------+---------+
+---------------------------------------------------+----------+----------+
| | 2010 | 2009 |
+---------------------------------------------------+----------+----------+
| Group | GBP'000 | GBP'000 |
+---------------------------------------------------+----------+----------+
| Current income tax: | | |
+---------------------------------------------------+----------+----------+
| Current income tax charge at 28% | 1,194 | (15) |
+---------------------------------------------------+----------+----------+
| Group relief claimed | 709 | 570 |
+---------------------------------------------------+----------+----------+
| Group relief adjustments in respect of previous | 219 | - |
| periods | | |
+---------------------------------------------------+----------+----------+
| Adjustments in respect of previous periods | 91 | - |
+---------------------------------------------------+----------+----------+
| Total current income tax | 2,213 | 555 |
+---------------------------------------------------+----------+----------+
| Deferred income tax: | | |
+---------------------------------------------------+----------+----------+
| Origination and reversal of temporary differences | 797 | 242 |
+---------------------------------------------------+----------+----------+
| Adjustments in respect of previous periods | (73) | - |
+---------------------------------------------------+----------+----------+
| Total deferred income tax | 724 | 242 |
+---------------------------------------------------+----------+----------+
| Income tax charge | 2,937 | 797 |
+---------------------------------------------------+----------+----------+
The income tax charge in the income statement for the year differs from the
standard rate of corporation tax in the UK of 28% (2009: 28%). The differences
are reconciled below:
+---------------------------------------------------+----------+----------+
| | 2010 | 2009 |
+---------------------------------------------------+----------+----------+
| | GBP'000 | GBP'000 |
+---------------------------------------------------+----------+----------+
| Profit before income tax | 10,262 | 2,864 |
+---------------------------------------------------+----------+----------+
| Tax calculated at the UK standard rate of | 2,873 | 797 |
| corporation tax of 28% (2009: 28%) | | |
+---------------------------------------------------+----------+----------+
| Effects of: | | |
+---------------------------------------------------+----------+----------+
| Income not taxable | (173) | - |
+---------------------------------------------------+----------+----------+
| Adjustments in respect of previous periods | 237 | - |
+---------------------------------------------------+----------+----------+
| Income tax charge | 2,937 | 797 |
+---------------------------------------------------+----------+----------+
Notes to the financial statements for the year ended 31 March 2010
As permitted by Section 408 of the Companies Act 2006, the parent company's
profit and loss account has not been included in these financial statements. The
loss dealt with in the financial statements of the parent company is GBP20,000
(2009: GBP8,000).
+----------------------------+----------------+-----------+-----------+----------+
| | | Control | Office | |
| | Interconnector | equipment | equipment | |
| | | | | Total |
+----------------------------+----------------+-----------+-----------+----------+
| Group | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+----------------+-----------+-----------+----------+
| Cost | | | | |
+----------------------------+----------------+-----------+-----------+----------+
| At 1 April 2008 | 128,748 | 3,785 | 15 | 132,548 |
+----------------------------+----------------+-----------+-----------+----------+
| Adjustment to | (849) | - | - | (849) |
| decommissioning provision | | | | |
+----------------------------+----------------+-----------+-----------+----------+
| Additions | - | - | 1 | 1 |
+----------------------------+----------------+-----------+-----------+----------+
| At 31 March 2009 and at 31 | 127,899 | 3,785 | 16 | 131,700 |
| March 2010 | | | | |
+----------------------------+----------------+-----------+-----------+----------+
| | | | | |
+----------------------------+----------------+-----------+-----------+----------+
| Accumulated depreciation | | | | |
+----------------------------+----------------+-----------+-----------+----------+
| At 1 April 2008 | 20,635 | 1,135 | 13 | 21,783 |
+----------------------------+----------------+-----------+-----------+----------+
| Provided during the year | 3,155 | 190 | 1 | 3,346 |
+----------------------------+----------------+-----------+-----------+----------+
| At 31 March 2009 | 23,790 | 1,325 | 14 | 25,129 |
+----------------------------+----------------+-----------+-----------+----------+
| Provided during the year | 3,180 | 188 | 1 | 3,369 |
+----------------------------+----------------+-----------+-----------+----------+
| At 31 March 2010 | 26,970 | 1,513 | 15 | 28,498 |
+----------------------------+----------------+-----------+-----------+----------+
| | | | | |
+----------------------------+----------------+-----------+-----------+----------+
| Net book amount | | | | |
+----------------------------+----------------+-----------+-----------+----------+
| At 31 March 2010 | 100,929 | 2,272 | 1 | 103,202 |
+----------------------------+----------------+-----------+-----------+----------+
| At 31 March 2009 | 104,109 | 2,460 | 2 | 106,571 |
+----------------------------+----------------+-----------+-----------+----------+
| At 1 April 2008 | 108,113 | 2,650 | 2 | 110,765 |
+----------------------------+----------------+-----------+-----------+----------+
Depreciation expense of GBP3,369,000 (2009: GBP3,346,000) has been fully charged
to operating costs.
Borrowings are secured on all of the property, plant and equipment of the group.
Notes to the financial statements for the year ended 31 March 2010
+--------------------------------------------+--------+--------+----------+
| | | | Licences |
+--------------------------------------------+--------+--------+----------+
| Group | | | GBP'000 |
+--------------------------------------------+--------+--------+----------+
| Cost | | | |
+--------------------------------------------+--------+--------+----------+
| At 1 April 2008, 31 March 2009 and at 31 | | | 56,477 |
| March 2010 | | | |
+--------------------------------------------+--------+--------+----------+
| | | | |
+--------------------------------------------+--------+--------+----------+
| Accumulated amortisation | | | |
+--------------------------------------------+--------+--------+----------+
| At 1 April 2008 | | | 8,305 |
+--------------------------------------------+--------+--------+----------+
| Provided during the year | | | 1,661 |
+--------------------------------------------+--------+--------+----------+
| At 31 March 2009 | | | 9,966 |
+--------------------------------------------+--------+--------+----------+
| Provided during the year | | | 1,661 |
+--------------------------------------------+--------+--------+----------+
| At 31 March 2010 | | | 11,627 |
+--------------------------------------------+--------+--------+----------+
| | | | |
+--------------------------------------------+--------+--------+----------+
| Net book amount | | | |
+--------------------------------------------+--------+--------+----------+
| At 31 March 2010 | | | 44,850 |
+--------------------------------------------+--------+--------+----------+
| At 31 March 2009 | | | 46,511 |
+--------------------------------------------+--------+--------+----------+
| At 31 March 2008 | | | 48,172 |
+--------------------------------------------+--------+--------+----------+
Licences include intangible assets acquired through business combinations.
Licences have been granted for a minimum of 34 years. The group has concluded
that these assets have a remaining useful economic life of 27 years.
+------------------------------------------------------+----+-------------+
| | | |
| | | Subsidiary |
| | | |
| | | undertaking |
+------------------------------------------------------+----+-------------+
| Company | | GBP'000 |
+------------------------------------------------------+----+-------------+
| Cost | | |
+------------------------------------------------------+----+-------------+
| At 1 April 2008, 31 March 2009 and at 31 March 2010 | | 20,950 |
+------------------------------------------------------+----+-------------+
The company's investment in its subsidiary undertaking is recorded at cost,
which is the fair value of the consideration paid.
The company's subsidiary undertaking which is incorporated in Northern Ireland
is:
+------------------+--------------+-------------+-------------------------+
| | | | |
| | | Proportion | Nature of |
| Name of company | Holding | held | Business |
+------------------+--------------+-------------+-------------------------+
| Moyle | Ordinary | 100% | Operation of Moyle |
| Interconnector | shares | | Interconnector |
| Limited | | | |
+------------------+--------------+-------------+-------------------------+
Notes to the financial statements for the year ended 31 March 2010
+-------------+---------+---------+---------+---------+
| | Group | Company |
+-------------+-------------------+-------------------+
| | 2010 | 2009 | 2010 | 2009 |
+-------------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------+---------+---------+---------+---------+
| Financial | | | | |
| assets | | | | |
+-------------+---------+---------+---------+---------+
| Amounts | - | - | 108,083 | 114,158 |
| owed by | | | | |
| subsidiary | | | | |
| undertaking | | | | |
+-------------+---------+---------+---------+---------+
| Amounts | 22,886 | 21,846 | - | - |
| owed by | | | | |
| related | | | | |
| parties | | | | |
+-------------+---------+---------+---------+---------+
| | 22,886 | 21,846 | 108,083 | 114,158 |
+-------------+---------+---------+---------+---------+
| Amounts | - | - | (5,143) | (4,511) |
| owed by | | | | |
| subsidiary | | | | |
| undertaking | | | | |
| (current | | | | |
| assets) | | | | |
+-------------+---------+---------+---------+---------+
| | 22,886 | 21,846 | 102,940 | 109,647 |
+-------------+---------+---------+---------+---------+
None of the group's or company's loans and receivables are impaired or past due.
The group and company have no history of default in respect of its loans and
receivables. The maximum exposure to credit risk at the reporting date is the
carrying value of each class of receivable mentioned above. The fair value of
the group's non-current trade and other receivables is GBP25,693,000 (2009:
GBP22,214,000). This fair value has been calculated by discounting the future
cash flows using discount rates in the range 1.83% to 2.98%. The fair value of
the company's loans and receivables is GBP99,395,000 (2009: GBP106,673,000).
This fair value has been calculated by discounting the future cash flows using a
discount rate of 4.65% (2009: 4.4%).
+--------------+---------+---------+---------+---------+
| | Group | Company |
+--------------+-------------------+-------------------+
| | 2010 | 2009 | 2010 | 2009 |
+--------------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------+---------+---------+---------+---------+
| Trade | 1,599 | - | - | - |
| receivables | | | | |
+--------------+---------+---------+---------+---------+
| Prepayments | 2,361 | 1,840 | 171 | 171 |
| and accrued | | | | |
| income | | | | |
+--------------+---------+---------+---------+---------+
| Other | 854 | 873 | 2 | 4 |
| receivables | | | | |
+--------------+---------+---------+---------+---------+
| Amounts | 39 | 130 | 2 | - |
| owed by | | | | |
| related | | | | |
| parties | | | | |
+--------------+---------+---------+---------+---------+
| Amounts | - | - | 5,149 | 4,514 |
| owed by | | | | |
| subsidiary | | | | |
| undertakings | | | | |
+--------------+---------+---------+---------+---------+
| | 4,853 | 2,843 | 5,324 | 4,689 |
+--------------+---------+---------+---------+---------+
None of the group's or company's trade and other receivables are impaired or
past due. The group and company has no history of default in respect of its
trade and other receivables. The maximum exposure to credit risk at the
reporting date is the carrying value of each class of receivable mentioned
above. The fair value of the group's and company's trade and other receivables
is not materially different to their carrying values.
+------------+---------+---------+---------+---------+
| | Group | Company |
+------------+-------------------+-------------------+
| | 2010 | 2009 | 2010 | 2009 |
+------------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------+---------+---------+---------+---------+
| Cash | 99 | 114 | 86 | 111 |
| at | | | | |
| bank | | | | |
| and in | | | | |
| hand | | | | |
+------------+---------+---------+---------+---------+
| Short-term | 53,048 | 49,847 | - | - |
| bank | | | | |
| deposits | | | | |
+------------+---------+---------+---------+---------+
| | 53,147 | 49,961 | 86 | 111 |
+------------+---------+---------+---------+---------+
Cash and cash equivalents earn interest at a range from Bank of England base
rate less 0.15% to Bank of England base rate plus 2.5%.
Notes to the financial statements for the year ended 31 March 2010
+--------------------------------------------------------+---------+---------+
| | 2010 | 2009 |
+--------------------------------------------------------+---------+---------+
| Group and company | GBP'000 | |
| | | GBP'000 |
+--------------------------------------------------------+---------+---------+
| Allotted and fully paid | | |
+--------------------------------------------------------+---------+---------+
| 50,000 ordinary shares of GBP1 each | 50 | 50 |
+--------------------------------------------------------+---------+---------+
+---------------+--------+--------+--------+---------+
| Group | | | | GBP'000 |
+---------------+--------+--------+--------+---------+
| At 1 | | | | 20,967 |
| April | | | | |
| 2008 | | | | |
+---------------+--------+--------+--------+---------+
| Total | | | | 2,067 |
| comprehensive | | | | |
| income for | | | | |
| the year | | | | |
+---------------+--------+--------+--------+---------+
| At 31 | | | | 23,034 |
| March | | | | |
| 2009 | | | | |
+---------------+--------+--------+--------+---------+
| Total | | | | 7,325 |
| comprehensive | | | | |
| income for | | | | |
| the year | | | | |
+---------------+--------+--------+--------+---------+
| At 31 | | | | 30,359 |
| March | | | | |
| 2010 | | | | |
+---------------+--------+--------+--------+---------+
| | | | | |
+---------------+--------+--------+--------+---------+
| Company | | | | GBP'000 |
+---------------+--------+--------+--------+---------+
| At 1 | | | | (194) |
| April | | | | |
| 2008 | | | | |
+---------------+--------+--------+--------+---------+
| Total | | | | (8) |
| comprehensive | | | | |
| income for | | | | |
| the year | | | | |
+---------------+--------+--------+--------+---------+
| At 31 | | | | (202) |
| March | | | | |
| 2009 | | | | |
+---------------+--------+--------+--------+---------+
| Total | | | | (20) |
| comprehensive | | | | |
| income for | | | | |
| the year | | | | |
+---------------+--------+--------+--------+---------+
| At 31 | | | | (222) |
| March | | | | |
| 2010 | | | | |
+---------------+--------+--------+--------+---------+
+------------+---------+---------+
| | 2010 | 2009 |
+------------+---------+---------+
| Group | GBP'000 | GBP'000 |
| and | | |
| company | | |
+------------+---------+---------+
| Non | | |
| current | | |
+------------+---------+---------+
| 2.9376% | 120,764 | 128,793 |
| Index | | |
| linked | | |
| guaranteed | | |
| secured | | |
| bond | | |
+------------+---------+---------+
| Current | | |
+------------+---------+---------+
| 2.9376% | 6,158 | 5,171 |
| Index | | |
| linked | | |
| guaranteed | | |
| secured | | |
| bond | | |
+------------+---------+---------+
| Total | 126,922 | 133,964 |
| borrowings | | |
+------------+---------+---------+
The 2.9376% guaranteed secured bond 2033 was issued to finance the acquisition
of Moyle Interconnector Limited and to repay indebtedness owed to members of
Viridian Group PLC and is indexed linked to the Retail Price Index. The bond is
secured by fixed and floating charges over all the assets of the group, and also
by way of an unconditional and irrevocable financial guarantee given by Assured
Guaranty (Europe) Limited as to scheduled payments of principal and interest,
excluding default interest. In return for this guarantee, every six months the
group pays an index linked fee of 0.125% of the outstanding balance of the bond.
The fair value of the bond is GBP113,440,000 (2009: GBP121,471,000). This fair
value has been calculated by discounting the future cash flows using a discount
rate of 4.65% (2009: 4.4%).
Notes to the financial statements for the year ended 31 March 2010
+------------+---------+
| |
| Decommissioning |
| |
| provision |
+----------------------+
| Group | GBP'000 |
+------------+---------+
| At 1 | 3,184 |
| April | |
| 2008 | |
+------------+---------+
| Adjustment | (849) |
| in cost | |
| estimate | |
| (note 7) | |
+------------+---------+
| Movement | 771 |
| on | |
| discount | |
| during | |
| the year | |
+------------+---------+
| At 31 | 3,106 |
| March | |
| 2009 | |
+------------+---------+
| Movement | (570) |
| on | |
| discount | |
| during | |
| the year | |
+------------+---------+
| At 31 | 2,536 |
| March | |
| 2010 | |
+------------+---------+
Provision has been made for expenditure to be incurred in meeting the expected
costs arising from the future decommissioning of the Interconnector in 33 years,
at the end of its useful economic life. This provision is expected to be
utilised within 33years. The provision represents the present value of the
current estimated costs of dismantling the connections to the main electricity
grids in Scotland and Northern Ireland. The provision has been discounted at a
rate of 4.47% (2009: 4.37%).
Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets and current tax liabilities and
when the deferred income taxes relate to the same fiscal authority.
+----------------------+----------+----------+
| | 2010 | 2009 |
+----------------------+----------+----------+
| Group | GBP'000 | GBP'000 |
+----------------------+----------+----------+
| Deferred | - | 615 |
| income | | |
| tax | | |
| assets | | |
+----------------------+----------+----------+
| Deferred | (19,281) | (19,172) |
| income | | |
| tax | | |
| liabilities | | |
+----------------------+----------+----------+
| Deferred | (19,281) | (18,557) |
| income | | |
| tax | | |
| assets/(liabilities) | | |
| - net | | |
+----------------------+----------+----------+
The gross movement on the deferred income tax account is as follows:
+-----------+--------+--------+--------+----------+
| Group | | | | GBP'000 |
+-----------+--------+--------+--------+----------+
| At 1 | | | | (18,315) |
| April | | | | |
| 2008 | | | | |
+-----------+--------+--------+--------+----------+
| Income | | | | (242) |
| statement | | | | |
| charge | | | | |
| for the | | | | |
| year | | | | |
+-----------+--------+--------+--------+----------+
| At 31 | | | | (18,557) |
| March | | | | |
| 2009 | | | | |
+-----------+--------+--------+--------+----------+
| Income | | | | (724) |
| statement | | | | |
| charge | | | | |
| for the | | | | |
| year | | | | |
+-----------+--------+--------+--------+----------+
| At 31 | | | | (19,281) |
| March | | | | |
| 2010 | | | | |
+-----------+--------+--------+--------+----------+
The movement in deferred tax assets and liabilities during the year is as
follows:
+------------------------------------+---------+-------------+------------+----------+
| | | | | |
| | | Accelerated | Valuation | |
| | | capital | of | |
| | Tax | allowances | intangible | Total |
| | losses | | assets | |
+------------------------------------+---------+-------------+------------+----------+
| Group | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+---------+-------------+------------+----------+
| At 1 April 2008 | 618 | (5,444) | (13,489) | (18,315) |
+------------------------------------+---------+-------------+------------+----------+
| Income statement (charge)/credit | (3) | (704) | 465 | (242) |
| for the year | | | | |
+------------------------------------+---------+-------------+------------+----------+
| At 31 March 2009 | 615 | (6,148) | (13,024) | (18,557) |
+------------------------------------+---------+-------------+------------+----------+
| Income statement (charge)/credit | (615) | (575) | 466 | (724) |
| for the year | | | | |
+------------------------------------+---------+-------------+------------+----------+
| At 31 March 2010 | - | (6,723) | (12,558) | (19,281) |
+------------------------------------+---------+-------------+------------+----------+
Notes to the financial statements for the year ended 31 March 2010
The portion of the group's deferred tax liability arising from intangible assets
that is expected to fall due after more than 12 months is GBP12,092,000 (2009:
GBP12,558,000). The portion of the group's deferred tax liability arising from
accelerated capital allowances that is expected to fall due after more than 12
months is estimated at GBP6,723,000 (2009: GBP6,148,000).
+---------------------------------------------------+----------+-----------+
| Group | | GBP'000 |
+---------------------------------------------------+----------+-----------+
| At 1 April 2008 | | 43,703 |
+---------------------------------------------------+----------+-----------+
| Amortised during the year | | (1,324) |
+---------------------------------------------------+----------+-----------+
| At 31 March 2009 | | 42,379 |
+---------------------------------------------------+----------+-----------+
| Amortised during the year | | (1,324) |
+---------------------------------------------------+----------+-----------+
| At 31 March 2010 | | 41,055 |
+---------------------------------------------------+----------+-----------+
The government grant was provided to the company for the purpose of its
expenditure on its property, plant and equipment. The current portion of the
government grant is GBP1,324,000 (2009: GBP1,324,000). The non current portion
is GBP39,731,000 (2009: GBP41,055,000).
+--------------+---------+---------+---------+---------+
| | Group | Company |
+--------------+-------------------+-------------------+
| | 2010 | 2009 | 2010 | 2009 |
+--------------+---------+---------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------+---------+---------+---------+---------+
| Trade | 144 | 759 | 12 | 12 |
| payables | | | | |
+--------------+---------+---------+---------+---------+
| Accruals | 6,546 | 4,300 | 3 | 4 |
| and | | | | |
| deferred | | | | |
| income | | | | |
+--------------+---------+---------+---------+---------+
| Amounts | 937 | 1,028 | 3 | 18 |
| owed to | | | | |
| related | | | | |
| parties | | | | |
+--------------+---------+---------+---------+---------+
| Amounts | - | - | 2,532 | 1,551 |
| owed to | | | | |
| subsidiary | | | | |
| undertakings | | | | |
+--------------+---------+---------+---------+---------+
| Other | 308 | 555 | - | - |
| tax | | | | |
| and | | | | |
| social | | | | |
| security | | | | |
+--------------+---------+---------+---------+---------+
| | 7,935 | 6,642 | 2,550 | 1,585 |
+--------------+---------+---------+---------+---------+
Notes to the financial statements for the year ended 31 March 2010
Operating lease commitments - group as lessee
The group has entered into a commercial lease on land and this lease has a
remaining lease term of 90 years. There are no restrictions placed upon the
lessee by entering into these leases.
The future aggregate minimum lease payments under non-cancellable operating
leases are as follows:
+--------+---------+---------+
| | 2010 | 2009 |
+--------+---------+---------+
| Group | GBP'000 | GBP'000 |
+--------+---------+---------+
| Not | 94 | 94 |
| later | | |
| than | | |
| one | | |
| year | | |
+--------+---------+---------+
| After | 376 | 376 |
| one | | |
| year | | |
| but | | |
| not | | |
| more | | |
| than | | |
| five | | |
| years | | |
+--------+---------+---------+
| After | 7,907 | 8,001 |
| more | | |
| than | | |
| five | | |
| years | | |
+--------+---------+---------+
| | 8,377 | 8,471 |
+--------+---------+---------+
The ultimate controlling parties of the group are the members of Mutual Energy
Limited.
During the year the group entered into transactions, in the ordinary course of
business, with related parties.
Transactions entered into, and balances outstanding at 31 March with related
parties, are as follows:
+--------------+--------+--------+--------+---------+---------+
| | | | Amount owed |
| | | | (to)/from |
| | | | |
| | | | related party |
+--------------+--------+-----------------+-------------------+
| | | | | 2010 | 2009 |
+--------------+--------+--------+--------+---------+---------+
| Group | | | | GBP'000 | GBP'000 |
+--------------+--------+--------+--------+---------+---------+
| Parent | | | | 12,495 | 11,870 |
| undertakings | | | | | |
+--------------+--------+--------+--------+---------+---------+
| Fellow | | | | 15 | 106 |
| subsidiary | | | | | |
| undertakings | | | | | |
+--------------+--------+--------+--------+---------+---------+
| Fellow | | | | 10,415 | 10,000 |
| subsidiary | | | | | |
| undertakings | | | | | |
+--------------+--------+--------+--------+---------+---------+
| Parent | | | | (174) | - |
| undertakings | | | | | |
+--------------+--------+--------+--------+---------+---------+
| Fellow | | | | (763) | (1,028) |
| subsidiary | | | | | |
| undertakings | | | | | |
+--------------+--------+--------+--------+---------+---------+
+--------------+-------------+---------+---------+
| | | |
| | | Amount of |
| | | transaction |
+--------------+-------------+-------------------+
| | | 2010 | 2009 |
+--------------+-------------+---------+---------+
| Group | Nature | GBP'000 | GBP'000 |
| | of | | |
| | transaction | | |
+--------------+-------------+---------+---------+
| Fellow | Group | (754) | (570) |
| subsidiary | relief | | |
| undertakings | claimed | | |
+--------------+-------------+---------+---------+
| Parent | Group | (174) | - |
| undertakings | relief | | |
| | claimed | | |
+--------------+-------------+---------+---------+
| Fellow | Survey | (34) | (729) |
| subsidiary | and | | |
| undertakings | security | | |
| | costs | | |
| | payable | | |
+--------------+-------------+---------+---------+
| Parent | Charges | (330) | (308) |
| undertakings | payable | | |
+--------------+-------------+---------+---------+
| Parent | Interest | 702 | 662 |
| undertakings | receivable | | |
+--------------+-------------+---------+---------+
| Fellow | Loan | - | 10,000 |
| subsidiary | provided | | |
| undertakings | to | | |
+--------------+-------------+---------+---------+
| Fellow | Interest | 319 | 95 |
| subsidiary | receivable | | |
| undertakings | | | |
+--------------+-------------+---------+---------+
Notes to the financial statements for the year ended 31 March 2010
+--------------+--------+--------+--------+---------+---------+
| | | | Amount owed |
| | | | (to)/from |
| | | | |
| | | | related party |
+--------------+--------+-----------------+-------------------+
| | | | | 2010 | 2009 |
+--------------+--------+--------+--------+---------+---------+
| Company | | | | GBP'000 | GBP'000 |
+--------------+--------+--------+--------+---------+---------+
| Subsidiary | | | | (2,532) | (1,551) |
| undertakings | | | | | |
+--------------+--------+--------+--------+---------+---------+
| Subsidiary | | | | 108,083 | 114,158 |
| undertakings | | | | | |
+--------------+--------+--------+--------+---------+---------+
| Fellow | | | | 2 | 3 |
| subsidiary | | | | | |
| undertakings | | | | | |
+--------------+--------+--------+--------+---------+---------+
| Fellow | | | | (3) | (18) |
| subsidiary | | | | | |
| undertakings | | | | | |
+--------------+--------+--------+--------+---------+---------+
| Subsidiary | | | | 6 | - |
| undertakings | | | | | |
+--------------+--------+--------+--------+---------+---------+
+--------------+-------------+---------+---------+
| | | |
| | | Amount of |
| | | transaction |
+--------------+-------------+-------------------+
| | | 2010 | 2009 |
+--------------+-------------+---------+---------+
| Company | Nature | GBP'000 | GBP'000 |
| | of | | |
| | transaction | | |
+--------------+-------------+---------+---------+
| Parent | Group | 6 | - |
| undertakings | relief | | |
| | surrendered | | |
+--------------+-------------+---------+---------+
| Fellow | Group | 2 | 3 |
| subsidiary | relief | | |
| undertakings | surrendered | | |
+--------------+-------------+---------+---------+
| Subsidiary | Interest | 2,468 | 11,398 |
| undertaking | receivable | | |
+--------------+-------------+---------+---------+
Compensation of key management (including directors):
+-----------------+---------+---------+
| | 2010 | 2009 |
+-----------------+---------+---------+
| Group | GBP'000 | GBP'000 |
+-----------------+---------+---------+
| Short | 159 | 167 |
| term | | |
| employee | | |
| benefits | | |
+-----------------+---------+---------+
| Post-employment | 13 | 11 |
| benefits | | |
+-----------------+---------+---------+
Notes to the financial statements for the year ended 31 March 2010
The group and company's financial instruments are classified as follows:
+------------------------------------+-------------------------------------+
| Assets and liabilities | Category of financial instrument |
+------------------------------------+-------------------------------------+
| Trade and other receivables | Loans and other receivables |
+------------------------------------+-------------------------------------+
| Cash and cash equivalents | Loans and other receivables |
+------------------------------------+-------------------------------------+
| Borrowings | Other financial liabilities at |
| | amortised cost |
+------------------------------------+-------------------------------------+
| Trade and other payables | Other financial liabilities at |
| | amortised cost |
+------------------------------------+-------------------------------------+
The group's and company's contractual undiscounted cash flows (including
principal and interest payments) of its financial liabilities are as follows:
+----------+---------+---------+---------+---------+---------+---------+---------+
| | | | | | | | |
| | | | | | | More | |
| At 31 | Within | 1-2 | 2-3 | 3-4 | 4-5 | | |
| March | | | | | | than 5 | Total |
| 2010 | 1 year | years | Years | years | years | | |
| | | | | | | years | |
+----------+---------+---------+---------+---------+---------+---------+---------+
| Group | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------+---------+---------+---------+---------+---------+---------+---------+
| 2.9376% | 9,914 | 10,641 | 10,710 | 10,558 | 10,324 | 115,386 | 167,533 |
| bond | | | | | | | |
+----------+---------+---------+---------+---------+---------+---------+---------+
| Trade | 7,627 | - | - | - | - | - | 7,627 |
| and | | | | | | | |
| other | | | | | | | |
| payables | | | | | | | |
+----------+---------+---------+---------+---------+---------+---------+---------+
| | 17,541 | 10,641 | 10,710 | 10,558 | 10,324 | 115,386 | 175,160 |
+----------+---------+---------+---------+---------+---------+---------+---------+
+----------+---------+---------+---------+---------+---------+---------+---------+
| | | | | | | | |
| | | | | | | More | |
| At 31 | Within | 1-2 | 2-3 | 3-4 | 4-5 | | |
| March | | | | | | than 5 | Total |
| 2009 | 1 year | years | Years | years | years | | |
| | | | | | | years | |
+----------+---------+---------+---------+---------+---------+---------+---------+
| Group | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------+---------+---------+---------+---------+---------+---------+---------+
| 2.9376% | 9,378 | 10,058 | 10,795 | 10,865 | 10,711 | 127,529 | 179,336 |
| bond | | | | | | | |
+----------+---------+---------+---------+---------+---------+---------+---------+
| Trade | 6,087 | - | - | - | - | - | 6,087 |
| and | | | | | | | |
| other | | | | | | | |
| payables | | | | | | | |
+----------+---------+---------+---------+---------+---------+---------+---------+
| | 15,465 | 10,058 | 10,795 | 10,865 | 10,711 | 127,529 | 185,423 |
+----------+---------+---------+---------+---------+---------+---------+---------+
+----------+---------+---------+---------+---------+---------+---------+---------+
| | | | | | | | |
| | | | | | | More | |
| At 31 | Within | 1-2 | 2-3 | 3-4 | 4-5 | | |
| March | | | | | | than 5 | Total |
| 2010 | 1 year | years | Years | years | years | | |
| | | | | | | years | |
+----------+---------+---------+---------+---------+---------+---------+---------+
| Company | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------+---------+---------+---------+---------+---------+---------+---------+
| 2.9376% | 9,914 | 10,641 | 10,710 | 10,558 | 10,324 | 115,386 | 167,533 |
| bond | | | | | | | |
+----------+---------+---------+---------+---------+---------+---------+---------+
| Trade | 2,550 | - | - | - | - | - | 2,550 |
| and | | | | | | | |
| other | | | | | | | |
| payables | | | | | | | |
+----------+---------+---------+---------+---------+---------+---------+---------+
| | 12,464 | 10,641 | 10,710 | 10,558 | 10,324 | 115,386 | 170,083 |
+----------+---------+---------+---------+---------+---------+---------+---------+
+----------+---------+---------+---------+---------+---------+---------+---------+
| | | | | | | | |
| | | | | | | More | |
| At 31 | Within | 1-2 | 2-3 | 3-4 | 4-5 | | |
| March | | | | | | than 5 | Total |
| 2009 | 1 year | years | Years | years | years | | |
| | | | | | | years | |
+----------+---------+---------+---------+---------+---------+---------+---------+
| Company | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------+---------+---------+---------+---------+---------+---------+---------+
| 2.9376% | 9,378 | 10,058 | 10,795 | 10,865 | 10,711 | 127,529 | 179,336 |
| bond | | | | | | | |
+----------+---------+---------+---------+---------+---------+---------+---------+
| Trade | 1,585 | - | - | - | - | - | 1,585 |
| and | | | | | | | |
| other | | | | | | | |
| payables | | | | | | | |
+----------+---------+---------+---------+---------+---------+---------+---------+
| | 10,963 | 10,058 | 10,795 | 10,865 | 10,711 | 127,529 | 180,921 |
+----------+---------+---------+---------+---------+---------+---------+---------+
Notes to the financial statements for the year ended 31 March 2010
The immediate parent undertaking is Moyle Holdings Limited, a company
incorporated in Northern Ireland. Group financial statements for that company
are not prepared.
The ultimate parent undertaking, and the only undertaking for which group
financial statements are prepared, is Mutual Energy Limited, a company
incorporated in Northern Ireland. Group financial statements for that company
are available to the public from First Floor, The Arena Building, 85 Ormeau
Road, Belfast, BT7 1SH.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SSFSUFFSSEEW
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