NORTHERN IRELAND ELECTRICITY PLC - Annual Financial Report.

Northern Ireland Electricity plc Annual Report and Accounts for year ended 31 March 2010

 Northern Ireland Electricity's Annual Report and Accounts
for the year ended 31 March 2010 have been submitted to the UKLA's
viewing facility and are also available on Northern Ireland Electricity
plc's website at: 

www.nie.co.uk/accounts/NIE_Accounts_2009-2010.pdf

The full annual report and accounts follow:-

DIRECTORS' REPORT

The directors of Northern Ireland Electricity plc (NIE or the Company) present their report and the Group accounts for the year ended 31 March 2010. All references in this report and accounts to "Group" denote Northern Ireland Electricity plc and its subsidiary undertakings and to "Company" denote Northern Ireland Electricity plc, the parent company.

The accounts have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and applied in accordance with the provisions of the Companies Act 2006.

Results and Dividends

 The results for the year ended 31 March 2010 show a profit after
tax of [pounds]60.6m (2009 - [pounds]75.7m).  The Company paid interim
ordinary dividends of [pounds]55.0m (2009 - [pounds]110.6m).
 Principal Activities
The Company's principal activity is the transmission and
distribution of electricity in Northern Ireland through NIE Transmission
and Distribution (T& D).  The Company completed the sale of SONI
Limited (SONI), the transmission system operator in Northern Ireland, to
EirGrid plc on 11 March 2009. 

Events Since the Year End

 On 6 July 2010 Viridian Group Limited (Viridian), the immediate
parent undertaking of the Company, entered into a conditional agreement
to sell the Company to ESB.  The sale is subject to a number of
conditions including Republic of Ireland (RoI) and United Kingdom (UK)
competition clearance and new financing arrangements being put in place
for the remaining Viridian group businesses.  Subject to fulfilment of
the conditions, the transaction is expected to complete by the end of
2010. 

Key Performance Indicators 

The directors have determined that the following key performance indicators (KPIs), covering both financial and operational performance, are the most effective measures of progress towards achieving the Group's objectives.

Financial KPIs

The Group's financial KPIs are Group pro-forma operating profit (based on regulated entitlement) and interest cover (based on pro-forma operating profit).

 KPIs                                                        2010
2009
 

Group pro-forma operating profit (based on regulated [pounds]108.8m [pounds]114.0m entitlement)

Interest cover (based on pro-forma operating profit) 5.3 times 4.3 times

 The Group's pro-forma operating profit decreased from
[pounds]114.0m to [pounds]108.8m, reflecting the disposal of SONI and
lower T&D profits principally reflecting the impact of deflation on
regulated revenue and costs associated with an ice storm on 30 March
2010. 

The calculation of Group pro-forma operating profit is shown below:

 2010       2009 Year to 31 March
[pounds]m 

[pounds]m

 Group statutory operating profit*: Operating profit from
continuing operations                114.6       84.0 Operating profit
from discontinued operations                  -       32.8
                                                            -----
-----
                                                           114.6
116.8
Deduct: over-recovery of regulated entitlement              (5.8) 

(2.8)

 -----      ----- Group pro-forma operating profit
108.8      114.0
 *In accordance with IFRS 5 Non-Current Assets Held for Sale and
Discontinued Operations, SONI is classified as a discontinued operation
in the income statement for the year ended 31 March 2009.  IFRS 5
requires that, in the circumstances of discontinued operations, the
profits earned by the continuing operations on sales to the discontinued
operations be eliminated on consolidation and attributed to the
discontinued operations and vice versa. 

This representation does not reflect the profits earned by continuing or discontinued operations as if they were stand alone entities.

Interest cover increased from 4.3 times to 5.3 times principally due to lower finance costs. The calculation of interest cover is shown below:

 Year to 31 March                                           2010
2009
                                                              [pounds]m
[pounds]m
Group pro-forma operating profit                          108.8
114.0
Net finance costs (before net pension scheme interest): Continuing
operations                                     (20.6)      (26.2)
Discontinued operations                                       -
(0.5)
                                                          -----
-----
                                                          (20.6)
(26.7)
Interest cover                                         5.3 times   4.3
times
Operational KPIs
The operational KPIs are: 

- performance against the overall and guaranteed standards set by the Northern

Ireland Authority for Utility Regulation (NIAUR);

- the number of complaints which the Consumer Council for Northern Ireland 

(Consumer Council) takes up on behalf of consumers (Stage 2 complaints); and

- the average number of minutes lost per consumer per annum through

distribution fault interruptions, excluding the effect of major storms (CML).

Operational KPIs and commentary thereon are set out on page 9.

Regulation and Legislation

The electricity industry in Northern Ireland is governed principally by the Electricity (Northern Ireland) Order 1992 (the 1992 Order) and by the conditions of the licences which have been granted under the 1992 Order. The 1992 Order has been amended by subsequent legislation including the Energy (Northern Ireland) Order 2003 (the 2003 Order) and most recently, the Electricity Regulations (Northern Ireland) 2007 and the Electricity (Single Wholesale Market) (Northern Ireland) Order 2007 (the SEM Order).

Regulators

 NIAUR and the Department of Enterprise Trade and Investment
(DETI) are the principal regulators.  Each is given specific powers,
duties and functions under the relevant legislation.  The functions of
NIAUR include licensing (pursuant to a general authority given by DETI)
and the general supervision and enforcement of the licensing regime.
DETI's functions include licensing, the giving of consents for new
power stations and overhead lines, fuel stocking, the encouragement of
renewable generation and the regulation of matters relating to the
quality and safety of electricity supply. 

Regulators' objectives and duties

 The principal objective of both NIAUR and DETI in carrying out
their functions in relation to electricity is to protect the interests
of consumers of electricity, wherever appropriate, by promoting
effective competition between those engaged in, or in commercial
activities connected with, the generation, transmission or supply of
electricity.  Each of NIAUR and DETI has a duty to carry out its
functions in the manner which it considers is best calculated to further
this principal objective, having regard to a number of factors,
including the need to ensure that all reasonable demands for electricity
are met and that licensees are able to finance their authorised
activities.  In performing that duty they are required to have regard to
the interests of individuals whose circumstances include being disabled,
chronically sick or of pensionable age or having low incomes or residing
in rural areas.  They must also have regard to the effect of the
industry's activities on the environment and their role includes
promoting energy efficiency.
 The 2003 Order gives the Consumer Council responsibility for
representing electricity consumers and dealing with their complaints.
The Consumer Council has powers to investigate matters relating to the
interests of consumers regarding their electricity supply and to obtain
information from electricity licence holders.
EU Legislation 

A further package of EU legislative measures concerning energy markets was introduced on 3 September 2009. The package includes measures which aim to ensure the effective separation of networks from generation and supply activities. The sale of SONI in March 2009 was consistent with this aim. DETI intends to consult on its implementation proposals from October to December 2010 following which the required regulations will be drafted and finalised.

Licence

As a transmission licensee and electricity distributor, the Company is required to develop and maintain an efficient, co-ordinated and economical system of:

- electricity transmission - the bulk transfer of electricity across its high

voltage network of overhead lines, underground cables and associated equipment

mainly operating at 275kV and 110kV; and

- electricity distribution - the transfer of electricity from the high voltage 

transmission system and its delivery to consumers across a network of overhead

lines and underground cables operating at 33kV, 11kV and lower voltages.

The Company's licence requires it to:

- provide transmission services, including making the transmission system

available to SONI and offer terms to SONI for connections by third parties to

the transmission system;

- comply with the transmission interface arrangements which govern its

relationship with SONI;

- comply with specified industry codes and agreements;

- offer terms for connection to and use of the distribution system on a

non-discriminatory basis and secure NIAUR's approval for the basis of charges;

- provide market registration and data services to suppliers to support

competition for supplies to consumers and establish market registration

arrangements to facilitate its obligations as an appointed meter data provider

under the Single Electricity Market (SEM) trading rules;

- draw up and publish a schedule of public service obligation (PSO) charges for

the provision of services which are of a public service nature; and

- manage the land bank which retains sites in Northern Ireland that are

suitable for electricity generation and which all prospective generators can

access.

 NIAUR sets guaranteed and overall standards, the majority of
which apply to services provided by the Company (e.g. the timely
restoration of consumers' supplies following an interruption and
prescribed times for responding to consumers' voltage complaints).
The guaranteed standards apply in individual cases and the Company is
obliged to make a payment to each consumer affected if it fails to meet
a guaranteed standard.  The overall standards apply at the collective
level and, whilst the Company is not required to make payments to
consumers if it fails to meet an overall standard, the licence obliges
the Company to conduct its business in such a way as can reasonably be
expected to lead to it achieving the overall standards. 

NIAUR has statutory powers to enforce compliance with licence conditions. The 2003 Order provides for NIAUR to levy a financial penalty (up to 10% of the licensee's revenue) for breach of a relevant condition.

 NIAUR may modify the conditions of the licence, either in
accordance with its terms or in accordance with the procedures set out
in the relevant legislation, with the agreement of the Company after due
notice, public consultation and consideration of any representations and
objections.  In the absence of such agreement, NIAUR is required to make
a referral to the Competition Commission before a proposed licence
modification can be made.  Modifications may introduce new conditions
(relating to activities authorised by the licence or to other
activities) or may amend existing conditions.  A modification can be
vetoed by DETI.  Modifications of licence conditions may also be made by
statutory order as a consequence of a reference under the Competition
Act 1998.  In addition, specific powers have been given in legislation
to modify licence conditions without the Company's consent e.g. to
implement EU legislation.
 The licence may be terminated by not less than 25 years' notice
given by DETI and is revocable in certain circumstances including: where
the Company consents to revocation; where the Company fails to comply
with an enforcement order made by NIAUR; or where specified insolvency
procedures are initiated in respect of the Company or its assets. 

The Company's licence is available on NIAUR's website www.uregni.gov.uk

Business Review

Transmission and Distribution (T&D)

Background information

NIE holds a transmission licence covering its roles as owner of the transmission and distribution assets and distribution system operator in Northern Ireland. It is responsible for the planning, development, construction and maintenance of the transmission and distribution network and for the operation of the distribution network.

 The T&D network comprises a number of interconnected networks
of overhead lines and underground cables which are used for the transfer
of electricity to c819,000 consumers via a number of substations.  There
are 2,100km of the transmission system, of which some 80km are
underground; 42,900km of the distribution system, of which some 13,100km
are underground; and c240 major substations.  T&D's
transmission system is connected to that of the RoI through 275kV and
110kV interconnectors and to that in Scotland via the Moyle
Interconnector.
 The T&D business derives its revenue principally through charges
for use of the distribution system and PSO charges levied on electricity
suppliers and charges for transmission services (mainly for use of the
transmission system) levied on SONI.
NIE Powerteam, a fellow subsidiary undertaking of Viridian, provides
electrical infrastructure construction and refurbishment, supply chain
and meter reading services to the Company.
Price control
T&D is subject to a price control, defined in a formula set out in
the Company's licence, which limits the revenue it may earn and the
prices it may charge.  The principles of price regulation employed in
the licence conditions reflect the general duties of NIAUR and DETI
under the relevant legislation. These include having regard to the need
to ensure that NIE is able to finance its authorised activities.
If the amount of revenue recovered in any one year exceeds or falls
short of the amount allowed by the price control formula, a correction
factor operates in the following year to give back any surplus with
interest, or to recover any deficit with interest, as appropriate.  A
surplus is referred to as an over-recovery and a deficit as an
under-recovery.
The T&D price control was reset with effect from 1 April 2007 and is
scheduled to run to 31 March 2012.  This is the fourth five year
regulatory period since privatisation of the Company and it is referred
to as Regulatory Period 4 (RP4). 

The key aspects of the RP4 price control are as follows:

 Rate of return: Up until 31 March 2010 the allowed rate of return
was consistent with the 2005 distribution network operator (DNO) price
control in Great Britain (GB) in respect of the distribution portion of
T&D's regulatory asset base (RAB) (which is taken to represent
82% of the overall RAB) but a lower rate applied to the 18% representing
the transmission portion.  This resulted in a blended rate of return of
4.8% post tax real.  For the last two years of RP4 the baseline allowed
rate of return on the distribution portion of the RAB will be 4.0% (post
tax real) in line with the GB DNO Distribution Price Control Review 5
(DPCR5).  The allowed rate of return on the transmission portion will
remain unchanged.   This results in a blended rate of return of 4.1%
post tax real.
 Operating costs: The allowance for controllable costs in each year of
RP4 is set equal to the RPI-indexed level of actual costs incurred
during the corresponding year in RP3 (T&D price control period April
2002 to March 2007). The allowance was subject to some specific
reductions in 2007/08 and 2008/09 and also a small disallowance in
respect of early retirement pension deficiency costs.  The allowance for
uncontrollable costs such as rates, wayleaves and licence fees is set
equal to the actual cost in each year.
Capital expenditure: The five year capital expenditure budget (net of
customer contributions) agreed at the start of RP4 was [pounds]358m (in
2009/10 prices) compared to [pounds]293m in RP3 (in 2009/10 prices).
This investment is driven by the need to replace worn assets and to meet
continued growth in customer demand.
T&D has commenced discussions with NIAUR on the price control which
is due to apply from 1 April 2012 (RP5).  NIAUR's indicative
timetable shows an initial consultation in June 2010, covering policies
and issues, a business plan submission by T&D in October 2010,
NIAUR's initial proposals in June 2011 and final proposals in
November 2011. 

Financial performance

T&D revenues (based on regulated entitlement) increased from [pounds]233.1m to [pounds]236.2m reflecting growth in the RAB and higher PSO charges offset by the impact of deflation. T&D operating profit (based on regulated entitlement) decreased from [pounds]110.1m to [pounds]107.7m principally reflecting the impact of deflation on regulated revenue and costs associated with an ice storm on 30 March 2010.

 Operational performance
 KPIs                                                    2010     2009
                                                      Number   Number
Overall standards - defaults                            None     None
Guaranteed standards - defaults                         None     None
Stage 2 complaints to the Consumer Council                 3        3
CML *                                                     59       62

*average number of minutes lost per consumer per annum through distribution fault interruptions, excluding the effect of major storms

All the overall standards were achieved and there were no defaults against the guaranteed standards (2009 - none).

 T&D's strong focus on service failure analysis limits
the number of instances when consumers are dissatisfied to the extent
that they refer a complaint to the Consumer Council.  The number of
Stage 2 complaints was three (2009 - three).
 The number of CML was 59 minutes (2009 - 62).  This performance is
better than the target range of 70-90 minutes set by NIAUR for the
period of the RP4 price control.
Ice storm 

On 30 March 2010, a severe ice storm resulted in widespread damage to T&D's network and the loss of supply to almost 140,000 consumers. T&D's emergency plan was fully implemented with the mobilisation of employees and external contractors including significant additional resources from the RoI and GB.

 Helicopters were deployed to assist in locating and assessing
damage and delivering equipment to locations which were inaccessible due
to heavy snow. Supplies of electricity were restored to 83% of the
affected consumers within 24 hours and over 120km of overhead lines were
rebuilt in a five day period. In the areas worst affected, T&D, in
conjunction with local councils, opened nine community reception centres
to provide warmth, food and access to voluntary services.  A dedicated
team maintained contact with c400 critical care consumers dependent on
life-supporting electrical equipment, who lost electricity supply as a
result of the storm.  Following the restoration of supplies T&D made
goodwill payments of [pounds]100 to c700 consumers who lost electricity
supply for the longest period.
 NIAUR has agreed to treat the storm as a severe weather event and to
apply an exemption from guaranteed standards of performance relating to
the restoration of supply.
Investment 

T&D continues to make substantial investment in its infrastructure assets. Total capital expenditure during the year (before customer contributions) including expenditure on non-network assets was [pounds]95.1m (2009 - [pounds]104.7m).

 T&D, working jointly with EirGrid, is progressing the
development of the 400kV Tyrone-Cavan interconnector to further
strengthen the interconnection of the electricity networks of Northern
Ireland and the RoI. In December 2009, T&D submitted a planning
application seeking consent to construct a new 275/400kV substation near
Moy, Co Tyrone and 33.9km of new 400kV overhead transmission line from
the new substation to a crossing point on the border between Co. Armagh
and Co. Monaghan in the RoI.  Submissions made during a public
consultation process, which closed on 19 February 2010, are being
considered by the Northern Ireland Planning Service and a decision is
expected during 2010/ 11.
 DETI has proposed a target for Northern Ireland of 40% of electricity
consumption from renewable sources by 2020.  T&D is working with
DETI and NIAUR on a long-term strategy for the development of the
electricity network to support the connection of additional renewable
generation.  It is estimated that an investment in the transmission
system of the order of [pounds]1bn over the next 10 - 15 years will be
needed to achieve DETI's target. 

During the year T&D made further progress with an IT project to support the full decoupling of T&D and NIE Energy Supply (a fellow Viridian business) customer records and remove the current restrictions, inherent in the legacy systems, on residential consumers in Northern Ireland switching electricity supplier.

 Financial Review 

Group revenue and operating profit

 Based on IFRS 5, revenue from continuing operations increased
from [pounds]206.5m to [pounds] 242.0m and operating profit from
continuing operations increased from [pounds]84.0m to [pounds]114.6m.
 The directors consider that the Group's pro-forma revenue and
operating profits from continuing and discontinued operations (as shown
in note 3(iii) to the accounts) give a more meaningful measure of
performance.  Revenue (based on regulated entitlement) decreased from
[pounds]257.4m to [pounds]236.2m principally reflecting the disposal of
SONI.  Operating profit (based on regulated entitlement) decreased from
[pounds]114.0 to [pounds]108.8m reflecting the disposal of SONI and
lower T&D profits.
Net finance costs 

The Group's net finance costs relating to continuing operations decreased from [pounds]33.2m to [pounds]30.4m reflecting lower interest rates.

Tax charge

 The Group's tax charge relating to continuing operations of
[pounds]21.8m (2009 - [pounds] 14.1m) reflects the increase in the
profit before tax from continuing operations of [pounds]84.2m (2009 -
[pounds]50.8m).  An analysis of the tax charge is shown in note 8 to the
accounts. 

Loss for the year from discontinued operations

The loss for the year from discontinued operations of [pounds]1.8m relates to the finalisation of pension arrangements in respect of SONI employees and related adjustments to the disposal consideration.

Cash flow

The Group's net cash flows from operating activities increased to [pounds]102.0m (2009 - [pounds]86.9m) reflecting working capital movements and lower interest payable.

The cash out flow in respect of the purchase of property, plant and equipment (net of customer contributions) was [pounds]77.4m (2009 - [pounds]88.6m) reflecting a reduction in the number of new connections to the T&D network.

Interim ordinary dividends paid were [pounds]55.0m (2009 - [pounds]110.6m).

Net debt

Net debt increased from [pounds]466.6m at 31 March 2009 to [pounds]497.3m at 31 March 2010 reflecting the cash flows noted above. An analysis of net debt is shown in note 21 to the accounts.

Defined benefit pension liability

 The pension liability in the Group's defined benefit scheme
under IAS 19 Employee Benefits increased from [pounds]77.9m at 31 March
2009 to [pounds]136.2m at 31 March 2010 reflecting higher scheme
liabilities due to a decrease in the discount rate (resulting from lower
bond yields) used to discount scheme liabilities, higher inflation
forecasts and changes in mortality assumptions (reflecting recent scheme
experience and the continuing upward trend in observed life
expectancies), offset by higher asset values. 

Corporate Governance 

The Board

The directors of the Company are:

Mike Toms (independent non-executive chairman); John Biles (independent non-executive director); and Harry McCracken (executive director).

Harry McCracken was appointed as a director on 7 July 2009. Laurence MacKenzie resigned as a director on 7 July 2009.

As required under the Company's licence, the Board of Directors comprises a majority of independent non-executive directors. Each independent non-executive director has relevant experience and knowledge of the energy sector.

Mike Toms, Chairman, is a non-executive director of UK Coal PLC, Birmingham Airport Holdings Limited, Oxera Consulting Limited and Bellway plc and was formerly Group Director, Planning and Regulatory Affairs at BAA and a member of the BAA plc Board.

 John Biles, Chairman of the Audit Committee, is a non-executive
director and Chairman of the Audit Committee of Charter International
plc, Bodycote PLC, Sutton & East Surrey Water PLC and Hermes Fund
Managers Ltd.   He was formerly Finance Director of FKI plc and Group
Financial Director of Chubb Security Plc.
 Harry McCracken is Managing Director.  He chairs the Company's
Executive Committee and is also an executive director of Viridian.  He
was appointed MD of the Company in July 2009.  From 2003 to 2009 he was
Group Managing Director of Viridian Power & Energy.  He joined the
Company in 1970 as an engineer and progressed to Corporate Planning
Manager prior to appointment to the Company's Board as Operations
Director in 1992.
The Company's licence requires it to establish and at all times
maintain the full managerial and operational independence of the T&D
business from other businesses within the Viridian group involved in the
generation and supply of electricity in Northern Ireland or in the RoI.
The Company's Compliance Plan sets out the practices, procedures,
systems and rules of conduct to ensure compliance with this licence
condition.  The Compliance Plan provides that the Board will at all
times be responsible for the day to day management and operation of the
Company.  Viridian participates in the corporate governance of the
Company to the extent permitted by the Compliance Plan. 

Risk management

 The directors acknowledge that they have responsibility for the
Company's systems of internal control and risk management and
monitoring their effectiveness.  The purpose of these systems is to
manage, rather than eliminate, the risk of failure to achieve business
objectives, to provide reasonable assurance as to the quality of
management information and to maintain proper control over the income,
expenditure, assets and liabilities of the Company.  No system of
control can, however, provide absolute assurance against material
misstatement or loss.  Accordingly, the directors have regard to those
specific controls, which in their judgement, are appropriate to the
Company's business given the relative costs and benefits of
implementing them. 

Audit Committee

The Board's Audit Committee comprises the two independent non-executive directors and is chaired by John Biles. The Board is satisfied that John Biles has recent and relevant financial experience.

 The Committee had four meetings during the year with both members
attending each meeting.  The external auditors (Ernst & Young LLP),
the internal auditors (PricewaterhouseCoopers LLP), and the
Company's Managing Director attend each meeting at the invitation
of the Committee. 

In relation to financial reporting the Committee:

- monitors the integrity of the Company's interim and annual accounts and

regulatory accounts before their submission to the Board for approval;

- considers the appropriateness of the Company's accounting policies, whether

the accounts give a true and fair view and the appropriateness of the going

concern assumption;

- reviews significant issues and judgements and challenges where necessary the

actions and judgements of management in relation to the accounts; and

- considers guidance issued by the Financial Reporting Council as it applies to

the Company.

 The Committee monitors and reviews the effectiveness of internal
controls and the Company's risk management system and the
effectiveness of the internal audit function.  The Committee approves
the annual internal audit plan and, at each meeting, reviews reports
from the internal auditors on progress against the plan, assurance
levels, recommendations made and proposed actions to implement
recommendations.
 The Committee oversees the relationship with the external auditors and
keeps under review the effectiveness of the external auditors' work
in terms of nature, scope and results of audit and reviews and monitors
the independence of the external auditor.  The Committee makes
recommendations to the Board on the appointment of the external auditors
and their remuneration and determines their terms of engagement.
The Committee reviews the Company's arrangements for its employees
to raise concerns about possible wrongdoing in financial reporting or
other matters as set out in the Company's Whistleblowing Policy.
There were no issues raised under the policy during the year. 

The Audit Committee regularly meets with the internal and external auditors without management being present.

Internal control and risk management in relation to the financial reporting process

 Strong financial and business controls are necessary to ensure
the integrity and reliability of financial and other information on
which the Company relies for day-to-day operations, external reporting
and for longer term planning. The Company exercises financial and
business control through a combination of: appropriately qualified and
experienced personnel; rigorous business planning processes; detailed
performance analysis; an integrated accounting system; and clearly
defined approval limits.  The internal auditors test the effectiveness
of financial and business controls.  The external auditors provide
advice on specific accounting and tax issues.  The Audit
Committee's role in respect of financial reporting is set out in
the Audit Committee section above. 

Risk Management and Principal Risks and Uncertainties

 The Company operates a structured and disciplined approach to the
management of risk.  The Company conducts business in a manner which
balances costs and risks while taking account of all its stakeholders
and protecting the Company's performance and reputation by
prudently managing the risks inherent in the business.  Management
regularly identifies and considers the risks to which the business is
exposed.  Management's assessment of the key risks and the
associated controls and actions required to mitigate these risks are
recorded in risk registers.  Each risk is regularly assessed for the
severity of its impact on the business and for the effectiveness of the
controls in place.  The risk environment is reviewed continually in
order to identify new or emerging potential risks.
 As noted above the Audit Committee plays a key role in internal control
and risk management.  The emphasis on sound management structures and
policies and procedures is backed up by operational and financial review
mechanisms and an externally resourced internal audit function, provided
by PricewaterhouseCoopers LLP. 

The principal risks and uncertainties that affect the Company are described below but are not intended to be an exhaustive analysis of all the risks that may arise in the ordinary course of business or otherwise.

Network reliability

 The Company has a key responsibility to maintain a safe and
reliable electricity network and to restore supplies as quickly as
possible following interruptions.  Over the long-term this is achieved
by ensuring the correct level of investment in the network.  One of the
major operational risks is that in the short-term the electricity
network, which is primarily of overhead line construction, can be
subject to damage, and potentially major disruption, by storms caused by
high winds, ice-accretion on power lines resulting from snowfalls and
lightning storms.
 The Company has measures in place to manage the risk of damage to the
electricity network resulting from adverse weather conditions.  These
include the strengthening of the network through appropriate investment,
reliability-centred network maintenance and a systematic overhead line
refurbishment and tree cutting programme.  A specific emergency plan
exists to address major incidents impacting the network: this plan is
regularly reviewed and tested.
Consumer service
There is a risk that the Company fails to meet consumer service
expectations or fails to deliver the overall and guaranteed standards of
service agreed with NIAUR which could result in damage to reputation and
compensation payments to consumers.  Adherence to consumer standards is
closely monitored and the number of complaints to the Consumer Council
and performance against overall and guaranteed standards are KPIs. 

Health and safety

 The Company is committed to ensuring a safe working environment.
The risks arising from inadequate management of health and safety
matters are the exposure of employees, contractors and third parties to
the risk of injury, potential liability and/or loss of reputation. These
risks are closely managed by the Company through the promotion of a
strong health and safety culture and well defined health and safety
policies.  The annual health, safety and risk plan sets out detailed
targets for the management of safety.  There is a strong focus on the
audit of work sites and the reporting and reviewing of near miss
incidents.  The approach to health and safety issues is described more
fully in the Corporate Social Responsibility section. 

Regulation

 One of the major risks for the Company arises from the
quinquennial regulatory price control review, when the future income
that the Company is entitled to receive from charges for use of the
electricity network is set for the next five years.  The Company's
approach to price control reviews is to be pro-active in promoting
arrangements that will lead to an agreed outcome.  This includes
adherence to relevant precedent and best practice.  The Company's
price control for regulated entitlement contains an element of
indexation which is linked to the Retail Price Index (RPI).
 The relationships with NIAUR and DETI are managed by senior management
and the dedicated regulatory affairs team through frequent meetings,
informed dialogue and formal correspondence.  There is regular reporting
to NIAUR and DETI on a wide range of financial and other regulatory
matters including capital expenditure and licence compliance. 

Business continuity

 The Company has measures in place to manage the risk that it
sustains a greater than necessary financial impact through inability to
carry on its operations either for a short or prolonged period.  The
Company maintains a business continuity plan and an IT disaster recovery
plan.  Business continuity plans are reviewed and tested annually.
Contingency plans to manage the risk from a potential 'flu pandemic
were reviewed and updated throughout the year in light of government and
World Health Organisation advice. 

Outsourcing 

 The Company outsources a range of important ICT (information and
communication technology) and business process services.  There is a
risk of disruption to the Company if there are service delivery
failures.  Comprehensive business continuity and disaster recovery plans
are maintained to manage this risk. Following an OJEU (Official Journal
of the European Union) retendering exercise Northgate Managed Services
Limited was reappointed to deliver these services for the five year
period from October 2009.   Voice and data telecoms services are
provided by eircom through a contract managed by Northgate. 

Social, environmental and ethical factors

 The Company has in place measures to protect against financial
and reputational risk from any failure to manage social, environmental
and ethical (SEE) factors.  In general, SEE factors are managed through
embedding corporate social responsibility (CSR) into the Company's
management processes and core business activities.  Environmental risk,
in particular, is managed through: a detailed environmental risk
register; environmental action plans; certified environmental management
systems; and identification of potential environmental exposures.  These
matters are monitored by nominated environmental compliance officers in
key parts of the business. 

Pensions

 Most employees of the Company are members of VGPS.  This has two
sections: 'Options' which is a money purchase arrangement and
'Focus' which is a defined benefit arrangement, closed to new
entrants in 1998.  There is a risk that the cost of funding the Focus
section could increase if investment returns are lower than expected,
mortality rates improve or salary or benefit increases are higher than
expected.  The VGPS trustees seek the advice of professional investment
managers regarding the scheme's investments.  Discussions with the
VGPS trustees are ongoing in relation to the 31 March 2009 actuarial
valuation.  It is expected that the past service contribution rate will
increase reflecting lower than expected investment returns during the
three year period since the last valuation and changes in mortality
assumptions reflecting VGPS recent experience and the continuing upward
trend in observed life expectancies as advised by Hewitt, the actuaries
to VGPS. 

IT security and data protection

Failure to maintain adequate IT security measures could lead to the loss of data through malicious attack on the Company's IT systems or employee negligence. Loss of Company or consumer data could damage the Company's reputation, adversely impact operational performance or lead to a loss of income. The Company actively promotes awareness of IT security and data protection and targeted controls and procedures are in place to mitigate the risks.

 Treasury risks 

Viridian's centralised treasury function manages the Company's liquidity, funding, investment and financial risk, including interest rate and counterparty credit risk. The Viridian treasury function's objective is to manage risk at optimum cost. The treasury function employs a continuous forecasting and monitoring process to manage risk.

Capital management and liquidity risk

 The Company is financed through a combination of equity and debt
finance. Details in respect of the Company's equity are shown in
the Statement of Changes in Equity and in note 24 to the accounts.  The
Company's debt finance at 31 March 2010 comprised [pounds]173.5m in
respect of a Eurobond due to mature in September 2018 and intercompany
loans from Viridian of [pounds]317.6m which are repayable on demand.
 At 31 March                                               2010
2009
                                                            [pounds]m
[pounds]m
Cash and cash equivalents                                  0.2       1.6
Intercompany loans from Viridian                        (317.6)
(288.4) Eurobond                                                (173.5)
(173.4) Interest payable on Eurobond                              (6.4)
(6.4)
                                                         -----     -----
Net debt                                                (497.3)
(466.6)
Loans and other borrowings maturity analysis: In one year or less or on
demand                        (324.0)   (294.8) In more than five years
(173.5)   (173.4)
                                                         -----     -----
                                                        (497.5)
(468.2)

The main source of liquidity for the Company, including short-term working capital requirements, is cash generated from operations and intercompany loans from Viridian.

The Company's liquidity risk in respect of intercompany funding is managed through the preparation of cash flow forecasts and discussions with Viridian's treasury function regarding the level of intercompany funding required. Intercompany loans are adjusted on a daily basis to meet the Company's operating cash requirements.

 As noted above, Viridian has entered into a conditional agreement
to sell the Company to ESB.  Upon completion of the sale the
intercompany loans from the Viridian group would be replaced by
intercompany loans from ESB or third party funding.
 In relation to equity, the Company's policy is to finance equity
dividends from accumulated profits.  In relation to debt finance, the
Company's policy is to maintain a prudent level of gearing.  As
noted above, interest cover is a KPI. There have been no changes in the
Company's capital management policies since last year. 

The Company's licence contains various financial conditions. The Company complies with these conditions which principally relate to the availability of financial resources, borrowings on an arm's length basis, restrictions on granting security over the Company's assets and the payment of dividends.

Interest rate risk

 The borrowings of the Company are denominated in Sterling.  The
Eurobond carries a fixed interest rate of 6.875% and intercompany loans
from Viridian carry a variable interest rate based on LIBOR.  The
Company has no derivative financial instruments in respect of interest
rates.  Interest rate exposure is managed by Viridian at the group
level.
 At 31 March                                              2010      2009
                                                           [pounds]m
[pounds]m Loans and other borrowings fixed/floating analysis: Fixed rate
debt                                        (179.9)   (179.8) Variable
rate debt                                     (317.6)   (288.4)
                                                        -----     -----
                                                       (497.5)   (468.2)
Credit risk
The Company's principal financial assets are cash and cash
equivalents, trade and other receivables and other financial assets as
outlined in the table below:
At 31 March                                                 2010   2009
                                                              [pounds]m
[pounds]m
Cash and cash equivalents                                    0.2    1.6
Trade and other receivables                                 43.4   46.1
Other financial assets                                       0.3    0.4
                                                            ----   ----
                                                            43.9   48.1

As noted above, the T&D business derives its revenue principally from charges for use of the distribution system and PSO charges levied on electricity suppliers and charges for transmission services levied on SONI.

 The Company's credit risk in respect of trade receivables
from electricity suppliers is mitigated by security received in the form
of cash deposits, letters of credit or parent company guarantees.  With
the exception of public bodies, payments in relation to new connections
or alterations are paid for in advance of the work being carried out.
Payments received on account are disclosed in note 18 to the accounts.
 The Company may be exposed to credit-related loss in the event of
non-performance by bank counterparties.  The Company does not anticipate
any non-performance given the high credit ratings of the established
financial institutions that comprise these counterparties.  The Company
manages credit risk arising in respect of such counterparties by
transacting only with bank counterparties rated investment grade and
above. 

Further information on financial instruments is set out in the notes to the accounts in compliance with IFRS 7 Financial Instruments: Disclosures.

Going concern

The Company's business activities, together with the principal risks and uncertainties likely to affect its future performance, are described above.

 On the basis of their assessment of the Company's financial
position, which has included discussions with the Viridian group, the
directors have a reasonable expectation that the sale of the Company to
ESB will be completed and that the financing requirements of the Company
will be supported by ESB following the sale.  Accordingly, the directors
continue to adopt the going concern basis in preparing the annual report
and accounts. 

Corporate Social Responsibility (CSR)

The Company is committed to operating in a socially, environmentally and ethically responsible manner. It aims to be recognised as transparent and ethical in its dealings and to contribute to the general economic and social well-being and development of the communities in which it operates.

 The Company recognises the importance of engaging with a wide
range of stakeholders including: its shareholders; consumers; employees;
the wider community; those representing the environment; and suppliers.
It does this through many channels including working closely with:
industry regulators; various environmental bodies; various health and
safety bodies; trade unions; business representatives; elected
representatives and politicians; contractors; and landlords. 

The Company has defined a number of principal CSR themes and priorities relevant to the management of SEE-related risks that may impact upon the short and long-term value of the Company. These are classified below under the headings of Workplace, Environment, Marketplace and Community.

Workplace

 The Company had 256 employees at 31 March 2010 (2009 - 262).  NIE
Powerteam, a fellow subsidiary undertaking of Viridian, provides
electrical infrastructure construction and refurbishment and other
managed services to the Company.  NIE Powerteam had 940 employees at 31
March 2010 (2009 - 966). 

Health and safety

 A CSR priority for the Company is to ensure the safety of
employees, contractors and the general public through the promotion of a
positive health and safety culture and adherence to legislation and
recognised safety standards.  The Company's health and safety
policy aims to promote high standards and is supported by specific
safety principles, rules, policies and procedures.  Contractors must
adhere to the same safety rules and requirements as employees. 

The Board is deeply saddened to record that in September 2009 a six year old girl died on coming into contact with an overhead line while climbing a tree.

 The Company health and safety management system is based upon the
principles of the Health and Safety Executive guidance 'Successful
Health and Safety Management' and the Institute of Directors/Health
and Safety Commission guidance 'Leading Health and Safety at
Work'.  The approach to employment-related performance, such as
safety and sickness absence, is to set targets in line with best
practice.  Safety performance is reported to the Energy Networks
Association and the Company regularly engages with other relevant
organisations including the Royal Society for the Prevention of
Accidents (RoSPA), the Health and Safety Executive for Northern Ireland
and DETI.  During the year RoSPA awarded the Company and NIE Powerteam a
Level Four Quality Safety Audit award following a comprehensive audit. 

Including NIE Powerteam, there were five reportable incidents (2009 - six) and no lost time incidents (2009 - two) during the year. Formal processes for incident investigation and analysis are in place.

Employment

 The Company is committed to a working environment: in which
personal and employment rights are upheld; which ensures equality of
opportunity for all employees and job applicants; and which enables
employees to realise their maximum potential and to be appropriately
challenged and fully engaged in the business, with opportunities for
skills enhancement and personal development. The Company and NIE
Powerteam are Investors in People accredited. 

Equal opportunities

 The Company is pro-active in implementing human resource policies
and procedures to ensure compliance with fair employment, sex
discrimination, equal pay, disability discrimination, race
discrimination, sexual orientation and age discrimination legislation.
The Group's equal opportunities policy commits it to providing
equality of opportunity for all employees and job applicants and it
regularly monitors its actions to promote compliance with legislation
and to ensure that it provides equality of opportunity in all its
employment practices.  Equal opportunity measures and statistics in
respect of the relevant businesses are reported formally to the Equality
Commission for Northern Ireland. 

Disability

 It is Company policy to provide people with disabilities equal
opportunities for employment, training and career development, having
regard to aptitude and ability.  Any member of staff who becomes
disabled during employment is given assistance and re-training where
possible. 

Remuneration 

 The Company operates fair and visible remuneration policies which
are externally benchmarked to ensure that employees are paid an
appropriate salary for the work they undertake. The Company seeks to
align employee interests with those of other key stakeholders through an
effective approach to recognition and reward, based on business and
individual performance.  Various reward schemes are in place including
incentive schemes, out of hours schemes, time banking arrangements,
bonus schemes and skills progression arrangements. 

Learning and development

 The Company aims to align its human resources policies with key
business drivers, which include performance and productivity
improvement; cost reduction; business growth and innovation; and
providing value to customers. These policies are supported by clearly
defined values and behaviours, a robust performance management process,
a strong commitment to employee and management development and
organisational competence built upon appropriate capabilities and
skills.  To ensure a highly skilled, multi-disciplined workforce, a
multi-skilled approach has been taken to vocational training schemes.
Learning and development needs are identified through performance,
planning and review processes.
 Policies
There are formal employee complaints and grievance procedures and the
Company has a wide range of family-friendly working arrangements
including enhanced maternity and paternity provisions, adoption,
parental and dependant leave, a child care scheme, career breaks, job
sharing and flexible working hours. 

Sickness absence

 The Company believes that the pro-active management of illness
and absenteeism is to the mutual benefit of the Company and its
employees.  An employee health and well-being policy is in place with
specific policies on stress management, mental health, alcohol and
drug-related problems, smoking and first aid. External occupational
health and counselling services are available for employees.  Including
NIE Powerteam, sickness absence was 2.44% in 2009/10 compared to 2.68%
the previous year, below the UK national average of 3.3%. 

Employee participation and external engagement

 The Company places significant emphasis on internal
communications.  Employee communications occur through team briefings,
engagement groups, communication and involvement groups, project groups,
electronic communications, company forums and through interaction,
consultation and negotiation with trade unions.  Employee relations are
positive and constructive.  Including NIE Powerteam, approximately 73%
of employees are union members.  There are well established arrangements
for consultation, involvement and the promotion of employee relations
through a framework of company councils.  Several consultative
committees are also in place dealing with areas such as health and
safety and business improvement ideas. A managed process of
communication occurs at the individual employee level and the
performance, planning and review processes are designed to include
upward feedback. 

The Company engages with relevant external organisations including the Confederation of British Industry (CBI) Employment Affairs Committee, the Equality Commission for Northern Ireland and the Labour Relations Agency.

Environment

 The Company's environmental policy commits the Company to
protecting the environment and is designed to ensure compliance with all
relevant legislative and regulatory requirements.  Where practical and
economically viable, the Company seeks to develop standards in excess of
such requirements.  Areas of particular focus include the responsible
management of emissions, waste and recycling, measures to protect
against oil pollution and the promotion of energy efficiency.
 The Company is assessing its obligations under, and collating data in
order to ensure compliance with, the UK Government's Carbon
Reduction Commitment (CRC) Energy Efficiency Scheme which  became
effective in April 2010.
As noted in the Business Review, the Company continues to work with DETI
and NIAUR on a long-term strategy for the development of the electricity
network to support the connection of additional renewable generation.
The Company is committed to a programme of research and development
appropriate to its businesses.  As part of its price control
arrangements under RP4, the Company has committed to a [pounds]1m
Sustainable Networks Programme to fund research focused on identifying
the best long-term options for development of the T&D network to
accommodate Government objectives on sustainability.  Over the last
three years [pounds]0.6m has been provided to progress a number of
projects aimed at facilitating the connection of increased levels of
distributed renewable generation to the network.
During the year the Company and NIE Powerteam renewed their ISO
14001:2004 certification for their environmental management system.  In
the 2009 environmental management survey conducted by ARENA Network in
Northern Ireland, the Company was positioned in the first quintile
achieving a score of 88% compared with the Northern Ireland average of
67% and a utilities sector average of 72%. The Company has a full time
environmental compliance officer and designated auditors in its relevant
operations.
The Company's Sustainable Management of Assets and Renewable
Technologies (SMART) programme is part of the regulatory framework
agreed with NIAUR.  The programme supports emerging renewable energy
technologies and encourages a sustainable approach to the provision of
network infrastructure to meet customer demand in Northern Ireland.
During the year the Company committed over [pounds]0.4m under the SMART
programme to support photovoltaics, biomass and wind and hydro-electric
power projects. 

Marketplace

 A CSR priority is to maintain a highly ethical approach to
regulatory responsibilities, licence obligations and public positioning.
The Company aims to be transparent and ethical in all its dealings with
third parties and has a number of policies in place to underpin this
objective.  Policies include internal ethical dealing and
'whistleblowing' procedures as well as the Company's
corporate governance arrangements.
 The Company recognises that it has an opportunity to encourage
suppliers of materials and services to deliver good environmental and
safety performance and to maintain responsible practices towards their
employees and the communities in which they operate.  The Company
subscribes to the Achilles utilities vendor database to pre-qualify
potential suppliers for major contracts on a fair and equal basis; this
assessment includes environmental and health and safety practices.  In
addition the Company assesses suppliers' CSR practices through
questionnaires issued with invitation-to-tender documents. 

Community

Through its mainstream business activities and its community involvement policy, the Company seeks to make a positive impact on the communities in which it operates.

 The Company seeks to maintain safe and reliable electricity
supplies to consumers.  As noted in the Business Review, the number of
CMLs during the year was 59 minutes, compared with 62 minutes the
previous year.  The overall consumer standards set by NIAUR were
achieved and there were no defaults against the guaranteed standards.
Over recent years the Company has achieved a significant reduction in
the level of complaints referred to the Consumer Council with only three
such complaints during 2009/10 (2008/09 - three). 

The Company provides a critical care information service to c2,800 consumers who are dependent on life-supporting electrical equipment.

 During the year, the Company continued its public safety
awareness programme, promoting the importance of electrical safety to
over 18,000 school children, farmers, anglers and building contractors.
The Company's 'Kidzsafe' programme raises safety
awareness among primary school children in an effort to reduce
incidences of vandalism and electricity-related injuries. 

The Company continued to host a number of farm safety events. The Company's safety website www.niesafety.co.uk offers key safety advice on a wide range of activities.

 As part of its price control arrangements for RP4, the Company
has committed to a [pounds]1m vulnerable customer programme to help
alleviate fuel poverty in Northern Ireland by assisting low income
households to access grants and social benefits. 

Charitable and Political Donations

In addition to sponsorship of charities and organisations of [pounds]4,000, the Group's donations to charities in the year were [pounds]10,000 (2009 - [pounds]10,000).

There were no contributions for political purposes.

Payment of Suppliers

 The Company's procurement policy is to source equipment,
goods and services from a wide range of suppliers throughout the EU and
beyond in accordance with commercial practices based on fairness and
transparency.  The Company recognises the important role that suppliers
play in its business, and works to ensure that payments are made to them
in accordance with agreed contractual terms.  At 31 March 2010 the
Company had 45 days payments outstanding to trade creditors. 

Disclosure of Information to the Auditors

 So far as each person who was a director at the date of approving
this report is aware, there is no relevant audit information, being
information needed by the auditors in connection with preparing their
report, of which the auditors are unaware.  Having made enquiries of
fellow directors and the Group's auditors, each director has taken
all the steps that he is obliged to take as a director in order to make
himself aware of any relevant audit information and to establish that
the auditors are aware of that information. 

Directors' Insurance

The Company purchased and maintained directors' and officers' liability insurance throughout the year.

Statement of Directors' Responsibilities

The directors are responsible for preparing the accounts in accordance with applicable United Kingdom law and those IFRS as adopted by the EU.

 The directors are required to prepare accounts for each financial
year which present fairly the financial position of the Company and of
the Group and the financial performance and cash flows of the Company
and the Group for that year.  In preparing those accounts, the directors
are required to: 

- select suitable accounting policies and then apply them consistently;

- present information, including accounting policies, in a manner that provides

relevant, reliable, comparable and understandable information;

- provide additional disclosures when compliance with the specific requirements

of IFRS is insufficient to enable users to understand the impact of particular

transactions, other events and conditions on the entity's financial position

and financial performance of the Company and the Group, and disclose and

explain any departure from IFRS where, in their view, compliance would be so

misleading as to conflict with a fair presentation; and

- state that (except for any such departure) the accounts have been prepared in

accordance with IFRS as adopted by the EU.

 The directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Group and the Company to enable them to ensure
that the Group and Company accounts comply with the Companies Act 2006
and, in the case of the Group accounts, Article 4 of the International
Accounting Standards (IAS) Regulation.  They are also responsible for
safeguarding the assets of the Group and the Company and hence for
taking reasonable steps for the prevention and detection of fraud and
other irregularities. 

As required under the UK Listing Authority's Disclosure and Transparency Rules, each of the directors listed on page 12 confirms that to the best of his knowledge:

- the accounts, prepared in accordance with IFRS as adopted by the EU, give a

true and fair view of the assets, liabilities, financial position and profit of

the Company and the undertakings included in the consolidation taken as a

whole; and

- the Directors' Report includes a fair review of the development and

performance of the business and the position of the Company and the

undertakings included in the consolidation taken as a whole, together with a

description of the principal risks and uncertainties that they face.

 By order of the Board
 Ruth Conacher Company Secretary
Registered Office 120 Malone Road Belfast BT9 5HT Registered Number: NI
26041
Date: 21 July 2010
INDEPENDENT AUDITORS' REPORT 

To the members of Northern Ireland Electricity plc

 We have audited the accounts of Northern Ireland Electricity plc
for the year ended 31 March 2010 which comprise the Group Income
Statement, the Group and Company Statements of Comprehensive Income, the
Group and Company Balance Sheets, the Group and Company Statements of
Changes in Equity, the Group and Company Cash Flow Statements and the
related notes 1 to 28.  The financial reporting framework that has been
applied in their preparation is applicable law and International
Financial Reporting Standards (IFRS) as adopted by the European Union
(EU) and, as regards the Company accounts, as applied in accordance with
the provisions of the Companies Act 2006.
 This report is made solely to the Company's members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.  Our
audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditors' report and for no other purpose.  To the fullest
extent permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body
for our audit work, for this report or for the opinions we have formed. 

Respective responsibilities of directors and auditors

 As explained more fully in the Statement of Directors'
Responsibilities set out on page 23, the directors are responsible for
the preparation of the accounts and for being satisfied that they give a
true and fair view.  Our responsibility is to audit the accounts in
accordance with applicable law and International Standards on Auditing
(ISA) (UK and Ireland).  Those standards require us to comply with the
Auditing Practices Board's Ethical Standards for Auditors. 

Scope of the audit of the accounts

 An audit involves obtaining evidence about the amounts and
disclosures in the accounts sufficient to give reasonable assurance that
the accounts 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 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 accounts. 

Opinion on the accounts

In our opinion:

- the accounts give a true and fair view of the state of the Group's and

Company's affairs as at 31 March 2010 and of the Group's profit for the year

then ended;

- the Group accounts have been properly prepared in accordance with IFRS as

adopted by the EU;

- the Company accounts have been properly prepared in accordance with IFRS as

adopted by the EU and as applied in accordance with the provisions of the

Companies Act 2006; and

- the accounts have been prepared in accordance with the requirements of the

Companies Act 2006 and as regards the Group accounts, Article 4 of the IAS 

Regulation.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors' Report for the financial year for which the accounts are prepared is consistent with the accounts.

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 Company, or returns

adequate for our audit have not been received from branches not visited by us;

or

- the Company accounts 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.

Colm Devine (Senior Statutory Auditor) For and on behalf of Ernst & Young LLP, Statutory Auditor Belfast 

 Date: 22 July 2010
 GROUP INCOME STATEMENT for the year ended 31 March 2010
                                                             2010
2009
                                                   Note        [pounds]m
[pounds]m Continuing operations Revenue
3,5     242.0     206.5
Operating costs                                       5    (127.4)
(122.5)
                                                            -----
----- OPERATING PROFIT                                            114.6
84.0
Finance costs                                               (20.6)
(26.2) Net pension scheme interest
(9.8)     (7.0)
Net finance costs                                     7     (30.4)
(33.2)
                                                            -----
----- PROFIT FROM CONTINUING OPERATIONS BEFORE TAX                 84.2
50.8
Tax charge                                            8     (21.8) 

(14.1)

 -----     ----- PROFIT FROM CONTINUING OPERATIONS AFTER TAX
62.4      36.7
 Discontinued operations 

(Loss)/profit for the year from discontinued 4 (1.8) 39.0 operations

 -----     ----- PROFIT FOR THE YEAR ATTRIBUTABLE TO THE EQUITY
60.6      75.7 HOLDERS OF THE PARENT COMPANY
=====     =====
 STATEMENTS OF COMPREHENSIVE INCOME for the year ended 31 March 2010
                                       Note        Group
Company
                                               2010     2009     2010
2009
                                                 [pounds]m
[pounds]m       [pounds]m       [pounds]m
Profit for the financial year                  60.6     75.7     60.6
76.7
                                               ----     ----     ----
---- Other comprehensive income/(expense): 

Actuarial loss on pension scheme 23 (59.7) (25.7) (59.7) (25.2)

 assets and liabilities
 Deferred tax credit relating to                16.7      7.2     16.7 

7.1

 actuarial loss on pension scheme  assets and liabilities
----     ----     ----     ----
 Net other comprehensive expense for          (43.0)   (18.5)   (43.0)
(18.1) the year                                      ----     ----
----     ----
Total comprehensive income for the year attributable to the equity
holders of the parent company                 17.6     57.2     17.6
58.6
                                              ====     ====     ====
====
GROUP AND COMPANY BALANCE SHEET as at 31 March 2010
                                             Note       2010
2009
                                                          [pounds]m
[pounds]m Non-current assets Property, plant and equipment
11    1,063.1       1,009.1 Intangible assets
13       38.6          44.0 Financial assets
14        0.1           0.2
                                                     -------
-------
                                                     1,101.8
1,053.3 Current assets                                       -------
------- Inventories                                    15        6.0
6.1 Trade and other receivables                    16       43.4
46.1 Financial assets                               14        0.2
0.2 Cash and cash equivalents                      17        0.2
1.6
                                                     -------
-------
                                                        49.8
54.0
                                                     -------
------- TOTAL ASSETS                                         1,151.6
1,107.3
                                                     -------
------- Current liabilities Trade and other payables
18      104.0          98.7 Current tax payable
9.4          13.1 Deferred income                                19
7.8           7.4 Financial liabilities                          20
324.0         294.8 Provisions                                     22
1.7           3.8
                                                     -------
-------
                                                       446.9
417.8
                                                     -------
------- Non-current liabilities Deferred tax liabilities
8       80.1          91.9 Deferred income
19      219.3         212.7 Financial liabilities
20      173.5         173.4 Provisions
22        7.5           8.1 Pension liability
23      136.2          77.9
                                                     -------
-------
                                                       616.6
564.0
                                                     -------
------- TOTAL LIABILITIES                                    1,063.5
981.8
                                                     -------
------- NET ASSETS                                              88.1
125.5
                                                     =======
======= Equity Share capital                                  24
36.4          36.4 Share premium                                  24
24.4          24.4 Capital redemption reserve                     24
6.1           6.1 Accumulated profits
21.2          58.6
                                                     -------
------- TOTAL EQUITY                                            88.1
125.5
                                                     =======
=======

The accounts were approved by the Board of directors and authorised for issue on 21 July 2010. They were signed on its behalf by:

 Harry McCracken Managing Director
 Date: 21 July 2010
STATEMENTS OF CHANGES IN EQUITY for the year ended 31 March 2010
Group                                             Capital
                                 Share   Share redemption Accumulated
                               capital premium    reserve     profits
Total
                                    [pounds]m      [pounds]m
[pounds]m          [pounds]m      [pounds]m
At 1 April 2008                   36.4    24.4        6.1       112.0
178.9 Profit for the year                  -       -          -
75.7    75.7 Net other comprehensive              -       -          -
(18.5)  (18.5)  expense for the year             ----    ----       ----
-----   ----- Total net comprehensive income       -       -          -
57.2    57.2  for the year Equity dividends                     -
-          -      (110.6) (110.6)
                                  ----    ----       ----       -----
----- At 1 April 2009                   36.4    24.4        6.1
58.6   125.5
Profit for the year                  -       -          -        60.6
60.6 Net other comprehensive              -       -          -
(43.0)  (43.0)  expense for the year             ----    ----      -----
-----   ----- Total net comprehensive income       -       -          -
17.6    17.6  for the year Equity dividends                     -
-          -       (55.0)  (55.0)
                                  ----   -----       ----       -----
----- At 31 March 2010                  36.4    24.4        6.1
21.2    88.1
                                  ====    ====       ====       =====
=====
Company                                           Capital
                                 Share   Share redemption Accumulated
                               Capital premium    reserve     profits
Total
                                    [pounds]m      [pounds]m
[pounds]m          [pounds]m      [pounds]m
At 1 April 2008                   36.4    24.4        6.1       110.6
177.5
Profit for the period                -       -          -        76.7
76.7 Net other comprehensive              -       -          -
(18.1)  (18.1)  expense for the year
                                  ----   -----       ----       -----
----- Total net comprehensive              -       -          -
58.6    58.6  income for the year Equity dividends                     -
-          -      (110.6) (110.6)
                                  ----    ----       ----       -----
----- At 1 April 2009                   36.4    24.4        6.1
58.6   125.5
Profit for the period                -       -          -        60.6
60.6 Net other comprehensive              -       -          -
(43.0)  (43.0)  expense for the year
                                  ----    ----       ----        ----
---- Total net comprehensive              -       -          -
17.6    17.6  income for the year Equity dividends                     -
-          -       (55.0)  (55.0)
                                  ----    ----       ----        ----
---- At 31 March 2010                  36.4    24.4        6.1
21.2    88.1
                                  ====    ====       ====        ====
====
CASH FLOW STATEMENTS for the year ended 31 March 2010
                                                   Group
Company
                                          Note   2010     2009     2010
2009
                                                   [pounds]m
[pounds]m       [pounds]m       [pounds]m
Cash flows from operating activities Profit for the year
60.6     75.7     60.6     76.7 Adjustments for:  Tax charge -
continuing operations              21.8     14.1     21.8 

14.1

 Tax charge - discontinued operations               -      8.8
- 

9.7

 Net finance costs - continuing                  30.4     33.2
30.4 

33.2

 operations  Net finance costs - discontinued                   -
0.7        -        -
   operations  Loss/(gain) on disposal of                       1.8
(15.7)     1.8    (14.2)
  discontinued operations  Depreciation of property, plant and        11
40.8     38.6     40.8     36.0
  equipment  Amortisation of customers'                 19   (7.8)
(7.4)    (7.8)    (7.4)
  contributions and grants 

Amortisation of intangible assets 13 5.6 5.7 5.6

5.7

 Loss on disposal of property, plant              0.1        -
0.1 

-

 and equipment  Impairment of property, plant and
-      2.6        - 

2.6

 equipment  Defined benefit pension charge less        22   (8.5)
(8.5)    (8.5)    (8.1)
   contributions paid  Net movement in provisions
(2.8)    (4.1)    (2.8)    (4.1)
                                                -----    -----    -----
----- Operating cash flows before movement in         142.0    143.7
142.0    144.2  working capital
Decrease/(increase) in working capital            1.9     (3.6)     1.9 

3.0

 -----    -----    ----- 

-----

 Cash generated from operations                  143.9    140.1
143.9    147.2
 Interest received                                   -        -        -
0.6 Interest paid                                   (20.6)   (28.5)
(20.6)   (28.2) Current taxes paid                              (21.3)
(24.7)   (21.3)   (24.2)
                                                -----    -----    -----
----- Net cash flows from operating activities        102.0     86.9
102.0     95.4
                                                -----    -----    -----
-----
Purchase of property, plant and                 (92.2)  (110.1)   (92.2)
(104.8)  equipment Purchase of intangible assets               13
(0.2)    (0.7)    (0.2)    (0.7) 

Contributions in respect of property, 19 14.8 21.5 14.8 21.5

 plant and equipment Disposal of subsidiary undertaking
4      -     11.8        -     14.2 Repayment of loans made
-     12.0        -      7.4
                                                 -----    -----    -----
----- Net cash flows used in investing                (77.6)   (65.5)
(77.6)   (62.4)  activities                                     -----
-----    -----    -----
Cash flows from financing activities Proceeds from borrowings
29.2     85.2     29.2     79.5 Equity dividend paid
(55.0)  (110.6)   (55.0)  (110.6)
                                                -----    -----    -----
----- Net cash flows used in financing                (25.8)   (25.4)
(25.8)   (31.1)  activities                                     -----
-----    -----    -----

Net (decrease)/increase in cash and cash (1.4) (4.0) (1.4)

1.9

 equivalents Cash and cash equivalents at beginning            1.6
5.6      1.6     (0.3)  of year
----     ----     ----     ----
 

Cash and cash equivalents at end of year 17 0.2 1.6 0.2

 1.6
                                                  ====     ====     ====
====

For the purposes of the cash flow statements, cash and cash equivalents comprise cash at bank and in hand, short-term bank deposits and bank overdrafts.

 NOTES TO THE ACCOUNTS
 1.  General Information 

Northern Ireland Electricity plc is a public limited company incorporated and domiciled in Northern Ireland.

 The accounts have been prepared in accordance with IFRS as
adopted by the EU and applied in accordance with the provisions of the
Companies Act 2006.  The accounts are presented in Sterling ([pounds])
with all values rounded to the nearest [pounds] 100,000 except where
otherwise indicated. 

2. Accounting Policies

Adoption of new and revised accounting standards and interpretations

The Group has adopted the following revised accounting standards that are relevant in the preparation of the accounts for the year ended 31 March 2010:

- IAS1 (revised) "Presentation of Financial Statements". The reconciliation of

changes in equity, previously disclosed in note 24 to the Group's accounts for

the year ended 31 March 2009 is now a primary statement entitled "Statement of

Changes in Equity". In addition, the Group and Company Statements of

Recognised Income and Expense have been replaced with Group and Company

Statements of Comprehensive Income resulting in some presentational changes

from the previous statement.

- Amendment to paragraph 23 of IFRS 8 'Operating Segments' in the Improvements

to IFRS April 2009. The Group has early adopted the amendment and not

disclosed total assets information for each reportable segment.

 The following amendments to existing standards and
interpretations were also effective for the current period, but did not
have a material impact on the Group's accounts:
 IAS 1 and IAS 32    Amendment - Financial Instruments Puttable at Fair
Value
                    and Obligations Arising on Liquidation (effective
for
                    accounting periods beginning on or after 1 January
2009)
IAS23               Borrowing Costs (revised)
IFRS 7              Amendments to IFRS 7 Improving Disclosures about
Financial
                    Instruments
IFRIC 14            The Limit in a Defined Benefit Asset, Minimum
Funding
                    Requirements and their Interaction
IFRS 1 and IAS 27   Amendment - Cost of Investment in a Subsidiary,
Jointly
                    Controlled Entity or Associate
IFRS 2              Amendment - Vesting Conditions and Cancellations
(effective
                    for accounting periods beginning on or after 1 July
2008)
IFRIC 13            Customer Loyalty Programmes (effective for
accounting
                    periods beginning on or after 1 July 2008)
IFRIC 15            Agreements for the Construction of Real Estate
(effective
                    for accounting periods beginning on or after 1
January 2009)
IFRIC 16            Hedges of a Net Investment in a Foreign Operation
(effective
                    for accounting periods beginning on or after 1
October 2008)
IFRIC 17            Distribution of Non-Cash Assets to Owners (effective
for
                    accounting periods beginning on or after 1 July
2009) 

At the date of authorisation of these accounts, the following standards and interpretations considered as relevant to the Group and Company, which have not been applied in the accounts, were in issue but not yet effective:

 IAS 27 (revised)    Consolidated and Separate Financial
Statements
                     (effective for accounting periods beginning on or
after
                    1 July 2009)
IAS 24              Revised Related Party Disclosures (effective for
accounting
                    periods beginning on or after 1 January 2011)
IAS 39              Amendment - Eligible Hedged Items (effective for
accounting
                    periods beginning on or after 1 July 2009)
IFRS 3 (revised)    Business Combinations (effective for accounting
periods
                    beginning on or after 1 July 2009)
IFRS 9              Financial Instruments: Classification and
Measurement
                    (effective for accounting periods beginning on or
after
                    1 January 2013)
Improvements        Improvements to IFRS (April 2009) (various effective
dates) 

IFRIC 9 and IAS 39 Embedded Derivatives (effective for accounting periods

 beginning on or after 30 June 2009)
 IFRIC 14            Amendment - Prepayments of a Minimum Funding
Requirement
                    (effective) for accounting periods beginning on or
after
                    1 January 2011)
IFRIC 18            Transfers of Assets from Customers (effective for
accounting
                    periods beginning after 31 October 2009 in respect
of
                    transfers of assets on or after 1 July 2009) 

Whilst the directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the Group's accounts in the period of initial application, the adoption of the standards and interpretations may result in certain changes in the presentation of the Group's accounts from 2011 onwards.

The principal accounting policies are set out below:

Basis of consolidation

 The Group accounts consolidate the accounts of Northern Ireland
Electricity plc (the Company) and entities controlled by the Company
(its subsidiaries). Subsidiaries are consolidated from the date on which
control is transferred to the Group and cease to be consolidated from
the date on which control is transferred out of the Group. 

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Company's investments in subsidiaries

The Company recognises its investments in subsidiaries at cost less any recognised impairment loss. Distributions received from subsidiaries are recognised in the income statement. The carrying values of investments in subsidiaries are reviewed annually for any indications of impairment, including whether the carrying value is impaired as a result of the receipt of dividends.

Foreign currency translation

The functional and presentational currency of the Company and its subsidiaries is Sterling ([pounds]).

 Foreign currency transactions are translated into the functional
currency at the rates of exchange prevailing on the dates of the
transactions.  Foreign exchange gains and losses resulting from
settlement of such transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies at the exchange
rates prevailing at the balance sheet date are recognised in the income
statement. 

Property, plant and equipment

 Property, plant and equipment are included in the balance sheet
at cost, less accumulated depreciation and any recognised impairment
loss.  The cost of self-constructed assets includes the cost of
materials, direct labour and an appropriate portion of overheads.
Interest on funding attributable to significant capital projects is
capitalised during the period of construction provided it meets the
recognition criteria in IAS 23 and is written off as part of the total
cost of the asset. 

Freehold land is not depreciated. Other property, plant and equipment are depreciated on a straight-line basis so as to write off the cost, less estimated residual values, over their estimated useful economic lives as follows:

Infrastructure assets - up to 40 years Non-operational buildings - freehold and long leasehold - up to 50 years Fixtures and equipment - up to 25 years

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Where the carrying value exceeds the estimated recoverable amount, the asset is written down to its recoverable amount.

 The recoverable amount of property, plant and equipment is the
greater of net selling price and value in use.  In assessing value in
use, estimated future cash flows are discounted to their present value
using a pre tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset.  For an
asset that does not generate largely independent cash flows, the
recoverable amount is determined for the cash generating unit to which
the asset belongs.  Impairment losses are recognised in the income
statement.
 An item of property, plant and equipment is derecognised upon disposal
or when no future economic benefits are expected to arise from its
continued use.  The gain or loss arising on the disposal or retirement
of an asset is determined as the difference between the net selling
price and the carrying amount of the asset. 

Computer software

 The cost of acquiring computer software is capitalised and
amortised on a straight-line basis over its estimated useful economic
life which is between five and ten years.  Costs include direct labour
relating to software development and an appropriate portion of directly
attributable overheads. Interest on funding attributable to significant
capital projects is capitalised during the period of construction
provided it meets the recognition criteria in IAS 23 and is written off
as part of the total cost of the asset. 

The carrying value of computer software is reviewed for impairment annually when the asset is not yet in use and subsequently when events or changes in circumstances indicate that the carrying value may not be recoverable.

Gains or losses arising from derecognition of computer software are measured as the difference between the net selling price and the carrying amount of the asset.

Inventories

Inventories are stated at the lower of average purchase price and net realisable value.

 Financial instruments 

Cash and cash equivalents Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with maturities of three months or less.

Loans and receivables Loans and receivables are initially recorded at fair value. After initial recognition, loans and receivables are measured at amortised cost using the effective interest method.

 Interest bearing loans and overdrafts Interest bearing loans and
overdrafts are initially recorded at fair value, being the proceeds
received net of direct issue costs.  After initial recognition, interest
bearing loans are subsequently measured at amortised cost using the
effective interest method.
 Trade and other receivables Trade receivables do not carry any interest
and are recognised and carried at the lower of their original invoiced
value and recoverable amount.  Provision is made when there is objective
evidence that the asset is impaired.  Balances are written off when the
probability of recovery is assessed as being remote. 

Trade payables Trade payables are not interest bearing and are stated at their nominal value.

Borrowing costs

Borrowing costs attributable to significant capital projects are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Operating lease contracts

 Leases are classified as operating lease contracts whenever the
terms of the lease do not transfer substantially all the risks and
benefits of ownership to the lessee. 

Rentals payable under operating leases are charged to the income statement on a straight-line basis over the lease term.

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, exclusive of value added tax and other sales related taxes.

The following specific recognition criteria must also be met before revenue is recognised:

 Interest receivable Interest income is accrued on a time basis,
by reference to the principal outstanding and at the effective interest
rate applicable, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial asset to
that asset's net carrying amount. 

Use of System and PSO revenue Revenue is recognised on the basis of units distributed during the year. Revenue includes an assessment of the volume of electricity distributed, estimated using historical consumption patterns.

Transmission service revenue Revenue is recognised in accordance with the schedule of entitlement set by NIAUR for each tariff period.

Government grants and customer contributions

Government grants and customer contributions received in respect of property, plant and equipment are deferred and released to the income statement by instalments over the estimated useful economic lives of the related assets.

Grants received in respect of expenditure charged to the income statement during the year are included in the income statement.

Tax

 The tax charge represents the sum of tax currently payable and
deferred tax. Tax is charged or credited in the income statement, except
when it relates to items charged or credited directly to equity, in
which case the tax is also dealt with in equity.
 Tax currently payable is based on taxable profit for the year.  Taxable
profit differs from net profit as reported in the income statement
because it excludes both items of income or expense that are taxable or
deductible in other years as well as items that are never taxable or
deductible.  The Group's liability for current tax is calculated
using tax rates (and tax laws) that have been enacted or substantially
enacted by the balance sheet date.
Deferred tax is the tax payable or recoverable on differences between
the carrying amount of assets and liabilities in the accounts and the
corresponding tax bases used in the computation of taxable profit, and
is accounted for using the balance sheet liability method.  Deferred tax
liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it
is probable that taxable profits will be available against which
deductible temporary differences can be utilised.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates, and
interests in joint ventures, except where the Group is able to control
the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. 

Deferred tax is not recognised on temporary differences where they arise from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss.

 The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all
or part of the deferred tax asset to be recovered.
 Deferred tax assets and liabilities are calculated at the tax rates
that are expected to apply to the period when the asset is realised or
the liability is settled, based on tax rates (and tax laws) that have
been enacted or substantially enacted by the balance sheet date. 

Dividends

Final dividends are recorded in the period in which shareholder approval is obtained. Interim dividends are recorded in the period in which they are paid.

Provisions

 Provisions are recognised when (i) the Group has a present
obligation (legal or constructive) as a result of a past event (ii) it
is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and (iii) a reliable estimate
can be made of the amount of the obligation.  Where the Group expects a
provision to be reimbursed, the reimbursement is recognised as a
separate asset but only when the reimbursement is virtually certain.  If
the effect of the time value of money is material, provisions are
determined by discounting the expected future cash flows at a pre tax
rate that reflects current market assessments of the time value of money
and, where appropriate, the risks specific to the liability.  Where
discounting is used, the increase in the provision due to the passage of
time is included within finance costs. 

Pensions and other post-retirement benefits

Employees of the Group are entitled to membership of VGPS, which has both defined benefit and defined contribution pension arrangements. The amount recognised in the balance sheet in respect of liabilities represents the present value of the obligations offset by the fair value of assets.

 Pension scheme assets are measured at fair value and liabilities
are measured using the projected unit method and discounted at a rate
equivalent to the current rate of return on a high quality corporate
bond of equivalent currency and term to the liabilities.  Full actuarial
valuations are obtained at least triennially and updated at each balance
sheet date.  Actuarial gains and losses are recognised in full in the
period in which they occur and are recognised outside the income
statement and presented in the statement of comprehensive income.
 The cost of providing benefits under the defined benefit scheme is
charged to the income statement over the periods benefiting from
employees' service.  Past service cost is recognised immediately to
the extent that the benefits are already vested.  Curtailment losses are
recognised in the income statement in the period they occur.  The
expected return on pension scheme assets and the interest on pension
scheme liabilities are included within net finance costs. 

Pension costs in respect of defined contribution arrangements are charged to the income statement as they become payable.

The Group has adopted the exemption allowed in IFRS 1 to recognise all cumulative actuarial gains and losses at the transition date in reserves.

Exceptional items

The Group presents as exceptional items on the face of the income statement those material items of income and expense which, because of the nature and expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better trends in financial performance.

Critical accounting judgements and key sources of estimation uncertainty

 Pensions and other post employment benefits Employees of the
Group are entitled to membership of VGPS which has both defined benefit
and defined contribution arrangements.  The cost of providing benefits
under the defined benefit scheme is determined using the projected unit
method.  The key assumptions used for the actuarial valuation are based
on the Group's best estimate of the variables that will determine
the ultimate cost of providing post-employment benefits, on which
further detail is provided in note 22. 

3. Operating Segments Information

The Group's operating businesses are organised and managed according to the nature of the goods and services provided as described in the Directors' Report. Until 11 March 2009, the Group's operating segments included SONI Limited.

 The operating segment information provided below is based on
regulated entitlement in line with the basis of information regularly
reported to the directors.  The adjustment for over-recovery represents
the amount by which the Group over-recovered against its regulated
entitlement.  Inter-segment pricing is determined on an arm's
length basis. 

In accordance with IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations, SONI is classified as a discontinued operation in the income statement for the year ended 31 March 2009.

 IFRS 5 requires that, in the circumstances of discontinued
operations, the profits earned by the continuing operations on sales to
the discontinued operations be eliminated on consolidation and
attributed to the discontinued operations and vice versa.  This
representation does not reflect the profits earned by continuing or
discontinued operations as if they were stand alone entities.  The
combination of this treatment is the main reason for the increase in
revenue and operating profits from continuing operations to
[pounds]242.0m and [pounds]113.5m respectively in the year ended 31
March 2010 from [pounds]206.5m and [pounds] 84.0m respectively in the
year ended 31 March 2009. 

(i) Revenue and profit - continuing operations

 2010     2010    2010     2009     2009    2009
                          External Internal   Total External Internal
Total
                               [pounds]m       [pounds]m      [pounds]m
[pounds]m       [pounds]m      [pounds]m
Revenue T&D                         236.0      0.2   236.2    197.9
35.2   233.1 Other                         0.2        -     0.2      0.3
0.1     0.4
                            -----     ----   -----    -----     ----
-----
                            236.2      0.2   236.4    198.2     35.3
233.5 Inter-group elimination                       (0.2)
(35.3)
                                             -----
-----
                                             236.2
198.2 Adjustment for                                 5.8
8.3 over-recovery                                -----
-----
                                             242.0
206.5
                                             -----
----- Operating costs T&D
(128.5)                   (123.0) Other
0.9                       0.4 Inter-group elimination
0.2                       0.1
                                             -----
-----
                                            (127.4)
(122.5)
                                             -----
----- Operating profit T&D
107.7                     110.1 Other
1.1                       0.8 Inter-group elimination
-                     (35.2)
                                             -----
-----
                                             108.8
75.7 Adjustment for                                 5.8
8.3 over-recovery                                -----
----
                                             114.6
84.0
Finance costs                                (20.6)
(26.2) Net pension scheme                            (9.8)
(7.0) interest                                      ----
----
Net finance costs                            (30.4)
(33.2)
                                              ----
----
Profit from continuing                        84.2
50.8 operations before tax                         ====
====

(ii) Revenue and profit - discontinued operations

 2010     2010  2010      2009     2009   2009
                            External Internal Total  External Internal
Total
                                 [pounds]m       [pounds]m    [pounds]m
[pounds]m       [pounds]m     [pounds]m Revenue SONI
-        -     -      59.2        -   59.2 Adjustment for
-                      (5.5)  under-recovery
----                      ----
                                                 -
53.7
                                              ----
---- Operating costs SONI                                             -
(56.1) Inter-group elimination                          -
35.2
                                              ----
----
                                                 -
(20.9)
                                              ----
---- Operating profit SONI                                             -
3.1 Inter-group elimination                          -
35.2
                                              ----
----
                                                 -
38.3 Adjustment for                                   -
(5.5)  under-recovery                               ----
----
                                                 -
32.8
Interest receivable                              -
0.4 Finance costs                                    -
(0.9) Net pension scheme interest                      -
(0.2)
                                               ---
---- Net finance costs                                -
(0.7)
                                               ---
---- Profit before tax charge                         -
32.1
                                              ====
====

(iii) Revenue and profit - continuing and discontinued operations

The above disclosures are in accordance with IFRS 5. However, the directors believe the following breakdown of the total Group's business gives a more meaningful measure of performance.

 Revenue       Operating profit
                                          2010     2009     2010
2009
                                           [pounds]m       [pounds]m
[pounds]m        [pounds]m
T&D                                     236.2    233.1    107.7
110.1 SONI                                        -     59.2        -
3.1 Other                                     0.2      0.4      1.1
0.8 Inter-group elimination                  (0.2)   (35.3)       -
-
                                        -----    -----    -----
-----
                                        236.2    257.4    108.8
114.0
Adjustment for over-recovery              5.8      2.8      5.8
2.8
                                        -----    -----    -----
----- Total                                   242.0    260.2    114.6
116.8
                                        =====    =====    =====
=====

Relating to continuing operations 242.0 206.5 114.6 84.0 Relating to discontinued operations - 53.7 - 32.8

 -----    -----    -----     ----- Total
242.0    260.2    114.6     116.8
                                         =====    =====    =====
=====
(iv)  Other information
                                                           2010
2009
                                                             [pounds]m
[pounds]m Capital additions Continuing operations: T&D
  95.1        104.7 Other
-          0.1 Discontinued operations: SONI
-          4.8
                                                          -----
-----
                                                           95.1
109.6
                                                          =====
===== Depreciation and amortisation Continuing operations: T&D
          38.5         36.7 Other
0.1          0.2
                                                           ----
----
                                                           38.6
36.9
                                                           ====
==== Increase in provisions Continuing operations: T&D
   1.5          0.7
                                                           ====
====
Major customers 

The table below shows revenue received by the Group from

fellow Viridian undertakings:

 2010           2009
                                                             [pounds]m
[pounds]m Continuing operations: T&D
186.1          173.2 Discontinued operations: SONI
-           35.2
                                                         -----
-----
                                                         186.1
208.4
                                                         =====
===== 

During the year ended 31 March 2010 T&D received revenue of [pounds]35.0m from SONI.

(v) Geographical information

The following table provides an analysis of the Group's external revenue based on the location of customers.

 UK     RoI   Total      UK     RoI   Total
                                    2010    2010    2010    2009    2009
2009
                                     [pounds]m      [pounds]m
[pounds]m      [pounds]m      [pounds]m      [pounds]m Continuing
operations T&D                               235.5     6.5   242.0
192.5    14.0   206.5
                                  =====   =====   =====   =====   =====
===== Discontinued operations SONI                                  -
-       -    53.7       -    53.7
                                  =====   =====   =====   =====   =====
===== 

RoI revenue relates to use of system charges to suppliers based in the RoI, which supply energy to customers based in Northern Ireland.

The Group's assets are all located within the UK.

4. Discontinued operations

On 11 March 2009 the sale of SONI was completed.

(i) Group Income Statement

 The results of discontinued operations in the Group Income
Statement are as follows:
                                                               2010
2009
                                                                [pounds]m       [pounds]m
Revenue                                                          -
53.7 Operating costs                                                  -
(20.9)
                                                              ----
---- Operating profit                                                 -
32.8
Interest receivable                                              -
0.4 Finance costs                                                    -
(0.9) Net pension scheme interest                                      -
(0.2)
                                                              ----
---- Net finance costs                                                -
(0.7)
                                                              ----
---- Profit from discontinued operations before tax                   -
32.1
Current tax charge                                               -
(9.7) Deferred tax credit                                              -
0.9
                                                              ----
---- Total tax charge                                                 -
(8.8)
                                                              ----
---- Profit from discontinued operations after tax                    -
23.3

(Loss)/profit on disposal of discontinued operations before (1.1) 15.7

 tax 

Tax charge relating to loss on disposal of discontinued (0.7) -

 operations                                                   ----
----
 

(Loss)/profit on disposal of discontinued operations (1.8) 15.7

 ----     ---- 

(Loss)/profit for the year from discontinued operations (1.8) 39.0

 ====     ====
 

The loss on disposal of discontinued operations in the current year arises from the finalisation of pension arrangements in respect of SONI employees and related adjustments to the disposal consideration.

The tax charge in the Group Income Statement relating to the profit on disposal of discontinued operations is [pounds]0.7m (2009 - [pounds]nil).

(ii) Cash Flow Statement

The cash flows of discontinued operations which have been included in the Cash Flow Statement are as follows:

 Group         Company
                                                       2010    2009
2010   2009
                                                        [pounds]m
[pounds]m     [pounds]m     [pounds]m

Net cash flows (used in)/from operating cash flows - (7.7) -

-

Net cash flows (used in)/from investing activities - (5.2) -

-

 Net cash flows provided by/(used in) financing           -
9.5      - 

-

 activities
 

An analysis of the assets and liabilities of SONI at the date of disposal and the profit arising on disposal is as follows:

 As at 11 March 2009
                                                                               [pounds]m
Total disposal consideration 

15.4

-----

 Net assets: Property, plant and equipment
15.4 Deferred tax asset
0.4 Trade and other receivables
13.4 Cash and cash equivalents
2.4 Trade and other payables
(19.4) Loans                                                                      (12.0) Pension liability
(1.7)
                                                                            ----- Total net liabilities sold
(1.5)
                                                                           ----- Costs of disposal
1.2
                                                                           ----- Profit on disposal
15.7
                                                                           ===== Net cash inflow arising on disposal: Cash consideration
          15.4 Costs of disposal
(1.2)
                                                                           ----- Net proceeds received by the Company 

14.2

 Cash and cash equivalents disposed of
(2.4)
                                                                            -----
                                                                            11.8
                                                                           ===== 

(iii) Investment in Jointly Controlled Operation

Since 1 November 2007, SONI has undertaken the role of market operator to the SEM through a jointly controlled operation, SEMO, with EirGrid. Under the joint control agreement, SONI is responsible for 25% of the funding of SEMO.

 An analysis of SONI's share of SEMO's assets and
liabilities at the date of disposal is as follows:
                                                                             [pounds]m
Non-current assets                                                         7.8 Current assets
6.4
                                                                         ----- Total assets                                                              14.2
Current liabilities                                                      (13.5)
                                                                         ----- Share of net assets of jointly controlled operation 

0.7

=====

 The Group's share of the jointly controlled operation's
operating profits for the period ended 31 March 2009, included in
discontinued operations, was as follows:
                                                                           2009
                                                                            [pounds]m
Revenue                                                                    3.2 Operating costs
(2.6)
                                                                           --- Share of operating profit of jointly controlled operation 

0.6

===

5. Revenue and Operating Costs 

An analysis of external revenue is as follows:

 2010                          2009
                   Continuing Discontinued Total   Continuing
Discontinued Total
                          [pounds]m           [pounds]m    [pounds]m
[pounds]m           [pounds]m    [pounds]m
Regulated energy       242.0            - 242.0        206.5
53.7 260.2  business revenue Interest                   -            -
-            -          0.4   0.4  receivable            -----
----- -----        -----        ----- -----
                       242.0            - 242.0        206.5
54.1 260.6
                       =====        ===== =====        =====
===== =====

Operating costs are analysed as follows:

 2010                           2009
                   Continuing Discontinued Total   Continuing
Discontinued Total
                          [pounds]m           [pounds]m    [pounds]m
[pounds]m           [pounds]m    [pounds]m
Energy costs               -            -     -            -
5.2   5.2 Employee costs          11.3            -  11.3         11.2
3.9  15.1  (note 6) Depreciation and        38.6            -  38.6
36.9            -  36.9  amortisation Other operating         77.5
-  77.5         74.4         11.8  86.2  charges               -----
----- -----        -----        ----- -----
                       127.4            - 127.4        122.5
20.9 143.4
                       =====        ===== =====        =====
===== =====
Operating costs include:
                                                                  2010
2009
                                                                    [pounds]m      [pounds]m
Depreciation charge on property, plant and equipment              40.8 

38.6

 Associated release of customers' contributions and grants
(7.8)   (7.4)
                                                                   ----
----
                                                                  33.0
31.2
Amortisation of intangible assets                                  5.6 

5.7

 Impairment of property, plant & equipment
- 

2.6

 Minimum payments due under operating leases
0.4 

0.3

 Cost of inventories recognised as an expense
1.5     2.2
 Auditors' remuneration
[pounds]'000   [pounds]'000
Auditors' remuneration in respect of services to the Group and
Company:
Audit of the accounts                                               36
39 Taxation services
2      12 Other assurance
4       4
6.  Employees
Employee costs
                               2010                           2009
                  Continuing Discontinued Total   Continuing
Discontinued Total
                          [pounds]m           [pounds]m    [pounds]m
[pounds]m           [pounds]m    [pounds]m
Salaries                11.6            -  11.6         11.6
3.3  14.9 Social security          1.1            -   1.1          1.1
0.3   1.4  costs Pension costs - defined                0.3            -
0.3          0.3          0.1   0.4
  contribution
  plans - defined benefit        1.5            -   1.5          1.6
0.3   1.9
  plans                 ----         ----  ----         ----
----  ----
                        14.5            -  14.5         14.6
4.0  18.6
Less: charged to        (3.2)           -  (3.2)        (3.4)
(0.1) (3.5)  the balance sheet
                        ----         ----  ----         ----
----  ---- Charged to the          11.3            -  11.3         11.2
3.9  15.1  income statement       ====         ====  ====         ====
====  ====
Employee numbers
                        Average during                   Actual
headcount
                             the year                         at 31
March
                     Number           Number           Number
Number
                       2010             2009             2010
2009
T&D                     231              227              227
232 SONI                      -               68                -
- Other                    29               30               29
30
                        ---              ---              ---
---
                        260              325              256
262
                        ===              ===              ===
===
Directors' emoluments 

The remuneration of the directors paid by the Company was as follows:

 2010   2009
                                                                      [pounds]m     [pounds]m
Emoluments in respect of qualifying services                        0.7 

0.4

Aggregate contributions to defined contribution pension schemes - 0.1

Emoluments in respect of qualifying services for the year ended 31 March 2010 included deferred remuneration awarded in the year but payable in future years. No amounts were paid to directors in respect of long term incentive plans.

The remuneration in respect of the highest paid director was as follows:

 2010     2009
                                                                [pounds]'000    [pounds]'000
Emoluments                                                       589
328 Total accrued pension at 31 March (per annum)                    146
-
                                                                2010
2009
                                                              Number
Number
Members of the defined benefit pension scheme                      1
- Members of the defined contribution scheme                         1
1
No directors exercised share options during the year or received shares
under long-term incentive schemes.  The Company made pension
contributions of [pounds]21,000 in respect of the directors during the
year ended 31 March 2010 (2009 - [pounds] 71,000).
7.  Net Finance Costs
                                                                2010
2009
                                                                  [pounds]m       [pounds]m Interest receivable: Bank interest
-      0.4
                                                                ----
---- Interest payable: Amounts owed to fellow Viridian undertakings
(8.6)   (15.2) Eurobond
(12.0)   (12.0)
                                                                ----
----
                                                               (20.6)
(27.2) Less: capitalised interest
0.1      0.1
                                                                ----
---- Total interest charged to the Group Income Statement
(20.5) 

(27.1)

 ---- 

----

 Other finance costs: Amortisation of financing charges
(0.1)       -
                                                                 ----
---- Total finance costs
(20.6)   (27.1)
                                                                ----
---- Net pension scheme interest: Expected return on pension scheme
assets                        25.0 

30.9

 Interest on pension scheme liabilities
(34.8)   (38.1)
                                                                 ----
----
                                                                (9.8)
(7.2)
                                                                ----
---- Net finance costs
(30.4)   (33.9)
                                                                ====
====
Relating to continuing operations                              (30.4) 

(33.2)

 Relating to discontinued operations
-     (0.7)
                                                                 ----
----
                                                               (30.4)
(33.9)
                                                                ====
====

Interest charged to the balance sheet during the year was capitalised using a weighted average interest rate of 2.6% (2009 - 5.0%).

8. Tax Charge

(i) Analysis of charge in the year

 2010    2009 Group Income Statement
[pounds]m      [pounds]m
 Current tax charge UK corporation tax at 28% (2009 - 28%)
18.7 

21.9

 Corporation tax overprovided in previous years
(1.1)      -
                                                                     ----    ---- Total current tax charge
17.6    21.9
Deferred tax charge 

Origination and reversal of temporary differences in current year 5.8

1.0

Origination and reversal of temporary differences relating to (0.9)

 -  prior years
                                                                     ----    ---- Total deferred tax charge
4.9     1.0
                                                                    ----
---- Total tax charge
22.5    22.9
                                                                    ====
====
Relating to continuing operations                                   21.8

14.1

 Relating to discontinued operations
0.7     8.8
                                                                     ----    ----
                                                                    22.5
22.9
                                                                    ====
==== Tax relating to items charged in other comprehensive income
Deferred tax Actuarial losses on pension liability
(16.7) 

(7.2)

 ==== 

====

(ii) Reconciliation of total tax charge

The tax charge in the Group Income Statement for the year is lower than the standard rate of corporation tax in the UK of 28% (2009 - 28%). The differences are reconciled below:

 2010    2009
                                                                      [pounds]m      [pounds]m
Accounting profit from continuing and discontinued operations      83.1
82.9  before tax charge
Accounting profit multiplied by the UK standard rate of  corporation tax
of 28%  (2009 - 28%)                              23.3 

23.2

 Tax overprovided in previous years
(2.0) 

-

 Other permanent differences
1.2    (0.3)
                                                                    ----
---- Tax charge for the year
22.5    22.9
                                                                   ====
====

There are no tax consequences for the Company attaching to the payment of dividends to shareholders.

(iii) Deferred tax

 The deferred tax included in the Group and Company Balance Sheet
is as follows:
                                                                2010
2009
                                                                 [pounds]m         [pounds]m Deferred tax assets Pension liability
38.1       21.8 Other temporary differences
2.7        3.5
                                                               ----
----
                                                               40.8
25.3
                                                               ----
---- Deferred tax liabilities Accelerated capital allowances
119.6 

115.9

 Held-over gains on property disposals
1.3        1.3
                                                               -----
-----
                                                              120.9
117.2
                                                              -----
----- Net deferred tax liability
80.1       91.9
                                                              =====
===== 

The deferred tax included in the Group Income Statement is as follows:

 2010    2009
                                                                    [pounds]m      [pounds]m
Accelerated capital allowances                                    3.7 

0.1

 Other temporary differences
0.8 

1.5

 Temporary differences in respect of pensions
(0.4) 

0.3

 Deferred tax charge/(credit) in respect of discontinued
0.8    (0.9)  operations
---     ---
 Deferred tax charge                                               4.9
1.0
                                                                  ===
===
Relating to continuing operations                                 4.2 

1.9

 Relating to discontinued operations
0.7    (0.9)
                                                                   ---
---
                                                                  4.9
1.0
                                                                  ===
=== 

9. Profit for the Financial Year

The profit dealt with in the accounts of the Company is [pounds]60.6m (2009 - [pounds]76.7m). No separate income statement is presented for the Company as permitted by Section 408 of the Companies Act 2006.

10. Equity Dividends

 Amounts recognised as distributions to equity holders in the
2010    2009 year:                                                              [pounds]m      [pounds]m
 Equity dividends on ordinary shares: Interim dividend of 37.78p per
share for the year ended 31  March 2010 (2009 - 75.98p per share)
55.0   110.6
                                                                 ====
=====

11. Property, Plant and Equipment

 Group                                        Non-
                                       operational       Fixtures
                    Infrastructure       land and            and
                            assets      buildings      equipment
Total
                                [pounds]m             [pounds]m
[pounds]m          [pounds]m
Cost:
At 1 April 2008            1,427.4             5.1          39.6
1,472.1 Additions                    101.2               -           2.9
104.1 Disposals                     (0.4)              -             -
(0.4)
                           -------         -------       -------
------- At 31 March 2009           1,528.2             5.1          42.5
1,575.8
Additions                     92.6               -           2.3
94.9 Disposals                     (0.7)              -             -
(0.7)
                           -------         -------       -------
------- At 31 March 2010           1,620.1             5.1          44.8
1,670.0
                           -------         -------       -------
-------
Depreciation: At 1 April 2008              496.8             1.0
30.7       528.5 Charge for the year           35.7             0.1
2.8        38.6 Disposals                     (0.4)              -
-        (0.4)
                           -------         -------       -------
------- At 31 March 2009             532.1             1.1          33.5
566.7
Charge for the year           38.0             0.1           2.7
40.8 Disposals                     (0.6)              -             -
(0.6)
                           -------         -------       -------
------- At 31 March 2010             569.5             1.2          36.2
606.9
                           -------         -------       -------
------- Net book value At 31 March 2008             930.6
4.1           8.9       943.6
                           =======         =======       =======
=======
At 31 March 2009             996.1             4.0           9.0
1,009.1
                           =======         =======       =======
=======
At 31 March 2010           1,050.6             3.9           8.6
1,063.1
                           =======         =======       =======
=======
Included in Group infrastructure assets are amounts in respect of assets
under construction amounting to [pounds]31.7m (2009 - [pounds]40.4m) and
capitalised interest of [pounds] 4.5m (2009 - [pounds]4.5m).
Company                                       Non-
                                       operational      Fixtures
                    Infrastructure        land and           and
                            assets       buildings     equipment
Total
                                [pounds]m              [pounds]m
[pounds]m          [pounds]m
Cost: At 1 April 2008            1,427.0             5.1          39.6
1,471.7 Additions                    101.2               -           2.9
104.1
                           -------         -------       -------
------- At 31 March 2009           1,528.2             5.1          42.5
1,575.8
Additions                     92.6               -           2.3
94.9 Disposals                     (0.7)              -             -
(0.7)
                           -------         -------       -------
------- At 31 March 2010           1,620.1             5.1          44.8
1,670.0
                           -------         -------       -------
-------
Depreciation: At 1 April 2008              496.4             1.0
30.7       528.1 Charge for the year           35.7             0.1
2.8        38.6
                           -------         -------       -------
------- At 31 March 2009             532.1             1.1          33.5
566.7
Charge for the year           38.0             0.1           2.7
40.8 Disposals                     (0.6)              -             -
(0.6)
                           -------         -------       -------
------- At 31 March 2010             569.5             1.2          36.2
606.9
                           -------         -------       -------
------- Net book value At 31 March 2008             930.6
4.1           8.9       943.6
                           =======         =======       =======
=======
At 31 March 2009             996.1             4.0           9.0
1,009.1
                           =======         =======       =======
=======
At 31 March 2010           1,050.6             3.9           8.6
1,063.1
                           =======         =======       =======
=======

Included in Company infrastructure assets are amounts in respect of assets under construction amounting to [pounds]31.7m (2009 - [pounds]40.4m) and capitalised interest of [pounds]4.5m (2009 - [pounds]4.5m).

 12.  Investments
 Company - Investment in subsidiaries                            2010
2009
                                                                  [pounds]m       [pounds]m
At 1 April                                                         -
0.5 Impairment of investment in NIE Generation Limited                 -
(0.5)
                                                                 ---
--- At 31 March                                                        -
-
                                                                 ===
===
At 31 March 2010, the Company held an investment of 100% of ordinary
shares in NIE Generation Limited, a company incorporated in Northern
Ireland.  NIE Generation Limited ceased all operating activities on 14
September 2007 resulting in an impairment of the Company's carrying
value of its investment in NIE Generation Limited as at 31 March 2009.

13. Intangible Assets

 Group and Company - Computer software
2010
                                                                           [pounds]m Cost: At 1 April 2008
61.6 Additions acquired externally
0.7
                                                                        ---- At 31 March 2009
62.3 Additions acquired externally
0.2
                                                                        ---- At 31 March 2010
62.5
                                                                        ---- Amortisation/impairment: At 1 April 2008
12.6 Amortisation charge for the year
5.7
                                                                        ---- At 31 March 2009
18.3
Amortisation charge for the year
5.6
                                                                        ---- At 31 March 2010
23.9
                                                                        ----
Net book value: At 31 March 2008
49.0
                                                                        ==== At 31 March 2009
44.0
                                                                        ==== At 31 March 2010
38.6
                                                                        ====

Computer software includes capitalised interest of [pounds]0.8m (2009 - [pounds]0.9m).

 14.  Financial Assets
 Group and Company                                           2010
2009
                                                              [pounds]m
[pounds]m Non-current Other loans
0.1         0.2
                                                             ===
=== Current Other loans
0.2         0.2
                                                             ===
===
The directors consider that the carrying amount of financial assets
equates to fair value.
15.  Inventories
Group and Company                                           2010
2009
                                                              [pounds]m
[pounds]m
Materials and consumables                                    3.8
3.9 Work-in-progress                                             2.2
2.2
                                                             ---
---
                                                             6.0
6.1
                                                             ===
===
16.  Trade and Other Receivables
Group and Company                                           2010
2009
                                                              [pounds]m
[pounds]m

Trade receivables (including unbilled consumption) 10.3 9.3 Other receivables

 0.4 

0.5

 Amounts owed by fellow Viridian undertakings                32.2 

35.9

 Prepayments and accrued income                               0.5
0.4
                                                             ----
----
                                                            43.4
46.1
                                                            ====
====

Trade receivables are stated net of a provision of [pounds]0.8m (2009 - [pounds]0.7m) for estimated irrecoverable amounts based on past default experience:

 Group and Company                                           2010
2009
                                                               [pounds]m
[pounds]m
At 1 April                                                   0.7
0.5 Increase in provision                                        0.3
0.3 Bad debts written off                                       (0.2)
(0.1)
                                                             ---
--- At 31 March                                                  0.8
0.7
                                                             ===
===
The above provision includes [pounds]0.6m (2009 - [pounds]0.6m) in
respect of individual balances impaired based on the age of debt and
past default experience.  There is no provision for estimated
irrecoverable amounts included in 'amounts owed by fellow Viridian
undertakings' which are all within credit terms. 

The following shows an aged analysis of trade receivables:

 Group and Company                                           2010
2009
                                                               [pounds]m
[pounds]m
Within credit terms: Current
8.9         6.9 Past due but not impaired: Less than 30 days
-           - 30 - 60 days
0.3         0.5 60 - 90 days
-         0.1 + 90 days
1.1         1.8
                                                            ----
----
                                                            10.3
9.3
                                                            ====
====
The credit quality of trade receivables that are neither past due nor
impaired is assessed by reference to external credit ratings where
available, otherwise historical information relating to counterparty
default rates is used.  The directors consider that the carrying amount
of trade and other receivables approximates to fair value. 

17. Cash and Cash Equivalents

 Group and Company                                           2010
2009
                                                               [pounds]m
[pounds]m
Cash at bank and in hand                                     0.2
1.6
                                                             ===
===

Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. The directors consider that the carrying amount of cash and cash equivalents equates to fair value.

 18.  Trade and Other Payables
 Group and Company                                           2010
2009
                                                              [pounds]m
[pounds]m
Trade payables                                               7.0
11.5 Payments received on account                                27.8
23.1 Amounts owed to fellow Viridian undertakings                43.0
46.1 Tax and social security                                      3.1
1.6 Accruals                                                    23.1
16.4
                                                           -----
-----
                                                           104.0
98.7
                                                           =====
=====
The directors consider that the carrying amount of trade and other
payables equates to fair value.
19.  Deferred Income
Group and Company                                      Customers'
                                        Grants      contributions
Total
                                            [pounds]m
[pounds]m         [pounds]m
Current                                    0.5                6.4
6.9 Non-current                                9.6              189.5
199.1
                                         -----              -----
-----
Total at 1 April 2008                     10.1              195.9
206.0
                                         -----              -----
-----
Receivable                                   -               21.5
21.5 Released to income statement              (0.5)              (6.9)
(7.4)
                                         -----              -----
----- Current                                    0.5                6.9
7.4 Non-current                                9.1              203.6
212.7
                                         -----              -----
-----
Total at 31 March 2009                     9.6              210.5
220.1
                                         -----              -----
-----
Receivable                                   -               14.8
14.8 Released to income statement              (0.5)              (7.3)
(7.8)
                                         -----              -----
----- Current                                    0.5                7.3
7.8 Non-current                                8.6              210.7
219.3
                                         -----              -----
-----
Total at 31 March 2010                     9.1              218.0
227.1
                                         =====              =====
=====
20.  Financial Liabilities
Group and Company                                          2010
2009
                                                             [pounds]m
[pounds]m
Current Interest payable on Eurobond                                6.4
6.4 Amounts owed to fellow Viridian undertakings              317.6
288.4
                                                          -----
-----
                                                          324.0
294.8
                                                          =====
=====
Non-current Eurobond
173.5        173.4
                                                          =====
=====

Loans and other borrowings outstanding are repayable as follows:

 Group and Company                                          2010
2009
                                                              [pounds]m
[pounds]m
In one year or less or on demand                          324.0
294.8 In more than five years                                   173.5
173.4
                                                          -----
-----
                                                          497.5
468.2
                                                          =====
=====

The Group's objectives, policies and strategies in respect of financial liabilities and capital management are disclosed on pages 16-17 of the Directors' Report.

The principal features of the Group's borrowings are as follows:

- the Eurobond is repayable in 2018 and carries a fixed rate of interest of

6.875%;

- amounts owed to fellow Viridian undertakings are repayable on demand. The

weighted average interest rate during the year was 2.62% (2009 - 5.07%).

 With the exception of the Eurobond which had a fair value at 31
March 2010 of [pounds] 189.1m (2009 - [pounds]201.5m) based on current
market prices, the directors consider that the carrying amount of loans
and other borrowings equates to fair value.
 An increase of 0.5% in effective interest rates would increase the
interest charged to the Group Income Statement by [pounds]1.6m (2009 -
[pounds]1.6m); a decrease of 0.25% would reduce the interest charged to
the Group Income Statement by [pounds]0.8m (2009 - [pounds]0.7m).
The tables below summarise the maturity profile of the Group and
Company's financial liabilities (including trade and other
payables) based on contractual undiscounted payments.
At 31 March 2010                On  Within 3  3 to 12  1 to 5  More than
Group and Company           demand    months   months   years    5 years
Total
                                [pounds]m        [pounds]m
[pounds]m      [pounds]m         [pounds]m     [pounds]m
Interest payable on Eurobond     -         -     12.0    48.1       48.2
108.3 Eurobond                         -         -        -       -
175.0  175.0 Amounts owed to fellow       317.6         -        -
-          -  317.6  Viridian undertakings Trade and other payables
24.7      76.2        -       -          -  100.9
                             -----     -----    -----   -----      -----
-----
                             342.3      76.2     12.0    48.1      223.2
701.8
                             =====     =====    =====   =====      =====
=====
At 31 March 2009                On  Within 3  3 to 12  1 to 5  More than
Group and Company           demand    months   months   years    5 years
Total
                                [pounds]m        [pounds]m
[pounds]m      [pounds]m         [pounds]m     [pounds]m
Interest payable on Eurobond     -         -     12.0    48.0       60.3
120.3 Eurobond                         -         -        -       -
175.0  175.0 Amounts owed to fellow       288.4         -        -
-          -  288.4  Viridian undertakings Trade and other payables
21.5      75.6        -       -          -   97.1
                             -----     -----    -----   -----      -----
-----
                             309.9      75.6     12.0    48.0      235.3
680.8
                             =====     =====    =====   =====      =====
=====
21.  Analysis of Net Debt
                                          At                   Non
At
                                     1 April      Cash        cash
31 March
                                        2009      flow    movement
2010
                                          [pounds]m        [pounds]m
[pounds]m           [pounds]m
Cash and cash equivalents                1.6      (1.4)          -
0.2 Interest payable on Eurobond            (6.4)    (12.0)       12.0
(6.4) Current financial liabilities         (288.4)    (29.2)          -
(317.6) Eurobond                              (173.4)        -
(0.1)      (173.5)
                                      ------    ------      ------
------
                                      (466.6)    (42.6)       11.9
(497.3)
                                      ======    ======      ======
======
22.  Provisions
Group and Company
                                         Liability and
                                                damage
                                 Environment    claims       Other
Total
                                          [pounds]m        [pounds]m
[pounds]m           [pounds]m
Current                                  2.8       0.6         0.4
3.8 Non-current                              5.5       2.6           -
8.1
                                         ---       ---         ---
---
Total at 1 April 2009                    8.3       3.2         0.4
11.9
                                         ---       ---         ---
---- Applied in the year                     (1.5)     (0.5)       (0.2)
(2.2)
Increase in provisions                   0.1       1.2         0.2
1.5
Release to income statement             (2.0)     (0.1)          -
(2.1)
Unwinding of discount                    0.1         -           -
0.1
                                         ---       ---         ---
--- Current                                  0.4       0.9         0.4
1.7 Non-current                              4.6       2.9           -
7.5
                                         ---       ---         ---
---
Total at 31 March 2010                   5.0       3.8         0.4
9.2
                                         ===       ===         ===
===
Environment
Provision has been made for expected costs of decontamination and
demolition arising from obligations in respect of power station sites
formerly owned by the Group.  It is anticipated that most expenditure
will take place within the next five years.
Liability and damage claims
Notwithstanding the intention of the directors to defend vigorously
claims made against the Group, liability and damage claim provisions
have been made which represent the directors' best estimate of
costs expected to arise from ongoing third party litigation matters and
employee claims.  These provisions are expected to be utilised within a
period not exceeding five years. 

23. Pension Commitments

 Most employees of the Group are members of VGPS.  This has two
sections: 'Options' which is a money purchase arrangement
whereby the Group generally matches the members' contributions up
to a maximum of 6% of salary and 'Focus' which provides
benefits based on pensionable salary at retirement or earlier exit from
service.  The assets of the scheme are held under trust and invested by
the trustees on the advice of professional investment managers.
 Hewitt, the actuaries to VGPS, have provided a valuation of Focus under
IAS 19 as at 31 March 2010 based on the following assumptions (in
nominal terms) and using the projected unit method.
                                                       2010 

2009

 Rate of increase in pensionable salaries    4.45% per annum
4.0% per annum Rate of increase in pensions in payment     3.45% per
annum    3.0% per annum Discount rate
5.60% per annum   6.75% per annum Inflation assumption
3.45% per annum    3.0% per annum Life expectancy: 

Current pensioners (at age 60) - males 25.0 years 23.7 years

Current pensioners (at age 60) - females 27.7 years 26.4 years

Future pensioners (at age 60) - males *26.7 years 24.5 years

Future pensioners (at age 60) - females *29.4 years 27.2 years

*Life expectancy from age 60 for males and females currently aged 40.

The life expectancy assumptions are based on standard actuarial mortality tables and include an allowance for future improvements in life expectancy.

 The valuation under IAS 19 at 31 March 2010 shows a Group net
pension liability relating to continuing operations (before deferred
tax) of [pounds]136.2m (2009 - [pounds] 77.9m).  A 0.5%
increase/decrease in the assumed discount rate would decrease/ increase
the net pension liability by [pounds]45.8m.  A 0.5% increase/decrease in
the assumed inflation rate would increase/decrease the net pension
liability by [pounds] 43.8m.  A one year increase/decrease in life
expectancy would increase/decrease the net pension liability by
[pounds]17.9m. 

Assets and Liabilities

The Group and Company's share of the assets and liabilities of Focus and the expected rates of return are:

 Value at  Expected  Value at  Expected
                                      31 March   rate of  31 March
rate of
                                         2010    return      2009
return
                                           [pounds]m         %
[pounds]m         %
Equities                                210.3       7.7     137.1
7.2 Bonds                                   314.7       5.0     309.6
5.2 Other                                    19.4       4.5       3.2
4.0
                                        -----               ----- Total
market value of assets            544.4               449.9 Actuarial
value of liabilities         (680.6)             (527.8)
                                        -----               ----- Net
pension liability                  (136.2)              (77.9)
                                        =====               =====
The expected rate of return on equities is based on the expected median
return over the long-term.  The expected rate of return on bonds is
measured directly from actual market yields for UK gilts and corporate
bonds.  Other assets include cash balances and other investments.  The
expected rate of return on these assets is measured directly from
short-term market interest rates. 

Changes in the market value of assets

 Group                          Continuing operations
Discontinued operations
                                        2010     2009        2010
2009
                                         [pounds]m       [pounds]m
[pounds]m            [pounds]m
Market value of assets at 1 April     449.9    532.9           -
10.6 Expected return                        25.0     30.4           -
0.5 Contributions from employer            10.0      9.7           -
0.7 Contributions from scheme members       0.2      0.4           -
0.1 Benefits paid                         (34.7)   (32.6)          -
(0.7) Actuarial gain / (loss)                88.4    (90.9)          -
(1.7) Disposal of discontinued                5.6        -           -
(9.5)  operations                           -----    -----       -----
-----
Market value of assets at 31 March    544.4    449.9           -
-
                                      =====    =====       =====
=====
Company                        Continuing operations    Discontinued
operations
                                      2010      2009         2010
2009
                                        [pounds]m        [pounds]m
[pounds]m            [pounds]m
Market value of assets at 1 April    449.9     532.9            -
- Expected return                       25.0      30.4            -
- Contributions from employer           10.0       9.7            -
- Contributions from scheme members      0.2       0.4            -
- Benefits paid                        (34.7)    (32.6)           -
- Actuarial gain / (loss)               88.4     (90.9)           -
- Disposal of discontinued               5.6         -            -
-  operations                          -----     -----        -----
-----
Market value of assets at 31 March   544.4     449.9            -
-
                                     =====     =====        =====
=====

Changes in the actuarial value of liabilities

 Group                          Continuing operations
Discontinued operations
                                       2010      2009         2010
2009
                                        [pounds]m        [pounds]m
[pounds]m            [pounds]m
Actuarial value of liabilities at    527.8     586.7            -
12.0  1 April Interest cost                         34.8      37.4
-           0.7 Current service cost                   1.4       1.6
-           0.3 Curtailment loss                       0.1         -
-             - Contributions from scheme members      0.2       0.4
-           0.1 Benefits paid                        (34.7)    (32.6)
-          (0.7) Actuarial loss / (gain)              148.1     (65.7)
-          (1.2) Disposal of discontinued               2.9         -
-         (11.2)  operations                          -----     -----
-----         -----
Actuarial value of liabilities at    680.6     527.8            -
-  31 March                            =====     =====        =====
=====
Company                        Continuing operations    Discontinued
operations
                                      2010      2009         2010
2009
                                        [pounds]m        [pounds]m
[pounds]m            [pounds]m
Actuarial value of liabilities at    527.8     586.7            -
-  1 April Interest cost                         34.8      37.4
-             - Current service cost                   1.4       1.6
-             - Curtailment loss                       0.1         -
-             - Contributions from scheme members      0.2       0.4
-             - Benefits paid                        (34.7)    (32.6)
-             - Actuarial loss / (gain)              148.1     (65.7)
-             - Disposal of discontinued               2.9         -
-             -  operations                          -----     -----
-----         -----
Actuarial value of liabilities at    680.6     527.8            -
- 31 March                             =====     =====        =====
=====
The Group expects to make contributions of [pounds]1.9m to Focus in
2010/11 in respect of current service pension costs.  During the year
ended 31 March 2010, the Group made contributions of [pounds]6.0m in
respect of past service pension costs; it is expected that contributions
in respect of past service will increase significantly in 2010/11
reflecting lower than expected investment returns during the three year
period since the last valuation and changes in mortality assumptions
reflecting VGPS recent experience and the continuing upward trend in
observed life expectancies.
The Group's share of VGPS service costs is allocated based on the
pensionable payroll.  Contributions from employer, interest cost, asset
returns and experience gains or losses are allocated based on the
Group's share of the VGPS net pension liability. 

Analysis of the amount charged to operating Group Company costs (before capitalisation)

 2010    2009     2010    2009
                                                 [pounds]m
[pounds]m       [pounds]m      [pounds]m
Current service cost                          (1.4)   (1.9)    (1.4)
(1.6) Curtailment loss                              (0.1)      -
(0.1)      -
                                               ---     ---      ---
--- Total operating charge                        (1.5)   (1.9)    (1.5)
(1.6)
                                               ===     ===      ===
===
Relating to continuing operations             (1.5)   (1.6)    (1.5) 

(1.6)

 Relating to discontinued operations              -    (0.3)
-       -
                                                ---     ---      ---
---
                                              (1.5)   (1.9)    (1.5)
(1.6)
                                               ===     ===      ===
===
Focus is closed to new members and therefore under the projected unit
method the current service cost for members of this section as a
percentage of salary will increase as they approach retirement age.
Analysis of the amount (charged)/credited to       Group
Company net pension scheme interest                     2010     2009
2010     2009
                                                  [pounds]m
[pounds]m       [pounds]m       [pounds]m
Expected return on assets                       25.0     30.9     25.0
30.4 Interest on liabilities                        (34.8)   (38.1)
(34.8)   (37.4)
                                                ----     ----     ----
---- Net pension scheme interest                     (9.8)    (7.2)
(9.8)    (7.0)
                                                ====     ====     ====
====
Relating to continuing operations               (9.8)    (7.0)    (9.8) 

(7.0)

 Relating to discontinued operations                -     (0.2)
-        -
                                                  ---      ---      ---
---
                                                (9.8)    (7.2)    (9.8)
(7.0)
                                                 ===      ===      ===
=== 

The actual return on Group Focus assets was [pounds]113.4m (2009 - loss of [pounds]61.7m). The actual return on Company Focus assets was [pounds]113.4m (2009 - loss of [pounds]60.5m).

 Analysis of amount recognised in the            Group
Company Statement of Comprehensive Income               2010     2009
2010     2009
                                                   [pounds]m
[pounds]m       [pounds]m       [pounds]m
Actuarial gain/(loss) on assets                 88.4    (92.6)    88.4 

(90.9)

 Actuarial (loss)/gain on liabilities          (148.1)    66.9
(148.1)    65.7
                                                -----    -----   ------
------ Net actuarial loss                             (59.7)   (25.7)
(59.7)   (25.2)
                                               =====    =====    =====
=====
Relating to continuing operations              (59.7)   (25.2)   (59.7) 

(25.2)

 Relating to discontinued operations                -     (0.5)
-        -
                                                -----    -----    -----
-----
                                               (59.7)   (25.7)   (59.7)
(25.2)
                                               =====    =====    =====
=====
The cumulative actuarial losses recognised in the Group and Company
Statements of Comprehensive Income since 1 April 2004 are [pounds]38.5m
and [pounds]44.4m respectively (2009 - actuarial gains of [pounds]21.2m
and [pounds]15.3m).  The directors are unable to determine how much of
the net pension liability recognised on transition to IFRS and taken
directly to equity is attributable to actuarial gains and losses since
the inception of Focus.  Consequently, the directors are unable to
determine the amount of actuarial gains and losses that would have been
recognised in the Group and Company Statements of Comprehensive Income
shown before 1 April 2004.
                          Group                              Company
            2010  2009   2008   2007   2006   2010   2009   2008   2007
2006
              [pounds]m    [pounds]m     [pounds]m     [pounds]m
[pounds]m     [pounds]m     [pounds]m     [pounds]m     [pounds]m
[pounds]m
History of experience gains and losses
Experience  88.4 (92.6) (28.5) (22.8)  86.5   88.4  (90.9) (23.4) (19.5)
74.0 (losses)/ gains on assets

Experience (3.6) (0.7) (0.4) (4.6) (30.6) (3.6) (0.7) (0.3) (3.9) (26.1) losses on

liabilities

 ----   ----   ----   ----   ----   ----   ----   ----   ----
----
                         Group                                Company At
31      2010   2009   2008   2007   2006   2010   2009   2008   2007
2006 March        [pounds]m     [pounds]m     [pounds]m     [pounds]m
[pounds]m     [pounds]m     [pounds]m     [pounds]m     [pounds]m
[pounds]m
Market    544.4  449.9  543.5  672.6  676.0  544.4  449.9  532.9  574.4
576.5 value of assets
Actuarial(680.6)(527.8)(598.7)(759.6)(790.3)(680.6)(527.8)(586.7)(647.8)(673.7) value of 

liabilities

 -----  -----  -----  -----  -----  -----  -----  -----  -----
-----
 Net      (136.2) (77.9) (55.2) (87.0)(114.3)(136.2) (77.9) (53.8)
(73.4) (97.2) pension liability 

----- ----- ----- ----- ----- ----- ----- ----- ----- -----

 Relating (136.2) (77.9) (53.8) (87.0)(114.3)(136.2) (77.9) (53.8)
(73.4) (97.2) to continuing operations
 Relating      -      -   (1.4)     -      -      -      -      -      -
- to discontinued operations
-----  -----  -----  -----  -----  -----  -----  -----  -----  -----
        (136.2) (77.9) (55.2) (87.0)(114.3)(136.2) (77.9) (53.8) (73.4)
(97.2)
         -----  -----  -----  -----  -----  -----  -----  -----  -----
----- 

24. Share Capital and Equity

 2010         2009
                                                        [pounds]m
[pounds]m
Share capital                                        36.4         36.4
Share premium                                        24.4         24.4
Capital redemption reserve                            6.1          6.1
Accumulated profits                                  21.2         58.6
                                                    -----        -----
TOTAL EQUITY                                         88.1        125.5
                                                    =====        =====

The balance classified as share capital comprises the nominal value of the Company's equity share capital.

The balance as share premium records the total net proceeds on the issue of the Company's equity share capital less the nominal value of the share capital.

The balance classified as capital redemption reserve arises from the legal requirement to maintain the capital of the Company following the return of that amount of capital to shareholders on 2 August 1995.

 Allotted and fully paid share capital:                   2010
2009
                                                            [pounds]m
[pounds]m
145,566,431 ordinary shares of 25p each                  36.4     36.4
                                                         ====     ====

25. Lease Obligations

Property, plant and equipment

The Group and Company have entered into leases on certain items of property, plant and equipment. These leases contain options for renewal before the expiry of the lease term at rentals based on market prices at the time of renewal.

 The future minimum lease payments under non-cancellable operating
leases are as follows:
                                             2010   2009
                                              [pounds]m     [pounds]m
Within one year                              0.5    0.5 After one year
but not more than five years  1.7    1.8 More than five years
5.3    5.7
                                            ----   ----
                                             7.5    8.0
                                            ====   ====

26. Commitments and Contingent Liabilities

(i) Capital commitments

At 31 March 2010 the Group and Company had contracted future capital expenditure in respect of property, plant and equipment of [pounds]9.4m (2009 - [pounds] 10.8m).

 (ii)  Contingent liabilities
 Contract buy-out agreement
In December 2000, the Group renegotiated a number of the generating
contracts at Ballylumford.  As part of these arrangements a contract
buy-out (CBO) agreement was entered into to make payments to fund a
buy-out of the profit element under the original agreements at
Ballylumford.  The CBO agreement has provisions under which a
termination amount becomes payable in certain circumstances.  The size
of the payment depends on the termination date.  The Group does not
anticipate that any liability will arise and no provision has been made.
Protected persons
The Group has contingent liabilities in respect of obligations under the
Electricity (Protected Persons) Pensions Regulations (Northern Ireland)
1992 to protect the pension rights of employees of the Group at
privatisation.  This includes members employed in companies which have
subsequently been disposed of by the Group.  The Group does not
anticipate that any liability will arise. 

Power station sites

 The Group leases sites to power stations in Northern Ireland.
Under the terms of the lease agreements the Group may be required to pay
compensation if a lease is terminated.  Since the extent of the
compensation will depend on the circumstances which give rise to the
termination, it is not possible to identify the magnitude of any
potential liability.  The Group does not anticipate that any liability
for compensation will arise and no provision has been made.
 Liability and damage claims
In the normal course of business the group has contingent liabilities
arising from claims made by third parties and employees.  Provision for
a liability is made (as disclosed in note 22) when the directors believe
that it is probable that an outflow of funds will be required to settle
the obligation where it arises from an event prior to the year end.
The Group does not anticipate that any material liabilities will arise
other than those recognised in the accounts. 

27. Related Party Disclosures

Remuneration of key management personnel

 Key management personnel of the Group comprise the directors of
the Company and the Company Secretary.  The compensation paid to those
personnel is set out below in aggregate for each of the categories
specified in IAS 24 Related Party Disclosures:
                                                       2010    2009
                                                        [pounds]m
[pounds]m
Salaries and short-term employee benefits              0.5     0.4 Post
employment benefits:  - defined benefit scheme
-       -  - defined contribution scheme                           -
0.1 Other long-term benefits                               0.2       -
                                                       ---     ---
                                                       0.7     0.5
                                                       ===     ===
Other related parties 

During the year the Group and Company contributed [pounds]10.3m (2009 - Group: [pounds]10.8m, Company: [pounds]10.0m) to VGPS.

 Group
 The immediate parent undertaking of the Group is Viridian Group Limited
(Viridian).  The ultimate parent undertaking in the United Kingdom is El
Ventures Limited.  The parent of the smallest and largest group of which
the Company is a member and for which group accounts are prepared is
Viridian Group Holdings Limited, a company incorporated in the Cayman
Islands.  A copy of Viridian Group Holdings Limited's accounts is
available from the Company Secretary, Viridian Group Limited, 120 Malone
Road, Belfast, BT9 5HT.  The ultimate parent undertaking and controlling
party of the Group is Arcapita Bank B.S.C.(c), a company incorporated in
the Kingdom of Bahrain. 

Principal subsidiaries of Viridian Group Holdings Limited are related parties of the Group and are listed below:

 Eco Wind Power Ltd                   Viridian Capital Ltd EI
Ventures Ltd                      Viridian Energy Ltd (trading as
Energia) ElectricInvest Acquisitions Ltd      Viridian Energy Supply Ltd
(trading as
                                        Energia) ElectricInvest Holding
Company Ltd   Viridian Enterprises Ltd ElectricInvest (Lux) RoI S.a.r.l.
Viridian Group Ltd GenSys Power Ltd                     Viridian Group
Investments Ltd Huntstown Power Company Ltd          Viridian Insurance
Ltd NIE Powerteam Ltd                    Viridian Power Ltd NIE Energy
Ltd                       Viridian Power and Energy Holdings Ltd 

Power and Energy Holdings (RoI) Ltd Viridian Power and Energy Ltd

 Powerteam Electrical Services Ltd    Viridian Properties Ltd
Powerteam Electrical Services (UK)   Viridian Resources Ltd Ltd
 

Transactions between the Group and the related parties above and the balances outstanding are disclosed below:

 Revenue   Charges     Amounts     Amounts
                                          from      from     owed by
owed to
              Ordinary                related   related     related
related
             dividends    Interest      party     party     party at
party at
                  paid        paid                         31 March
31 March
                    [pounds]m          [pounds]m         [pounds]m
[pounds]m          [pounds]m          [pounds]m Year to 31  March 2010
Viridian          55.0         8.6          -         -           -
328.8 Viridian             -           -      186.1      71.2
32.2        31.8  subsidiaries    -----       -----      -----     -----
-----       -----
                  55.0         8.6      186.1      71.2        32.2
360.6
                 =====       =====      =====     =====       =====
=====
Year to 31  March 2009 Viridian         110.6        14.3          -
-           -       299.6 Viridian             -         0.9      208.4
77.2        35.9        34.9  subsidiaries    -----       -----
-----     -----       -----       -----
                 110.6        15.2      208.4      77.2        35.9
334.5
                 =====       =====      =====     =====       =====
=====

Transactions between the Company and the related parties above and the balances outstanding are disclosed below:

 Revenue               Amounts     Amounts
               Ordinary    Interest       from    Charges    owed by
owed
             dividends       paid/    related       from    related  to
related
                  paid   (received)     party    related   party at
party at
                                                   party   31 March
31 March
                    [pounds]m          [pounds]m         [pounds]m
[pounds]m         [pounds]m          [pounds]m
Year to 31  March 2010 Viridian          55.0         8.6          -
-          -       328.8 Viridian             -           -      186.1
71.2       32.2        31.8  subsidiaries     ----        ----
-----      -----       ----       -----
                  55.0         8.6      186.1       71.2       32.2
360.6
                  ====        ====      =====      =====       ====
=====
Year to 31  March 2009 NIE subsidiaries     -        (0.6)      34.6
0.2          -           - Viridian         110.6        14.2          -
-          -       299.6 Viridian             -         0.7      173.2
72.3       35.9        34.9  subsidiaries    -----       -----
-----      -----      -----       -----
                 110.6        14.3      207.8       72.5       35.9
334.5
                 =====       =====      =====      =====      =====
=====
Interest received from and paid to fellow Viridian undertakings reflects
floating interest rates based on LIBOR.  Outstanding balances with
subsidiaries are unsecured.  Intra-group loan balances are repayable on
demand while current account balances are settled on a monthly basis.
Current account balances primarily arise from transactions relating to
regulated sales to Viridian subsidiaries and utility contracting
services purchased from Viridian subsidiaries.  Transactions with
Viridian group undertakings are determined on an arm's length
basis. 

28. Events Since the Year End

 On 6 July 2010 Viridian Group Limited entered into a conditional
agreement to sell the Company to ESB.   The sale is subject to a number
of conditions including RoI and UK competition clearance and new
financing arrangements being put in place in respect of the remaining
Viridian group businesses.  Subject to fulfilment of the conditions, the
transaction is expected to complete by the end of 2010.