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NORTHERN IRELAND ELECTRICITY LIMITED - Annual Financial Report

Friday, March 22, 2013 7:33 AM


Northern Ireland Electricity Limited's Report and Accounts for the 9 months ended
31 December 2012 have been submitted to the National Storage Mechanism and will shortly
be available for inspection at: www.Hemscott.com/nsm.do and are available on Northern
Ireland Electricity Limited's website at:

www.nie.co.uk/About-NIE/financial-information

Contact for enquiries:

NIE Corporate Communications - telephone 0845 300 3556

The full report and accounts follow:-

DIRECTORS' REPORT

The directors of Northern Ireland Electricity Limited (NIE or the Company)
present their report and the Group accounts for the nine month period ended 31
December 2012.  The accounts consolidate the results of NIE and its subsidiary
undertakings (the Group).  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.

The ultimate parent undertaking of the Company is Electricity Supply Board (ESB), a statutory corporation established under the Electricity (Supply) Act 1927 domiciled in the Republic of Ireland.

The Company has changed its accounting reference date from 31 March to 31 December. The accounts presented are for the nine month period to 31 December 2012 with the comparative period reported being the year to 31 March 2012.

Results and Dividends

The results for the nine month period ended 31 December 2012 show a profit
after tax of £44.6m (year ended 31 March 2012 - £58.8m).  The Company did not
pay any dividends during the period (31 March 2012 - £nil).  A financial review
is set out below.
Background Information
The Group's principal activity is the transmission and distribution of
electricity in Northern Ireland through NIE Transmission and Distribution (T&
D).  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
c846,000 consumers via a number of substations.  There are 2,200km (circuit
length) of the transmission system, 43,500km of the distribution system and
approximately 250 major substations.  NIE's transmission system is connected to
that of the Republic of Ireland (RoI) through 275kV and 110kV interconnectors
and to that in Scotland via the Moyle Interconnector.
The Group derives its revenue principally through charges for use of the
distribution system and Public Service Obligation (PSO) charges levied on
electricity suppliers and charges for transmission services (mainly for use of
the transmission system) levied on the electricity transmission system operator
in Northern Ireland (SONI).
The Company is regulated by the Northern Ireland Authority for Utility
Regulation (the Utility Regulator) and the Department of Enterprise Trade and
Investment (DETI).  Each is given specific powers, duties and functions under
relevant legislation.  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.

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 the Utility Regulator and DETI under relevant
legislation.  These include having regard for the need to ensure that NIE is
able to finance its authorised activities.

Business Overview

Key achievements during the period included:

- Continued strong focus on managing health and safety;

- Continued investment in Northern Ireland's electricity infrastructure to:

replace worn assets; service increased customer demand; facilitate connection

of renewable generation and maintain safety and security of supply;

- Successful implementation of new billing and market IT systems that have

facilitated full retail competition in the Northern Ireland electricity market

for consumers wishing to change electricity supplier and have allowed

harmonisation of market processes with the Republic of Ireland, thereby

creating the first harmonised retail market scheme between two jurisdictions in

Europe. The project was awarded 'IT Initiative of the Year' at the UK Annual

Utility Industry Achievement Awards in December 2012;

- Introduction of 100% chargeability for customer connections to the

distribution network, following a decision by the Utility Regulator to remove

subsidies in place since before privatisation;

- Financial results in line with expectations under the framework of the RP4

price control extension;

- Significant effort made by NIE to progress its fifth five-year price control

(RP5) review; and

- Significant contributions of approximately £140m per annum into the Northern

Ireland economy through employment and payments to local businesses and

   authorities.
Financial Review
Financial KPIs
The directors have determined that the Group's financial key performance
indicators (KPIs) are Group pro-forma operating profit and pro-forma Funds From
Operations (FFO) interest cover.
As explained above, T&D is subject to a price control which limits the revenue
it may earn and the prices it may charge.  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 results reported in the accounts for the nine month period ended 31
December 2012 include an over-recovery of £20.4m, compared to an over-recovery
of £14.4m during the year ended 31 March 2012.  The over-recovery during the
period ended 31 December 2012 is largely attributed to timing differences
between the period for which the accounts are prepared and the period for which
revenues are recovered in accordance with tariffs set by the Utility Regulator.
The directors consider that pro-forma revenue and operating profits (based on
regulated entitlement as allowed by T&D's price control) as shown in note 3 to
the accounts, give a more meaningful measure of performance than revenue and
operating profits reported in the Group Income Statement.

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

                                                 9 months to          Year to
                                                 31 December         31 March
                                                        2012             2012
                                                          £m               £m
Group operating profit                                  85.1            107.0

(Deduct) / Add back regulatory correction factor (20.4) (14.4)

                                                        ----             

----

Group pro-forma operating profit                        64.7             

92.6

The Group's pro-forma operating profit was £64.7m compared to £92.6m for the
year to 31 March 2012 mainly reflecting a nine month period compared to a
twelve month period.  On an annualised basis, pro-forma operating profit has
reduced largely due to higher depreciation charges.  Pro-forma operating profit
excludes £3.6m in respect of revenue allowances that are currently awaiting
regulatory approval.  It is expected that these allowances will be recovered
during 2013.
Pro-forma FFO interest cover is calculated as pro-forma funds from operations
divided by net interest charged to the income statement.  Pro-forma FFO
interest cover decreased from 3.8 times to 3.5 times primarily due to higher
interest payable on borrowings.
A summary of the financial results for the period on a statutory basis is shown
below.
                                                 9 months to         Year to
                                                 31 December        31 March
                                                        2012            2012
                                                          £m              £m
Revenue                                                201.9           253.3
Operating profit                                        85.1           107.0
Net debt                                               551.5           547.9
Net assets                                             202.8           192.5
                                                         

Income Statement - Revenue of £201.9m (31 March 2012 - £253.3m) largely comprises revenue in

respect of use of the transmission and distribution systems and PSO levies. On

an annualised basis, revenue has increased compared to the prior year largely

due to an increase in tariffs.

- Operating costs for the nine month period were £116.8m compared to prior

year operating costs of £146.3m. Operating costs are higher on an annualised

basis compared to the prior year due to higher depreciation and amortisation

reflecting the ongoing capital expenditure programme.

- Operating profit for the nine month period was £85.1m compared to £107.0m in

the prior year. On an annualised basis operating profit was higher than the

prior year due to higher regulatory over-recovery in the period to 31 December

2012.

- Net finance costs of £31.0m for the nine month period largely comprised £

28.2m (year ended 31 March 2012 - £33.2m) in respect of bond interest charges

and pension scheme interest of £3.3m (year ended 31 March 2012 - £1.3m). On an

annualised basis finance costs are higher than the prior year as a result of

the effect of a full year of interest charges on the £400m bond issued in June

2011 and higher net pension scheme interest.

- Tax charge for the period was £9.5m (year ended 31 March 2012 - £13.8m) and

is net of a deferred tax credit in the period of £2.4m reflecting a reduction

   in the deferred tax rate.
-  Profit after tax for the period was £44.6m (year ended 31 March 2012 -
   £58.8m) and broadly in line with the prior year on an annualised basis.

Balance Sheet

- Non-current assets at 31 December 2012 were £1,664.3m (31 March 2012 -

£1,611.9m). The increase reflects capital expenditure during the period and an

increase of £20.1m in the mark-to-market value of RPI interest rate swaps.

- Current assets have increased by £12.6m to £107.6m largely reflecting higher

trade and other receivables offset by lower cash balances.

- Current liabilities of £137.3m (31 March 2012 - £137.1m) mainly reflect

higher tax payable offset by lower interest payable on borrowings and lower

trade and other payables due to timing of payments.

- Non-current liabilities at 31 December 2012 were £1,431.8m (31 March 2012 -

£1,377.3m). The increase largely reflects an increase of £20.1m in the

mark-to-market value of RPI interest rate swap liabilities and an increase of £

34.4m in the IAS 19 pension liability. The pension liability in the Group's

defined benefit scheme increased to £140.2m (31 March 2012 - £105.8m) primarily

reflecting a decrease in the discount rate (resulting from lower bond yields)

used to discount scheme liabilities and experience losses on liabilities offset

by a decrease in the inflation assumption applicable to future pension

payments.

Cash flow

- Net cash flows from operating activities of £74.3m (31 March 2012 - £144.2m)

offset by cash out flows in respect of investing activities of £87.1m (31 March

2012 - £130.1m) resulted in a net decrease in cash and cash equivalents during

the period of £12.8m. Cash flows from operating activities decreased mainly as

a result of higher interest paid and higher working capital at the period end.

On an annualised basis, cash flows from investing activities reduced from the prior

period due to the implementation of the new billing system in May 2012.

- There were no cash flows from financing activities during the period (year

ended 31 March 2012 - £36.7m).

Financial Risk Management
The main financial risks faced by the Group relate to liquidity, funding,
investment and financial risk, including interest rate and counterparty credit
risk.  The Group's objective is to manage financial risks at optimum cost.  The
Group employs a continuous forecasting and monitoring process to manage risk.
Capital management and liquidity risk
The Group is financed through a combination of equity and debt finance.
Details in respect of the Group's equity are shown in the Statement of Changes
in Equity and in note 22 to the accounts.  The Group's debt finance at 31
December 2012 comprised bonds of £173.9m and £397.9m (net of issue costs) which
are due to mature in September 2018 and June 2026 respectively.
The Group issued a 15 year £400m bond in June 2011 which is repayable in 2026
and carries a fixed rate of interest of 6.375%.  The bond issue enabled NIE to
replace its short term variable rate intercompany debt with long term fixed
rate debt, better aligned to the investment profile of its asset base whilst
also providing NIE with adequate funding facilities to meet its projected
requirements until 2014.  The Company has maintained an investment grade credit
rating from Standard & Poor's and Fitch during the period.

The Group's liquidity risk is managed through the preparation of cash flow forecasts. The Group's policy is to have sufficient funds and intercompany loan facilities in place to meet capital expenditure funding requirements for the next 12 - 18 months. The Group has committed undrawn intercompany loan facilities in place of £60m.

The Company's policy in relation to equity 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 FFO interest cover is a
KPI.
The Company's licence contains various financial conditions which relate
principally 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.  The Company is in compliance with these conditions.
Interest rate risk
The £175m and £400m bonds are denominated in sterling and carry fixed interest
rates of 6.875% and 6.375% respectively and therefore the Group is not exposed
to changes in interest rates.
As previously reported, at the time of the acquisition of the Company by ESB
from Viridian Group Limited (Viridian) in December 2010, a £550m portfolio of
RPI interest rate swaps, previously held by a Viridian group company, were
novated to the Company.  Under the terms of the swaps the Company pays an
average fixed rate of interest of 2.38% indexed by RPI and receives a variable
rate of interest based on LIBOR.  The swaps have maturity dates between 2026
and 2036 (average maturity 2031) and have a mandatory break date on 22 December
2015.  On 1 April 2011, the Company entered into RPI interest rate swap
arrangements which have identical matching terms to the swaps novated to the
Company in December 2010 and therefore hedge the Company's exposure in respect
of these swaps.

The estimated fair values of the Group's derivative financial instruments are disclosed in note 16 to the accounts.

Credit risk
The Group's principal financial assets are cash and cash equivalents, trade and
other receivables (excluding prepayments and accrued income) and other
financial assets as outlined in the table below:
                                                          9 months to   Year to
                                                          31 December  31 March
                                                                 2012      2012
                                                                   £m        £m
Cash and cash equivalents                                        38.6      51.4
Trade and other receivables (excluding prepayments and
 accrued income)                                                 46.0     

30.2

Other financial assets - current and non-current                408.9     384.0
                                                                 ----      ----
                                                                493.5     465.6
The Group's credit risk in respect of trade receivables from licensed
electricity suppliers is mitigated by appropriate policies with 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 received in advance of the work being carried
out.  Payments received on account are disclosed in note 14 to the accounts.
Other financial assets comprise RPI interest rate swap arrangements entered
into with ESBNI Limited (ESBNI), an ESB group company.  The counterparty risk
from ESBNI is not considered significant given ESB's investment in the Company
and ESB's strong investment grade credit rating.
The Group may be exposed to credit-related loss in the event of non-performance
by bank counterparties.  This risk is managed through conducting business only
with approved counterparties which meet the criteria outlined in the Group's
treasury policy.

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 Group's business activities, together with the principal risks and
uncertainties likely to affect its future performance, are described in this
Directors' Report.  As noted in the section on capital management and liquidity
risk, the Group is financed through a combination of equity and debt finance.
On the basis of their assessment of the Group's financial position, which
included a review of the Group's projected funding requirements for a period of
12 months, from the date of approval of the accounts, the directors have a reasonable
expectation that the Group will have adequate financial resources for the 12 month
period and accordingly continue to adopt the going concern basis in preparing the
report and accounts.
Operational Review
Operational KPIs
The directors have determined that the following KPIs are the most effective
measures of progress towards achieving the Group's operational objectives:

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

Regulator, 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 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 for the period through

   distribution fault interruptions, excluding the effect of major storms (CML).
KPIs                                                  9 months to      Year to
                                                      31 December     31 March
                                                             2012         2012
                                                           Number       Number
CML                                                            36           53
Overall standards - defaults                                 None         None
Guaranteed standards - defaults                              None         

None

Stage 2 complaints to the Consumer Council                      1          

2

The number of CML for the nine month period to 31 December 2012 was 36 minutes
(year ended 31 March 2012 - 53 minutes).  CML for the period reflects seasonal
factors and abnormally favourable weather conditions.

A key priority for NIE is to consistently provide the highest standards in customer service and network performance. During the period all the overall standards were achieved and there were no defaults against the guaranteed standards (year ended 31 March 2012 - none).

The Company's continued 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. There was one Stage 2 Complaint in the period (year ended 31 March 2012 - two complaints).

NIE continues to improve incrementally its emergency response capabilities during severe weather events in order to effectively restore supply to all consumers. The significant commitment of its frontline staff helps to ensure that NIE effectively manages this very important aspect of its business.

RP5 Price Control
NIE's fifth five-year price control period (RP5) was due to commence on 1 April
2012.  The Utility Regulator initially announced during 2011 that the
implementation of RP5 would be deferred to 1 October 2012.  In August 2012, the
Utility Regulator notified NIE that the commencement date of RP5 would be
further deferred to 1 January 2013.
In April 2012, the Utility Regulator published its draft determination for RP5
for consultation.  The Utility Regulator's final determination was published in
October 2012 and NIE responded on 20 November 2012, advising the Utility
Regulator that regrettably it was unable to accept the Utility Regulator's
proposed terms for the RP5 price control.  Copies of NIE's responses to the
draft and final determinations are available on the NIE website.

The overall effect of the final determination proposals would be:

- insufficient revenue to enable NIE to provide T&D services during RP5 and

beyond to the standard required by its statutory and licence obligations and to

satisfy the reasonable demands of customers in terms of safety, security and

quality of service;

- a materially lower level of funding relative to the GB Distribution Network

Operators which would render NIE unattractive to investors and would not allow

   the Company to finance its business efficiently; and
-  a departure from the well-established UK system of incentive-based
   regulation for network utilities towards a system of regulation by

micro-management and ex-post adjustments that will be detrimental to customers'

interests.

The Utility Regulator has decided that the matter will be referred to the
Competition Commission and has indicated that it intends making the formal
reference in late April at the earliest.  NIE is anxious to have this important
matter resolved as soon as possible and has expressed its concern to the
Utility Regulator that late April would be some four months after the expiry of
the second extension to the RP4 price control and more than five months after
NIE formally rejected the final determination.

Investment

During the period ended 31 December 2012 NIE has continued to invest in its
infrastructure to replace worn network assets, to accommodate increasing load
and new consumer connections and to meet requirements in respect of the
connection of renewable generation.  In addition, a new billing and market IT
system, to facilitate full retail competition in the Northern Ireland
electricity market, was successfully implemented in May 2012.
In its business plan submission to the Utility Regulator for RP5, NIE proposed
that the level of investment would need to increase significantly, with the
focus of investment driven by: the need to replace worn network assets
installed as part of significant network development during the 1950s and
1960s; an increasing need for large transmission related projects; and meeting
the requirements of new legislation.  As outlined above, the allowances
proposed by the Utility Regulator fall substantially short of the amounts
required to enable NIE to meet its statutory and licence obligations and to
carry out the necessary programme of work for RP5 to deliver the level of
service customers expect.

NIE's strategy is to continue to grow and maintain a secure and sustainable electricity network to meet the demands of Northern Ireland's electricity market, including the connection of renewable generation to support the Northern Ireland Assembly in reaching its targets in respect of electricity consumption from renewable sources.

In order to further strengthen the interconnection of the electricity networks
of Northern Ireland and the Republic of Ireland, NIE continued to work jointly
with EirGrid on the development of the 400 kV Tyrone-Cavan interconnector.  A
public inquiry by the Planning Appeals Commission in respect of NIE's planning
application commenced in March 2012.  The public inquiry has been adjourned
following a request from the Planning Appeals Commission for the planning
application to be re-advertised and for relevant environmental statements to be
modified.  No date has been set for re-commencement of the public inquiry.
EU Legislation
NIE's application for certification of transmission arrangements between NIE
and SONI under Article 9(9) of Directive 2009/72/EC (the IME3 Directive) is
subject to approval by the Single Electricity Market Committee and verification
by the European Commission.  NIE expects the certification process to be
completed over the next few months.

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.

A number of initiatives were undertaken during the period to support the Company's principal CSR themes and priorities, as described below.

People

Health and safety
Ensuring the safety of employees, contractors and the general public is a key
priority for the Company.  This is achieved by the promotion of a positive
health and safety culture and adherence to legislation and recognised safety
standards.  The Company health and safety management system is based on best
practice guidance from the Health and Safety Executive for Northern Ireland
(HSENI).  Formal processes for incident investigation and analysis are in
place.
The Company engages with the Energy Networks Association, other utilities and
relevant statutory organisations to review and improve its safety performance
and learning.
The benefit of staff reporting near miss incidents is key to improving safety
performance.  Employees are encouraged to report near miss incidents and there
has been a steady increase in reporting during the nine month period.  This
information enables weaknesses in operational procedures to be identified and
addressed.
The target for lost time and reportable incidents continues to be set at zero.
Including NIE Powerteam, a fellow subsidiary undertaking of ESB providing
electrical infrastructure construction and refurbishment and other managed
services exclusively to the Company, there were two lost time incidents during
the period (year ended 31 March 2012 - two) and four incidents reported under
HSENI's reporting regulations (year ended 31 March 2012 - nine).
The ongoing programme of safety training continued throughout the period with
appropriate staff attending a wide range of courses including NIE Safety Rules,
Construction Design and Management Regulations workshops, Managing Safely
course by the Institution of Occupational Safety and Health and tree cutting
safety workshops.

The focus on managing occupational road risk and reducing road traffic collisions continued through education and the promotion of safe road use and driving techniques.

The site safety inspection programme continued to be strengthened with over 200
trained staff, comprising members of the Executive Committee, managers, and
engineers at all levels, in addition to the three full time safety assurance
engineers, conducting over 2,000 audits throughout the period.
Instructions and guidance to support NIE's Safety Rules Handbook were revised
and communicated to operational staff regularly.  There are comprehensive
contractor management arrangements in place to ensure that contractors adhere
to the same safety rules and requirements as employees.

Employment

Including NIE Powerteam, the number of employees remained stable during the period. As at 31 December 2012 the Company had 296 employees (31 March 2012 - 281) and NIE Powerteam had 978 employees (31 March 2012 - 1,000).

Employees are the most important asset in the business.  NIE aims to attract,
develop and retain highly skilled people through graduate schemes,
apprenticeships and other trainee and sponsorship programmes.  A number of
outreach initiatives, including attending careers fairs in schools, colleges
and universities, were undertaken throughout the period to attract high calibre
engineering graduates. Ten apprentices and three electrical engineering
graduates were recruited during the period.
The Company is committed to a working environment 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.  Human Resources policies are aligned with key business drivers
including: performance and productivity improvement; clearly defined values and
behaviours; a robust performance management process; and a strong commitment to
employee development.
The focus on succession management and leadership development continued with
over 200 management and technical leadership roles involved from senior
executive to first line managers.  The development programme during the period
included role changes, role enhancement, skills development, formal
qualifications, team development initiatives, external coaching and internal
mentoring.

To ensure a highly skilled, multi-disciplined workforce, a multi-skilled approach has been taken to vocational training schemes. The Education and Training Inspectorate has assessed as "Outstanding" the quality of training provided by NIE's apprenticeship training programme.

The Company believes that the pro-active management of absenteeism is to the
mutual benefit of NIE and its employees.  An employee health and well-being
policy covering stress management is in place with specific policies on mental
health, alcohol and drug-related problems and non-smoking.  External
occupational health and counselling services are available for employees.
During the period flu vaccinations were offered to all employees with 30%
availing of the service. Including NIE Powerteam, sickness absence during the
period was 2.80% (year ended 31 March 2012 - 2.22%).  This remains below the UK
national average of 3.0%.

New procedures and training for safeguarding children, young persons and vulnerable adults were implemented during the period.

Significant emphasis is placed on employee participation and communications. There is a formal induction programme for all new starts including meeting with senior management. There are monthly employee briefings and interaction, consultation and negotiation with trade unions. Including NIE Powerteam, approximately 68% of employees are union members. Employee relations are positive and constructive.

In late 2012 an employee engagement survey was conducted in partnership with
People Insight, with the aim of gauging how engaged employees are with the
Company.  Participation in the survey was encouraging with 78% of employees
(999) responding and the overall engagement score, also at 78%, was positive.
The results of the survey have been presented to employees and a programme
developed for 2013 for each business unit to consider its specific results and
develop plans to address the areas for improvement highlighted in the survey.
 As over 70% of employees participated in the survey the Company donated £2 per
participant to Brainwaves NI, an employee nominated charity providing support
and information to brain tumour sufferers, their families and carers.
The Company is accredited by the UK Commission for Employment and Skills with
the new Investors in People (IIP) Standard, which tests ongoing investment in
people to improve business performance.
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.  As set out in the Company's Equal Opportunities
Policy, NIE is committed to providing equality of opportunity for all employees
and job applicants.  There is ongoing monitoring of actions taken to promote
compliance with legislation and to ensure that NIE provides equality of
opportunity in all its employment practices.
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.

Sustainability

Policy and Objectives
The Company's environmental policy commits 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 waste and recycling, measures to protect
against oil pollution and the promotion of energy efficiency.  The Company has
a full-time environmental compliance officer and designated auditors in its
relevant operations.
During the period the Company's environmental management system retained its
certificate to ISO 14001:2004 standard. In the 2012 environmental management
survey conducted by ARENA Network in Northern Ireland, the Company achieved a
first quintile position significantly out-performing both the Northern Ireland
average and the utilities sector average.
Waste Management
There has been continued focus on waste management targets.  The recycling rate
for all hazardous and non-hazardous waste (excluding excavation waste from road
carriageways and footpaths) increased to 95% for the nine month period (year
ended 31 March 2012 - 89%).
Future Networks
In addition to the 45 electric vehicle charge posts installed to date as part
of the Office for Low Emission Vehicles "Plugged in Places Infrastructure
Framework", NIE will be installing up to a further 130 charge posts throughout
Northern Ireland providing total coverage for electric vehicle travel across
Northern Ireland.
Research & Development
The "Shift & Save" Smart grid trial was launched in January 2012.  The trial,
involving 200 homes, investigates how Smart meters and Smart grid technology
could change homeowners' energy usage patterns, particularly at times of peak
demand in the early evening, to reduce and flatten demands on the network.
 Smart meters have been installed in participants' homes and Smart monitoring
equipment installed at the substations supplying these homes.  The trial will
continue until June 2014.

Sponsorship

During the period financial sponsorship was provided to:

- Royal Society for the Protection of Birds to support its programme to

reintroduce to Northern Ireland the Red Kite Raptor, an indigenous bird of

prey, by providing tagging and electronic tracking equipment for each new

fledgling; and

- Conservation Volunteers Northern Ireland, to deliver a range of projects in

conjunction with primary schools to establish wooded and other natural habitats

to improve local biodiversity.

Community

NIE's operations across Northern Ireland affect every business and household.
Through its mainstream business activities and various specific initiatives the
Company seeks to make a positive impact on the communities in which it
operates, as outlined below.

Policies

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 including ethical dealing, 'whistleblowing' and anti bribery
and corruption 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 which acts as an aid 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'
ethical practices through pre-tender questionnaires.
Customer care
The Company provides a critical care information service to c4,000 consumers
who are dependent on life-supporting electrical equipment.  In the event of
consumers being without electricity for an extended period of time due to
severe weather there are arrangements in place with local councils to open
community reception centres providing warmth, food and access to voluntary
services.

From January 2013, consumers can report a power cut and receive up to date fault information online as well as over the phone. Consumers can also contact NIE via Twitter @NIElectricity.

During the period NIE, Northern Ireland Water, BT and Phoenix Natural Gas have
worked together to identify ways to provide mutual support during periods of
severe weather or other unforeseen situations.  The group also published a
Winter Preparation Contact List for consumers.

With employees, such as meter readers, working daily in the community, NIE supported the Police Service of Northern Ireland's (PSNI) Quick Check scheme to encourage homeowners to check the identification of callers.

Safety advice
NIE aims to continually heighten the awareness of the general public to the
dangers of electricity and the risks of coming into contact with the
electricity network.  All operational employees have been trained on the best
approach to providing safety advice.
Over 4,000 farmers and contractors received safety advice during the period.
The focus on farm safety continued during the period with NIE involvement in
farm safety events and the issue of 'Farm Risk Assessment' and other safety
material to farmers through the Ulster Farmers Union.  NIE assisted HSENI in
issuing safety advice for contractors working near the low voltage network.

Together with other organisations, NIE assisted the PSNI to develop a Risk Avoidance and Danger Awareness Resource (RADAR), a dedicated safety training facility for children and young people to become operational in 2013.

Over 8,500 children attended NIE's ongoing 'Kidzsafe' programme, to raise safety awareness among primary school children in an effort to reduce incidences of vandalism and electricity-related injuries.

In conjunction with other utilities and Crimestoppers NIE has developed and launched a campaign to raise awareness of the safety risks associated with metal theft crime.

The Company's website www.nie.co.uk/Safety offers key safety advice on a wide range of activities.

Work Experience
NIE provides valuable work experience opportunities to GCSE and A-Level
pupils.  During the summer, NIE provided four weeks of work experience for two
A-Level students via the Nuffield Bursary scholarship.  During the period NIE
agreed to participate in a pilot Youth Employment Scheme launched by the
Department of Employment and Learning.  Under the scheme NIE will provide
voluntary work placements of between two and eight weeks to four young
unemployed people.
Educational outreach
NIE continues to focus on establishing close links with schools, colleges and
universities to promote careers in the electricity industry in the light of
skills shortages via a number of educational outreach initiatives.

During the period NIE has:

- co-ordinated careers and activity days with 10 schools across Northern

Ireland encouraging children to continue with science, technology, engineering

and maths (STEM) subjects at GCSE level;

- sponsored the First Lego League, a global robotics programme for children

providing a cross-curricular approach to teaching STEM subjects;

- continued to provide mentoring services to school children participating in

the Institute of Engineering and Technology (IET) SMART Energy project and Team

   R&D, a research and development project in conjunction with Sentinus, a
   government charity working with schools and colleges throughout Northern
   Ireland to deliver programmes promoting STEM learning;

- provided two further NIE Electrical Engineering scholarships in conjunction

with Queen's University Belfast;

- sponsored a further three Electrical and Electronic Engineering students

through their studies as part of the IET Power Academy Council that works

alongside seven UK universities to encourage students into power engineering;

and

- supported Queen's University, Belfast to acquire a DeLorean car for students

to convert to electric-powered and for use by both NIE and Queen's University

in educational outreach work.

Corporate Governance

The Company's licence requires it to establish, and at all times maintain, full
managerial and operational independence of the T&D business.  The Company's
Compliance Plan, which is under review following the acquisition of the Company
by ESB, sets out the practices, procedures, systems and rules of conduct to
ensure compliance with this licence condition.

NIE Board and Committees

The Board comprises two executive directors and three independent non-executive
directors in line with the Company's licence requirement that the Board
comprises a majority of independent non-executive directors.  Stephen Kingon,
CBE, chairs the Board.  Rotha Johnston, CBE, and Ronnie Mercer are the Board's
other independent non-executive directors.  Joe O'Mahony, Managing Director NIE
and Peter Ewing, Deputy Managing Director and Director of Regulation are the
executive directors.  There were no changes to the composition of the Board
during the period.  The Board meets quarterly and also meets on other occasions
as necessary: it met five times during the nine month period to 31 December
2012 with all members attending each meeting.
The Board has overall responsibility for the long term success and management
of the Company.  The Board has delegated authority to the Executive Committee
of the Board, within pre-defined authority limits, to undertake much of the
day-to-day business and management and operation of NIE.  It meets monthly and
on other occasions as necessary and reports on its activities to each Board
meeting.

There is a formal schedule of matters specifically reserved to the Board including:

-  approval of the annual financial plan;
-  approval of annual statutory, interim and regulatory accounts;
-  approval of major capital expenditure;
-  approval of major regulatory submissions and certain annual regulatory reports;
-  approval of key corporate policies;
-  approval of the annual Health & Safety Plan;
-  review of financial and operational performance; and
-  review of internal control and risk management.
The Audit Committee of the Board oversees the financial reporting process and
internal control and risk management systems.  Further details are provided
on
page 16.
Board Members
STEPHEN KINGON CBE was appointed independent non-executive Chairman of the
Board in March 2011.  He is Chairman of the NI Centre for Competitiveness,
Balcas Group and Lagan Group (Holdings) Limited.  He is Honarary Treasurer at Queen's
University Belfast, a member of Belfast Harbour Commissioners and a non-executive
director of a number of companies.  He was formerly Chairman of Invest Northern Ireland
and Managing Partner of PricewaterhouseCoopers in NI.
ROTHA JOHNSTON CBE was appointed as an independent non-executive director in
March 2011.  She is Pro-Chancellor of Queen's University Belfast and National
Trustee for Northern Ireland for the BBC Trust.  She is a non-executive
director of Allied Irish Bank (UK) Limited, a member of Belfast Harbour
Commissioners and an independent board member at the Department of Justice for
Northern Ireland.  Ms Johnston chairs the Audit Committee.
RONNIE MERCER was appointed as an independent non-executive director in March
2011.  He has been Chairman of Scottish Water since 2006 and is also Chairman
of Business Stream.  He has extensive relevant experience and knowledge of the
energy sector as he formerly held senior executive positions at Scottish Power
including Group Director, Infrastructure and Executive Vice President,
Operations of the PacifiCorp subsidiary.
JOE O'MAHONY joined the Board in March 2011.  He was appointed Managing
Director in July 2011.  He has held a number of senior executive positions in
ESB including Head of Wind Development and Head of Network Projects. Prior to
this he held senior roles in ESB Human Resources, Commercial Management and
with ESB International. He is a non-executive director of the National Roads
Authority of Ireland.

PETER EWING was appointed NIE's Deputy Managing Director and Director of Regulation in December 2010 on ESB's acquisition of the Company and joined the Board in July 2011. He joined NIE in 1998 as Director of Finance and was appointed General Manager Viridian Group Finance in 2003. In 2007 he was appointed to the Viridian Group Board as Group Finance Director. He was formerly Finance Director of Moy Park Limited and Associate Director of IBI Corporate Finance.

Executive Committee Members

The Executive Committee is chaired by the Managing Director.  Its other members
are the Deputy Managing Director and Director of Regulation, Asset Management
Director, Construction Director, Operations Director, Finance Director, and HR
Director.

ROBERT WASSON was appointed as Asset Management Director in January 2012 following joining NIE in January 2011. Previously he has led KPMG's organisational restructuring and performance improvement practice and Watershed, a consulting and interim management company, both based in the RoI. Prior to that he held various technical and managerial roles in ESB's Transmission and Distribution function and with ESB International.

CON FEENEY was appointed as Construction Director in January 2012.  Prior to that
he was Director of Operations.  He joined NIE in 1996 as a graduate engineer and
has progressed through various management roles in Lines and Cables, Customer
Operations and Plant and Technical.

ROGER HENDERSON was appointed Operations Director in January 2012. He joined NIE as a graduate engineer in 1991 and has progressed through various management roles in Power Networks, Major Projects and Plant and Technical.

MARY COLLINS was appointed Finance Director of NIE and a member of the
Executive Committee in January 2011.  She has held a number of senior
commercial and financial positions throughout the ESB Group including Group
Financial Controller from 2004 - 2009.  Prior to joining NIE she managed ESB's
Corporate Performance Improvement Project.  A fellow of the Institute of
Chartered Accountants, Mary qualified with KPMG and worked in their Irish, US
and UK practices.
GORDON PARKES was appointed as NIE's HR Director and member of the Executive
Committee in January 2011.  He joined NIE Powerteam as HR Director in 2000 and
was also appointed HR Director of NIE in 2002.  From 2004 to 2010 he was
General Manager Group HR for the Viridian Group.  Previously he held HR
director roles in the textiles, pharmaceutical and manufacturing sectors.

Audit Committee

The Audit Committee is a formally constituted committee of the Board with responsibility for overseeing the financial reporting process and internal control and risk management systems of NIE.

The Audit Committee comprises the three independent non-executive directors and
is chaired by Rotha Johnston.  The Board is satisfied that at least one member
of the Committee has recent and relevant financial experience.  The Committee
had three meetings during the period with all members attending each meeting.

During the period the Committee reviewed:

- NIE's risk management framework, key risks facing NIE, key risks facing each

   business unit and mitigating actions being taken;
-  NIE's process-driven approach to business continuity arrangements
-  the annual internal audit plan, with updates on audit reports and issues
   arising being considered at each meeting;
-  the effectiveness of internal controls and the risk management system;
-  terms of engagement of internal auditors;

- NIE's interim, annual and regulatory accounts and NIE Finance PLC's annual

accounts, considering the appropriateness of accounting policies, whether the

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

assumption and reviewing the significant issues and judgements;

- reports from the external auditor on its audit of the annual and regulatory

accounts, recommendations made by the auditor and management's response and its

   review of NIE's interim report and accounts;
-  a report on the effectiveness and independence of the external auditors;
-  various regulatory submissions; and
-  an assessment of the adequacy of Anti Bribery and Corruption procedures.

The Committee makes recommendations to the Board on the appointment of the external auditors and their remuneration and determines their terms of engagement.

There is a policy in place regarding the provision of non-audit services by the
external auditor, whereby, other than as specifically approved by the
Committee, such services should be limited to advice in relation to accounting,
taxation and compliance issues.
The internal and external auditors have full access to the Audit Committee.

During the period the Committee met separately with each of the internal and external auditors without management present.

Internal Control Framework

The directors acknowledge that they have responsibility for the Group'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 Group.  Strong financial and
business controls are necessary to ensure the integrity and reliability of
financial information on which the Group relies for day-to-day operations,
external reporting and for longer term planning.
The Group has in place a strong internal control framework which includes:

- a clearly defined organisational structure with defined authority limits and

   reporting mechanisms;
-  a risk management framework including the maintenance of risk registers;
-  a comprehensive set of policies and procedures relating to financial and
   operational controls;
-  appropriately qualified and experienced personnel;
-  comprehensive budgeting and business planning processes with an annual
   budget approved by the Board; and

- an integrated accounting system with a comprehensive system of management

and financial reporting. Cumulative monthly actual results are reported

against budget and considered by the Executive Committee and the Board on a

monthly basis. Any significant changes and adverse variances are questioned

and remedial action taken where appropriate.

Key managers formally evaluate, and the internal auditors test, the satisfactory and effective operation of financial and operational controls. The external auditors provide advice on specific accounting and tax issues.

The Audit Committee's role in respect of internal controls and financial reporting is described in the Audit Committee section above.

Risk Management Framework and Principal Risks and Uncertainties

Risk is an active element of the environment within which NIE operates. NIE is
committed to successfully managing exposure to risk and to minimising the
impact of risk on the achievement of business objectives.  The risk management
framework is maintained and updated by NIE's Risk Management Committee,
overseen by the Executive Committee and Audit Committee and implemented by
management.
NIE's Risk Management Committee, comprising a number of senior managers and
chaired by the Finance Director, oversees and directs risk policy and practice
and considers risk assessments carried out by each business unit.  Risks are
ranked by probability and potential consequences.  The nature of each risk
determines how the exposure is managed.  Details of key risks are maintained
and updated in the NIE Risk Register.  The Committee's findings are reported on
a regular basis to the Executive Committee, Audit Committee and Board.

The internal audit function is independent of the risk management process and, following a specific assignment during the period, has provided independent assurance on the adequacy and effectiveness of NIE's risk management arrangements.

NIE's risk management framework comprises:

- appropriate structures in place to support risk management;

- formal assignment of risk responsibilities to facilitate managing and

reporting on individual risks and to ensure specific risks are understood;

- procedures and systems for risk identification, assessment and reporting;

   and
-  ongoing monitoring of the effectiveness of risk mitigation actions and
   controls.
The principal risks and uncertainties that affect the Group, as identified by
the Risk Management Committee, along with the main mitigating strategies
deployed are outlined below.
Risk        Risk Description              Mitigating Strategies
Category
HEALTH AND SAFETY RISKS
Failure to  Exposure of employees,        A comprehensive annual Health, Safety and
manage      contractors and the general   Risk Plan approved by the NIE Board
Health and  public to risk of injury and  setting out detailed targets for the
Safety      the associated potential      management of health and safety.
obligations liability and/or loss of
            reputation for NIE.           Comprehensive safety rules, policies,
                                          procedures and guidance which are
                                          reviewed and communicated regularly.
                                          A strong focus on the inspection of work
                                          sites and the reporting, reviewing and
                                          communication of near miss incidents.
                                          Ongoing programmes to increase public
                                          awareness of the risks and dangers.
REGULATORY RISKS
Price       Unsatisfactory outcome from   NIE manages regulatory risks through the
Controls    price control reviews.        Director of Regulation, the Regulatory
                                          Affairs team and relevant senior managers
                                          across the organisation.  Regulatory
                                          submissions are evidence based to support
                                          NIE's position and ensure adequate
                                          returns.
                                                                                    
Licence     Fail to comply with           The Compliance Manager within the
compliance  regulatory licence            Regulatory affairs team co-ordinates and
            obligations.                  monitors compliance with all regulatory
                                          licence obligations and reporting to the
                                          Utility Regulator on financial and other
                                          regulatory matters.
FINANCIAL RISKS
                                                                                   
Funding and Exposure to financial         NIE's credit risk in respect of
Liquidity   counterparty risk.            receivables from licensed electricity
                                          suppliers is mitigated by appropriate
                                          policies with security received in the
                                          form of cash deposits, letters of credit
                                          or parent company guarantees.
            Inadequate funding            NIE employs a continuous forecasting and
                                          monitoring process to manage risk of
                                          inadequate funding.
                                          NIE's detailed Treasury Policy and
                                          procedures are regularly reviewed,
                                          revised and approved by the Board as
                                          appropriate.
Pensions    Increase in the deficit in    "Focus" has been closed to new entrants
            the defined benefit section   since 1998.  Since then new

members have

            of the Northern Ireland       joined the money purchase section of the
            Electricity Pension Scheme    NIEPS ("Options").
            (NIEPS) ("Focus").
                                          The NIEPS trustees seek the advice of
                                          professional investment managers
                                          regarding the scheme's investments.
                                          A deficit repair plan has been
                                          implemented following the actuarial
                                          review as at 31 March 2011.
MARKET RISKS
                                                                                   

Consumer Fail to meet standards for Stretching consumer service standards are Service consumer service resulting approved by the NIE Board. Performance

            in damage to reputation.      against these standards is monitored and
                                          reported on a monthly basis.
OPERATIONAL RISKS
                                                                                   

Network Widespread and prolonged The risk is minimised through ongoing Reliability failure of the transmission assessment of the network condition and

            or distribution network.      development of asset management
                                          techniques to inform maintenance and
                                          replacement strategies and priorities.
                                          The network is strengthened through
                                          appropriate investment, a
                                          reliability-centred approach to
                                          maintenance and a systematic overhead
                                          line refurbishment and tree cutting
                                          programme.
Response to Failing to respond adequately System risk assessments are completed
Emergency   following damage to the       regularly and weather forecasts actively
Situations  electricity network from      monitored daily.
            adverse weather conditions.
                                          There is a comprehensive Emergency Plan
                                          and Storm Action plan in place, each
                                          reviewed and tested regularly with
                                          emergency simulations carried out at
                                          least annually.  Duty incident teams
                                          provide cover 365 days a year with
                                          arrangements in place for access to
                                          external utility resources if required.
                                                                                   

Business NIE could sustain a greater NIE maintains business continuity plans Continuity than necessary financial incorporating an IT disaster recovery and

            impact though inability to    relocation plans which are 

reviewed and

            carry on its operations,      tested annually.
            either for a short or
            prolonged period.             Comprehensive business continuity and
                                          disaster recovery plans are maintained
                                          for important outsourced ICT, business
                                          process and telecommunications services.
IT Security Loss of data through          NIE's IT Security Forum ensures the
and Data    malicious attack on IT        maintenance of adequate IT security
Protection  systems or employee           policies.  Robust ICT standards, policies
            negligence impacting on       and procedures for system access are in
            operational performance or    place and communicated across the
            reputation.                   organisation.
                                          NIE's Data Protection Forum implements
                                          and monitors compliance with data
                                          protection policy and procedures.
PEOPLE RISKS
Knowledge   Inadequate resources with     A strategy is in place to attract,
and skills  the necessary knowledge       recruit and develop highly skilled people
and         and skills.                   through graduate, apprenticeship, trainee
succession                                and sponsorship programmes to ensure that
management                                appropriate resources are in place to
                                          meet NIE's regulatory obligations.
            Failure to develop and        People development is a key priority for
            retain staff.                 the Company with continued investment in
                                          staff training, skills development and
                                          ongoing performance improvement.  Focused
                                          management development programmes are in
                                          place to maximise the potential of staff
                                          and ensure adequate succession planning.
                                                                                   

Charitable and Political Donations

The Company donated £7,500 to charity during the period (year ended 31 March 2012 - £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 December 2012 the Company had 45 days payments outstanding to
trade creditors.

Re-appointment of Auditors

In accordance with Section 487 of the Companies Act 2006, Ernst & Young LLP is deemed to be reappointed as external auditors of the Company.

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/she is obliged to take
as a director in order to make himself/herself 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 period.

Statement of Directors' Responsibilities

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

Company law requires the directors to prepare accounts for each financial period. Under company law the directors must not approve the accounts unless they are satisfied that they give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group and the Company for that period.

In preparing those accounts the directors are required to:

- present fairly the financial position, financial performance and cash flows

   of the Group and the Company;
-  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;
-  make judgements that are reasonable;
-  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 Group and the

Company's financial position and financial performance, 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 that are
sufficient to show and explain the Group's transactions and disclose with
reasonable accuracy at any time the financial position of the Group and the
Company and 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 as detailed on page 13 confirms that to the best of his/
her 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
Northern Ireland Electricity Limited
Registered Office
120 Malone Road
Belfast BT9 5HT
Registered Number: NI 26041
Date: 20 March 2013

INDEPENDENT AUDITOR'S REPORT
To the members of Northern Ireland Electricity Limited
We have audited the accounts of Northern Ireland Electricity Limited for the
nine month period ended 31 December 2012 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
26.  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 auditor's report and for no other purpose.  To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company's members as a body for our
audit work, for this report or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors' Responsibilities set out
on page 21, 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 and express an opinion on 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. In addition, we read
all the financial and non-financial information in the Report and Accounts to
identify any material inconsistencies with the audited accounts. If we become
aware of any apparent material misstatements or inconsistencies we consider
the
implications for our report.
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 December 2012 and of the Group's profit for the nine

month period 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 period 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.

Keith Jess (Senior Statutory Auditor)
For and on behalf of Ernst & Young LLP, Statutory Auditor
Belfast
Date: 20 March 2013

- The maintenance and integrity of the Northern Ireland Electricity Limited

web site is the responsibility of the Directors; the work carried out by the

auditors does not involve consideration of these matters and, accordingly, the

auditors accept no responsibility for any changes that may have occurred to the

financial statements since they were initially presented on the web site.

- Legislation in the United Kingdom governing the preparation and

dissemination of financial statements may differ from legislation in other

   jurisdictions.

GROUP INCOME STATEMENT
for the period ended 31 December 2012
                                                               9 months to   Year to
                                                               31 December  31 March
                                                           Note       2012      2012
                                                                        £m        £m
Revenue                                                     3        201.9     253.3
Operating costs                                             4      (116.8)   (146.3)
                                                                     -----     -----
OPERATING PROFIT                                                      85.1     107.0
                                                                     -----     -----
Finance revenue                                             6          0.2       0.3
Finance costs                                               6       (27.9)    (33.4)
Net pension scheme interest                                 6        (3.3)     (1.3)
                                                                     -----     -----
Net finance costs                                           6       (31.0)    (34.4)
                                                                     -----     -----
PROFIT BEFORE TAX                                                     54.1      72.6
Tax charge                                                  7        (9.5)    (13.8)
                                                                     -----     -----
PROFIT FOR THE PERIOD / YEAR ATTRIBUTABLE TO THE EQUITY
 HOLDERS OF THE PARENT COMPANY                                        44.6 
    58.8
                                                                     =====     =====
STATEMENTS OF COMPREHENSIVE INCOME
for the period ended 31 December 2012
                                                     Group              Company
                                              9 months     Year   9 months     Year
                                                 to 31    to 31      to 31    to 31
                                              December    March   December    March
                                         Note     2012     2012       2012     2012
                                                    £m       £m         £m       £m
                                                                                   
Profit for the financial period / year            44.6     58.8       44.6 

58.8

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

----

Other comprehensive (expense) / income:
Actuarial loss on pension scheme assets                                    
 and liabilities                           21   (43.1)   (78.0)     (43.1)   (78.0)
                                                                                   
Deferred tax credit relating to                                            

components of other comprehensive income 7 9.6 19.6 9.6

19.6

                                                  ----     ----       ----     ----
Net other comprehensive expense for the
 period / year                                  (33.5)   (58.4)     (33.5) 

(58.4)

                                                  ----     ----       ----     ----
Total comprehensive income for the
 period / year attributable to the equity
 holders of the parent company                    11.1      0.4       11.1 
    0.4
                                                  ====     ====       ====     ====
BALANCE SHEETS
as at 31 December 2012
                                                  Group                  Company
                                               31        31            31         31
                                         December      March     December      March
                                  Note       2012       2012         2012       2012
                                               £m         £m           £m         £m
Non-current assets                                                                  

Property, plant and equipment 9 1,226.5 1,186.4 1,226.5

 1,186.4
Intangible assets                  10        40.0       47.8         40.0       47.8
Derivative financial assets        16       397.8      377.7        397.8      377.7
Investments                        17           -          -          0.1          -
                                          -------    -------      -------    -------
                                          1,664.3    1,611.9      1,664.4    1,611.9
                                          -------    -------      -------    -------
Current assets
Inventories                        11         6.3        5.2          6.3        5.2
Trade and other receivables        12        51.6       32.1         51.6       32.1
Derivative financial assets        16        11.1        6.3         11.1        6.3
Cash and cash equivalents          13        38.6       51.4         38.5       51.4
                                          -------    -------      -------    -------
                                            107.6       95.0        107.5       95.0
                                          -------    -------      -------    -------
TOTAL ASSETS                              1,771.9    1,706.9      1,771.9    1,706.9
                                          -------    -------      -------    -------
Current liabilities
Trade and other payables           14        74.4       82.1         74.4       82.1
Current tax payable                          22.6       11.3         22.6       11.3
Deferred income                    15         9.1        8.8          9.1        8.8
Financial liabilities:
-  Derivative financial            16        11.1        6.3         11.1        6.3
   liabilities
-  Other financial liabilities     18        18.3       27.6         18.3       27.6
Provisions                         20         1.8        1.0          1.8        1.0
                                          -------    -------      -------    -------
                                            137.3      137.1        137.3      137.1
                                          -------    -------      -------    -------
Non-current liabilities
Deferred tax liabilities           7         57.2       68.4         57.2       68.4
Deferred income                    15       257.3      245.4        257.3      245.4
Financial liabilities:
-  Derivative financial            16       397.8      377.7        397.8      377.7
   liabilities
-  Other financial liabilities     18       571.8      571.7        571.8      571.7
Provisions                         20         7.5        8.3          7.5        8.3
Pension liability                  21       140.2      105.8        140.2      105.8
                                          -------    -------      -------    -------
                                          1,431.8    1,377.3      1,431.8    1,377.3
                                          -------    -------      -------    -------
TOTAL LIABILITIES                         1,569.1    1,514.4      1,569.1    1,514.4
                                          -------    -------      -------    -------
NET ASSETS                                  202.8      192.5        202.8      192.5
                                          =======    =======      =======    =======
Equity
Share capital                      22        36.4       36.4         36.4       36.4
Share premium                      22        24.4       24.4         24.4       24.4
Capital redemption reserve         22         6.1        6.1          6.1        6.1
Accumulated profits                22       135.9      125.6        135.9      125.6
                                          -------    -------      -------    -------
TOTAL EQUITY                                202.8      192.5        202.8      192.5
                                          =======    =======      =======    =======

The accounts were approved by the Board of directors and authorised for issue on 20 March 2013. They were signed on its behalf by:

Joe O'Mahony
Director
Date: 20 March 2013
STATEMENTS OF CHANGES IN EQUITY
for the period ended 31 December 2012
Group
                                                     Capital
                                Share     Share   redemption   Accumulated
                         Note capital   premium      reserve       profits    Total
                                   £m        £m           £m            £m       £m
At 1 April 2011                  36.4      24.4          6.1         126.5    193.4
Profit for the year                 -         -            -          58.8     58.8
Net other comprehensive
 ncome for the year                 -         -            -        (58.4)   (58.4)
Total comprehensive              ----      ----         ----          ----     ----
 income for the year                -         -            -           0.4      0.4
Deferred tax relating to
items charged in changes
in equity                 7         -         -            -         (1.3)    (1.3)
                                 ----      ----         ----          ----     ----
At 1 April 2012                  36.4      24.4          6.1         125.6    192.5
Profit for the period               -         -            -          44.6     44.6
Net other comprehensive
 income for the period              -         -            -        (33.5)   (33.5)
Total comprehensive              ----      ----         ----          ----     ----
 income for the period              -         -            -          11.1     11.1
Deferred tax relating to
 items charged in changes
 in equity                7         -         -            -         (0.8)    (0.8)
                                 ----      ----         ----          ----     ----
At 31 December 2012              36.4      24.4          6.1         135.9    202.8
                                 ====      ====         ====          ====     ====
Company
                                                     Capital
                                Share     Share   redemption   Accumulated
                         Note capital   premium      reserve       profits    Total
                                   £m        £m           £m            £m       £m
At 1 April 2011                  36.4      24.4          6.1         126.5    193.4
Profit for the year                 -         -            -          58.8     58.8
Net other comprehensive
 income for the year                -         -            -        (58.4)   (58.4)
Total comprehensive              ----      ----         ----          ----     ----
 income for the year                -         -            -           0.4      0.4
Deferred tax relating to
 items charged in changes
 in equity                7         -         -            -         (1.3)    (1.3)
                                 ----      ----         ----          ----     ----
At 1 April 2012                  36.4      24.4          6.1         125.6    192.5
Profit for the period               -         -            -          44.6     44.6
Net other comprehensive
 income for the period              -         -            -        (33.5)   (33.5)
Total comprehensive              ----      ----         ----          ----     ----
 income for the period              -         -            -          11.1     11.1
Deferred tax relating to
 items charged in changes
 in equity                7         -         -            -         (0.8)    (0.8)
                                 ----      ----         ----          ----     ----
At 31 December 2012              36.4      24.4          6.1         135.9    202.8
                                 ====      ====         ====          ====     ====
CASH FLOW STATEMENTS
for the period ended 31 December 2012
                                                     Group              Company
                                              9 months     Year   9 months     Year
                                                 to 31    to 31      to 31    to 31
                                              December    March   December    March
                                         Note     2012     2012       2012     2012
                                                    £m       £m         £m       £m
Cash flows from operating activities                                       
Profit for the period / year                      44.6     58.8       44.6     58.8
Adjustments for:
  Tax charge                                       9.5     13.8        9.5     13.8
  Net finance costs                       6       31.0     34.4       31.0     34.4
  Depreciation of property, plant and
     equipment                            9       35.8     45.2       35.8  

45.2

  Release of customers' contributions
     and grants                           15     (6.9)    (8.8)      (6.9)  

(8.8)

Amortisation of intangible assets 10 15.7 13.7 15.7

13.7

  Contributions in respect of property,
     plant and equipment                  15      19.1     23.7       19.1  

23.7

  Defined benefit pension charge less
     contributions paid                   21    (11.9)   (13.4)     (11.9)  

(13.4)

Net gain on transfer of pension assets                                     
   and liabilities to former employees    21         -    (0.7)          -    (0.7)
  Net movement in provisions                         -    (0.2)          -    (0.2)
                                                  ----     ----       ----     ----
Operating cash flows before movement in                                    
working capital                                  136.9    166.5      136.9    166.5
Increase in working capital                     (24.7)    (6.1)     (24.7)    (6.1)
                                                  ----     ----       ----     ----
Cash generated from operations                   112.2    160.4      112.1 
  160.4
Interest received                                  0.2      0.3        0.2      0.3
Interest paid                                   (37.5)   (13.6)     (37.5)   (13.6)
Current taxes paid                               (0.6)    (2.9)      (0.5)    (2.9)
                                                  ----     ----       ----     ----

Net cash flows from operating activities 74.3 144.2 74.3

144.2

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

----

Cash flows from investing activities                                       

Purchase of property, plant and equipment (77.7) (110.7) (77.7) (110.7) Purchase of intangible assets

                    (9.4)    (19.4)    (9.4)   

(19.4)

Purchase of investment in subsidiary 17 - - (0.1)

-

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

----

Net cash flows used in investing activities (87.1) (130.1) (87.2) (130.1)

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

----

Cash flows from financing activities                                       
Proceeds from borrowings                             -     399.6        -     399.6
Bond issue costs                                     -     (1.7)        -     (1.7)
Repayment of borrowings                              -   (361.2)        -   (361.2)
                                                  ----      ----     ----      ----
Net cash flows from financing activities             -      36.7        -  

36.7

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

----

Net (decrease) / increase in cash and cash
  equivalents                                   (12.8)      50.8   (12.9)   

50.8

Cash and cash equivalents at beginning of                                  
  period / year                                   51.4       0.6     51.4       0.6
                                                  ----      ----     ----      ----
Cash and cash equivalents at end of period /                               
  year                                       13   38.6      51.4     38.5      51.4
                                                  ====      ====     ====      ====
                                                                                   

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 Limited (NIE or the Company) is a limited company
incorporated and domiciled in Northern Ireland.  The Company's registered
office address is 120 Malone Road, Belfast, BT9 5HT.  The principal activities
of the Company are described in the Directors' Report.
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 (£) with all values rounded to the nearest £
100,000 except where otherwise indicated.

The Company has changed its accounting reference date from 31 March to 31 December.

2. Accounting Policies

Adoption of new and revised accounting standards and interpretations

The following amendments to existing standards and interpretations were
effective for the period, but did not have a material impact on the Group's
accounts:
IFRS 7           Disclosures - Transfers of financial assets (effective
(revised)        for accounting periods beginning on or after 1 July 2011)
IAS 12           Income Taxes: Limited scope amendment (recovery of

underlying assets)

                 (effective for accounting periods beginning on or after 1 

January 2012)

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

IFRS 1           First time adoption for government loans (effective for accounting
                 periods beginning on or after 1 January 2013)
IFRS 7           Offsetting of financial assets and financial liabilities
(revised)        (effective for accounting periods beginning on or after 1 January 2013)
IFRS 9           Financial Instruments: Classification and Measurement (effective
                 for accounting periods beginning on or after 1 January 2015)
IFRS 10          Consolidated Financial Statements (effective for accounting
                 periods beginning on or after 1 January 2013)
IFRS 11          Joint Arrangements (effective for accounting periods beginning on
                 or after 1 January 2013)
IFRS 12          Disclosure of Interests in Other Entities (effective for
                 accounting periods beginning on or after 1 January 2013)
IFRS 13          Fair Value Measurement (effective for accounting periods
                 beginning on or after 1 January 2013)
IAS 1            Amendments to revise the way other comprehensive income is presented
                (effective for accounting periods beginning on or after 1 July 2012)
IAS 19           Employee Benefits: Post-Employment Benefits and Termination Benefits
(revised)        (effective for accounting periods beginning on or after 1 January 2013)
IAS 27           Reissued as Separate Financial Statements (as amended 2011)
(revised)        (effective for accounting periods beginning on or after 1 January 2013)
IAS 28           Reissued as Investments in Associates and Joint Ventures (as amended
                 2011) (effective for accounting periods beginning on or

after 1 January

                 2013)
IAS 32           Offsetting Financial Assets and Financial Liabilities 

(effective for

                 accounting periods beginning on or after 1 January 2014)

IFRIC 20 Production phase stripping costs of a surface mine (effective for

                 accounting periods beginning on or after 1 January 2013)

Improvements to IFRSs 2009-2011 (effective for accounting periods beginning on or after 1 January 2013)

None of the standards listed are expected to have a material impact on the accounts except for the following:

IAS 19 (revised): 'Employee benefits'
This standard will be effective for the Group's 2013 accounts and as a result
the accounts as presented at 31 December 2012 will be restated in line with the
revised accounting standard.
The impact on the accounts will be to replace interest cost and expected return
on plan assets with a net interest amount that is calculated by applying the
discount rate to the net pension liability at the opening balance sheet date
taking account of any changes in the net pension liability during the period as
a result of contributions and benefit payments.

This will have the effect of increasing the net pension scheme interest charge in the Group Income Statement from £3.3m as reported to £4.0m as restated.

 Total net finance costs will increase from £31.0m as reported to £31.7m as
restated.  The tax charge will reduce from £9.5m as reported to £9.3m as
restated.  The profit for the period will reduce from £44.6m as reported to £
44.1m as restated.
The actuarial loss reported as a component of Other Comprehensive Income in
both the Statement of Comprehensive Income and the Statement of Changes in
Equity will decrease from £43.1m as reported to £42.4m as restated and the
deferred tax credit thereon will reduce from £9.6m as reported to £9.4m as
restated.  Total Comprehensive Income will remain at £11.1m as reported.
Whilst the directors do not anticipate that the adoption of the remaining
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 2013 onwards.

The principal accounting policies are set out below.

Basis of Preparation - Going Concern
The Group's business activities including financial risk management along with
the factors likely to affect its future development are set out within the
Financial Review and Operational Review sections of the Directors' Report.
As described in the Directors' Report, on the basis of their assessment of the
Group's financial position, which included a review of the Group's projected funding
requirements for a period of 12 months from the date of approval of the accounts, the
directors have a reasonable expectation that the Group will have adequate financial
resources for the 12 month period and accordingly continue to adopt the going concern
basis in preparing the report and accounts.
Basis of consolidation
The Group accounts consolidate the accounts of Northern Ireland Electricity
Limited (the Company) and entities controlled by the Company (its
subsidiaries).  Subsidiaries are consolidated from the day 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.  Dividends 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 Group and its subsidiaries is
sterling (£).
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. Net realisable value is the estimated selling price in the ordinary course of business less the estimate costs of completion and the estimated costs necessary to make the sale.

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.

Derivative financial instruments
Derivatives that are not designated as hedging instruments are accounted for at
'fair value through profit or loss'.  These derivatives are carried in the
balance sheet at fair value, with changes in fair value recognised in net
finance costs in the income statement.
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 period.  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 the
Utility Regulator for each tariff period.
Customer contributions
Customer contributions received in respect of property, plant and equipment and
released to revenue in the income statement by instalments over the estimated useful
economic lives of the related assets.
Government grants
Government grants received in respect of property, plant and equipment are
deferred and released to operating costs in 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
period 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 period.  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 Company
and 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.

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 the Northern Ireland Electricity
Pension Scheme (NIEPS) 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 period, 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 NIEPS 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 21.

3. Revenue and Operating Profit

The Group's operating activities, which comprise one operating segment, are
described in the Directors' Report.  Financial information is reported to the
Executive Committee on a consolidated basis and is not segmented.  The
regulatory correction factor represents the amount by which the amount of
revenue recovered in the period exceeds or falls short of the amount allowed by
the Company's price control formula.
                                                           9 months to    Year to
                                                           31 December   31 March
                                                                  2012       2012
                                                                    £m         £m
Revenue:                                                                         
Based on regulatory entitlement                                  175.0     

230.6

Release of customer contributions from deferred income             6.5     

8.3

                                                                  ----      

----

Total revenue (based on regulated entitlement)                   181.5     

238.9

Adjustment for regulatory correction factor                       20.4     
 14.4
                                                                  ----       ----
                                                                 201.9      253.3
Interest receivable                                                0.2        0.3
                                                                  ----       ----
                                                                 202.1      253.6
                                                                  ====       ====
Operating Profit:                                                                
Based on regulated entitlement                                    64.7     

92.6

Adjustment for regulatory correction factor                       20.4     
 14.4
                                                                  ----       ----
                                                                  85.1      107.0
                                                                  ====       ====
Major customers
The Group received revenue from one major customer during the period of £84.4m
(year ended 31 March 2012 - £115.5m).
Geographical information
The following table provides an analysis of the Group's external revenue based
on the location of customers.
              9 months to 31 December 2012                 Year to 31 March 2012
            UK            RoI            Total           UK       RoI        Total
            £m             £m               £m           £m        £m           £m
         187.3           14.6            201.9        226.7      26.6        253.3
         =====           ====            =====        =====      ====        =====

The majority of Republic of Ireland (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 United Kingdom.

4. Operating Costs

Operating costs are analysed as follows:

                                                          9 months to     Year to
                                                          31 December    31 March
                                                                 2012        2012
                                                                   £m          £m
Employee costs (note 5)                                           9.5        12.7
Depreciation and amortisation                                    51.5        58.9
Other operating charges                                          55.8        74.7
                                                                -----       -----
                                                                116.8       146.3
                                                                =====       =====
Operating costs include:
                                                           9 months to     Year to
                                                           31 December    31 March
                                                                  2012        2012
                                                                                  
Depreciation charge on property, plant and equipment              35.8     

45.2

Amortisation of intangible assets                                 15.7     

13.7

Minimum payments due under operating leases                        0.5     

0.4

Cost of inventories recognised as an expense                       0.9     
   1.5

Auditors' remuneration                                           £'000       £'000
                                                                                  

Fees payable to the Group and Company auditors' for the audit 26

28

  of the accounts
Fees payable to the Group and Company auditors for other
  services:
The audit of the company's subsidiaries pursuant to legislation      3           3
Audit related assurance services                                    14     
    11
Tax advisory services                                                1           1
Corporate finance services*                                          -          25
 

*Remuneration of £25,000 was paid to the Company's auditors' during the year ended 31 March 2012 in relation to the £400m bond issue. These costs were capitalised as part of the bond issue costs in that year.

5.  Employees
Employee costs
                                                           9 months to     Year to
                                                           31 December    31 March
                                                                  2012        2012
                                                                    £m          £m
Salaries                                                          10.5        13.1
Social security costs                                              1.0         1.2
Pension costs / (credit)
-  defined contribution plans                                      0.4         0.4
-  defined benefit plans                                           1.8         2.2
-  other                                                             -       (0.7)
                                                                  ----        ----
                                                                  13.7        16.2
                                                                                  
Less: charged to the balance sheet                               (4.2)     

(3.5)

                                                                  ----      

----

Charged to the income statement                                    9.5     
  12.7
                                                                  ====        ====

Other pension credit of £0.7m in the year ended 31 March 2012 related to a net gain arising on the transfer of pension scheme assets and liabilities in respect of former employees. Further details are provided in note 21.

                           Average during the
                             period / year                 Actual headcount
                      9 months to          Year to
                      31 December         31 March   31 December         31 March
                             2012             2012          2012             2012
                           Number           Number        Number           Number
Employee numbers              301              267           296              281
                             ====             ====          ====             ====
Directors' emoluments

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

                                                         9 months to      Year to
                                                         31 December     31 March
                                                                2012         2012
                                                                  £m           £m
Emoluments in respect of qualifying services                     0.4       

0.8

No amounts were paid to directors in respect of long term incentive plans.  No
directors exercised share options during the period or received shares under
long-term incentive schemes.

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

                                                           9 months to    Year to
                                                           31 December   31 March
                                                                  2012       2012
                                                                 £'000      £'000
Emoluments                                                         215        276

Total accrued pension at 31 December / 31 March (per annum) -

  150

                                                           31 December   31 March
                                                                  2012       2012
                                                                Number     Number
                                                                                  
Members of a defined benefit pension scheme                          1     

2

Members of a defined contribution scheme                             1     

1

Aggregate contributions by the Company to defined contribution pension schemes
in respect of the directors during the period was £41,000 (year ended 31 March
2012 - £41,000).
6.  Net Finance Costs
                                                          9 months to      Year to
                                                          31 December     31 March
                                                                 2012         2012
                                                                   £m           £m
Interest receivable:
Bank interest receivable                                          0.2          0.3
                                                                 ----         ----
Interest payable:
£175m bond                                                      (9.1)       (12.0)
£400m bond                                                     (19.1)       (21.2)
Amounts owed to group undertakings                                  -      
 (1.6)
Interest rate swaps                                                 -            -
                                                                 ----         ----
                                                               (28.2)       (34.8)
Less: capitalised interest                                        0.4          1.6
                                                                 ----         ----
Total interest charged to the income statement                 (27.8)      
(33.2)
                                                                 ----         ----
Other finance costs:                                                             
Amortisation of financing charges                               (0.1)      

(0.2)

Net loss on financial assets and liabilities at fair value
  charged to the income statement                                   -            -
                                                                 ----         ----
Total finance costs                                            (27.9)       (33.4)
                                                                 ----         ----
Net pension scheme interest:                                                     
Expected return on pension scheme assets                         25.7      

39.7

Interest on pension scheme liabilities                         (29.0)      
(41.0)
                                                                 ----         ----
                                                                (3.3)        (1.3)
                                                                 ----         ----
Net finance costs                                              (31.0)       (34.4)
                                                                 ====         ====
                                                                                 

Interest charged to the balance sheet during the period was capitalised using a weighted average interest rate of 6.63% (year ended 31 March 2012 - 6.37%).

7. Tax Charge

(i) Analysis of charge during the period / year

                                                            9 months to    Year to
                                                            31 December   31 March
                                                                   2012       2012
Group Income Statement                                               £m         £m
Current tax charge                                                               

UK corporation tax at 24% (year ended 31 March 2012 - 26%) 11.9

11.8

Corporation tax underprovided in previous years                       -    
   1.1
                                                                   ----       ----
Total current income tax                                           11.9       12.9
                                                                   ----       ----
Deferred tax (credit) / charge                                             

Origination and reversal of temporary differences in current 1.4

7.1

  period / year

Origination and reversal of temporary differences relating to -

0.8

  prior years
Effect of decreased tax rate on opening liability                 (3.8)    

(7.0)

                                                                   ----     

----

Total deferred tax (credit) / charge                              (2.4)    
   0.9
                                                                   ----       ----
Total tax charge                                                    9.5       13.8
                                                                   ====       ====
                                                                                 
Tax relating to items charged in other comprehensive income                
Deferred tax                                                                     

Deferred tax credit relating to components of other comprehensive (9.9) (18.7)

  income

Effect of decreased tax rate on opening liability / (asset) 0.3

 (0.9)
                                                                    ----      ----
                                                                   (9.6)    (19.6)
                                                                    ====      ====
Tax relating to items charged in changes in equity                         
Deferred tax                                                                     
Effect of decreased tax rate on opening asset                        0.8   

1.3

                                                                    ====    

====

(ii) Reconciliation of total tax charge

The tax charge in the Group Income Statement for the period is lower than the
standard rate of corporation tax in the UK of 24% (year ended 31 March 2012 -
26%).  The differences are reconciled below:
                                                             9 months to   Year to
                                                             31 December  31 March
                                                                    2012      2012
                                                                      £m        £m
                                                                   
Accounting profit before tax charge                                 54.1   

72.6

Accounting profit multiplied by the UK standard rate of
  corporation tax of 24%(year ended 31 March 2012 - 26%)            13.0    

18.9

Tax effect of:                                                             

Impact of deferred tax at 23% (year ended 31 March 2012 - 24%) (3.9)

(7.6)

Other permanent differences                                          0.4   

0.6

Tax underprovided in previous years                                    -   

1.9

                                                                    ----    

----

Tax charge for the period / year                                     9.5   
  13.8
                                                                    ====      ====
(iii)  Deferred tax
The deferred tax included in the Group and Company Balance Sheet is as follows:
                                                        31 December       31 March
                                                               2012           2012
                                                                 £m             £m
Deferred tax assets
Pension liability                                              32.2           25.4
Interest rate swaps                                            47.0           51.2
Other temporary differences                                     1.3        
   1.4
                                                               ----           ----
                                                               80.5           78.0
                                                               ----           ----
Deferred tax liabilities                                                          
Accelerated capital allowances                              (106.3)       

(112.2)

Interest rate swaps                                          (30.3)        

(33.1)

Held-over gains on property disposals                         (1.1)        
 (1.1)
                                                             ------         ------
                                                            (137.7)        (146.4)
                                                             ------         ------
Net deferred tax liability                                   (57.2)         (68.4)
                                                              =====          =====
Deferred tax has been calculated at 23% as at 31 December 2012 reflecting HMRC
enactment, in March 2012, of a reduction in the corporation tax rate effective
from 6 April 2012.

HM Treasury has announced its intention for the main rate of corporation tax to decrease to 21% by 2014, through a 1% reduction per annum over the next two years, although this decrease in rates is not enacted at the balance sheet date. A decrease in rate to 21% would reduce the deferred tax asset at 31 December 2012 to £73.5m and the deferred tax liability to £125.7m.

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

                                                          31 December     31 March
                                                                 2012         2012
                                                                   £m           £m
                                                                                  
Accelerated capital allowances                                  (5.9)      

(3.6)

Interest rate swaps                                               1.4      

(1.3)

Temporary differences in respect of pensions                      2.0      
   4.8
Other temporary differences                                       0.1          1.0
                                                                 ----         ----
Deferred tax (credit) / charge                                  (2.4)      
   0.9
                                                                 ====         ====
                                                                                  

8. Profit for the Financial Period

The profit dealt with in the accounts of the Company is £44.6m (year ended 31 March 2012 - £58.8m). No separate income statement is presented for the Company as permitted by Section 408 of the Companies Act 2006.

9. Property, Plant and Equipment

Group and Company                                    Non-
                                               operational     Fixtures
                             Intrastructure       land and          and
                                     assets      buildings    equipment      Total
                                         £m             £m           £m         £m
Cost:
At 1 April 2011                     1,714.9            5.1         50.1    1,770.1
Additions                             109.2              -          1.9      111.1
                                    -------          -----        -----    -------
At 31 March 2012                    1,824.1            5.1         52.0    1,881.2
Additions                              74.1              -          1.8       75.9
                                    -------          -----        -----    -------
At 31 December 2012                 1,898.2            5.1         53.8    1,957.1
                                    -------          -----        -----    -------
Depreciation:
At 1 April 2011                       609.7            1.2         38.7      649.6
Charge for the year                    42.6            0.1          2.5       45.2
                                    -------          -----        -----    -------
At 31 March 2012                      652.3            1.3         41.2      694.8
Charge for the period                  33.6            0.1          2.1       35.8
                                    -------          -----        -----    -------
At 31 December 2012                   685.9            1.4         43.3      730.6
                                    -------          -----        -----    -------
Net book value:
At 31 March 2011                    1,105.2            3.9         11.4    1,120.5
                                    =======          =====        =====    =======
At 31 March 2012                    1,171.8            3.8         10.8    1,186.4
                                    =======          =====        =====    =======
At 31 December 2012                 1,212.3            3.7         10.5    1,226.5
                                    =======          =====        =====    =======
Infrastructure assets include amounts in respect of assets under construction
of £30.5m (31 March 2012 - £45.1m) and capitalised interest of £4.8m (31 March
2012 - £4.7m).  Fixtures and equipment include amounts in respect of assets
under construction of £nil (31 March 2012 - £3.3m).

10. Intangible Assets

Group and Company - Computer software                       31 December   31 March
                                                                   2012       2012
                                                                     £m         £m
Cost:                                                           
At the beginning of the period / year                              90.8    

71.6

Additions acquired externally                                       7.9    

19.2

                                                                   ----     

----

At the end of the period / year                                    98.7    

90.8

                                                                   ----     

----

Amortisation / impairment:
At the beginning of the period / year                              43.0    

29.3

Amortisation charge for the period / year                          15.7    

13.7

                                                                   ----     

----

At the end of the period / year                                    58.7    

43.0

                                                                   ----     

----

Net book value:
At the beginning of the period / year                              47.8    

42.3

                                                                   ====     

====

At the end of the period / year                                    40.0    

47.8

                                                                   ====     

====

Software assets include amounts in respect of assets under construction amounting to £Nil (31 March 2012 - £27.0m) and capitalised interest of £2.2m (31 March 2012 - £2.0m).

The continued implementation of new IT systems has led to a reduction in the
estimated useful lives of existing assets.  In the period the amortisation
charged on the assets was accelerated to fully write down the assets.  This has
resulted in accelerated amortisation of £9.8m charged in the period (year
ended
31 March 2012 - £8.7m).
11.  Inventories
Group and Company                                    31 December          31 March
                                                            2012              2012
                                                              £m                £m
Materials and consumables                                    5.5               4.7
Work-in-progress                                             0.8               0.5
                                                             ---               ---
                                                             6.3               5.2
                                                             ===               ===

12. Trade and Other Receivables

Group and Company                                    31 December          31 March
                                                            2012              2012
                                                              £m                £m
Trade receivables (including unbilled consumption)          42.0           

27.6

Other receivables                                            0.8           

1.0

Amounts owed by group undertakings                           3.2           

1.6

Prepayments and accrued income                               5.6           
   1.9
                                                            ----              ----
                                                            51.6              32.1
                                                            ====              ====

Trade receivables are stated net of a provision of £0.5m (31 March 2012 - £ 0.5m) for estimated irrecoverable amounts based on past default experience.

Group and Company                                    31 December          31 March
                                                            2012              2012
                                                              £m                £m
                                                            
At the beginning of the period / year                        0.5           
   0.6
Bad debts written off                                          -             (0.1)
                                                             ---               ---
At the end of the period / year                              0.5           

0.5

                                                             ===            

===

The above provision includes £0.2m (31 March 2012 - £0.2m) in respect of individual balances impaired based on the age of debt and past default experience. There are no provisions for estimated irrecoverable amounts included in 'amounts owed by group undertakings' which are all within credit terms. Further details on credit risk are included in the financial risk management section in the Directors' Report.

The following shows an aged analysis of trade receivables:

Group and Company                                    31 December          31 March
                                                            2012              2012
                                                              £m                £m
Within credit terms:
Current                                                     41.0              26.6
Past due but not impaired:
Less than 30 days                                            1.3               0.1
30 - 60 days                                                 0.3               0.1
60 - 90 days                                                 0.2               0.1
+ 90 days                                                    0.6               0.7
                                                            ----              ----
                                                            43.4              27.6
                                                            ====              ====
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.

13. Cash and Cash Equivalents

                                     Group                        Company
                          31 December        31 March   31 December        31 March
                                 2012            2012          2012            2012
                                   £m              £m            £m              £m
Cash at bank and in hand          7.6             0.9           7.5             0.9
Short-term deposits              31.0            50.5          31.0            50.5
                                 ----            ----          ----            ----
                                 38.6            51.4          38.5            51.4
                                 ====            ====          ====            ====
Cash at bank and in hand earns interest at floating rates based on daily bank
deposit rates.  Short-term deposits are made for varying periods of between one
day and three months' depending on the immediate cash requirements of the Group
and Company, and earn interest at the respective short-term deposit rates.  The
directors consider that the carrying amount of cash and cash equivalents
equates to fair value.
14.  Trade and Other Payables
Group and Company                                    31 December           31 March
                                                            2012               2012
                                                              £m                 £m
Trade payables                                              10.5               17.1
Payments received on account                                28.5               30.8
Amounts owed to group undertakings                           9.8           
    7.3
Tax and social security                                      8.1                5.4
Accruals                                                    17.5               21.5
                                                            ----               ----
                                                            74.4               82.1
                                                            ====               ====
The directors consider that the carrying amount of trade and other payables
equates to fair value.
15.  Deferred Income
Group and Company                                              Customers'
                                              Grants        contributions     Total
                                                  £m                   £m        £m
                                                ----                -----     -----
Current                                          0.5                  7.7       8.2
Non-current                                      8.1                223.0     231.1
                                                ----                -----     -----
Total at 1 April 2011                            8.6                230.7     239.3
                                                ----                -----     -----
Receivable                                         -                 23.7      23.7
Released to income statement                   (0.5)                (8.3)     (8.8)
                                                ----                -----     -----
Current                                          0.5                  8.3       8.8
Non-current                                      7.6                237.8     245.4
                                                ----                -----     -----
Total at 31 March 2012                           8.1                246.1     254.2
                                                ----                -----     -----
Receivable                                       0.2                 18.9      19.1
Released to income statement                   (0.4)                (6.5)     (6.9)
                                                ----                -----     -----
Current                                          0.5                  8.6       9.1
Non-current                                      7.4                249.9     257.3
                                                ----                -----     -----
Total at 31 December 2012                        7.9                258.5     266.4
                                                ====                =====     =====
                                                                                

16. Derivative Financial Instruments

Group and Company - Interest rate swaps                  31 December      
31 March
                                                                2012           2012
                                                                  £m             £m
Current assets                                                  11.1            6.3
Non-current assets                                             397.8          377.7
                                                               -----          -----
                                                               408.9          384.0
                                                               =====          =====
Current liabilities                                           (11.1)          (6.3)
Non-current liabilities                                      (397.8)        (377.7)
                                                               -----          -----
                                                             (408.9)        (384.0)
                                                               =====          =====
  
On 21 December 2010 ESBNI Limited (ESBNI), the immediate parent undertaking of
the Company, acquired the entire share capital of the Company from Viridian
Group Limited (Viridian).  A £550m portfolio of RPI linked interest rate swaps,
previously held by a Viridian group company, was novated to the Company on
acquisition.  Under the swap arrangements, the Company pays an average fixed
rate of interest of 2.38% indexed by RPI and receives a variable rate of
interest based on LIBOR.  RPI accretion is accounted for as interest in the
Group Income Statement.  The swaps have maturity dates between 2026 and 2036
(average maturity 2031) and have mandatory break dates on 22 December 2015.
At 31 December 2012 the fair value of the above interest rate swaps was a
liability of £408.9m (31 March 2012 - £384.0m).  During the period ended 31
December 2012, losses in respect of movements in the fair value of the swaps of
£12.5m are included within finance costs in the income statement (year ended 31
March 2012 - £101.3m).

The fair value of interest rate swaps has been valued by calculating the present value of future cash flows, estimated using forward rates from third party market price quotations.

On 1 April 2011, the Company entered into interest rate swap arrangements with
ESBNI which have identical matching terms to the swaps novated to the Company
in December 2010.

The swap arrangements with ESBNI relate to a £550m portfolio of RPI linked interest rate swaps, under which the Company receives an average fixed rate interest of 2.38% indexed by RPI and pays a variable rate of interest based on LIBOR. RPI accretion is accounted for as interest in the Group Income Statement. The swaps have maturity dates between 2026 and 2036 (average maturity 2031) and have mandatory break dates on 22 December 2015.

At 31 December 2012, the fair value of interest rate swaps was an asset of £
408.9m (31 March 2012 - £384.0m).  During the period ended 31 December 2012,
gains in respect of movements in the fair value of the swaps of £12.5m are
included within the income statement (year ended 31 March 2012 - £101.3m).

The Company uses the hierarchy as set out in IFRS 7 Financial Instruments: Disclosures for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and

Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

The fair value of interest rate swaps as at 31 December 2012 is considered by
the Company to fall within the level 2 fair value hierarchy.  There have been
no transfers between level 1 or 3 of the hierarchy during the period.
An increase / (decrease) of 0.5% in interest rates would decrease / (increase)
the fair value of interest rate swap liabilities by £64.0m / (£70.2m) (31 March
2012 - £67.8m / (£74.8m)).  However, the swap arrangements entered into with
ESBNI on 1 April 2011 hedge the Company's cashflows in respect of these
liabilities and therefore, an increase / (decrease) of 0.5% in interest rates
would increase / (decrease) the fair value of the interest rate swap assets by
£64.0m / (£70.2m) (31 March 2012 - £67.8m / (£74.8m)) and thereby offset the
exposure to the swap liabilities.  These sensitivities are based on an
assessment of market rate movements during the period and each is considered to
be a reasonably possible range.

Further details on interest rate risk are included in the financial risk management section in the Directors' Report.

17. Investments

Company - Investment in subsidiaries

                                                        31 December      31 March
                                                               2012          2012
                                                                 £m            £m
Cost:                                                                            
At the beginning of the period / year                             -        

-

Ordinary shares fully paid up                                   0.1        

-

                                                                ---         

---

At the end of the period / year                                 0.1        
    -
                                                                ===           ===
On 28 April 2011, the Company subscribed for the entire share capital of NIE
Finance PLC on incorporation.  The investment of £12,500 comprised 50,000 £1
ordinary shares partly paid at £0.25.  On 17 September 2012, the Company paid
the remaining £0.75 per ordinary share for its investment in NIE Finance PLC
bringing the total investment value to £50,000 at 31 December 2012. The
principal activity of NIE Finance PLC during the period was to continue to act
as the issuer of the £400m bond issued on 2 June 2011.  Further details of the
bond issue are included in note 18.
Dormant subsidiaries
The Company holds 100% of the share capital of NIE Generation Limited, NIE
Limited, NIE Power Limited and NIE Enterprises Limited.  These companies are
dormant and the carrying value of these investments as at 31 December 2012 was
£nil (31 March 2012 - £nil).
18.  Financial Liabilities
                                               Group                 Company
                                             31        31             31        31
                                       December     March       December     March
                                           2012      2012           2012      2012
                                             £m        £m             £m        £m
Current                                                                         
Interest payable on £175m bond              3.4       6.4            3.4  

6.4

Interest payable on £400m bond             14.9      21.2              -  
      -
Interest payable to group                     -         -           14.9      21.2
  undertakings                            -----      ----           ----      ----
                                           18.3      27.6           18.3      27.6
                                           ====      ====           ====      ====
Non-current
£175m bond                                173.9     173.8          173.9     173.8
£400m bond                                397.9     397.9              -         -
Amounts owed to group undertakings            -         -          397.9   
 397.9
                                          -----     -----          -----     -----
                                          571.8     571.7          571.8     571.7
                                          =====     =====          =====     =====
                                                                                

Loans and other borrowings outstanding are repayable as follows:

Group and Company                                      31 December        31 March
                                                              2012            2012
                                                                £m              £m
                                                                                   
In one year or less or on demand                              18.3         
  27.6
Between two and five years                                       -               -
In more than five years                                      571.8           571.7
                                                             -----           -----
                                                             590.1           599.3
                                                             =====           =====
                                                                                  

The Group and Company's objectives, policies and strategies in respect of financial liabilities and capital management are disclosed on page 4 of the Directors' Report.

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

- the £175m bond is repayable in 2018 and carries a fixed rate of interest of

6.875%;

- on 2 June 2011, the Group issued a 15 year £400m bond which is repayable in 2026

and carries a fixed rate of interest of 6.375%. The bond issue incurred £2.1m

of costs associated with raising finance.

On 2 June 2011, NIE Finance PLC granted a back-to-back loan of £400m to the Company, which was issued net of £2.1m of costs associated with raising finance. Interest is paid on the loan at a fixed rate of 6.375%.

The £175m and £400m bonds had fair values at 31 December 2012 of £206.9m (31
March 2012 - £193.6m) and £476.6m (31 March 2012 - £414.8m) respectively, based
on current market prices.  The Company's £400m back-to-back loan had a fair
value at 31 December 2012 of £476.6m (31 March 2012 - £414.8m) based on the
fair value of the £400m bond.  The directors consider that the carrying amount
of other financial liabilities equate to fair value.
The £175m bond, £400m bond, and the Company's related back-to-back loan with
NIE Finance PLC carry interest at fixed rates.  Therefore at 31 December 2012
the Group and Company were not exposed to movements in interest rates.
The tables below summarise the maturity profile of the Group's financial
liabilities (including trade and other payables) based on contractual
undiscounted payments.
At 31 December 2012           On  Within 3   3 to 12   1 to 5   More than
Group                     demand    months    months    years     5 years      Total
                              £m        £m        £m       £m          £m         £m
£175m bond (including          -         -      12.0     48.1       187.0      247.1
  interest payable)
£400m bond (including          -         -      25.5    102.0       629.5      757.0
  interest payable)
Trade and other payables    28.5      37.8         -        -           -       66.3
Interest rate swap             -         -      11.1    397.8           -      408.9
  liabilities               ----      ----      ----    -----       -----    -------
                            28.5      37.8      48.6    547.9       816.5    1,479.3
                            ====      ====      ====    =====       =====    =======
At 31 March 2012              On  Within 3   3 to 12   1 to 5   More than
Group                     demand    months    months    years     5 years      Total
                              £m        £m        £m       £m          £m         £m
£175m bond (including          -         -      12.0     48.1       199.1      259.2
  interest payable)
£400m bond (including          -      25.5         -    102.0       655.0      782.5
  interest payable)
Trade and other payables    25.4      51.3         -        -           -       76.7
Interest rate swap             -       3.2       3.1    614.1           -      620.4
  liabilities               ----      ----      ----    -----       -----    -------
                            25.4      80.0      15.1    764.2       854.1    1,738.8
                            ====      ====      ====    =====       =====    =======
 

The tables below summarise the maturity profile of the Company's financial liabilities (including trade and other payables) based on contractual undiscounted payments.

At 31 December 2012           On  Within 3   3 to 12   1 to 5   More than
Company                   demand    months    months    years     5 years      Total
                              £m        £m        £m       £m          £m         £m
£175m bond (including          -         -      12.0     48.1       187.0      247.1
  interest payable)
Amounts owed to group          -         -      25.5    102.0       629.5      757.0
  undertakings
Trade and other payables    28.5      37.8         -        -           -       66.3
Interest rate swap             -         -      11.1    397.8           -      408.9
  liabilities               ----      ----      ----     ----       -----    -------
                            28.5      37.8      48.6    547.9       816.5    1,479.3
                            ====      ====      ====    =====       =====    =======
At 31 March 2012              On  Within 3   3 to 12   1 to 5   More than
Company                   demand    months    months    years     5 years      Total
                              £m        £m        £m       £m          £m         £m
£175m bond (including          -          -      12.0     48.1       199.1     259.2
  interest payable)
Amounts owed to group          -       25.5         -    102.0       655.0     782.5
  undertakings                                                                      
Trade and other payables    25.4       51.3         -        -           -      76.7
Interest rate swap             -        3.2       3.1    614.1           -     620.4
  liabilities               ----       ----     -----    -----       -----   -------
                            25.4       80.0      15.1    764.2       854.1   1,738.8
                            ====       ====      ====    =====       =====   =======
19.  Analysis of Net Debt
Group                                     At                    Non              At
                                     1 April      Cash         cash     31 December
                                        2012      flow     movement            2012
                                          £m        £m           £m              £m
Cash and cash equivalents               51.4    (12.8)            -            38.6

Interest payable on £175m bond (6.4) (12.0) 15.0

(3.4)

Interest payable on £400m bond (21.2) (25.5) 31.8

  (14.9)
£175m bond                           (173.8)         -        (0.1)         (173.9)
£400m bond                           (397.9)         -            -         (397.9)
                                       -----     -----        -----           -----
                                     (547.9)    (50.3)         46.7         (551.5)
                                       =====     =====        =====           =====
Company                                   At                    Non              At
                                     1 April      Cash         cash     31 December
                                        2012      flow     movement            2012
                                          £m        £m           £m              £m
Cash and cash equivalents                51.4   (12.9)            -            38.5

Interest payable on £175m bond (6.4) (12.0) 15.0

(3.4)

Amounts owed to group undertakings    (397.9)        -            -        
(397.9)
Interest payable to group              (21.2)   (25.5)         31.8          (14.9)
  undertakings
£175m bond                            (173.8)        -        (0.1)         (173.9)
                                        -----    -----        -----           -----
                                      (547.9)   (50.4)         46.7         (551.6)
                                        =====    =====        =====           =====
20.  Provisions
Group and Company                                 Liability and
                                                         damage
                                  Environment            claims    Other    Total
                                           £m                £m       £m       £m
                                          ---               ---      ---      ---
Current                                   0.2               0.6      0.2      1.0
Non-current                               4.8               3.5        -      8.3
                                          ---               ---      ---      ---
Total at 1 April 2012                     5.0               4.1      0.2      9.3
                                          ---               ---      ---      ---
Applied in the period                       -             (0.4)        -    (0.4)
Increase in provisions                      -               0.6        -      0.6
Release to income statement                 -             (0.2)        -    (0.2)
                                          ---               ---      ---      ---
Current                                   0.4               1.2      0.2      1.8
Non-current                               4.6               2.9        -      7.5
                                          ---               ---      ---      ---
Total at 31 December 2012                 5.0               4.1      0.2      9.3
                                          ===               ===      ===      ===
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.

21. Pension Commitments

Most employees of the Group are members of Northern Ireland Electricity Pension
Scheme (NIEPS).  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.
Aon Hewitt, the actuaries to NIEPS, have provided a valuation of Focus under
IAS 19 as at 31 December 2012 based on the following assumptions (in nominal
terms) and using the projected unit method.
                                              31 December 2012      31 

March 2012

Rate of increase in pensionable salaries       3.05% per annum    3.60% per annum
Rate of increase in pensions in payment        1.80% per annum    2.10% per
annum
Discount rate                                  4.30% per annum    4.80% per annum
Inflation assumption (CPI)                     1.80% per annum    2.10% per annum
Life expectancy:                                                                 
 Current pensioners (at age 60) - males             26.4 years         26.4

years

 Current pensioners (at age 60) - females           28.9 years         28.9

years

 Future pensioners (at age 60) - males             *27.9 years        *27.9

years

 Future pensioners (at age 60) - females           *30.5 years        *30.5

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 December 2012 shows a net pension liability
relating to continuing operations (before deferred tax) of £142.9m (31 March
2012 - £105.8m).  A 0.5% increase / decrease in the assumed discount rate would
decrease / increase the net pension liability by £67.7m (31 March 2012 - £
54.1m).  A 0.5% increase / decrease in the assumed inflation rate would
increase / decrease the net pension liability by £61.6m (31 March 2012 - £
49.6m).  A one year increase / decrease in life expectancy would increase /
decrease the net pension liability by £31.9m (31 March 2012 - £24.9m).
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 December   rate of  31 March   rate of
                                              2012    return      2012    return
                                                £m         %        £m         %
Equities                                     229.8       7.6     227.9       7.6
Bonds                                        491.0       3.7     488.7       3.7
Other                                          2.1       2.7       3.9       3.2
                                             -----               -----          
Total market value of assets                 722.9               720.5
Actuarial value of liabilities             (863.1)             (826.3)     
                                             -----               -----
Net pension liability                      (140.2)             (105.8)
                                             =====               =====
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 and Company                                          31 December   31 March
                                                                  2012       2012
                                                                    £m         £m
Market value of assets at the beginning of the period /          720.5      705.5
  year
Expected return                                                   25.7       39.7
Contributions from employer                                       13.8       15.6
Contributions from scheme members                                  0.2     
  0.2
Benefits paid                                                   (33.8)     (44.6)
Actuarial (loss) / gain                                          (3.5)        3.4
Net transfer of assets in respect of former employees                -     

0.7

                                                                 -----      

-----

Market value of assets at the end of the period / year           722.9     

720.5

                                                                 =====      

=====

Changes in the actuarial value of liabilities

Group and Company                                                    31        31
                                                               December     March
                                                                   2012      2012
                                                                     £m        £m
                                                                                  
Actuarial value of liabilities at the beginning of the            826.3    
746.1
  period / year
Interest cost                                                      29.0      41.0
Current service cost                                                1.8       2.0
Curtailment loss                                                    0.1       0.2
Contributions from scheme members                                   0.1    
  0.2
Benefits paid                                                    (33.8)    (44.6)
Actuarial loss                                                     39.6      81.4
                                                                  -----     -----
Actuarial value of liabilities at the end of the period /         863.1     826.3
  year                                                            =====     =====
Following completion of the sale of the Company by Viridian in December 2010,
Viridian Group Pension Scheme (VGPS) changed its name to NIEPS and most members
of the scheme who were employed by subsidiary undertakings of the Viridian
Group transferred to a new pension scheme.  The net transfers of assets and
liabilities in respect of former employees reflect the reallocation to the
Group of scheme assets and liabilities which were previously allocated to other
Viridian Group undertakings, net of assets and liabilities transferred to the
new Viridian pension scheme.  A net gain of £0.7m in respect of the
finalisation of this transfer was recognised in the income statement in the
year to 31 March 2012.

The Group expects to make contributions of c£18.8m to Focus in 2013.

The Group's share of NIEPS 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 NIEPS net pension liability.

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

Group and Company                                       9 months to         Year to
                                                        31 December        31 March
                                                               2012            2012
                                                                 £m              £m
Current service cost                                          (1.8)           (2.0)
Curtailment loss                                              (0.1)           (0.2)
Net gain arising on transfer of assets and liabilities            -        

0.7

  in respect of former employees                               ----             ---
Total operating charge                                        (1.9)           (1.5)
                                                                ===             ===
                                                                                 

Focus has been closed to new members since 1998 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 to net pension scheme interest

Group and Company                                      9 months to          Year to
                                                       31 December         31 March
                                                              2012             2012
                                                                £m               £m
Expected return on assets                                     25.7             39.7
Interest on liabilities                                     (29.0)           (41.0)
                                                              ----             ----
Net pension scheme interest                                  (3.3)            (1.3)
                                                              ====             ====

The actual return on Focus assets was £22.2m (year ended 31 March 2012 - £ 43.1m).

Analysis of amounts recognised in the Statement of Comprehensive Income

Group and Company                                      9 months to          Year to
                                                       31 December         31 March
                                                              2012             2012
                                                                £m               £m
                                                                                  
Actuarial (loss) / gain on assets                            (3.5)         
    3.4
Actuarial loss on liabilities                               (39.6)           (81.4)
                                                              ----             ----
Net actuarial loss                                          (43.1)           (78.0)
                                                              ====             ====
The cumulative actuarial losses recognised in the Group and Company Statements
of Comprehensive Income since 1 April 2004 are £70.3m and £76.2m respectively
(31 March 2012 - £27.2m and £33.1m respectively).  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 Statement of Comprehensive Income shown before 1 April 2004.

History of experience gains and losses

                                         9 months to          Years ended
                                         31 December            31 March
                                                2012   2012    2011      2010    2009
                                                  £m     £m      £m        £m      £m
Group                                                                           

Experience (losses) / gains on assets (3.5) 3.4 163.4 88.4 (92.6) Experience losses on liabilities

              (15.6)  (0.4)       -     (3.6)   (0.7)
                                                ----   ----   -----      ----    ----
Company                                                                         

Experience (losses) / gains on assets (3.5) 3.4 163.4 88.4 (90.9) Experience losses on liabilities

              (15.6)  (0.4)       -     (3.6)   (0.7)
                                                ----   ----   -----      ----    ----
                                         31 December            31 March
                                                2012   2012     2011     2010    2009
                                                 £m      £m       £m       £m      £m
Market value of assets                        722.9   720.5    705.5    544.4    449.9
Actuarial value of liabilities              (863.1) (826.3)  (746.1)  (680.6)  (527.8)
                                              -----   -----    -----    -----    -----
Net pension liability                       (140.2) (105.8)   (40.6)  (136.2)   (77.9)
                                              =====   =====    =====    =====    =====
22.  Share Capital and Equity
                                                     31 December         31 March
                                                            2012             2012
                                                              £m               £m
Share capital                                               36.4             36.4
Share premium                                               24.4             24.4
Capital redemption reserve                                   6.1              6.1
Accumulated profits                                        135.9            125.6
                                                           -----            -----
                                                           202.8            192.5
                                                           =====            =====
                                                                                 

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

The balance classified 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:                  31 December     31
March
                                                               2012         2012
                                                                 £m           £m
145,566,431 ordinary shares of 25p each                        36.4        
36.4
                                                               ====         ====
23.  Lease Obligations

Property, plant and equipment

The Group has 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:
                                                         31 December     31 March
                                                                2012         2012
                                                                  £m           £m
Within one year                                                  0.4          0.5
After one year but not more than five years                      0.3       
  0.9
More than five years                                             1.0          1.3
                                                                 ---          ---
                                                                 1.7          2.7
                                                                 ===          ===

24. Commitments and Contingent Liabilities

(i) Capital commitments

At 31 December 2012 the Group and Company had contracted future capital expenditure in respect of property, plant and equipment of £6.1m (31 March 2012 - £6.2m) and computer software assets of £1.8m (31 March 2012 - £4.3m).

(ii) Contingent liabilities

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 20) 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.

25. Financial Commitments

In June 2011 NIE Finance PLC, a subsidiary undertaking of the Company, issued a
£400m bond on behalf of the Company.  The Bond has been admitted to the
Official List of the UK Listing Authority and to trading on the London Stock
Exchange's regulated market.  The payments of all amounts in respect of the £
400m bond are unconditionally and irrevocably guaranteed by the Company.

26. Related Party Disclosures

Remuneration of key management personnel
The compensation paid to key management personnel is set out below in aggregate
for each of the categories specified in IAS 24 Related Party Disclosures.  Key
management personnel of the Group comprise the directors of the Company and the
executive team.  The composition in the prior year's accounts was deemed to be
the directors of the Company and the Company Secretary and has been restated
below to reflect the revised composition.
                                                         9 months to      Year to
                                                         31 December     31 March
                                                                2012         2012
                                                                  £m           £m
                                                                                 
Salaries and short-term employee benefits                        1.0       
  1.6
Post employment benefits                                         0.2          0.2
Other long-term benefits                                         0.1            -
                                                                 ---          ---
                                                                 1.3          1.8
                                                                 ===          ===
Group
The immediate parent undertaking of the Group and the ultimate parent company
in the UK is ESBNI Limited (ESBNI).  The ultimate parent undertaking and
controlling party of the Group and the parent of the smallest and largest group
of which the Company is a member and for which group accounts are prepared is
Electricity Supply Board (ESB), a statutory corporation established under the
Electricity (Supply) Act 1927 domiciled in the Republic of Ireland.  A copy of
ESB's accounts is available from 27 Lower Fitzwilliam Street, Dublin 2.

A full list of the subsidiary undertakings of ESB are included in its accounts.

Related parties of the Company also include the subsidiaries listed in note 17.

Transactions between the Group and related parties and the balances outstanding
are disclosed below:
Group                                                         Amounts      Amounts
                                                              owed by      owed to
                          Revenue  Charges         Other      related      related
                Interest     from     from  transactions     party at     party at
                 (paid)/  related  related  with related  31 December  31 December
                received    party    party         party    /31 March    /31 March
                      £m       £m       £m            £m           £m           £m
Period to
31 December 2012
ESBNI                  -        -        -           1.4            -            -
ESB subsidiaries       -     14.8   (46.7)           0.8          3.2          9.8
                     ---     ----     ----          ----          ---          ---
                       -     14.8   (46.7)           2.2          3.2          9.8
                     ===     ====     ====          ====          ===          ===
Year to
31 March 2012
ESBNI              (1.6)        -        -       (359.7)            -            -
ESB subsidiaries      -      23.5   (59.3)             -          1.6          7.3
                     ===     ====     ====         =====          ===          ===
                   (1.6)     23.5   (59.3)       (359.7)          1.6          7.3
                    ===      ====     ====         =====          ===          ===
Outstanding balances with subsidiaries are unsecured.  Current account balances
are settled on a monthly basis.  Amounts owed to related parties primarily
arise from transactions relating to regulated sales and services purchased from
ESB subsidiaries.  Transactions with ESB group undertakings are determined on
an arm's length basis.
Other transactions with ESBNI primarily reflect the repayment of intercompany
loans.  The impact of swap arrangements entered into during the prior year, as
explained in note 16, was offset by a corresponding increase in intercompany
funding.

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

Company                                                       Amounts      Amounts
                                                              owed by      owed to
                          Revenue  Charges         Other      related      related
                Interest     from     from  transactions     party at     party at
                 (paid)/  related  related  with related  31 December  31 December
                received    party    party         party    /31 March    /31 March
                      £m       £m       £m            £m           £m           £m
Period to
31 December 2012
Company's          (19.1)       -        -             -            -        412.8
 subsidiaries
ESBNI                   -       -        -           1.4            -            -
ESB subsidiaries        -    14.8   (46.7)           0.8          3.2          9.8
                     ----    ----     ----           ---          ---        -----
                     19.1    14.8   (46.7)           2.2          3.2        422.6
                     ====    ====     ====           ===          ===        =====
Year to
31 March 2012
Company's          (21.2)       -        -             -            -        419.1
 subsidiaries
ESBNI               (1.6)       -        -       (359.7)            -            -
ESB subsidiaries        -    23.5   (59.3)             -          1.6          7.3
                     ----    ----    -----         -----          ---        -----
                    (22.8)    23.5   (59.3)       (359.7)         1.6        426.4
                     ====    ====     ====         =====          ===        =====
                                                                                  

Amounts owed by the Company to related parties at 31 December 2012 include the £400m loan and the associated interest.

Other related parties
During the period the Company contributed £14.2m (year ended 31 March 2012 - £
16.0m) to NIEPS.

(Source: PR Newswire )
(Source: Quotemedia)

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