TIDM92AJ 
 
RNS Number : 6219O 
Belfast Gas Transmission Fin PLC 
01 July 2010 
 

Belfast Gas Transmission Financing plc 
Annual report 
For the year ended 31 March 2010 
 
 
 
Annual report for the year ended 31 March 2010 
Pages 
Directors and advisers 
                                                                    1 
Operating and financial review 
                                                              2 - 7 
Directors' report 
                                                                     8 - 9 
Independent auditors' report 
                                                            10 - 11 
Group statement of comprehensive income 
                                                      12 
Group and parent company balance sheets 
                                                      13 
Group and parent company cash flow statements 
                                                   14 
Notes to the financial statements 
                                                            15 - 32 
 
 
 
Directors and advisers 
Directors 
Felicity Huston 
Patrick Larkin                        Executive Director 
Gerard McIlroy                     Executive Director 
 
Company secretary 
Gerard McIlroy 
 
Registered office 
First Floor 
The Arena Building 
85 Ormeau Road 
Belfast 
BT7 1SH 
 
Principal place of business 
 
First Floor 
The Arena Building 
85 Ormeau Road 
Belfast 
BT7 1SH 
 
Solicitors 
Arthur Cox Northern Ireland 
Capital House 
3 Upper Queen Street 
Belfast 
BT1 6PU 
 
Bankers 
+-------------------------------------+ 
| Barclays Bank plc                   | 
+-------------------------------------+ 
| Donegall House                      | 
+-------------------------------------+ 
| Donegall Square North               | 
+-------------------------------------+ 
| Belfast                             | 
+-------------------------------------+ 
| BT1 5LU                             | 
+-------------------------------------+ 
 
Statutory auditors 
PricewaterhouseCoopers LLP 
Chartered Accountants and Statutory Auditors 
Waterfront Plaza 
8 Laganbank Road 
Belfast 
BT1 3LR 
 
 
 
 
 
 
 
 
Operating and financial review for the year ended 31 March 2010 
Business description 
 
The Group ("Belfast Gas") was formed to own and operate the Belfast Gas 
Transmission pipeline. The Belfast Gas Transmission pipeline, which was acquired 
in March 2009 and was funded by a bond issue of GBP109m over a term of 40 years, 
is a 24 inch diameter gas transmission pipeline which transports natural gas 
from Ballylumford to Belfast. 
 
Belfast Gas' principal stakeholders are the energy consumers of Northern Ireland 
and the financiers of its bond.  Its business is to provide a safe, reliable and 
efficient transmission service to the gas systems of Northern Ireland and in 
particular to the shippers of gas to Northern Ireland. Belfast Gas aims to 
maximise value to its stakeholders through the provision of these services. 
 
Belfast Gas manages the Belfast Gas Transmission pipeline on behalf of energy 
consumers with all the benefits of the low cost of capital and operational 
efficiencies being returned to energy consumers.  In addition, proactive and 
coordinated management of the Belfast Gas Transmission pipeline has meant that 
further opportunities for operational savings have been identified and captured. 
The quality of the service provided to our customers is determined by the 
performance of the Belfast Gas Transmission pipeline in delivering high 
availability gas transmission to gas shippers and to the gas systems of Northern 
Ireland. 
 
Belfast Gas receives its revenue from the postalised gas transmission system of 
Northern Ireland (the "POT") and earns revenue for the POT through its capacity 
and commodity sales to gas shippers. 
 
Safety and reliability are critical to the operation of our business, we are 
pleased to report that we have operated our gas assets without incident or lost 
time injury and that our system has been fully available at all times. 
 
External market environment 
 
All the gas used in Northern Ireland is transported from Scotland in our 
pipeline system and that of a fellow subsidiary undertaking, the Premier 
Transmission Group ("Premier"). Belfast Gas and Premier provide a service to 
shippers from Moffat in Scotland to exit points at Premier Power, Ballylumford, 
the connection with BGE(NI) pipelines at Middle Division and Phoenix Exit points 
in Belfast. The shippers who currently use our system are Centrica, Phoenix, 
Premier Power, Coolkeeragh/ ESB, Firmus and Energia. 
 
Gas volumes transported in our pipeline system decreased by 6% from the previous 
year due to 9% less gas being used in Northern Ireland for power generation. 
This decline in power generation usage of gas was a consequence of lower 
electricity demand and a shift in power supply to generators in the Republic of 
Ireland and imports across the Moyle interconnector. 
 
The fall in the power generation demand was partially offset by a 6% increase in 
gas demand in the non power (distribution) sector compared to the previous year. 
Gas prices have remained depressed during 2009 primarily due to lower demand 
caused by the global recession and the commissioning of additional gas supply 
infrastructure in GB. Conversely oil prices have been steadily climbing from 
their most recent autumn 2008 low. This differential in price has encouraged new 
customers to connect to the network. This, combined with an unusually cold 
winter, has increased demand on the distribution network. 
 
The most recent network studies indicate that SNIP has the capacity to supply 
Northern Ireland until at least the winter of 2015 /16, assuming no new power 
generation. 
 
EU "Second and Third Packages" 
Regulation (EC) No 1775/2005 of the European Parliament concerning conditions 
for access to the natural gas transmission networks requires TSO's to make 
available cross border tariffs arrangements, additional capacity products, 
(namely short term capacity products) and real time operational information. 
Provision of such products will require changes to operational IT systems and 
network code development. This work has not previously been progressed following 
instruction from NIAUR as they anticipated that the requirements would be 
addressed by the Common Arrangements for Gas project. Action on this is now 
pressing. 
 
Similarly Directive 2009/73/EC of the European Parliament and the council 
concerning common rules for the internal market in natural gas is also on the 
road to implementation. The Directive is a part of an energy liberalisation 
package that represents a further major step towards the creation of a fully 
competitive, liberalised internal market in natural gas in the European 
Community. Whilst the Directive imposes many different requirements it is the 
requirements relating to unbundling of the ownership of gas transmission which 
will impact ourselves and to a greater extent BGE. 
 
Operating and financial review for the year ended 31 March 2010 (continued) 
 
External market environment (continued) 
 
The first round of consultation has concluded, with submission by 1 February 
2010, where we sought to convince that our transmission operations are fully 
unbundled. The second stage will be a consultation on the implementation of all 
aspects of the Directive (including transmission unbundling). It will take place 
in Autumn 2010. The transmission unbundling requirements must be effective by 3 
March 2012, with certification by NIAUR to demonstrate compliance by March 2011. 
 
Future developments 
 
The future operation of the gas transportation system in Ireland will be 
dominated by the proposed convergence of the rules governing the gas markets in 
Northern Ireland and the Republic of Ireland, known as the Common Arrangements 
for Gas ("CAG"),and the overarching concerns for security of supply as the gas 
market continues to grow. 
 
The two Regulatory Authorities, the Northern Ireland Authority for Utility 
Regulation in Northern Ireland and the Commission for Energy Regulation ("CER") 
in the Republic, have prepared a "conclusions paper" recommending a single 
Transmission System Operator and single Network Code. This is being considered 
by their respective governments. 
 
 Regardless of whether this is implemented ROI and NI are legally obliged to 
have in place a mechanism to allow shippers to trade gas across the South North 
pipeline. Key decisions on single system operation and a combined network code 
will need to be taken in the next few years and could change our business 
significantly. We will work to ensure there is no increased risk to our 
creditors, that all Ireland pipeline owners will have a similar status within 
new arrangements, that costs do not increase for consumers in Northern Ireland 
and that the benefits of our mutual business model are not eroded. 
 
Following a request by Premier Transmission and the Northern Ireland 
Authorities, the UK government have written to the Republic of Ireland 
government, to  exercise an option in the Irish Sea Interconnector Agreement, 
allowing Northern Ireland an increase in capacity on fair commercial terms, from 
2012. The impact of the exercise of this option would be to increase the maximum 
volume of gas that Premier Transmission and Belfast Gas Transmission could 
transport through the existing pipeline system. We are currently awaiting RoI 
proposals for fair commercial terms however developments in CAG may impact on 
the need for such ring fenced additional capacity. 
 
Security of Supply is a fundamental government concern, driven by the increasing 
reliance on gas as a provider of both electricity and domestic fuel in Ireland. 
Diversification into liquefied natural gas, gas storage and oil and gas 
exploration are being encouraged politically, to mitigate against the inevitable 
increasing dependence on natural gas. 
 
New local sources of gas supply could reduce the gas flowed from GB. The gas 
network in Northern Ireland continues to grow with BGE's development of markets 
along the route of their pipelines. All of NI's gas is still supplied by the 
Premier Transmission Pipeline System (our two gas businesses, "PTPS") and that 
system is more than capable of meeting demand assuming organic growth for the 
foreseeable future. A new large customer such as a power station (Kilroot or 
Quinns) would mean that additional supply capacity would be required. This could 
be provided by the South North pipeline, accessing additional capacity in the 
Moffat to Twynholm line for SNIP or from gas storage if it goes ahead. 
 
In order to improve security of supply and increase the flexibility of gas 
supply in an energy market with high levels of wind generation Mutual Energy, 
the Group's parent company, has been closely involved in a project to develop a 
500 million cubic metres natural gas salt cavity storage facility beneath Larne 
Lough. A planning application for the project was submitted by Islandmagee 
Storage Limited (ISML) on 23 March 2010. ISML is a joint venture between 
Infrastrata UK Limited (65% shareholder) and fellow subsidiary Moyle Energy 
Investments Limited (35% shareholder). Objectives for the coming year are to 
achieve full planning consent, and agree licence terms, tariff arrangements, and 
to develop a full shareholder agreement. 
 
Forward-looking statements 
 
The Chairman's Statement and Operating and Financial Review in the annual report 
of Mutual Energy Limited contain forward-looking statements. Due to the inherent 
uncertainties including both economic and business risk factors underlying such 
forward-looking information, the actual results of operations, financial 
position and liquidity may differ materially from those expressed or implied by 
these forward-looking statements. 
 
 
Operating and financial review for the year ended 31 March 2010 (continued) 
Performance during the year 
 
Environment and safety 
Belfast Gas continues to put a high value on the safety of its operations and to 
recognise the importance of minimising the impact of its activities on the 
environment, both locally and in the global context. 
 
Belfast Gas has delivered highly reliable energy transmission services to their 
customers without lost time accidents or public safety incidents. They continue 
to maintain regular contact with the landowners through whose land its pipelines 
pass, to ensure that any land issues are addressed and that no works by others 
are taking place in the vicinity of its installations. 
 
Belfast Gas use significant quantities of gas for heating the gas transiting 
through our pipelines prior to pressure reduction. The Group measures the 
quantities used and sets targets to reduce these. 
 
An improvement implemented in November 2009 on the pre heat gas process at 
Twynholm made in conjunction with Bord Gais who own the site has meant there has 
been no gas used over the recent winter period for pre heat gas usage. This will 
be monitored going forward to quantify the cost savings for NI gas consumers. 
 
Belfast Gas is committed to environmental performance, with no breach of any 
environmental licence or permit recorded in the year. Usage of gas for pre 
heating is monitored to help target improvements. 
 
 
Operating company performance 
 
Revenue and Profitability 
Under Belfast Gas Transmission Limited's licence, the company's revenue is 
regulated so as to match the Group's debt service costs and operating 
expenditure in cash terms, with an annual reconciliation of actual to forecast 
being agreed with the Northern Ireland Utility Regulator at the end of each gas 
year (1st October).  In the 2009 reconciliation, Belfast Gas Limited's costs 
were broadly in line with forecast. 
 
Being regulated in this way, Belfast Gas collects only the cash required to meet 
its costs.  As a result, although the business is cash generative and able to 
meet its debt service obligations, it is not expected to be profitable for some 
years. 
 
The directors consider that the performance of the Belfast Gas Transmission 
business is shown by its earnings before interest, taxation, depreciation and 
amortisation (EBITDA) of GBP3.2m (2009: GBP3.2m). 
 
Operational Performance 
The booked capacity on the SNIP rose from 7.58 mscm in the first 6 months of the 
2009/10 financial year to 7.63 mscm for the second 6 month period. This was in 
response to growth in the distribution sector outside of the Greater Belfast 
area. A total volume of 16,579 GWhs flowed through the SNIP in the 2009/10 
financial year, down 6% on the previous year's figure of 17,602GWhs. 
 
Although the annual demand decreased, the island of Ireland experienced an all 
time peak day of gas usage on 7th January 2010, with Northern Ireland demand 
being 6.7 mscm (74,731 MWhs), which is 88% of the total current booked capacity 
on the pipeline. This was due to the extremely cold weather and the high 
dispatch of the two NI power stations on the same day. 
 
There have been no incidents or lost time injuries associated with gas business 
operations and the gas transmission system was available for 100% of the time 
year ending 31 March 2010. 
 
The programme of works for the period focused on resilience of our systems, 
particularly pre-heating, and some improvement work to the Belfast Gas pipeline 
corridors. At Ballylumford a review of the design of waterbath heaters was 
undertaken with the intention of reducing call outs. 
 
To demonstrate continued fitness for purpose the pressure in our entire pipeline 
system was raised to reaffirm its Maximum Permitted Operating Pressure (MPOP) 
(recommended every 5 years). 
 
During the year the process to retender the key Maintenance and Emergency 
Response contract commenced with a view to formal invitation via the European 
Journal in 2010. 
 
Operating and financial review for the year ended 31 March 2010 (continued) 
 
Operational performance (continued) 
National Grid acting as the UK Network Emergency Coordinator (UK NEC), conducted 
a two day simulated gas supply emergency exercise called "Exercise Quartz". 
Premier Transmission Ltd and the Northern Ireland Network Emergency Co-ordinator 
(NINEC) co-ordinated the exercise for the gas industry in the Northern Ireland, 
as they would in the event of an actual NI Gas Supply Emergency. The exercise 
simulated the load-shedding of gas at Moffat. DETI and NIAUR both attended the 
exercise in our offices and both parties confirmed the exercise as beneficial to 
their understanding of the emergency process and issues which arose. A debrief 
with industry was coordinated to address any issues which arose and discuss 
learning points. 
 
Consumers' Returns and Receipts and employee matters 
As a mutual energy company working for consumers, the directors continue to 
consider it appropriate to report here any returns made to or receipts from the 
energy consumers of Northern Ireland 
 
Efficiency gains achieved by the gas business through reduction in its costs are 
primarily returned to shippers by way of a year-end reconciliation payment. The 
company's success in maximising its returns to and minimising receipts from 
consumers is therefore reflected in the comparison between the forecast revenue 
requirement submitted at the start of the gas year to the Northern Ireland 
Utility Regulator and the actual outturn for the year.  For the gas year ended 
30th September 2009, the combined gas businesses actual required revenue was 
GBP18.4m, against a forecast of GBP20.4m. GBP1.9m was returned to shippers in 
January 2010, with GBP0.1m retained in the businesses. 
 
The Company is committed to maintaining a high quality and committed workforce. 
As such the company employs a personal performance evaluation system with 
assessment of targets and training needs to encourage performance. Remuneration 
is linked to performance throughout the organisation. 
 
Key performance indicators (KPI's) 
 
The directors have identified four groups of KPI's chosen to reflect what is 
important to our stakeholders. 
 
The Group's main business continues to be in the operation of regulated 
debt-financed infrastructure assets.  This business generates cash and is 
structured to meet the requirements of its financiers and to minimise costs to 
consumers.  By its nature, it is not necessarily profitable in its early years. 
While the Group strives towards profitability, its contribution to the energy 
consumers of Northern Ireland is best measured by its cash returns to or 
receipts from consumers. 
 
Consumer financial benefit KPIs 
The gas consumers of Northern Ireland provide Belfast Gas' required revenue 
through the POT. For this financial year we consider the relevant KPI to be the 
difference between the Forecast Required Revenue for the last gas year (ending 
September 2009) and the Actual Required Revenue of that gas year.  (consumer 
benefit KPIs ) 
 
Operational performance KPI's 
The quality of service to our direct customers is determined by the performance 
of our assets, of which the principal measure is the availability of 
transmission capacity.  As availability should be at or close to 100%, the KPI 
is expressed as its inverse, unavailability. As Belfast Gas provides the only 
supply of gas to Northern Ireland, the directors have set a target of 0% 
unavailability. 
 
Financial KPI's 
In addition to compliance with the respective financing covenants, the principal 
requirements of the financiers are the maintenance of Annual Debt Service Cover 
Ratios (ADSCR) of greater than 1.2. These calculations are based upon specific 
methodologies outlined in the relevant collateral deeds with the information 
sourced from the Group's management accounts. 
 
Corporate responsibility KPI's 
The Group's contribution to society is focused on the safe and efficient 
operation of vital infrastructure in a cost efficient manner. Cost efficiency 
impacts upon the ability to return cash to customers (consumer benefit KPI's) 
and on the financial performance. Safe and efficient operation is measured with 
reference to the operational performance KPI's and the corporate responsibility 
KPI's. These aim to measure both the absolute performance (availability) and the 
environmental and safety impact of achieving this performance (corporate 
responsibility). 
 
 
 
Operating and financial review for the year ended 31 March 2010 (continued) 
 
Key performance indicators (KPI's) (continued) 
 
Note: The KPIs in table 1,2 and 4 relate to Belfast Gas and Premier combined. 
 
KPI table 1 
+----------------------------------------------------+---------+---------+ 
|                                                    |  2010   |  2009   | 
+----------------------------------------------------+---------+---------+ 
| Consumer benefits                                  |         |         | 
+----------------------------------------------------+---------+---------+ 
| Gas business saving against Forecast Required      |  2.0m   |GBP1.8m  | 
| Revenue ( by gas year)                             |         |         | 
+----------------------------------------------------+---------+---------+ 
|                                                    |         |         | 
+----------------------------------------------------+---------+---------+ 
|     The KPI for gas business operational savings is calculated by      | 
| subtracting the actual agreed revenue for the gas year, calculated in  | 
|    accordance with the gas companies' licences, from the forecast      | 
|          required revenue submitted in advance of the year.            | 
|                                                                        | 
|              This is a measure of operational efficiency.              | 
|                                                                        | 
+------------------------------------------------------------------------+ 
| KPI table 2                                        |         |         | 
+----------------------------------------------------+---------+---------+ 
|                                                    |  2010   |  2009   | 
+----------------------------------------------------+---------+---------+ 
| Operational Performance                            |         |         | 
+----------------------------------------------------+---------+---------+ 
| Unavailability                                     |   0%    |   0%    | 
+----------------------------------------------------+---------+---------+ 
|                                                    |         |         | 
+----------------------------------------------------+---------+---------+ 
Availability is the key measure of operating performance. 
For the gas businesses availability has been 100% throughout the entire period 
of their ownership by the mutual energy group. 
 
+----------------------------------------------------+---------+---------+ 
| KPI table 3                                        |         |         | 
+----------------------------------------------------+---------+---------+ 
|                                                    |  2010   |  2009   | 
+----------------------------------------------------+---------+---------+ 
| Financial performance                              |         |         | 
+----------------------------------------------------+---------+---------+ 
| ADSCR                                              |  1.97   |  2.29   | 
+----------------------------------------------------+---------+---------+ 
|                                                                        | 
| The Annual Debt Service Cover Ratios are calculated in accordance with | 
| the terms of the bonds for each operational company.                   | 
|                                                                        | 
| The basis of calculation is Available Cash / Debt Service in the next  | 
| 12 months.                                                             | 
|                                                                        | 
| In each case Available Cash = the difference between income and        | 
| expenses in the period + cash in designated bank accounts, where cash  | 
| in the designated bank accounts is limited to 1x Debt service.         | 
|                                                                        | 
| The ADSCR for both Belfast Gas and Premier will tend to average        | 
| towards 2.0. Over-performance above 2.0 in the 2006 to 2009 period was | 
| driven by interest income and some operational savings retained in     | 
| accordance with the licences. In the future years when this cash is    | 
| released to the benefit of consumers there will be a consequential     | 
| fall in the ADSCR below 2.0.                                           | 
+------------------------------------------------------------------------+ 
|                                                    |         |         | 
| KPI table 4                                        |         |         | 
+----------------------------------------------------+---------+---------+ 
|                                                    |  2010   |  2009   | 
+----------------------------------------------------+---------+---------+ 
| Corporate Responsibility                           |         |         | 
+----------------------------------------------------+---------+---------+ 
| Lost time and reportable accidents                 |       0 |       0 | 
+----------------------------------------------------+---------+---------+ 
| Usage of gas in operations                         |   4,266 |   5,096 | 
|                                                    |     mwh |     mwh | 
+----------------------------------------------------+---------+---------+ 
|                                                    |         |         | 
+----------------------------------------------------+---------+---------+ 
 
 
 
 
 
 
 
 
 
 
 
 
Operating and financial review for the year ended 31 March 2010 (continued) 
 
Financial position and financial management 
 
Revenue, profitability and reserves 
Group revenue in the period to 31 March 2010 was GBP4.6m (2009: GBP4.7m).  Group 
operating loss before interest and tax was GBP0.3m (2009: GBP0.2m).  After 
accounting for debt service, the Group made an after-tax loss of GBP5.2m (2009: 
GBP2.0m) 
 
Belfast Gas was cash generative during the year and is required to hold high 
levels of cash reserves as conditions of its financing arrangements.  Cash 
reserves in Belfast Gas Transmission amounted to GBP6.9m . 
 
Debt Service and Liquidity 
Under their respective financing documents, the ongoing ability of all the core 
regulated business to meet its debt service obligations is measured by the ADSCR 
at the level of the licence holding entity.  For the year under review, the 
ADSCRs, calculated by comparing the actual cash flows with the debt service 
payments which they funded in accordance with the methodology dictated by the 
financing agreement, were 1.97 against a required figure of 1.20 for Belfast 
Gas. 
 
The Group has low liquidity risk due to its strong cash flows and the reserve 
accounts and liquidity facilities required by its financing documents.  The 
required reserve accounts were fully funded and liquidity facilities were in 
place throughout the year. 
 
Treasury 
Belfast Gas' only borrowings are the Index Linked Guaranteed Secured Bonds 2048 
issued by Belfast Gas Transmission Financing plc. The purpose of this 
arrangement is to manage the index risk arising from the Group's sources of 
long-term finance. 
 
The Group's treasury policies, determined by the terms of its long-term bond 
financing, are aimed at minimising the risks associated with the Group's 
financial assets and liabilities.  Where the Group provides its transmission 
services on deferred terms to parties who do not hold an appropriate credit 
rating, security cover is required.  The cash reserves of the Group are held in 
interest-bearing accounts or invested in fixed term deposits of up to one year 
spread across a panel of approved banks and financial institutions having high 
credit ratings. 
 
Interest received for the period was GBP0.1m (2009: GBP0.3m). 
 
 Resources and relationships 
 
The business of the Group has been stable throughout the year and the directors 
continue to believe that the debt-financed and outsourced model is appropriate 
to that business.  The directors consider that the management arrangements, 
together with the Group's relationships with its professional advisers and 
appropriate insurance arrangements continue to be robust against management 
contingencies and effective in succession terms. 
 
The Group holds significant cash resources on its balance sheet. The directors 
continue to seek investment opportunities which will ensure that these resources 
will be used in ways which are in the long-term interests of the energy 
consumers of Northern Ireland, with a risk profile which is appropriate to the 
nature of the Group. 
 
For most of its business activities, the Group relies on its network of 
professional advisers and contractors. While ensuring that contracts are at 
market rates, the Group aims to build relatively long-term relationships of the 
order of five years. 
 
During the year, the Group ensured compliance with the terms of the financing of 
its regulated subsidiary and continued to maintain good relations with the 
respective bond financiers, represented by Assured Guaranty (Europe) Limited as 
controlling creditor and Prudential Trustee Company Limited. 
 
Belfast Gas Transmission Ltd, the operating company of the Group, is regulated 
under the terms of their gas conveyance licence and the directions issued by the 
Utility Regulator under the licence. The Group aims to work closely with the 
Utility Regulator to build a long-term co-operative relationship in the interest 
of consumers and, to this end, meets regularly with the Utility Regulator at 
various levels. 
 
Belfast Gas Transmission Pipeline System 
Operation and maintenance of Belfast Gas Transmission assets, is carried out by 
the Premier Transmission management team, using the same key contractors and 
harmonised processes and procedures. 
 
Directors' report for the year ended 31 March 2010 
The directors present their report and the audited financial statements for the 
year ended 31 March 2010. 
Principal activity, review of the business and key performance indicators 
The group's principal activity during the year was the financing and operation 
through its subsidiary of the Belfast Gas Transmission Pipeline which transports 
gas from Ballylumford to Greater Belfast and Larne.  It is the intention of the 
directors to continue to maintain the efficient and effective operation of the 
pipe line. The Operating and Financial Review on pages 2 to 7 of these financial 
statements provides a review of the business, future developments and its key 
performance indicators for the Belfast Gas Transmission Financing plc group and 
is therefore incorporated into this report by cross reference. 
Results and dividends 
The group's loss for the year is GBP5,169,000 (2009: GBP1,978,000). The 
directors do not recommend the payment of a dividend (2009: GBPnil). 
Directors 
The directors who served the group during the year were: 
Alan McClure         (Resigned 29 September 2009) 
Felicity Huston 
Damian McAteer    (Resigned 29 September 2009) 
William Cargo        (Resigned 1 January 2010) 
Patrick Larkin 
Gerard McIlroy       (Appointed 1 January 2010) 
 
Financial risk management 
Please refer to note 1 to these financial statements for a description of the 
financial risks that the group faces and how it addresses those risks. 
 
Political and charitable donations 
 
No political or charitable donations have been made during the year (2009: 
GBPnil). 
 
Payment of suppliers 
The group's procurement policy is to source equipment, goods and services from a 
wide range of suppliers in accordance with commercial practices based on 
fairness and transparency. 
The group recognises the important role that suppliers play in its business and 
works to ensure that payments are made to them in accordance with agreed 
contract terms. 
The group had trade payable days of 6 days at 31 March 2010 (2009: 18 days). The 
group intends to continue to meet the payment terms contained in its agreements 
with suppliers. 
Directors' report for the year ended 31 March 2010 (continued) 
Statement of directors' responsibilities 
The directors are responsible for preparing the Annual Report and the financial 
statements in accordance with applicable law and regulations. 
 
Company law requires the directors to prepare financial statements for each 
financial year. Under that law the directors have prepared the group and parent 
company financial statements in accordance with International Financial 
Reporting Standards (IFRSs) as adopted by the European Union. Under company law 
the directors must not approve the financial statements unless they are 
satisfied that they give a true and fair view of the state of affairs of the 
group and the company and of the profit or loss of the group for that period. 
In preparing these financial statements, the directors are required to: 
 
·      select suitable accounting policies and then apply them consistently; 
·      make judgements and accounting estimates that are reasonable and prudent; 
·      state whether applicable IFRSs as adopted by the European Union have been 
followed, subject to any material departures disclosed and explained in the 
financial statements; and 
·      prepare the financial statements on the going concern basis unless it is 
inappropriate to presume that the company will continue in business. 
The directors are responsible for keeping adequate accounting records that are 
sufficient to show and explain the company's transactions and disclose with 
reasonable accuracy at any time the financial position of the company and the 
group and enable them to ensure that the financial statements comply with the 
Companies Act 2006 and, as regards the group financial statements, Article 4 of 
the IAS Regulation. They are also responsible for safeguarding the assets of the 
company and the group and hence for taking reasonable steps for the prevention 
and detection of fraud and other irregularities. 
 
The directors are responsible for the maintenance and integrity of the company's 
website. Legislation in the United Kingdom governing the preparation and 
dissemination of financial statements may differ from legislation in other 
jurisdictions. 
 
Statement of disclosure of information to auditors 
So far as each of the directors in office at the date of approval of these 
financial statements is aware: 
·      there is no relevant audit information of which the group and parent 
company's auditors are unaware; and 
·      they have taken all the steps that they ought to have taken as directors 
in order to make themselves aware of any relevant audit information and to 
establish that the group and parent company's auditors are aware of that 
information. 
Independent auditors 
PricewaterhouseCoopers LLP have indicated their willingness to continue in 
office, and a resolution concerning their reappointment will be proposed at the 
Annual General Meeting. 
By order of the Board 
 
 
 
 
 
Gerard McIlroy 
Company secretary 
23 June 2010 
Independent auditors' report to the members of Belfast Gas Transmission 
Financing plc 
We have audited the group and parent company financial statements ("financial 
statements") of Belfast Gas Transmission Financing plc for the year ended 31 
March 2010 which comprise the group statement of comprehensive income, the group 
and parent company balance sheets and the group and parent company cash flow 
statements and the related notes. The financial reporting framework that has 
been applied in their preparation is applicable law and International Financial 
Reporting Standards (IFRSs) as adopted by the European Union and, as regards the 
parent company financial statements, as applied in accordance with the 
provisions of the Companies Act 2006. 
Respective responsibilities of directors and auditors 
As explained more fully in the Directors' Responsibilities Statement set out on 
page 9, the directors are responsible for the preparation of the financial 
statements and for being satisfied that they give a true and fair view. Our 
responsibility is to audit the financial statements in accordance with 
applicable law and International Standards on Auditing (UK and Ireland). Those 
standards require us to comply with the Auditing Practices Board's Ethical 
Standards for Auditors. 
 
This report, including the opinions, has been prepared for and only for the 
company's members as a body in accordance with Chapter 3 of Part 16 of the 
Companies Act 2006 and for no other purpose.  We do not, in giving these 
opinions, accept or assume responsibility for any other purpose or to any other 
person to whom this report is shown or into whose hands it may come save where 
expressly agreed by our prior consent in writing. 
 
Scope of the audit of the financial statements 
 
An audit involves obtaining evidence about the amounts and disclosures in the 
financial statements sufficient to give reasonable assurance that the financial 
statements are free from material misstatement, whether caused by fraud or 
error. This includes an assessment of: whether the accounting policies are 
appropriate to the group's and the parent company's circumstances and have been 
consistently applied and adequately disclosed; the reasonableness of significant 
accounting estimates made by the directors; and the overall presentation of the 
financial statements. 
 
Opinion on financial statements 
 
In our opinion: 
 
·      the financial statements give a true and fair view of the state of the 
group's and of the parent company's affairs as at 31 March 2010 and of the 
group's loss and group's and parent company's cash flows for the year then 
ended; 
 
·      the group financial statements have been properly prepared in accordance 
with IFRSs as adopted by the European Union; 
 
·      the parent company financial statements have been properly prepared in 
accordance with IFRSs as adopted by the European Union and as applied in 
accordance with the provisions of the Companies Act 2006; and 
 
·      the financial statements have been prepared in accordance with the 
requirements of the Companies Act 2006 and, as regards the group financial 
statements, Article 4 of the lAS Regulation. 
 
Opinion on other matters prescribed by the Companies Act 2006 
 
 
In our opinion the information given in the Directors' Report for the financial 
year for which the financial statements are prepared is consistent with the 
financial statements. 
 
 
 
 
 
 
 
 
Independent auditors' report to the members of Belfast Gas Transmission 
Financing plc (continued) 
 
Matters on which we are required to report by exception 
 
 
We have nothing to report in respect of the following matters where the 
Companies Act 2006 requires us to report to you if, in our opinion: 
·      adequate accounting records have not been kept by the parent company, or 
returns adequate for our audit have not been received from branches not visited 
by us; or 
 
·      the parent company financial statements are not in agreement with the 
accounting records and returns; or 
 
·      certain disclosures of directors' remuneration specified by law are not 
made; or 
 
·      we have not received all the information and explanations we require for 
our audit 
 
 
 
 
Kevin MacAllister (Senior Statutory Auditor) 
for and on behalf of PricewaterhouseCoopers LLP 
Chartered Accountants and Statutory Auditors 
Belfast 
30 June 2010 
Group statement of comprehensive income for the year ended 31 March 2010 
+------------------------------------------+-------+----------+----------+ 
|                                          |       |     2010 |     2009 | 
+------------------------------------------+-------+----------+----------+ 
|                                          |Notes  |  GBP'000 |  GBP'000 | 
+------------------------------------------+-------+----------+----------+ 
| Revenue - continuing operations          |       |    4,563 |    4,741 | 
+------------------------------------------+-------+----------+----------+ 
| Operating costs                          |  2    |  (4,824) |  (4,934) | 
+------------------------------------------+-------+----------+----------+ 
| Earnings before depreciation and         |       |    3,180 |    3,247 | 
| amortisation of intangible assets        |       |          |          | 
+------------------------------------------+-------+----------+----------+ 
| Amortisation of intangible assets        |       |  (2,487) |  (2,487) | 
+------------------------------------------+-------+----------+----------+ 
| Depreciation (net of amortisation of     |       |    (954) |    (953) | 
| government grants)                       |       |          |          | 
+------------------------------------------+-------+----------+----------+ 
| Operating loss                           |       |    (261) |    (193) | 
+------------------------------------------+-------+----------+----------+ 
| Finance income                           |  4    |       62 |      284 | 
+------------------------------------------+-------+----------+----------+ 
| Finance costs                            |  4    |  (6,642) |  (2,839) | 
+------------------------------------------+-------+----------+----------+ 
| Finance costs - net                      |  4    |  (6,580) |  (2,555) | 
+------------------------------------------+-------+----------+----------+ 
| Loss before income tax                   |       |  (6,841) |  (2,748) | 
+------------------------------------------+-------+----------+----------+ 
| Income tax credit                        |  5    |    1,672 |      770 | 
+------------------------------------------+-------+----------+----------+ 
| Loss for the year                        |  13   |  (5,169) |  (1,978) | 
+------------------------------------------+-------+----------+----------+ 
 
The notes on pages on pages 15 to 32 are an integral part of these group 
financial statements. 
 
 
Group and parent company balance sheets as at 31 March 2010 
+------------------------+-------+---------+---------+---------+---------+ 
|                        |       |      Group        |      Company      | 
+------------------------+-------+-------------------+-------------------+ 
|                        |       |    2010 |    2009 |    2010 |    2009 | 
+------------------------+-------+---------+---------+---------+---------+ 
|                        |Notes  | GBP'000 | GBP'000 | GBP'000 | GBP'000 | 
+------------------------+-------+---------+---------+---------+---------+ 
| Assets                 |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
| Non current assets     |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
| Property, plant and    |  7    |  35,997 |  37,239 |       - |       - | 
| equipment              |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
| Intangible assets      |  8    | 104,439 | 106,926 |       - |       - | 
+------------------------+-------+---------+---------+---------+---------+ 
| Investment in          |  9    |       - |       - | 112,384 | 112,384 | 
| subsidiary undertaking |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
| Deferred income tax    |  15   |     225 |       - |       - |       - | 
| assets                 |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
|                        |       | 140,661 | 144,165 | 112,384 | 112,384 | 
+------------------------+-------+---------+---------+---------+---------+ 
| Current assets         |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
| Trade and other        |  10   |   1,649 |   1,071 |      51 |      41 | 
| receivables            |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
| Cash and cash          |  11   |   6,923 |   6,644 |   1,307 |   1,314 | 
| equivalents            |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
|                        |       |   8,572 |   7,715 |   1,358 |   1,355 | 
+------------------------+-------+---------+---------+---------+---------+ 
| Total assets           |       | 149,233 | 151,880 | 113,742 | 113,739 | 
+------------------------+-------+---------+---------+---------+---------+ 
|                        |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
| Equity                 |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
| Ordinary shares        |  12   |      50 |      50 |      50 |      50 | 
+------------------------+-------+---------+---------+---------+---------+ 
| Retained earnings      |  13   | (7,147) | (1,978) |       8 |       3 | 
+------------------------+-------+---------+---------+---------+---------+ 
| Total equity           |       | (7,097) | (1,928) |      58 |      53 | 
+------------------------+-------+---------+---------+---------+---------+ 
|                        |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
| Liabilities            |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
| Non current            |       |         |         |         |         | 
| liabilities            |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
| Borrowings             |  14   | 111,463 | 108,143 | 111,463 | 108,143 | 
+------------------------+-------+---------+---------+---------+---------+ 
| Deferred income tax    |  15   |  35,017 |  35,737 |       - |       - | 
| liabilities            |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
| Government grant       |  16   |   8,062 |   8,350 |       - |       - | 
+------------------------+-------+---------+---------+---------+---------+ 
|                        |       | 154,542 | 152,230 | 111,463 | 108,143 | 
+------------------------+-------+---------+---------+---------+---------+ 
| Current liabilities    |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
| Trade and other        |  17   |     851 |     735 |   1,572 |   4,988 | 
| payables               |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
| Borrowings             |  14   |     649 |     555 |     649 |     555 | 
+------------------------+-------+---------+---------+---------+---------+ 
| Government grant       |  16   |     288 |     288 |       - |       - | 
+------------------------+-------+---------+---------+---------+---------+ 
|                        |       |   1,788 |   1,578 |   2,221 |   5,543 | 
+------------------------+-------+---------+---------+---------+---------+ 
| Total liabilities      |       | 156,330 | 153,808 | 113,684 | 113,686 | 
+------------------------+-------+---------+---------+---------+---------+ 
| Total equity and       |       | 149,233 | 151,880 | 113,742 | 113,739 | 
| liabilities            |       |         |         |         |         | 
+------------------------+-------+---------+---------+---------+---------+ 
 
The notes on pages 15 to 32 are an integral part of these group financial 
statements. 
 
The group financial statements on pages 12 to 32 were authorised for issue by 
the Board of Directors on 23 June 2010 and were signed on its behalf by: 
 
 
 
+-------------------------------------+-------------------------------------+ 
| Patrick Larkin                      | Felicity Huston                     | 
+-------------------------------------+-------------------------------------+ 
| Director                            | Director                            | 
|                                     |                                     | 
+-------------------------------------+-------------------------------------+ 
Belfast Gas Transmission Financing plc 
                                               Registered number: NI 067348 
 
Group and parent company cash flow statements for the year ended 31 March 2010 
 
+----------------------------------+-------+---------+------------+---------+-----------+ 
|                                  |       |        Group         |      Company        | 
+----------------------------------+-------+----------------------+---------------------+ 
|                                  |       |    2010 |       2009 |    2010 |      2009 | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
|                                  |Notes  | GBP'000 |    GBP'000 | GBP'000 |   GBP'000 | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Cash flows from operating        |       |         |            |         |           | 
| activities                       |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Loss before income tax and       |       |   (261) |      (193) |    (14) |       (5) | 
| finance costs                    |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Adjustments for:                 |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Depreciation of property, plant  |       |   1,242 |      1,241 |       - |         - | 
| and equipment                    |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Amortisation of government grant |       |   (288) |      (288) |       - |         - | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Amortisation of intangible       |       |   2,487 |      2,487 |       - |         - | 
| assets                           |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Movement in trade and other      |       |      86 |      9,139 |    (10) |      (41) | 
| receivables                      |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Movement in trade and other      |       |     179 |    (8,689) |      11 |   (4,150) | 
| payables                         |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Net cash  generated from /(used  |       |   3,445 |      3,697 |    (13) |   (4,196) | 
| in) operating activities         |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
|                                  |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Cash flows from investing        |       |         |            |         |           | 
| activities                       |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Interest received                |       |      62 |        284 |   3,234 |     2,847 | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Acquisition of subsidiaries, net |       |       - |  (103,247) |       - | (103,247) | 
| of cash acquired                 |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Net cash generated from /(used   |       |      62 |  (102,963) |   3,234 | (100,400) | 
| in) investing activities         |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
|                                  |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Cash flows from financing        |       |         |            |         |           | 
| activities                       |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Interest paid                    |       | (2,659) |    (2,647) | (2,659) |   (2,647) | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Proceeds from issue of share     |       |       - |         50 |       - |        50 | 
| capital                          |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Repayment of borrowings          |       |   (569) |      (493) |   (569) |     (493) | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Proceeds from borrowings         |       |       - |    109,000 |       - |   109,000 | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Net cash (used in)/generated     |       | (3,228) |    105,910 | (3,228) |   105,910 | 
| from financing activities        |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
|                                  |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Movement in cash and cash        |       |     279 |      6,644 |     (7) |     1,314 | 
| equivalents                      |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Cash and cash equivalents at the |  11   |   6,644 |          - |   1,314 |         - | 
| beginning of the year            |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
| Cash and cash equivalents at the |  11   |   6,923 |      6,644 |   1,307 |     1,314 | 
| end of the year                  |       |         |            |         |           | 
+----------------------------------+-------+---------+------------+---------+-----------+ 
 
 
The notes on pages 15 to 32 are an integral part of these group financial 
statements. 
 
Notes to the financial statements for the period ended 31 March 2010 
1          Accounting policies, financial risk management & critical accounting estimates/judgements 
General information 
The group's principal activity during the year was the financing and operation 
through its subsidiary of the Belfast Gas Transmission Pipeline which transports 
gas from Ballylumford to Greater Belfast and Larne. The company is incorporated 
and domiciled in Northern Ireland. 
The financial statements are presented in Sterling and all values are rounded to 
the nearest thousand pounds (GBP'000) except when otherwise indicated. All of 
the group and company's assets and liabilities are denominated in Sterling. 
These financial statements were authorised for issue by the board of directors 
on 23 June 2010 and were signed on their behalf by Patrick Larkin and Felicity 
Huston. The principal accounting policies applied in the preparation of these 
consolidated financial statements are set out below. These policies have been 
consistently applied to all the years presented, unless otherwise stated. 
Basis of preparation 
The consolidated financial statements of Belfast Gas Transmission Financing plc 
have been prepared in accordance with International Financial Reporting 
Standards as adopted by the European Union, IFRIC Interpretations and the 
Companies Act 2006 applicable to companies reporting under IFRS. The 
consolidated financial statements have been prepared under the historical cost 
convention. The preparation of financial statements in conformity with IFRS 
requires the use of certain critical accounting estimates. It also requires 
management to exercise its judgement in the process of applying the group's 
accounting policies. The areas involving a higher degree of judgement or 
complexity, or areas where assumptions and estimates are significant to the 
consolidated financial statements are disclosed on page 22. 
Going concern 
The group has recurring accounting losses and accordingly net liabilities.  In 
view of the structure of the group's initial set up including the acquisition of 
Belfast Gas Transmission Limited and the issuing of a bond, this is a situation 
which will prevail for potentially 20 years.  However the group is cash 
generative and is forecast to remain cash positive over that 20 year period. The 
forecast cash generated is adequate to meet the group's liabilities as they fall 
due over the next 12 months including the scheduled partial repayment of bond 
capital and interest.  In the unlikely event that a change in circumstances 
results in the group being short of adequate cash to service the bond an 
arrangement approved by the Northern Ireland Authority for Utility Regulation 
would be triggered which would ensure bond payments are made.  Accordingly in 
view of the above the Directors consider it appropriate to adopt the going 
concern basis in the preparation of the accounts. 
 
 
Notes to the financial statements for the period ended 31 March 2010 
1          Accounting policies, financial risk management & critical accounting estimates/judgements (continued) 
Standards, amendments and interpretations effective in the year ended 31 March 
2010 and that are relevant to the group and parent company 
The following standards, amendments and interpretations to published standards 
are effective for the year ended 31 March 2010 and are relevant to the group's 
or parent company's operations: 
 
·      IAS 1 Revised - This revised standard requires entities to prepare a 
statement of comprehensive income. All non-owner changes in equity are required 
to be shown in a performance statement, but entities can choose whether to 
present one performance statement (the statement of comprehensive income) or two 
statements (the income statement and statement of comprehensive income). Owner 
changes in equity are shown in a statement of changes in equity. In addition, 
entities making restatements or reclassifications of comparative information are 
required to present a restated balance sheet as at the beginning of the 
comparative period in addition to the current requirement to present balance 
sheets at the end of the current period and comparative period; 
 
·      IFRS 8 - This standard replaces IAS 14 and aligns segment reporting with 
the requirements of the US standard SFAS 131, 'Disclosures about segments of an 
enterprise and related information'. This new standard uses a 'management 
approach', under which segment information is presented on the same basis as 
that used for internal reporting purposes; and 
 
·      Amendment to IFRS 7 - This amendment forms part of the IASB's response to 
the financial crisis and addresses the G20 conclusions aimed at improving 
transparency and enhancing accounting guidance. The amendment increases the 
disclosure requirements about fair value measurement and reinforces existing 
principles for disclosure about liquidity risk. The amendment introduces a 
three-level hierarchy for fair value measurement disclosure and requires some 
specific quantitative disclosures for financial instruments in the lowest level 
in the hierarchy. In addition, the amendment clarifies and enhances existing 
requirements for the disclosure of liquidity risk primarily requiring a separate 
liquidity risk analysis for derivative and non-derivative financial liabilities. 
 
Standards, amendments and interpretations effective in the year ended 31 March 
2010 and that are not relevant to the group and parent company 
The following standards, amendments and interpretations to published standards 
are effective for the year ended 31 March 2010 but they are not relevant to the 
group's or parent company's operations: 
+------------------+ 
| International    | 
| Accounting       | 
| Standards        | 
| (IAS/IFRSs)      | 
+------------------+ 
|                  | 
+------------------+ 
|                  | 
| IAS 32           | 
| (A)              | 
| Amendment        | 
| to               | 
| financial        | 
| instruments:     | 
| presentation     | 
+------------------+ 
|                  | 
| IAS 23           | 
| (R)              | 
| Borrowing        | 
| costs            | 
| (revised)        | 
+------------------+ 
|                  | 
| IAS              | 
| 32/IFRS          | 
| 7 (A)            | 
| Amendment        | 
| to               | 
| financial        | 
| instruments:     | 
| reclassification | 
+------------------+ 
|                  | 
| IFRIC            | 
| 9/IA S           | 
| 39 (A)           | 
| Amendment        | 
| to               | 
| financial        | 
| instruments:     | 
| embedded         | 
| derivatives      | 
+------------------+ 
|                  | 
| IFRS 1           | 
| Amendment        | 
| to first         | 
| time             | 
| adoption         | 
| of IFRS          | 
+------------------+ 
|                  | 
| IFRS 2           | 
| Amendment        | 
| to share         | 
| based            | 
| payments:        | 
| vesting          | 
| conditions       | 
+------------------+ 
|                  | 
+------------------+ 
| International    | 
| Financial        | 
| Reporting        | 
| Interpretation   | 
| Committee        | 
| (IFRICs)         | 
+------------------+ 
|                  | 
+------------------+ 
|                  | 
| IFRIC            | 
| 12               | 
| Service          | 
| concession       | 
| arrangements     | 
| IFRIC 13         | 
| Customer         | 
| loyalty          | 
| programmes       | 
+------------------+ 
|                  | 
| IFRIC            | 
| 15               | 
| Agreements       | 
| for the          | 
| construction     | 
| of real          | 
| estate           | 
+------------------+ 
|                  | 
| IFRIC            | 
| 16               | 
| Hedges           | 
| of a             | 
| net              | 
| investment       | 
| in a             | 
| foreign          | 
| investment       | 
|                  | 
|                  | 
|                  | 
|                  | 
|                  | 
|                  | 
+------------------+ 
Notes to the financial statements for the period ended 31 March 2010 
1          Accounting policies, financial risk management & critical accounting estimates/judgements (continued) 
Standards, amendments and interpretations to existing standards that are not yet 
effective and have not been early adopted 
During the year, the IASB and IFRIC have issued the following accounting 
standards and interpretations with an effective date after the date of these 
financial statements (i.e. applicable to accounting periods beginning on or 
after the effective date). The directors do not anticipate that the adoption of 
these standards and interpretations will have a material impact on the group's 
financial statements in the period of initial application: 
+----------------+-----------+ 
|                |Effective  | 
|                |   date    | 
+----------------+-----------+ 
| International  |           | 
| Accounting     |           | 
| Standards      |           | 
| (IAS/IFRSs)    |           | 
+----------------+-----------+ 
|                |           | 
+----------------+-----------+ 
|                |  1 July   | 
| IAS 24         |   2009    | 
| (A)            |    (*)    | 
| Amendment      |           | 
| to             |           | 
| Related        |           | 
| party          |           | 
| disclosures    |           | 
+----------------+-----------+ 
|                |  1 July   | 
| IAS 27         |   2009    | 
| (R)            |           | 
| Consolidated   |           | 
| and separate   |           | 
| financial      |           | 
| statements     |           | 
| (revised)      |           | 
+----------------+-----------+ 
|                |    1      | 
| IFRS 9         |  January  | 
| Financial      |   2009    | 
| instruments    |    (*)    | 
+----------------+-----------+ 
|                |    1      | 
| IAS 32         | February  | 
| (A)            |   2010    | 
| Amendment      |           | 
| to             |           | 
| financial      |           | 
| instruments:   |           | 
| presentation   |           | 
| on             |           | 
| classification |           | 
| of rights      |           | 
| issues         |           | 
+----------------+-----------+ 
|                |  1 July   | 
| IAS 39         |   2009    | 
| (A)            |    (*)    | 
| Amendment      |           | 
| to             |           | 
| financial      |           | 
| instruments:   |           | 
| eligible       |           | 
| hedged items   |           | 
+----------------+-----------+ 
|                |    1      | 
| IFRS 2         |  January  | 
| (A)            |   2010    | 
| Amendment      |           | 
| to share       |           | 
| based          |           | 
| payments:      |           | 
| group          |           | 
| cash-settled   |           | 
| transactions   |           | 
+----------------+-----------+ 
|                |  1 July   | 
| IFRS 3         |   2009    | 
| (R)            |           | 
| Business       |           | 
| combinations   |           | 
| (Revised)      |           | 
+----------------+-----------+ 
| International  |           | 
| Financial      |           | 
| Reporting      |           | 
| Interpretation |           | 
| Committee      |           | 
| (IFRICs)       |           | 
+----------------+-----------+ 
|                |           | 
+----------------+-----------+ 
|                |    1      | 
| IFRIC          |  January  | 
| 14 (A)         |   2011    | 
| Amendment      |           | 
| to IAS 19      |           | 
+----------------+-----------+ 
|                |  1 July   | 
| IFRIC          |   2009    | 
| 17             |           | 
| Distributions  |           | 
| of non cash    |           | 
| assets to      |           | 
| owners         |           | 
+----------------+-----------+ 
|                |    31     | 
| IFRIC          |  October  | 
| 18             |   2009    | 
| Transfer       |           | 
| of             |           | 
| assets         |           | 
| from           |           | 
| customers      |           | 
+----------------+-----------+ 
|                |  1 July   | 
| IFRIC          |   2010    | 
| 19             |    (*)    | 
| Extinguishing  |           | 
| financial      |           | 
| liabilities    |           | 
| with equity    |           | 
| instruments    |           | 
+----------------+-----------+ 
(*) not yet adopted by the European Union. 
 
Basis of consolidation 
The group financial statements consolidate the financial statements of Belfast 
Gas Transmission Financing plc and its subsidiary undertaking drawn up to 31 
March 2010.  Subsidiaries are entities that are directly or indirectly 
controlled by the group. Control exists where the group has the power to govern 
the financial and operating policies of the entity so as to obtain benefits from 
its activities. In assessing control, potential voting rights that are currently 
exercisable or convertible are taken into account. 
The purchase method of accounting is used to account for the acquisition of 
subsidiaries by the group. The cost of an acquisition is measured as the fair 
value of the assets given, equity instruments issued and liabilities incurred or 
assumed at the date of exchange, plus costs directly attributable to the 
acquisition. Identifiable assets acquired and liabilities and contingent 
liabilities assumed in a business combination are measured initially at their 
fair values at the acquisition date, irrespective of the extent of any minority 
interest. The excess of the cost of acquisition over the fair value of the 
group's share of the identifiable net assets acquired is recorded as goodwill. 
If the cost of acquisition is less than the fair value of the net assets of the 
subsidiary acquired, the difference is recognised directly in the income 
statement. 
Inter-company transactions, balances and unrealised gains on transactions 
between group companies are eliminated. Unrealised losses are also eliminated 
but considered an impairment indicator of the asset transferred. Accounting 
policies of subsidiaries have been changed where necessary to ensure consistency 
with the policies adopted by the group. 
Segment reporting 
The group has one business segment, the selling of capacity for the transmission 
of gas to Greater Belfast and Larne and one geographical segment, the United 
Kingdom. Accordingly segment reporting is not deemed to be applicable. 
 
 
Notes to the financial statements for the period ended 31 March 2010 
1          Accounting policies, financial risk management & critical accounting estimates/judgements (continued) 
Investments 
Investments are recognised initially at fair value and subsequently measured at 
amortised cost using the effective interest method. 
Revenue 
Revenue comprises the fair value of the consideration received or receivable 
from the sale of capacity on the Belfast Gas Transmission Pipeline which 
transports gas to Greater Belfast and Larne. All revenue is generated within the 
United Kingdom. Revenue is shown net of value-added tax, returns, rebates and 
discounts and after eliminating sales within the group. Revenue is recognised 
over the period for which capacity is provided, using a straight line basis over 
the term of the agreement. The group recognises revenue when the amount of 
revenue can be reliably measured and it is probable that future economic 
benefits will flow to the entity. 
Intangible assets 
Licences acquired on acquisitions are recognised initially at fair value. 
Licences have a finite useful life and are carried at cost less accumulated 
amortisation. Amortisation is calculated using the straight-line method to 
allocate the cost of licences over their estimated useful lives. The remaining 
estimated useful lives of the licences are 42 years. 
Property, plant and equipment 
Property, plant and equipment is stated at cost less depreciation and 
accumulated impairment losses.  The initial cost of an asset comprises cost plus 
any costs directly attributable to bringing the asset into operation and an 
estimate of any decommissioning costs. 
 
Subsequent costs are included in the asset's carrying amount or recognised as a 
separate asset, as appropriate, only when it is probable that future economic 
benefits associated with the item will flow to the group and the cost of the 
item can be measured reliably. The carrying amount of the replaced part is 
derecognised. All other repairs and maintenance are charged to the income 
statement during the financial period in which they are incurred. 
 
The charge for depreciation is calculated so as to write off the depreciable 
amount of assets over their estimated useful economic lives on a straight line 
basis.  The lives of each major class of depreciable asset are as follows: 
                Pipeline 
          31 years 
The assets' residual values and useful lives are reviewed, and adjusted if 
appropriate, at each balance sheet date. 
An asset's carrying amount is written down immediately to its recoverable amount 
if the asset's carrying amount is greater than its estimated recoverable amount. 
An asset is derecognised upon disposal or when no future economic benefit is 
expected to arise from the asset. 
Impairment of non-financial assets 
The group assesses at each reporting date whether there is an indication that an 
asset may be impaired. If any such indication exists, or when annual impairment 
testing for an asset is required, the group makes an estimate of the asset's 
recoverable amount. An asset's recoverable amount is the higher of an asset's or 
cash-generating unit's fair value less costs to sell and its value in use and is 
determined for an individual asset. Where the carrying amount of an asset 
exceeds its recoverable amount, the asset is considered impaired and is written 
down to its recoverable amount. In assessing value in use, the estimated future 
cash flows are discounted to their present value using a pre-tax discount rate 
that reflects current market assessments of the time value of money and the 
risks specific to the asset. Impairment losses of continuing operations are 
recognised in the income statement in those expense categories consistent with 
the function of the impaired asset. 
Notes to the financial statements for the period ended 31 March 2010 
1          Accounting policies, financial risk management & critical accounting estimates/judgements (continued) 
Classification of financial instruments 
The group classifies its financial assets as loans and receivables. The 
classification depends on the purpose for which the financial assets were 
acquired. Management determines the classification of its financial assets at 
initial recognition. 
 
Loans and receivables are non-derivative financial assets with fixed or 
determinable payments that are not quoted in an active market. They are included 
in current assets, except for maturities greater than 12 months after the end of 
the reporting period. These are classified as non-current assets. The group's 
loans and receivables comprise 'trade and other receivables' and cash and cash 
equivalents in the balance sheet. 
 
Loans and receivables (financial instruments) 
(a) Trade and other receivables 
Trade and other receivables are recognised initially at fair value and 
subsequently measured at amortised cost using the effective interest method, 
less provision for impairment. A provision for impairment of trade and other 
receivables is established when there is objective evidence that the group will 
not be able to collect all amounts due according to the original terms of the 
receivables. Significant financial difficulties of the debtor, probability that 
the debtor will enter bankruptcy or financial reorganisation, and default or 
delinquency in payments are considered indicators that the trade and other 
receivable is impaired. The amount of the provision is the difference between 
the asset's carrying amount and the present value of estimated future cash 
flows, discounted at the original effective interest rate. The carrying amount 
of the asset is reduced through the use of an allowance account, and the amount 
of the loss is recognised in the income statement within 'operating costs'. When 
a trade and other receivable is uncollectible, it is written off against the 
allowance account for trade receivables. Subsequent recoveries of amounts 
previously written off are credited against 'operating costs' in the income 
statement. 
Trade and other receivables with a maturity of more than twelve months from the 
balance sheet date are shown as non-current trade and other receivables. 
(b) Cash and cash equivalents 
Cash and cash equivalents includes cash in hand, deposits held at call with 
banks, other short-term highly liquid investments with original maturities of 
three months or less. 
Impairment of financial assets 
 
The group assesses at the end of each reporting period whether there is 
objective evidence that a financial asset or group of financial assets is 
impaired. A financial asset or a group of financial assets is impaired and 
impairment losses are incurred only if there is objective evidence of impairment 
as a result of one or more events that occurred after the initial recognition of 
the asset (a 'loss event') and that loss event (or events) has an impact on the 
estimated future cash flows of the financial asset or group of financial assets 
that can be reliably estimated. 
 
The criteria that the group uses to determine that there is objective evidence 
of an impairment loss include: 
 
·      significant financial difficulty of the issuer or obligor; 
·      a breach of contract, such as a default or delinquency in interest or 
principal payments; 
·      the group, for economic or legal reasons relating to the borrower's 
financial difficulty, granting to the borrower a concession that the lender 
would not otherwise consider; 
·      it becomes probable that the borrower will enter bankruptcy or other 
financial reorganisation; 
·      the disappearance of an active market for that financial asset because of 
financial difficulties; or 
·      observable data indicating that there is a measurable decrease in the 
estimated future cash flows from a portfolio of financial assets since the 
initial recognition of those assets, although the decrease cannot yet be 
identified with the individual financial assets in the portfolio, including i) 
adverse changes in the payment status of borrowers in the portfolio; and ii) 
national or local economic conditions that correlate with defaults on the assets 
in the portfolio. 
Notes to the financial statements for the year ended 31 March 2010 
1          Accounting policies, financial risk management & critical accounting 
estimates/judgements (continued) 
Impairment of financial assets (continued) 
 
The group first assesses whether objective evidence of impairment exists. The 
amount of the loss is measured as the difference between the asset's carrying 
amount and the present value of estimated future cash flows (excluding future 
credit losses that have not been incurred) discounted at the financial asset's 
original effective interest rate. The carrying amount of the asset is reduced 
and the amount of the loss is recognised in the consolidated income statement. 
If a loan or held-to-maturity investment has a variable interest rate, the 
discount rate for measuring any impairment loss is the current effective 
interest rate determined under the contract. As a practical expedient, the group 
may measure impairment on the basis of an instrument's fair value using an 
observable market price. 
 
If, in a subsequent period, the amount of the impairment loss decreases and the 
decrease can be related objectively to an event occurring after the impairment 
was recognised (such as an improvement in the debtor's credit rating), the 
reversal of the previously recognised impairment loss is recognised in the 
consolidated income statement. 
 
Ordinary shares 
Ordinary shares are classified as equity. 
Other financial liabilities at amortised cost (financial instruments) 
(a) Borrowings 
Borrowings are recognised initially at fair value, net of transaction costs 
incurred. Borrowings are subsequently stated at amortised cost; any difference 
between the proceeds (net of transaction costs) and the redemption value is 
recognised in the income statement over the period of the borrowings using the 
effective interest method. 
Borrowings are classified as current liabilities unless the group has an 
unconditional right to defer settlement of the liability for at least 12 months 
after the balance sheet date. 
(b)   Trade and other payables 
Trade and other payables are recognised initially at fair value and subsequently 
measured at amortised cost using the effective interest method. 
Income tax and deferred income tax 
The tax expense for the period comprises current and deferred tax. Tax is 
recognised in the income statement. 
 
Current income tax assets and liabilities are measured at the amount expected to 
be recovered from or paid to the taxation authorities, based on tax rates and 
laws that are enacted or substantively enacted by the balance sheet date. 
 
Deferred income tax is provided in full, using the liability method, on 
temporary differences arising between the tax bases of assets and liabilities 
and their carrying amounts in the consolidated financial statements. However, 
the deferred income tax is not accounted for if it arises from initial 
recognition of an asset or liability in a transaction other than a business 
combination that at the time of the transaction affects neither an accounting 
nor a taxable profit or loss. Deferred income tax is determined using tax rates 
(and laws) that have been enacted or substantially enacted by the balance sheet 
date and are expected to apply when the related deferred income tax asset is 
realised or the deferred income tax liability is settled. 
Deferred income tax assets are recognised to the extent that it is probable that 
future taxable profit will be available against which the temporary differences 
can be utilised. 
Deferred income tax is provided on temporary differences arising on investments 
in subsidiaries, except where the timing of the reversal of the temporary 
difference is controlled by the group and it is probable that the temporary 
difference will not reverse in the foreseeable future. Income tax is charged or 
credited directly to equity if it relates to items that are credited or charged 
to equity.  Otherwise income tax is recognised in the income statement. 
Notes to the financial statements for the year ended 31 March 2010 
1          Accounting policies, financial risk management & critical accounting 
estimates/judgements (continued) 
Government grants 
Grants from the government are recognised at their fair value where there is a 
reasonable assurance that the grant will be received and the group will comply 
with all attached conditions. 
Government grants relating to costs are deferred and recognised in the income 
statement over the period necessary to match them with the costs they are 
intended to compensate. 
Government grants relating to property, plant and equipment are included in non 
current liabilities as deferred government grants and are credited to the income 
statement on a straight line basis over the expected useful economic lives of 
the related assets. 
Operating lease commitments 
Leases in which a significant portion of the risks and rewards of ownership are 
retained by the lessor are classified as operating leases. Payments made under 
operating leases (net of any incentives received from the lessor) are charged to 
the income statement on a straight-line basis over the period of the lease. 
Pensions and other post-retirement benefits 
The group contributes to individual's personal pension schemes.  Contributions 
are recognised in the income statement in the period in which they become 
payable. 
Foreign currency translation 
Foreign currency transactions are translated into the functional currency using 
the exchange rates prevailing at the dates of the transactions. Foreign exchange 
gains and losses resulting from the settlement of such transactions and from the 
translation at year end exchange rates of monetary assets and liabilities 
denominated in foreign currencies are recognised in the income statement. 
Financial risk management 
Financial risk factors 
 
The group operates the gas pipeline which links the gas transmission systems of 
Northern Ireland and Scotland under a licence agreement with the Northern 
Ireland Authority for Utility Regulation. Under the licence agreement the group 
receives revenue that compensates it for its operating expenses, financing costs 
and repayment of borrowings. Accordingly the group has limited financial risk. 
 (a) Market risk 
The group's interest rate cash flow risk arises from its long term borrowings. 
The group issued its long term borrowings to refinance its transmission assets 
at the lowest possible rates in order to reduce the costs of transmission to the 
consumers of Northern Ireland. Its long term borrowings were issued at rates 
linked to the Retail Price Index. The group's long term borrowings are therefore 
susceptible to changes in the Retail Price Index. A change in the Retail Price 
Index by 1 basis point would have increased finance costs during the year by 
GBP1,073,000. 
Under the terms of its licence agreement the group receives sufficient revenue 
to settle its operating costs and its repayments of borrowings. Accordingly the 
group does not need to actively manage its exposure to cash flow interest rate 
risk. 
 
Notes to the financial statements for the year ended 31 March 2010 
1          Accounting policies, financial risk management & critical accounting 
estimates/judgements (continued) 
Financial risk management (continued) 
(b) Credit risk 
Under the group's licence agreement it receives revenue that compensates the 
group for its operating expenses, financing costs and repayment of borrowings. 
Accordingly the group has limited liquidity risk. The Group also retains 
significant cash reserves and a liquidity facility with an A - rated bank to 
manage any short term liquidity risk. The undiscounted contractual maturity 
profile of the group's borrowings is shown in note 20. 
Capital risk management 
The group has no obligation to increase members' funds as the company's ultimate 
parent undertaking is a company limited by guarantee. The group's management of 
its borrowings and credit risk is referred to in the preceding paragraphs. 
Fair value estimation 
 
Effective 1 January 2009, the group adopted the amendment to IFRS 7 for 
financial instruments that are measured in the balance sheet at fair value, this 
requires disclosure of fair value measurements by level of the following fair 
value measurement hierarchy: 
 
·      Quoted prices (unadjusted) in active markets for identical assets or 
liabilities (level 1); 
·      Inputs other than quoted prices included within level 1 that are 
observable for the asset or liability, either directly (that is, as prices) or 
indirectly (that is, derived from prices) (level 2); and 
·      Inputs for the asset or liability that are not based on observable market 
data (that is, unobservable inputs) (level 3). 
 
The group's financial instruments fair valued (for disclosure purposes only) 
under level 2 are the group's borrowings. The fair value of these financial 
instruments is determined by discounting future cash flows using a suitable 
discount rate.  These discount rates are based on Bank of England UK gilt yield 
curve data for a term that is similar to the financial instrument 
 
Critical accounting estimates and judgements 
 
Estimates and judgements are continually evaluated and are based on historical 
experience and other factors, including expectations of future events that are 
believed to be reasonable under the circumstances. 
 
The group makes estimates and assumptions concerning the future. The resulting 
accounting estimates will, by definition, seldom equal the related actual 
results. The estimates and assumptions that have a significant risk of causing a 
material adjustment to the carrying value of assets and liabilities within the 
next financial year are discussed below: 
(a) Estimate of useful economic life of assets 
The group assesses the useful economic life of assets on an annual basis. The 
remaining useful economic life of the pipeline was determined as approximately 
30 years at the beginning of the year. If the remaining useful economic life had 
been assessed at 31 years depreciation would have decreased by GBP40,000 and if 
the remaining useful economic life had been assessed at 29 years depreciation 
would have increased by GBP43,000. 
 
Notes to the financial statements for the year ended 31 March 2010 
2          Expenses by nature 
+--------------+---------+---------+ 
|              |    2010 |    2009 | 
+--------------+---------+---------+ 
| Group        | GBP'000 | GBP'000 | 
+--------------+---------+---------+ 
| Depreciation |   3,441 |   3,440 | 
| and          |         |         | 
| amortisation |         |         | 
| (net of      |         |         | 
| amortisation |         |         | 
| of           |         |         | 
| government   |         |         | 
| grants)      |         |         | 
+--------------+---------+---------+ 
| Operating    |      12 |      12 | 
| lease        |         |         | 
| payments     |         |         | 
+--------------+---------+---------+ 
| Fees         |         |         | 
| payable      |      15 |      11 | 
| to the       |         |         | 
| company's    |         |         | 
| auditor      |         |         | 
| in           |         |         | 
| respect      |         |         | 
| of the       |         |         | 
| audit of     |         |         | 
| the          |         |         | 
| company's    |         |         | 
| financial    |         |         | 
| statements   |         |         | 
+--------------+---------+---------+ 
| Other        |   1,356 |   1,471 | 
| expenses     |         |         | 
+--------------+---------+---------+ 
| Total        |   4,824 |   4,934 | 
| operating    |         |         | 
| costs        |         |         | 
+--------------+---------+---------+ 
 
3          Employee benefit expense 
The group had no employees other than its directors during the year. The group's 
directors received emoluments of GBP467,000 (2009: GBP229,000) (including 
contributions to pension scheme) in respect of their services to the Mutual 
Energy group. The directors do not believe that it is practicable to apportion 
this amount between their services as directors of the Group and their services 
as directors of other Group companies. 
4          Finance income and costs 
+------------+---------+---------+ 
|            |    2010 |    2009 | 
+------------+---------+---------+ 
| Group      | GBP'000 | GBP'000 | 
+------------+---------+---------+ 
| Interest   |         |         | 
| expense:   |         |         | 
+------------+---------+---------+ 
| Borrowing  | (6,642) | (2,839) | 
| (including |         |         | 
| borrowing  |         |         | 
| fees)      |         |         | 
+------------+---------+---------+ 
| Finance    | (6,642) | (2,839) | 
| costs      |         |         | 
+------------+---------+---------+ 
| Interest   |         |         | 
| income:    |         |         | 
+------------+---------+---------+ 
| Short-term |      62 |     284 | 
| bank       |         |         | 
| deposits   |         |         | 
+------------+---------+---------+ 
| Finance    |      62 |     284 | 
| income     |         |         | 
+------------+---------+---------+ 
| Finance    | (6,580) | (2,555) | 
| costs -    |         |         | 
| net        |         |         | 
+------------+---------+---------+ 
 
5          Income tax 
+------------------------------------------------+----------+----------+ 
|                                                |     2010 |     2009 | 
+------------------------------------------------+----------+----------+ 
| Group                                          |  GBP'000 |  GBP'000 | 
+------------------------------------------------+----------+----------+ 
| Current income tax:                            |          |          | 
+------------------------------------------------+----------+----------+ 
| Current income tax charge at 28%               |        1 |        - | 
+------------------------------------------------+----------+----------+ 
| Group relief surrendered                       |    (570) |     (82) | 
+------------------------------------------------+----------+----------+ 
| Group relief adjustments in respect of         |    (158) |        - | 
| previous periods                               |          |          | 
+------------------------------------------------+----------+----------+ 
| Total current income tax                       |    (727) |     (82) | 
+------------------------------------------------+----------+----------+ 
| Deferred income tax:                           |          |          | 
+------------------------------------------------+----------+----------+ 
| Origination and reversal of temporary          |  (1,346) |    (688) | 
| differences                                    |          |          | 
+------------------------------------------------+----------+----------+ 
| Adjustments in respect of previous periods     |      401 |        - | 
+------------------------------------------------+----------+----------+ 
| Total deferred income tax                      |    (945) |    (688) | 
+------------------------------------------------+----------+----------+ 
| Income tax credit                              |  (1,672) |    (770) | 
+------------------------------------------------+----------+----------+ 
 
 
Notes to the financial statements for the year ended 31 March 2010 
5          Income tax 
The income tax credit in the income statement for the year differs from the 
standard rate of corporation tax in the UK of 28% (2009: 28%). The differences 
are reconciled below: 
+-------------+---------+---------+ 
|             |    2010 |    2009 | 
+-------------+---------+---------+ 
|             | GBP'000 | GBP'000 | 
+-------------+---------+---------+ 
| Loss        | (6,841) | (2,748) | 
| before      |         |         | 
| income      |         |         | 
| tax         |         |         | 
+-------------+---------+---------+ 
| Tax         | (1,915) |   (770) | 
| calculated  |         |         | 
| at the UK   |         |         | 
| standard    |         |         | 
| rate of     |         |         | 
| corporation |         |         | 
| tax of 28%  |         |         | 
| (2009: 28%) |         |         | 
+-------------+---------+---------+ 
| Effects     |         |         | 
| of:         |         |         | 
+-------------+---------+---------+ 
| Adjustments |     243 |       - | 
| in respect  |         |         | 
| of previous |         |         | 
| periods     |         |         | 
+-------------+---------+---------+ 
| Income      | (1,672) |   (770) | 
| tax         |         |         | 
| credit      |         |         | 
+-------------+---------+---------+ 
 
 
6          Profit attributable to members of the parent company 
As permitted by Section 408 the Companies Act 2006, the parent company's profit 
and loss account has not been included in these financial statements. The profit 
dealt with in the financial statements of the parent company is GBP5,000 (2009: 
GBP3,000). 
7          Property, plant and equipment 
+--------------+----------+ 
|              |          | 
|              | Pipeline | 
+--------------+----------+ 
| Group        |  GBP'000 | 
+--------------+----------+ 
| Cost         |          | 
+--------------+----------+ 
| Arising      |   38,480 | 
| on           |          | 
| acquisition  |          | 
+--------------+----------+ 
| At 31        |   38,480 | 
| March        |          | 
| 2009         |          | 
| and at       |          | 
| 31           |          | 
| March        |          | 
| 2010         |          | 
+--------------+----------+ 
|              |          | 
+--------------+----------+ 
| Accumulated  |          | 
| depreciation |          | 
+--------------+----------+ 
| Provided     |    1,241 | 
| during       |          | 
| the year     |          | 
+--------------+----------+ 
| At 31        |    1,241 | 
| March        |          | 
| 2009         |          | 
+--------------+----------+ 
| Provided     |    1,242 | 
| during       |          | 
| the year     |          | 
+--------------+----------+ 
| At 31        |    2,483 | 
| March        |          | 
| 2010         |          | 
+--------------+----------+ 
|              |          | 
+--------------+----------+ 
| Net          |          | 
| book         |          | 
| amount       |          | 
+--------------+----------+ 
| At 31        |   35,997 | 
| March        |          | 
| 2010         |          | 
+--------------+----------+ 
| At 31        |   37,239 | 
| March        |          | 
| 2009         |          | 
+--------------+----------+ 
 
Depreciation expense of GBP1,242,000 (2009: GBP1,241,000) has been fully charged 
to operating costs. 
Borrowings are secured on the property, plant and equipment of the group. 
 
 
 
 
Notes to the financial statements for the year ended 31 March 2010 
8          Intangible assets 
+--------------------------------------+----------+----------+----------+ 
|                                      |          |          | Licences | 
+--------------------------------------+----------+----------+----------+ 
| Group                                |          |          |  GBP'000 | 
+--------------------------------------+----------+----------+----------+ 
| Cost                                 |          |          |          | 
+--------------------------------------+----------+----------+----------+ 
| Arising on acquisition               |          |          |  109,413 | 
+--------------------------------------+----------+----------+----------+ 
| At 31 March 2009 and 31 March 2010   |          |          |  109,413 | 
+--------------------------------------+----------+----------+----------+ 
|                                      |          |          |          | 
+--------------------------------------+----------+----------+----------+ 
| Accumulated amortisation             |          |          |          | 
+--------------------------------------+----------+----------+----------+ 
| Provided during the year             |          |          |    2,487 | 
+--------------------------------------+----------+----------+----------+ 
| At 31 March 2009                     |          |          |    2,487 | 
+--------------------------------------+----------+----------+----------+ 
| Provided during the year             |          |          |    2,487 | 
+--------------------------------------+----------+----------+----------+ 
| At 31 March 2010                     |          |          |    4,974 | 
+--------------------------------------+----------+----------+----------+ 
|                                      |          |          |          | 
+--------------------------------------+----------+----------+----------+ 
| Net book amount                      |          |          |          | 
+--------------------------------------+----------+----------+----------+ 
| At 31 March 2010                     |          |          |  104,439 | 
+--------------------------------------+----------+----------+----------+ 
| At 31 March 2009                     |          |          |  106,926 | 
+--------------------------------------+----------+----------+----------+ 
 
Licences include intangible assets acquired through business combinations. 
Licences have been granted for a minimum of 44 years. The Group has concluded 
that these assets have a remaining useful economic life of 42 years. 
 
9          Investments 
+---------------------------------------------------+----------+-------------+ 
|                                                   |          |  Subsidiary | 
|                                                   |          | undertaking | 
+---------------------------------------------------+----------+-------------+ 
| Company                                           |          |     GBP'000 | 
+---------------------------------------------------+----------+-------------+ 
| Cost                                              |          |             | 
+---------------------------------------------------+----------+-------------+ 
| Arising on acquisition and at 31 March 2009 and   |          |     112,384 | 
| 31 March 2010                                     |          |             | 
+---------------------------------------------------+----------+-------------+ 
 
Investments in subsidiary undertakings are recorded at cost, which is the fair 
value of the consideration paid. 
The company's subsidiary undertaking, which is incorporated in Northern Ireland, 
is: 
+---------------------+----------+-------------+--------------------------+ 
| Name of company     | Holding  | Proportion  | Nature of business       | 
|                     |          |    held     |                          | 
+---------------------+----------+-------------+--------------------------+ 
|                     |          |             | Operation of Belfast Gas | 
| Belfast Gas         | Ordinary |    100%     | Transmission pipeline    | 
| Transmission        |   shares |             |                          | 
| Limited             |          |             |                          | 
+---------------------+----------+-------------+--------------------------+ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the financial statements for the year ended 31 March 2010 
 
10        Trade and other receivables 
+-------------+---------+---------+---------+---------+ 
|             |      Group        |      Company      | 
+-------------+-------------------+-------------------+ 
|             |    2010 |    2009 |    2010 |    2009 | 
+-------------+---------+---------+---------+---------+ 
|             | GBP'000 | GBP'000 | GBP'000 | GBP'000 | 
+-------------+---------+---------+---------+---------+ 
| Trade       |     134 |     112 |       - |       - | 
| receivables |         |         |         |         | 
+-------------+---------+---------+---------+---------+ 
| Other       |     657 |     732 |       - |       - | 
| receivables |         |         |         |         | 
+-------------+---------+---------+---------+---------+ 
| Amounts     |     770 |     106 |      37 |      37 | 
| owed by     |         |         |         |         | 
| related     |         |         |         |         | 
| parties     |         |         |         |         | 
+-------------+---------+---------+---------+---------+ 
| Prepayments |      88 |     121 |      14 |       4 | 
| and accrued |         |         |         |         | 
| income      |         |         |         |         | 
+-------------+---------+---------+---------+---------+ 
|             |   1,649 |   1,071 |      51 |      41 | 
+-------------+---------+---------+---------+---------+ 
 
None of the group's or company's trade and other receivables are impaired or 
past due. The group and company have no history of default in respect of its 
trade and other receivables. The maximum exposure to credit risk at the 
reporting date is the carrying value of each class of receivable mentioned 
above. The fair value of the group's and company's trade and other receivables 
is not materially different to their carrying values. 
 
 
11        Cash and cash equivalents 
+------------+---------+---------+---------+---------+ 
|            |      Group        |      Company      | 
+------------+-------------------+-------------------+ 
|            |    2010 |    2009 |    2010 |    2009 | 
+------------+---------+---------+---------+---------+ 
|            | GBP'000 | GBP'000 | GBP'000 | GBP'000 | 
+------------+---------+---------+---------+---------+ 
| Cash       |   4,318 |   2,891 |   1,307 |   1,314 | 
| at         |         |         |         |         | 
| bank       |         |         |         |         | 
| and in     |         |         |         |         | 
| hand       |         |         |         |         | 
+------------+---------+---------+---------+---------+ 
| Short-term |   2,605 |   3,753 |       - |       - | 
| bank       |         |         |         |         | 
| deposits   |         |         |         |         | 
+------------+---------+---------+---------+---------+ 
|            |   6,923 |   6,644 |   1,307 |   1,314 | 
+------------+---------+---------+---------+---------+ 
 
Cash and cash equivalents earn interest at a range of Bank of England base rate 
less 0.15% to Bank of England base rate plus 2.5%. 
 
 
12        Called up share capital 
+----------+---------+---------+ 
|          |    2010 |    2009 | 
+----------+---------+---------+ 
| Group    | GBP'000 | GBP'000 | 
| and      |         |         | 
| company  |         |         | 
+----------+---------+---------+ 
| Allotted |         |         | 
| and      |         |         | 
| fully    |         |         | 
| paid     |         |         | 
+----------+---------+---------+ 
| 50,000   |      50 |      50 | 
| ordinary |         |         | 
| shares   |         |         | 
| of GBP1  |         |         | 
| each     |         |         | 
+----------+---------+---------+ 
 
 
 
 
 
 
 
 
Notes to the financial statements for the year ended 31 March 2010 
13        Retained earnings 
+---------------+---------+ 
| Group         | GBP'000 | 
+---------------+---------+ 
| Total         | (1,978) | 
| comprehensive |         | 
| income for    |         | 
| the year      |         | 
+---------------+---------+ 
| At 31         | (1,978) | 
| March         |         | 
| 2009          |         | 
+---------------+---------+ 
| Total         | (5,169) | 
| comprehensive |         | 
| income for    |         | 
| the year      |         | 
+---------------+---------+ 
| At 31         | (7,147) | 
| March         |         | 
| 2010          |         | 
+---------------+---------+ 
 
 
+---------------+---------+ 
| Company       | GBP'000 | 
+---------------+---------+ 
| Total         |       3 | 
| comprehensive |         | 
| income for    |         | 
| the year      |         | 
+---------------+---------+ 
| At 31         |       3 | 
| March         |         | 
| 2009          |         | 
+---------------+---------+ 
| Total         |       5 | 
| comprehensive |         | 
| income for    |         | 
| the year      |         | 
+---------------+---------+ 
| At 31         |       8 | 
| March         |         | 
| 2010          |         | 
+---------------+---------+ 
 
 
14        Borrowings 
+-------------+---------+---------+ 
|             |    2010 |    2009 | 
+-------------+---------+---------+ 
| Group       | GBP'000 | GBP'000 | 
| and         |         |         | 
| company     |         |         | 
+-------------+---------+---------+ 
| Non-current |         |         | 
+-------------+---------+---------+ 
| 2.207%      | 111,463 | 108,143 | 
| Index       |         |         | 
| linked      |         |         | 
| guaranteed  |         |         | 
| secured     |         |         | 
| bond        |         |         | 
+-------------+---------+---------+ 
| Current     |         |         | 
+-------------+---------+---------+ 
| 2.207%      |     649 |     555 | 
| Index       |         |         | 
| linked      |         |         | 
| guaranteed  |         |         | 
| secured     |         |         | 
| bond        |         |         | 
+-------------+---------+---------+ 
| Total       | 112,112 | 108,698 | 
| borrowings  |         |         | 
+-------------+---------+---------+ 
 
The 2.207% Index linked guaranteed secured bonds 2048 were issued to finance the 
acquisition of Belfast Gas Transmission Limited and are linked to the Retail 
Price Index.  The bond is secured by fixed and floating charges over all the 
assets of the group, and also by way of an unconditional and irrevocable 
financial guarantee given by Assured Guaranty (Europe) Limited as to scheduled 
payments of principal and interest, including default interest. In return for 
this guarantee, every six months the Group pays an index linked fee of 0.18% of 
the outstanding balance of the bond. The fair value of the bond is GBP74,228,000 
(2009: GBP72,714,000). This fair value has been calculated by discounting the 
future cash flows using a discount rate of 4.64% (2009: 4.42%). 
 
 
 
 
 
 
 
 
 
Notes to the financial statements for the year ended 31 March 2010 
15        Deferred income tax 
Deferred income tax assets and liabilities are offset when there is a legally 
enforceable right to offset current tax assets and current tax liabilities and 
when the deferred income taxes relate to the same fiscal authority. 
+----------------------+--------+--------+-----------+----------+ 
|                      |        |        |      2010 |     2009 | 
+----------------------+--------+--------+-----------+----------+ 
| Group                |        |        |   GBP'000 |  GBP'000 | 
+----------------------+--------+--------+-----------+----------+ 
| Deferred             |        |        |       225 |        - | 
| income               |        |        |           |          | 
| tax                  |        |        |           |          | 
| assets               |        |        |           |          | 
+----------------------+--------+--------+-----------+----------+ 
| Deferred             |        |        |  (35,017) | (35,737) | 
| income               |        |        |           |          | 
| tax                  |        |        |           |          | 
| liabilities          |        |        |           |          | 
+----------------------+--------+--------+-----------+----------+ 
| Deferred             |        |        | (34,792)) | (35,737) | 
| income               |        |        |           |          | 
| tax                  |        |        |           |          | 
| assets/(liabilities) |        |        |           |          | 
| - net                |        |        |           |          | 
+----------------------+--------+--------+-----------+----------+ 
 
The gross movement on the deferred income tax account is as follows: 
+-------------+--------+--------+--------+----------+ 
|             |        |        |        |          | 
+-------------+--------+--------+--------+----------+ 
| Group       |        |        |        |  GBP'000 | 
+-------------+--------+--------+--------+----------+ 
| Arising     |        |        |        | (36,425) | 
| on          |        |        |        |          | 
| acquisition |        |        |        |          | 
+-------------+--------+--------+--------+----------+ 
| Income      |        |        |        |      688 | 
| statement   |        |        |        |          | 
| credit      |        |        |        |          | 
| for the     |        |        |        |          | 
| year        |        |        |        |          | 
+-------------+--------+--------+--------+----------+ 
| At 31       |        |        |        | (35,737) | 
| March       |        |        |        |          | 
| 2009        |        |        |        |          | 
+-------------+--------+--------+--------+----------+ 
| Income      |        |        |        |      945 | 
| statement   |        |        |        |          | 
| credit      |        |        |        |          | 
| for the     |        |        |        |          | 
| year        |        |        |        |          | 
+-------------+--------+--------+--------+----------+ 
| At 31       |        |        |        | (34,792) | 
| March       |        |        |        |          | 
| 2010        |        |        |        |          | 
+-------------+--------+--------+--------+----------+ 
 
The movement in deferred tax assets and liabilities during the period is as 
follows: 
+-----------------+--------+--------+---------+-------------+------------+---------------+ 
|                 |        |        |         |             |            |               | 
|                 |        |        |         | Accelerated | Valuation  |               | 
|                 |        |        |  Losses |             | of         |         Total | 
|                 |        |        |         | capital     |            |               | 
|                 |        |        |         |             | intangible |               | 
|                 |        |        |         | allowances  | assets     |               | 
+-----------------+--------+--------+---------+-------------+------------+---------------+ 
| Group           |        |        | GBP'000 |     GBP'000 |    GBP'000 |               | 
|                 |        |        |         |             |            |       GBP'000 | 
+-----------------+--------+--------+---------+-------------+------------+---------------+ 
| Arising         |        |        |       - |     (5,789) |   (30,636) |      (36,425) | 
| on              |        |        |         |             |            |               | 
| acquisition     |        |        |         |             |            |               | 
+-----------------+--------+--------+---------+-------------+------------+---------------+ 
| Income          |        |        |       - |         (9) |        697 |           688 | 
| statement       |        |        |         |             |            |               | 
| (charge)/credit |        |        |         |             |            |               | 
| for the year    |        |        |         |             |            |               | 
+-----------------+--------+--------+---------+-------------+------------+---------------+ 
| At 31           |        |        |       - |     (5,798) |   (29,939) |      (35,737) | 
| March           |        |        |         |             |            |               | 
| 2009            |        |        |         |             |            |               | 
+-----------------+--------+--------+---------+-------------+------------+---------------+ 
| Income          |        |        |     225 |          23 |        697 |           945 | 
| statement       |        |        |         |             |            |               | 
| credit          |        |        |         |             |            |               | 
| for the         |        |        |         |             |            |               | 
| year            |        |        |         |             |            |               | 
+-----------------+--------+--------+---------+-------------+------------+---------------+ 
| At 31           |        |        |     225 |     (5,775) |   (29,242) |      (34,792) | 
| March           |        |        |         |             |            |               | 
| 2010            |        |        |         |             |            |               | 
+-----------------+--------+--------+---------+-------------+------------+---------------+ 
 
The portion of the group's deferred tax liability arising from intangible assets 
that is expected to fall due after more than 12 months is GBP28,545,000 (2009: 
GBP29,242,000). The portion of the group's deferred tax liability arising from 
accelerated capital allowances that is expected to fall due after more than 12 
months is estimated at GBP5,775,000 (2009: GBP5,798,000). The portion of the 
group's deferred tax asset arising from losses that is expected to fall due 
after more than 12 months is GBP225,000 (2009: GBPnil). 
 
 
 
 
 
 
 
 
 
Notes to the financial statements for the year ended 31 March 2010 
 
16        Government grant 
+-------------+--------+---------+ 
| Group       |        | GBP'000 | 
+-------------+--------+---------+ 
| Arising     |        |   8,926 | 
| on          |        |         | 
| acquisition |        |         | 
+-------------+--------+---------+ 
| Amortised   |        |   (288) | 
| during      |        |         | 
| the year    |        |         | 
+-------------+--------+---------+ 
| At 31       |        |   8,638 | 
| March       |        |         | 
| 2009        |        |         | 
+-------------+--------+---------+ 
| Amortised   |        |   (288) | 
| during      |        |         | 
| the year    |        |         | 
+-------------+--------+---------+ 
| At 31       |        |   8,350 | 
| March       |        |         | 
| 2010        |        |         | 
+-------------+--------+---------+ 
 
The government grant was provided to the company for the purpose of its 
expenditure on its property, plant and equipment. The current portion of the 
government grant is GBP288,000 (2009: GBP288,000) and the non-current portion is 
GBP8,062,000 (2009: GBP8,350,000). 
17        Trade and other payables 
+-------------+---------+---------+---------+---------+ 
|             |      Group        |      Company      | 
+-------------+-------------------+-------------------+ 
|             |    2010 |    2009 |    2010 |    2009 | 
+-------------+---------+---------+---------+---------+ 
|             | GBP'000 | GBP'000 | GBP'000 | GBP'000 | 
+-------------+---------+---------+---------+---------+ 
| Trade       |      20 |      79 |       8 |       6 | 
| payables    |         |         |         |         | 
+-------------+---------+---------+---------+---------+ 
| Accruals    |     399 |     293 |       6 |       3 | 
| and         |         |         |         |         | 
| deferred    |         |         |         |         | 
| income      |         |         |         |         | 
+-------------+---------+---------+---------+---------+ 
| Amounts     |       - |       - |   1,557 |   4,979 | 
| owed to     |         |         |         |         | 
| subsidiary  |         |         |         |         | 
| undertaking |         |         |         |         | 
+-------------+---------+---------+---------+---------+ 
| Amounts     |      66 |      50 |       - |       - | 
| owed to     |         |         |         |         | 
| related     |         |         |         |         | 
| parties     |         |         |         |         | 
+-------------+---------+---------+---------+---------+ 
| Other       |     366 |     313 |       1 |       - | 
| tax         |         |         |         |         | 
| and         |         |         |         |         | 
| social      |         |         |         |         | 
| security    |         |         |         |         | 
+-------------+---------+---------+---------+---------+ 
|             |     851 |     735 |   1,572 |   4,988 | 
+-------------+---------+---------+---------+---------+ 
 
 
18        Commitments 
Operating lease commitments - group as lessee 
The group has entered into a commercial lease on land which expires on 31 
December 2051. There are no restrictions placed upon the lessee by entering into 
these leases. 
The future aggregate minimum lease payments under non-cancellable operating 
leases are as follows: 
+--------+---------+---------+ 
|        |    2010 |    2009 | 
+--------+---------+---------+ 
| Group  | GBP'000 | GBP'000 | 
+--------+---------+---------+ 
| Not    |      12 |      12 | 
| later  |         |         | 
| than   |         |         | 
| one    |         |         | 
| year   |         |         | 
+--------+---------+---------+ 
| After  |      47 |      47 | 
| one    |         |         | 
| year   |         |         | 
| but    |         |         | 
| not    |         |         | 
| more   |         |         | 
| than   |         |         | 
| five   |         |         | 
| years  |         |         | 
+--------+---------+---------+ 
| After  |     429 |     441 | 
| five   |         |         | 
| years  |         |         | 
+--------+---------+---------+ 
|        |     488 |     500 | 
+--------+---------+---------+ 
 
 
 
 
 
 
 
 
Notes to the financial statements for the year ended 31 March 2010 
 
19        Related party transactions 
The ultimate controlling parties of the group are the members of Mutual Energy 
Limited. 
During the year the group entered into transactions, in the ordinary course of 
business, with related parties. 
Transactions entered into, and balances outstanding at 31 March with related 
parties, are as follows: 
+--------------+--------+--------+--------+---------+---------+ 
|                       |                 |       Amount owed | 
|                       |                 |         (to)/from | 
|                       |                 |     related party | 
+-----------------------+-----------------+-------------------+ 
|              |        |        |        |    2010 |    2009 | 
+--------------+--------+--------+--------+---------+---------+ 
| Group        |        |        |        | GBP'000 | GBP'000 | 
+--------------+--------+--------+--------+---------+---------+ 
| Fellow       |        |        |        |     770 |      58 | 
| subsidiary   |        |        |        |         |         | 
| undertakings |        |        |        |         |         | 
+--------------+--------+--------+--------+---------+---------+ 
| Parent       |        |        |        |    (45) |      48 | 
| undertakings |        |        |        |         |         | 
+--------------+--------+--------+--------+---------+---------+ 
| Fellow       |        |        |        |    (21) |    (50) | 
| subsidiary   |        |        |        |         |         | 
| undertakings |        |        |        |         |         | 
+--------------+--------+--------+--------+---------+---------+ 
 
+--------------+-------------+---------+---------+ 
|                            |                   | 
|                            |         Amount of | 
|                            |       transaction | 
+----------------------------+-------------------+ 
|              |             |    2010 |    2009 | 
+--------------+-------------+---------+---------+ 
| Group        | Nature      | GBP'000 | GBP'000 | 
|              | of          |         |         | 
|              | transaction |         |         | 
+--------------+-------------+---------+---------+ 
| Parent       | Charges     |     190 |     171 | 
| undertakings | payable     |         |         | 
+--------------+-------------+---------+---------+ 
| Parent       | Group       |       - |      36 | 
| undertakings | relief      |         |         | 
|              | surrendered |         |         | 
+--------------+-------------+---------+---------+ 
| Fellow       | Group       |     728 |      46 | 
| subsidiary   | relief      |         |         | 
| undertakings | surrendered |         |         | 
+--------------+-------------+---------+---------+ 
| Fellow       | Charges     |      31 |      24 | 
| subsidiary   | payable     |         |         | 
| undertakings |             |         |         | 
+--------------+-------------+---------+---------+ 
 
 
+--------------+--------+--------+--------+---------+---------+ 
|                       |                 |       Amount owed | 
|                       |                 |         (to)/from | 
|                       |                 |     related party | 
+-----------------------+-----------------+-------------------+ 
|              |        |        |        |    2010 |    2009 | 
+--------------+--------+--------+--------+---------+---------+ 
| Company      |        |        |        | GBP'000 | GBP'000 | 
+--------------+--------+--------+--------+---------+---------+ 
| Subsidiary   |        |        |        | (1,557) | (4,979) | 
| undertaking  |        |        |        |         |         | 
+--------------+--------+--------+--------+---------+---------+ 
| Fellow       |        |        |        |      37 |      37 | 
| subsidiary   |        |        |        |         |         | 
| undertakings |        |        |        |         |         | 
+--------------+--------+--------+--------+---------+---------+ 
 
 
+--------------+-------------+---------+---------+ 
|                            |                   | 
|                            |    Amount of      | 
|                            |    transaction    | 
+----------------------------+-------------------+ 
|              |             |    2010 |    2009 | 
+--------------+-------------+---------+---------+ 
| Company      | Nature      | GBP'000 | GBP'000 | 
|              | of          |         |         | 
|              | transaction |         |         | 
+--------------+-------------+---------+---------+ 
| Fellow       | Group       |       - |     (1) | 
| subsidiary   | relief      |         |         | 
| undertakings | claimed     |         |         | 
+--------------+-------------+---------+---------+ 
| Subsidiary   | Interest    |   6,817 |   2,752 | 
| undertaking  | receivable  |         |         | 
+--------------+-------------+---------+---------+ 
| Subsidiary   | Interest    |     162 |      53 | 
| undertaking  | payable     |         |         | 
+--------------+-------------+---------+---------+ 
 
 
 
 
 
Notes to the financial statements for the year ended 31 March 2010 
20        Financial instruments 
The group's and company's financial instruments are classified as follows: 
+------------------------------------+-------------------------------------+ 
| Assets and liabilities             | Category of financial instrument    | 
+------------------------------------+-------------------------------------+ 
| Trade and other receivables        | Loans and other receivables         | 
+------------------------------------+-------------------------------------+ 
| Cash and cash equivalents          | Loans and other receivables         | 
+------------------------------------+-------------------------------------+ 
| Borrowings                         | Other financial liabilities at      | 
|                                    | amortised cost                      | 
+------------------------------------+-------------------------------------+ 
| Trade and other payables           | Other financial liabilities at      | 
|                                    | amortised cost                      | 
+------------------------------------+-------------------------------------+ 
 
The group's and company's contractual undiscounted cash flows (including 
principal and interest payments) of its financial liabilities are as follows: 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
|          |         |         |         |         |         |         |         | 
|          |         |         |         |         |         | More    |         | 
| As at    | Within  | 1-2     | 2-3     | 3-4     | 4-5     |         |         | 
| 31       |         |         |         |         |         | than 5  | Total   | 
| March    | 1 year  | years   | years   | years   | years   |         |         | 
| 2010     |         |         |         |         |         | years   |         | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
| Group    | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
| 2.207%   |   3,119 |   3,182 |   3,246 |   3,311 |   3,376 | 158,831 | 175,065 | 
| bond     |         |         |         |         |         |         |         | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
| Trade    |     485 |       - |       - |       - |       - |       - |     485 | 
| and      |         |         |         |         |         |         |         | 
| other    |         |         |         |         |         |         |         | 
| payables |         |         |         |         |         |         |         | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
|          |   3,604 |   3,182 |   3,246 |   3,311 |   3,376 | 158,831 | 175,550 | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
|          |         |         |         |         |         |         |         | 
|          |         |         |         |         |         | More    |         | 
| As at    | Within  | 1-2     | 2-3     | 3-4     | 4-5     |         |         | 
| 31       |         |         |         |         |         | than 5  | Total   | 
| March    | 1 year  | years   | years   | years   | years   |         |         | 
| 2009     |         |         |         |         |         | years   |         | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
| Group    | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
| 2.207%   |   2,951 |   3,009 |   3,069 |   3,131 |   3,194 | 156,473 | 171,827 | 
| bond     |         |         |         |         |         |         |         | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
| Trade    |     422 |       - |       - |       - |       - |       - |     422 | 
| and      |         |         |         |         |         |         |         | 
| other    |         |         |         |         |         |         |         | 
| payables |         |         |         |         |         |         |         | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
|          |   3,373 |   3,009 |   3,069 |   3,131 |   3,194 | 156,473 | 172,249 | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
|          |         |         |         |         |         |         |         | 
|          |         |         |         |         |         | More    |         | 
| As at    | Within  | 1-2     | 2-3     | 3-4     | 4-5     |         |         | 
| 31       |         |         |         |         |         | than 5  | Total   | 
| March    | 1 year  | years   | years   | years   | years   |         |         | 
| 2010     |         |         |         |         |         | years   |         | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
| Company  | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
| 2.207%   |   3,119 |   3,182 |   3,246 |   3,311 |   3,376 | 158,831 | 175,065 | 
| bond     |         |         |         |         |         |         |         | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
| Trade    |   1,571 |       - |       - |       - |       - |       - |   1,571 | 
| and      |         |         |         |         |         |         |         | 
| other    |         |         |         |         |         |         |         | 
| payables |         |         |         |         |         |         |         | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
|          |   4,690 |   3,182 |   3,246 |   3,311 |   3,376 | 158,831 | 176,636 | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
 
 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
|          |         |         |         |         |         |         |         | 
|          |         |         |         |         |         | More    |         | 
| As at    | Within  | 1-2     | 2-3     | 3-4     | 4-5     |         |         | 
| 31       |         |         |         |         |         | than 5  | Total   | 
| March    | 1 year  | years   | years   | years   | years   |         |         | 
| 2009     |         |         |         |         |         | years   |         | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
| Company  | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
| 2.207%   |   2,951 |   3,009 |   3,069 |   3,131 |   3,194 | 156,473 | 171,827 | 
| bond     |         |         |         |         |         |         |         | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
| Trade    |   4,988 |       - |       - |       - |       - |       - |   4,988 | 
| and      |         |         |         |         |         |         |         | 
| other    |         |         |         |         |         |         |         | 
| payables |         |         |         |         |         |         |         | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
|          |   7,939 |   3,009 |   3,069 |   3,131 |   3,194 | 156,473 | 176,815 | 
+----------+---------+---------+---------+---------+---------+---------+---------+ 
 
 
 
Notes to the financial statements for the year ended 31 March 2010 
21        Ultimate parent undertaking 
The immediate parent undertaking is Belfast Gas Transmission Holdings Limited, a 
company incorporated in Northern Ireland. Group financial statements for this 
company are not prepared. 
The ultimate parent undertaking, and the only group of undertakings for which 
group financial statements are prepared, is Mutual Energy Limited, a company 
incorporated in Northern Ireland. Copies of the group financial statements are 
available to the public from First Floor, The Arena Building, 85 Ormeau Road, 
Belfast, BT7 1SH. 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 FR SSMSUFFSSEFW 
 

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