The directors present their Strategic report on Road Management Services (Finance) plc ("the Company") for the year ended 31 December 2024.
The principal activity of the Company during the year was as a financing vehicle for the Design, Build, Finance and Operation contract which was entered into with the Secretary of State for Environment, Transport and the Regions on 13 February 2003 by its parent Road Management Services (Darrington) Limited. The contract is in the operational phase and in year 21 of its 33 year term, expiring in May 2036.
On 26 February 2004, the Company authorised the creation and issue of £113,240,000 in aggregate principal amount of 2.8332 per cent Secured Guaranteed Sterling Index Linked Bonds due 2035. The bonds are listed on the London Stock Exchange. The Company also entered into a loan agreement with the European Investment Bank ("EIB") under which EIB granted a loan of £105,000,000 at 2.3774 per cent Index Linked. The bonds and bank loan have the benefit of an unconditional and irrevocable financial guarantee as to all payments of interest and principal issued by the monoline insurer AMBAC. The Board acknowledges that the AMBAC rating was downgraded in November 2008 and April 2009 (to below BBB) and that this created uncertainty due to the risk that EIB may request that this institution be replaced. As in previous years a waiver letter has been provided by EIB in respect of the AMBAC downgrade dated 13 March 2025 which covers the period to 30 April 2026. This letter postpones testing of the covenant until after that date. Given the continued discussions with EIB the directors are assured that adequate safeguards are in place to enable this funding to remain in place for the foreseeable future.
All funds were on-loaned to Road Management Services (Darrington) Limited.
On 31 March 2005 Road Management Services (Darrington) Limited cancelled variation bonds with a nominal value of £1,500,000 against a corresponding portion of on-loan from the Company, reducing the nominal value of the bond from £113,240,000 to £111,740,000.
Principal risks and uncertainties
The risk management policy of the Company is linked to the risk management policy of the Company's immediate parent company, Road Management Services (Darrington) Limited (the "Parent"), being designed to identify and manage risk at the earliest point.
The Parent's exposure to financial instruments, price risk, credit risk, liquidity risk, major maintenance replacement risk and legislative risks are detailed below:
Financial Instrument Risk
The Company has raised finance through guaranteed secured bonds and has on-lent these to Road Management Services (Darrington) Limited.
Interest on financial instruments is fixed until maturity of the investment. As such, there is no associated interest rate risk. However, the financial liabilities comprise a 2.8332% (coupon rate) Index Linked Guaranteed Secured Bond and a 2.3774% (coupon rate) Index Linked European Investment Bank loan and are therefore affected by fluctuations in RPI. This forms part of the Parent's risk strategy, used to offset the effect of RPI on the Parent's income. The financial assets comprise cash and short term investments. The return on cash is determined by bank market interest rates.
The terms of the financial instruments ensure that the profile of the debt service costs is tailored to match expected revenues arising from the contract. The Company does not undertake financial instrument transactions that are speculative or unrelated to the trading activities.
A proportion of the Parent's cash-flows generated from the roadway concession increase in line with RPI inflators and this covers all expenditure which is affected by inflation.
Credit Risk
The roadway concession cash-flows are secured under contract with National Highways Limited, a government body. As such the directors of the Company consider it to be exposed to very low credit risk.
Liquidity Risk
The Parent is required to hold at all times funds in a special reserve account equal to the sum required for the next two debt service payments. Under the financing arrangements the Parent can elect to make a loan to the shareholders, via its immediate parent undertaking, from this reserve account in return for Letters of Credit amounting to the same value and currently such loans amount to £19,500K (2023: £19,500K). In addition the Parent is required to maintain levels of net cash flow in each year equal to 1.125 times the annual debt service payments.
The liquidity risk is further managed via intra-group loan agreements in place to define funding arrangements between the Parent and Road Management Services (Darrington) Holdings Limited.
Major Maintenance replacement risk
The Parent takes the risk that its projections for ongoing major maintenance replacement of the roadway are adequate. These projections have been agreed with third parties and are subject to regular review by the directors.
Legislative Risk
The Parent faces legislative risks such as any matters which would normally materially increase the flow of traffic on the roadway through restrictions placed on traffic movements of any alternative routes, a policy which forces traffic onto this roadway, or by major developments in the locality which increases traffic volumes, which could adversely impact on the Company. These risks are managed by close monitoring by management of significant developments and maintaining an awareness regarding exposure to penalties.
The Company's results are in line with expectations, with all transactions passed through to the Parent on a back to back basis.
Going concern
These financial statements have been prepared on the going concern basis for the reasons set out in the Accounting Policies.
Throughout the year the directors monitor the Company's financial covenants, as set out by the senior debt providers. The key condition reviewed is the debt service ratio and during the year the company was fully compliant with the required loan covenant ratios. The directors believe that any further analysis using key performance indicators for the company is not necessary or appropriate for an understanding of the performance or position of the company.
Climate Change
The directors recognise that it is important to disclose their view of the impact of climate change on the company. Whilst the company has no contracts which could be impacted by climate change, the company's parent holds key operational contracts are long-term and with a small number of known counterparties. In most cases, the cashflows from these contracts can be predicted with reasonable certainty for at least the medium-term. Having considered the parent company's operations, its contracted rights and obligations and forecast cash flows, there is not expected to be a significant impact upon the company's operational or financial performance arising from climate change.
The following disclosure describes how the Board has had regard to the matters set out in section 172 (1) (a) to (f) and forms the Directors' Statement required under section 414CZA of the Companies Act 2006.
The purpose of the Company is a special purpose vehicle established to be the financing vehicle for the Design, Build, Finance and Operate contract which was entered into by its parent company Road Management Services (Darrington) Limited under the Government's Private Finance Initiative scheme ("PFI"). The parent company operates the A1 road between Darrington and Dishforth over a concession period of 33 years to the satisfaction of National Highways Limited. The aim of the group, headed by the parent company is to work in partnership with National Highways Limited to provide effective infrastructure, in which congestion is managed and with a focus on the safety performance of the road. This shapes the group's values and objectives and defines long term success. Decisions are taken in the context of this ethos of working in partnership. The Company has the long term funding in place, as described in the Strategic Report and has on-lent these to Road Management Services (Darrington) Limited. The detailed PFI contracts set out the relationships with National Highways Limited, debt funders, maintenance and operations contractors. These parties are the Company's main stakeholders. The Company also works with the local authority to ensure their requirements are met. Debt funders are provided with operational and financial performance reports on a quarterly basis. The operational management team works closely with National Highways Limited and the maintenance and operations contractors to programme major works on the road. National Highways Limited receive regular updates on programmed works and applications for road closures to enable major works, so that disruption to the public can be kept to a minimum. The group ensures that the road is maintained to the required standards and works collaboratively to ensure that factors impacting traffic flow are addressed between the parties. The Company does not have any employees. As described in the Strategic Report the principal risk of the Company is the ability of the parent company to meet its debt service obligations to the Company. The success of the Company is therefore dependent upon the success of the parent company.
The Board is an experienced team with representatives of all shareholders. The Board members have experience of working with other key stakeholders, which enables them to identify the long term consequences of the principal decisions. The Board meet on a quarterly basis and information is provided at the meetings by the operational and financial management teams. This information will have regard to health and safety matters, the operational and financial performance of the project, planned major maintenance works and relationships with the client and the main sub-contractors. The operational and financial management team make recommendations to the Board of directors. These are considered at the quarterly board meetings. These Board meetings are minuted and actions arising are monitored. Decisions made by the directors that have a financial impact are accounted for in a concession length forecast of financial performance.
Principal decisions of the group are those that are key to the Company's success. These include but are not limited to: decisions impacting upon the relationships between the parties, decisions impacting upon the availability and safety of the road and decisions impacting the return to the shareholders.
The above decisions ensure that the relationships between the parties that work together in partnership continue and that the road is maintained with minimum disruption to users. The safety performance of the road is maintained both in terms of users and the health and safety of the contractors' staff. These decisions ensure the long term success of the project, which protects shareholder returns.
This report was approved by the board of directors on 24 April 2025 and signed on behalf of the board by:
The directors present their annual report and the audited financial statements of Road Management Services (Finance) plc ("the Company") for the year ended 31 December 2024.
The results for the year are set out on page 13.
The profit for the financial year, after taxation, amounted to £nil (2023: nil).
The directors are satisfied with the overall performance of the Company and do not foresee any significant change in the Company's activities in the coming financial year.
Ordinary dividends were paid amounting to £nil (2023: £nil). The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of approval of the financial statements were as follows:
The independent auditors, PricewaterhouseCoopers LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
The board are appointed by the shareholders and meet quarterly to review the financial and operational performance of the Company. The Company's business is confined to those activities detailed in the Strategic Report and is restricted by the contracts which it has entered into. Please see the Section 172 statement within the Strategic Report for more details.
The directors oversee external financial reporting and reviews the external auditor's assessment of their independence and ensures that auditor rotation rules are adhered to.
The directors have overall responsibility for ensuring that the company has adequate risk management and internal controls in relation to the financial reporting process.
For the year ended 31 December 2024 the Company did not have securities carrying voting rights admitted to trading on a regulated market and therefore disclosures required by paragraph 13 of Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/4210) are not applicable.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", and applicable law).
Under company law, 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
state whether applicable United Kingdom Accounting Standards, comprising FRS102 have been followed, subject to any material departures disclosed and explained in the financial statements;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
They are responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are also 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 enable them to ensure that the financial statements comply with the Companies Act 2006.
Directors’ confirmations
Each of the directors, whose names and functions are listed in The Directors' report confirm that, to the best of their knowledge:
the company financial statements, which have been prepared in accordance with United Kingdom Accounting Standards, comprising FRS 102, give a true and fair view of the assets, liabilities and financial position of the company, and of the profit of the company; and
the Directors' report includes a fair review of the development and performance of the business and the position of the company, together with a description of the principal risks and uncertainties that it faces.
The financial statements were approved and signed by the director and authorised for issue on 24 April 2025
Neil Rae
Director
Basis for opinion
Overview
Audit scope
The company's financial statements comprise just one component which was subject to a full scope audit.
Key audit matter
Recoverability of loans to group undertakings.
Materiality
Overall materiality: £1,921,840 (2023: £501,505) based on 1% of total assets
Performance materiality: £1,441,380 (2023: £376,129).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The key audit matter below is consistent with last year.
Recoverability of loans to group undertakings.
Road Management Services (Finance) PLC has borrowings in the form of Secured Guaranteed Sterling Index linked bonds listed on the London Stock Exchange (LSE) and other external borrowings. The amounts payable at the year-end date in respect of these borrowings are set out in notes 8 and 9 to the financial statements. All borrowings are on-loaned to group undertakings and the repayment of the external borrowings is dependent on the recoverability and timely receipt of the amounts loaned on to group undertakings. Due to the long term nature of the project, there are inherent risks and uncertainties in relation to the future financial performance of the group undertakings. As a result of its significance to the financial statements and to our audit, we have identified this to be a key audit matter.
In order to obtain evidence as to the recoverability of the loans to group undertakings, we considered the financial position of the counterparty from which the amounts were due, and their ability to provide funds to the company when needed. We also read the terms of the bond agreement with the lender to understand the repayment schedule and any terms which might trigger earlier repayment. We found no indications that earlier repayment would be required, nor that the counterparties did not have sufficient realisable net assets to be able to provide the necessary funds to enable the company to meet the repayment schedule for the foreseeable future.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the company, the accounting processes and controls, and the industry in which it operates.
The company is a financing vehicle, and issuer of listed senior bonds on the London Stock Exchange. It had no trading activities during the year. It operates in one geographic location and we performed a full scope audit.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the company’s financial statements, and we remained alert when performing our audit procedures for any indicators of the impact of climate risk. Our procedures did not identify any material impact as a result of climate risk on the company’s financial statements.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall company materiality | £1,921,840 (2023: £501,505). |
How we determined it | 1% of total assets |
Rationale for benchmark applied | The company is a financing company to the group and as such total assets is considered the most appropriate benchmark. |
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2023: 75%%) of overall materiality, amounting to £1,441,380 (2023: £376,129) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls - and concluded that an amount in the middle of our normal range was appropriate.
We agreed with the directors that we would report to them misstatements identified during our audit above £192,180 (2023: £50,151) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Strategic report and Directors' report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' report for the year ended 31 December 2024 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report and Directors' report.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
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.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
we have not obtained all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or
certain disclosures of directors' remuneration specified by law are not made; or
the financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
We were appointed by the directors on 10 February 2015 to audit the financial statements for the year ended 31 December 2014 and subsequent financial periods. The period of total uninterrupted engagement is 11 years, covering the years ended 31 December 2014 to 31 December 2024.
All the activities of the company are from continuing operations.
The notes on pages 16 to 22 form part of these financial statements.
The notes on pages 16 to 22 form part of these financial statements.
The notes on pages 16 to 22 form part of these financial statements.
Road Management Services (Finance) plc ("the Company") is a private company limited by shares incorporated in the United Kingdom and is registered England and Wales. The registered office is located at 8th Floor, 6 Kean Street, London, WC2B 4AS.
The principal activity of the Company during the year was as a financing vehicle for the Design, Build, Finance and Operation contract which was entered into with the Secretary of State for Environment, Transport and the Regions on 13 February 2003 by its parent Road Management Services (Darrington) Limited. The contract is in the operational phase and in year 21 of its 33 year term, expiring in May 2036.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £000's.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Not to disclose transactions with wholly owned members of a group.
The financial statements of the company are consolidated in the financial statements of Road Management Service (Darrington) Holdings Limited. These consolidated financial statements are available from its registered office at 8th Floor, 6 Kean Street, London, WC2B 4AS.
The bond and bank loan have the benefit of an unconditional and irrevocable financial guarantee as to all payments of interest and principal issued by AMBAC. The Board acknowledges that the AMBAC rating was downgraded in November 2008 and April 2009 (to below BBB) and that this created uncertainty due to the risk that EIB may request that this institution be replaced. As in previous years a waiver letter has been provided by EIB in respect of the AMBAC downgrade dated 13 March 2025 which covers the period to 30 April 2026. This letter postpones testing of the covenant until after that date. Given the continued discussions with EIB the directors are assured that adequate safeguards are in place to enable this funding to remain in place for the foreseeable future.
The performance of the Company's parent, Road Management Services (Darrington) Limited, is important when considering and assessing the Company's going concern status. The parent prepares cash flow forecasts covering the expected life of the asset and so including the 12 month period from the date the financial statements are signed. In drawing up these forecasts, the directors have made assumptions based upon their view of the current and future economic conditions that will prevail over the forecast period. Based on these forecasts the directors have a reasonable expectation that the parent and therefore the Company has adequate resources to continue in operational existence for the foreseeable future, including a period of 12 months from the authorisation of this set of financial statements.
In light of this, the directors continue to adopt the going concern basis of accounting in preparing the Company's annual financial statements.
Basic financial assets, which include debtors, cash and bank balances, are initially measured at transaction price including transaction costs and debtors are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial instruments are subsequently measured at fair value, with any changes recognised in the Statement of Comprehensive Income, with the exception of hedging instruments in a designated hedging relationship.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including Creditors, bank loans, loans from fellow group are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at each reporting date. The fair values of the derivatives have been calculated by discounting the fixed cash flows at forecasted forward interest rates over the term of the financial instrument. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The carrying value of those assets recorded in the Company's Statement of financial position, at amortised cost less any impairment losses, could be materially reduced where circumstances exist which might indicate that an asset has been impaired and an impairment review is performed. Impairment reviews consider the fair value and/or value in use of the potentially impaired asset or assets and compare that with the carrying value of the asset or assets in the Statement of financial position. Any reduction in value arising from such a review would be recorded in the Statement of comprehensive income. Impairment reviews involve the significant use of assumptions. Consideration has to be given as to the price that could be obtained for the asset or assets, or in relation to a consideration of value in use, estimates of the future cash flows that could be generated by the potentially impaired asset or assets, together with a consideration of an appropriate discount rate to apply to those cash flows.
The auditors' remuneration of £6K (2023: £6K) was borne by the parent company, Road Management Services (Darrington) Limited and was not recharged.
The average number of persons employed by the Company during the financial year amounted to nil (2023: nil). The directors are not employed by the Company and receive remuneration from another company for their services as directors of this entity and a number of fellow subsidiaries. It is not possible to make an accurate apportionment of their remuneration in respect of each of the subsidiaries.
The European Investment Bank (EIB) loan instrument incorporates an embedded derivative in the form of step up interest payable if the credit rating of the guarantor falls below a certain grading. For the EIB loan, the AMBAC rating downgrade in November 2008 and April 2009 (to below BBB), has led to an additional interest charge of 0.45% and 0.85% respectively.
Amounts owed by Group undertakings of £192,133K (2023: £196,974K) relate to the on-loan of the Company's senior debt to its parent company, Road Management Services (Darrington) Limited. Repayment of and interest receivable on the on-loan are aligned with the Secured Guaranteed Sterling Index Linked Bond and the EIB loan detailed in note 10. The on-loan also carries the same guarantees and loan referred to.
Other amounts owed by group undertakings are unsecured, have no fixed repayment date and are recoverable on demand.
On 26 February 2004, the Company authorised the creation and issue of £113,240,000 in aggregate principal amount of 2.8332 per cent Secured Guaranteed Sterling Index Linked Bonds due 2035. It also entered into a loan agreement with the European Investment Bank under which the European Investment Bank granted it a loan of £105,000,000 at 2.3774 per cent Index Linked. On 31 March 2005, variation bonds with a nominal value of £1,500,000 were cancelled, reducing the nominal value of the bond to £111,740,000.
At the year end the Secured Guaranteed Sterling Index Linked Bond due 2035, listed on the London Stock Exchange, with a coupon rate of 2.8332% per annum index linked, which are repayable in instalments on 31 March and 30 September each year, commencing 31 March 2007, held a liability of £118,337K (2023: £116,256K). An amount of £2,469K (2023: £2,743K) is included in amounts falling due within one year, and £115,868K (2023: £113,513K) is included in amounts falling due in greater than one year.
At the year end the European Investment Bank loan at an interest rate of 2.3774% per annum index linked, which are repayable in instalments on 31 March and 30 September each year, commencing 31 March 2007, held a liability of £72,789K (2023: £79,743K). An amount of £10,746K (2023: £10,147k) is included in amounts falling due within one year and £62,043K (2023: £69,596K) is included in amounts falling due in more than one year.
The loans are shown net of unamortised loan issue expenses of £435K (2023: £518K) of which £311K (2023: £388K) relates to the Bond and £124K (2023: £130K) the EIB Loan. £357K (2023: £435K) is included in amounts falling due in greater than one year.
The Bond and EIB loan are secured by charges and assignments in favour of the Company and over all the assets of Road Management Services (Darrington) Limited.
The Company's bonds and bank loan have the benefit of an unconditional and irrevocable financial guarantee as to all payments of interest and principal issued, by the monoline insurer AMBAC.
There is a single class of ordinary share. There are no restrictions on the distribution of dividends and the repayment of capital.