Introduction
This Strategic Report explains the operations of WoDS Transmission plc (“the Company”) and the main trends and factors underlying the development and performance of the Company during the year ended 31 March 2025, as well as those matters which are likely to affect its future development and performance.
The ultimate parent company of the Company is WoDS Transmission TopCo Limited (“TopCo”), a company incorporated and registered in Jersey.
The Company’s principal activity is to provide an electricity transmission service to National Energy System Operator Limited (“NESO”), being the electricity transmission system operator for Great Britain.
The Company owns and operates a transmission system that electrically connects an offshore wind farm generator to the onshore electricity transmission system owned by National Grid Electricity Transmission plc (“NGET”).
Background
The Office of Gas and Electricity Markets (“Ofgem”), supporting government initiatives, has developed a regulatory regime for electricity transmission networks connecting offshore wind farms to the onshore electricity system. A key feature of this regime is that each new tranche of transmission assets required by offshore generators will be owned and operated by Offshore Transmission Owners (“OFTOs”). OFTOs are subject to the conditions of a transmission licence.
The Company holds an Offshore Electricity Transmission Licence (“the Licence”), awarded by The Gas and Electricity Markets Authority (“the Authority”) that became effective from 20 August 2015. This Licence, amongst other matters, permits and requires the Company to maintain and operate the West of Duddon Sands offshore electricity transmission assets for the period the Licence is in force. The Company’s offshore electricity transmission system exports the output of the West of Duddon Sands wind farm to NGET’s onshore electricity transmission system.
The Electricity and Gas (Internal Markets) Regulations 2011 require all transmission system operators such as the Company to be certified as complying with the unbundling requirements concerning common rules for the internal market in electricity (“the third package”). The Company has been issued a certificate pursuant to Section 10D of the Electricity Act 1989 by the Authority confirming its compliance with the third package requirements. The Company has ongoing obligations and is required to make certain ongoing declarations to the Authority pursuant to the Licence to ensure compliance with the terms of the certificate which it has met through to the date of this report.
The Company’s offshore electricity transmission system
The Company transmits the electrical power of the West of Duddon Sands wind farm from the offshore connection point of the Company’s electrical assets with the electrical assets owned by the windfarm to the onshore connection point of the Company’s assets with the electricity transmission system of NGET. The roles and responsibilities of parties at electrical connection points are dealt with through Interface Agreements and industry codes.
The West of Duddon Sands offshore wind farm comprises 108 turbines, with a combined capacity of around 389 megawatts (“MW”) and is located in the East Irish Sea approximately 14 km from the nearest coast on Walney Island, Cumbria. The power that is generated by the wind farm is transported to shore by the Company and connects into the NGET system at Heysham in Lancashire.
The wind farm turbines are interconnected in “strings” by medium voltage (33kV) submarine cables that act as a power collection and transport system. The medium voltage cables are owned by the windfarm and run to the offshore electricity substation that is owned by the Company. At the offshore electricity substation, the voltage is “stepped up” to 132kV by electrical transformers and then transported to land by two high voltage submarine cables buried in the sea floor. At landfall, the submarine cables are joined to land cables that run to the Company’s onshore electricity substation at Heysham. At the Heysham substation the power factor of the electricity is corrected using reactive compensation equipment and the transported power is then connected into NGET’s electricity transmission system.
Licence obligations
Under the terms of the Licence the Company is required to carry out its licenced activities and have in place governance arrangements that ensure (amongst other obligations) that the Company does not provide cross-subsidies to, or receive cross-subsidies from, any other business of the Licensee or of any affiliate. In addition, the Licence places restrictions on the Company’s activities and how it conducts its transmission activities. In carrying out its transmission activities it must do so in a manner that does not confer upon it an unfair commercial advantage, in particular, in relation to any activity that does not relate to the operation of the offshore transmission business.
A failure by the Company to materially comply with the terms of the Licence could ultimately lead to the revocation of the Licence. The Directors take very seriously their obligations to comply with the terms of the Licence and have processes, procedures and controls in place to ensure compliance.
Regulated revenue and incentives
The Licence awarded by the Authority to the Company determines how much the Company may charge for the OFTO services that it provides to NESO. In any relevant charging year which runs from 1 April through to the following 31 March all such charges are determined in accordance with the requirements of the Licence. The Licence also provides the Company with an incentive to ensure that the offshore transmission assets are available to transmit electricity by reference to the actual availability of the Company’s transmission system in any given calendar year versus the regulatory target. The regulatory target availability is 98% of the total megawatt hour capacity of the Company’s electricity transmission system (as determined by the Company’s Services Capability Specification in any given calendar year, or part thereof).
Transmission charges are based on the target transmission system availability of 98% and increase on 1 April following any given calendar year end by reference to the rate of increase in the UK retail price index (“RPI”) in the 12-month period through to the previous September. The revenue derived from charges based on this target availability represents the Company’s “base revenue”. For the avoidance of doubt, the Company’s transmission charges are not exposed to commodity risk and are not exposed to any generation risk.
As previously noted, the Licence contains mechanisms to incentivise the Company to provide the maximum possible electricity transmission system availability, having regard to the safe running of the system. The Licence includes incentives to maximise availability on a monthly basis with higher targets and higher potential penalties or credits, in the winter months and lower targets and lower potential penalties or credits, in the summer months. These incentive mechanisms are designed to encourage the Company to proactively manage transmission system availability across the year by focusing maintenance activities, which could lower transmission system availability, into those months with the lowest targets and related penalties or credits.
If the achieved transmission system availability is different to the target availability, then there is a mechanism contained within the Licence that could potentially affect the Company’s charges and hence its revenue in future periods. The Licence provides for adjustments to “base revenue” where the OFTO’s system availability performance is different from the target system availability. If transmission system availability in any given calendar year is in excess of the target availability level, then credits are “earned” and if availability is less than target then penalties accrue. These availability credits and penalties are measured in megawatt hours (“MWhrs”). The Company is then permitted or required under the Licence, as the case may be, to change its prices to convert the availability credits earned or penalties accrued into a financial adjustment to “base revenue”. The maximum availability credit which the Company can “earn” and then collect in charges in any one charging year is the financial equivalent of 5% of base revenue for the immediately preceding charging year and the maximum availability penalty that can be reflected in charges for any one charging year is the financial equivalent of 10% of base revenue for the immediately preceding charging year. Availability credits and penalties that arise in the first and final period of operations reflect a partial period of operations and the financial impact on charges is apportioned accordingly.
Notional availability penalties and credits as measured in MWhrs are recorded on a monthly basis during the calendar year. If at the end of any calendar year there is a cumulative net credit this net credit is eligible for conversion as a financial adjustment to charges during the following charging year. The financial conversion of availability credits and penalties is carried out by reference to the “base revenue” for the charging year immediately prior to the charging year that the credits/penalties adjust charges.
In respect of net availability penalties which are outstanding at the end of the calendar year then, in principle, these net availability penalties would be converted as a financial adjustment to base revenue in respect of the following charging year. Net availability penalties can only be converted as an adjustment to base revenue to the extent that such adjustment does not exceed 10% of the base revenue for the previous charging year. Any net availability penalties not converted as an adjustment to base revenue are carried forward on a cumulative and notional basis and aggregated with additional availability credits and penalties arising in subsequent years. Net availability penalties that arise in any one calendar year can only be carried forward for a maximum of five charging years.
There are a number of risks that the Company faces that affect the level of transmission system availability and therefore affect potential incentive credits and penalties that otherwise might arise under the incentive arrangements. The principal factors governing transmission system availability include the following:
the inherent design of the transmission system e.g. system redundancy;
the management of maintenance activities so that the assets are maintained to good industry practice, thereby avoiding unnecessary equipment failure and where possible the Company seeks to carry out such maintenance with the minimum number and duration of planned outages whilst having regard to the safe operation of those assets; and
the management of necessary planned outages of the transmission system having regard to the activities of other interested parties and to bias such outages towards those periods during the year, with the lowest system availability targets and related penalties or credits.
The Company mitigates the risk of system unavailability due to equipment failure through the maintenance regime described above, the holding of strategic spares and a robust contingency plan to respond to any unplanned system outages. All maintenance activities are carried out in accordance with good industry practice.
In certain circumstances and in respect of certain costs, such as non-domestic rates relating to the Company’s onshore electricity network and costs charged by the Authority associated with running the OFTO tender regime, the Company is permitted under the terms of its Licence to pass these costs to its customer by altering charges as required.
Transmission system capability (capacity)
As described earlier, the Company is incentivised to provide the maximum transmission system availability as is possible having regard to the safe running of the system. The maximum availability of the system is defined in the Licence and is expressed in MWhrs.
The Company has reported 98.78% transmission capacity based on the operational maximum capacity of the transmission system during the performance year ended 31 December 2024 as compared with 98.22% for the prior performance year. These reported availability figures exclude the impact of any outages as permitted to be excluded by the Licence or as otherwise approved by the Authority.
During May 2023, there was a failure of a Voltage Transformer leading to an unplanned outage of one of the Company’s electricity transmission circuits during the period 7 May 2023 to 25 May 2023 – which ultimately resulted in the replacement of that Voltage Transformer during the financial year ended 31 March 2024. Because of this failure, there was an adverse impact on the Company’s reported availability for the performance year ended 31 December 2023 which has been reported at 98.22%.
While the failure of a Voltage Transformer is a highly unusual event, there was insufficient evidence for us to successfully pursue an Exceptional Event claim with the Authority. Consequently, the reduction in availability caused by this outage is reflected accordingly in the availability reported for the performance year ended 31 December 2023.
During the performance year ended 31 December 2021 there was an outage on the Company’s transmission system following a third party’s faulty operation. Further related outages were taken during the performance year ended 31 December 2022 and the performance year ended 31 December 2023 as part of the Company’s investigation into the root cause of the outage caused by the third-party faulty operation during the performance year ended 31 December 2021. In January 2025, the Authority notified the Company that it accepted that the outages during the performance years ended 31 December 2021 and 31 December 2022 resulted from an Exceptional Event as defined under the Licence, and allowed for the exclusion of these outages from reported availability for the performance years ended 31 December 2021 and 31 December 2022.
Transmission system capability (capacity) (continued)
As a result of the successful Exceptional Event notified to the Company in January 2025, in respect of the performance years ended 31 December 2021 and 31 December 2022, this has led to a restatement of the reported transmission capacity for those performance years from 99.38% to 99.94% in respect of the performance year ended 31 December 2021 and from 99.30% to 99.51% in respect of the performance year ended 31 December 2022.
A summary of actual Transmission system availability (adjusted for outages as permitted by the Licence or as otherwise approved by the Authority) and incentive related availability credits in MWhrs for the performance years ended 31 December 2024 and 31 December 2023 are shown in the table “Transmission system availability” later in this Strategic Report.
Transmission system quality of supply
The STC sets out the minimum technical, design, operational and performance criteria that Offshore Transmission Owners must ensure that their transmission system can satisfy. For the Company’s transmission system, the most significant requirements are in respect of the reactive power capability, voltage control and the quality of the power (as measured by harmonic performance) deliverable at the connection point of the Company’s transmission system with NGET’s transmission system.
The Company has met its requirements to transmit electricity in accordance with the parameters agreed with NESO during the year under review and through to the date of this report.
Key performance indicators ("KPIs")
The Company has identified the following KPIs as being instrumental to the management of the transmission business. Such KPIs include financial and non-financial KPIs:
The Company’s operational performance
The Company’s prime operational objectives are to maximise transmission system availability and to ensure that the quality of electricity at the onshore connection point is compliant with the SQSS and the STC having regard in all respects to the safety of employees, contractors and the general public at large.
In support of these objectives the Company has developed a comprehensive asset management policy and framework that is consistent with good industry practice. The policy and framework are derived by applying a risk assessment model that considers the probability and consequences, of failure to determine overall risk to components within the generic asset classes that comprise the OFTO assets: offshore platform; offshore substation; offshore cable; onshore cables and onshore substation.
During the year, the Company has continued the successful application of its asset management policy and framework and has carried out its asset management activities in accordance with the resulting Asset Operating Plan. Maintenance activities have been successfully carried out in accordance with the maintenance plan, and the Company submitted its network outage plan to NESO, the Great Britain energy system operator.
As referenced under “Transmission system capability (capacity)” earlier in this section, there was a failure of a Voltage Transformer in May 2023. As previously stated, this is a highly unusual event as this equipment has an expected useful working life of 40 years and requires minimal maintenance. The Company and its O&M contractor responded quickly to this event, to reduce the adverse financial impact of the outage caused by this failure. A Voltage Transformer that had originally been purchased to replace another Voltage Transformer as part of a future planned maintenance activity was used to restore electricity transmission to the impacted circuit.
Transmission system availability
The performance of the Company’s transmission system for the performance year ended 31 December 2024 and 31 December 2023 was as tabulated below:
Quality of supply
The quality of supply constraints must comply with the requirements of the STC (see "Principal regulatory, industry contracts and industry code matters - Transmission system quality of supply" earlier). The Company is required to transmit electricity within certain parameters in relation to: voltage control; reactive power' and harmonic distortion. a failure to meet these quality of supply constraints could result in NESO requiring the Company's transmission system to be disconnected from NGET's electricity transmission system, resulting in the loss of transmission availability and reduced incentive credits or performance penalties. The Company closely monitors compliance with these quality of supply constraints and carries out appropriate maintenance activities consistent with good industry practice to allow the Company to meet these quality of supply obligations.
During the year ended 31 March 2025 and year ended 31 March 2024, the Company has met its obligations to transmit electricity compliant with these operational obligations. The Company has continued to comply with these obligations through to the date of this report.
Health, safety and environmental performance
The Board recognises that the nature of its business requires an exceptional focus on health, safety and the environment. Safety is critical both to business performance and to the culture of the Company. The operation of the Company's assets gives rise to the potential risk that they could injure people and/or damage property if these risks are not properly controlled. Our objective is to eliminate or minimise those risks to achieve zero injuries or harm and to safeguard members of the general public.
The Board is pleased to report that, during the year under review there were no health or safety incidents that required reporting under applicable legislation and that contractor "lost days" arising from safety incidents that required reporting under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 were zero.
The Company is committed to reducing the environmental impact of its operations to as low as practically possible. The Company does so by reducing the effect its activities have on the environment by: respecting the environmental status and biodiversity of the area where the Company's assets are installed; considering whole life environmental costs and benefits in making business decisions; looking for ways to use resources more efficiently through good design, use of sustainable materials, responsibly refurbishing existing assets and reducing and recycling waste; and continually improving management systems to prevent pollution and to reduce the risk of environmental incidents.
The Board is also pleased to report that during the year under review there were no environmental incidents or matters that required reporting to any relevant competent authority and that it has continued to comply with the Marine licence obligations that were transferred to it by the vendors of the offshore electricity transmission assets since the transmission assets were acquired by the Company.
Commitment to ethical business practices
The Company is committed to ethical business practices in the way that the Company carries out its business and is committed to complying with all laws and regulations that apply to the Company at all times.
As a member of the WoDS Transmission TopCo Limited group of companies (“the TopCo group”) the Company is subject to the policies of the TopCo group and that of its own policies, which include:
a code of conduct that governs the activities of those persons directly involved in the business, which applies in particular to the Directors and the employees and consultants engaged by FPL in the provision of service to the Company and the TopCo group generally;
a tax evasion policy, including a consideration of the implications of the Criminal Finances Act 2017;
compliance with General Data Protection Regulation; and
an anti-bribery and anti-corruption policy.
The Company has identified no instances of non-compliance with any of the above polices for the year ended 31 March 2025 and through to the date of this report.
The Company respects the rights of those persons who work directly or indirectly in the business. While the Company does not have a formal modern slavery policy, as it is not obliged to have such a policy, it does not condone in any way modern slavery within its business or that of its supply chain.
Commitment to ethical business practices (continued)
The Company has made enquires of key suppliers during the year within its supply chain as to their policies in respect of business ethics generally and human rights and modern slavery policies in particular. Based on the responses received from key suppliers and a review of policies supplied by those key suppliers, it appears clear that those suppliers are also committed to highly ethical business practices.
Stakeholder relationships
The potentially hazardous nature of Company’s operations and the environmentally sensitive nature of the locations where its assets are located require the Company to engage and communicate with a wide audience of stakeholders and to establish good relationships with them. As well as industry participants and local and national government bodies this audience includes: Port Authorities; the emergency services; the maritime community; environmental agencies and organisations; landowners and the general public. Accordingly, the Company has defined and implemented a stakeholder engagement and communications plan which it has continued to apply during the year and through to the date of this report.
The Directors consider that stakeholder relationships are satisfactory.
Statement in respect of section 172 of the Companies Act 2006
The Directors have an obligation under section 172 of the Companies Act to promote the long-term success of the Company for the benefit of its sole shareholder but in doing so, they should have regard to other interested parties, including those businesses in its supply chain and its customers. As the Company does not have any employees, it is crucially important for the Company to have good relationships with businesses within its supply chain. In addition, the Directors should and do have due regard to the impact its operations have on the environment and the local community. The Directors take all of these responsibilities extremely seriously.
This Strategic Report outlines the actions and outcomes that the Board has taken in relation to its obligations under S172 of the Companies Act 2006, references to these are provided below:
“The Company’s operational performance - Health, safety and environmental performance”;
“Commitment to ethical business practices”; and
“Stakeholder relationships”.
The Company has an effective governance process in place, and this is explained in detail in the Corporate governance report that commences on page 20. In addition, the Corporate governance report includes details of the Company’s compliance with certain Licence obligations – see page 22 and the impact the Company’s operations have had on the environment – see page 24 for details.
Other
All Directors of the Company are male.
The Company's financial performance
Summary
The financial performance of the Company for the year ended 31 March 2025 and its financial position as at 31 March 2025, was satisfactory and is summarised on the following page. In this report, all numbers have been rounded to the nearest £1,000 where each £1,000 is represented by the symbol £k or £'000.
The Company reports its results in accordance with the UK-adopted international accounting standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under UK-adopted IAS; the currency used in reporting these financial statements is GBP.
Operating and finance income
Operating and finance income is derived from the Company’s activities as a provider of transmission services. The vast majority of the Company’s income was derived from NESO for the year ended 31 March 2025 and the year ended 31 March 2024.
Finance income for the year amounted to £9,307k (2024: £9,815k), and represents the finance income that would have been generated from an efficient standalone “transmission owner”. The finance income for the year has reduced as compared with the prior year reflecting the lower absolute return on the average lower value of the carrying value of the transmission owner asset which has been recorded in accordance with the principal accounting policies adopted by the Company. A discussion of the critical accounting policies adopted by the Company is shown in note 2 of the financial statements commencing on page 43.
Operating income for the year amounted to £6,338k (2024: £5,706k), and primarily represents the operating income that would be generated by an efficient provider of operating services to NESO. Such operating services include those activities that result in the efficient and safe operation of the transmission assets and are reflective of the costs incurred in providing those services, including the cost of insuring those assets on behalf of a standalone transmission owner. Operating income has been recorded in accordance with the principal accounting policies adopted by the Company and has increased as compared with the prior year primarily as a result of the impact of inflationary increases permitted under the Licence net of the impact of RPI swaps.
Operating costs
Operating costs for the year amounted to £4,856k (2024: £4,982k). The most significant cost included within these costs relates to the operations, maintenance and management of the Company and amounted to £4,572k (2024: £4,474k). This cost covers operations and maintenance fees, insurance premiums, management service fees, and non- domestic rates associated with the transmission network. The decrease in operating costs for the year is primarily related to the absence of repair costs that were incurred during the year ended 31 March 2024 relating to the removal and replacement of a Voltage Transformer – see further information in relation to this asset failure earlier in this Strategic Report - "Transmission system capability (capacity)".
Operating profit
Operating profit being the residual of operating income, finance income and operating costs amounted to £10,789k (2024: £10,539k). The increase in operating profit for the year as compared with year ended 31 March 2024, reflects the changes discussed earlier, but is primarily explained by the decrease in operating costs.
Investment revenues
Investment revenues of £1,466k (2024: £1,370k) relates solely to interest earned on bank deposits, with the increase in investment revenues being reflective of interest being earned on higher average deposits during the year as compared with the prior year.
Finance costs amounted to £10,821k (2024: £11,160k). The vast majority of the finance costs relate to the interest cost of servicing the senior debt bondholders £5,852k (2024: £6,273k) and holders of the other borrowing £4,475k (2024: £4,385k). Interest expense and finance costs principally arise from the cost of debt used to finance the initial acquisition of the transmission owner asset. The finance cost relating to senior debt bondholders reduced in the year as a result of the partial repayment of this debt and consequently the interest expense is lower than the previous year as the average senior debt balance during the year ended 31 March 2025 was lower than for the prior year.
Taxation
The net taxation charge on profit (2024: profit) before taxation for the year is £682k (2024: £571k) and relates solely to deferred taxation. There was no current taxation arising in the year (2024: £nil) as the Company has no taxable profit (2024: no taxable profit).
The net taxation charge on profit before taxation for the year ended 31 March 2025 has been computed at 25% (2024: 25%). The 25% rate of corporation taxation is the rate of corporation tax that would be expected to apply when all (2024: all) of the temporary differences as underlie these deferred taxation balances are anticipated to reverse.
A net taxation charge of £826k (2024: £85k) has been recognised in other comprehensive loss relating to pre-taxation gains arising on marking the Company’s cash flow hedges to market at the Statement of Financial Position date.
The net taxation charge for the year ended 31 March 2025 (2024: net charge) on other comprehensive income relates solely to deferred taxation and has been computed at 25% (2024: 25%).
Profit after taxation
Profit for the year after taxation amounted to £752k (2024: £178k). The profit after taxation for the year ended 31 March 2025 as compared with the prior year reflects the impact of the changes on operating profit, investment revenues, finance costs and taxation which are discussed earlier.
Cash flows
Net cash flows from operations amounted to £22,784k (2024: £22,652k) primarily reflecting the amounts invoiced and received from NESO in relation to the provision of transmission services in the year net of cash outflows relating to operating activities incurred during the year. The increase in net cash flows from operations for the year ended 31 March 2025 as compared with the prior year primarily reflects higher availability payments received from NESO (inclusive of the impact of RPI swaps on net cash inflows) in the year.
Net cash flows generated from investing activities for the year ended 31 March 2025 amounted to £1,466k (2024: £1,370k), reflecting the receipt of interest income.
+ Excluding those current assets and liabilities included within net debt.
Transmission owner asset and decommissioning provision
The transmission owner asset is classified as a contract asset and a financial asset and is carried at the cost directly attributable to the acquisition of the WoDS offshore transmission system at the date of acquisition, plus finance income and adjusted for any amounts that have been invoiced which are deemed to be attributable to the carrying value of that asset. The net result being that the carrying value of the transmission owner asset reflects the application of the effective interest rate method and is determined in accordance with the principal accounting policies adopted by the Company. A discussion of the critical accounting policies adopted by the Company that give rise to this balance is shown in the accounting policies section of the financial statements commencing on page 38.
The transmission owner asset at the date of acquisition included an estimate of the cost of decommissioning the transmission owner asset at the end of its useful economic life in 2035 and also includes an amount equivalent to the amount recognised as an infrastructure liability at that date. At 31 March 2025, the carrying value of the transmission owner asset was £205,362k (2024: £217,255k) and the decommissioning provision amounted to £4,194k (2024: £4,011k).
Non-current deferred taxation
The Company has recognised a net deferred taxation asset of £2,407k (2024: £3,914k) which reflects the recognition, in full, of the deferred taxation impact of all temporary differences existing at the Statement of Financial Position date, including the fair valuing of all derivative financial instruments.
Net debt
Net debt is defined as all borrowings, the carrying value of all financial derivative contracts that are marked to market (UK Retail Price Index (RPI) related swaps) plus an infrastructure financial liability, less cash and deposits. This definition of net debt has changed since the prior year. In the prior year the definition of net debt was inclusive of any interest accruals.
At 31 March 2025 net debt stood at £219,102k (2024: £235,825k) and included £28,975k (2024: £32,278k) of derivative financial liabilities that were marked to market at that date and a further £2,919k (2024: £3,050k) relating to an infrastructure financial liability. A discussion of the capital structure and the use of financial derivatives is provided later in the Strategic Report.
The Company is funded by a combination of senior debt, other borrowing, an infrastructure financial liability and equity in accordance with the Directors’ objectives of establishing an appropriately funded business consistent with that of a prudent offshore electricity transmission operator and the terms of all legal and regulatory obligations including those of the Licence and the Utilities Act 2000. The senior debt is supported by the European Investment Bank (“EIB”) who have issued a Project Bonds Credit Enhancement (“PBCE”) letter of credit in support of the senior debt. The PBCE letter of credit allows the Company to make certain payments in respect of the senior debt and hedging agreements in certain specified circumstances.
All senior debt is serviced on a six-monthly basis and is expected to amortise through to 24 August 2034. The total principal carrying value of the senior debt outstanding at 31 March 2025 net of unamortised issue costs amounted to £162,473k (2024: £174,133k).
The senior debt carries a fixed rate coupon of 3.446% and requires servicing semi-annually on 30 June and 31 December in each year in accordance with the conditions specified in the Bond Trust Deed dated 20 August 2015 and the Prospectus issued in respect of the senior debt.
The other borrowing is unsecured and is held by the Company’s immediate parent undertaking, HoldCo. The other borrowing was issued by the Company on a commercially priced basis and carries a fixed rate coupon. At 31 March 2025, the total principal carrying value of the other borrowing outstanding amounted to £54,973k (2024: £53,131k).
An infrastructure financial liability amounting to £2,919k (2024: £3,050k) at 31 March 2025 has been recognised.
Ordinary equity share capital and share premium amounted to £469k at 31 March 2025 (2024: £469k).
Going concern, liquidity and treasury management
The Directors have confirmed that after due enquiry they have sufficient evidence to support their conclusion that the Company is a going concern and has adequate resources in the foreseeable future to meet its on-going obligations, including the servicing of debt holders, as those obligations fall due. Consequently, they have formed the opinion that it is reasonable to adopt the going concern basis in preparing the financial statements.
The Directors note that total shareholders’ equity at 31 March 2025 is negative (2024: negative) but this position arises as a consequence of the application of certain technical accounting rules associated with hedge accounting which requires the mark-to-market of derivative financial instruments which has resulted in the recognition of a negative hedging reserve. The existence of a negative hedging reserve implies derivative net cash outflows will arise in future periods (based on the conditions prevailing at the Statement of Financial Position date).
However, when these cash flows are considered together with the expected cash flows to be derived from the underlying position being hedged, then the net cash flow is as expected by the Board and is factored into the financial plans of the Company. Further information regarding the Company’s “Hedging arrangements” is discussed later in this Strategic Report. As a result of the cash flow hedging arrangements in place, this provides the Directors with additional evidence to support their opinion that it is reasonable to adopt the going concern basis in preparing the financial statements. The other evidence considered to arrive at these conclusions is based on a number of factors which are summarised below and on the following page.
The expected cash inflows that are likely to accrue to the Company over the foreseeable future from its electricity transmission operations are highly predictable and would not be expected to fall below a certain level as explained earlier under “Principal regulatory, industry contracts and industry code matters - Regulated revenue and incentives”. All of the cash inflows generated by the Company in respect of its electricity transmission services were derived from NESO in its capacity as the Great Britain energy system operator and it continues to settle all invoices to the date of this report in accordance with its obligations under the STC. Similar to the Company, NESO is also regulated by the Authority.
The Company enjoys certain protections afforded under the Licence granted to the Company. In particular, provided that the Company can demonstrate that it has applied good industry practice in the management of the Company and its assets, then in the event that an unforeseen incident results in the Company suffering a loss in excess of £1,000k (in so far as it relates to its activities under the Licence) it can apply to the Authority for an income adjusting event. In these circumstances the Company may be able to recover any loss it has suffered.
Going concern, liquidity and treasury management (continued)
In the event that the Company suffers a loss of transmission system availability due to an Exceptional Event (as defined in the Licence), then the Company can apply to the Authority to have the loss of availability ignored for the purposes of determining the Company’s reported system incentive performance. In the event of a successful claim, then the Company’s performance credits determined in accordance with the incentive arrangements would be unaffected by any outage that was caused by an Exceptional Event.
The Company has also put in place prudent insurance arrangements primarily in relation to property damage and third-party liabilities, such that it can make claims in the event that an insurable event takes place and thereby continue in business.
The Licence protections together with the insurance arrangements put in place reduce uncertainties and address certain risks regarding potential loss of income and/or loss/destruction of assets that arise from remote and/or catastrophic events.
The Company has also entered into certain hedging arrangements, through the use of RPI swaps, which are explained in more detail under “Hedging arrangements” later in this Strategic Report, but these arrangements have the effect of converting a high proportion of the variable cash flows which are subject to RPI arising from the Company’s transmission services activities into a known and rising series of cash flows over substantially all of the expected life of the transmission business or project. This reduces the uncertainty as to the predictability of the likely cash in-flows that are expected to occur over the life of the project.
The highly predictable cash inflows (after RPI swaps), as described earlier, are then available to service the contractual net cash outflows associated with the senior debt that can be forecast with certainty, as the interest and principal repayments are known at the outset of the project.
Other contractual arrangements with third parties have been entered into that have a pricing mechanism that features linkages to RPI or other indices, which has the effect of reducing the uncertainty as to the quantum and frequency of cash outflows arising. As a consequence, it is the opinion of the Directors that the costs and related cash flows associated with these arrangements are more likely than not to vary in a similar manner with the principal cash inflows generated by the Company in relation to its transmission services that are not subject to the RPI swaps arrangements.
At 31 March 2025, the Company had access to a working capital reserve of £7,345k (2024: £6,747k) that it could access in the event that it is required to pay for any insurance deductible or to satisfy any reactive maintenance expenditure attributable to outages or repairs that could not be met in the ordinary course of business. In addition, in the event that the Company had insufficient funds to meet the contractual senior debt service and hedging payments, the Company can draw down under the PBCE letter of credit, with a view to meeting these obligations. The maximum amount that can be accessed under this facility amounts to 15% of the outstanding nominal principal amount of the senior debt outstanding.
Finally, under the terms of the other borrowing agreement, absent certain matters of default, the loan notes do not have to be redeemed until 2035. Therefore, there is no requirement for the Company to service this debt earlier than this date, although it is expected that it will do so.
Credit rating
It is a condition of the regulatory ring-fence around the Company that it uses reasonable endeavours to maintain an investment grade credit rating in respect of its senior debt. The rating agency carries out regular and periodic reviews of the rating. The Company has maintained an investment grade credit rating in respect of its senior debt consistent with its obligations under the Licence.
During the rating agency’s assessment of the Company’s credit rating, amongst other matters, the rating agency will and has considered: the cash flows expected to arise over the term of the project; the regulatory environment within which the Company operates; the nature of the principal contractual arrangements in place; the insurance arrangements; unusual and/or material maintenance expenditure; and the credit risk of all material counterparties in arriving at their assessment of the appropriate credit rating.
It is the Directors assessment, that having regards to the principal risks and uncertainties regarding cash flows, the creditworthiness of counterparties; the regulatory environment, the insurance arrangements and other matters that are discussed in this Strategic Report, that there are reasonable grounds to believe that the rating agency will continue to confirm the Company’s senior debt investment grade status in the foreseeable future based on the information available to the Directors at the date of this annual report.
On-going funding requirements
The Company does not expect to have any significant funding requirements over the expected life of the project that will require additional external funding. Loan servicing and other obligations of the Company are expected to be met by the cash inflows generated by the Company. Consequently, based on the current capacity of the existing transmission system operated by the Company, there is minimal refinancing risk.
To the extent that a requirement for significant expenditure is required in the future as a result of additional capital works being required to provide incremental transmission capacity, there is a mechanism in the Company’s transmission licence to allow the Company to increase its charges in respect of such expenditure. The Directors expect that additional funding would be made available based on the increased cash inflows that would be expected to arise from such additional expenditure. No such additional expenditure is planned or expected in the foreseeable future.
Surplus funds
The Company is restricted under the lending agreements as to the nature of the investments it may hold. Typically, such investments are held in term deposits with UK banks which have a rating for its long-term unsecured and non- credit enhanced debt obligations of A- or higher by S&P or Fitch or A3 or higher by Moody's or an equivalent long- term rating from another Rating Agency.
At 31 March 2025, the Company had £31,365k (2024: £27,868k) of cash balances of which £22,097k (2024: £19,593k) were held in bank accounts that restrict the use of the monies contained in those accounts for specific purposes. The remaining cash and cash equivalents are held for general corporate purposes. A description of the restrictions applied to certain deposits and other matters are referred to later under “Lending covenants and other restrictions”.
The Company has some variability of cash flows in relation to the interest it earns on its investments, as typically these investments are held in deposits with a typical maturity of 6 months or less and earn variable rates of interest.
Hedging arrangements
General
It is the policy of the Board that the Company will only enter into derivative financial instruments for the purpose of hedging an economic risk. No derivative financial instruments will be entered into unless there is an underlying economic position to be hedged. No speculative positions are entered into.
RPI swaps
The Company has entered into arrangements with third parties for the purpose of exchanging the vast majority (approximately 75%) of variable cash inflows arising from the electricity transmission service it provides to NESO in exchange for a pre-determined stream of cash inflows with the final payment date expected on 24 August 2034. The period through to 24 August 2034 closely matches the remaining period over which the Company enjoys exclusive rights to operate the offshore transmission system under the Licence and the period over which the vast majority of future cash flows from the project are expected to be generated.
As previously described (see “Principal regulatory, industry contracts and industry code matters - Regulated revenue and incentives”), under the terms of the Licence, regulatory and other contractual agreements, the Company is permitted to charge its principal customer, NESO, an agreed amount for the transmission services it provides, the price of which is uplifted each year commencing 1 April by a sum equivalent to the increase in RPI over the previous 12-month period measured from September to September.
The use of derivative arrangements (“RPI swaps”) has the effect of exchanging the vast majority of variable cash inflows derived from the Company’s transmission services (impacted by changes in actual RPI) in exchange for a known and predetermined stream of rising cash flows over the same period.
RPI swaps (continued)
The Directors believe that the use of these RPI swaps is consistent with the Company's risk management objective and strategy for undertaking the hedge. The vast majority of the Company’s cash outflows relate to borrowings that carry a fixed coupon so that both the resultant principal repayments and coupon payments are predetermined. The purpose of the RPI swap arrangements is to generate highly certain cash inflows (thereby reducing uncertainty) so that the Company can meet its obligations under the terms of the Company’s borrowing arrangements and therefore reduce the risk of default. The Directors believe that the RPI swaps continue to have a highly effective hedging relationship with the forecast cash inflows that are considered to be highly probable and as a consequence have concluded that these derivatives meet the definition of a cash flow hedge and have formally designated them as such.
The carrying value of RPI swap liabilities at 31 March 2025 was £28,975k (2024: £32,278k). Further information relating to these derivative financial instruments is contained within notes 17 and 25-31 to the financial statements.
Lending covenants and other restrictions
The Company is subject to certain covenants and conditions under lending agreements with the senior debt holders. The Company entered into the lending agreements to allow it to fund the acquisition of the transmission owner asset. Under these lending agreements, a Security Trustee and Bond Trustee have been appointed to represent the interests of the senior debt holders and to exercise certain rights under the lending documents. In addition, a Technical Adviser and an Insurance Adviser have also been appointed under the terms of the lending agreements. The covenants and conditions of the lending agreements include (but are not limited to) the following:
the Company is required to operate on the basis of forecasts included within a computer model prepared for the purpose of monitoring the performance of the project and to ensure compliance with certain financial ratios and certain covenants that the Company has made under the lending agreements. The forecast is refreshed on an annual basis or on a more frequent basis under certain specified conditions;
the Company is required to produce and publish a report for senior debt investors semi-annually, describing the performance of the project to date, which should provide a business and regulatory update and set out the Company’s compliance with certain lending ratios required under the lending agreements. In addition, the Company should provide and where appropriate publish semi-annual management accounts, yearly audited financial statements and yearly regulatory accounts on a designated website;
the lending agreements specify the bank accounts that the Company is permitted to operate and in addition, restrict the way in which those accounts should be operated – this includes, in respect of certain accounts, requiring those accounts to be funded for specific purposes and only allowing access to those accounts for that specified purpose;
the Company is required to maintain certain financial ratios (both historical and forward looking) in respect of debt service cover and loan life cover;
the Company is restricted under the lending agreements as to its ability to invest its surplus funds such that it is only permitted to invest those surplus funds in investments with maturities that are allowed under the terms of those agreements. Typically, this results in the Company investing in term deposits with maturities not exceeding six months;
the Company is required to maintain adequate insurances at all times; and
the Company is required to meet all the conditions contained within the lending agreements before any servicing of the other borrowing can take place or any distributions can be made to shareholders.
If the Company materially fails to comply with the terms of the lending agreements or has failed to apply one of the specified remedies, then the Company is in default of the lending agreements. In these circumstances, the amounts due under the lending agreements are immediately due and payable or are repayable on demand.
Since entering into the lending agreements, the Company has materially complied with all of the lending covenants and conditions and has continued to do so through to the date of this report.
Accounting policies
The financial statements present the results of the Company using the accounting policies outlined in the financial statements and are prepared in accordance with UK-adopted International Accounting Standards (“UK-adopted IAS”) and with the requirements of the Companies Act 2006 as applicable to companies reporting under UK- adopted IAS. This is explained in more detail in the accounting policies section of the financial statements under “Basis of preparation of these financial statements” on page 38.
UK-adopted IAS in compliance with the requirements of the Companies Act 2006 as applicable to companies reporting under UK-adopted IAS permits certain choices and the following material choices have been made as follows:
Presentation of financial statements
The Company uses the nature of expense method for the presentation of its Income Statement and presents its Statement of Financial Position showing net liabilities and total equity.
In the Income Statement the Company presents a sub-total of operating profit, being the total of operating income, finance income and operating costs. Finance income represents the income derived from the operation of the Company’s transmission owner asset and is included within operating profit to reflect the fact that this is one of the principal revenue generating activities of the Company and relates to the Company’s principal operating activity as a provider of electricity transmission availability services.
Financial Instruments
The Company has elected to apply hedge accounting to its standalone derivative financial instruments.
Critical accounting policies
The application of accounting principles requires the Directors of the Company to make estimates, judgements and assumptions that are likely to affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in the financial statements. Better information, or the impact of an actual outcome, may give rise to a change as compared with any estimates used and consequently the actual results may differ significantly from those estimates. The impact of revised estimates, or the impact of actual outcomes, will be reflected in the period when the better information or actual outcome is known.
A discussion of critical accounting policies is contained within the accounting policies section of the financial statements together with a discussion of those policies that require particularly complex or subjective decisions or assessments. The accounting policies section of the financial statements commences on page 38.
Approved on behalf of the Board
In accordance with the requirements of the Companies Act 2006 the following sections describe the matters that are required for inclusion in the Directors’ Report and were approved by the Board. Further details of matters required to be included in the Directors’ Report are incorporated by reference into this report, as detailed below.
The Directors who held office during the year and up to the date of signature of the financial statements were as follows:
A full description of the Company’s principal activities, business and principal risks and uncertainties is contained in the Strategic Report on pages 1 to 16, which is incorporated by reference into this report.
Company status
WoDS Transmission plc is a public company limited by shares. The Company is domiciled in the United Kingdom and registered in England and Wales.
WoDS Transmission plc is a wholly owned subsidiary undertaking of WoDS Transmission Holdco Limited (“HoldCo”), which itself is a wholly owned subsidiary undertaking of WoDS Transmission TopCo Limited (“TopCo”).
During the year ended 31 March 2025, the Company paid £2,607k (2024: £2,296k) of interest to HoldCo in relation to the unsecured 8.31% Loan Notes 2035 that were issued by the Company to HoldCo. The principal outstanding on these unsecured loans amounted to £54,973k at 31 March 2025 (2024: £53,131k).
No dividends were paid during the year (2024: £nil). The Directors are not proposing a final ordinary dividend (2024: £nil).
Details on the use of financial instruments and financial risk management (“Hedging Arrangements”) are included on pages 14 to 15 in the Strategic Report.
Details of greenhouse gas emissions by the Company during the year are shown in the Corporate governance statement – see page 24.
Future developments
Details of future developments are contained in the Strategic Report.
The Directors have concluded that the Company is a going concern for the reasons explained in the Strategic Report under the heading "Going concern, liquidity and treasury management".
The Company's strategy, long-term business objectives and operating model
The Company's strategy, long-term business objectives and operating model are set out in the Strategic Report and include an explanation of how the Company will generate value over the longer term.
The Audit Committee has recommended to the Board the reappointment of PricewaterhouseCoopers LLP. The reappointment and a resolution to that effect is expected to be included on the agenda for the next AGM. PricewaterhouseCoopers LLP has indicated its willingness to continue as Auditor. The Audit Committee will also be responsible for determining the audit fee on behalf of the Board.
The Company does not have any employees and does not expect to engage any employees in the foreseeable future – see “The Company’s Operating Model” in the Strategic Report on page 2.
Directors’ remuneration report
The Directors did not receive any direct remuneration from the Company during the year (2024: £nil). The Directors are employed and remunerated by a company within the Dalmore Holdings Limited group of companies of which Dalmore Capital Limited, who manage the investment in the Company on behalf of investment funds, is a part. It is not practicable to allocate or apportion their remuneration specifically to this Company. Consequently, there is no charge in respect of Directors’ remuneration that has been recognised in these financial statements.
The Company is a wholly owned indirect subsidiary undertaking of WoDS Transmission TopCo Limited (“TopCo”) and consequently operates within the corporate governance framework of TopCo and its subsidiary undertakings (“the TopCo group”). The companies that comprise the TopCo group are: TopCo, (being the ultimate parent undertaking); WoDS Transmission Holdco Limited (“HoldCo” - the immediate parent undertaking); and the Company. An understanding of the TopCo group’s governance framework is required to understand the Company’s position within that framework.
None of the members of the TopCo group have a premium listing of equity shares in the UK and therefore they are not subject to the UK Corporate Governance code.
The Company is a public company limited by shares and is registered in England and Wales. The Company does have listed debt in the form of £254,849,000 worth of 3.446 per cent Fixed Rate Secured Bonds due August 2034 – which are listed on the Official List of the Irish Stock Exchange.
As at 31 March 2025 and 31 March 2024 - the ordinary shares in TopCo were held by entities where the equitable interest is vested in funds ultimately managed by Dalmore Capital Limited – an FCA authorised entity (“Dalmore Funds”). The Dalmore funds that hold 100% of the equitable interest in the ordinary share capital of TopCo at 31 March 2025 and 31 March 2024 are Dalmore Infrastructure Investments 31 LP, Dalmore Infrastructure Investments 32 LP, Dalmore Infrastructure Investments 33 LP and PPP Equity PIP Limited Partnership.
On 22 May 2025, Dalmore Capital Limited, the asset manager, announced that Royal London Asset Management had agreed to acquire the entire share capital of Dalmore Capital Limited with completion expected later in the year. Dalmore Capital Limited is expected to operate as a stand-alone infrastructure capability within Royal London Asset Management and consequently there is currently no expectation as to any impact on the management of the TopCo group.
The Directors representing the shareholders’ interests are appointed to the boards of all companies in the TopCo group by Dalmore Capital Limited. Consequent upon these arrangements between the shareholders, the TopCo group, including the Company, does not have a nomination committee and the performance of the TopCo group boards are not evaluated.
The Directors have the relevant expertise and experience, drawn from their involvement in a wide range of infrastructure companies to define and to develop the strategy of the TopCo group and Company so as to meet their respective objectives and to generate or preserve value over the longer term. The Directors regularly review the effectiveness of the TopCo group’s risk management and internal control framework as it applies to the Company and are satisfied that this framework is effective.
None of the Directors has declared a conflict of interest, as would be required by Section 175 of the Companies Act 2006 and the Company’s Articles of Association.
While the TopCo group does not have a specific policy on the diversity of appointed board members, Diversity and Inclusion is one of the key focus areas within Dalmore Capital’s Environmental, Social and Governance (ESG) being one of nine pillars in the Dalmore Capital ESG Framework. Refer to the Dalmore Capital 2023 ESG Highlights Report for further details:
https://www.dalmorecapital.com/policies-and-documents.
The Company
Board and management meetings
The Company is governed by a Board of two Directors, none of whom are independent. The Board does not have a separately appointed chairman. Meetings are chaired by a member of the Board and are convened as required, but usually not less than four times per annum. The Company Board is responsible for monitoring the effectiveness of the day-to-day operation and management of the Company’s regulated transmission business.
The Company’s operating model is to outsource all O&M activities and management services to independent third-party suppliers. FPL provides the Company with management and other services, through a Management Services Agreement (“MSA”) with the Company. Additional technical support and accounting & administration support is provided to the Company from Infrastructure Managers Limited, a specialist in providing financial and other support services to special purpose vehicles.
Directors and their attendance at Company board meetings
The Directors of the Company are as shown below. Board meetings were held on 7 occasions during the year under review. Attendance by the Directors at Board meetings expressed as a number of meetings attended out of a number eligible to attend are shown below.
Daniel Pires 7 of 7
George Tasker 6 of 7
Board activity
The Board is responsible for leadership and the setting of objectives and targets to ensure that its business objectives are met and monitors performance against those targets, which it has continued to do so during the year under review. Amongst other matters, the Directors have monitored the operational and financial performance of the Company during Board meetings. In doing so, the Directors have due regard to the objectives of the Company and the business plan that is being executed. In addition, the Directors have attended regular operational review meetings during the financial year together with representatives from FPL, the management services provider, where the operations and financial performance of the Company have been scrutinised in detail and the performance of third-party suppliers in managing the assets of the Company were assessed accordingly.
The Board is satisfied with operational and financial performance of the Company during the year ended 31 March 2025 and a discussion of the operational and financial performance of the business is included in the Strategic Report – which commences on page 6.
The Board is responsible for setting policies or applying group-wide policies set by the TopCo board. Responsibility for monitoring compliance with those policies rests with the Board. The Board has satisfied itself that there has been compliance with all of its policies during the year – further details can be seen from the “Strategic Report – Commitment to ethical business practices” on page 7.
The Board recognises its responsibility for the Company’s system of internal control and for reviewing its effectiveness. They are assisted in discharging that responsibility through the establishment of an audit committee by TopCo – see “Audit committee” later in this statement. The Board confirm that they have reviewed the effectiveness of the system of internal control during the year ended 31 March 2025 and are satisfied that the internal control system that is in place is considered adequate and appropriate to the Company’s circumstances.
The Board recognises that the Company, in carrying out its activities, has to do so in the context of an environment that is subject to risk. The Board is responsible for managing those risks and maintains a risk register which is updated regularly and actively monitored. The principal and emergent risks faced by the Company are discussed throughout the Strategic Report that commences on page 1 and is satisfied that all key risks to the business have been adequately managed and mitigated.
The Board recognises its obligations under S172 of the Companies Act 2006 and a statement to that effect is provided within the Strategic Report on page 8.
Board activity (continued)
Certain Licence related compliance activities are delegated for detailed consideration by the compliance committee set up by the Board. Certain other matters are considered by committees of TopCo, where it is efficient and effective for certain activities and policies to be considered on a group-wide basis. Matters discussed at these committee meetings are then considered by the Board on a regular basis and endorsed accordingly. The activities of these committees are discussed below and on the following pages.
Compliance committee
The Company has a compliance committee. The compliance committee is a permanent internal body having an informative and consultative role, without executive functions, with powers of information, assessment and presentations to the Board. David Pagan was the Company’s compliance officer for the financial year ended 31 March 2025 and has remained in that position through to the date of this report. David Pagan is not and has never been engaged in the management or operation of the Company’s licensed transmission business system, or the activities of any associated business. The compliance officer is required to report to the compliance committee, audit committee and the Board at least once annually.
The principal role of the compliance officer is to provide relevant advice and information to the Directors of the Company, the compliance committee and consultants and other third parties providing services to the Company. The compliance officer is required to facilitate compliance with the Licence as regards the prohibition of cross subsidies; restriction of activities and financial ring fencing; the conduct of the transmission business and restriction on the use of certain information. In addition, the compliance officer is required to monitor the effectiveness of the practices, procedures and systems adopted by the Company in accordance with the compliance statement required by amended standard condition E12 - C2 of the Licence (Separation and Independence of the Transmission Business).
Members of the compliance committee and their attendance, expressed as a number of meetings attended out of a number eligible to attend during the year under review were as follows:
Daniel Pires 1 of 1
George Tasker 1 of 1
Compliance statement and annual compliance report
The Company has published a compliance statement and code of conduct “Separation and Independence of the Transmission Business Compliance Statement” (copy available from www.wodstransmission.com) that addresses how the Company has addressed certain Licence obligations.
The Company’s last annual compliance report dated 20 November 2024 concluded that the Company, as Licensee, had been compliant with the relevant duties of the Licensee though to 19 August 2024. The committee is not aware of any instance of non-compliance with the relevant duties of the Licensee since 20 August 2024 through to the date of this report.
TopCo and its role in the governance of the Company
Meetings of the board of TopCo
TopCo is governed by a board of directors, none of whom are independent. The TopCo board does not have a separately appointed chairman. Meetings are chaired by a member of the TopCo board and are convened as required, but usually not less than four times per annum. The TopCo board is accountable to the shareholders of TopCo for the good conduct of the TopCo group’s affairs, including those of the Company.
Where appropriate, the TopCo board sets group-wide policies that the Company has to comply with. Information relating to policies followed by the Company can be seen from the “Strategic Report – Commitment to ethical business practices” on page 7.
Neither the Company nor the TopCo group have an internal audit function. The Directors have concluded that the cost of such a function would be disproportionate to the benefits derived from such a function. TopCo has established an audit committee, which typically convenes twice per year. The members of the committee are the same as the members of all boards in the TopCo group including that of the Company. The purpose of the audit committee is to assist the board of TopCo and that of the Company in the effective discharge of their responsibilities for the consideration of financial and regulatory reporting and for internal control principles in order to ensure high standards of probity and transparency.
The audit committee acts to safeguard the interests of its shareholders by:
monitoring the integrity of statutory and regulatory reports issued by TopCo and all of its subsidiaries including the Company, with the objective of ensuring that these reports present a fair, clear and balanced assessment of the position and prospects of TopCo, HoldCo and the Company as the case may be;
reviewing the economy, efficiency and effectiveness of the TopCo group's operations and internal controls, the reliability and integrity of information and accounting systems and the implementation of established policies and procedures;
considering any significant issues and the extent to which they have been disclosed in the relevant annual report and financial statements of all companies in the TopCo group, including a consideration of the critical accounting policies adopted by the Company (a discussion of which is included on pages 43 to 49);
reviewing and approving the internal control and risk management policies applicable to the TopCo group;
maintaining an appropriate relationship with the external auditors; and
assessing the objectivity and independence of the external auditors by considering: the nature and extent of non-audit services; a consideration of the effectiveness of the audit process including a recommendation to the Boards of the Company and that of HoldCo as to the reappointment of the auditors to the Company (who were appointed at or prior to the commencement of operations in 2015).
In carrying out its activities, the audit committee have noted in particular the following:
the audit committee has considered the disclosures included within the financial statements. The audit committee note that the impact of new accounting standards, interpretations and other pronouncements that apply for the first time to these financial statements has had a minimal impact on the measurement of assets and liabilities and related disclosures;
the audit committee has considered carefully the disclosures contained within the Company’s annual report and financial statements generally and in particular disclosures relating to “going concern” and climate change and has concluded that the information provided is proportionate and appropriate to the activities and experiences of the Company; and
the audit committee has also considered the key internal controls and risk management procedures as they applied to the Company and judge them to have operated appropriately during the year. It has also considered all of the related internal control and risk related disclosures contained within the annual report and financial statements to be relevant and appropriate to the operations of the Company.
Representatives of the auditors are invited to attend meetings of the audit committee to attend as they see fit; the auditors also have unrestricted access to those charged with the governance of the Group. There have been no issues raised by the auditors’ representatives that were of concern to the members of the audit committee.
The audit committee is satisfied as to the auditors’ objectivity and independence following enquiry and discussion with the auditors and with management. PricewaterhouseCoopers LLP were appointed by the Directors on 22 April 2015 to audit the financial statements for the year ended 31 March 2015 and the subsequent financial periods.
The audit committee regularly monitors the system of internal control of all companies in the TopCo group, including those operated by the Company, reviews the effectiveness of those internal controls and reports to the respective board within the TopCo group on their findings.
The Company’s system of internal control is designed to provide its immediate parent undertaking (HoldCo), its ultimate parent undertaking (TopCo) and the investors in the ultimate parent undertaking with assurance that material risks to the business are adequately managed, that its assets are safeguarded, that transactions are authorised and properly recorded and that the likelihood of material errors and irregularities taking place are minimised. The audit committee together with the Board is cognisant of the Company’s obligations under the Licence and the Company’s system of internal control is designed to ensure compliance with that Licence. However, no system of internal control can eliminate the risk of failure to achieve any of the objectives referenced earlier.
Health, safety and environment advisory committee
The boards of both TopCo and the Company recognise that the nature of the Company’s business requires an exceptional focus on health, safety and the environment. Accordingly, the TopCo Board has set up a Health, Safety and Environmental Advisory Committee which considers health, safety and environment matters for all companies in the TopCo group including the Company and meets at least twice each year. At the present time, it is only the Company that has any operational activities likely to give rise to any significant health, safety or environmental matters of any particular concern. The committee is responsible for:
setting of health, safety and environmental targets for the Company in particular;
ensuring that the TopCo group’s safety and health policy statement and environmental policy statement, are being adhered to;
setting the health, safety and environmental plan for the year for the Company, including the objective of carrying out health and safety audits of the Company’s O&M provider and monitoring the performance against planned targets;
encouraging greater awareness throughout the TopCo group and the Company of the importance of health, safety and the environment and higher achievement in health, safety and environmental performance;
providing guidance to FPL, the management services company, and the O&M provider and all other sub-contractors to the Company that have the day-to-day responsibility for the management of health, safety and environment; and
reporting to the Company’s Board as to the activities of the committee throughout the year.
The health, safety and environment advisory committee is satisfied as to the health, safety and environment performance of the Company and details are provided in the “Strategic Report – The Company’s operational performance - Health, safety and environmental performance” on page 7.
Climate Change and greenhouse gas emissions
The Board acknowledges that the impact of climate change is apparent, through climate and weather extremes and environmental events that are increasing in frequency and intensity. The Board is proud to be managing a business that is fundamental to the UK’s efforts to achieve net zero emissions by 2050 in line with the Paris Agreement and the UK Government’s target. The activities of the Company allow for the transmission of c389 MW of clean energy from the West of Duddon Sands offshore windfarm to the onshore electricity transmission system and is sufficient to power approximately 350,000 homes.
The Company operates facilities that have the potential to emit harmful greenhouse gases. In particular, the Company uses sulphur hexafluoride (SF6) in the operation of some of the Company’s electrical equipment. SF6 is an inorganic, colourless, odourless and non-flammable greenhouse gas and the Company has an active maintenance regime in place to monitor equipment for gas leaks and, where necessary, take appropriate actions to repair equipment to prevent the escape of SF6.
Basis for opinion
Our audit approach
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 matters below are consistent with last year.
Key audit matter |
| How our audit addressed the key audit matter | |
Valuation of derivatives
(see note 17 of the financial statements).
The Company has entered into an arrangement with third parties that is designed to hedge future cash receipts arising from its activities as a provider of transmission availability services (RPI swaps). The Company has designated that this arrangement is a hedge of another(non-derivative) financial instrument, to mitigate the impact of potential volatility on the Company's net cashflows. We focused on this area as valuation, specifically in respect of derivatives, is an area which requires the use of judgement by the Directors and the involvement of valuation experts. Derivatives require judgement because,for some instruments, quoted prices are not readily available. As such, management use models to estimate their fair value. The key judgements for derivative valuations is whether appropriate valuation methodology and judgements around input assumptions have been made and whether there are any changes required to the methodology of these models as a result of market practice, accounting or regulatory updates. |
| Our audit work in respect of the valuation of derivative assets and liabilities include understanding and assessing the models and methodology used for the derivative instruments, using our valuation specialists. We also recalculated the valuations using independent models and sourcing our own input data from recognised independent market data and investigating any differences found that were greater than predefined thresholds. We determined that the assumptions used, and the resultant valuations of the derivatives, were within ranges that we consider to be acceptable. | |
How we tailored the audit scope
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.
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’s principal activity is to provide an electricity transmission service to National Electricity System Operator Limited (“NESO”), being the electricity transmission system operator for Great Britain. The Company is an issuer of listed senior bonds on the Irish Stock Exchange. It operates in one geographic location. As a result we were able to perform a full scope audit over the key line items.
Overall Company materiality | £272,156 (2024: £272,156). |
How we determined it | 2.5% of Earnings before Interest Tax Depreciation and Amortisation (EBITDA) |
Rationale for benchmark applied | We believe that EBITDA better reflects the key measure for shareholders in assessing the performance of the entity, being a reasonable approximation to free cash flow generated by the OFTO. Shareholders are invested in the asset for the long term with an objective of generating a cash return on that investment, and as a result, EBITDA is more closely aligned to this objective than profit/loss before tax. We also believe that this is a generally accepted auditing benchmark. |
Reporting on other information
The other information comprises the information included in the annual report other than the financial statements and our auditors' report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors' report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.
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 March 2024 2025 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company and industry, we identified that the principal risks of noncompliance with laws and regulations related to the Companies Act 2006 and UK tax legislation, and we considered the extent to which non-compliance might have a material effect on the financial statements. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries and the risk of management bias in accounting estimates. Audit procedures performed by the engagement team included:
Enquiries of management around known or suspected instances of non-compliance with laws and regulations, claims and litigation, and instances of fraud;
Understanding of management's controls designed to prevent and detect irregularities;
Review of board minutes;
Challenging management on assumptions and judgements made in their significant accounting estimates, in particular in relation to the fair value of derivative financial instruments; and
Identifying and testing journal entries to assess whether any of the journals appeared unusual, for example impacting revenue and distributable reserves.
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.
A further description of our responsibilities for the audit of the financial statements is located on FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.
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.
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.
The notes on pages 38 to 68 form part of these financial statements.
The notes on pages 38 to 68 form part of these financial statements.
The notes on pages 38 to 68 form part of these financial statements.
The notes on pages 38 to 68 form part of these financial statements.
The notes on pages 38 to 68 form part of these financial statements.
Transmission availability arrangements (continued)
A transmission owner asset has been recognised at cost in accordance with the principles of IFRIC 12 and IFRS 15. The transmission owner asset includes: the cost of acquiring the transmission network asset from the constructor of the network; those costs incurred that are directly attributable to the acquisition of the transmission network including an infrastructure financial liability; and the estimated cost of decommissioning the transmission network at the end of its estimated useful life. The transmission owner asset has been classified as a contract asset and financial asset and is accounted for as described later – see “1.5 – Financial Instruments”. In accordance with IFRIC 12, transmission availability charges are recognised in the financial statements in three ways:
as an adjustment to the carrying value of the transmission owner asset – see “1.5. Financial Instruments” later;
as finance income - see “1.3. Operating and finance income” later; and
as operating income - see “1.3. Operating and finance income” later.
Transmission availability payments are recognised at the time the transmission service is provided.
The value of amounts invoiced for transmission availability services in any one year is determined by a regulatory agreement that allows the transmission system operator to invoice an amount primarily relating to the expected availability of the transmission system during that year, together with the recovery of certain costs. Where the level of availability of the transmission system or the costs that are permitted to be recovered is different to that expected this might result in an adjustment to charges in a subsequent accounting period. Such potential adjustments to future charges are not recognised in the financial statements as assets or liabilities, until such time as prices are changed to reflect these adjustments and consequently there is no impact on the Income Statement until such time as prices are changed.
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the Company.
Income taxation comprises current and deferred taxation. Income taxation is recognised where a taxation asset or liability arises that is permitted to be recognised under generally accepted accounting principles. All identifiable taxation assets or liabilities are recognised in the Income Statement except to the extent that the taxation arising relates to other items recognised directly in equity, in which case such taxation assets or liabilities are recognised in equity.
Infrastructure financial liabilities are initially recognised at the present value of the payments expected to be made over the term of the lease arrangements to which these liabilities relate and are discounted using an estimate of the Company’s incremental borrowing rate at the date the lease arrangements were entered into. Thereafter, these liabilities are reassessed at each Statement of Financial Position date to reflect: a) any future increases in variable lease payments based on an index, which are not reflected in the initial lease liability as such liabilities are only recognised when the change in index takes effect; b) the finance costs on these liabilities; and c) reduced by any payments made in respect of these liabilities.
Any remeasurement of the infrastructure financial liabilities following a reassessment of those liabilities at the Statement of Financial Position date is recognised immediately in the Income Statement within operating costs. Finance costs relating to these liabilities are recognised in the Income Statement within net interest expense over the period of the lease using the effective interest rate method.
Accounting developments
Accounting standards, amendments to accounting standards and interpretations as applied to these financial statements
In preparing these financial statements the Company has complied with UK-adopted IAS applicable either for accounting periods starting by 1 April 2024 or ending by 31 March 2025.
There are no new accounting standards, amendments to standards, interpretations or other pronouncements that have been issued and are effective in respect of these financial statements that have had any material impact on the measurement, recognition or disclosures included in these financial statements.
New accounting standards, amendments to standards and interpretations issued that may be relevant to the Company’s activities but are not effective in these financial statements
New accounting standards, amendments to accounting standards and interpretations have been published. These accounting standards, amendments and interpretations are not required to be applied in the preparation of these financial statements and have not been early adopted by the Company. These new accounting standards, amendments and interpretations are not expected to have a material impact on the Company in future reporting periods.
The preparation of financial statements requires management to make accounting judgements, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.
Assumptions and estimates are reviewed on an on-going basis and any revisions to them are recognised in the period the revision occurs. The following is a summary of the critical accounting policies adopted by the Company together with information about the key judgements, estimations and assumptions that have been applied.
Operating income – including identification of key estimates
Operating income represents the income derived from the provision of operating services, principally to NESO, the Great Britain energy system operator, and following the application of the judgements referenced above – see “2.1 Transmission availability arrangements – including a consideration of the judgements applied to recognise income and a transmission owner asset”.
Such operating services include those activities that result in the efficient and safe operation of those assets and the value attributable to these services are reflective of an estimate of costs incurred in providing those services, including the cost of insuring those assets on behalf of a standalone transmission owner.
Estimates were made by management with effect from the date that the Licence came into force (20 August 2015), to determine the appropriate amount of revenue that would be attributable to this income classification as if this service were provided by an independent standalone operator with responsibility for operations, maintenance and insurance. The principles attributable to these estimates determined with effect from the date that the Licence came into force continue to apply to the charges made by the Company for transmission network availability in each financial year over the expected useful life of the transmission owner asset. To the extent that an alternative estimate could have been made at the date that the Licence came into force as to a reasonable level of revenue attributable to this income classification then the estimate of income attributable to finance income (see below) may have been amended.
Finance income - including identification of key estimates
Following the application of the judgements referenced earlier – see “2.1 Transmission availability arrangements – including a consideration of the judgements applied to recognise income and a transmission owner asset” - finance income arising from the provision of transmission availability services represents an estimate of the return that an efficient standalone and independent “transmission owner” would expect to generate from the holding of the transmission owner asset. An estimate of an appropriate return to the owner of such an asset having regard to the risks associated with those arrangements was carried out by the Company from the date the Licence came into force (20 August 2015) and applies over the expected useful life of the transmission owner asset accordingly. The return that is generated on this asset is allocated to each period using the effective interest rate method. To the extent that an alternative estimate could have been made as to a reasonable level of return attributable to such a transmission asset owner from the date the Licence came into force, then the estimate of income attributed to operating income (see earlier) would have been amended accordingly.
General
The Company uses derivative financial instruments to hedge certain economic exposures in relation to movements in RPI as compared with the position that was expected at the date the underlying transaction being hedged was entered into. The Company fair values its derivative financial instruments and records the fair value of those instruments on its Statement of Financial Position.
Application of judgements to hedge accounting and deriving fair values
Movements in the fair values of the Company’s derivative financial instruments may be accounted for using hedge accounting where the requirements of hedge accounting are met under UK-adopted IAS including the creation of compliant documentation and meeting the effectiveness testing requirements. In principle, while the application of the requirements of UK -adopted IAS hedge accounting rules do not require the exercise of judgement – consideration and judgements need to be made from time to time to determine if a hedge continues to meet the criteria for hedge accounting, which may include a consideration of whether there has been a substantial modification to the terms of the hedge, or where there is some degree of ineffectiveness identified in respect of the hedging relationship, then the change in fair value in relation to these items will be recorded in the Income Statement. If a hedging relationship is judged to be discontinued for hedge accounting, then any amounts previously deferred in other comprehensive income must immediately be recognised in the Income Statement. Similarly, when the forecast transaction is no longer expected to occur, the cumulative gain or loss and deferred costs of hedging that were reported in equity are immediately reclassified to profit or loss. Otherwise, in respect of the Company’s derivative financial instruments, these changes in fair value are recognised in other comprehensive income.
Application of estimates to hedge accounting and deriving fair values
As referred to earlier, the Company carries its derivative financial instruments in its Statement of Financial Position at fair value. No market prices are available for these instruments and consequently the fair values are derived using a financial model from a third party based on counterparty information that is independent of the Company but also use observable market data in respect of RPI as an input to valuing those derivative financial instruments. Where observable market data is not available, as in the case of valuing the transmission owner asset for the purpose of disclosure only, unobservable market data is used.
Current taxation including a consideration of the judgements and estimates used in determining current taxation liabilities
Current taxation is based on taxable profit for the year. Taxable profit is different from accounting profit due to temporary differences between accounting and tax treatments, and due to items that are never taxable or tax deductible. The Company is required to estimate the current tax liability based on its understanding of taxation law and the anticipated decisions of HM Revenue and Customs. However, actual tax liabilities could differ from any recorded current taxation liability and in such event the Company would be required to make an adjustment in a subsequent period which could have a material impact on the reported profit for subsequent reporting periods.
Deferred taxation including a consideration of the judgements and estimates used in determining deferred taxation liabilities and assets
Deferred taxation is provided using the Statement of Financial Position liability method and is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding taxation bases used in the computation of taxable profit.
The recognition of deferred taxation reflects the expected manner of recovery of deferred taxation assets or the settlement of a deferred taxation liabilities, using the basis of taxation enacted or substantively enacted by the Statement of Financial Position date. Deferred taxation assets are not recognised where it is more likely than not that the assets will not be realised in the future.
Judgements are required to be made as to the calculation and identification of temporary differences and in the case of the recognition of deferred taxation assets, the Directors have to form an opinion as to whether it is probable that the deferred taxation asset recognised is recoverable against future taxable profits arising. This exercise of judgement requires the Directors to consider forecast information over a long-time horizon having regard to the risks that the forecasts may not be achieved and then form a reasonable opinion as to the recoverability of the deferred taxation asset.
General
The carrying value of those financial assets recorded in the Company’s Statement of Financial Position at amortised cost, including the transmission owner asset, could be materially reduced if the value of those financial assets were assessed to have been impaired.
Expected credit losses arise as a result of all possible default events over the expected life of a financial instrument. Allowances for expected credit losses are made based on the risk of non-payment taking into account ageing, previous experience, economic conditions and forward-looking data. Such allowances are measured as either 12-months expected credit losses or lifetime expected credit losses depending on changes in the credit quality of the counterparty.
Application of judgements to the recognition of expected credit losses
At each reporting date, the Company performs an assessment as to whether the credit risk on a financial instrument has increased. Depending upon the outcome of that assessment, which requires the application of judgement, the Company will determine if there is any requirement for any expected credit losses to be applied and that assessment will also determine whether credit losses are determined by reference to a 12-month period or by reference to expected credit losses over the lifetime of the financial instrument.
Application of estimates to the recognition of expected credit losses
Having applied judgement as to whether there should be any adjustment to the carrying value of financial assets the Company estimates an appropriate allowance for expected credit losses in accordance with the requirements of IFRS 9, recognising any material allowance for credit losses using the 12-month expected credit losses where there has been no significant change in credit risk or on the basis of lifetime credit losses where there has been a significant change in the credit risk. This assessment involves considering reasonable and supportable information involving the significant use of assumptions.
Any reduction in value arising from such a review would be recorded in the Income Statement.
General
Provisions are made for certain liabilities where the timing and amount of the liability is uncertain. The Company’s only provision relates to the estimated costs of decommissioning the Company’s offshore transmission system at the end of its expected economic life – being 20 years. These estimated costs have then been discounted at an appropriate rate and the resultant liability reflected in the Statement of Financial Position. The plan for decommissioning these assets has not yet been approved by the Department for Business, Energy and Industrial Strategy but the preliminary assessment of the decommissioning plan includes many assumptions.
Application of judgement to determine the carrying value of the decommissioning provision
Significant judgements used in determining the carrying value of this provision include, but are not limited to, the following:
the estimated useful economic life of the transmission system is assumed to be 20 years being the period the Company has exclusive rights to charge for the provision of transmission services under the Licence and the period which is expected to generate the vast majority of cash flows relating to the ownership of the system. To the extent that the expected useful life is reduced or increased – this could materially change the carrying value of the decommissioning provision with a corresponding impact on the Income Statement; and
the carrying value of the decommissioning reflects the decommissioning assumptions contained in any approved decommissioning plan. These assumptions reflect the application of judgements and if those judgements change over time or the execution of the decommissioning plan in accordance with those judgements is not possible – then this could change the carrying value of the decommissioning provision with a corresponding impact on the Income Statement.
Application of estimates to determine the carrying value of the decommissioning provision
The carrying value of the decommissioning provision has required the extensive use of estimates, which include but are not limited to, the following:
the estimate of costs relating to the appropriate and safe removal, disposal, recycling and making safe of the transmission system having regard to market prices and access to the appropriate level of technology; and
discount rate appropriate to the 20-year life of the assets being decommissioned. The Company has adopted the practice (absent a significant unforeseen event taking place) of considering the appropriate discount rate to apply to the decommissioning provision every five years, reflective of the long-term nature of this liability, rather than re-evaluating the discount rate over a shorter time period.
The estimates are based on management estimates with the use of technical consultants and are subject to periodic revision. The initial estimated discounted cost of decommissioning the offshore transmission system is included within the carrying value of the transmission owner asset. All subsequent changes to estimates in relation to estimated gross cost of decommissioning or the appropriate discount rate are reflected in the Income Statement.
General
Infrastructure financial liabilities are initially recognised in the Statement of Financial Position at the present value of the future lease payments to which these liabilities relate. A corresponding amount was recognised as an addition to the cost of the transmission owner asset at the date of acquisition.
Application of estimates to determine infrastructure financial liabilities
Management were required to estimate the incremental borrowing cost to the Company at the date the lease arrangements giving rise to infrastructure financial liabilities were entered into as a proxy for the interest rate implicit in those lease arrangements. This interest rate was then used to discount the expected future cash flows to derive the present value of the future lease payments.
Application of judgements to determine infrastructure financial liabilities
Management were required to exercise judgement as to the period over which payments would be made that are the subject of discounting to arrive at a present value and also to determine the incremental borrowing cost to apply to the discounting of those cash flows.
Any future change to the period over which payments are expected to be made would result in the reassessment of the infrastructure financial liabilities with the impact of any such reassessment being reflected in the Income Statement.
The Board of Directors is the Company’s chief operating decision-making body. The Board of Directors has determined that there is only one operating segment – electricity transmission. The Board of Directors evaluates the performance of this segment on the basis of profit before and after taxation and cash available for debt service (net cash inflows from operating activities plus cash flows from investing activities). The Company and segmental results, Statement of Financial Position and relevant cash flows can be seen in the Income Statement, Statement of Financial Position and Statement of Cash Flows on page 32, 34 and 37 respectively. Additional notes relating to the Company and segment are shown in the notes to the financial statements on pages 38 to 68.
The electricity transmission operation of the Company comprises the transmission of electricity from a wind farm located off coast of Walney Island in the East Irish Sea, and then connecting directly into the NGET onshore transmission system at an electricity substation in Heysham, Lancashire.
All of the Company’s sales and operations take place in the UK.
All of the assets and liabilities of the Company arise from the activities of the segment.
Operating income of £6,338k (2024: £5,706k) and finance income of £9,307k (2024: £9,815k) primarily relates to the Company’s activity as a provider of electricity transmission services to the Company’s principal customer – National Energy System Operator Limited (NESO). The Company’s income is derived from NESO. Finance income is calculated using the effective interest rate method – consistent with the Company’s accounting policy – see “Accounting policies - 1.3. Operating and finance income”.
Operations, maintenance and management costs represent costs associated with the provision of operating, maintenance and management provided to the Company by independent third parties together with other operational costs including insurance costs and non-domestic rates related to the transmission network.
No Director received any direct remuneration from the Company (2024: none).
Other audit services represents fees payable for services in relation to engagements which are required to be carried out by auditors. In particular, this includes fees for audit reports on regulatory returns.
Other finance costs include £105k (2024: £105k) relating to infrastructure financial liability interest.
The taxation charge for the year differs from (2024: differs from) the standard rate of corporation tax in the UK of 25% (2024: 25%) for the reasons outlined below:
a) Taxation on items included in the Income Statement
The net taxation charge for the year is £682k (2024: £571k) and has been computed at 25% (2024: 25%). The net taxation charge for the year represents deferred taxation.
b) Taxation on items included in other comprehensive income
The net taxation charge for the year is £825k (2024: £85k) and has been computed at 25% (2024: 25%). The net taxation charge for the year represents deferred taxation.
c) Taxation – future years
Future tax charges, and therefore the Company’s future effective tax rate, could be affected by future changes in legislation. Similarly, the interpretation of existing legislation by the Company and or the relevant tax authorities could also impact the Company’s future tax charges and future effective tax rate.
The transmission owner asset is a contract asset and is carried at amortised cost. The estimated fair value of the transmission owner asset at 31 March 2025 was £218,131k (2024: £223,421k). The basis for estimating the fair value of the transmission owner asset was to estimate the net cash flows arising over the estimated economic life of the project and to discount those expected net cash flows at a discount rate of 4.54% (2024: 4.54%) per annum.
The Directors have considered expected credit losses in relation to the carrying value of the transmission owner asset and have concluded that these are expected to be immaterial and as a result no provision for expected credit losses has been recognised at 31 March 2025 (2024: £nil).
The net deferred taxation asset recognised in the Statement of Financial Position arises as follows:
The carrying value of all deferred taxation balances has been computed at 25% (2024: 25%) - being the rate of corporation tax that is expected to apply when the temporary differences reverse and reflects the latest enacted legislation in force at the Statement of Financial Position date.
Cash and cash equivalents comprise short term deposits of £31,365k (2024: £27,868k). Short-term deposits are made for various periods of between one day and 6 months, depending on the timing of cash requirements and earn interest at the respective short-term deposit rates. All cash and equivalents are carried at amortised cost.
Cash and cash equivalents include amounts of £22,097k (2024: £19,593k) that the Company can only use for specific purposes and in compliance with the lending agreements. The remaining cash and cash equivalents are held for general corporate purposes provided that use is compliant with the lending arrangements. The estimated fair value of cash and cash equivalents approximates to their carrying value
Due to their short maturities, the fair value of all financial instruments included within trade and other payables approximates to their book value. All trade and other payables are recorded at amortised cost and are all expected to be settled within 12 months of the Statement of Financial Position date.
Included in accruals are amounts owed to the immediate parent undertaking in respect of interest on the other borrowing – see note 24.
The secured bonds carry an interest rate of 3.446% per annum. The secured bonds amortise over the period through to 24 August 2034.
The secured bonds, being the senior debt, are secured over all of the assets of the Company and of WoDS Transmission Holdco Limited (“HoldCo” - the immediate parent undertaking) via fixed and floating charges where permitted by the Licence.
The other borrowing relates to amounts owed to HoldCo. This other borrowing is unsecured and carries a fixed coupon of 8.31% per annum and is contractually repayable on 25 August 2035.
Fair value information in relation to borrowings is shown in note 25.
As at 31 March 2025, the Company had access to a PBCE letter of credit issued by the European Investment Bank amounting to £24,541k (2024: £26,321k) which guarantees certain payments to be made in respect of the secured bonds and the Company’s hedging arrangements all of which was undrawn (2024: undrawn).
There have been no instances of default or other breaches of the terms of the loan agreements during the year in respect of all loans outstanding at 31 March 2025 (2024: no defaults or breaches).
The remeasurement adjustment charge reflects a change in the expected cash flows over the remaining life of the lease following the application of an indexation change.
The decommissioning provision is all non-current (2024: all non-current).
The decommissioning provision of £4,194k at 31 March 2025 (2024: £4,011k) represents the net present value of the estimated expenditure expected to be incurred at the end of the economic life of the project to decommission the West of Duddon Sands transmission assets. The decommissioning expenditure relates to the removal and scrapping of all transmission assets above the level of the seabed and the burial of all cable ends. The gross expenditure expected to be incurred on decommissioning amounts to £6,683k (2024: £6,683k), and is expected to be incurred in 2035.
The discount rate used to discount the gross expenditure to be incurred on decommissioning is a pretaxation ‘risk free’ rate with a maturity similar to that of the decommissioning liability. This reflects the best estimate of the time value of money risks specific to the liability, as the estimated gross decommissioning costs appropriately reflect the risks associated with that liability.
If the expected nominal cost of decommissioning in 2035 was 10% higher or lower than that reflected in the decommissioning provision at 31 March 2025, this would have the effect of increasing or decreasing the carrying value of the decommissioning provision at 31 March 2025 by £419k (2024: £401k).
The decommissioning provision arises from the Company’s obligations under S105 of the Energy Act 2004 and the contractual obligations relating to the lease of the West of Duddon Sands seabed granted by the Crown Estate Commissioners on 20 August 2015. The draft decommissioning plan has yet to be approved by the Secretary of State for Business, Energy and Industrial Strategy, as required under S106 of the Energy Act 2004, as the Company is considering responses to a consultation on a draft version of the decommissioning plan. When the consultation is complete, this may result in a change to that plan and a change to the value of the decommissioning costs.
The decommissioning provision is a financial instrument under UK-adopted IAS, and the fair value of the obligation equates to its carrying value, as the carrying value represents the net present value of the future expenditure expected to be incurred as described earlier.
Derivative financial instruments are recorded in the Statement of Financial Position at market value and the carrying value of these derivative financial instruments may result in assets and/or liabilities being recognised at Statement of Financial Position date. Derivative financial instruments derive their market value from the price of an underlying item, such as the RPI index or other indices and have been entered into for the sole purpose of hedging the underlying economic activity of the Company. All such derivative financial instruments are classified under IFRS 9 at fair value through profit and loss.
All hedge accounting continues to be carried out in accordance with the hedge accounting requirements of IAS 39 as permitted by IFRS 9, and as a consequence, that part of the movement in the fair value of derivative financial instruments that is deemed to be hedge effective under IAS 39 continues to be reflected though other comprehensive income in the hedging reserve.
RPI swaps
The Company has entered into arrangements with third parties for the purpose of exchanging the vast majority (approximately 75%) of variable cash inflows arising from the operation of the Company’s transmission assets in exchange for a pre-determined stream of cash inflows from these third parties. These arrangements meet the definition to be classified as derivative financial instruments.
The Company’s use and strategy relating to RPI swaps is described in more detail in the “Strategic Report - Hedging Arrangements”.
The Directors believe that the hedging relationship is highly effective and that the forecast cash inflows are highly probable and as a consequence have concluded that the RPI swap derivatives meet the definition of a cash flow hedge and have formally designated them as such.
Carrying value of all derivative financial instruments
All of the Company’s derivative financial instruments comprising RPI swaps are carried at market value. The carrying value of the RPI swaps at 31 March 2024 amounted to liabilities of £28,975k (2024: £32,278k). The total movement in the fair value of these derivative financial instruments has been reflected through other comprehensive income and recorded in the hedging reserve - resulting in the recognition of a credit amounting to £3,303k (2024: £339k).
Further details regarding derivative financial instruments and their related risks are given in notes 25-31.
The Company has one class of Ordinary Share with a nominal value of £1 each which carries no right to fixed income. The holders of Ordinary Shares are entitled to receive dividends as declared and are entitled to one vote per share at meetings of the Company.
All reserves with the exception of the hedging reserve are distributable.
The following information relates to material transactions with related parties during the year. These transactions were carried out in the normal course of business and at terms equivalent to those that prevail in arm’s length transactions. There were no other transactions carried out directly with other companies within the WoDS Transmission TopCo Limited (“TopCo”) group of companies, except as disclosed below.
A summary of funding transactions with the immediate parent undertaking (WoDS Transmission Holdco Limited or “HoldCo”) is shown below:
Borrowings from the immediate parent undertaking (HoldCo) were negotiated on normal commercial terms and are repayable in accordance with the terms of the unsecured 8.31% loan notes 2035 (“the notes”). Interest payments were made during the year amounting to £2,607k (2024: £2,296k). Absent any non-compulsory repayment of the notes, the notes are contractually repayable on 25 August 2035.
Related party bad and doubtful debts
No amounts have been provided at 31 March 2025 (2024: £nil) and no expense was recognised during the year (2024: £nil) in respect of bad or doubtful debts for any related party transactions.
The following is an analysis of the Company’s financial instruments at the Statement of Financial Position date, comparing the carrying value included in the Statement of Financial Position with the fair value of those instruments at that date. None of the Company’s financial instruments have quoted prices. Consequently, the following techniques have been used to determine fair values as follows:
Cash and cash equivalents – approximates to the carrying value because of the short maturity of these instruments;
Transmission owner asset – based on the net present value of discounted cash flows;
Current borrowings – approximates to the carrying value because of the short maturity of these instruments;
Non-current borrowings – based on the net present value of discounted cash flows in respect of the 3.446% fixed rate secured bonds loans due August 2034 and in respect of the unsecured 8.31% loan notes due August 2035;
Derivative financial instruments – based on the net present value of discounted cash flows;
Financial instrument receivables and payables – approximates to the carrying value because of the short maturity of these instruments; and
Decommissioning provision – approximates to carrying value.
The table below and the following page compares the carrying value of the Company’s financial instruments with the fair value of those instruments at 31 March 2025 (plus prior year comparatives) using the techniques described above. The table excludes those instruments where the carrying value of the financial instrument approximates to its fair value as a result of the short maturity of those instruments. Consequently, no financial instruments which fall due within the next twelve months are included in this table:
The best evidence of fair value is a quoted price in an actively traded market; where this data is available then the instrument is classified as having been determined using a level 1 valuation. In the event that the market for a financial instrument is not active, alternative valuation techniques are used. The Company does not have any financial instruments where it is eligible to apply a level 1 valuation technique.
With the exception of the transmission owner asset and decommissioning provision, all of the other fair values have been valued using Level 2 valuation techniques as identified in the preceding table which means that in respect of the Company's financial instruments these have been valued using models where all significant inputs are based directly or indirectly on observable market data.
In the case of the transmission owner asset and decommissioning provision, these have been valued using a valuation technique where significant inputs such as the assumed discount rate are based on unobservable market data. This means that these financial instruments have been classified as having been valued using a level 3 valuation and have been identified as such in the previous table.
The valuation categories that have been assigned to the financial instruments in the forgoing table have been applied throughout the year (2024: applied throughout the year) and there have been no reclassifications or transfers between the various valuation categories during the year (2024: no reclassifications or transfers).
The Board has overall responsibility for the Company’s risk management framework. This risk framework is discussed further in the Strategic Report.
The Company’s activities expose it to a variety of financial risks, which arise in the normal course of business: market risk, credit risk and liquidity risk. The overall risk management programme seeks to minimise the net impact of these risks on the operations of the Company by using financial instruments, including the use of derivative financial instruments – being the RPI swaps described in note 17 that are appropriate to the circumstances and economic environment within which the Company operates. The objectives and policies for holding, or issuing, financial instruments and similar contracts and the strategies for achieving those objectives that have been followed during the year are explained in notes 25 to 31.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Changes in market price are derived from: currency movements; interest rate changes; and changes in prices caused by factors other than those derived from currency or interest rate changes.
The Company operates in the UK and has no significant exposure to foreign currency and therefore this has an immaterial impact on market risk. Short-term financial assets and liabilities, such as trade receivables and payables, are not subject to market risk. Interest rate risk arises from the use of following financial instruments: transmission owner asset and cash and cash equivalents.
The transmission owner asset is classified as a contract asset and is carried at amortised cost and the carrying value is affected by the rate of interest implicit within the calculation of finance income that has a consequential effect on the carrying value of the transmission owner asset. The fair value of the transmission owner asset is subject to price risk caused by changes in RPI and/or changes in interest rates.
The Company is not exposed to changes in the market value of the infrastructure financial liability as the liability is determined by discounting the future cash flows relating to the lease arrangements giving rise to infrastructure financial liabilities by the incremental borrowing cost to the Company at the date the lease arrangements were entered into as a proxy for the interest rate implicit in those lease arrangements. Infrastructure financial liabilities do expose the Company to potential future increases in variable lease payments based on an index, which are not included in the initial lease liability and are only recognised when the change in index takes effect. When adjustments to lease payments are made based on an index taking effect, the lease liability is reassessed and adjusted through the Income Statement.
All of the Company’s borrowings have been issued at fixed rates which exposes the Company to fair value interest rate risk and, as a result, the fair value of borrowings fluctuates with changes in interest rates. All borrowings are carried at amortised cost, and therefore changes in interest rates, in respect of those borrowings, do not impact the Income Statement or Statement of Financial Position.
Cash and cash equivalents, where placed on interest bearing deposits, attract interest at variable rates and therefore are subject to cash flow interest rate risk as cash flows arising from these sources will fluctuate with changes in interest rates. However, the interest cash flows arising from these sources are insignificant to the Company’s activities.
The cash flows arising from the transmission owner asset fluctuate with positive changes in RPI. The Company has entered into a series of RPI swaps to significantly reduce this cash flow risk. Further details and an explanation of the rationale for entering into these arrangements are explained in the “Strategic Report – Hedging Arrangements”.
For the reasons outlined in the “Strategic Report”, the Directors have designated the RPI swaps as cash flow hedging derivatives and these are carried at fair value in the Statement of Financial Position. The RPI swaps are considered to be effective cash flow hedges.
Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations.
Credit risk primarily arises from the Company’s normal commercial operations that actually, or potentially, arises from the Company’s exposure to: a) NESO in respect of invoices submitted by the Company for transmission services; b) the counterparties to the RPI swaps; and c) short term deposits. There are no other significant credit exposures to which the Company is exposed. The maximum exposure to credit risk at the 31 March 2025 (and 31 March 2024) is the fair value of all financial assets held by the Company. Information relating to the fair value of all financial assets is given earlier – note 25. None of the Company’s financial assets are past due or impaired.
At 1 October 2024 NESO was acquired by the UK government and is now a publicly owned company. NESO operates a low risk regulated business within the UK and the regulatory regime under which it operates results in a highly predictable and stable, revenue stream. The regulatory regime is managed by the Authority and is considered by the Directors to have a well-defined regulatory framework which is classified as a predictable and supportive regime by the major rating agencies.
Having considered the credit risks arising in respect of the exposures to NESO, the Directors consider that those risks are extremely low, given the evidence available to them.
In respect of the counterparties to the cash flow derivative hedges (RPI swaps) these arrangements have been entered into with banks that the Directors consider to be of good standing and having carried out an appropriate risk assessment, consider that where a derivative asset position might exist the event of default is considered extremely low. At 31 March 2025, the fair values attributable to these positions were liabilities amounting to £28,975k (2024: £32,278k) and consequently there was no credit risk at 31 March 2025.
Included in the Statement of Financial Position at 31 March 2025 and 31 March 2024 are cash and cash equivalents that comprised short term deposits which were immediately accessible at that date. It is the Company’s policy, and a requirement under the Company’s lending agreements, that surplus cash and/or restricted cash deposits can only be invested in a limited set of high-quality investments with a view to ensuring that the risk of default is extremely low and that the investments are readily accessible.
Liquidity risk is the risk that the Company will have insufficient funds to meet its liabilities. The Board of Directors manages this risk.
As a result of: the regulatory environment under which the Company operates; the credit worthiness of the Company’s principal customer (NESO); and the RPI swaps that have been put in place, the cash inflows generated by the Company are highly predictable and stable. In addition, all of the Company’s senior debt carries a fixed coupon, and based on the forecasts prepared by the Company, all of these debt service costs are expected to be met from the cash inflows the Company is expected to generate over the whole remaining period of the project. During the year ended 31 March 2025, senior debt-service costs amounted to £17,822k (2024: £17,759k). There is no contractual obligation on the Company to service the unsecured borrowing until 25 August 2035, although it is the Company’s intention to service this borrowing when cash flows are sufficient, and it is prudent to do so. Cash outflows in respect of the other borrowing amounted to £2,607k (2024: £2,296k).
In accordance with the conditions of the various lending agreements, the Company is required to transfer funds to certain specified bank accounts and/or hold certain amounts on deposit for specified purposes. Access to these bank accounts by the Company is subject to the agreement of the lenders and in particular, access to amounts held on deposit held for specified purposes is restricted under the lending agreements. Such specific purposes include the holding of sufficient funds in restrictive bank accounts to meet senior debt servicing requirements at the next scheduled senior debt service date and to meet forecast maintenance costs. The Company’s use of these funds is restricted either to the specific purpose contemplated by the lending agreements, or until certain conditions are met or exceeded.
Where these conditions are met or exceeded then the use of any net cash generated in excess of the minimum necessary to meet the restrictive conditions is unfettered.
At 31 March 2025, the Company had access to a working capital reserve of £7,345k (2024: £6,747k) that it could access in the event that it is required to pay for any insurance deductible or to satisfy any reactive maintenance expenditure attributable to outages or repairs that could not be met in the ordinary course of business. In addition, in the event that the Company had insufficient funds to meet the contractual senior debt service or hedging payments, the Company can draw down under the PBCE letter of credit, with a view to meeting these obligations, the maximum amount that can be accessed under this facility amounts to 15% of the outstanding nominal principal amount of the senior debt outstanding.
At 31 March 2025, cash and cash equivalents included £22,097k (2024: £19,593k) that are held for specific purposes in the manner described in this section (including the working capital reserve) and additional amounts of cash and cash deposits amounting to £9,268k (2024: £8,275k) the disbursement of which has to comply with the terms of the lending agreements generally, but otherwise are available for general corporate purposes.
The Company prepares both short-term and long-term cash flow forecasts on a regular basis to assess the liquidity requirements of the Company. These forecasts also include a consideration of the lending requirements including the need to transfer funds to certain bank accounts that are restricted as to their use. It is the Company’s policy to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due without incurring unacceptable losses or risking damage to the Company’s reputation.
During the year, the Company has continued to meet its contractual obligations as they have fallen due and based on the forecasts prepared the Directors expect that the Company will continue to do so for the foreseeable future. The Company has exceeded its targets in relation to the obligations that it has to senior debt bondholders and the forecasts continue to support that these will continue to be exceeded. All of these factors have allowed the Directors to conclude that the Company has sufficient headroom to continue as a going concern. The Statement of going concern is included in the Strategic Report.
The contractual cash flows shown in the table on the following page are the contractual undiscounted cash flows relating to the relevant financial instruments. Where the contractual cash flows are variable based on a price or index in the future, the contractual cash flows in the table have been determined with reference to the relevant price, interest rate or index as at the Statement of Financial Position date.
The numbers in the following tables have been included in the Company’s cash flow forecasts for the purposes of considering Liquidity Risk as noted earlier. The following tables show the undiscounted contractual maturities of financial assets and financial liabilities, including interest:
Changes in RPI affect the carrying value of those financial instruments that are recorded in the Statement of Financial Position at fair value. The only financial instruments that are carried in the Statement of financial position at fair value are the standalone derivative financial instruments - RPI swaps as described in note 17 earlier. As previously explained, the Directors believe that these derivative financial instruments have a highly effective hedging relationship with the underlying cash flow positions they are hedging, and they expect this relationship to continue into the foreseeable future. Changes in the fair value of RPI swaps are expected to be substantially matched by changes in the fair values of the position they are hedging, due to the highly effective hedging relationships. However, the underlying positions being hedged – in the case of RPI swaps a substantial proportion of the cash flows emanating from the transmission owner asset which is carried at amortised cost. Consequently, any change in the fair value of the underlying hedged position, being the transmission owner asset, would not be recorded in the financial statements. The Directors are of the opinion that the net impact of potential changes in the fair value of the derivative financial instruments held by the Company has no substantive economic impact on the Company because of the corresponding economic impact on the underlying cashflows they are hedging.
Any changes in future cash flows in relation to the derivative financial instruments held by the Company, arising from future changes in RPI, are expected to be matched by substantially equal and opposite changes in cash flows arising from or relating to that proportion of the underlying cash flows being hedged that emanate from the holding of the transmission owner asset.
The Company is funded by a combination of senior debt, other borrowing, an infrastructure financial liability and equity in accordance with the Directors’ objectives of establishing an appropriately funded business consistent with that of a prudent offshore electricity transmission operator and the terms of all legal and regulatory obligations including those of the Licence and the Utilities Act 2000.
Senior debt comprises a fixed rate borrowing arising from the issuance of fixed rate secured bonds due August 2034 that were issued in August 2015. The secured bonds are guaranteed by HoldCo and in certain specified circumstances where the Company has insufficient funds to meet the contractual senior debt service or hedging payments, the Company can draw down under the PBCE letter of credit, with a view to meeting these obligations, with the maximum amount that can be accessed under this facility equivalent to 15% of the outstanding nominal principal amount of the senior debt outstanding. All of the senior debt and related RPI swap hedging arrangements are serviced on a six-monthly basis (June and December) and are expected to amortise through to 24 August 2034. At 31 March 2025, the total principal carrying value of senior debt net of unamortised issue costs excluding any accrued interest amounted to £162,473k (2024: £174,133k).
The other unsecured borrowing raised from the Company’s immediate parent undertaking, HoldCo, carries a fixed rate coupon (see note 14). At 31 March 2025, the total principal value of the other borrowing outstanding excluding accrued interest amounted to £54,973k (2024: £54,232k).
No ordinary equity share capital was issued during the year (2024: £nil). At 31 March 2025 share capital and associated share premium amounted to £469k (2024: £469k).
The Directors consider that the capital structure of the Company meets the Company’s objectives and is sufficient to allow the Company to continue its operations for the foreseeable future based on current projections and consequently has no current requirement for additional funding.