1.      GENERAL INFORMATION

The information included within these condensed financial statements that refer to the year ended 31 December 2020 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor reported on those accounts and that report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

2.      ACCOUNTING POLICIES

Basis of preparation

The annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards as adopted by the International Accounting Standards Board ("IASB"). The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the IASB.

Going concern

In the Company's latest annual report and accounts for the year to 31 December 2020 the directors set out a number of factors taken into account when considering continuing to adopt the going concern basis in preparing that annual report and accounts.

The directors confirm that no events have occurred during the six months to 30 June 2021, which alter the view expressed in the Company's annual report and accounts for the year to 31 December 2020.

Changes in accounting policy

The Company's accounting policies and methods of computation are the same as the accounting policies which are described in the Company's financial statements for the year ended 31 December 2020.

Application of new and revised IFRS

None of the standards, interpretations and amendments which are effective for periods beginning 1 January 2021 has had a material effect on the financial statements:

·  Amendments to IFRS 16 - COVID 19 related rent concessions;

·  Amendments to IAS 1 - Presentation of financial statements; and

·  Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS16 - Interest rate benchmark reform.

3.      INCOME TAX EXPENSE

Tax for the six month period to 30 June 2021 is charged at 19.00% (six months ended 30 June 2020: 19.00%), which represents the best estimate of the average annual effective tax rate expected for the full year, as applied to the pre-tax income of the six month period.

Finance Bill 2020 was enacted in July 2020 and as a result, the rate of corporation tax has been held at 19% as the Finance Bill 2020 effectively removed the proposed reduction to 17% which was included within Finance Bill 2016.

In addition, the March 2021 Budget announced that the corporation tax rate will increase from 19% to 25% from 1 April 2023. This increase in tax rate was included within Finance Bill 2021 which was substantively enacted on 24 May 2021 and received Royal Assent on 10 June 2021.

4.      FINANCIAL INSTRUMENTS

Except as detailed in the following table, the directors consider that the carrying value amounts of financial assets and financial liabilities recorded at amortised cost are approximately equal to their fair values:

5.     

5.         RELATED PARTY TRANSACTIONS

Transactions entered into with related parties and balances outstanding were as follows:

Interest on loans to/from companies within the Northern Powergrid Group is charged at a commercial rate of interest.