Viridian Group PLC,
Registered Office,
120 Malone Road,
Belfast BT9 5HT
Registered in N.Ireland NI 33250
http://www.viridiangroup.co.uk
This document is printed on environmentally-kind paper. 
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Printed by Heanor Gate Printing Limited Annual Report and Accounts 2003-2004 Viridian Group Businesses
Business
Northern Ireland Electricity is responsible for the regulated
procurement, transmission, distribution and supply of electricity
to homes and businesses in Northern Ireland.
NIE Powerteam is a power utility contractor specialising in the
design, construction, commissioning and maintenance of high-
voltage transmission and distribution power systems, principally
for NIE, but also for electricity companies and industrial
customers in Great Britain and Ireland.
Viridian Power & Energy’s generation business unit
incorporates Huntstown Power Co Ltd, owner of the 343MW
combined cycle gas turbine plant north of Dublin, GenSys Power
Ltd, provider of operation and maintenance services and 
Viridian Power Ltd, specialising in the future development of
generation projects.
Energia, the Group’s independent electricity supply business,
operates in the competitive supply markets in both Northern
Ireland and the Republic of Ireland.
Sx3 is a leading IT and business services company, supplying a
range of IT and business support services to selected markets,
with a strong focus on services and products for education, local
and housing authorities and the wider public sector.
Address
120 Malone Road, Belfast, BT9 5HT
Telephone: 028 9066 1100
Facsimile: 028 9068 9117
www.nie.co.uk
Fortwilliam House,
Edgewater Office Park, 
Edgewater Road, Belfast, BT3 9JQ
Telephone: 028 9095 4336
Facsimile: 028 9095 4326
www.niepowerteam.co.uk
Mill House, Ashtowngate,
Navan Road, Dublin 15, Ireland
Telephone: 353 1 869 2000
Facsimile: 353 1 869 2040
www.huntstownpower.ie
Energia House, 62 Newforge Lane,
Belfast, BT9 5NF
Telephone: 028 9068 5900
Facsimile: 028 9068 5902
www.energia.ie
Hillview House, 61 Church Road, 
Newtownabbey, Co Antrim, BT36 7SS
Telephone: 028 9085 9085
Facsimile: 028 9085 9086
www.sx3.com
Contents
1 Group Financial Highlights
2 Chairman’s Statement
4 Group Chief Executive’s Review
8 Financial Review
11 Board of Directors
12 Corporate Governance
18 Directors’ Remuneration Report
25Directors’ Report
28 Statement of Directors’ Responsibilities
29 Independent Auditors' Report
30 Group Profit and Loss Account
30 Group Statement of Total 
Recognised Gains and Losses
31 Balance Sheets
32 Group Cash Flow Statement
33 Notes to the Accounts
64 Shareholder Information Page One Viridian Group PLC Annual Report and Accounts 2003-2004
Group Financial Highlights
Philip Rogerson
Chairman (non-executive)
Patrick Haren
Group Chief Executive
Patrick Bourke
Group Finance Director
Harry McCracken
Group Managing Director, Viridian Power & Energy
• Turnover increased to £834.2m (2003 - £781.2m)
• Profit before interest and tax of £114.2m 
(2003 - £104.8m)
• Increase in pro-forma profit before interest and tax
1
to
£112.5m (2003 - £106.9m)
• Increase in contribution from Viridian Power & Energy
to £18.3m (2003 - £6.4m)
• Basic earnings per share increased to 55.9p 
(2003 – 39.2p)
• Pro-forma earnings per share
2
increased 12% to 53.3p
(2003 – 47.6p)
• A final dividend of 24.20p per share which, together
with the interim dividend of 9.46p, gives a total of
33.66p, a 3.5% increase over 2002/03
1
Pre under-recovery of regulatory entitlement, exceptional items and
goodwill amortisation as described more fully in the Financial Review.
2
Pre under-recovery of regulatory entitlement, exceptional items,
goodwill amortisation and deferred taxation as described more fully in
the Financial Review.
All references in this document to “Group” denote Viridian Group PLC and its
subsidiary undertakings and “Company” denote Viridian Group PLC the
parent company.
Group Financial Highlights Page Two
Chairman’s Statement
Philip Rogerson
The Group has delivered a good set of results.  Northern
Ireland Electricity’s ("NIE") regulated businesses continued to
meet the challenges of their price controls, maintaining their
focus on cost reductions while absorbing renewed pension
charges.  Viridian Power & Energy significantly increased its
contribution to profits reflecting a first full year of operation
from our Huntstown CCGT plant and a strong performance
from Energia.  Outside the energy sector, Sx3 further
improved its margins and profitability.
We remain committed to our well-focused strategy:
• to maximise the efficiency of our regulated assets, which
remain the mainstay of the business;
• to grow a profitable energy business in competitive
markets across Ireland; and
• to maximise the potential of our unregulated businesses
outside the energy sector.
In line with this strategy, we participated in the competition
for new generation capacity conducted in 2003 by the
Commission for Energy Regulation ("CER") in the Republic of
Ireland ("RoI").  While we were unsuccessful, we continue 
to assess the opportunity for a second station on the
Huntstown site, as well as other investment opportunities in
the energy sector.
In November 2003 we announced the sale of Fleet Solutions
(Ireland) Limited ("Fleet").  This followed the disposals of the
Moyle Interconnector in April 2003 and our shareholding in
Lislyn Limited ("Lislyn") in May 2003.  The benefits of the
disposals we have effected over the last two years are
evident both in our reported profits, with the elimination of
under-performing joint ventures and associates, and in the
strength of our balance sheet.
Financial Results
Group turnover increased by 7% from £781.2m to £834.2m.
This was principally due to increased turnover from Viridian
Power & Energy which increased revenues from £161.7m 
to £206.0m.
Taken together, NIE’s regulated businesses incurred a net
under-recovery of £9.5m against the income to which they
are entitled under their regulatory formulae.  This is a timing
issue; tariffs have been set to recover the under-recovery
during the year ending 31 March 2005.  As further explained
in the Financial Review, we have added back the impact of
under-recovery (5.0p per share) in arriving at pro-forma
earnings per share because we believe that NIE’s
performance should be assessed by reference to its
regulated entitlement.
Pro-forma profit before interest and tax (pre under-recovery,
exceptional items and goodwill amortisation) increased from
£106.9m to £112.5m despite renewed pension charges of
£12.3m.  Reduced interest and taxation charges resulted in
pro-forma earnings per share (pre under-recovery,
exceptional items, goodwill amortisation and deferred tax)
increasing by 12% to 53.3p (2003 – 47.6p).  Basic earnings
per share, which include a net exceptional credit arising from
disposals, increased to 55.9p (2003 – 39.2p).  Net debt
decreased by £139.4m to £382.7m at 31 March 2004 from
£522.1m at 31 March 2003, primarily as a result of proceeds
from the Moyle Interconnector and Fleet disposals. Dividends
A final dividend of 24.20p per share is recommended which,
together with the interim dividend of 9.46p, amounts to a
total of 33.66p for the year, a 3.5% increase on 2002/03.
This is in line with our commitment to deliver real dividend
growth across the current regulatory period.
Board
Dipesh Shah, Chief Executive of the United Kingdom Atomic
Energy Authority, and Mike Toms, Group Director, Planning
and Regulatory Affairs at BAA plc, were appointed non-
executive directors of the Company with effect from 1
November 2003.  I am very pleased that we have been 
able to attract people of such high calibre to our Board and I
have no doubt that they will make a significant contribution
to the Group.
Employees
The credit for the Group’s performance must go to our
employees.  They have worked hard, effectively and with
dedication throughout the year.  They have been equal to
the demands of constant improvement and the challenges
posed by regulation, competition and new markets and have
addressed them with commitment and enthusiasm.
Looking Forward
We place a premium on the delivery of strong operating
performance, which is key to the future of the Group; this is
demonstrated again in this year’s results.  In particular, we
are committed to realising further efficiencies and advances
in quality in our regulated businesses and are looking to
build on the significant progress Viridian Power & Energy has
made during the year.  Outside the energy sector, our
principal objective remains to improve Sx3’s margins and
enhance its profitability.
Philip Rogerson
13 May 2004
Page Three Viridian Group PLC Annual Report and Accounts 2003-2004
Chairman’s Statement Page Four
Group Chief
Executive’s Review
Patrick Haren
This has been another year of good progress by the Group.
Pro-forma profit before interest and tax (pre under-recovery,
exceptional items and goodwill amortisation) grew from
£106.9m to £112.5m.  Increased profits from Viridian Power
& Energy and Sx3 more than offset both the net loss of
profits from the businesses we have sold and lower profits
from NIE, now at the end of the second year of the
Transmission and Distribution price control.
NIE’s Transmission and Distribution business is meeting the
challenge of its cost reduction targets while successfully
absorbing renewed pension charges.  NIE’s other businesses
continue to make important contributions; we are close to
agreeing with Ofreg an extension of the price control for NIE
Supply to March 2007 and we have begun initial discussions
with Ofreg on extensions to the price controls for Power
Procurement and SONI, which currently run to March 2005.
Viridian Power & Energy more than doubled its contribution
and is now a significant business in its own right.  Our
Huntstown plant achieved better than expected availability
and heat rate and Energia expanded its customer base in
both Northern Ireland and the RoI.
Sx3, the Group’s IT and business services company,
continued to improve its margins and profitability.  In
November 2003 we disposed of our Fleet business; this
further releases management and financial resources to
concentrate on energy activities.
Northern Ireland Electricity
Transmission and Distribution
Transmission and Distribution revenues decreased by £3.7m
due to the X factor of 5% in the price control and the
reduction in the Transmission and Distribution regulated
asset base ("RAB") associated with the Moyle transaction,
offset by unit growth and inflation.  Based on regulated
entitlement, the business made profits of £73.9m compared
to £76.2m last year, reflecting the reduction in revenues
together with renewed pension charges (£6.0m out of the
total Group charge of £12.3m) and a higher depreciation
charge, offset by reductions in operating costs.  Operating
costs were lower on a number of fronts, notably due to
reductions in staff numbers, supply chain costs, information
technology costs and premises costs.  A substantial
proportion of these cost reductions have been achieved
through ongoing rationalisation of our customer 
service centres and district work centres and a focus 
on quality of customer service delivery together with
improved productivity.
We have invested in Six Sigma training and methodology
across the Group and are using it as a mechanism for
analysing and redesigning our processes in order to achieve
improved service quality and lower costs.  We continue to
assess opportunities for lower costs while maintaining our
focus on standards of service to our customers, and have
recently launched a programme to simplify the service
delivery processes within Transmission and Distribution and
NIE Powerteam to achieve a more effective use of resources
and a clearer focus on customer needs.
Capital expenditure on the network, related customer service
systems and other non-network assets was £66.4m before
customer contributions (2003 - £61.7m).  Network capital
expenditure was in line with the regulatory allowance.   Page Five Viridian Group PLC Annual Report and Accounts 2003-2004
The modifications to NIE’s licence required to implement the
Transmission and Distribution price control were formally
adopted in October 2003.  As part of the price control, we
have continued to work with Ofreg on incentives to invest in
demand side management projects involving renewable
energy and energy efficiency measures that may offer lower
cost alternatives to conventional network reinforcement.  To
date 17 projects totalling £1.9m have been proposed.
Power Procurement/SONI
Profitability based on regulatory entitlement from the Power
Procurement business and the transmission system operator,
SONI, reduced to £5.6m (2003 - £5.9m) reflecting renewed
pension charges offset by increased trading income.  The
current price controls for both businesses last until March
2005 and we are in preliminary discussions with Ofreg on
their extension.
In September 2003 Premier Power Limited (a member of the
BG Group) commissioned its new 600MW CCGT plant at
Ballylumford; Power Procurement has contracted for this
plant’s output until 2012, replacing contracts with existing
units on the same site.  In July 2003 Power Procurement
agreed to sell 170MW of other capacity to Electricity Supply
Board ("ESB") in the RoI through the North-South
interconnector which links the Northern Ireland and RoI
electricity systems, having contracted to purchase this
capacity from units no longer under long-term contract at
Ballylumford.  This arrangement helps to address the
capacity need in the RoI, brings a reduction in costs to
customers in Northern Ireland and provides Power
Procurement with a transaction fee. 
In September 2003 the Minister for Enterprise, Trade and
Investment announced proposals for payments of, initially,
some £30m per annum towards the high generation costs
inherited from privatisation of the generating stations in
Northern Ireland.  These payments are intended to reduce
electricity prices to industrial and commercial customers.
They are subject to EU State Aid clearance, which is
currently being sought by the Department of Enterprise,
Trade and Investment ("DETI").
NIE Supply
Profits based on regulatory entitlement in our Supply
business decreased to £5.8m (2003 - £7.8m) as a result of
renewed pension charges.  We expect to reach agreement
soon with Ofreg on an extension of NIE Supply’s price
control from April 2005 to March 2007.  This will support
further investment in the new keypad meters which have
been promoted by NIE, further investment in energy
efficiency measures and a new programme designed to
promote the development of micro-renewable generation
focused on the domestic sector.
NIE Powerteam
At NIE Powerteam, our specialist infrastructure services
business, operating profits remained flat at £2.4m (2003 -
£2.4m) reflecting increased revenues from external
contracts, offset by renewed pension charges.  Powerteam
derives most of its revenue from the Transmission and
Distribution business but increased its external sales to 
37% of total sales (2003 – 27%).  This increase was
underpinned by the award, in June 2003, of a three year
contract to refurbish up to 2,500 km per annum of ESB’s
medium voltage network, providing revenues of up to 
€18m per annum.
Viridian Power & Energy
Viridian Power & Energy increased its revenues from
£161.7m to £206.0m, with increases in both Northern Ireland
and the RoI.  The business provided a significantly higher
profit contribution of £18.3m (2003 - £6.4m) reflecting a full
year’s operation from our Huntstown CCGT plant and an
increase in profits from Energia, our competitive market
supply business.  
Huntstown
The Huntstown plant achieved availability of 93% during the
year, reflecting a good operating performance and its first
planned outage in June 2003.  We continue to assess the
opportunity for a second generating station on the
Huntstown site taking into account updated demand
projections from ESB and other factors which will affect the
future supply/demand balance.
In March 2004 the Environmental Protection Agency in the
RoI issued its final allocation plan for carbon dioxide
emissions under the EU Emissions Trading Scheme.  This set
out a 74% allocation of emission credits for all generating
plant in the RoI, including Huntstown.  Our expectation is
that the net cost of the emission credit shortfall for
Huntstown will be offset by increases in RoI electricity prices,
leaving Viridian Power & Energy broadly neutral.
Group Chief Executive’s Review Page Six
Northern Ireland Supply
In Northern Ireland, Viridian Power & Energy’s turnover
increased from £64.7m to £78.1m primarily due to increased
volumes in the eligible market, an increase in prices due to
higher use of system charges and support levies and
increased sales from renewable sources.  Profits increased
from £1.6m to £3.9m reflecting increased sales volumes
together with better margins.
The Northern Ireland supply market comprises three
categories of electricity customer: large energy users ("LEU")
(approximately 750 customer sites); small to medium-sized
enterprises ("SME") (approximately 57,000 customer sites);
and some 684,000 domestic customers.
Until recently, competitive suppliers such as Energia have
only been able to access the demand of LEUs. Generation for
the competitive market is sourced across the Moyle
Interconnector with capacity on the interconnector being
auctioned annually and suppliers contracting with generators
in Great Britain.  Energia has maintained a 50% share by
volume of the LEU market.
The SME market in Northern Ireland is opening on a phased
basis during 2004 and 2005.  In April 2004 some 300
monthly-billed SMEs (which tend to be the larger users)
became eligible to participate in the competitive market.  By
the end of the financial year, all 57,000 SMEs are expected to
become eligible customers.  Energia is targeting selected
customers in this sector.
The SME market in Northern Ireland is already open to
competition for electricity supplied from renewable sources.
This market is expected to remain active for some time for
those SMEs which decide not to incur the cost of on-line
metering required to participate in the full competitive
market.  Energia has been using contracted wind farm
capacity to supply SMEs on this basis and now has customers
operating on some 2,700 sites with a capacity demand of
50MW.  DETI intends to implement a renewables obligation
scheme in Northern Ireland similar to the schemes
introduced in Great Britain.  As currently proposed, this will
require suppliers to source 6.3% of their capacity from
renewable generators by 2012.
RoI Supply
In the RoI, Viridian Power & Energy’s turnover increased
from £97.0m to £127.9m, representing increased volumes in
the eligible market supported by Huntstown’s 343MW
capacity for a full year, higher market prices following a 3%
increase in ESB’s tariffs and increased sales from renewable
sources.  Profits increased from £4.8m to £14.4m reflecting a
full year’s contribution from Huntstown together with
increased volumes and improved margins for Energia.
The RoI supply market comprises four categories of
electricity customer: LEUs (approximately 800 sites); low
voltage maximum demand ("LVMD") users (approximately
5,800 customer sites); SMEs (approximately 161,500
customer sites); and over 1.7 million domestic customers.
Up until February 2004 the competitive market in the RoI was
only open to LEUs.  Energia’s market share of the LEU sector
was approximately 30% in 2003/04, supplied by our
Huntstown plant.  In February 2004 the LVMD sector and the
larger SMEs by volume became open to competition, in total
some 11,300 customers.  The balance of the SME sector is
due to open to competition in February 2005.  Since
February 2004, Energia has sold 40MW of capacity obtained
from ESB to newly eligible LVMD and SME customers where
appropriate margins can be achieved.
As in Northern Ireland, Energia can offer electricity from
renewable sources to the SME sector in the RoI prior to
market opening and is currently supplying 2,600 sites.
Energia has used electricity derived from CHP generating
stations in Scotland imported over the Moyle Interconnector
and the North-South interconnector to meet this demand;
this source of electricity qualifies as renewable in the RoI.
There is currently no specific renewable obligation in the RoI.
In February 2004 a consultation paper was issued on the
future policy of renewables in the RoI seeking views on
options and targets.  We have submitted our response to this
consultation and await its conclusions.
Viridian Power & Energy represents a natural avenue for
growth for the Group.  Opportunities lie in further generation
in the RoI, competitive market opening in both jurisdictions
and growth in renewables across the island.  We have also
submitted a response, as part of a consortium, to the CER’s
request for indications of interest in the construction and
operation of an interconnector between the RoI and Wales. Page Seven Viridian Group PLC Annual Report and Accounts 2003-2004
Viridian Capital
Sx3
Sx3’s profitability increased from £3.4m to £7.1m, primarily
driven by a higher contribution from its Applications
Solutions division.  Turnover reduced marginally to £117.3m
compared to £120.7m last year; turnover in the Infrastructure
Solutions division fell  but was offset by growth in other
divisions.  The increase in Sx3’s operating profit margin from
2.8% to 6.1% was driven by a greater proportion of higher
margin services, against a matching decline in product-
related sales.  Our target for Sx3 remains high single digit
operating margins.
Sx3 comprises three operating divisions:
• Applications Solutions, where we have a strong market
position through our iWorld Revenues and Benefits and
Housing applications for local government.  This division
made particularly good progress during the year in
migrating existing customers to the iWorld product set,
in winning new customers for iWorld, and in selling
other applications and services to its customer base.
• Managed Services, where we are seeking to add to our
existing contracts through leveraging off our strong
market position in the local government sector.  The
installation phase of the Classroom 2000 Lot 3 contract
is nearing completion with most of the associated capital
expenditure now spent.
• Infrastructure Solutions, which comprises our reselling
operations in Northern Ireland, Scotland and Boldon
near Newcastle.  In this division we see opportunity for a
better contribution through cost reduction and
improved efficiency.
The Sx3 management team has concentrated on enhancing
profitability and their success is reflected in these results.
Our strategy is to build on the company’s strong position 
in the public sector, maintaining our focus on operating 
profit margins.
Patrick Haren
13 May 2004
Group Chief Executive’s Review Page Eight
Financial Review
Patrick Bourke
Summary of Financial Performance
Group turnover increased by 7% from £781.2m to £834.2m,
principally due to increased turnover from Viridian Power &
Energy.  Operating costs pre exceptional items increased
from £671.7m to £733.4m.  Profit before interest and
taxation as set out in the Group Profit and Loss Account
increased from £104.8m to £114.2m.  
NIE’s regulated businesses incurred a net under-recovery of
£9.5m against the income to which they are entitled under
their regulatory formulae; this arose as a result of higher than
anticipated fuel costs during the year.  Under UK GAAP the
under-recovery reduces NIE's statutory profits;  however this
is a timing difference, tariffs have been set to recover the
under-recovery during the year ending 31 March 2005.  The
directors believe that the most appropriate measure of
performance for the Group is NIE’s profit based on its
regulated entitlement.  Together with adjustments for
goodwill amortisation and exceptional items, this gives rise to
pro-forma profit before interest and tax for the Group of
£112.5m (2003 - £106.9m).  A reconciliation is set out below:
2004 2003
£m £m
Profit before interest and tax 114.2 104.8
Add back:
-     goodwill amortisation 2.2 2.2
-     under-recovery by NIE businesses 9.5 -
Deduct: exceptional credit (13.4) (0.1)
Pro-forma profit before interest and tax 112.5 106.9
The increase in pro-forma profit before interest and tax from
£106.9m to £112.5m was due to increased profits from
Viridian Power & Energy and Sx3, offset by lower profits
from NIE’s regulated businesses and the net loss of profits
from disposals.
Exceptional items amounted to a net credit of £13.4m (2003 -
£0.1m).  This reflects:
• an exceptional credit of £17.7m, arising from the
disposal in April 2003 of the Moyle Interconnector and
the reduction of £10.0m in the Transmission and
Distribution RAB agreed with Ofreg as part of the Moyle
transaction; offset by
• an exceptional charge of £1.8m as a result of the
disposal in November 2003 of Fleet; and
• an exceptional charge of £2.5m relating to the Group’s
liability in respect of certain members of Lislyn’s defined
benefit pension scheme.  In May 2003 we completed
the disposal of our 30% shareholding in Lislyn, an
electrical goods retailing business trading under the
Shop Electric brand.  Lislyn and its new owners went
into administration on 31 October 2003.  Under
legislation put in place at the time of privatisation of NIE,
the Group has a liability in respect of those members of
Lislyn’s defined benefit pension scheme who were
employees of NIE at privatisation.  Assuming Lislyn’s
scheme is funded on an ongoing basis, this liability is
estimated at £2.5m.
The Group's net interest charge decreased from £26.4m to
£25.0m, with interest saved through the disposals of the
Moyle Interconnector and Fleet offsetting the effect of a full
year’s interest being charged on the borrowings underlying
Huntstown; in addition last year’s charge included £2.3m in
respect of the Group’s share of interest borne by nevada 
and Lislyn.  Net debt at the end of the year was £382.7m
(2003 - £522.1m), reflecting cash inflow from the Group’s
operations together with proceeds from the disposals of 
the Moyle Interconnector and Fleet, offset by ongoing 
capital expenditure on NIE’s network and on Sx3’s 
long-term contracts. Page Nine Viridian Group PLC Annual Report and Accounts 2003-2004
The tax charge for the year decreased to £14.9m (2003 -
£26.7m) due to lower deferred tax charges combined with a
reduction in the effective current tax rate to 15.6% (2003 –
22.6%).  This reduction in the effective current tax rate is
primarily due to no tax charge being attributable to the net
profit on the disposals of the Moyle Interconnector and Fleet
and the cessation of our share of joint venture and associate
losses which were non deductible.  The effective current tax
rate is net of the release of £4.0m (2003 - £4.0m) over-
provided in previous years.  
Basic earnings per share reported in the Group Profit and
Loss Account increased to 55.9p (2003 – 39.2p).  Pro-forma
earnings per share increased from 47.6p to 53.3p and are
reconciled to basic earnings per share as shown below:
2004 2003
Basic earnings per share 55.9p 39.2p
Add back:
-     goodwill amortisation 1.7 1.7
-     under-recovery of £9.5m by NIE 5.0 -
businesses (net of tax at 30%)
-     deferred taxation 0.8 6.8
Deduct: exceptional credit (10.1) (0.1)
(£13.4m in 2003/04)
Pro-forma earnings per share 53.3p 47.6p
The recommended final dividend of 24.20p brings the total
dividend for the year to 33.66p, a 3.5% increase on 2002/03.
This dividend is covered 1.6 times by pro-forma earnings 
per share.  
Pension Costs
The Group incurred pension charges of £12.3m (net of
capitalisation), in line with the estimate given last year that
the charge would be approximately £12m.  The deficit in 
the Group’s defined benefit scheme under FRS 17
“Retirement Benefits” decreased to £118.0m net of tax at 31
March 2004 from £135.8m at 31 March 2003 (see note 25 to
the accounts).
Special Share
On 5 May 2004, the Company redeemed its special rights
non-voting redeemable preference share of £1 ("Special
Share") at par, following notification by DETI that it required
the Special Share to be redeemed.  As a consequence, the
Company is proposing a resolution at the Annual General
meeting (“AGM”) to be held on 2 July 2004 to remove the
15% limit on shareholdings in its Articles of Association.
International Accounting Standards
In compliance with the European Commission’s International
Accounting Standards Regulation, the Group will prepare its
consolidated financial statements for the year ending 31
March 2006, including prior year comparatives, under
International Financial Reporting Standards ("IFRS").  The
Group has made substantial progress towards implementing
the changes required to convert to IFRS.  A project team is
looking at all implementation aspects, including changes to
accounting policies and the impact on systems and we
expect the Group to be fully prepared for the transition.  At
this stage, our view is that the major differences between our
current accounting practice and IFRS will be in respect of
accounting for pensions and deferred tax.
Treasury
The role of the Group's centralised treasury operation is to
manage liquidity, funding, investment and the Group's
financial risk, including risk from volatility in currency,
interest rates, commodity prices and counterparty credit risk.
The treasury operation is not a profit centre and its objective
is to manage risk at optimum cost.  It operates within policies
and procedures approved by the Board and controlled by
the Group Finance Director.  
The treasury operation employs a continuous forecasting and
monitoring process to ensure that the Group complies with
its banking and other financial covenants.  Treasury
operations and future treasury requirements are identified in
a monthly treasury report to the Group Finance Director.  
Financial Review Page Ten
Financing and Interest Rate Risk
The Group's policy is to finance its operations primarily
through a mixture of retained earnings and medium to long-
term loans and bank debt.  Borrowings are controlled and
approved centrally by the treasury operation.  Medium to
long-term borrowings are denominated in Sterling and Euros
and bear a mixture of fixed and floating interest rates.
Interest rate exposure on borrowings is also managed, where
appropriate, by the treasury operation through the use of
financial instruments.  The Group's policy is to target a ratio
of 50% fixed rate debt to 50% floating rate debt within a
range of one third to two thirds either way.  The policy
permits the exclusion of fixed rate project finance debt in the
calculation of the ratio and on this basis the ratio at 31 March
2004 was 57% fixed rate debt and 43% floating rate debt.
Including fixed rate project finance debt, the ratio was 70%
fixed rate debt and 30% floating rate debt.
The Group's policy is to maintain an appropriate spread of
maturity to ensure continuity of funding.  At 31 March 2004,
1% of its borrowings were due to mature in less than one
year, 15% in more than one year but less than five years and
84% in more than five years.  The Group manages its funding
profile through a combination of long-term capital market
funding and medium to long-term committed bank facilities
and short-term uncommitted bank facilities.
In May 2003 part of the proceeds from the disposal of the
Moyle Interconnector in April 2003 were used to repay early
a £60m bank loan taken out by NIE in November 1998 and
due to be repaid in November 2003.
At 31 March 2004 the Group had undrawn committed
facilities of £177.1m (2003 - £151.0m) and uncommitted
facilities of £31.0m (2003 - £31.0m).
Foreign Currency Risk
The Group's treasury policy is to hedge foreign exchange
exposures with a value equivalent to or greater than £0.5m
with the percentage level of hedging dependent on the
specific project.  A high proportion of the Group’s income
and expenditure is denominated in Sterling, however both
Viridian Power & Energy and NIE Powerteam receive income
and incur expenditure in Euros.  As the Group continues to
undertake operational activities in the RoI, exchange rate
exposures arising are identified, monitored and hedged
through the use of financial instruments (mainly forward
currency contracts and swap arrangements) in accordance
with its treasury policy.
Commodity Risk
The Group’s policy is to hedge the level of commodity risk
exposure deemed appropriate on a project specific basis.
Viridian Power & Energy is exposed to changes in the price
of gas purchased for the operation of Huntstown.  During
the year Viridian Power & Energy employed fixed price
purchase contracts as well as financial commodity swaps to
hedge exposures identified.  Approximately 63% of Viridian
Power & Energy’s forecast gas requirements for the year
ending 31 March 2005 have been hedged.
Credit Risk
The Group considers that it is not exposed to major
concentrations of credit risk.  However the Group may be
exposed to credit related loss in the event of non-
performance by counterparties under financial instruments.
The Group does not anticipate any non-performance given
the high credit ratings of the established financial institutions
that comprise these counterparties.  The Group controls
credit risk arising on financial instruments by only transacting
with bank counterparties rated investment grade and above,
as set out in the Group’s treasury policy. 
Information on financial instruments is set out in note 31 to
the accounts in compliance with FRS 13 "Derivatives and
Other Financial Instruments".
Going Concern
Based on normal business planning and control procedures,
the directors have a reasonable expectation that the Group
has adequate resources to continue in operational existence
for the foreseeable future.  For this reason, they continue to
adopt the going concern basis in preparing the accounts.
Patrick Bourke
13 May 2004 Page Eleven Viridian Group PLC Annual Report and Accounts 2003-2004
Harry McCracken (aged 54),
Group Managing Director,
Viridian Power & Energy (E)
Appointed Group Managing
Director, Viridian Power &
Energy in February 2003.
Previously Managing Director,
NIE with responsibility for the
Group’s regulated electricity
businesses.  Joined NIE in 1970
as an engineer and progressed
to Corporate Planning Manager
prior to appointment to the
Board of NIE as Operations
Director in 1992.
Patrick Haren (aged 53),
Group Chief Executive (E, N)
Joined NIE as Chief Executive
in 1992.  Appointed Group
Chief Executive in February
1998.  He is a Board member
of Invest NI, Northern
Ireland’s economic
development agency.
Previously Director of New
Business Investment with
Electricity Supply Board (ESB)
in the Republic of Ireland and
Chairman of ESB
International.
Philip Rogerson (aged 59),
Chairman (non-executive) (N)
Appointed non-executive
Chairman in January 1999
following his appointment as
a non-executive director and
Deputy Chairman in July
1998.  Chairman of Aggreko
plc, and non-executive
director of Northgate plc and
Celltech Group plc.
Previously Deputy Chairman
of BG plc (formerly British
Gas plc) until February 1998
having been a director since
1992.  Prior to that he spent
14 years with ICI, latterly as
General Manager, Finance.
Duncan Lewis (aged 53) 
(* A, N, R)
Appointed as a non-
executive director in
February 2002.  Senior
Advisor to the Carlyle
Group.  Non-executive
director of the British Library
and CompleTel nv.  Formerly
President and Chief
Operating Officer of GTS Inc,
Managing Director of Equant
nv, Chief Executive of
Granada Media Group and
held a number of managing
director and chief executive
positions at Cable and
Wireless.  Duncan Lewis
chairs the Remuneration
Committee.
Desmond Smyth (aged 54)
(*A, N, R)
Appointed as a non-
executive director in 1996.
Desmond Smyth CBE has
been nominated by the
Board as the Senior
Independent Director and
chairs the Audit Committee.
A chartered accountant, he
was Managing Director of
Ulster Television plc for 17
years until October 1999.
Dipesh Shah (aged 51) 
(* A, N, R)
Appointed as a non-executive
director in November 2003.
Chief Executive of the United
Kingdom Atomic Energy
Authority.  Non-executive
director at Babcock
International Group PLC and
Naps Systems Oy and non-
executive Chairman of IT
Power Limited.  Until late 2002
held a number of senior
positions within BP plc, latterly
as Vice President and General
Manager, Acquisitions and
Divestments and formerly as
Chief Executive of several
businesses within BP plc.
Mike Toms (aged 50) 
(* A, N, R)
Appointed as a non-executive
director in November 2003.
Group Director, Planning and
Regulatory Affairs at BAA plc
since 2001.  Formerly Director
of Corporate Strategy at BAA
plc.  He is a member of the
Governing Board of the
Airports Council International.  
Patrick Bourke (aged 47),
Group Finance Director  (E)
Joined as Group Finance
Director in September
2000.  Previously Head of
Mergers and Acquisitions
and then Group Treasurer at
Powergen plc.  He was
formerly a director of
Barclays de Zoete Wedd
and qualified as a chartered
accountant with Peat
Marwick (now KPMG).
* - independent non-executive director
A - member of Audit Committee
E - member of Executive Committee
N - member of Nomination Committee
R - member of Remuneration Committee
Board of Directors
Board of Directors Corporate Governance
Page Twelve
The Board considers that good corporate governance is
essential to achieving its objective of maximising shareholder
value.  During the year the Company has continued to apply
the principles of governance contained within the Combined
Code on Corporate Governance issued in 1998 (the
"Combined Code").  Throughout the year ended 31 March
2004 the Company has complied with all the provisions set
out in Section 1 of the Combined Code. 
The Board has reviewed the Company’s governance
arrangements in light of the revised Combined Code
published by the Financial Reporting Council on 23 July 2003
which will apply to the Company for the year ending 31
March 2005 and thereafter, and has made changes as
necessary and appropriate.  Some additional disclosures
have been made within this report as a transition towards
compliance with the revised Combined Code.  The next
Annual Report will include a comprehensive report on the
application of the principles of, and compliance with, the
provisions of the revised Combined Code.
The Board
The Group is led and controlled by its Board of Directors.  Its
role is to: determine long-term strategy; ensure that the
Group has adequate available resources; monitor the
achievement of business objectives; promote good corporate
governance; and ensure that the Group meets its
responsibilities to shareholders, other providers of finance,
customers, employees, industry regulators, local
communities and other stakeholders.  The Board has a
schedule of matters specifically reserved to it for decision
including material investment decisions, the award of specific
contracts, appointment of principal advisers and acquisitions
and divestments.
Formal procedures are in place for directors to receive
regular information and matters for approval from the various
Committees that assist in managing the Group’s affairs.
Briefing papers are circulated to Board members in advance
of meetings and presentations are often provided on
significant issues and new developments.
All directors bring an independent judgement to bear on the
issues the Board considers.  The directors have direct access
to the advice and services of the Company Secretary who is
responsible for ensuring that applicable rules and regulations
are complied with and that Board procedures are observed.
The removal of the Company Secretary is a matter for the
Board as a whole.  Independent professional advice may also
be taken, at the Company’s expense, by directors in the
furtherance of their duties.  Consideration is given to the
training needs of directors on their appointment to the Board
and non-executive directors benefit from a comprehensive
induction to the Company’s business.
A statement of the directors’ responsibilities in respect of the
accounts is set out on page 28.
The Board currently comprises the Chairman, four
independent non-executive directors and three executive
directors.  Desmond Smyth is the Board’s Senior
Independent Director.  There is a clear division of
responsibilities between the Chairman, Philip Rogerson, and
the Group Chief Executive, Patrick Haren, which has been
set out in writing and agreed by the Board. 
Directors are subject to re-appointment by shareholders at
the first AGM following their appointment.  Dipesh Shah and
Mike Toms, who were appointed as non-executive directors
in November 2003, will seek re-appointment this year.  All
directors are subject to re-appointment by shareholders at
the AGM at least every three years.  This year Patrick Bourke
and Patrick Haren offer themselves for re-appointment 
by shareholders.
The Board will implement a process for the evaluation of its
effectiveness and that of its Committees and individual
directors during the year ending 31 March 2005 in
accordance with the requirements of the revised 
Combined Code. Page Thirteen Viridian Group PLC Annual Report and Accounts 2003-2004
Board Committees
The Board has delegated the decisions regarding the day-to-
day running of the Group to an Executive Committee
comprising the three executive directors, the Company
Secretary and the Managing Director, Electricity
Infrastructure.  The Committee normally meets monthly.
During the year there were 10 scheduled meetings and a
number of additional meetings to consider specific issues.
The Chairman may attend these meetings at his discretion.
The Nomination Committee is chaired by the Chairman of
the Board.  The Group Chief Executive and the four
independent non-executive directors are members of the
Committee.  It has a remit to consider and make
recommendations to the Board on all new appointments of
directors having regard to the overall balance and
composition of the Board; to consider succession planning;
and to make recommendations to the Board concerning the
reappointment of any non-executive director following
conclusion of his or her specified term of office.  Executive
search consultants are used by the Committee in the search
and selection process. 
The Remuneration Committee is chaired by Duncan Lewis
and all members of the Committee are independent non-
executive directors.  The Committee’s function is to
determine remuneration policy and specific remuneration
packages for executive directors, including pension
arrangements and service contracts.  The Committee’s remit
was expanded during the year to include the Chairman’s and
Company Secretary’s remuneration in addition to that of the
executive directors.  The Committee consults with the Group
Chief Executive on aspects of the other executive directors’,
and the Company Secretary’s, remuneration.  Details on
remuneration policy and the remuneration of directors are
provided in the Directors' Remuneration Report on page 18.
The Audit Committee is chaired by Desmond Smyth and all
members of the Committee are independent non-executive
directors.  The External Auditors, the Internal Auditors, the
Chairman, the Group Finance Director and other executive
directors may attend at the invitation of the Committee.  The
Committee’s remit is to monitor the integrity of the financial
statements and any formal announcements relating to the
Company’s financial performance; to review significant
financial reporting issues and judgements which they
contain; to review accounting policies and internal controls;
and to make recommendations on these matters to the Board
for decision.
During the year the Committee received regular updates
from the Risk Management Committee covering its review of
business risk registers and steps taken to enhance further the
risk management framework within the Group.  The Internal
Auditors, PricewaterhouseCoopers, provide the Committee
with reports covering risk assurance and updates on work
carried out under the internal audit plan.  The External
Auditors, Ernst & Young LLP, provide the Committee with
reports on the accounts of the Company and its subsidiaries.
Group Finance has also provided the Committee with
updates on the planned implementation of IFRS within 
the Group.
The Committee advises the Board on the appointment of
Auditors and their remuneration for audit and non-audit
services and keeps under review the cost effectiveness and
the independence and objectivity of the Auditors.  Ernst &
Young LLP provide external audit and non-audit services and
the costs of these services during the year ended 31 March
2004 are detailed in note 4 to the accounts.  Much of the
non-audit cost was associated with the disposals of the
Moyle Interconnector, Fleet and the Group’s 30%
shareholding in Lislyn.  Involvement by Ernst & Young LLP in
such transactions was considered appropriate and in the best
commercial interests of the Group.  With regard to the
provision of ongoing taxation services, including verification,
compliance and tax planning, the services of Ernst & Young
LLP are used where considered appropriate.
Corporate Governance Page Fourteen
Relations with Shareholders
Communication with shareholders continues to be a matter of
priority for the Board.  A detailed review of the business and
future developments is included on pages 2 to 10.  The Board
uses the AGM to communicate with shareholders and
welcomes their participation.
Shareholders are invited to vote separately on each resolution
and the percentage of proxy votes lodged for and against each
resolution is announced at the AGM (the percentage of votes
withheld will also be announced from this year).  Details of
resolutions to be proposed at the AGM on 2 July 2004 can be
found in the Notice of Annual General Meeting enclosed.
Regular contact is maintained with institutional and other
investors and details of related presentations and
announcements are available on the Group’s website:
www.viridiangroup.co.uk.  There is a continual programme of
meetings between the executive directors and major
shareholders on a range of issues and in addition major
shareholders have been offered meetings with the Chairman,
the Senior Independent Director and the non-executive
directors appointed in November 2003.  Feedback from
analysts and major shareholders on presentations and other
meetings is provided to the Board on a regular basis.
During the year the Board adopted a policy on the supply of
non-audit services by the External Auditors specifying areas of
non-audit work that can be carried out by the External Auditors
and the financial thresholds above which non-audit work
requires the approval of the Board.  The Board adopted a new
policy on the employment of former employees of the External
Auditors.  Confidential arrangements, by which Group staff
may raise concerns about possible improprieties in financial
reporting and other matters within the Group and have them
investigated and followed up, were also introduced.
The terms of reference of the Nomination, Remuneration and
Audit Committees were reviewed by the Board during the year
and are available on request from the Company and on the
Company’s website: www.viridiangroup.co.uk.
The following table shows the number of, and each individual member’s attendance at, meetings of the Board as well as of the
Nomination, Remuneration and Audit Committees during the year:
Director Patrick Patrick Duncan Harry Philip Dipesh Desmond Mike
Bourke Haren Lewis McCracken Rogerson Shah
2
Smyth T oms
2
Committee Membership (N) (N, R*, A) (N*, R
1
, A
1
)(N
2
, R
2
, A
2
) (N, R, A*) (N
2
, R
2
, A
2
)
(* denotes chairman)
Board 13 14 11 11 13 4 10 4
(14 meetings)
Nomination 2 1 2 1
(2 meetings)
Remuneration 5 3 2 4 2
(5 meetings)
Audit 3 2 1 3 1
(3 meetings)
N - Nomination Committee
1
Resigned in November 2003
R - Remuneration Committee
2
Appointed in November 2003
A - Audit Committee Page Fifteen Viridian Group PLC Annual Report and Accounts 2003-2004
Corporate Governance
Internal Control
Turnbull Compliance
The Board has fully implemented the Turnbull Guidance
"Internal Control: Guidance for Directors on the 
Combined Code".
The Board is responsible for the Group's system of internal
control and for reviewing its effectiveness.  Such a system is
designed to manage rather than eliminate the risk of failure
to achieve business objectives and can only provide
reasonable and not absolute assurance against material
misstatement or loss.
There is an ongoing process for identifying, evaluating and
managing the Group's significant risks.  This process has
been in place for the year ended 31 March 2004 and up to
the date of approval of the Annual Report and Accounts,
accords with the Turnbull Guidance "Internal Control:
Guidance for Directors on the Combined Code" and is
regularly reviewed by the Board. 
Work has continued throughout the year to embed internal
control and risk management further into the operations of
the business and to deal with areas of improvement which
come to management’s and the Board’s attention.
Businesses are required to maintain risk registers and review
them on a regular basis. 
Risk Management Committee
The Risk Management Committee, chaired by the Group
Finance Director, comprises a number of senior managers
from throughout the Group and meets monthly to assist the
Board in fulfilling its risk management and control
responsibilities.  It reviews the risk management process and
ensures appropriate communication between the Board,
Audit Committee, Executive Committee, Internal Auditors
and those with responsibility for risk management issues
within the Group.  The Committee regularly reviews
individual business risk registers as well as registers covering
a number of cross functional areas such as Accounting,
Treasury, Regulatory Affairs, Procurement and Information
Technology.  Business continuity and disaster recovery plans
are reviewed by the Committee annually.  The Committee
reviews the level of exposure to individual risks and its
acceptability within the policy on risk.  It reports to the Audit
Committee, the Executive Committee and the Board on a
regular basis.
Risk issues are also addressed at management meetings
through the review of risk information and risk indicators,
early warning signs of risks materialising and significant
control failings or weaknesses.  The Board specifically
considers and reviews risks of a corporate nature.
Internal Audit
The Group’s emphasis on sound management structures and
policies and procedures is backed up by operational and
financial review mechanisms and an externally resourced
internal audit function.  Internal Audit has carried out a
programme of audits and a review of the risk management
process during the year.  Results of the audits were reported
to management and the Audit Committee.  Internal Audit
also carries out follow-up reviews to determine the extent of
implementation of actions that have been agreed by
management.  The annual internal audit and risk assurance
programme and significant internal audit findings are
reviewed by the Audit Committee as are any relevant reports
prepared by the External Auditors. 
Annual Assessment
The Board has carried out its annual review of effectiveness
of the system of internal control.  In carrying out this review
it considered a number of key reports.  A report from the
Executive Committee set out its assessment of current
significant risks.  A report from the Risk Management
Committee verified that each executive director and senior
manager had completed and signed a letter of representation
confirming his or her responsibility in relation to internal
control, the completeness and accuracy of his or her risk
register and risk reporting, disclosing any known material
failings or weaknesses in internal controls.  Reports were also
considered from the Chairman of the Audit Committee on
risk management issues discussed during the year and from
Internal Audit on the risk management process.
The Board regards the development of the system of internal
control as an ongoing process and continues to review and
develop the internal control systems of the Group. Corporate Social Responsibility ("CSR")
The Group is committed to operating in a socially, ethically and
environmentally responsible manner in every aspect of its
business activities.  The Group aims to be recognised as
transparent and ethical in all its dealings and to contribute
through its normal business operations and community
involvement programmes to the general economic and social
well-being of the communities in which it operates.  During the
year ended 31 March 2004, the Group reviewed its approach
to CSR issues and its performance with the aim of embedding
CSR into its mainstream business processes.  
Following the review, the Board adopted a CSR policy with
targeted strategies to address CSR risks and opportunities
particularly with regard to environmental performance,
community involvement, marketplace and workplace issues.
Patrick Haren, the Group Chief Executive, has taken
responsibility at Board level for the CSR policy.  The Group will
utilise its existing risk management framework to identify and
manage the risks and opportunities arising from social,  ethical
and environmental issues and to oversee compliance with the
CSR policy.  This framework will assist the Group in reporting
on all areas of corporate responsibility. 
The Group’s continued commitment to corporate responsibility
was recognised, in January 2004, by being awarded
membership of the FTSE4Good Index Series. 
Environment
The Group has developed an environmental policy and
established a framework of objectives aimed at ensuring
continuous improvement and risk mitigation in any area which
may have significant environmental impact.  Harry McCracken,
Group Managing Director, Viridian Power & Energy, has
responsibility at Board level for environmental matters.
In May 2003 NIE and NIE Powerteam successfully completed
an independently-assessed strategic review of their certified
ISO 14001 Environmental Management System.  This
management system covers circa 75% of current Group activity.
The review identified the management system as effective with
a responsible attitude toward environmental performance.
Improvements in waste management, energy efficiency, visual
impact reduction, and pollution prevention were cited as
commendable.  Various areas for improvement were identified,
such as integrating resource usage and supply chain initiatives,
all of which have been incorporated into the 2004/05
Environmental Action Plan.  During the year the Group also
maintained its top quintile position in the Annual Arena
Network Environmental Management survey of Northern
Ireland’s leading companies.
In August 2003 "Action Renewables", a joint venture between
the Group and DETI, was launched to raise awareness on
climate change and to promote renewable energy.
EcoEnergy, our "green" electricity tariff, continues to grow;
sales during the year ended 31 March 2004 were in excess of
130GWh.  In January 2004 EcoEnergy was recommended by
Friends of the Earth in their guide to green electricity tariffs. 
Community and marketplace
The Group and its individual businesses are committed to the
communities in which they operate.  They seek to make a
worthwhile contribution to economic and social development
and environmental improvements in those communities.
During the last 12 months many local and national
organisations have continued to benefit from this commitment.
During the year the Board adopted a Group-wide Community
Involvement Policy supporting three key themes:
• Growth - promoting social and economic development;
• Environment - safeguarding and protecting the natural
environment; and
• Safety - promoting safe and efficient use of electricity.
Page Sixteen Page Seventeen Viridian Group PLC Annual Report and Accounts 2003-2004
Corporate Governance
New partnerships have been formed and longer term
partnering has continued during the year ended 
31 March 2004.
Sx3’s partnership with Action Cancer in its award winning
"Action Man" campaign for cancer awareness continued with
sponsorship and marketing expertise and helped raise
£715,000 during the campaign.  Sx3 continues to support the
Knights Wheelchair Basketball Team.
NIE has sponsored the Northern Ireland Ornithologists’ Club
programme to promote bird conservation throughout Northern
Ireland with local schools.
This year we completed our four-year "More Power to Trees"
partnership with the Woodland Trust.  Through the partnership
NIE has directly assisted in the establishment of 13 out of a total
of 50 new woods in Northern Ireland.  NIE’s contribution
represented more than 48% of the total number of trees
planted for the entire scheme.
In partnership with The Queen’s University of Belfast the
Group has supported a unique children’s health education
programme, "Medics in Primary Schools", in the greater 
Belfast area.
The award winning "Time to Read" project continued with staff
throughout the Group giving time each week to help school
children improve their reading skills.
Central to NIE’s activities is promoting energy efficiency, which
encourages reduced energy use and decreases reliance on
fossil fuels for energy generation.  Targets which help address
the key issues in the areas of climate change and fuel poverty
have been in place since 1997.  To date Northern Ireland
electricity customers have benefited from energy efficiency
measures with lifetime savings in excess of £100m.  In addition
over 1,900GWh of energy have been saved together with the
reduction of over 360,000 tonnes of carbon dioxide emissions
into the atmosphere. 
Workplace
The Group has a long standing and recognised commitment to
promote equality and provide a safe working environment.  A
Royal Society for the Prevention of Accidents Quality Safety
Audit was recently conducted on the Health & Safety
Management System and the implementation of Health &
Safety Policy and Procedures within NIE and NIE Powerteam.
The recommendations from this audit will be implemented to
enhance the present Health & Safety Management System and
demonstrate continual improvement in both quality and
effectiveness.  Harry McCracken, Group Managing Director,
Viridian Power & Energy, has responsibility at Board level for
health and safety issues.
As a premier Northern Ireland company with employees based
throughout Great Britain and the island of Ireland, the Group
ensures fairness, integrity and respect for all of its employees.
NIE, NIE Powerteam and Sx3 have all received Investors in
People accreditation (with NIE and NIE Powerteam achieving
re-accreditation during the year).
The Group strives to support under-represented groups and to
demonstrate an inclusive approach to diversity issues. The
Group is represented on a number of committees including the
Equality Forum NI, Employers’ Forum on Disability NI and
Women into Science and Engineering. 
The Company encourages share ownership amongst all 
of its employees, including regular offers under its 
Sharesave Scheme. Directors’ Remuneration Report
This report has been prepared to comply with the Directors’
Remuneration Report Regulations 2002 although compliance
is not required under Northern Ireland legislation. 
The report is divided into two sections, the first section
contains unaudited information and the second section
contains the audited information.
Remuneration Committee and Advisers
The Remuneration Committee (the " Committee") consists
solely of independent non-executive directors and was
chaired throughout the year by Duncan Lewis.  Its other
members are Desmond Smyth, Dipesh Shah (since
November 2003) and Mike Toms (since November 2003).
Philip Rogerson stood down from the Committee in
November 2003.  Its members have no personal financial
interests, other than as shareholders, in the matters
considered by the Committee and they have no conflicts
arising from cross-directorships or day-to-day involvement in
the running of the Group.   
The Committee operates within terms of reference agreed by
the Board.  The Committee’s function is to determine
remuneration policy and specific remuneration packages for
executive directors, including pension arrangements and
service contracts.  The Committee’s remit was expanded
during the year to include the Chairman’s and the Company
Secretary’s remuneration in addition to that of the executive
directors.  The Committee’s role also includes
recommending and monitoring the level and structure of
remuneration for senior management below Board level.
The terms of reference are available on the Company’s
website: www.viridiangroup.co.uk.
In October 2003 Towers Perrin was formally appointed by
the Committee as independent remuneration consultant to
advise on all aspects of directors’ remuneration except
pensions.  Towers Perrin also provides advice on senior
management remuneration and non-executive directors’
fees.  Prior to this Towers Perrin had advised the Committee
on specific matters and Monks Partnership (appointed in
1999) had advised on all aspects of executive director
remuneration.  Monks Partnership is a division of
PricewaterhouseCoopers who, since April 2003, have also
provided internal audit services to the Group.  Hewitt, Bacon
& Woodrow, the Company’s pensions advisers and actuaries
to the Group’s pension schemes, advise the Committee 
on pensions.  The Committee also consults with the 
Group Chief Executive on aspects of the other executive
directors’ remuneration. 
Remuneration Policy
The Company’s policy on executive directors’ remuneration
for the year ended 31 March 2004 was that the overall
package should be sufficiently competitive to attract, 
retain and motivate high quality executives capable of
achieving the Group’s objectives and thereby enhancing
shareholder value.
The package consists of basic salary, benefits, performance-
related bonus, a performance share plan and pension
benefits, with a significant proportion based on performance
and dependent upon the achievement of corporate and
individual targets.  In setting performance-related
remuneration the Committee has regard to the provisions 
set out in Schedule A to the Combined Code.  Consideration
is also given to pay and employment policies elsewhere in
the Group.
This report sets out the Company’s policy on executive
directors’ remuneration for the year ended
31 March 2004 and, so far as practicable, for subsequent
years.  There are no plans to change the current policy in
2004/05.  However, the Remuneration Committee considers
that a successful remuneration policy needs to be sufficiently
flexible to take account of future changes in the Company’s
business environment and in remuneration practice.  Any
changes in policy for years after 2004/05 will be described 
in future Directors’ Remuneration Reports, which will
continue to be put to shareholders for approval.  As
indicated to shareholders in 2000 the Committee will 
review the Performance Share Plan ("PSP") five years
following its adoption. 
Currently each executive director’s package is structured so
that, in the event that the maximum annual performance
bonus and the maximum award under the PSP are achieved,
over 50% of the total value of the package (excluding
pensions and benefits) is performance-related.  
Page Eighteen Page Nineteen Viridian Group PLC Annual Report and Accounts 2003-2004
Pension arrangements for executive directors will be
reviewed ahead of 6 April 2006 to determine what action
may be necessary to respond to, and where necessary to
ensure compliance with, the Inland Revenue’s pension
simplification arrangements, and in particular the
introduction of individual lifetime allowances announced by
the Chancellor of the Exchequer in his March 2004 budget. 
Basic Salary and Benefits
Salaries for executive directors are reviewed annually taking
account of mid-market levels amongst FTSE mid-250
companies generally with a focus on a group of utility and
industrial and service sector companies of a similar size.
Non-cash benefits include a company car and fuel and
private health insurance.
Annual Performance Bonus
The Annual Performance Bonus is a non-pensionable cash
payment for achieving targets set by the Committee.  The
maximum bonus opportunity for each executive director is
50% of basic salary, with the level of bonus awarded
depending on performance against challenging corporate
and individual targets.  35% is dependent upon achieving a
target EPS and the remaining 15% of the maximum bonus is
linked to individual targets agreed for each executive by the
Committee.  These relate to the achievement of key business
objectives, both short-term and long-term, derived from
corporate strategy including the development of new
business opportunities and improvements in operating
efficiencies where appropriate. The Committee reviews
targets and criteria annually to ensure appropriate
measurement of performance.
Performance Share Plan
The PSP links share awards to total shareholder return
("TSR") being dividends paid and change in share price.
Contingent share awards are made annually to each
executive director, based on the market value of the
Company’s shares at the date of award, with a maximum
value of 100% of basic salary.  The shares will not normally be
released to the participant until the completion of a three
year performance period.  As a result directors have a long-
term interest in the Company’s performance.  Vesting of
awards depends on the performance of the Company’s TSR
compared to that of a group of utility and industrial and
service sector companies (the "Comparator Group") over the
three year performance period. 
At the end of the performance period actual awards will be
determined as follows.  No award will vest if TSR
performance is below that of the median ranking company in
the Comparator Group.  If TSR performance is equal to that
of the median ranking company in the Comparator Group,
the participant will receive 50% of the award.  If TSR
performance is equal to or greater than that of the upper
quartile ranking company in the Comparator Group, the
participant will receive 100% of the award.  The proportion of
the award which the participant may receive for TSR ranking
between the median and upper quartile of the Comparator
Group will be calculated on a straight line basis.
The Committee will satisfy itself that the recorded TSR is
consistent with the achievement of commensurate
underlying financial performance before any shares are
received by participants.  
The Committee reviews the Comparator Group companies
annually when determining the contingent share awards.  For
contingent share awards made during the year ended 31
March 2004, the Comparator Group companies were:
ARRIVA Kelda
Associated British Ports Mersey Docks
AWG National Express
BAA National Grid Transco
Bristol Water Pennon
Centrica Scottish and Southern Energy
East Surrey Scottish Power
First Group Severn Trent
Forth Ports South Staffordshire
Go Ahead Group Stagecoach
International Power United Utilities
If during the three year performance period a Comparator
Group company is no longer appropriate (e.g. due to 
de-listing or takeover) to be included in the Comparator
Group, the Committee has discretion to adjust the
Comparator Group. 
The performance conditions are chosen to align the
executive directors’ rewards with the value created for the
Company’s shareholders in comparison to the value they
would have achieved by investing elsewhere.  In order to
ensure that the assessment of performance is independent
Towers Perrin report to the Committee as to whether
performance criteria have been met. 
The Committee keeps remuneration policy under review
and, as indicated to shareholders in 2000, will review the
operation of the PSP five years following its adoption.
Before introduction of the PSP in 2000 executive directors
participated in a deferred bonus long term incentive plan
(the "LTIP").  Final awards made under the LTIP to Patrick
Haren and Harry McCracken were exercised during the year.  
All Employee Sharesave Schemes
All of the executive directors participate in the Group's all
employee Sharesave Schemes and, as is normal market
practice, there are no performance conditions for the
exercise of options.
Directors’ Remuneration Report Page Twenty
Pensions
Executive directors have a normal pension age of 60 and
participate in the Company’s defined benefit pension
scheme.  For executive directors whose pensionable
earnings are capped by the Inland Revenue’s earnings cap
on pensionable salary imposed in 1989, the Complementary
Pension Plan ("CPP") provides alternative pension
arrangements.  CPP benefits are paid in the form of a lump
sum on retirement.  Annual performance bonuses, incentive
scheme benefits and benefits in kind for which executive
directors are eligible are not pensionable.
Service Contracts
All the executive directors have service contracts, dated 3
July 2003, which expire at age 60 and are terminable on 12
months’ notice by the Company and six months’ notice by
the director.  
Where the Company relieves the director of his duties
before the end of the notice period, the Company is required
to continue to pay the director’s salary and benefits
(including pension) for the whole period.  In the event of
contract termination by the employer or the director within
12 months of a change in control, the director will be entitled
to a compensation payment of 12 months’ basic salary and
benefits, bonus payments and employer’s pension
contributions.  These arrangements exclude any PSP award
that may become due under the PSP Rules.  
The Chairman and the non-executive directors do not have
service contracts, notice periods or entitlements to
compensation on early termination of their appointment.
They are appointed for fixed terms of three years and will
normally serve no more than three terms.  Their details are 
as follows:
Letter of Unexpired term at
Director Appointment dated 31 March 2004
D Lewis 14 February 2002 10 months
P Rogerson 1 July 2001
1
3 months
D Shah 1 November 2003 31 months
D Smyth 1 March 2002
1
11 months
M Toms 1 November 2003 31 months
1
replaces an earlier letter of appointment
Dipesh Shah and Mike Toms are subject to re-appointment at
the AGM on 2 July 2004 being the first AGM following their
appointment.  Patrick Bourke and Patrick Haren retire by
rotation at the AGM and, being eligible, offer themselves for
re-appointment.  Biographical details of all directors can be
found on page 11.
External appointments
The Company recognises the benefits of its directors
accepting appointments as non-executive directors of other
companies.  Executive directors are permitted to accept one
such appointment and the director concerned will retain the
fees.  Patrick Haren is a non-executive director of the
economic development agency, Invest Northern Ireland, 
and the fees received for the year ended 31 March 2004
were £10,480.  
Chairman and Non-Executive directors 
The Chairman’s remuneration is determined by the
Committee.  The remuneration of the non-executive
directors is determined by the Board within the limits set out
in the Articles of Association, with the non-executive
directors not participating in this process.  It takes the form of
a combined fee for attending meetings and chairing
committees as required.  The Chairman’s and non-executive
directors’ fees are reviewed annually with advice from
Towers Perrin.  The Chairman and the non-executive
directors are not eligible for pension scheme membership
and do not participate in any of the Group’s bonus or
incentive schemes.  
Performance Graph
The graph below compares the value of an investment of
£100 in the Company’s ordinary shares with an investment in
the FTSE 350 Index (including investment trusts) over the
five years starting 1 April 1999 assuming that all dividend
income is reinvested.  
The FTSE 350 Index was selected as it represents a 
broad equity market index in which the Company is a
constituent member.  
April
1999
April
2000
April
2001
April
2002
April
2003
April
2004
60
70
80
90
100
110
120
value of hypothetical
£100 holding
Viridian Group PLC
FTSE-350 Page Twenty-one Viridian Group PLC Annual Report and Accounts 2003-2004
Audited information
Directors’ Remuneration
The remuneration of individual directors for the year ended 31 March 2004 was as follows:
Basic salary/fees Benefits in kind Performance bonus Total
£'000 £'000 £'000 £'000
2004 2003 2004 2003 2004 2003 2004 2003
Non-Executive Chairman
P Rogerson 77.5 75.0 - - - - 77.5 75.0
Executive Directors
P Bourke 202.0 185.0 53.3 44.6 94.9 74.0 350.2 303.6
P Haren 300.0 256.0 90.3 72.0 141.0 102.4 531.3 430.4
H McCracken 202.0 185.0 21.2 20.9 94.9 74.0 318.1 279.9
Non-Executive Directors
D Lewis 25.0 24.0 - - - - 25.0 24.0
L Rouse - 22.0 - - - - - 22.0
D Shah 10.4 - - - - - 10.4 -
D Smyth 25.0 24.0 - - - - 25.0 24.0
M Toms 10.4 - - - - - 10.4 -
________ ________ ________ ________ ________ ________ ________ ________
Total 852.3 771.0 164.8 137.5 330.8 250.4 1,347.9 1,158.9
________ ________ ________ ________ ________ ________ ________ ________
________ ________ ________ ________ ________ ________ ________ ________
Dipesh Shah and Mike Toms were appointed as non-executive directors on 1 November 2003.  Lynda Rouse’s term of office
ended on 28 February 2003.
The benefits in kind for each executive director comprise the provision of a company car and fuel and private health insurance.
Benefits in kind for Patrick Haren and Patrick Bourke also include a discretionary bonus in respect of the benefit in kind tax
liability arising from the CPP .
Directors’ Remuneration Report Performance Share Plan
Directors’ interests in the PSP at 31 March 2004:
Contingent Share Awards
As at Made Lapsed As at Performance period
1 April during during 31 March
2003 year year 2004
P Bourke 28,432 - 28,432 - 1 Jan 2001 – 31 Dec 2003
39,445 - - 39,445 1 Jan 2002 – 31 Dec 2004
- 37,934 - 37,934 1 Jan 2003 – 31 Dec 2005
________ ________ ________ ________
Total 67,877 37,934 28,432 77,379
________ ________ ________ ________
P Haren 39,317 - 39,317 - 1 Jan 2001 – 31 Dec 2003
54,584 - - 54,584 1 Jan 2002 – 31 Dec 2004
- 56,338 - 56,338 1 Jan 2003 – 31 Dec 2005
________ ________ ________ ________
Total 93,901 56,338 39,317 110,922
________ ________ ________ ________
H McCracken 28,432 - 28,432 - 1 Jan 2001 – 31 Dec 2003
39,445 - - 39,445 1 Jan 2002 – 31 Dec 2004
- 37,934 - 37,934 1 Jan 2003 – 31 Dec 2005
________ ________ ________ ________
Total 67,877 37,934 28,432 77,379
________ ________ ________ ________
For contingent share awards made during the year the market value of the Company’s ordinary shares at the date of award was
532.5 pence.
Contingent share awards represent the maximum award possible if the performance criteria are met at the end of the three
year performance period.  At the end of the performance period actual awards will be determined as follows.  No award will
vest if TSR performance is below that of the median ranking company in the Comparator Group.  If TSR performance is equal to
that of the median ranking company in the Comparator Group, the participant will receive 50% of the award.  If TSR
performance is equal to or greater than that of the upper quartile ranking company in the Comparator Group, the participant
will receive 100% of the award.  The proportion of the award which the participant may receive for TSR ranking between the
median and upper quartile of the Comparator Group will be calculated on a straight line basis.
Contingent share awards made in 2001 lapsed following the end of the three year performance period as the Company’s TSR
performance was below that of the median ranking company in the Comparator Group.
Page Twenty-two Page Twenty-three
LTIP
Details of share awards under the LTIP are as follows:
As at Bonus Exercised As at Market price Market price Date
1 April awards during year 31 March at date of at date of exercised
2003 during year 2004 award exercise
(pence) (pence)
P Haren 33,465 1,739     35,204 -   701.3 580 5 March 2004
H McCracken 24,020 1,248 25,268 -     701.3 577.5 8 March 2004
No awards have been made under the LTIP since 2000.  The PSP replaced the LTIP .  Bonus award shares represent the
dividends which would have been paid over the Deferral Period in respect of the shares held in trust.  There were no
performance conditions in respect of awards exercised during the year.
Share Options
Directors’ interests in share options held under the all employee Sharesave Schemes were as follows:
As at Exercised Lapsed As at Option Market Normally
1 April during during 31 March price price at exercisable/exercised
2003 year year 2004 (pence) date of 
exercise
(pence)
P Bourke 2,350 - - 2,350 402 1 February 2006 – 31 July 2006
________ ________ ________ ________
Total 2,350 - - 2,350
________ ________ ________ ________
P Haren 839 839 - - 461.5 540 16 June 2003
2,350 - - 2,350 402 1 February 2006 – 31 July 2006
________ ________ ________ ________
Total 3,189 839 - 2,350 
________ ________ ________ ________
H McCracken 2,445 2,445 - - 287 590 1 March 2004
2,350 - - 2,350 402 1 February 2006 – 31 July 2006
________ ________ ________ ________
Total 4,795 2,445 - 2,350 
________ ________ ________ ________
No options were granted during the year.  No performance conditions attach to these options.
The aggregate gain made by directors on the exercise of share options during the year (based on the difference between the
mid-market price of a share on the day on which the options were exercised and the exercise price) was £8,067 (2003 –
£424,784).  The closing market price of the Company’s ordinary shares on 31 March 2004 was 552 pence and the range during
the year was 508 pence to 600 pence.   
Viridian Group PLC Annual Report and Accounts 2003-2004
Directors’ Remuneration Report Page Twenty-four
Pensions
Age at Increase in Increase in Total accrued pension at
31 March accrued pension accrued pension 31 March 2004
2004 (net of inflation) (including inflation)
£’000 pa £’000 pa £’000 pa
P Bourke 47 8 8 24
P Haren 53 21 23 100
H McCracken 54 10 14 135
The pension figures in the above table include, in the case of Patrick Bourke and Patrick Haren, the target accrued pensions
under the CPP .  At 31 March 2004 £12,294 pa of Patrick Bourke’s pension is due from the CPP and this would be paid in the
form of a tax-free lump sum at retirement of £124,964 (2003 - £76,773).  At 31 March 2004 £60,409 pa of Patrick Haren’s
pension is due from the CPP and this would be paid in the form of a tax-free lump sum at retirement of £743,973 (2003 -
£506,996).  
Directors’ Transfer value of Increase in transfer Transfer value of accrued
contributions for accrued pension at value over year less pension at 31 March 2004
the year 1 April 2003 directors’ contributions
£’000 £’000 £’000 £’000
P Bourke 12 138 65 215
P Haren 15 974 306 1,295
H McCracken 5 1,711 297 2,013
Transfer values represent a liability in respect of directors’ pensions entitlement, not an amount paid or due to the individual.
Following the 1997 and 2000 actuarial valuations of the Viridian Group Pension Scheme ("VGPS"), part of the designated
surplus was set aside for distribution to Focus (defined benefits section) members.  On retirement these funds would be used
to provide benefits in addition to those ordinarily provided by the VGPS, subject to Inland Revenue limits not being exceeded.
The final payment into these funds was made in May 2003.  As Focus members, each of the executive directors has designated
funds allocated to him by the VGPS trustees for his benefit.  The values of these amounts as at 31 March 2004 were: Patrick
Bourke £17,316, Patrick Haren £24,661 and Harry McCracken £43,719.  These amounts are not included in the accrued
benefits and transfer values quoted above.  Due to the impact of Inland Revenue limits, there may be limited scope to utilise
these funds.  Any unused funds would be returned to the general assets of the VGPS.
Target pension benefits are based on 
1
/ 30 of final salary for each year of pensionable service after 1 April 1998, 
1
/ 45 of final salary
for service between 1 April 1994 (31 March 1992 for Patrick Haren) and 1 April 1998 and 
1
/ 60 of final salary for service prior to
1 April 1994, with aggregate benefits subject to a maximum pension of 
2
/3 of final salary less retained benefits from previous
UK employments.  Harry McCracken reached this maximum limit in August 2003 and pensionable service accrual and member
contributions ceased from that date.  Pension increases are in line with inflation, with increases above 5% at the Company’s
discretion.
If a director takes early retirement without Board consent a pension with actuarial reduction would be payable from age 50.  A
pension on ill-health retirement would be based on potential service to normal pension age.  If the executive dies whilst in
service, a lump sum of four times final salary and a contingent spouse’s pension of 
2
/3 of the director’s pension (based on
service to normal pension age) would be payable. In the event of a change in control of the Company resulting in early
retirement, there would be no actuarial reduction for early payment of pension over the age of 50.
By order of the Board 
Ian Thom
Company Secretary
13 May 2004 Directors’ Report
Page Twenty-five Viridian Group PLC Annual Report and Accounts 2003-2004
The directors of Viridian Group PLC present their report and
the Group accounts for the year ended 31 March 2004.
Results and Dividends
The results for the year ended 31 March 2004 show a profit
after taxation of £74.3m. An interim dividend of 9.46p per
share was paid on 31 March 2004.  The directors
recommend payment of a final dividend of 24.20p per share
resulting in total dividends for the year of 33.66p at a total
cost of £44.8m.
Principal Activities and Review 
of Business Developments
The Group’s regulated energy activities of Power
Procurement, Transmission and Distribution and Supply of
electricity are carried out through its subsidiary, NIE.  The
Group’s unregulated energy activities are carried out through
its subsidiary Viridian Power and Energy Ltd which primarily
comprises Energia – competitive market supply, and
Huntstown – CCGT plant.  The Group also provides other
business services through unregulated subsidiaries, notably
Sx3 - IT and business services and NIE Powerteam - specialist
infrastructure contracting.
On 14 April 2003 the Group completed the disposal of the
Moyle Interconnector with net proceeds of £122.2m.  The
disposal resulted in a profit of £17.7m.
On 15 May 2003 the Group completed the disposal of its
shareholding in Lislyn for a nominal cash sum.  A provision of
£8.3m was made by the Group in the year ended 31 March
2003 in respect of its investment in Lislyn.  On 31 October
2003 Lislyn went into voluntary administration.  Under the
Electricity (Protected Persons) Pensions Regulations
(Northern Ireland) 1992 the Group has certain obligations in
respect of those members of Lislyn’s defined benefit pension
scheme who were employees of NIE at privatisation.  The
Group has made a provision of £2.5m in the year ended 31
March 2004 in respect of these obligations.
On 26 November 2003 the Group completed the disposal of
Fleet with net proceeds of £13.4m.  The disposal resulted in
a loss of £1.8m.
On 5 May 2004 the Company redeemed its special rights
non-voting redeemable preference share of £1 ("Special
Share") at par, following notification from DETI that it
required the Special Share to be redeemed.
Reviews of the Group's activities and potential future
developments are provided in the Chairman's Statement, the
Group Chief Executive's Review and the Financial Review.
Share Capital
Details of the authorised and issued share capital are given in
note 23 to the accounts.  
Directors
The present directors are:
Philip Rogerson (Chairman)
Patrick Haren (Group Chief Executive)
Patrick Bourke (Group Finance Director)
Harry McCracken (Group Managing Director, Viridian Power
& Energy)
Desmond Smyth (Senior Independent Director)
Duncan Lewis
Dipesh Shah
Mike Toms
All of the directors held office throughout the period with the
exception of Dipesh Shah and Mike Toms who were
appointed as non-executive directors on 1 November 2003.
Directors’ Report The directors’ beneficial interests in ordinary shares of the
Company (which include those of their families) are shown
below, other than with respect to share awards under the
PSP and the LTIP (see pages 22 and 23) and with respect to
options to acquire ordinary shares under the all employee
Sharesave Schemes (see page 23).  At 31 March 2003, the
executive directors were regarded as interested in 338,509
shares held by the Trustee of the Viridian Group 1997
Qualifying Employee Share Ownership Trust ("Quest").  All
employees (including executive directors) were potential
beneficiaries of the Quest which previously held shares to
satisfy options granted under the Company’s Sharesave
Schemes.  At 31 March 2004 and 30 April 2004, no shares
were held in the Quest (2 May 2003 – 334,029).
Shares
2004 2003*
No. No.
Philip Rogerson 9,189 9,189
Patrick Haren 78,112 77,181
Patrick Bourke 2,000 2,000
Harry McCracken 62,802 62,802
Desmond Smyth 10,000 10,000
Duncan Lewis - -
Dipesh Shah - -
Mike Toms 2,000 -
* As at 31 March 2003 or subsequent date of appointment.
There have been no changes in directors’ share interests
between 31 March 2004 and 13 May 2004.
At this year’s AGM Patrick Bourke and Patrick Haren will
retire by rotation and offer themselves for re-appointment.
Dipesh Shah and Mike Toms, as required under the Articles
of Association, will seek re-election as directors following
their appointment by the Board during the year.
Biographical details of the directors are set out on page 11.
Research and Development
The Group is committed to a programme of research and
development activities appropriate to its businesses.  In
particular, NIE in conjunction with local universities and other
partners is committed to research and development in the
areas of embedded generation systems, particularly
renewable generation, performance enhancement of
interconnection and windpower.  
Sx3 carries out research and development into internet-
based software for use in local authority systems.
Substantial Shareholdings
As at 30 April 2004 the Group had been notified of the
following substantial shareholdings:
No. of shares %
Legal and General Assurance Soc. Ltd 4,440,115 3.33
Standard Life Investments 4,753,069 3.57
Equal Opportunities
The Group has been pro-active in compliance with fair
employment, sex discrimination, equal pay, disability
discrimination and race discrimination legislation in Northern
Ireland.  It regularly monitors its actions to promote
compliance and to ensure that it provides equality of
opportunity in all its employment practices.
Disability
The Group has taken active steps to implement the Disability
Discrimination Act.  It is Group policy to provide people 
with disabilities equal opportunities for employment, 
training and career development, having regard to aptitude
and ability.  Any member of staff who becomes disabled
during employment is given assistance and re-training 
where possible.
Page Twenty-six Page Twenty-seven Viridian Group PLC Annual Report and Accounts 2003-2004
Employee Participation
The Group recognises the value of effective communication
with employees.  There are well-established arrangements
for consultation and the promotion of employee relations
through a framework of company councils.  A number of
Group-wide consultative committees are also in place dealing
with areas such as health and safety and current ideas.
NIE, NIE Powerteam and Sx3 have all achieved Investors in
People accreditation.
Health and Safety at Work of Employees
The Group strives for continual improvement in safety
performance through review of safe working practices and
increased safety awareness of all employees. 
Charitable and Political Donations
The Group’s wide-ranging sponsorship activities are
described in the Corporate Social Responsibility section on
page 16.  Apart from sponsorship, donations to charities in
the year were £13,000 (2003 - £20,000).  There were no
contributions for political purposes.
Auditors
A resolution to re-appoint Ernst & Young LLP as External
Auditors and to authorise the directors to determine their
remuneration will be proposed at the AGM.
Annual General Meeting
Full details of the AGM to be held on 2 July 2004 and
explanations of the resolutions to be proposed at the
meeting appear in the Notice of Annual General Meeting
enclosed separately with this report.
Payment of Suppliers
The Group’s procurement policy is to source equipment,
goods and services from a wide range of suppliers
throughout the European Union and beyond in 
accordance with commercial practices based on fairness 
and transparency.
The Group recognises the important role that suppliers play
in its business, and works to ensure that payments are made
to them in accordance with agreed contract terms.
By order of the Board
Ian Thom
Company Secretary
Registered Office
120 Malone Road
Belfast BT9 5HT
Registered Number: NI33250
13 May 2004
Directors’ Report Page Twenty-eight
Company law requires the directors to prepare accounts for
each financial year which give a true and fair view of the state
of affairs of the Company and the Group and of the profit or
loss of the Group for that period.  In preparing those accounts
the directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent; and
• state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the accounts.
The directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time
the financial position of the Group and which enable them to
ensure that the accounts comply with the Companies (Northern
Ireland) Order 1986.  They are also responsible for
safeguarding the assets of the Group and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
Statement of Directors’ Responsibilities 
in Respect of the Accounts Page Twenty-nine Viridian Group PLC Annual Report and Accounts 2003-2004
Independent Auditors’ Report to the 
Members of Viridian Group PLC
We have audited the Group's financial statements for the year
ended 31 March 2004 which comprise the Group Profit and
Loss Account, Group Statement of Total Recognised Gains
and Losses, Group Balance Sheet, Company Balance Sheet,
Group Cash Flow Statement and the related notes 1 to 32.
These financial statements have been prepared on the basis
of the accounting policies set out therein.  We have also
audited the information in the Directors’ Remuneration
Report that is described as having been audited.
This report is made solely to the Company's members, as a
body, in accordance with Article 243 of the Companies
(Northern Ireland) Order 1986.  Our audit work has been
undertaken so that we might state to the Company's
members those matters we are required to state to them in an
auditors' report and for no other purpose.  To the fullest
extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the
Company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors are responsible for preparing the Annual
Report, including the financial statements which are required
to be prepared in accordance with applicable United
Kingdom law and accounting standards as set out in the
Statement of Directors' Responsibilities, in relation to the
financial statements.
Our responsibility is to audit the financial statements and the
part of the Directors’ Remuneration Report to be audited in
accordance with relevant legal and regulatory requirements,
United Kingdom Auditing Standards and the Listing Rules of
the Financial Services Authority.
We report to you our opinion as to whether the financial
statements give a true and fair view and whether the financial
statements and the part of the Directors’ Remuneration
Report to be audited have been properly prepared in
accordance with the Companies (Northern Ireland) Order
1986.  We also report to you if, in our opinion, the Directors'
Report is not consistent with the financial statements, if the
Company has not kept proper accounting records, if we have
not received all the information and explanations we require
for our audit, or if information specified by law or the Listing
Rules regarding directors' remuneration and transactions with
the Group is not disclosed.
We review whether the Corporate Governance Statement
reflects the Group’s compliance with the seven provisions of
the Combined Code specified for our review by the Listing
Rules, and we report if it does not.  We are not required to
consider whether the Board's statements on internal control
cover all risks and controls, or form an opinion on the
effectiveness of the Group's corporate governance
procedures or its risk and control procedures.
We read other information contained in the Annual Report
and consider whether it is consistent with the audited
financial statements.  This other information comprises the
Group Financial Highlights, the Chairman's Statement, Group
Chief Executive’s Review, Financial Review, Corporate
Governance Statement, the unaudited part of the Directors’
Remuneration Report and the Directors' Report.  We consider
the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the
financial statements.  Our responsibilities do not extend to
any other information.
Basis of audit opinion 
We conducted our audit in accordance with United Kingdom
Auditing Standards issued by the Auditing Practices Board.
An audit includes examination, on a test basis, of evidence
relevant to the amounts and disclosures in the financial
statements and the part of the Directors' Remuneration
Report to be audited.  It also includes an assessment of the
significant estimates and judgments made by the directors in
the preparation of the financial statements, and of whether
the accounting policies are appropriate to the Group's
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the
information and explanations which we considered necessary
in order to provide us with sufficient evidence to give
reasonable assurance that the financial statements and the
part of the Directors’ Remuneration Report to be audited are
free from material misstatement, whether caused by fraud or
other irregularity or error.  In forming our opinion we also
evaluated the overall adequacy of the presentation of
information in the financial statements and the part of the
Directors’ Remuneration Report to be audited.
Opinion
In our opinion the financial statements give a true and fair
view of the state of affairs of the Company and of the Group
as at 31 March 2004 and of the profit of the Group for the
year then ended and the financial statements and the part of
the Directors’ Remuneration Report to be audited have been
properly prepared in accordance with the Companies
(Northern Ireland) Order 1986.
Ernst & Young LLP
Registered Auditor
Belfast
13 May 2004
Independent Auditors’ Report Page Thirty
Group Profit and Loss Account
for the year ended 31 March 2004
2004 2003
Note
Total Total
£m £m
TURNOVER
Turnover: Group and share of discontinued joint venture's turnover 834.2 789.0
Less: share of discontinued joint venture's turnover - (7.8)
Continuing operations 831.2 763.4
Discontinued operations 3.0 17.8
GROUP TURNOVER 3 834.2 781.2
Operating costs 4 (733.4) (671.7)
________ ________
GROUP OPERATING PROFIT
Operating profit before goodwill amortisation
-     Continuing operations 102.6 105.0
-     Discontinued operations 0.4 6.7
103.0 111.7
Goodwill amortisation
-     Continuing operations (2.2) (2.2)
100.8 109.5
Share of operating loss of discontinued associate - (1.3)
Share of operating loss of discontinued joint venture - (3.5)
________ ________
TOTAL OPERATING PROFIT 100.8 104.7
Profit on disposal of discontinued operation 5 17.7 -
Loss on disposal of discontinued operation 5 (1.8) -
Decrease in provision in respect of investment in discontinued joint  5 - 8.4
venture undertaking
Provision in respect of investment in discontinued associate undertaking 5 (2.5) (8.3)
________ ________
PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST AND TAXATION 114.2 104.8
Net interest payable
-     Group 7 (25.0) (24.1)
-     Share of discontinued joint venture - (2.2)
-     Share of discontinued associate - (0.1)
________ ________
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 89.2 78.4
Tax on profit on ordinary activities 8 (14.9) (26.7)
________ ________
PROFIT FOR THE FINANCIAL YEAR ATTRIBUTABLE TO MEMBERS 24 74.3 51.7
OF THE PARENT COMPANY
Dividends 10 (44.8) (43.2)
________ ________
RETAINED PROFIT FOR THE YEAR 24 29.5 8.5
________ ________
________ ________
Pence Pence
EARNINGS PER SHARE
BASIC 11 55.9 39.2
DILUTED 11 55.8 39.1
Group Statement of Total Recognised Gains and Losses
for the year ended 31 March 2004
2004 2003
£m £m
Profit for the financial year excluding share of losses of discontinued joint venture and associate 74.3 58.8
Share of discontinued joint venture loss for the year - (5.7)
Share of discontinued associate loss for the year - (1.4)
Exchange difference on retranslation of net assets of subsidiary undertakings (0.2) 0.2
________ ________
Total recognised gains and losses relating to the year 74.1 51.9
________ ________
________ ________ Page Thirty-one Viridian Group PLC Annual Report and Accounts 2003-2004
Balance Sheets
As at 31 March 2004
Group Company
Note 2004 2003 2004 2003
£m £m £m £m
FIXED ASSETS
Intangible assets 12 39.0 43.6 - -
Tangible assets 13 967.8 1,089.0 - -
Investment in associate 14 - - - -
Investment in own shares 14 - 1.0 - 1.0
Investment in subsidiaries 14 - - 697.0 697.0
Other investment 14 0.3 0.2 - -
________ ________ ________ ________
1,007.1 1,133.8 697.0 698.0
________ ________ ________ ________
CURRENT ASSETS
Stocks 15 13.9 11.2 - -
Debtors 16 159.6 169.5 110.1 156.2
Investments 17 47.5 32.0 27.0 10.0
Cash at bank and in hand 10.6 13.7 9.1 3.2
________ ________ ________ ________
231.6 226.4 146.2 169.4
________ ________ ________ ________
CREDITORS (amounts falling due within one year) 18 (244.7) (284.9) (182.5) (147.1)
________ ________ ________ ________
NET CURRENT (LIABILITIES)/ASSETS (13.1) (58.5) (36.3) 22.3
________ ________ ________ ________
TOTAL ASSETS LESS CURRENT LIABILITIES 994.0 1,075.3 660.7 720.3
CREDITORS (amounts falling due after more 18 (435.1) (501.7) (39.3) (83.0)
than one year)
PROVISIONS FOR LIABILITIES AND CHARGES 20 (115.3) (120.3) - -
DEFERRED INCOME 22 (166.6) (206.3) - -
________ ________ ________ ________
NET ASSETS 3 277.0 247.0 621.4 637.3
________ ________ ________ ________
________ ________ ________ ________
CAPITAL AND RESERVES
Called up share capital 23 33.3 33.3 33.3 33.3
Share premium account 24 10.0 9.3 10.0 9.3
Merger reserve 24 - - 442.9 442.9
Profit and loss account 24 233.7 204.4 135.2 151.8
________ ________ ________ ________
SHAREHOLDERS’ FUNDS 277.0 247.0 621.4 637.3
________ ________ ________ ________
________ ________ ________ ________
The accounts on pages 30 to 63 were approved by the Board of directors and were signed on its behalf by:
Philip Rogerson Patrick Bourke
Chairman Group Finance Director
Date: 13 May 2004
Balance Sheets Page Thirty-two
Group Cash Flow Statement
for the year ended 31 March 2004
Note 2004 2003
£m £m
CASH FLOW FROM OPERATING ACTIVITIES 28 167.3 157.6
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 29 (26.8) (35.6)
TAXATION (19.2) (7.2)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT 29 (79.7) (117.8)
ACQUISITIONS AND DISPOSALS 29 135.6 70.9
EQUITY DIVIDENDS PAID (43.6) (41.9)
________ ________
CASH INFLOW BEFORE USE OF LIQUID RESOURCES 133.6 26.0
AND FINANCING
MANAGEMENT OF LIQUID RESOURCES (15.5) 12.9
FINANCING 29 (121.2) (62.5)
________ ________
DECREASE IN CASH IN THE YEAR (3.1) (23.6)
________ ________
________ ________
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN
NET DEBT
Decrease in cash in the year (3.1) (23.6)
Cash outflow from movement in debt 121.9 62.6
Cash outflow/(inflow) from movement in liquid resources 15.5 (12.9)
________ ________
Change in net debt resulting from cash flows 30 134.3 26.1
Translation difference 30 5.1 (13.0)
________ ________
Movement in net debt in the year 139.4 13.1
Net debt at beginning of year 30 (522.1) (535.2)
________ ________
Net debt at end of year 30 (382.7) (522.1)
________ ________
________ ________ Page Thirty-three Viridian Group PLC Annual Report and Accounts 2003-2004
Notes to the Accounts 31 March 2004
1. Basis of Consolidation and Presentation of Financial Information
The Group accounts consolidate the accounts of the Company and its subsidiary undertakings drawn up to 31 March 2004.  No
separate profit and loss account is presented for Viridian Group PLC as permitted by Article 238 (3) of the Companies (Northern
Ireland) Order 1986.
Entities in which the Group held an interest on a long-term basis and which were jointly controlled by the Group and one or more
other venturers under a contractual arrangement were treated as joint ventures.  In the Group accounts, joint ventures were
accounted for using the gross equity method.
Entities, other than subsidiary undertakings or joint ventures, in which the Group had a participating interest and over whose
operating and financial policies the Group exercised a significant influence were treated as associates.  In the Group accounts,
associates were accounted for using the equity method.
As more fully explained in note 1 to the 1998 accounts, the conditions for merger accounting set out in FRS 6 "Acquisitions and
Mergers" and schedule 4 (A) to the Companies (Northern Ireland) Order 1986 were not fully met in the Group reconstruction which
led to the acquisition by the Company of NIE.  However the directors considered that if acquisition accounting had been applied, the
Group accounts would have failed to show a true and fair view for the shareholders since they had a continuing interest in NIE before
and after the reconstruction.  Accordingly merger accounting was applied.  No quantification has been given of this departure
because to do so would be misleading.
2. Accounting Policies
Accounting convention
The accounts are prepared under the historical cost convention and in accordance with applicable accounting standards except as
indicated in note 1 above.  
Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation.  The charge for depreciation is calculated so as to write off the cost of assets
over their estimated useful lives on a straight-line basis, except for infrastructure assets as referred to below.  The lives of each major
class of depreciable asset are as follows:
Infrastructure assets 40 years
Depreciation is charged at 3% for 20 years followed by 2% for the remaining 20 years
Generation assets Up to 30 years
Non-operational buildings - freehold and long leasehold Up to 50 years
Fixtures and equipment Up to 25 years
Vehicles and mobile plant Up to 5 years
Freehold land is not depreciated.
Notes to the Accounts Page Thirty-four
Goodwill
Goodwill may arise on the acquisition of subsidiary and associated undertakings, the trade and assets of a business, and interests in
joint ventures. It represents the excess of cost over fair value of the Group’s share of tangible assets acquired.  In accordance with
FRS 10 "Goodwill and Intangible Assets", such goodwill is capitalised as an intangible asset and amortised by equal instalments against
profit over its estimated useful economic life which usually does not exceed 20 years.  It is reviewed for impairment at the end of the
first full financial year following the acquisition and in other periods if events or changes in circumstances indicate that the carrying
value may not be recoverable.
Research and development
Research and development expenditure is written off as incurred, except that software development expenditure incurred on specific
projects is carried forward when its future recoverability can reasonably be regarded as assured.  Any expenditure carried forward is
amortised by equal instalments against profit over its estimated useful economic life.
Investments
Current asset investments are shown at the lower of cost and net realisable value.
Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction or at the contracted rate if the
transaction is covered by a forward foreign currency contract.  Monetary assets and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the balance sheet date or where appropriate at the forward contract rate.
The accounts of overseas subsidiary undertakings are translated at the rate of exchange ruling at the balance sheet date.  The
exchange difference arising on the retranslation of opening net assets is taken directly to reserves.  All other translation differences
are taken to the profit and loss account with the exception of differences on foreign currency borrowings to the extent that they are
used to finance or provide a hedge against Group equity investments in foreign enterprises, which are taken directly to reserves.  
Financial Instruments
Financial instruments and derivatives are used to hedge interest rate, foreign exchange and commodity risks.  Profits and losses on
financial instruments and derivatives are reported in the profit and loss account in the period in which the underlying hedged
transactions are recognised.  The Group does not hold derivative financial instruments for speculative purposes.  The Financial
Review on pages 8 to 10 provides detail on how the Group manages its financial risks; and disclosure of the Group’s financial
instruments is set out in note 31.
Stocks and work in progress
Stocks are valued at the lower of average purchase price and net realisable value.
Pension costs
The Group has both defined benefit and defined contribution pension arrangements. Pension costs in respect of defined benefit
arrangements are assessed by qualified actuaries and are charged to the profit and loss account so as to recognise the expected cost
of benefits over members' working lives with the employer.  Pension costs in respect of defined contribution arrangements are
charged to the profit and loss account as they become payable.
Grants
Grants received in respect of expenditure charged to the profit and loss account during the year are included in the profit and loss
account.
Deferred taxation
Deferred taxation is provided on timing differences arising from the different treatment for accounts and taxation purposes of
transactions and events recognised in the accounts of the current year and previous years.  Deferred taxation is measured at the tax
rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or
substantially enacted at the balance sheet date.  Deferred taxation is discounted using the post tax yields to maturity that could be
obtained at the balance sheet date on government bonds with maturity dates similar to those of the deferred taxation assets and
liabilities.  Deferred taxation is not provided in respect of gains arising from the sale or revaluation of fixed assets unless, by the
balance sheet date, a binding commitment to sell the asset has been entered into and it is unlikely that any gain will be rolled over. Page Thirty-five Viridian Group PLC Annual Report and Accounts 2003-2004
Deferred income
Grants and customers' contributions received in respect of fixed assets are deferred and released to the profit and loss account by
instalments over the expected useful lives of the related assets.  Support and maintenance revenue is deferred on invoicing and
released to the profit and loss account over the term of the support and maintenance period.
Software licence revenue
Revenue in respect of software licences is recognised where delivery is complete and there are no future elements to be delivered or
there are no significant customisations which are essential to the functionality of the delivered element.  Where the software requires
significant customisation over an extended period, licence revenue is recognised over the period of implementation on a percentage
complete basis.
Long-term contract accounting
Profit on long-term contracts is taken as the work is carried out if the outcome can be assessed with reasonable certainty.  The profit
included is calculated on a prudent basis to reflect the proportion of the work carried out at the period end, by recording turnover
and related costs as contract activity progresses.  Turnover is calculated as that proportion of total contract value which costs incurred
to date bear to total expected costs for that contract. Revenues derived from variations on contracts are recognised only when they
have been accepted by the customer.  Full provision is made for losses on all contracts in the year in which they are first foreseen.
Hire purchase and finance lease contracts
Assets held under finance leases, which are leases where substantially all the risks and rewards of ownership of the asset have passed
to the Group, and hire purchase contracts are capitalised in the balance sheet and are depreciated over their useful lives.  The capital
elements of future obligations under leases and hire purchase contracts are included as liabilities in the balance sheet.  The interest
elements of the rental obligations are charged to the profit and loss account over the periods of the leases and hire purchase
contracts and represent a constant proportion of the balance of capital repayments outstanding.
Rentals payable under operating leases are charged to the profit and loss account on a straight-line basis over the lease term.
Capitalised interest
Interest on the funding attributable to significant capital projects is capitalised during the period of construction and written off as part
of the total cost over the operational life of the asset.  All other interest payable and receivable is reflected in the profit and loss
account as it arises.
Bid costs
The Group expenses, when incurred, all bid costs and other related costs where recovery is not specifically provided for in
accordance with the contract terms, except that directly attributed costs (which can be separately identified and reliably measured)
are recognised as assets when it is virtually certain that a contract will be achieved and that contract is expected to generate future
net cash inflows with a net present value at least equal to the amounts recognised as an asset. Costs incurred before this level of
certainty is obtained are not subsequently reinstated.
Decommissioning
Provision is made where appropriate for the estimated decommissioning costs at the end of the producing lives of the Group’s
infrastructure and generation assets on a discounted basis. Capitalised decommissioning costs are depreciated over the useful lives of
the related assets. The unwinding of the discount is included within net interest payable.
Notes to the Accounts Page Thirty-six
3. Turnover and Segmental Information
Turnover represents the invoiced value of goods sold and services provided, exclusive of value added tax, with the following
exceptions:
• electricity sales, which include an estimate of the sales value of units supplied to customers between the date of the last meter
reading and the period end; and
• software licence revenue, support and maintenance revenue and turnover in respect of long-term contracts which are
recognised in accordance with the accounting polices set out in note 2.
Discontinued operations comprise the Moyle Interconnector and Fleet as set out in note 14.
Group turnover and Group operating profit are analysed between the businesses as follows:
Group turnover Group operating profit
External Internal Total External Internal Total
2004 2004 2004 2003 2003 2003 2004 2003
£m £m £m £m £m £m £m £m
Continuing operations:
NIE 501.9 55.6 557.5 473.9 49.6 523.5 75.9 89.9
NIE Powerteam 23.5 39.7 63.2 12.9 34.3 47.2 2.4 2.4
Viridian Power & Energy 205.5 0.5 206.0 161.2 0.5 161.7 18.3 6.4
Sx3 98.3 19.0 117.3 100.4 20.3 120.7 7.1 3.4
Other 2.0 0.4 2.4 15.0 0.7 15.7 - 3.9
Discontinued operations:
Moyle Interconnector -- - 14.1 - 14.1 - 6.4
Fleet 3.0 2.3 5.3 3.7 4.2 7.9 0.4 0.3
Consolidation adjustments:
Inter-group elimination - (117.5) (117.5) - (109.6) (109.6) (1.1) (1.0)
Goodwill amortisation -- - -- - (2.2) (2.2)
_____________________________ _____________________________ ______________________
834.2 - 834.2 781.2 - 781.2 100.8 109.5
_____________________________ _____________________________ ______________________
_____________________________ _____________________________ ______________________
The Group operates primarily in the United Kingdom with the exception of the following operations originating in the RoI.
Turnover Operating profit
External Internal Total External Internal Total
2004 2004 2004 2003 2003 2003 2004 2003
£m £m £m £m £m £m £m £m
Viridian Power & Energy 127.9 - 127.9 97.0 - 97.0 14.4 4.8
NIE Powerteam 19.0 - 19.0 9.9 - 9.9 0.5 0.2
_____________________________ _____________________________ ______________________
_____________________________ _____________________________ ______________________ Page Thirty-seven Viridian Group PLC Annual Report and Accounts 2003-2004
3. Turnover and Segmental Information (Continued)
In addition to the disclosures required under SSAP 25 given above, the directors believe the following breakdown of NIE's business
according to its regulated entitlement is useful to shareholders:
Turnover Operating profit
2004 2003 2004 2003
£m £m £m £m
Based on regulated entitlement:
Power Procurement/SONI 383.1 343.7 5.6 5.9
Transmission and Distribution 164.9 168.6 73.9 76.2
NIE Supply 447.0 452.2 5.8 7.8
Other 0.2 0.3 0.1 -
Inter-group elimination (428.2) (441.3) - -
_________________________ _________________________
567.0 523.5 85.4 89.9
Adjustment for under-recovery (9.5) - (9.5) -
_________________________ _________________________
557.5 523.5 75.9 89.9
_________________________ _________________________
_________________________ _________________________
The under-recovery adjustment represents the amount by which NIE under-recovered against its regulated entitlement.
Segmental information by destination is not materially different from that disclosed above by origin.
Group net operating assets are analysed between the businesses as follows:
Net operating assets
2004 2003
£m £m
Continuing operations:
NIE 594.2 579.1
NIE Powerteam 7.4 5.0
Viridian Power & Energy 152.4 159.7
Sx3 14.6 17.3
Other (5.5) (7.1)
Discontinued operations:
Moyle Interconnector - 106.4
Fleet - 13.1
Consolidation adjustments:
Inter-group elimination (5.0) (5.1)
_________________________
Net operating assets 758.1 868.4
Unallocated net liabilities (481.1) (621.4)
_________________________
Total net assets 277.0 247.0
_________________________
_________________________
Unallocated net liabilities include net debt, proposed dividends, corporation tax, deferred tax, goodwill and loan notes recoverable.
Group net operating assets are attributable to operations within the United Kingdom with the exception of the following operations
originating in the RoI.
Net operating assets
2004 2003
£m £m
Viridian Power & Energy 155.4 161.1
NIE Powerteam 2.7 2.4
_________________________
_________________________
The segmental analysis has been amended and comparative amounts have been restated to show Group net operating assets as the
directors believe this information is more meaningful to shareholders.
Notes to the Accounts Page Thirty-eight
4. Operating Costs
Operating costs were as follows:
2004 2003
Continuing Discontinued Total Continuing Discontinued Total
£m £m £m £m £m £m
Energy costs 471.6 - 471.6 409.6 - 409.6
Staff costs 88.5 0.6 89.1 71.0 - 71.0
Depreciation 45.9 2.5 48.4 38.9 7.4 46.3
Goodwill amortisation 2.2 - 2.2 2.2 - 2.2
Other operating charges 120.3 1.8 122.1 134.7 7.9 142.6
____________________________________ ____________________________________
728.5 4.9 733.4 656.4 15.3 671.7
____________________________________ ____________________________________
____________________________________ ____________________________________
The directors believe that the nature of the Group’s business is such that the analysis of operating costs set out in the Companies
(Northern Ireland) Order 1986 format is not appropriate.  As required by the Order, the directors have therefore adopted the
presented format so that operating costs are disclosed in a manner appropriate to the Group’s activities.
2004 2003
Operating costs also include: £m £m
Depreciation charge:
-     On tangible fixed assets owned 48.4 46.3
Operating lease rental:
-     Plant and machinery, office equipment 2.0 0.4
-     Land and buildings 1.5 1.1
Auditors' remuneration in respect of services to the Group:
-     Audit services 0.2 0.2
-     Non-audit services   -   taxation advice 0.1 0.1
-   other consultancy 0.1 0.1
________ ________
________ ________
Auditors’ remuneration in respect of audit services to the Company amounted to £60,000 (2003 - £56,000).
In addition, auditors' remuneration for non-audit services (taxation and other advice) in respect of disposals amounted to £0.8m (2003
- £0.7m).
The depreciation charge is net of the associated release of customers' contributions and grants of £6.0m (2003 - £7.7m). Page Thirty-nine Viridian Group PLC Annual Report and Accounts 2003-2004
5. Exceptional Items
Note 2004 2003
£m £m
Recognised after arriving at total operating profit:
-     Profit on disposal of discontinued operation (i) 17.7 -
-     Loss on disposal of discontinued operation (ii) (1.8) -
-     Decrease in provision in respect of investment in discontinued joint venture undertaking (iii) - 8.4
-     Provision in respect of investment in discontinued associate undertaking (iv) (2.5) (8.3)
________ ________
13.4 0.1
________ ________
________ ________
(i) Profit on disposal of discontinued operation in the year relates to the disposal on 14 April 2003 of the Moyle Interconnector.
(ii) Loss on disposal of discontinued operation in the year relates to the disposal on 26 November 2003 of Fleet.
(iii) In 2002/03, following the disposal of the Group’s interest in nevada, provisions of £8.4m were released to the profit and loss
account.
(iv) In 2002/03 the Group made a provision of £8.3m in respect of its investment in Lislyn, its associate undertaking.  This
investment was disposed of on 15 May 2003 for a nominal sum.
In 2003/04 the Group made a provision of £2.5m for its obligations in respect of those members of Lislyn’s defined benefit
pension scheme who were employees of NIE at privatisation.
The effect on the taxation charge for the year of the exceptional items recognised after arriving at total operating profit is disclosed in
note 8.
6. Staff
Staff costs
Total staff costs for the year amounted to:
2004 2003
£m £m
Salaries 83.7 81.5
Social security costs 8.2 7.1
Pension costs 15.8 0.1
________ ________
107.7 88.7
Less: charged to balance sheet (18.6) (17.7)
________ ________
Charged to the profit and loss account 89.1 71.0
________ ________
________ ________
Staff numbers
Average number Actual headcount
during the year at 31 March
2004 2003 2004 2003
No. No. No. No.
NIE 422 460 406 438
NIE Powerteam 1,112 930 1,018 939
Viridian Power and Energy 77 71 79 71
Sx3 1,159 1,220 1,150 1,160
Other 5 8 5 5
Discontinued – Fleet 21 43 - 36
________ ________ ________ ________
TOTAL 2,796 2,732 2,658 2,649
________ ________ ________ ________
________ ________ ________ ________
Details of the remuneration, pension entitlements, PSP awards, LTIP awards and share options for each director are included in the
Directors’ Remuneration Report on pages 21 to 24. 
Notes to the Accounts Page Forty
7. Net Interest Payable
2004 2003
£m £m
Group interest payable and similar charges:
Bank loans and overdrafts (14.9) (20.9)
Eurobond (12.1) (12.1)
Loan notes (0.1) (0.4)
Unwinding of discount on decommissioning provisions (0.1) (0.2)
________ ________
Group interest payable and other similar charges (27.2) (33.6)
Less : charged to balance sheet 0.3 6.0
________ ________
(26.9) (27.6)
Group interest receivable and similar income 1.9 3.5
________ ________
Group net interest payable (25.0) (24.1)
________ ________
________ ________
8. Tax on Profit on Ordinary Activities
(i) Analysis of charge in the year 2004 2003
£m £m
Current tax:
UK Corporation tax at 30% (2003 - 30%) 17.9 21.7
Corporation tax overprovided in previous years (4.0) (4.0)
________ ________
Total current tax 13.9 17.7
________ ________
Deferred tax:
Origination and reversal of timing differences in current year 5.6 6.1
Origination and reversal of timing differences relating to prior years (3.1) -
Deferred tax discount (credit)/charge (1.5) 2.9
________ ________
Total deferred tax 1.0 9.0
________ ________
Total tax on profit on ordinary activities 14.9 26.7
________ ________
________ ________
The deferred tax effect in the profit and loss account relating to the exceptional items recognised after arriving at total operating profit
is a credit of £0.8m (2003 – £nil). Page Forty-one Viridian Group PLC Annual Report and Accounts 2003-2004
8. Tax on Profit on Ordinary Activities (Continued)
(ii) Factors affecting tax charge for the year
The tax assessed for the year varies from the standard rate of corporation tax in the UK (30%).  The differences are explained below:
2004 2003
£m £m
Profit on ordinary activities before tax 89.2 78.4
________ ________
________ ________
Profit on ordinary activities multiplied by the standard rate of UK corporation tax of 30% 26.8 23.6
Effects of:
Goodwill amortisation 0.7 0.7
Net profit on disposal of discontinued operations (4.8) -
Depreciation in excess of capital allowances 1.8 2.7
Rolled over gains on property disposals (0.3) (1.6)
RoI profits taxed at a lower rate 0.9 -
Capital expenditure treated as revenue for tax purposes (6.3) (7.1)
Other timing differences (0.9) 1.3
Share of joint venture and associate's losses - 2.1
Corporation tax overprovided in previous years (4.0) (4.0)
________ ________
Current tax charge for the year 13.9 17.7
________ ________
________ ________
(iii) Factors that may affect future tax charges
The Group will continue to treat a proportion of its network capital expenditure as revenue for tax purposes in 2004/05, resulting in
an effective tax rate that is lower than the standard rate of corporation tax. From 1 April 2005, this capital expenditure can no longer
be treated as revenue for tax purposes.
9. Profit for the Financial Year
The profit dealt with in the accounts of the parent company was £28.2m (2003 - £29.5m).  
10. Dividends
These dividends are all in respect of equity shares.
2004 2003
£m £m
Ordinary shares
Interim paid 9.46p per share (2003 – 9.14p) 12.5 12.1
Final proposed 24.20p per share (2003 – 23.38p) 32.3 31.1
________ ________
44.8 43.2
________ ________
________ ________
Notes to the Accounts Page Forty-two
11. Earnings per Share
The calculation of basic earnings per ordinary share is based on profit of £74.3m (2003 - £51.7m) and on 132.8m (2003 – 132.0m)
ordinary shares, being the weighted average number of ordinary shares in issue during the year excluding the shares owned by the
Quest.  The calculation of basic diluted earnings per share is based on profit of £74.3m (2003 - £51.7m) and on 133.0m (2003 –
132.2m) ordinary shares, calculated as follows:
2004 2003
No. No.
Basic weighted average number of shares (million) 132.8 132.0
Dilutive potential ordinary shares:
Employee sharesave and executive share options (million) 0.2 0.2
________ ________
133.0 132.2
________ ________
________ ________
In prior years, the Group has also presented adjusted earnings per share in its financial statements, based on profit before goodwill
amortisation and non-operating exceptional items, and before accounting for deferred tax as the directors believed this gave a more
meaningful comparison of financial performance.  In any given year, NIE’s regulated businesses may or may not experience a net over
or under-recovery against the revenue to which they are entitled under their regulatory formulae.  Such over or under-recovery is
corrected through the following year’s tariffs.  Under FRS 14 “Earnings per share”, the Group is not able to adjust earnings for such
over or under-recovery but the directors have accepted any difference against adjusted earnings per share as it has not been
significant.  However, in the year ended 31 March 2004 NIE has significantly under-recovered its net regulatory entitlement.  As a
result the directors have decided that this measure of adjusted earnings per share no longer allows for a meaningful comparison of
financial performance to be made.  Accordingly it has been withdrawn from the financial statements.
The directors believe that the performance of NIE’s regulated businesses is best assessed by reference to their regulated entitlement
and as a result the directors present both basic earnings per share (under FRS 14) and earnings per share on a pro-forma basis in the
Financial Review.
12. Intangible Assets
Group Development Goodwill Total
costs
£m £m £m
Cost:
At 1 April 2003 and 31 March 2004 11.7 71.2 82.9
________ ________ ________
Amortisation:
At 1 April 2003 4.1 9.2 13.3
Charge for the year 2.4 2.2 4.6
________ ________ ________
At 31 March 2004 6.5 11.4 17.9
________ ________ ________
Provision for impairment:
At 1 April 2003 and 31 March 2004 - 26.0 26.0
________ ________ ________
Net book value:
At 1 April 2003 7.6 36.0 43.6
________ ________ ________
________ ________ ________
At 31 March 2004 5.2 33.8 39.0
________ ________ ________
________ ________ ________
Goodwill arising on all acquisitions has been capitalised and is being amortised over its estimated useful economic life from the date
of acquisition.  In each case the useful economic life is 20 years. Page Forty-three Viridian Group PLC Annual Report and Accounts 2003-2004
13. Tangible Assets
Non-
Infrastructure operational
and generation land and Fixtures and Vehicles and
assets buildings equipment mobile plant Total
Group £m £m £m £m £m
Cost:
At 1 April 2003 1,368.4 19.0 88.1 30.9 1,506.4
Exchange adjustment (4.9) (0.3) - - (5.2)
Additions 77.5 0.4 27.6 5.4 110.9
Disposals (0.2) - (0.1) (2.7) (3.0)
Disposal of subsidiary undertakings (162.3) - (0.4) (26.5) (189.2)
Reclassification 0.5 (0.3) 1.1 0.1 1.4
________ ________ ________ ________ ________
At 31 March 2004 1,279.0 18.8 116.3 7.2 1,421.3
________ ________ ________ ________ ________
Depreciation:
At 1 April 2003 349.2 1.9 48.5 17.8 417.4
Exchange adjustment (0.1) - - - (0.1)
Charge for the year 39.5 0.4 11.3 3.2 54.4
Disposals (0.1) - - (1.8) (1.9)
Disposal of subsidiary undertakings (4.9) - (0.2) (12.6) (17.7)
Reclassification (1.3) 0.7 1.8 0.2 1.4
________ ________ ________ ________ ________
At 31 March 2004 382.3 3.0 61.4 6.8 453.5
________ ________ ________ ________ ________
Net book value:
At 1 April 2003 1,019.2 17.1 39.6 13.1 1,089.0
________ ________ ________ ________ ________
________ ________ ________ ________ ________
At 31 March 2004 896.7 15.8 54.9 0.4 967.8
________ ________ ________ ________ ________
________ ________ ________ ________ ________
Included in fixed assets are amounts in respect of capitalised interest of £15.8m (2003 - £19.8m).
The net book value of non-operational land and buildings comprises:
2004 2003
£m £m
Freehold 11.7 12.3
Long leasehold 1.3 1.2
Short leasehold 2.8 3.6
________ ________
15.8 17.1
________ ________
________ ________
Notes to the Accounts Page Forty-four
14. Investments
Investment in associate
Group Share of Loan Provision Total
net liabilities
£m £m £m £m
At 1 April 2003 (1.2) 1.5 (0.3) -
Disposal of associate 1.2 (1.5) 0.3 -
________________________________________________________
At 31 March 2004 - - - -
________________________________________________________
________________________________________________________
Investment in own shares
Group Quest E.B.T. Total
£m £m £m
Cost:
At 1 April 2003 1.0 0.4 1.4
Disposals (1.0) (0.4) (1.4)
________ ________ ________
At 31 March 2004 -- -
________ ________ ________
Provision:
At 1 April 2003 - 0.4 0.4
Exercised by directors - (0.4) (0.4)
________ ________ ________
At 31 March 2004 -- -
________ ________ ________
Net book value:
At 1 April 2003 1.0 - 1.0
________ ________ ________
________ ________ ________
At 31 March 2004 -- -
________ ________ ________
________ ________ ________
Where shares are held in trust for the benefit of employees, the assets and liabilities of such trusts are recognised as assets and
liabilities of the Group.  Until such time as the shares vest unconditionally with employees, they are recognised as an investment in
own shares within fixed assets.  The carrying value of such shares is the lower of cost and residual value to the Group, such residual
value being the contribution receivable by the Group from such employees when they exercise their option to acquire the shares.  All
expenses incurred by the trusts are settled by the Group and charged in the accounts as incurred.
In accordance with Urgent Issues Task Force Abstract 17 "Employee Share Schemes", the Company has taken advantage of the
exemptions contained therein in respect of accounting for discounts arising on the grant of options in the Company’s Inland Revenue
approved Sharesave Schemes. 14. Investments (Continued)
Quest (Qualifying Employee Share Ownership Trust)
The Company shares held in trust related to a Sharesave Scheme.  Employees enter into a savings contract to make monthly
contributions over a fixed period, at the end of which time they have the option to buy ordinary shares of the Company at a price
fixed at the time of the grant of the options.  Dividends on shares held by the Quest were waived. As at 31 March 2004 no ordinary
shares in the Company were held by the Quest. At 31 March 2003, 338,509 shares were held by the Quest at a market value of
£1.7m and with a  nominal value of £84,627. 
E.B.T. (Employee Benefit Trust)
The E.B.T. held shares in respect of the Initial, Matching and Bonus Awards made to participants under the LTIP .  The shares were
held in trust for a minimum three year period and within this period could not be acquired by the participants other than in
exceptional circumstances.  Dividends received by the E.B.T. were utilised to acquire shares for the Bonus Award.  At 31 March
2004, no shares were held by the E.B.T.  At 31 March 2003, 57,485 ordinary shares at a market value of £0.3m and with a nominal
value of £14,371 were held by the E.B.T. 
Other investment
Group £m
At 1 April 2003 0.2
Additions 0.1
________
At 31 March 2004 0.3
________
________
Company Investment in Subsidiary Total
own shares undertakings
£m £m £m
Cost:
At 1 April 2003 1.0 968.1 969.1
Disposals (1.0) - (1.0)
________ ________ ________
At 31 March 2004 - 968.1 968.1
________ ________ ________
Provision:
At 1 April 2003 and 31 March 2004 - 271.1 271.1
________ ________ ________
Net book value:
At 1 April 2003 1.0 697.0 698.0
________ ________ ________
________ ________ ________
At 31 March 2004 - 697.0 697.0
________ ________ ________
________ ________ ________
Viridian Group PLC Annual Report and Accounts 2003-2004 Page Forty-five
Notes to the Accounts Page Forty-six
14. Investments (Continued)
Details of the principal investments in which the Group or Company holds more than 20% of the nominal value of any class of share
capital are as follows:
Name of company Holding Proportion held Nature of business
of voting rights
and shares
Subsidiary undertakings
Northern Ireland Electricity plc Ordinary shares and 100% Power Procurement,
Preference shares Transmission, Distribution
and Supply of electricity
SONI Ltd Ordinary shares 100% * Transmission system operator
NIE Powerteam Ltd Ordinary shares 100% * Infrastructure contracting
Powerteam Electrical Services Ltd Ordinary shares 100% * Infrastructure contracting
Viridian Power and Energy Ltd Ordinary shares 100% Holding company
Huntstown Power Company Ltd Ordinary shares 100% * Electricity generation
GenSys Power Ltd Ordinary shares 100% * Operating and maintenance services
Viridian Power Ltd Ordinary shares 100% * Generation development
Viridian Energy Supply Ltd (trading as Energia) Ordinary shares 100% * Energy supply
Viridian Energy Ltd (trading as Energia) Ordinary shares 100% * Energy supply
Viridian Capital Ltd Ordinary shares 100% Holding company
Service and Systems Solutions Ltd (trading as Sx3) Ordinary shares 100% * IT & business services
LearnServe Ltd Ordinary shares 100% * IT & business services
Viridian Enterprises Ltd Ordinary shares 100% * Holding company
Viridian Properties Ltd Ordinary shares 100% * Property development
Viridian Insurance Ltd Ordinary shares 100% * Captive insurance company 
* held by a subsidiary undertaking.
All of the above companies are incorporated in Northern Ireland with the exception of:
-      Viridian Insurance Ltd incorporated in the Isle of Man; and
-      Huntstown Power Company Ltd, GenSys Power Ltd, Viridian Power Ltd, Viridian Energy Ltd and Powerteam Electrical
Services Ltd incorporated in the RoI. Page Forty-seven Viridian Group PLC Annual Report and Accounts 2003-2004
14. Investments (Continued)
On 14 April 2003 the Group completed the disposal of the Moyle Interconnector.  On 26 November 2003 the Group completed the
disposal of Fleet.  The disposals are analysed as follows:
2004 2004 2004 2003
Moyle Fleet Total Total
£m £m £m £m
Net assets disposed of:
Fixed assets 157.4 14.1 171.5 3.0
Goodwill -- - 11.9
Debtors 4.8 2.3 7.1 108.8
Cash at bank and in hand -- - 7.9
Securitisation facility -- - (18.7)
Other creditors (1.5) (0.4) (1.9) (24.0)
Provisions (5.1) (0.5) (5.6) (0.8)
Deferred income (51.1) (0.3) (51.4) -
Inter-group loans repaid on disposal (102.3) (4.2) (106.5) (66.3)
________ ________ ________ ________
2.2 11.0 13.2 21.8
Profit/(loss) on disposal 17.7 (1.8) 15.9 (1.3)
________ ________ ________ ________
19.9 9.2 29.1 20.5
________ ________ ________ ________
________ ________ ________ ________
Satisfied by:
Cash 19.9 9.2 29.1 12.5
Loan notes -- - 8.0
________ ________ ________ ________
19.9 9.2 29.1 20.5
________ ________ ________ ________
________ ________ ________ ________
Net inflow of funds to Group
Cash 19.9 9.2 29.1 12.5
Inter-group loans repaid 102.3 4.2 106.5 66.3
Cash disposed of -- - (7.9)
________ ________ ________ ________
122.2 13.4 135.6 70.9
________ ________ ________ ________
________ ________ ________ ________
During the year Fleet contributed £1.8m to the Group’s net operating cashflows, paid £0.1m in respect of net returns on investments
and servicing of finance, paid £0.3m in respect of taxation and utilised £3.6m for capital expenditure and financial investment.
Notes to the Accounts Page Forty-eight
15. Stocks
Group
2004 2003
£m £m
Materials and consumables 7.9 4.6
Work in progress 5.6 6.2
Goods held for resale 0.4 0.4
________ ________
13.9 11.2
________ ________
________ ________
16. Debtors
Group Company
2004 2003 2004 2003
£m £m £m £m 
Amounts falling due within one year:
Trade debtors (including unbilled consumption) 119.6 117.6 - -
Amounts recoverable on long-term contracts 9.3 15.5 - -
Other debtors 1.7 2.5 - -
Amounts owed by subsidiary undertakings - - 109.9 156.0
Prepayments and accrued income 8.2 10.7 0.2 0.2
Loan notes 1.5 0.5 - -
________ ________ ________ ________
140.3 146.8 110.1 156.2
________ ________ ________ ________
Amounts falling due after more than one year:
Pension prepayment 8.9 8.9 - -
Loan notes 10.4 13.8 - -
________ ________ ________ ________
19.3 22.7 - -
________ ________ ________ ________
159.6 169.5 110.1 156.2
________ ________ ________ ________
________ ________ ________ ________
17. Current Asset Investments
Group Company
2004 2003 2004 2003
£m £m £m £m 
Bank deposits 40.3 21.3 27.0 10.0
Short term managed funds 7.2 10.7 - -
________ ________ ________ ________
47.5 32.0 27.0 10.0
________ ________ ________ ________
________ ________ ________ ________ Page Forty-nine Viridian Group PLC Annual Report and Accounts 2003-2004
18. Creditors
Group Company
2004 2003 2004 2003
£m £m £m £m 
Amounts falling due within one year:
Bank loans and overdrafts 5.6 60.0 - -
Payments received on account 22.1 19.0 - -
Payments in advance under long-term contracts 16.9 10.0 - -
Trade creditors 89.7 81.2 - -
Amounts owed to subsidiary undertakings - - 144.8 103.8
Corporation tax 28.8 34.1 4.8 5.7
Taxation and social security 5.9 9.3 - -
Other creditors 0.3 1.3 - -
Accruals 43.0 32.8 0.6 0.5
Proposed dividend 32.3 31.1 32.3 31.1
Loan notes 0.1 6.1 - 6.0
________ ________ ________ ________
244.7 284.9 182.5 147.1
________ ________ ________ ________
________ ________ ________ ________
Amounts falling due after more than one year:
Eurobond 172.9 172.8 - -
Bank loans 262.2 328.9 39.3 83.0
________ ________ ________ ________
435.1 501.7 39.3 83.0
________ ________ ________ ________
________ ________ ________ ________
19. Loans
Amounts outstanding are repayable as follows:
Group Company
2004 2003 2004 2003
£m £m £m £m 
In one year or less or on demand 5.7 66.1 - 6.0
In more than one year but not more than two years 45.0 5.8 - -
In more than two years but not more than five years 19.5 116.8 39.3 83.0
In more than five years 370.6 379.1 - -
________ ________ ________ ________
440.8 567.8 39.3 89.0
________ ________ ________ ________
________ ________ ________ ________
Details of loans not wholly repayable within five years are as follows:
Group Company
2004 2003 2004 2003
£m £m £m £m
£175m Eurobond 2018 - 6.875% 172.9 172.8 - -
EIB loan 2009 - floating rate based on LIBOR 100.0 100.0 - -
€198.6m bank loan facility 2017 – 6.43% (see terms below) 128.5 131.0 - -
________ ________ ________ ________
401.4 403.8 - -
________ ________ ________ ________
________ ________ ________ ________
The EIB loan is floating rate based on LIBOR.  The weighted average interest rate was 3.65% (2003 – 3.89%).
The €198.6m bank loan facility is repayable in the period 2004 to 2017 with semi-annual instalments commencing in April 2004.  The
amount drawn down at 31 March 2004 is €192.2m (2003 - €189.7m).  This bank loan is secured over the assets of the Huntstown
plant.
Notes to the Accounts Page Fifty
20. Provisions for Liabilities and Charges
At Applied Released Increase Unwinding Disposal At
1 April in the to profit in of of 31 March
2003 year and loss provisions discount subsidiaries 2004
Group £m £m £m £m £m £m £m
Reorganisation and restructuring 2.1 (0.8) - 4.6 - - 5.9
Liability and damage claims 8.4 (2.0) (0.1) 1.4 - - 7.7
Provision for associate 8.0 (7.9) - 2.5 - - 2.6
Decommissioning 4.5 - - - 0.1 (3.2) 1.4
Environment 12.9 (0.4) (1.1) 3.3 - - 14.7
Deferred tax 84.4 - - 2.5 (1.5) (2.4) 83.0
________ ________ ________ ________ ________ ________ ________
Total 120.3 (11.1) (1.2) 14.3 (1.4) (5.6) 115.3
________ ________ ________ ________ ________ ________ ________
________ ________ ________ ________ ________ ________ ________
Reorganisation and restructuring
Reorganisation and restructuring provisions are expected to be utilised within two years.
Liability and damage claims
Provision has been made for liability and damage claims.  Provisions existing at 31 March 2004 are expected to be utilised within a
period not exceeding five years.
Provision for associate
Provision was held at 31 March 2003 for contingencies associated with investment in the associate undertaking.  During 2003/04
additional provision has been made by the Group for its obligations in respect of those members of Lislyn’s defined benefit pension
scheme who were employees of NIE at privatisation.  It is expected that this provision will be utilised within a period not exceeding
five years.
Decommissioning
Provisions made for decommissioning the Huntstown plant represent the present value of the current estimate of the costs of closure
of the plant at the end of its useful economic life.  The provisions are discounted to present values using a rate of 5.7%.
Environment
Provision has been made for expenditure to be incurred in meeting the obligations identified within the Group’s published
environmental policy.  These costs are expected to be incurred within the next five years.  Provision has also been made for expected
costs of decontamination and demolition arising from privatisation obligations in respect of sites at power stations formerly owned by
NIE.  The expected date of settlement of these obligations remains uncertain but it is anticipated that most expenditure will take place
within the next five years.  No discounting of the environmental provision has been made as its effect is not significant to the
accounts. Page Fifty-one Viridian Group PLC Annual Report and Accounts 2003-2004
21. Deferred Taxation
Deferred taxation provided in the accounts comprises:
2004 2003
£m £m
Accelerated capital allowances 140.5 132.2
Other (13.2) (3.4)
________ ________
Undiscounted provision for deferred tax 127.3 128.8
Discount (44.3) (44.4)
________ ________
Discounted provision for deferred tax 83.0 84.4
________ ________
________ ________
Provision at 1 April 84.4 75.4
Deferred tax charge for the year 1.0 9.0
Disposal of subsidiary undertakings (2.4) -
________ ________
Provision at 31 March 83.0 84.4
________ ________
________ ________
22. Deferred Income
Group Grants Customers' Support & Total
contributions maintenance
contracts
£m £m £m £m
At 1 April 2003 63.8 129.5 13.0 206.3
Receivable - 13.4 14.7 28.1
Released to profit and loss (0.6) (5.4) (10.4) (16.4)
Disposal of subsidiary undertakings (51.1) (0.3) - (51.4)
________ ________ ________ ________
At 31 March 2004 12.1 137.2 17.3 166.6
________ ________ ________ ________
________ ________ ________ ________
Notes to the Accounts Page Fifty-two
23. Share Capital
(a) Share capital Equity Non Total
equity
££ £
Authorised:
216,000,000 ordinary shares of 25p each 54,000,000 Nil 54,000,000
One special rights non-voting redeemable preference share of £1 ("Special Share") Nil 1 1
___________ ___________ ___________
54,000,000 1 54,000,001
___________ ___________ ___________
___________ ___________ ___________
Allotted and fully paid: Equity Non Total
equity
££ £
At 1 April 2003 – 133,015,906 shares of 25p each 33,253,976 1 33,253,977
Shares allotted during the year under Executive Share Option/ 39,227 - 39,227
Sharesave Schemes (156,908 shares)
___________ ___________ ___________
At 31 March 2004 – 133,172,814 shares of 25p each 33,293,203 1 33,293,204
___________ ___________ ___________
___________ ___________ ___________
The Special Share can only be allotted and issued to, held by or transferred to DETI, the Department of Finance and Personnel
("DFP") or any nominee of either DETI or DFP .  The holder of the special share ("Special Shareholder") is entitled to receive notice of,
and to attend and speak at, any general meeting or separate meetings, but not to vote or exercise any other rights at any such
meeting.  The Special Share confers no right to participate in the capital or profits of the Company except that, on winding-up of the
Company, the Special Shareholder shall be entitled to repayment in priority to other shareholders.
The Special Share was redeemed on 5 May 2004.
(b) Employee Share Schemes
The Group has established an all employee Sharesave Scheme and a discretionary Executive Share Option Scheme.  Shares under
option in the Sharesave Scheme and the Executive Share Option Scheme at 31 March 2004 were as follows:
Sharesave Scheme
Date of grant Number of Number of Exercise price Normal date
participants shares per share of exercise
7 January 1997 4 6,711 287.0p March 2004 - August 2004
12 December 2002 1,253 1,712,143 402.0p February 2006 - July 2006
Employees enter into a savings contract over a fixed period, at the end of which time they have the option to buy ordinary shares of
the Company at a price fixed at the time of grant of the option.  Options may be exercised earlier than the normal date in special
circumstances such as death or ceasing employment due to injury, redundancy, retirement or sale of the business.  
During the year 276 participants exercised options in respect of 440,610 shares for a total consideration of £1.4m. Page Fifty-three Viridian Group PLC Annual Report and Accounts 2003-2004
23. Share Capital (Continued)
Executive Share Option Scheme
Date of grant Number of Number of Exercise price Normal date
participants shares per share of exercise
29 September 1997 20 62,000 478.0p Sept 2000 - Sept 2007
5 June 1998 74 149,608 581.0p June 2001 - June 2008
11 June 1999 120 228,051 656.0p June 2002 - June 2009
22 June 2000 159 278,051 741.5p June 2003 - June 2010
21 May 2001 168 387,117 638.5p May 2004 - May 2011
16 November 2001 1 25,000 543.5p Nov 2004 - Nov 2011
29 May 2002 179 493,789 465.0p May 2005 - May 2012
22 May 2003 193 268,604 534.0p May 2006 - May 2013
During the year 19 participants exercised options in respect of 54,807 shares for a total consideration of £0.3m.  No directors have
been granted options since 5 July 1993.
Options granted under the Executive Share Option Scheme are exercisable within a period of 10 years from the date of grant and
entitle the participant to acquire ordinary shares in the Company at a price determined at the time options were granted by the Board.
The price of the option is not less than the higher of the nominal value of the share and the market value of a share on the dealing day
immediately preceding or, if the Board so determines, the average market value over the three dealing days preceding the date of
grant.
Options are normally only exercisable after three years from the date of grant by a participant who remains in the Group's
employment.
Notes to the Accounts Page Fifty-four
24. Reconciliation of Shareholders’ Funds and Movement in Reserves
Profit
Share Share and loss
capital premium account Total
£m £m £m £m
Group
At 1 April 2003 33.3 9.3 204.4 247.0
Proceeds from exercise of options under Executive Share - 0.7 - 0.7
Option/Sharesave Schemes
Profit for the year - - 74.3 74.3
Exchange difference on retranslation of net assets of subsidiary - - (0.2) (0.2)
undertakings
Dividends - - (44.8) (44.8)
________ ________ ________ ________
At 31 March 2004 33.3 10.0 233.7 277.0
________ ________ ________ ________
________ ________ ________ ________
Profit
Share Share and loss Merger
capital premium account reserve Total
£m £m £m £m £m
Company
At 1 April 2003 33.3 9.3 151.8 442.9 637.3
Proceeds from exercise of options under Executive - 0.7 - - 0.7
Share Option/Sharesave Schemes
Profit for the year - - 28.2 - 28.2
Dividends - - (44.8) - (44.8)
________ ________ ________ ________ ________
At 31 March 2004 33.3 10.0 135.2 442.9 621.4
________ ________ ________ ________ ________
________ ________ ________ ________ ________ Page Fifty-five Viridian Group PLC Annual Report and Accounts 2003-2004
25. Pension Commitments
Most employees of the Group are members of the Viridian Group Pension Scheme (VGPS).  This has three sections: "Options" which
is a money purchase arrangement whereby the Group matches the members’ contributions up to a maximum of 6% of salary, "Focus"
which provides benefits based on pensionable salary at retirement or earlier exit from service and the "Public Sector" section, which
provides final salary related benefits for certain employees who have joined from the public sector under outsourcing contracts.  In
addition, there is a money purchase arrangement for employees in the RoI known as Choices; its benefits mirror those of the Options
section of VGPS. The assets of the schemes are held under trust and invested by the trustees on the advice of professional
investment managers.
The pension cost for the year in respect of benefits under the schemes was £15.8m (2003 - £0.1m). The Group’s contributions to the
schemes totalled £15.8m (2003 - £0.1m).  A prepayment of £8.9m is included in the balance sheet at 31 March 2004 (2003 - £8.9m).
This represents the difference between the amounts funded and the amounts charged to the profit and loss account. 
The net pension charge in respect of the Focus and Public Sector sections of VGPS is derived from a regular cost of 14.9% of salaries,
increased by a variation charge of £7.9m, which represents the amortisation of the pension deficit over 15 years, the average
remaining service life of employees as at 31 March 2003 (2003 - £9.0m credit in respect of the amortisation of surplus assets over 13
years, the average remaining service life of employees as at 31 March 2000). The pension cost has been determined in accordance
with the advice of Hewitt Bacon & Woodrow, based on the latest actuarial valuation as at 31 March 2003.  For accounting purposes,
the attained age method was adopted, and the most significant actuarial assumptions were that investment returns at 7.6% per annum
pre-retirement would exceed general salary increases by 4.0% per annum and investment returns of 6.1% per annum post-retirement
would exceed future pension increases by 3.4% per annum.  The market value of the Focus and Public Sector sections’ assets as at 31
March 2003 was £593m.  The actuarial value of the assets represented 87% of the actuarial value of the accrued benefits.  The
accrued benefits include all benefits for pensioners and other former members as well as benefits based on completed service and
projected salaries for active members. The Group is making contributions to make the deficit good over the remaining service life of
the employees at the rates recommended by the schemes’ actuaries, Hewitt Bacon & Woodrow.
FRS 17 disclosures
Hewitt Bacon & Woodrow have provided a valuation of the Focus and Public Sector sections under FRS 17 as at 31 March 2004 using
the projected unit method.  The valuation at 31 March 2004 showed a decrease in the deficit (before deferred tax) from £194.0m to
£168.6m.  The major assumptions used were (in nominal terms):
2004 2003 2002
Rate of increase in pensionable salaries 3.9% per annum 3.6% per annum 4.0% per annum
Rate of increase in pensions in payment 3.0% per annum 2.7% per annum 2.7% per annum
Discount rate 5.5% per annum 5.4% per annum 5.1% per annum
Inflation assumption 2.9% per annum 2.6% per annum 2.5% per annum
Notes to the Accounts Page Fifty-six
25. Pension Commitments (Continued)
The assets in the Focus and Public Sector sections and the expected rate of return were:
Value at Expected Value at Expected Value at Expected
31 March rate of 31 March rate of 31 March rate of
2004 return 2003 return 2002 return
£m % £m % £m %
Equities 390.8 7.2 380.0 7.1 685.3 7.4
Bonds 277.8 5.5 206.0 5.4 122.2 5.7
Other 1.4 4.7 7.0 4.6 10.6 4.9
________ ________ ________
Total market value of assets 670.0 593.0 818.1
Actuarial value of liabilities (838.6) (787.0) (708.2)
________ ________ ________
(Deficit)/surplus in the Scheme (168.6) (194.0) 109.9
________ ________ ________
Net pension (liability)/asset (before (168.6) (194.0) 109.9
deferred tax asset/(liability))
Related deferred taxation asset/(liability) 50.6 58.2 (33.0)
________ ________ ________
Net pension (liability)/asset (118.0) (135.8) 76.9
________ ________ ________
________ ________ ________
Net assets and reserves of the Group under FRS 17 would be as follows:
31 March 31 March
2004 2003
£m £m
Net assets
Net assets 277.0 247.0
Less SSAP 24 pension prepayment (net of deferred tax) (6.2) (6.2)
FRS 17 pension liability (118.0) (135.8)
________ ________
Net assets including FRS 17 pension liability 152.8 105.0
________ ________
________ ________
Reserves
Profit and loss reserve 233.7 204.4
Less SSAP 24 pension prepayment (net of deferred tax) (6.2) (6.2)
FRS 17 pension liability (118.0) (135.8)
________ ________
Profit and loss reserve including FRS 17 pension liability 109.5 62.4
________ ________
________ ________
2004 2003
£m £m
Movement in pension deficit during the year
Opening (deficit)/surplus (194.0) 109.9
Movement in year:
Current service cost (11.5) (12.0)
Contributions 15.8 -
Curtailment loss (8.6) (17.0)
Actuarial gain/(loss) 33.5 (291.9)
Other financial (charge)/income (3.8) 17.0
________ ________
Closing deficit (168.6) (194.0)
________ ________
________ ________ Page Fifty-seven Viridian Group PLC Annual Report and Accounts 2003-2004
25. Pension Commitments (Continued)
An analysis of the pension cost for the years ended 31 March 2003 and 31 March 2004 under FRS 17 is shown below.  It is intended
that the current level of contributions will be maintained for the year ending 31 March 2005.
2004 2003
£m £m
Analysis of the amount charged to operating profit
Current service cost (11.5) (12.0)
Curtailment loss (8.6) (17.0)
________ ________
(20.1) (29.0)
Less: charged to balance sheet 2.7 2.8
________ ________
Total operating charge (17.4) (26.2)
________ ________
________ ________
2004 2003
£m £m
Other finance income 
Expected return on pension scheme assets 37.8 57.0
Interest on pension scheme liabilities (41.6) (40.0)
________ ________
Net (charge)/return (3.8) 17.0
________ ________
________ ________
The defined benefit section of VGPS is now closed to new members and therefore under the projected unit method the current
service cost will increase as the members approach retirement age.  The overall service cost will also reflect membership of the
defined contribution schemes.
2004 2003
£m £m
Analysis of amount recognised in the statement of total recognised gains and losses
Actual return less expected return on pension scheme assets 66.4 (243.0)
Experience (loss)/gain arising on pension scheme liabilities (10.7) 18.0
Loss arising from changes in assumptions underlying the present value of pension scheme liabilities (22.2) (66.9)
________ ________
Actuarial gain/(loss) recognised in the statement of total recognised gains and losses 33.5 (291.9)
________ ________
________ ________
History of experience gains and losses
2004 2003
Difference between the expected and actual return on pension scheme assets:
Amount (£ million) 66.4 (243.0)
Percentage of pension scheme assets 10% 41%
Experience gains and losses on pension scheme liabilities:
Amount (£ million) (10.7) 18.0
Percentage of present value of pension scheme liabilities 1% 3%
Total actuarial gain/(loss) recognised in the statement of total recognised gains and losses:
Amount (£ million) 33.5 (291.9)
Percentage of present value of pension scheme liabilities 4% 37%
Notes to the Accounts Page Fifty-eight
26. Lease Obligations
The annual commitments under non-cancellable operating leases are as follows:
Group
2004 2003
£m £m
Expiring:
Within one year 0.6 0.2
In two to five years 2.5 0.5
In over five years 1.4 0.7
________ ________
4.5 1.4
________ ________
________ ________
27. Commitments and Contingent Liabilities
(a) Capital commitments
Group
2004 2003
£m £m
Contracted future capital expenditure 14.3 75.3
________ ________
________ ________
(b) Other contractual commitments
NIE entered into power purchase agreements with generating companies in Northern Ireland in March 1992 to make payments for
the availability of generating capacity as well as for the purchase of electricity generated.  The principal remaining contracts are with
Premier Power Ltd (Ballylumford) and AES Kilroot Power Ltd (Kilroot).  The Ballylumford contracts expire in 2012 but NIE has options
to extend them by up to 10 years.  The Kilroot contracts expire in 2024 but Ofreg has early contract cancellation rights that can be
exercised from November 2010. 
In December 2000 a number of the contracts at Ballylumford were renegotiated and in addition a contract buy-out agreement ("CBO")
was entered into to make payments to fund a buy-out of the profit element under the original agreements at Ballylumford.  The CBO
agreement has provisions under which a termination amount becomes payable in certain circumstances.  The extent of the payment
will depend on the date on which such a termination event arises.  NIE does not anticipate that any liability will arise and no provision
has been made.
In July 2003 NIE agreed to sell 170MW of capacity to ESB in the RoI through the North-South interconnector which links the Northern
Ireland and RoI electricity systems, having contracted to purchase this capacity from units no longer under long-term contract at
Ballylumford.
NIE has also entered into the following power purchase contracts:
(i) agreements with renewable generators under the Non Fossil Fuel Orders which expire between 2009 and 2013; and
(ii) an agreement with Scottish Power to purchase electricity through the Moyle Interconnector which expires in 2007.
In order to meet their wholesale and retail supply commitments, Viridian Energy Ltd and Viridian Energy Supply Ltd have entered into
a portfolio of power purchase and capacity agreements which expire between 2005 and 2018.
Performance bonds and guarantees
The Group has entered into several letters of credit, performance bonds and guarantees totalling £39.7m (2003 - £19.5m), of which
the Company has guaranteed £32.3m, in relation to the trading activities of Viridian Power & Energy, NIE Powerteam and Sx3.  The
Group does not anticipate that any liability will arise and no provision has been made. Page Fifty-nine Viridian Group PLC Annual Report and Accounts 2003-2004
27. Commitments and Contingent Liabilities (Continued)
The Group has guaranteed Viridian Energy Ltd’s obligations under its Fuel Purchase and Energy Sale Agreement with Huntstown
Power Company Ltd for a period of 15 years.  The Group has also guaranteed 85% of Viridian Energy Supply Ltd’s obligations under a
power purchase agreement with Windfarm Developments Ltd in relation to the Altahullion windfarm for a period of 15 years.  The
Group has given a number of guarantees in relation to short-term power purchase, gas purchase and financial swap contracts with a
number of counterparties for a period of 1 to 3 years.  The Group does not anticipate that any liability will arise and no provision has
been made.
(c) Contingent liabilities
Protected Persons
The Group has contingent liabilities in respect of obligations under the Electricity (Protected Persons) Pensions Regulations (Northern
Ireland) 1992 for employees of NIE at privatisation.  This includes members employed in companies which have subsequently been
disposed of by the Group.  The Group does not anticipate that any liability will arise other than that disclosed in note 5 with respect to
Lislyn.
Power station sites
NIE lease sites to power stations in Northern Ireland.  Under the terms of the lease agreements NIE may be required to pay
compensation if a lease is terminated.  The extent of the compensation will depend on the circumstances which give rise to the
termination.  NIE does not anticipate that any liability for compensation will arise and no provision has been made.
Power station agreements
Under the terms of the power station agreements between NIE and generators in Northern Ireland, where modifications to generating
equipment are necessary and a generator is unable to procure the necessary financing, NIE must either provide such finance or pay
the costs incurred by the generator in carrying out such modifications.  The costs incurred by NIE in meeting these obligations are
recoverable under its licences, but will require to be financed by NIE until such recovery is achieved.
Property clawback
A clawback debenture was entered into in 1993 which entitles DETI to a proportion of any property gain (above certain thresholds)
accruing or treated as accruing to the Company or any member of the Group as a result of disposals, or events treated as disposals
("deemed disposals"), occurring after 31 March 1993 in relation to land and any buildings on that land in which NIE had an interest at
31 March 1993.  These arrangements lasted until 31 March 2003.
A provision for clawback in respect of property disposals would be made only to the extent that it is probable that a liability will
crystallise.  Such a liability may crystallise when an actual or deemed disposal occurs.
NIE is in dispute with DETI in connection with valuations relating to the possibility of any clawback liability payable to DETI as a result
of disposal by NIE of property at its Danesfort site and of some other retail properties.  The parties have agreed that the dispute
should be determined by an independent expert under the terms of the clawback debenture.
28. Reconciliation of Operating Profit to Operating Cash Flows
2004 2003
£m £m
Operating profit 100.8 109.5
Depreciation charges 48.4 46.3
Amortisation of goodwill 2.2 2.2
Profit on disposal of assets (0.5) (1.8)
Amortisation of development expenditure 2.4 2.4
(Decrease)/increase in other provisions (3.1) 2.5
(Increase)/decrease in stock (2.7) 5.9
Decrease/(increase) in debtors 3.0 (8.5)
Increase/(decrease) in creditors 16.8 (0.9)
________ ________
Net cash inflow from operating activities 167.3 157.6
________ ________
________ ________
Notes to the Accounts Page Sixty
29. Analysis of Cash Headings Netted in the Cash Flow Statement
2004 2003
£m £m
Returns on investments and servicing of finance
Interest received 1.8 1.0
Interest paid (28.6) (36.6)
________ ________
Net cash outflow for returns on investments and servicing of finance (26.8) (35.6)
________ ________
________ ________
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (95.6) (116.0)
Contributions in respect of tangible fixed assets 13.4 12.7
Development expenditure - (0.2)
Receipts from sale of tangible fixed assets 1.6 6.6
Sale of own shares 1.0 3.8
Debt restructuring in joint venture - (20.9)
Loan to discontinued joint venture - (2.2)
Loan to discontinued associate - (1.5)
Other investment (0.1) (0.1)
________ ________
Net cash outflow for capital expenditure and financial investment (79.7) (117.8)
________ ________
________ ________
Acquisitions and disposals
Disposal of subsidiary undertakings 29.1 12.5
Net cash disposed of with subsidiary undertakings - (7.9)
Intergroup loans discharged with disposal of subsidiary undertakings 106.5 66.3
________ ________
Net cash inflow from acquisitions and disposals 135.6 70.9
________ ________
________ ________
Financing
Issue of ordinary share capital 0.7 0.5
Share repurchase - (0.4)
Receipts from loans 1.7 131.0
Repayment of loans (117.6) (160.9)
Repayment of loan notes (6.0) (32.7)
________ ________
Net cash outflow from financing (121.2) (62.5)
________ ________
________ ________
30. Analysis of Net Debt
At 1 April Cash Non cash Translation At 31 March
2003 flow movement difference 2004
£m £m £m £m £m
Cash at bank and in hand 13.7 (3.1) - - 10.6
Debt due within one year (60.0) 60.0 (5.6) - (5.6)
Debt due after more than one year (501.7) 55.9 5.6 5.1 (435.1)
Current asset investments 32.0 15.5 - - 47.5
Loan notes (6.1) 6.0 - - (0.1)
________ ________ ________ ________ ________
TOTAL (522.1) 134.3 - 5.1 (382.7)
________ ________ ________ ________ ________
________ ________ ________ ________ ________
Current asset investments are regarded as liquid resources for the purpose of the cash flow statement. Page Sixty-one Viridian Group PLC Annual Report and Accounts 2003-2004
31. Financial Instruments
An explanation of the Group’s objectives, policies and strategies in respect of financial instruments can be found on pages 8 to 10.
The disclosures below exclude short-term debtors and creditors.
Interest rate risk profile of financial assets and liabilities
Financial assets
Interest rate and currency profile:
As at 31 March Total financial Total non Total floating
assets interest bearing rate
£m £m £m
2004: Sterling 58.8 2.5 56.3
Euro 11.5 - 11.5
_______________ _______________ _______________
Total 70.3 2.5 67.8
_______________ _______________ _______________
_______________ _______________ _______________
2003: Sterling 50.2 2.9 47.3
Euro 10.0 - 10.0
_______________ _______________ _______________
Total 60.2 2.9 57.3
_______________ _______________ _______________
_______________ _______________ _______________
Non-interest bearing financial assets comprise loan notes from the sale of Open + Direct Consumer Financial Services and other
investments.  The Sterling and Euro floating rate financial assets comprise monies on deposit earning interest based on LIBID and
EUROBID respectively together with loan notes arising from (i) the sale of Open + Direct Consumer Financial Services and (ii) the sale
of the Group’s shareholding in nevada, in both cases earning interest based on LIBOR.  
Financial liabilities
Interest rate and currency profile taking into account interest rate swaps:
Weighted 
Weighted average
Total Total Total average period for
financial floating fixed interest which rate
As at 31 March liabilities rate rate rate is fixed
£m £m £m % Years
2004: Sterling 273.0 100.1 172.9 6.88 13.5
Euro 167.8 32.8 135.0 6.41 12.5
________ ________ _____________________________________
Total 440.8 132.9 307.9 6.68 13.5
________ ________ _____________________________________
________ ________ _____________________________________
2003: Sterling 398.8 166.1 232.7 6.85 11.4
Euro 169.0 31.1 137.9 6.41 14.0
________ ________ _____________________________________
Total 567.8 197.2 370.6 6.67 12.4
________ ________ _____________________________________
________ ________ _____________________________________
The Sterling floating rate financial liabilities comprise loan notes and Sterling denominated bank borrowings bearing interest based on
LIBOR.  The Euro floating rate financial liabilities comprise Euro denominated bank borrowings bearing interest based on EURIBOR.
Notes to the Accounts Page Sixty-two
31. Financial Instruments (Continued)
Foreign currency risk
Borrowings denominated in Euro have been used to offset the impact on the Group's balance sheet of exchange rate movements on
fixed assets relating to the Huntstown plant.  Financial instruments, primarily forward contracts, have been used to hedge foreign
currency exposures into functional currencies.  As at 31 March 2004 the Group had Euro denominated financial assets of £nil (2003 -
£2.2m) in respect of Group operations where the functional currency is Sterling.
Hedging
As described on pages 8 to 10, the Group uses swap contracts to hedge commodity exposures from energy purchases, interest rate
swaps to manage its interest rate profile and forward contracts to manage foreign currency exposures.  Changes in the fair value of
instruments used as hedges are not recognised in the accounts until the hedged position matures.  Unrecognised gains and losses on
instruments used for hedging, and the movements therein, are as follows:
Unrecognised
total net
losses
£m
Losses on hedges as at 1 April 2003 (17.8)
Losses arising in previous years included in current year profit and loss account 6.9
________
Losses arising before 1 April 2003 not included in current year profit and loss account (10.9)
Losses arising in current year (2.6)
________
Net losses on hedges at 31 March 2004 (13.5)
________
________
Of which
Losses expected to be recognised in 2004/05 (2.7)
Losses expected to be recognised in 2005/06 or later (10.8)
________
________
Fair value
The estimated fair values of the Group’s financial assets and liabilities are as follows:
Carrying amount Fair value
Note 2004 2003 2004 2003
£m £m £m £m
Assets
Investments/cash at bank and in hand 1 58.4 45.9 58.4 45.9
Loan notes 2 11.9 14.3 11.9 14.3
Liabilities
Short-term debt 3 (5.7) (66.1) (5.7) (67.5)
Long-term debt 4 (435.1) (501.7) (454.3) (522.1)
Financial instruments
Commodity swap contracts 5 - - 0.9 (0.1)
Interest rate swap contracts 5 - - (15.3) (14.7)
Forward currency contracts 6 - - 0.9 (3.0) Page Sixty-three Viridian Group PLC Annual Report and Accounts 2003-2004
31. Financial Instruments (Continued)
1. The fair value of investments/cash at bank and in hand approximates to carrying value due to the short maturity of instruments
held.
2. The fair value of loan notes has been calculated by discounting the expected future cash flows at prevailing interest rates.
3. The fair value of short-term debt has been calculated by discounting the expected future cashflows at prevailing interest rates.
4. The fair value of the Eurobond at the reporting date has been estimated at quoted market rates and the fair value of other items
has been calculated by discounting the expected future cash flows at prevailing interest rates.
5. Market value has been used to determine the fair values of swap contracts.
6. Market value has been used to determine the fair values of forward currency contracts.
Maturity of financial liabilities
The maturity profile of the Group’s financial liabilities at 31 March 2004 was as follows:
2004 2003
£m £m
In one year or less, or on demand 5.7 66.1
In more than one year but not more than two years 45.0 5.8
In more than two years but not more than five years 19.5 116.8
In more than five years 370.6 379.1
________ ________
440.8 567.8
________ ________
________ ________
Borrowing facilities
The Group has various borrowing facilities available to it.  The undrawn committed facilities available at 31 March 2004 in respect of
which all conditions precedent had been met at that date are as follows:
2004 2003
£m £m
Expiring in less than one year 11.5 6.1
Expiring in more than two years 165.6 144.9
________ ________
177.1 151.0
________ ________
________ ________
32. Related Party Transactions
Lislyn acted as an agent collecting billing receipts on NIE’s behalf. During the year the Group incurred agency costs of £nil (2003:
£0.1m).  At 31 March 2004 the amount owing from Lislyn was £nil (2003 - owing from Lislyn £1.1m). The investment in Lislyn was
disposed of during the year (see note 14).
On 14 April 2003 the Group disposed of the Moyle Interconnector.  During the year the Group incurred charges of £6.1m for use of
system and capacity charges.  At 31 March 2004 the amount owing to Moyle Interconnector Ltd was £nil.
On 26 November 2003 the Group disposed of Fleet to AssetCo Solutions Ltd.  Following the disposal of Fleet, the Group incurred
charges of £1.4m for hire of plant and commercial vehicles.  At 31 March 2004 the amount owing to AssetCo Solutions Ltd was
£0.3m.
Notes to the Accounts Shareholder Information
Page Sixty-four
Shareholder Enquiries
All enquiries about individual shareholder matters should be
made to the Registrar at:
Capita Registrars
Shareholder Services Department
The Registry 
34 Beckenham Road
Beckenham 
Kent BR3 4TU 
Shareholder helpline: 0870 162 3100
Shareholder fax: 020 8639 2342
E-mail: ssd@capitaregistrars.com
Website: www.capitaregistrars.com
The Registrar will deal with any queries regarding:
shareholdings, dividends, lost share certificates, change of name
or address or death of a shareholder.  All correspondence
should be clearly marked “Viridian Group PLC” and quote the
full name and address in which the shares are registered.
On-line Shareholder Services
Shareholders can now access the following on-line services:
• Share Dealing Service
• Access to personal shareholding (including transaction
history)
• Change of address
• Record or alter a dividend mandate instruction
• Download forms
• Share valuations and market information
• Access to frequently asked questions
To find out more about these services and to register simply log
on to www.shareholder.viridiangroup.co.uk and follow the
instructions. When you register as a new user, a letter will then
be despatched to your registered address with your one-off
activation code which is required for the first time you log on to
this service.
Share Dealing Service
Capita IRG Trustees Ltd now provide a quick and easy share
dealing service. On-line and telephone dealing facilities are
available to buy or sell the Company’s shares. A postal dealing
service for sales is also available. For further information, or to
buy or sell shares, contact:
On-line dealing: www.capitadeal.com
Telephone dealing: 0870 458 4577
To obtain a postal sale form: 0870 162 3113
Dividend Payments
Arrangements can be made for the payment of any future
dividends directly into a bank or building society account by
writing to the Registrar at the above address stating the name
and address of the bank/building society, the sort code and
account number.  Alternatively, you will find a form of mandate
attached to your last dividend mailing which you may complete
and return to the Registrar. 
Annual General Meeting
The Annual General Meeting will be held in The King’s Hall
Exhibition and Conference Centre, Belfast BT9 6GW on 2 July
2004 at 10.00 am.  The Notice and explanatory notes in relation
to the Meeting are enclosed.
Key Dates
2 July 2004 Annual General Meeting
20 August 2004 Record date for final dividend
1 October 2004 Payment of final dividend (24.20p)
November 2004 Announcement of interim results for
2004/05
May 2005 Preliminary announcement of results for
2004/05
Unsolicited Mail
As the Company’s share register is open to public inspection,
shareholders may receive unsolicited mail from organisations
which use it as a mailing list.  You can limit the amount of
unsolicited mail you receive by contacting the Mailing
Preference Service, Freepost 29 LON20771, London W1E 0ZT.
You may, however, continue to receive mail from organisations
which do not support this service.
Private (including employees) (29.26%)
Priva te / Institutional shareholders
% of issued share capital
Institutions (70.74%)
10,001-49,999 (1.68%)
1-500 (19.05%)
Range of shareholders
% of issued share capital
501-10,000 (12.86%)
50,000+ (66.41%)