Thames Water (Kemble) Finance Plc. Interim report and financial statements. For the six months period ended 30 September 2013

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1 Registered no: (England and Wales) Thames Water (Kemble) Finance Plc Interim report and financial statements For the six months period ended 30 September 2013

2 Contents Pages Directors and advisors 1 Directors report for the six months period ended 30 September Statement of directors responsibilities in respect of the directors report and the financial statements 3 Independent auditor s review report to the members of Thames Water (Kemble) Finance Plc for the six months period ended 30 September Condensed Profit and loss account for the six months period ended 30 September Condensed Balance sheet at 30 September Notes to the financial statements for the six months period ended 30 September

3 Directors and advisors Directors A Beaumont S Ledger P Kerr Registered auditor KPMG LLP Chartered Accountants 15 Canada Square London E14 5GL Company Secretary & registered office J E Hanson Clearwater Court Vastern Road Reading Berkshire RG1 8DB 1

4 Directors report for the six months period ended 30 September 2013 Review of business, principal activities and future developments Thames Water (Kemble) Finance Plc ( the Company ) was established to make certain financing arrangements on behalf of its immediate parent undertaking Kemble Water Finance Ltd. The ultimate parent undertaking is Kemble Water Holdings Limited ( the Group ). The registered company number is The company is expected to continue to make certain financing arrangements on behalf of its immediate parent undertaking Kemble Water Finance Ltd for the foreseeable future. Financial results Turnover is consistent with the directors expectations for the half year and comprises financing costs arising from raising funds on behalf of Kemble Water Finance Limited are recharged to Kemble Water Finance Limited, plus an annual margin of 10,000. Principal risks and uncertainties The Company is a financing subsidiary of Kemble Water Finance Limited and accordingly, all financing transactions and obligations were passed to Kemble Water Finance Limited by way of an inter company loan. Risk management relating to the financing obligations of Kemble Water Finance Ltd are managed as part of the overall financial risk management strategy of the Group. From the perspective of the Company, the principal risks and uncertainties are integrated with the principal risks of the Group and are not managed separately. The principal risks discussed in the Group s annual report which apply to the Company include: increased competition in the water industry; failure to maintain adequate funding arrangements; down grading of credit rating as a result of poor financial performance or an adverse PR14 determination at Thames Water Utilities Limited; failure to meet regulatory targets; and future changes in laws and regulations. Directors The directors who held office during the period and to the date of signing were: A Beaumont S Ledger P Kerr (appointed on 6 September 2013) A Beaumont Director 28 November

5 Statement of directors responsibilities in respect of the directors report and the financial statements The directors confirm that to the best of their knowledge: the condensed set of financial statements has been prepared in accordance with the Statement Half-yearly financial reports issued by the UK Accounting Standards Board. the interim report and financial statements includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the period and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year. Paul Kerr has been appointed to the Board of directors since the publication of the Annual report and financial statements for the year ended 31 March The above statement of directors responsibilities was approved on 28 November By order of the Board A Beaumont Director 28 November

6 Independent auditor s review report to the members of Thames Water (Kemble) Finance Plc for the six months period ended 30 September 2013 Introduction We have been engaged by the Company to review the condensed set of financial statements in the halfyearly financial report for the six months period ended 30 September 2013, which comprises the condensed profit and loss account, the condensed balance sheet and the related explanatory notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the Company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rule ( the DTR ) of the UK s Financial Conduct Authority ( the UK FCA ). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this 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 for our review work, for this report, or for the conclusions we have reached. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA. The annual financial statements of the Company are prepared in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice). The condensed set of financial statements included in this half-yearly report has been prepared in accordance with the Statement Half-yearly financial reports issued by the UK Accounting Standards Board. Our responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim report based on our review. Scope of review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim report for the six months period ended 30 September 2013 is not prepared, in all material respects, in accordance with the Statement Half-yearly financial reports issued by the UK Accounting Standards Board and the DTR of the UK FCA. Anna Jones for and on behalf of KPMG LLP Chartered Accountants London 28 November

7 Condensed Profit and loss account for the six months period ended 30 September 2013 Note Six months to Six months to Year to 30 September 30 September 31 March Turnover 15,929 15,932 31,856 Interest payable and similar charges (15,924) (15,927) (31,846) Profit on ordinary activities before taxation Taxation charge on profit on ordinary activities 2 (1) (1) (2) Profit for the period All amounts above relate to continuing operations. The Company has no recognised gains or losses other than the results above therefore no separate statement of total recognised gains and losses has been presented. There is no difference between the profit on ordinary activities before taxation and the retained profit for the period as stated above and their historical cost equivalents. 5

8 Condensed Balance sheet at 30 September 2013 Current assets Note 30 September 30 September 31 March Debtors: amounts falling due within one year Amounts owed by group undertakings - Interest 15,500 15,500 15,528 Debtors: amounts falling due after more than one year Amounts owed by group undertakings 395, , ,958 Total debtors 3 410, , ,486 Cash and cash equivalents , , ,488 Creditors: amounts falling due within one year 4 (15,504) (15,526) (15,502) Net current assets 395, , ,986 Creditors: amounts falling due after more than one year 5 (395,345) (394,499) (394,921) Net assets Capital and reserves Called up share capital Profit and loss account Shareholder s funds The interim financial statements were approved by the Board of Directors on 28 November 2013 and signed on its behalf by: Andrew Beaumont Director 6

9 Notes to the financial statements for the six months period ended 30 September Basis of preparation These condensed interim financial statements ( the financial statements ) for the six months period ended 30 September 2013 have been prepared in accordance with the historical cost convention and on the basis of the accounting policies consistent with those set out in the Company s Annual report and financial statements for the year ended 31 March The financial statements do not include all the information required for full annual financial statements, do not comprise statutory accounts within the meaning of section 396 of the Companies Act 2006 and should be read in conjunction with the Annual report and financial statements for the year ended 31 March The financial statements have been prepared in accordance with the UK Accounting Standards Board s statement Half-yearly financial reports, and the requirements of the Disclosure and Transparency Rules issued by the Financial Conduct Authority other than as described in note 9. The statutory accounts for the year ended 31 March 2013 have been delivered to the Registrar of Companies. The auditor s report on these accounts was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 of the Companies Act Going concern The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and, accordingly, they have continued to adopt the going concern basis in preparing the condensed financial statements for the six months period ended 30 September Taxation The corporation tax charge is based upon UK corporation tax of 23% (half year to 30 September 2012 and full year to 31 March 2013: 24%). The interim corporation tax charge for the six months period ended 30 September 2013 is based upon the forecast effective tax rate for the full period to 31 March 2014 applied to the profits earned in the six months period to 30 September During the period, there was a change in law reducing the corporation tax rate from 23% to 21% from 1 April 2014 with a further reduction to 20% from 1 April As the Company has no deferred tax balances, there are no implications for these condensed interim financial statements. 3. Debtors Included in debtors is an amount of 410.9m (31 March 2013: 410.4m) comprising principal and interest with regards to a loan to the Company s immediate parent company, Kemble Water Finance Limited, of which 395.4m (31 March 2013: 394.9m) is falling due after more than one year. 7

10 Notes to the financial statements for the six months period ended 30 September Creditors: amounts falling due within one year 30 September 30 September 31 March Interest payable 15,500 15,500 15,500 Loan Corporation tax Creditors: amounts falling due after more than one year 15,504 15,526 15, September 30 September 31 March Secured bonds net of unamortised fees 395, , ,921 The Company has in issue, secured bonds with a principal value of 400.0m due on 1 April The fair value of the bond at 30 September 2013 is 436.9m (31 March 2013: 436.9m). The anticipated future cash flows including interest in relation this bond on an undiscounted basis is 586.0m (31 March 2013: 601.5m). The net proceeds of the secured bond were loaned to Kemble Water Finance Limited under mirrored interest terms plus an annual margin of 10, Share Capital 30 September 30 September 31 March Authorised called up and fully paid Authorised called up and unpaid Authorised and called up

11 Notes to the financial statements for the six months period ended 30 September Profit and loss account 30 September 2013 (unaudited) 000 At the beginning of the period 15 Profit for the period 4 At the end of the period Reconciliation of movements in shareholder s funds 30 September 30 September 31 March Opening shareholder s funds Profit for the period Closing shareholder s funds Related party transactions The Company has provided details of certain related party transactions in notes 3 and 5. The Company has not applied the requirements of DTR 4.2.8R regarding related party transactions on the grounds that the Company has listed debt and not listed equity. 9

Thames Water Utilities Finance Limited. Interim report and financial statements. For the six months ended 30 September 2015

Registered no: 02403744 (England & Wales) Thames Water Utilities Finance Limited Interim report and financial statements For the six months ended 30 September 1 Contents Pages Directors and advisors 1