TIDM56WD
RNS Number : 8017K
Northern Electric Finance PLC
26 September 2016
NORTHERN ELECTRIC FINANCE plc
HALF-YEARLY FINANCIAL REPORT
SIX MONTHSED 30 JUNE 2016
Page
Interim Management Report 1
Condensed Statement of Profit
or Loss 4
Condensed Statement of Profit
or Loss and Other Comprehensive
Income 4
Condensed Statement of Financial
Position 5
Condensed Statement of Changes
in Equity 6
Condensed Statement of Cash Flows 7
Notes to the CONDENSED Financial
Statements 8
Cautionary Statement
This interim management report has been prepared solely to
provide additional information to shareholders to assess the
business of Northern Electric Finance plc (the "Company") and
should not be relied on by any other party or for any other
purpose.
Operations
The Company is part of the Northern Powergrid Holdings Company
group of companies (the "Northern Powergrid Group") and is a
subsidiary of Northern Powergrid (Northeast) Limited ("NPg
Northeast"). The Company's principal activity during the six months
to 30 June 2016 was to act as the issuer of long-term bonds.
Results for the six months ended 30 June 2016
During the period ended 30 June 2016, the Company made a loss
after tax of GBP0.1 million (period ended 30 June 2015: loss of
GBP0.1 million).
The half-yearly accounts for the six months ended 30 June 2016
are prepared under International Financial Reporting Standards. The
half-yearly accounts do not comprise statutory accounts required to
be delivered to the Registrar of Companies under the Companies Act
2006 and have not been subject to audit or review by the Company's
auditor. The Company will deliver its statutory accounts for the
current financial year ending on 31 December 2016 to the Registrar
of Companies by 30 June 2017.
There were no significant events during the period ended 30 June
2016 such that there was no material impact on the financial
statements and the Company met its obligations to make the annual
interest payment on its 2035 debt securities on 4 May 2016. The
annual interest payment on the Company's 2020 debt securities is
due to be paid on 17 October 2016.
Key financials
A summary of the key financial results is set out below:
Income statement
Investment income and finance costs were in line with the same
period in the prior year.
Cash flow
Cash equivalents as at 30 June 2016 were in line with the
position at 31 December 2015.
Financial position
The loss after tax at GBP0.1 million was in line with the same
period in the prior year.
Related party transactions
Details of the related party transactions entered into by the
Company and changes therein are included in Note 6 to this
half-yearly financial report.
Dividends
No ordinary dividends were paid in the period such that reserves
were reduced by the loss of GBP0.1 million.
Risks and uncertainties
The principal risk facing the Company for the remainder of 2016
is not having sufficient liquidity to enable the Company to meet
its liabilities as they fall due and to provide adequately for
contingencies. In this respect, borrowing facilities are made
available to the Company by other companies in the Northern
Powergrid Group, if required.
Interest on the fixed interest rate loans exposes the Company to
fair value interest rate risk. The loans are non-secured and the
Company has no undrawn committed borrowing facilities.
As at 30 June 2016, 100% of the Company's long-term borrowings
were at fixed rates and the average maturity for these borrowings
was 13 years. No material currency risks are faced by the Group and
it is policy that no trading in financial instruments should be
undertaken.
Further information on the principal long-term risks and
uncertainties and the internal control system are included in
Northern Powergrid Holdings Company's annual reports and accounts
for the year to 31 December 2015, which is available at
www.northernpowergrid.com.
It is anticpated that these risks will continue for the
remaining six months of 2016.
Going concern
In the Company's latest annual reports and accounts for the year
to 31 December 2015 the directors set out a number of factors taken
into account when considering continuing to adopt the going concern
basis in preparing that annual report and accounts.
The directors confirm that no events have occurred during the
six months to 30 June 2016, which alter the view expressed in the
Company's annual report and accounts for the year to 31 December
2015.
Future strategy and objectives
The Company will continue to act as the issuer of long-term debt
securities.
Responsibility Statement
The directors confirm that to the best of their knowledge:
(a) the condensed set of finanical statements has been prepared
in accordance with IAS 34, "Interim Financial Reporting", and gives
a true and fair view of the assets, liabilities, financial position
and profit of the Company for the six months to 30 June 2016;
and
(b) the interim management report contains a fair review of the
important events that have occurred during the first six months of
the year and their impact, if any, on the condensed set of
financial statements and a description of the principal risks and
uncertainties for the remaining six months of the year.
By order of the board
T E Fielden
Director
23 September 2016
Six months Six months
ended 30 ended
June 2016 30 June
2015
(unaudited) (unaudited)
GBPm GBPm
CONTINUING OPERATIONS
Finance income 8.5 8.5
Finance costs (8.6) (8.6)
------------ ------------
LOSS BEFORE INCOME TAX (0.1) (0.1)
Income tax - -
------------ ------------
LOSS FOR THE PERIOD (0.1) (0.1)
------------ ------------
CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE PERIODED 30 JUNE 2016
There is no other comprehensive income for the Company for the
six months to 30 June 2016 or the comparative six month period in
2015 other than the losses reported above.
30 June 31 December
2016 2015
(unaudited)
GBPm GBPm
ASSETS
NON-CURRENT ASSETS
Trade and other receivables 248.0 248.0
------------ ------------
CURRENT ASSETS
Trade and other receivables 9.2 3.4
Tax receivable 0.1 -
Cash and cash equivalents - 1.5
------------ ------------
9.3 4.9
------------ ------------
TOTAL ASSETS 257.3 252.9
------------ ------------
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 0.1 0.1
Retained earnings (1.3) (1.2)
TOTAL EQUITY (1.2) (1.1)
------------ ------------
LIABILITIES
NON-CURRENT LIABILITIES
Borrowings 247.3 247.2
Deferred tax 0.2 0.1
247.5 247.3
------------ ------------
CURRENT LIABILITIES
Borrowings 11.0 6.7
TOTAL LIABILITIES 258.5 252.9
TOTAL EQUITY AND LIABILITIES 257.3 257.1
------------ ------------
The half-yearly financial statements were approved by the board
of directors and authorised for issue on 23 September 2016 and were
signed on its behalf by:
T E Fielden
Director
Share Retained Total
Capital Earnings Equity
GBPm GBPm GBPm
Balance at 1 January
2016 0.1 (1.2) (1.1)
Comprehensive income
for the period (unaudited) - (0.1) (0.1)
Balance at 30 June
2016 (unaudited) 0.1 (1.3) (1.2)
-------- --------- -------
Share Retained Total
Capital Earnings Equity
GBPm GBPm GBPm
Balance at 1 January
2015 0.1 (1.1) (1.0)
Comprehensive income
for the period (unaudited) - (0.1) (0.1)
Balance at 30 June
2015 (unaudited) 0.1 (1.2) (1.1)
-------- --------- -------
Share Retained Total
Capital Earnings Equity
GBPm GBPm GBPm
Balance at 1 January
2015 0.1 (1.1) (1.0)
Comprehensive income
for the period - (0.1) (0.1)
Balance at 31 December
2015 0.1 (1.2) (1.1)
-------- --------- -------
6 Months 6 Months
ended ended
30 June 30 June
2016 2015
(unaudited) (unaudited)
GBPm GBPm
Cash generated from operations - -
Net interest paid (5.1) (5.1)
------------ ------------
Net cash used in operating activities (5.1) (5.1)
------------ ------------
Financing activities
Movement in loan from group undertakings 3.6 3.5
------------ ------------
Net cash generated from financing
activities 3.6 3.5
------------ ------------
Net decrease in cash equivalents (1.5) (1.6)
Cash and cash equivalents at beginning
of period 1.5 1.6
------------ ------------
Cash and cash equivalents at end - -
of period
------------ ------------
1. GENERAL INFORMATION
The information included within these condensed financial
statements for the year ended 31 December 2015 does not constitute
statutory accounts as defined in section 434 of the Companies Act
2006. A copy of the statutory accounts for that year has been
delivered to the Registrar of Companies. The auditor reported on
those accounts and that report was unqualified, did not draw
attention to any matters by way of emphasis and did not contain a
statement under section 498(2) or (3) of the Companies Act
2006.
2. ACCOUNTING POLICIES
Basis of preparation
The annual financial statements of the Company are prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European
Union.
Going concern
In the Company's latest annual report and accounts for the year
to 31 December 2015 the directors set out a number of factors taken
into account when considering continuing to adopt the going concern
basis in preparing that annual report and accounts.
The directors confirm that no events have occurred during the
six months to 30 June 2016, which alter the view expressed in the
Company's annual report and accounts for the year to 31 December
2015.
Changes in accounting policy
The Company's accounting policies and methods of computation are
the same as the accounting policies which are described in the
Company's financial statements for the year ended 31 December 2015.
The Company has not adopted any new or revised accounting standards
in the current year.
3. INCOME TAX EXPENSE
Tax for the six month period to 30 June 2016 is charged at
20.00% (six months ended 30 June 2015: 20.25%; year ended 31
December 2015: 20.25%), which represents the best estimate of the
average annual effective tax rate expected for the full year, as
applied to the pre-tax income of the six month period.
The Finance No 2 Act 2015 included a provision that the standard
rate of corporation tax in the United Kingdom was to reduce from
20% to 19% from April 2017 and to 18% from April 2020. Deferred
taxation is measured at the tax rates that apply in the periods in
which the temporary differences are expected to reverse based on
the tax rates and laws that have been substantively enacted at the
statement of financial position date. Accordingly, 18% has been
applied when calculating deferred tax assets and liabilities as at
30 June 2016.
3. INCOME TAX EXPENSE (CONTINUED)
The Finance Bill 2016 contains provisions to further reduce the
rate of corporation tax to 17% with effect from 1 April 2020. It is
expected that the Finance Act 2016 will be substantively enacted in
October 2016. As substantive enactment of Finance Act 2016 is after
the statement of financial position date the further reduction to
the rate of UK corporation tax has been disregarded in calculating
the deferred tax position at 30 June 2016.
4. NOTES TO THE CASH FLOW STATEMENT
6 Months 6 Months
ended ended
30 June 30 June
2016 2015
(unaudited) (unaudited)
GBPm GBPm
Profit before income
tax (0.1) (0.1)
Finance costs 8.6 8.6
Finance income (8.5) (8.5)
------------ ------------
Cash generated from
operations - -
5. FINANCIAL INSTRUMENTS
Except as detailed in the following table, the directors
consider that the carrying value amounts of financial assets and
financial liabilities are approximately equal to their fair
values:
Carrying Value Fair Value
30 June 31 December 30 June 31 December
2016 2015 2016 2015
(unaudited) (unaudited)
GBPm GBPm GBPm GBPm
Financial assets
Amounts owed
by group undertakings 257.2 251.4 336.1 317.0
============ ============ ============ ============
Financial liabilities
Intercompany
short-term loan 3.6 - 3.6 -
2020 - 8.875%
bonds 105.5 101.0 136.7 130.5
2035 - 5.125%
bonds 149.1 152.9 197.6 180.5
------------ ------------ ------------ ------------
258.2 253.9 337.9 311.0
============ ============ ============ ============
6. RELATED PARTY TRANSACTIONS
Transactions entered into with related parties and balances
outstanding were as follows:
Interest Borrowings
received owed (to)/from
from related related
parties parties
GBPm GBPm
Related party
Six months ended 30 June
2016 (unaudited):
Northern Powergrid (Northeast)
Limited 8.5 257.2
Yorkshire Electricity Group
plc - (3.6)
-------------- ----------------
8.5 253.5
============== ================
Six months ended 30 June
2015 (unaudited):
Northern Powergrid (Northeast)
Limited 8.5 257.1
Yorkshire Electricity Group
plc - (3.6)
-------------- ----------------
8.5 253.5
============== ================
Year ended 31 December 2015:
Northern Powergrid (Northeast)
Limited 17.0 251.4
Yorkshire Electricity Group
plc - 1.5
-------------- ----------------
17.0 252.9
============== ================
Interest on loans to/from companies within the Northern
Powergrid Group is charged at a commercial rate of interest.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GIGDCDUDBGLL
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