REG - United Utilities Grp - Half-year Report <Origin Href="QuoteRef">UU.L</Origin> - Part 3

United UtilitiesAnnouncement

22/11/2017 07:05

- Part 3: For the preceding part double click  ID:nRSV1612Xb 

                                                                                                                  
 Amounts owed by related parties                                      179.9                               111.4                               163.5                     
                                                                                                                                                                        
 Amounts owed to related parties                                      3.4                                 1.8                                 12.1                      
 
 
* Amounts relating to sales of services and costs recharged at nil margin
under transitional service agreements have been represented to provide
additional detail in respect of these balances. 
 
Sales of services to related parties during the period mainly represent
non-household wholesale charges billed and accrued during the period. These
transactions were on the group's normal trading terms in respect of
non-household wholesale charges, which are governed by the wholesale charging
rules issued by Ofwat. 
 
At 30 September 2017 amounts owed by joint ventures, as recorded within trade
and other receivables in the statement of financial position, were £179.9
million (30 September 2016: £111.4 million, 31 March 2017: £163.5 million),
comprising £51.6 million of trade balances, which are unsecured and will be
settled in accordance with normal credit terms, and £128.3 million relating to
loans. Included within these loans receivable were the following amounts owed
by Water Plus: 
 
·     £100.0 million outstanding on a £100.0 million revolving credit facility
provided by United Utilities Water Limited, which is guaranteed by United
Utilities PLC, with a maturity date of 30 September 2019, bearing a floating
interest rate of LIBOR plus a credit margin; 
 
·     £9.0 million receivable being the fair value of amounts owed in relation
to a £12.5 million unsecured loan note held by United Utilities PLC, with a
maturity date of 28 March 2027. This is an interest-free shareholder loan with
a total amount outstanding at 31 March 2017 of £12.5 million, comprising the
£9.0 million receivable held at fair value, and £3.5 million recorded as an
equity contribution to Water Plus recognised within interests in joint
ventures; 
 
·     £3.1 million outstanding on a £19.6 million unsecured amortising loan
note held by United Utilities PLC, with a final maturity date of 30 November
2017, bearing a floating interest rate of LIBOR plus a credit margin.
Repayments received on this loan note represent part of the proceeds received
on disposal of the group's non-household retail business for the year ended 31
March 2017; and 
 
·     £12.5 million outstanding on a £20.0 million revolving credit facility
provided by United Utilities PLC, with a maturity date of 30 September 2019,
bearing a floating interest rate of LIBOR plus a credit margin. 
 
A further £3.7 million (30 September 2016: £2.6 million, 31 March 2017: £3.3
million) of non-current receivables was owed by other related parties at 30
September 2017. 
 
No expense or allowance has been recognised for bad and doubtful receivables
in respect of the amounts owed by related parties (30 September 2016 and 31
March 2017: £nil). 
 
During the period, United Utilities PLC provided guarantees in support of
Water Plus in respect of certain amounts owed to wholesalers. The aggregate
limit of these guarantees was £42.5 million, of which £24.0 million related to
guarantees to United Utilities Water Limited. 
 
At 31 March 2017, amounts owed to joint ventures were £3.4 million (30
September 2016: £1.8 million, 31 March 2017: £12.1 million). The amounts
outstanding are unsecured and will be settled in accordance with normal credit
terms. 
 
17. Events after the reporting period 
 
With the exception of the activity after the reporting date relating to the
group's borrowings as documented in note 11, there were no material events
arising after the reporting date that required recognition or disclosure in
the condensed financial statements for the period ended 30 September 2017. 
 
STATEMENT OF 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. 
 
Responsibilities Statement 
 
We confirm that to the best of our knowledge: 
 
·     the condensed set of financial statements has been prepared in
accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU; 
 
·     the interim management report 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 first six months of the financial year 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; and                                            
 -  DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.  
 
 
The directors of United Utilities Group PLC at the date of this announcement
are listed below: 
 
Dr John McAdam 
 
Steve Mogford 
 
Stephen Carter 
 
Mark Clare 
 
Steve Fraser 
 
Alison Goligher 
 
Russ Houlden 
 
Brian May 
 
Paulette Rowe 
 
Sara Weller 
 
This responsibility statement was approved by the Board and signed on its
behalf by: 
 
                                                     
 Steve Mogford              Russ Houlden             
 21 November 2017           21 November 2017         
 Chief Executive Officer    Chief Financial Officer  
 
 
INDEPENDENT REVIEW REPORT TO UNITED UTILITIES GROUP PLC 
 
Conclusion 
 
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2017 which comprises the consolidated income statement, the
consolidated statement of comprehensive income, the consolidated statement of
financial position, the consolidated statement of changes in equity, the
consolidated statement of cash flows and the related explanatory notes. 
 
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2017 is not prepared,
in all material respects, in accordance with IAS 34 Interim Financial
Reporting as adopted by the EU and the Disclosure Guidance and Transparency
Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). 
 
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. 
We read the other information contained in the half-yearly financial report
and consider whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements. 
 
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) 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. 
 
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. 
 
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with International Financial Reporting Standards as
adopted by the EU.  The directors are responsible for preparing the condensed
set of financial statements included in the half-yearly financial report in
accordance with IAS 34 as adopted by the EU. 
 
Our responsibility 
 
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. 
 
The purpose of our review work and to whom we owe our responsibilities 
 
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 DTR of 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. 
 
William Meredith 
 
for and on behalf of KPMG LLP 
 
Chartered Accountants 
 
St Peter's Square 
 
Manchester 
 
M2 3AE 
 
21 November 2017 
 
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