TIDM85MJ

RNS Number : 4664X

Network Rail Infrastructure Finance

24 November 2017

24 November 2017

NETWORK RAIL INFRASTRUCTURE FINANCE PLC

HALF-YEAR RESULTS 2017/18

Commentary

Network Rail Infrastructure Finance PLC ("NRIF", "the company") was incorporated on 31 March 2004 and entered into documentation to facilitate debt issuance on 29 October 2004.

As of 4 July 2014 Network Rail's funding requirement is met by the Department for Transport ("DfT") via a loan facility to Network Rail Infrastructure Limited ("NRIL") the owner and operator of the national rail network of Great Britain. As a result, NRIF continues to operate as the administrator of existing debt issues and derivatives under the Debt Issuance Programme ("DIP"), but will not be issuing new debt for the foreseeable future. Existing debt, derivatives and related interest payments within NRIF are passed onto NRIL in the form of an intercompany loan and embedded derivative.

The company was incorporated for the sole purpose of acting as the issuer under Network Rail's DIP and legally is not a member of the Network Rail group or related to or controlled by the Secretary of State for Transport. However, for accounting purposes the company is treated as a subsidiary in the consolidated accounts of Network Rail Limited ("NRL"). The DIP is guaranteed by a financial indemnity from the Secretary of State for Transport and as a result the financial indemnity is a direct sovereign obligation of the Crown and Network Rail's debt is zero per cent risk weighted.

The financial indemnity is an unconditional and irrevocable obligation of the UK Government to make payments directly to a security trustee to cover all debt service shortfalls, whatever the cause. The financial indemnity is also designed to ensure timely payment as well as ultimate recourse to the UK Government.

Within the DIP, which is administered by NRIL, is a multi-currency note programme with a maximum limit of GBP40bn, which has been assigned the following credit ratings: AA by Standard and Poor's, Aa2 (stable outlook) by Moody's and AA (negative outlook) by Fitch.

NRIF made a profit before tax of GBP55,000 in the six months to 30 September 2017, being the excess of the fee charged to NRIL for the provision of the facility over the fee charged by NRIL for the administration of the facility.

Reclassification of Network Rail

In December 2013, the Office for National Statistics announced the reclassification of Network Rail as a Central Government Body in the UK National Accounts and Public Sector Finances with effect from 1 September 2014. This is a statistical change driven by new guidance in the European System of National Accounts 2010 (ESA10).

As part of Network Rail's formal reclassification to the public sector, an arrangement was agreed whereby funding would be provided by the DfT in the form of a loan made directly to NRIL. As a result, from 4 July 2014, Network Rail borrows directly from the UK Government and currently has no plans to issue debt in its own name through NRIF.

In the unlikely event that the DfT withdraws or breaches its obligations on the loan facility to NRIL, NRIF may issue further bonds or commercial paper. NRIF's future debt service obligations will be met through repayments of the intercompany loan by NRIL.

Financial commentary

All of the outstanding bonds under the DIP, including nominal and index-linked benchmarks and private placements in all currencies, will continue to benefit from a direct and explicit guarantee from the UK Government under the financial indemnity.

At 30 September 2017 there was GBP27,702m of bonds outstanding issued under the DIP. No bonds matured in the period. UK RPI index-linked debt was 69 per cent of gross debt at 30 September 2017. There was no issued commercial paper outstanding as at 30 September 2017 (30 March 2017: GBPnil).

Cash balances are required for settlement of maturing bonds and for the purposes of managing collateral posted by financial derivative counterparties. This is funded by NRIL through the intercompany borrowing. The cash and cash equivalents balance as at 30 September 2017 totalled GBP946m, having increased by GBP942m compared to year end 2017 due to prefunding for a USD nominal bond settlement due on 3 October 2017.

The external derivative value decreased by GBP235m to negative GBP661m at 30 September 2017 (31 March 2017: negative GBP426m). This movement relates to the decrease in valuation of cross currency swaps (GBP388m), offset by an increase in the valuation of interest rate swaps of GBP153m.

Treasury operations

The treasury operations of NRIL, who administers the programme on behalf of NRIF, are co-ordinated and managed in accordance with policies and procedures approved by the Treasury Committee, being a full sub-committee of the Network Rail board. Treasury operations are subject to internal audits and the company does not engage in trades of a speculative nature.

Liquidity is provided by monitoring that NRIL has sufficient funds to meet its obligations to NRIF. NRIL are able to vary drawdowns under the DfT loan agreement in order to maintain liquidity. In addition a GBP4bn commercial paper programme is available to provide liquidity in the event of the withdrawal of, or default by, DfT under the DfT Loan Facility.

NRIF is also affected by future cash flow risks arising from changes in interest rate, inflation rate and foreign currency movements. The company enters into derivative financial instruments to partially mitigate these risks. Further detail is available in the Network Rail Limited annual report and accounts 2017.

Counterparty limits are set with reference to published credit ratings. These limits dictate how much and for how long management deals with each counterparty, and are monitored on a regular basis.

Outlook

The principal risks managed by Network Rail are unchanged from those set out in the directors' report on pages 39-44 of the Network Rail Limited annual report and accounts 2017. There are also further details on funding and financial risk management in note 24 on pages 125-133 of these accounts.

The major risks that the company faces are financing risks including, interest rate risk, foreign currency fluctuation risk, and liquidity risk. The treasury operation of NRIL, which administers the programme on behalf of NRIF, seeks to provide sufficient liquidity to meet the company's needs, while reducing financial risks and prudently maximising interest receivable on surplus cash.

Liquidity risk is managed by maintaining adequate cash balances and continuous monitoring of forecast and actual cash flows.

The company has certain debt issuances which are index-linked and thus exposed to movements in inflation rates. The company does not enter into any derivative arrangements to hedge these.

The credit risk with regard to all classes of derivative financial instruments entered into before 1 January 2013 is limited because Network Rail has arrangements in place which limits each counterparty to a threshold (based on credit ratings) which if exceeded requires the counterparty to post cash collateral. Trades entered into after 1 January 2013 are governed by new agreements where both Network Rail and its counterparties post collateral on their full adverse net derivative positions. The new agreements do not contain threshold provisions.

Treasury operations are co-ordinated and managed in accordance with policies and procedures approved by NRIL's board. Treasury operations are subject to regular internal audits and treasury does not engage in trades of a speculative nature.

Statement of directors' responsibilities

The directors confirm that this interim financial information has been prepared in accordance with International Accounting Standard ("IAS") 34 as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

-- an indication of important events that have occurred during the first six months 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 financial year; and

-- material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.

The directors of NRIF are listed in the NRIF annual accounts for the year ended 31 March 2017.

Approved by the board of directors and signed by order of the board.

Samantha Pitt (director)

22 November 2017

Independent review report

to Network Rail Infrastructure Finance PLC

I have been engaged by the company to review the condensed interim financial statements of Network Rail Infrastructure Finance Plc for the six months ended 30 September 2017 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Cash Flow Statement, the Statement of Changes in Equity and related explanatory notes.

I have read the other information contained in the interim financial statements and considered whether it contains any apparent misstatements or material inconsistences with the information in the condensed interim financial statements.

Respective responsibilities of the directors and the auditor

The condensed interim financial statements are the responsibility of, and have been approved by, the directors of Network Rail Infrastructure Finance Plc. As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for preparing the condensed interim financial statements in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the group is applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union. The condensed interim financial statements have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

My responsibility is to express to the company a conclusion on the condensed interim financial statements.

Scope of Review

I conducted my review in accordance with International Standards on Review Engagement (UK & 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 United Kingdom.

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 me to obtain assurance that I would become aware of all significant matters that might be identified in an audit. Accordingly, I do not express an audit opinion.

Conclusion

Based on my review, nothing has come to my attention that causes me to believe that the accompanying interim financial information for the six months ended 30 September 2017, is not prepared in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Matthew Kay (Senior Statutory Auditor)

23 November 2017

For and on behalf of the

Comptroller and Auditor General (Statutory Auditor)

National Audit Office

157-197 Buckingham Palace Road

Victoria

LONDON SW1W 9SP

Statement of comprehensive income

 
                                            Unaudited      Unaudited    Audited 
                                           six months     six months       year 
                                                ended          ended      ended 
                                         30 September   30 September   31 March 
                                                 2017           2016       2017 
                                                 GBPm           GBPm       GBPm 
 
Profit from operations                              -              -          - 
 
Finance income                                    757            562       1017 
Finance costs                                   (757)          (562)     (1017) 
 
Profit before taxation                              -              -          - 
Tax                                                 -              -          - 
 
Profit and total comprehensive income               -              -          - 
 for the period 
 
 

Statement of changes in equity

 
                           Share    Retained 
                         capital   Earnings*  Total 
                            GBPm        GBPm   GBPm 
                               - 
----------------------  --------  ----------  ----- 
At 1 April 2016                -           1      1 
Profit for the period          -           -      - 
                                                  - 
----------------------  --------  ----------  ----- 
At 1 April 2017                -           1      1 
Profit for the period          -           -      - 
 
At 30 September 2017           -           1      1 
 
 

Balance sheet

 
                                                 Unaudited        Unaudited    Audited 
                                              30 September     30 September   31 March 
                                                      2017             2016       2017 
                                    Notes             GBPm             GBPm       GBPm 
 
Non-current assets 
Receivables: amounts falling 
 due after more than one year         2             22,775           26,093     24,730 
Derivative financial instruments*                      466            1,096        864 
 
Total non-current assets                            23,241           27,189     25,594 
 
Current assets 
Receivables: amounts falling 
 due within one year                  2              3,694            2,738      2,333 
Derivative financial instruments*                    1,491            1,901      1,524 
Cash and cash equivalents             3                946               12          4 
 
Total current assets                                 6,131            4,651      3,861 
 
Total assets                                        29,372           31,840     29,455 
 
 
Current liabilities 
Borrowings                            3            (2,989)          (2,144)    (1,745) 
Derivative financial instruments*                      (3)              (4)          - 
Other payables                        4              (349)            (593)      (444) 
 
Total current liabilities                          (3,341)          (2,741)    (2,189) 
 
Net current assets                                   2,790            1,910      1,672 
 
Non-current liabilities 
Borrowings                            3           (24,713)         (27,240)   (25,738) 
Derivative financial instruments*                  (1,317)          (1,858)    (1,527) 
 
Total non-current liabilities                     (26,030)         (29,098)   (27,265) 
 
Total liabilities                                 (29,371)         (31,839)   (29,454) 
 
Net assets                                               1                1          1 
 
Equity 
Share capital                                            -                -          - 
Retained earnings                                        1                1          1 
 
Total equity                                             1                1          1 
 
 

* An embedded derivative with a value of positive GBP1,298m (September 2016: positive GBP1,504m, March 2017: positive GBP1,250m) is within the derivative financial instruments balance.

This interim report was approved by the board of directors on 22 November 2017.

It was signed on its behalf by:

 
 Samantha Pitt (director)                            Helena Whitaker (director) 
 

Cash flow statement

 
                                                   Unaudited      Unaudited          Audited 
                                                  six months     six months             year 
                                                       ended          ended            ended 
                                                30 September   30 September         31 March 
                                                        2017           2016             2017 
                                         Note           GBPm           GBPm             GBPm 
 
Cash flows from operating activities      6            1,113            418            2,167 
Interest paid                                          (272)          (261)            (593) 
 
Net cash inflow from operating 
 activities                                              841            157            1,574 
 
Investing activities 
Interest received                                        271            263              601 
 
Net cash flow from investing 
 activities                                              271            263              601 
 
Financing activities 
Repayment of borrowings                                    -          (606)          (2,388) 
(Increase)/Decrease in collateral 
 posted                                                (193)             75              194 
(Decrease)/Increase in collateral 
 held                                                  (136)             23             (71) 
Cash flow on settlement of derivatives                   159              -              (6) 
 
Net cash used in financing activities                  (170)          (508)          (2,271) 
 
Net increase/ (decrease) in 
 cash and cash equivalents                               942           (88)             (96) 
 
Cash and cash equivalents at 
 beginning of the period                                   4            100              100 
 
Cash and cash equivalents at 
 end of the period                                       946             12                4 
 
 

Notes to the interim financial statements

Six months ended 30 September 2017

1. General information

Network Rail Infrastructure Finance PLC is a company incorporated in Great Britain and registered in England and Wales under the Companies Act 2006.

The company's registration number is 5090412.

The company's registered office is situated at 1 Eversholt Street, London, NW1 2DN, United Kingdom.

The company's principal activities, details of the company's business activities and key events, and changes during the year are contained within the commentary on pages 1 to 3.

This condensed interim financial information does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2017 were approved by the board of directors on 18 July 2017 and delivered to the Registrar of Companies. The auditors' report on these accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain a statement under Section 498 of the Companies Act 2006.

The condensed interim financial statements are prepared in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. The condensed interim financial statements are prepared in accordance with IAS 34, 'Interim Financial Reporting', as adopted by the European Union.

This condensed interim financial information has been reviewed, not audited. The condensed interim financial information should be read in conjunction with the annual report and accounts for the year ended 31 March 2017, which have been prepared in accordance with IFRSs as adopted by the European Union. A copy of this document is available on the company's website: www.networkrail.co.uk

Accounting policies

The accounting policies and methods of computation adopted in this condensed set of financial statements are consistent with those set out in the annual financial statements for the year to 31 March 2017.

The following accounting standards have not been early adopted by the group but will become effective in future years and are considered to have a material impact on the group that has yet to be formally assessed:

i) IFRS 9 'Financial Instruments'. The standard addresses the classification, measurement and recognition of financial assets and liabilities.

There are no other IFRS or IFRS Interpretation Committee interpretations not yet effective that would be expected to have a material impact on the company.

Going concern

After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.

In reaching this conclusion the directors considered: the financial indemnity as described on page 1; the collateral arrangements with banking counterparties; and that the company has an inter-company agreement that recovers all net costs from NRIL.

Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

Operating segments

IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal reports about components of the company that are regularly reviewed by the board to allocate resources to the segments and to assess their performance. The company has adopted IFRS 8 for these financial statements. However, there has been no material change in presentation of these statements because the company operates one class of business, that of acting as issuer for Network Rail's DIP and undertakes that class of business in one geographical area, Great Britain. This debt is often issued in currencies other than sterling and sold to overseas investors.

Debt

Debt instruments are initially recorded at fair value, net of discount and direct issue costs, and are subsequently measured at amortised cost using straight line amortisation as a proxy for the IAS 39 effective interest rate method. Finance charges, including premiums payable on settlement or redemption and direct issue costs are recognised in the statement of comprehensive income over the life of the debt instrument. They are added to the carrying value of the debt instrument to the extent that they are not settled in the period in which they arise.

Derivative financial instruments

The company's activities expose it primarily to the financial risks of changes in interest rates and foreign currency exchange rates. The company uses interest rate swaps and foreign exchange forward contracts to hedge these exposures.

Interest rate swaps and foreign exchange forward contracts are recorded at fair value at inception and at each balance sheet date. Movements in fair value are recorded in the statement of comprehensive income.

Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of host contracts and the host contracts are not carried at fair value. Unrealised gains or losses are reported in the statement of comprehensive income.

Embedded derivative

An embedded derivative arises between NRIF and NRIL so as to offset NRIF's unrealised gains and losses.

All of NRIF's transactions and balances are passed through to NRIL via intra-group borrowings - this gives rise to two elements with the characteristics of a derivative (i.e. whose values change in response to specified rates) which are therefore to be treated (jointly) as an embedded derivative. The first is the element relating to movements in the carrying value of foreign denominated borrowings as a result of foreign exchange rate changes. This portion of the embedded derivative is therefore measured based on the cumulative effect of foreign exchange rate changes on the bond portfolio's carrying value. The second element is NRIF's primary derivatives, which are entered into in order to mitigate future cash flow risks. These - and the matching element of the embedded derivative - are measured at fair value.

As per IAS 39, this embedded derivative is disclosed separately from the loan and is included on the Balance Sheet as 'Derivative financial instruments', along with NRIF's primary derivatives.

Investments

Investments are classified as available-for-sale and measured at subsequent reporting dates at fair value. For available-for-sale investments, gains or losses from changes in fair value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the statement of comprehensive income for the period.

Foreign currencies

Monetary assets and liabilities expressed in foreign currencies are translated into sterling at rates of exchange prevailing at the balance sheet date. Individual transactions denominated in foreign currencies are translated into sterling at the exchange rates prevailing on the dates payment takes place. Gains or losses realised on any foreign exchange movements are recognised in the statement of comprehensive income.

Intra-group borrowings

The company provides the Network Rail group with funding. It passes all transactions and balances through the intra-group borrowings to NRIL.

2. Receivables

 
                                           Unaudited      Unaudited    Audited 
                                        30 September   30 September   31 March 
                                                2017           2016       2017 
                                                GBPm           GBPm       GBPm 
 
Non-current assets 
Loans to Network Rail Infrastructure 
 Limited                                      22,775         26,093     24,730 
 
Current assets 
Interest on loans to Network Rail 
 Infrastructure Limited                          226            239        184 
Loans to NRIL                                  2,650          1,755      1,524 
Interest receivable on investments                 -              -          - 
Collateral receivable                            818            744        625 
 
Total receivables                             26,469         28,831     27,063 
 
 

3. Net borrowings

 
                                            Unaudited       Unaudited    Audited 
                                         30 September    30 September   31 March 
                                                 2017            2016       2017 
                                                 GBPm            GBPm       GBPm 
 
Net borrowings by instrument 
Cash and cash equivalents*                        946              12          4 
Collateral receivable                             818             744        625 
Collateral obligation                           (123)           (353)      (259) 
Bank loans                                      (471)           (459)      (467) 
Bonds issued under the Debt Issuance 
 Programme                                   (27,231)        (28,925)   (27,016) 
 
At the end of the period/year                (26,061)        (28,981)   (27,113) 
 
 
                                                            Unaudited 
                                                           six months 
                                            Unaudited           ended    Audited 
                                         30 September    30 September   31 March 
                                                 2017            2016       2017 
                                                 GBPm            GBPm       GBPm 
 
Movements in net borrowings 
At the beginning of the period               (27,113)        (28,702)   (28,702) 
Increase in cash and cash equivalents             942            (88)       (96) 
Movement in collateral receivable                 193            (75)      (194) 
Movement in collateral obligation 
 to counterparties                                136            (23)         71 
Repayment of borrowings                             -             606      2,388 
Capital accretion on index-linked 
 bonds                                          (459)           (277)      (449) 
Exchange differences                              224           (438)      (164) 
Fair value and other movements                     16              16         33 
 
At the end of the period/year                (26,061)        (28,981)   (27,113) 
 
 
                                            Unaudited       Unaudited    Audited 
                                         30 September    30 September   31 March 
                                                 2017            2016       2017 
                                                 GBPm            GBPm       GBPm 
 
Cash and cash equivalents*                        946              12          4 
Collateral receivable                             818             744        625 
Collateral obligation                           (123)           (353)      (259) 
Borrowings included in current 
 liabilities                                  (2,989)         (2,144)    (1,745) 
Borrowings included in non-current 
 liabilities                                 (24,713)        (27,240)   (25,738) 
 
At the end of the period/year                (26,061)        (28,981)   (27,113) 
 
 

* Includes collateral received from derivative counterparties of GBP123m (September 2016: GBP353m, March 2017: GBP259m)

All borrowings are denominated in or swapped into sterling.

4. Other payables

 
                                       Unaudited      Unaudited    Audited 
                                    30 September   30 September   31 March 
                                            2017           2016       2017 
                                            GBPm           GBPm       GBPm 
 
Current liabilities 
Interest payable on bonds issued             225            239        183 
Interest on long term loans                    1              1          2 
Collateral obligation                        123            353        259 
 
Total payables                               349            593        444 
 
 

5. Financial instruments

The fair values of financial assets and liabilities are recognised at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

With the exception of bank loans and bonds, all financial assets and liabilities are carried at amounts that approximate to their fair value. Bank loans and bonds are initially measured at fair value and subsequently at amortised cost, as explained in note 1.

The corresponding carrying values and fair values of bank loans and bonds are set out below:

 
                      At 30 September     At 30 September     At 31 March 2017 
                            2017                2016 
                     Carrying      Fair  Carrying      Fair  Carrying      Fair 
                        value     value     value     value     value     value 
                         GBPm      GBPm      GBPm      GBPm      GBPm      GBPm 
 
Bank loans              (471)     (801)     (459)     (872)     (467)     (827) 
Bonds issued under 
 the DIP             (27,231)  (32,553)  (28,925)  (37,049)  (27,016)  (33,435) 
 
Total                (27,702)  (33,354)  (29,384)  (37,921)  (27,483)  (34,262) 
 
 

Bonds issued by NRIF benefit from a credit enhancement provided by the financial indemnity from the Secretary of State for Transport. This credit enhancement is reflected in the fair value of the bonds disclosed above.

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

-- Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities

-- Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of interest rate and cross currency swaps is calculated as the present value of the estimated future cash flows using yield curves at the reporting date; and

-- Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 
                                              Unaudited      Unaudited    Audited 
                                           30 September   30 September   31 March 
                                                   2017           2016       2017 
 
Level 2: 
 Derivative financial assets                      1,957          2,997      2,388 
Financial assets at amortised cost               27,415         28,843     27,067 
 
Level 1: 
Financial liabilities held at amortised 
 cost                                          (32,204)       (36,644)   (33,726) 
Level 2: 
 Derivative financial liabilities               (1,320)        (1,863)    (1,527) 
Financial liabilities held at amortised 
 cost                                           (1,499)        (1,870)    (1,649) 
 
Total                                           (5,651)        (8,537)    (7,447) 
 
 

A review of the categorisation of financial instruments into the three levels is made at each reporting date. There were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurements in the current or prior years.

There were no changes in valuation techniques during the periods.

6. Notes to the cash flow statement

 
 
                                            Unaudited       Unaudited    Audited 
                                           six months      six months       year 
                                                ended           ended      ended 
                                         30 September    30 September   31 March 
                                                 2017            2016       2017 
                                                 GBPm            GBPm       GBPm 
 
Profit before tax                                   -               -          - 
 
Operating cash flow before movements                -               -          - 
 in working capital 
Increase in receivables                         1,113             418      2,167 
 
Cash generated from operations                  1,113             418      2,167 
 
 

Cash and cash equivalents (which are represented as a single class of assets on the face of the balance sheet) comprise cash at bank, money fund balances and money market deposit investments with a maturity of up to three months.

7. Controlling party and related party transactions

50,000 shares of the company are held by HSBC Trustee (C.I.) Limited(a) . All shares and distributable reserves in the company are held for charitable purposes.

Legal control of the company is disclosed above but effective control of the company is held by Network Rail and therefore by the DfT and Secretary of State.

On this basis for accounting purposes the company is treated as a subsidiary in the consolidated accounts of Network Rail.

Transactions with NRIL are clearly identified within the relevant notes to the accounts.

a During the period NRIF was notified that HSBC Trustee (C.I.) Limited would no longer be providing share trustee responsibilities to its clients and the responsibilities needed to be transferred to another provider. Intertrust Corporate Services Limited was appointed on 5 October 2017 to fulfil these responsibilities.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR BGBDBDGDBGRS

(END) Dow Jones Newswires

November 24, 2017 10:00 ET (15:00 GMT)

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