Notes 33-42

Company Balance Sheet

31 December	Notes	2002 £m	2001 (as restated) £m
Fixed assets
Tangible assets	33	61	28
Investments:
Subsidiary undertakings		1,023	788
Other investments		22	29
	34	1,045	817
		1,106	845
Current assets
Debtors (amounts falling due within one year)	35	3,431	2,872
Debtors (amounts falling due after more than one year)	35	309	207
		3,740	3,079
Current asset investments	36	147	250
Cash at bank and in hand		316	–
		4,203	3,329
Creditors (amounts falling due within one year)
Borrowings	37	(237)	(447)
Other creditors	38	(2,484)	(1,445)
		(2,721)	(1,892)
Net current assets		1,482	1,437
Total assets less current liabilities		2,588	2,282

Creditors (amounts falling due after more than one year)
Borrowings	37	(518)	(493)
Other creditors	38	(205)	(205)
		(723)	(698)
Provisions for liabilities and charges	39	(33)	(36)
Net assets		1,832	1,548

Capital and reserves – equity interests
Called up share capital	20	236	223
Share premium account	40	537	62
Profit and loss account	40	1,059	1,263
Shareholders’ funds	41	1,832	1,548

The financial statements were approved by the board of directors on 20 February 2003 and were signed on its behalf by:

Sir Michael Perry GBE

Chairman

Phillip Bentley

Group Finance Director

The re-statement of the 2001 balance sheet is explained in note 34(iv). Notes 33-42 form part of these financial statements, along with the accounting policies note (1) and note 20.

Notes to the Company Balance Sheet

33 Tangible fixed assets

	Plant, equipment and vehicles £ m
Cost
1 January 2002	64
Additions	45
Disposals	(7)
31 December 2002	102

Depreciation and amortisation
1 January 2002	36
Charge for the year	9
Disposals	(4)
31 December 2002	41

Net book value
31 December 2002	61
31 December 2001	28
No assets were held under finance leases (2001: £nil). Amounts capitalised in respect of customer relationship management (CRM) infrastructure included within tangible fixed assets at 31 December 2002 were £26 million (2001: £nil).

34 Fixed asset investments

	£m	£m	£m	£m
	Investments in subsidiaries (i)
	Shares	Loans	Own shares (iii)(iv)	Total
Cost
1 January 2002 (as restated)(iv)	222	566	65	853
Additions(ii)	–	608	–	608
Disposals(ii)	–	(283)	(14)	(297)
Exchange adjustments	–	(90)	–	(90)
31 December 2002	222	801	51	1,074
Amounts written off
1 January 2002 (as restated)(iv)	–	–	(36)	(36)
Amortisation under long term incentive schemes	–	–	(7)	(7)
Disposals	–	–	14	14
31 December 2002	–	–	(29)	(29)
Net book value
31 December 2002	222	801	22	1,045
31 December 2001 (as restated)(iv)	222	566	29	817
(i) Investments comprise £1,023 million (2001: £788 million) of investments in subsidiary undertakings, being shares in subsidiaries of £222 million (2001: £222 million) and loans of £801 million (2001: £566 million), and own shares at cost of £51 million (2001 as restated: £65 million) to the Centrica Employees Share Trust. (ii) An investment of £434 million was made during the year in Enbridge Services Inc. Following the establishment of the Consumers’ Waterheater Income Fund, a repayment of part of the original investment of £283 million was made (note 32). Additional investments were also made in Centrica America Limited and Centrica Finance US Limited during the year. (iii) The Centrica Employees Share Trust held 27 million (2001: 39 million) ordinary shares in the company. This represented 0.64% of the called up ordinary share capital (2001: 1%), which had a market value at 31 December 2002 of £47 million and a nominal value of £2 million (2001: £88 million and £2 million respectively). During the year 12,213,398 shares were transferred from the trust with respect to awards held by employees of the company and its subsidiaries. (iv) In 2001 the company balance sheet showed the loan to the Centrica Employees Share Trust (£69 million) within fixed asset investments. This year the balance sheet has been restated to reflect the substance of the arrangements with the trust, whereby Centrica shares are held by the trust for the purpose of fulfilling awards to employees of Centrica plc and its subsidiaries under the long term incentive scheme. The balance sheet of the trust has therefore been consolidated with that of the company. This treatment is consistent with UITF 13 ESOP Trusts. £18 million of the amortisation carried forward has not been charged through the profit and loss account, but is included in amounts owed by group undertakings in note 35, as it reflects amounts recoverable from subsidiaries for awards due to their employees. At 31 December 2001, the amount owed by group undertakings relating to amortisation was £27 million, of which £16 million was due after more than one year. Debtors have been restated accordingly in note 35. Provisions have also been restated in note 39, reducing the 31 December 2001 balance by £13 million. Amounts previously included within provisions related to long term incentive scheme costs for company employees. These have now been included above within amortisation brought forward. The operation of the long term incentive scheme is described more fully in the remuneration report.

35 Debtors

	within one year £m	after one year £m	within one year £m	after one year £m
	2002		2001 (as restated)(ii)
Amounts owed by group undertakings(i)	3,360	309	2,837	190
Deferred corporation tax	–	–	–	17
Other debtors	55	–	24	–
Prepayments and other accrued income	16	–	11	–
	3,431	309	2,872	207
(i) A total of £18 million (2001: £23 million) is included relating to the accumulated cost of shares expected to be released to employees of subsidiaries under the long term incentive scheme. (ii) Explanation of the restatement is given in note 34(iv).

36 Current asset investments

	2002 £m	2001 £m
Money market investments	147	250
£10 million (2001: £9 million) of money market investments were held by the Law Debenture Trust, on behalf of the company, as security to cover unfunded pension liabilities.

37 Borrowings

Amounts falling due	Within one year £m	After one year £m	Within one year £m	After one year £m
Amounts falling due	2002		2001
Bank loans and overdrafts	–	–	140	–
Bonds(i)	–	518	–	493
Commercial paper	237	–	307	–
	237	518	447	493
(i) Bonds are sterling denominated and repayable as follows: between one and two years £nil (2001: £nil); between two and five years £125 million (2001: £100 million); and after five years £400 million (2001: £400 million). The bonds bear interest at fixed rates between 5.375% and 5.875% (2001: between 5.375% and 5.875%). The bonds have a face value of £525 million (2001: £500 million) and are stated net of £7 million (2001: £7 million) of issuance discount.

38 Other creditors

Amounts falling due	Within one year £m	After one year £m	Within one year £m	After one year £m
Amounts falling due	2002		2001
Trade creditors	28	–	25	–
Amounts owed to group undertakings	2,239	205	1,255	205
Other creditors	16	–	10	–
Accruals and deferred income	91	–	79	–
Dividend payable	110	–	76	–
	2,484	205	1,445	205

39 Provisions for liabilities and charges

	1 January 2002 (as restated)(iii) £m	Profit and loss charge £m	Utilised in the year £m	31 December 2002 £m
Pension costs(i)	12	9	(12)	9
Other(ii)	24	5	(5)	24
	36	14	(17)	33
Potential unrecognised deferred corporation tax assets amounted to £29 million (2001: £10 million).
(i) The pension cost provision includes the difference between charges to the profit and loss account and the contributions paid to the pension schemes in respect of retirement pensions and other related benefits. (ii) Other provisions principally represents estimated liabilities for restructuring, outstanding litigation and National Insurance in respect of long term incentive scheme liabilities. The National Insurance provision was based on a share price of 171 pence at 31 December 2002 (2001: 222 pence). (iii) Explanation of the restatement is given in note 34(iv).

40 Reserves

	Share premium account £m	Profit and loss account(i) £m	Total £m
1 January 2002	62	1,263	1,325
Retained loss for the year(i)	–	(200)	(200)
Exchange translation differences(ii)	–	(6)	(6)
Shares to be issued under long term incentive scheme(iii)	–	2	2
Issue of ordinary share capital (note 20)	475	–	475
31 December 2002	537	1,059	1,596
(i) As permitted by section 230(3) of the Companies Act 1985, no profit and loss account is presented. The company’s loss for the financial year was £28 million (2001: £11 million profit). (ii) Exchange gains of £84 million (2001: £18 million) on foreign currency borrowings have been offset in reserves against exchange losses, of £90 million (2001: £18 million), on the cost of investments in overseas undertakings. (iii) The company intends to fund certain of its long term incentive schemes through the issue of new shares when these schemes vest. The amount shown represents the expected value of the shares to be issued using the market price at the date allocations were granted.

41 Movement in shareholders’ funds

	2002 £m	2001 £m
1 January	1,548	1,644
(Loss)/profit attributable to the company	(28)	11
Dividends	(172)	(124)
Exchange translation differences	(6)	–
Issue of shares net of issue costs	488	17
Shares to be issued under long term incentive scheme	2	–
Net movement in shareholders’ funds for the financial year	284	(96)
31 December	1,832	1,548

42 Commitments and contingencies

a) Capital expenditure

At 31 December 2002, the company had placed contracts for capital expenditure amounting to £5 million (2001: £1 million).

b) Lease commitments

At 31 December 2002, there were £1 million of land and building operating lease commitments in relation to non-cancellable operating leases for the company (2001: £2 million). The company has guaranteed operating commitments of a subsidiary undertaking at 31 December 2002 of £8 million (2001: £4 million) in respect of land and buildings.

There were no commitments at 31 December 2002 under finance leases entered into, but for which inception occurs after 31 December 2002 (2001: £nil) for the company.