RNS Number : 6998B
  Canary Wharf Finance II PLC
  20 August 2008
   
    CANARY WHARF FINANCE II PLC
    
    19 AUGUST 2008
    30 JUNE 2008 HALF YEARLY FINANCIAL REPORT
    
    
    Pursuant to sections 4.2 and 6.3.5 of the Disclosure and Transparency Rules the board of Canary Wharf Finance II plc is pleased to
publish its half yearly financial report for the period ended 30 June 2008, which will shortly be available from www.
canarywharf.com/Investor Relations. 
    Two copies of the 30 June 2008 Half Yearly Financial Report will be submitted to the UK Listing Authority ("UKLA") in accordance with
Paragraph 9.6.1. The documents will shortly be available for inspection at  the UKLA's Document Viewing Facility, which is situated at 25
North Colonnade, Canary Wharf, London E14 5HS.
    INTERIM MANAGEMENT REPORT
    
    
    
    BUSINESS REVIEW
    The company is a wholly owned subsidiary of Canary Wharf Group plc and its ultimate parent undertaking is Songbird Estates plc.
    The principal activity of the company is to act as a finance company. The company is engaged in the provision of finance to the Canary
Wharf group, comprising Canary Wharf Group plc and its subsidiaries ('the group'). All activities take place within the United Kingdom. 
    At 30 June 2008, the company had �2,555,267,362 (31 December 2007: �2,558,722,801) of notes listed on the London Stock Exchange and had
lent the proceeds to a fellow subsidiary undertaking, CW Lending II Limited.  The notes are secured on the rental stream from certain
property interests at Canary Wharf held by fellow subsidiary undertakings.
    As shown in the company's profit and loss account, the company's profit after tax for the six month period was �10,724,786 (period ended
30 June 2007: �19,668,905). 
    The balance sheet shows the company's financial position at the period end and indicates that net assets were �3,827,454 (31 December
2007: liabilities of �18,201,329). 
    The financial position of the company as indicated by its balance sheet is impacted by the application of Financial Reporting Standard
26 (Financial Instruments: Recognition and Measurement) ('FRS 26') and its impact on other financial reporting standards.  Adjusting for the
effects of FRS 26 the net asset value of the company at 30 June 2008 was as follows:
    
 31 December                                             30 June         30 June
 2007                                                       2008            2007
 �                                                             �               �
 (18,201,329)  Net assets/(liabilities) per balance    3,827,454      37,891,973
                     sheet                         
 20,989,000                       Effects of FRS 26    (843,000)    (35,218,000)
 -----------                                         -----------  --------------
 2,787,671                      Adjusted net assets    2,984,454       2,673,973
 =======                                                 =======         =======

    There have been no significant events since the balance sheet date.

    KEY PERFORMANCE INDICATORS

 31 December                                       30 June             30 June
 2007                                                 2008                2007
 �                                                      �                   � 
 2,558,722,801             Securitised debt  2,555,267,362       2,562,178,240
 151,516,295         Financing cost (before     76,985,149          74,117,105
                    adjustments for FRS 26)
 359,523         Adjusted profit before tax        196,783             245,824
                                 and FRS 26
                                           
 18.8 years       Weighted average maturity     18.4 years          19.3 years
                                    of debt
 6.2%             Weighted average interest          6.2%                 6.2%
                                       rate
    The adjusted profit before tax comprises the profit on ordinary activities before tax of �10,724,786 (period ended 30 June 2007:
�19,668,905) adjusted for the FRS 26 items listed in Note 3, totalling �10,528,003 (period ended 30 June 2007: �19,423,081).
    PRINCIPAL RISKS AND UNCERTAINTIES
    The risks and uncertainties facing the business are monitored through continuing assessment by management and formal quarterly review
and discussion at audit committee and board level for the group. Board and audit committee discussion focuses on the risks identified as
part of the system of internal control which highlights key risks faced by the company and allocates specific day to day monitoring and
control responsibilities to management. As a provider of finance to the group, these key risks include the cyclical nature of the property
market, concentration risk and financing risk.  
    These risks, which are summarised below, relate both to the first six months and the second six months of the year and are unchanged
from the risks and uncertainties disclosed in the directors' report to the financial statements for the year ended 31 December 2007.
    The cyclical nature of the property market
    The property market is subject to factors such as the oversupply of available space in the office market or a decline in tenant demand
for space.  Such factors are monitored in order to ensure that the company can react promptly should the need arise.
    Concentration risk
    The properties on which the company's debt is secured are currently located on or adjacent to the Canary Wharf Estate.  Wherever
possible steps are taken to mitigate or avoid the material consequences arising from this concentration.
    Financing risk
    The broader economic cycle inevitably leads to movement in inflation, interest rates and bond yields. The company holds debenture
finance, principally in sterling at both fixed and floating rates and uses interest rate swaps to modify its exposure to interest rate
fluctuations.

     DIRECTORS' RESPONSIBILITY STATEMENT
    The board of directors, comprising G Iacobescu, A P Anderson II and B Niles, confirm to the best of their knowledge that:
    a) the condensed set of financial statements on pages 6 to 12, which has been prepared in accordance with the applicable set of
accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company as
required by Rule 4.2.4 of the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority ('the DTRs'); and
    b) the interim management report includes a fair review of the information required by Rule 4.2.7 of the DTRs (indication of important
events during the first six months and description of principal risks and uncertainties for the remaining six months of the year).

    Signed on behalf of the board by:
    A P Anderson II
    Director
    19 August 2008

    INDEPENDENT REVIEW REPORT TO CANARY WHARF FINANCE II PLC
    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 June 2008 which comprises the profit and loss account, the statement of total recognised gains and losses, the balance
sheet, and related notes 1 to 9. We have read the other information contained in the half-yearly financial 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 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
United Kingdom. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an
independent review 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 formed.
    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 Disclosure and Transparency Rules of the United Kingdom's Financial
Services Authority.
    As disclosed in note 1, the annual financial statements of the company are prepared in accordance with United Kingdom Generally Accepted
Accounting Practice. The condensed set of financial statements included in this half-yearly financial report have been prepared in
accordance with the accounting policies the group intends to use in preparing its next annual financial statements.
    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.
    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 United
Kingdom. A review of interim financial information consists of making inquiries, 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
half yearly financial report for the six months ended 30 June 2008 is not prepared, in all material respects, in accordance with the
Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
    Deloitte & Touche LLP
    Chartered Accountants and Registered Auditors
    19 August 2008
    London, United Kingdom
    UNAUDITED PROFIT AND LOSS ACCOUNT 
    FOR THE SIX MONTHS ENDED 30 JUNE 2008


                                                                                 Unaudited        Unaudited
 Audited                                                                       Six months        Six months
 Year ended                                                                          ended            ended
 31 December2007                                                            30 June 2008       30 June 2007
 �                                                             Note                     �                � 
 (7,050)                         Administrative expenses                           (7,050)                -
 --------                                                                         --------          -------
 (7,050)                                  OPERATING LOSS                           (7,050)                -
 151,882,868                     Interest receivable and                 2      77,188,982       74,362,929
                                          similar income
 (157,536,978)                      Interest payable and                 3    (66,457,146)     (54,694,024)
                                         similar charges
 ---------------                                                            --------------   --------------
 (5,661,160)                            (LOSS)/PROFIT ON                        10,724,786       19,668,905
                                     ORDINARY ACTIVITIES
                                         BEFORE TAXATION
 -                               Tax on (loss)/profit on                 4               -                -
                                     ordinary activities
 ------------                                                                 ------------      -----------
 (5,661,160)                            (LOSS)/PROFIT ON                 8      10,724,786       19,668,905
                                     ORDINARY ACTIVITIES
                                  AFTER TAXATION FOR THE
                                                    YEAR
                                                                                ========           ========
 ========
    
All amounts relate to continuing activities in the United Kingdom.

    The Notes on pages 9 to 12 form an integral part of this Half Yearly Financial Report.

    The interim results for the six months ended 30 June 2008 were approved by the Board of Directors on 19 August 2008.

    UNAUDITED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
    FOR THE SIX MONTHS ENDED 30 JUNE 2008


 Audited                                                         Unaudited  Unaudited
 Year ended                                                     Six months  Six months
 31 December                                                         ended  ended
 2007                                                         30 June 2008  30 June 2007
 �                                                                      �   � 
 (5,661,160)        (Loss)/profit for the financial year        10,724,786  19,668,905
 (4,553,178)          Fair value adjustment on effective        13,777,756  29,762,042
                                     hedging instruments                              
 2,967,178               Receipts from effective hedging       (1,927,756)  (1,140,042)
                                             instruments                               
 9,152,705        Termination of hedge reserve recycling                 -  9,152,705
 (646,657)                       Hedge reserve recycling         (546,003)  (91,420)
 ------------                                                 ------------  ------------
 1,258,888        Total recognised gains relating to the        22,028,783      57,352,190
                                                    year                                  
 ========                                                         ========  ========
    
    
    The Notes on pages 9 to 12 form an integral part of this Half Yearly Financial Report.

    UNAUDITED BALANCE SHEET AS AT 30 JUNE 2008

 Audited                 Unaudited           Unaudited
 31 December2007        30 June2008         30 June2007
 �                           Note          �                   � 
                    CURRENT ASSETS    
                    Debtors:  5  
 2,625,079,707      Amounts falling due after one year    2,620,527,116       2,666,278,515
 41,254,638         Amounts falling due within one year    42,795,911          39,394,575
 617,394            Cash at bank    820,885             456,206
 -------------          ------------        ------------
 2,666,951,739          2,664,143,912       2,706,129,296
 (39,084,360)       CREDITORS: Amounts falling due within one year  6  (40,632,340)        (37,176,808)
 ----------------       ----------------    ----------------
 2,627,867,379      NET CURRENT ASSETS    2,623,511,572       2,668,952,488
 ----------------       ----------------    ----------------
 2,627,867,379      TOTAL ASSETS LESS CURRENT LIABILITIES    2,623,511,572       2,668,952,488
 (2,646,068,708)    CREDITORS: Amounts falling due after more than one year  7  (2,619,684,118)     (2,631,060,515)
 -----------------      -----------------   -----------------
 (18,201,329)       NET ASSETS/(LIABILITIES)    3,827,454          37,891,973
 =========              =======            ========
                    CAPITAL AND RESERVES    
 50,000             Called-up share capital     50,000              50,000
 3,300,321          Hedging reserve  8  14,604,318          34,063,557
 (21,551,650)       Profit and loss account  8  (10,826,864)           3,778,416
 --------------         --------------        ------------
 (18,201,329)       SHAREHOLDER'S FUNDS/(DEFICIT)    3,827,454          37,891,973
 =========              ========            ========
    The Notes on pages 9 to 12 form an integral part of this Half Yearly Financial Report.

    NOTES TO THE HALF YEARLY FINANCIAL REPORT 
    FOR THE SIX MONTHS ENDED 30 JUNE 2008
    1.    PRINCIPAL ACCOUNTING POLICIES
    The half yearly financial report has been prepared in accordance with pronouncements on interim reporting issued by the Accounting
Standards Board, and on the basis of the accounting policies set out in the company's financial statements for the year ended 31 December
2007, which are prepared in accordance with UK GAAP.
    The financial information relating to the six months periods ended 30 June 2008 and 30 June 2007 is unaudited.
    The results for the year ended 31 December 2007 are not statutory accounts as defined in Section 240 of the Companies Act 1985. A copy
of the statutory accounts for the year has been delivered to the Registrar of Companies. The audit report on those accounts was not
qualified, did not contain a reference to any matters which the auditors drew attention by way of emphasis without qualifying the report and
did not contain statements under Section 237(2) or (3) of the Companies Act 1985.
    In accordance with the provisions of FRS 1 (Revised) the company is exempt from the requirements to prepare a cash flow statement, as it
is a wholly-owned subsidiary of Canary Wharf Group plc, which has prepared a consolidated cash flow statement.

    2.    INTEREST RECEIVABLE AND SIMILAR INCOME

 Audited                                             Unaudited       Unaudited
 Year ended                                         Six months      Six months
 31 December                                             ended           ended
 2007                                             30 June 2008    30 June 2007
 �                                                          �               � 
 101,667               Bank interest receivable         67,866          46,378
 151,781,201           Interest receivable from     77,121,116      74,316,551
                             group undertakings
       -------------                             -------------  --------------
 151,882,868                                        77,188,982      74,362,929
       =========                                      ========       =========

    3.    INTEREST PAYABLE AND SIMILAR CHARGES

                                                   Unaudited         Unaudited
 Audited                                          Six months        Six months
 Year ended                                            ended             ended
 31 December2007                                30 June 2008      30 June 2007
 �                                                        �                 � 
 151,516,295             Interest payable on      76,985,149        74,117,105
                  securitised debt (Note 6) 
 945,688           Fair value adjustments on     (9,982,000)      (25,053,312)
                        derivative financial
                                 instruments
 (3,431,053)      Foreign exchange movements               -       (3,431,053)
 (646,657)           Hedge reserve recycling       (546,003)          (91,421)
                                    (Note 8)
 9,152,705              Termination of hedge               -         9,152,705
                           reserve recycling
 ---------------                              --------------    --------------
 157,536,978                                      66,457,146        54,694,024
 ==========                                        =========         =========

    4.    TAXATION
    No provision for corporation tax has been made since the tax profit for the year will be covered by the group relief expected to be made
available to the company by other companies in the group. No charge will be made by other group companies for the surrender of group relief.
It is anticipated that group relief and other tax reliefs will impact on future tax charges. There is no unprovided deferred taxation.
    5.    DEBTORS

 Audited                                             Unaudited         Unaudited
 31 December                          30 June           30 June
 2007                                    2008              2007
 �                                         �                 � 
                    Due within one year:
 39,131,220         Loans to fellow subsidiary undertaking              40,677,267        37,292,641
 2,116,306          Amount owed by fellow subsidiary undertaking               2,109,256         2,096,181
 7,112              Accrued interest receivable                   9,388             5,753
 -------------                   ------------     -------------
 41,254,638                        42,795,911        39,394,575
 ========                            ========          ========
                    Due in more than one year:                        
 -                  Derivative financial instruments               1,415,000        35,218,000
 2,625,079,707      Loans to fellow subsidiary undertaking                               2,619,112,116     2,631,060,515
  ----------------           ----------------  ----------------
 2,625,079,707                  2,620,527,116     2,666,278,515
 ===========                       ==========       ===========
    The loans to a fellow subsidiary undertaking bear fixed rates of interest between 5.12% and 6.81% and are repayable in instalments
between 2005 and 2035. At 30 June 2008 the fair value of the loan was �2,355,076,000 (31 December 2007: �2,606,215,000), calculated by
reference to the fair values of the company's financial liabilities.
    Other amounts owed by group undertakings are non-interest bearing.
    6.    CREDITORS: Amounts falling due within one year

 Audited                                            Unaudited      Unaudited
 31 December                            30 June        30 June
 2007                                      2008           2007
 �                                           �              � 
 39,077,310     Securitised debt (Note 7)                    40,625,290     37,176,808
 7,050          Accruals and deferred income                         7,050              -
 -------------                    -------------  -------------
 39,084,360                          40,632,340     37,176,808
 ========                             =========      =========
    The amount of the securitised debt due within one year comprises �33,714,410 (31 December 2007: �32,166,430) of interest and �6,910,880
(31 December 2007: �6,910,880) of capital.
    7.    CREDITORS: Amounts falling due after more than one year

 Audited           Unaudited  U
                              n
                              a
                              u
                              d
                              i
                              t
                              e
                              d
 31 December       30 June  3
                            0
                            J
                            u
                            n
                            e
 2007              2008  2
                         0
                         0
                         7
 �                 �   �
                        
 2,625,079,708  Securitised debt   2,619,112,118  2
                                                  ,
                                                  6
                                                  3
                                                  1
                                                  ,
                                                  0
                                                  6
                                                  0
                                                  ,
                                                  5
                                                  1
                                                  5
 20,989,000     Derivative financial instruments  572,000  -
 -------------     ----------------  -
 ---                                 -
                                     -
                                     -
                                     -
                                     -
                                     -
                                     -
                                     -
                                     -
                                     -
                                     -
                                     -
                                     -
                                     -
                                     -
 2,646,068,708     2,619,684,118  2
                                  ,
                                  6
                                  3
                                  1
                                  ,
                                  0
                                  6
                                  0
                                  ,
                                  5
                                  1
                                  5
 ==========        ===========  =
                                =
                                =
                                =
                                =
                                =
                                =
                                =
                                =
                                =
                                =
    The securitised debt has a face value of �2,555,267,362 (31 December 2007: �2,558,722,801), of which �1,829,267,362 (31 December 2007:
�1,832,722,801) carries fixed rates of interest between 5.95% and 6.80%. The other �726,000,000 (31 December 2007: �726,000,000) of the
securitised debt carries floating rates of interest at LIBOR plus a margin.  The company uses interest rate swaps to hedge exposure to the
variability in cash flows on floating rate debt caused by movements in market rates of interest.  The hedged rates of the floating notes,
including the margins, are between 5.12% and 5.80%.  
    The market value of the securitised debt at 30 June 2008 was �2,354,233,000 (31 December 2007: �2,585,226,000).  At 30 June 2008 the
fair value of the interest rate derivatives resulted in the recognition of a net asset of �843,000 (31 December 2007: liability of
�20,989,000). Of this amount, assets totalling �1,239,000 were in respect of interest rate swaps which qualify for hedge accounting (31
December 2007: liabilities totalling �10,611,000) and net liabilities of �396,000 was in respect of interest rate swaps which do not qualify
for hedge accounting (31 December 2007: liabilities of �10,378,000).
    The amounts at which the securitised debt is stated comprise:

 Audited                                         Unaudited           Unaudited
 31 December                                       30 June             30 June
 2007                                                 2008                2007
 �                                                      �                   � 
 2,431,843,021           Brought forward     2,631,990,588       2,431,843,021
 (581,447,372)          Repaid in period       (3,455,440)       (577,991,932)
 726,000,000        Drawn down in period                 -         726,000,000
 (5,050,696)          Deferred financing       (2,512,150)         (2,525,329)
                                expenses
 60,645,635               Cross currency                 -          60,645,635
                             translation
 ---------------                          ----------------    ----------------
 2,631,990,588    Carried forward            2,626,022,998       2,637,971,395
                                        
 ==========                                    ===========         ===========
                                        
                                        
    
 6,910,880        Payable within one year        6,910,880           6,910,880
                              or ondemand
 2,625,079,708    Payable after more than    2,619,112,118      2,631,060,515 
                         oneyear         
 ---------------                           ---------------  ------------------
                                         
                                         
 2,631,990,588                               2,626,022,998       2,637,971,395
 ==========                                     ==========        ============

    Certain of the A1, A3 and B notes were issued at a premium which is being amortised to the profit and loss account on a straight-line
basis over the life of the relevant notes. At 30 June 2008 �70,755,636 (31 December 2007: �73,267,787) remained unamortised.
    The notes are secured on certain property interests in fellow subsidiary undertakings and the rental income stream therefrom.
    8.    RESERVES
                                                              Hedging reserve       Profit and loss         Total
                                                                                            account
                                                                            �                     �             �
 At 1 January 2008                                                  3,300,321          (21,551,650)  (18,251,329)
 Profit for the period                                                      *            10,724,786    10,724,786
 Fair value adjustment on effective hedging instruments            13,777,756                     *    13,777,756
 Receipts from effective hedging instruments                      (1,927,756)                     *   (1,927,756)
 Movements on discontinued hedge accounting transferred to          (546,003)                     *     (546,003)
 the profit and  loss account                               
              
                                                               --------------       ---------------  ------------
                                 At 30 June 2008                  14,604,318           (10,826,864)     3,777,454
                                                            
                                                                    =========             =========       =======
    9.    CAPITAL COMMITMENTS
    As at 30 June 2008 the company had given a fixed charge over all its assets, including first fixed charges over its bank accounts, to
secure the notes referred to in Note 7.
    Contact for queries: J R Garwood, Company Secretary, Canary Wharf Finance II plc

    Telephone: 020 7418 2000


This information is provided by RNS
The company news service from the London Stock Exchange
 
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