Financial performance

Credit rating

The credit rating for NWL has remained consistent throughout the year at BBB+ stable (Fitch and S&P) and Baa1 stable (Moody’s).

Treasury policy

The main purposes of the Group’s treasury function are to assess the Group’s ongoing capital requirement, to maintain short term liquidity and to raise funding, taking advantage of any favourable market opportunities. It ensures access to medium term committed back up facilities renewable on a five year basis.

It also invests any surplus funds the Group may have, based on its forecast requirements and in accordance with the Group’s treasury policy. On occasions, derivatives are used as part of this process, but the Group’s policies prohibit their use for speculation. Full details are provided in note 20 to the financial statements. The Group is operating in compliance with its policies.

Cash flow/liquidity

As noted previously, the Group has substantial cash resources and undrawn committed bank facilities available to maintain general liquidity.

Pensions

The Group operates both a defined benefit pension scheme, which closed to new entrants on 31 December 2007, and an occupational defined contribution arrangement which began on 1 January 2008.

The surplus (under IAS 19) of the defined benefit scheme of £90.5 million, at 31 March 2008 has moved to a deficit of £119.4 million at 31 March 2009. This is mainly due to the fall in the market value of the scheme’s assets since March 2008 and a reduction in the discount rate assumption to 6.1% (March 2008: 6.8%) to better match the average duration of the schemes liabilities.

The triennial actuarial valuation of the final salary scheme as at 31 December 2007 is complete and the formal report and certificates were signed in November 2008. The valuation resulted in a surplus of £42 million (6%) on an ‘ongoing’ basis, which takes into account the prepaid contributions (in 2006 and 2007) for the period up to 31 December 2010. While the actuarial valuation incorporates longer term forecasts and assumptions than the IAS 19 valuation, the prevailing market conditions are difficult and we will continue to monitor carefully. The Final Business Plan submission to Ofwat included a proposal for deficit recovery contributions.

Creditors

The Company’s policy is to agree payment terms with suppliers and to pay on time according to those agreed terms. The Company’s policy is to make payment not more than 30 days after receipt of a valid invoice, except as otherwise agreed. The ratio, expressed in days, between the amount invoiced by its suppliers during the year and the amount owed to its trade creditors at 31 March 2009, was 20 days (2008: 13 days).

Structure of the Company’s share capital

The authorised share capital of the Company is £70,000,000 divided into 700,000,000 ordinary shares of 10 pence each. As at 31 March 2009, the Company had 518,623,845 ordinary 10 pence shares admitted to trading.

Rights and obligations attaching to the shares

The rights attaching to the shares in the Company are set out in the Articles and may be changed with the approval of the shareholders. Subject to the provisions of the Companies Acts, shares may be issued with or have attached thereto such preferred, deferred, qualified or other rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise, as the Company may by ordinary resolution determine or, if there has not been any such determination, as the Board may determine.

Shareholders are entitled to requisition a general meeting of the Company and to attend, vote and speak at general meetings, in accordance with the Companies Acts and the Articles. Shareholders have the right to appoint proxies.