Caseware UK (AP4) 2024.0.164 2024.0.164 London 1 Embankment Place Total comprehensive loss for the year £7.2 million (2024: £2.9 million)Utilities Trust of Australia NatWest Group Pension Fund Régime de Rentes du Mouvement Desjardins Desjardins Financial Security Life Assurance Company Certas Home and Auto Insurance Company false true true Rocfort Road, Snodland, Kent, ME6 5AH true true true HDF (UK) Holdings Limited 2024-04-01 The company’s principal activity during the year and for the foreseeable future is that of an intermediate holding company. Its subsidiaries are South East Water Limited and South East Water (Finance)Limited.0 0 true false 04771490 2024-04-01 2025-03-31 04771490 2023-04-01 2024-03-31 04771490 2025-03-31 04771490 2024-03-31 04771490 2023-04-01 04771490 1 2024-04-01 2025-03-31 04771490 d:CompanySecretary1 2024-04-01 2025-03-31 04771490 d:Director4 2024-04-01 2025-03-31 04771490 d:Director4 2025-03-31 04771490 d:Director5 2024-04-01 2025-03-31 04771490 d:Director5 2025-03-31 04771490 d:Director6 2024-04-01 2025-03-31 04771490 d:RegisteredOffice 2024-04-01 2025-03-31 04771490 d:Agent1 2024-04-01 2025-03-31 04771490 c:NegativeGoodwill 2025-03-31 04771490 c:NegativeGoodwill 2024-03-31 04771490 c:CurrentFinancialInstruments 2025-03-31 04771490 c:CurrentFinancialInstruments 2024-03-31 04771490 c:Non-currentFinancialInstruments 2025-03-31 04771490 c:Non-currentFinancialInstruments 2024-03-31 04771490 c:Non-currentFinancialInstruments c:AfterOneYear 2025-03-31 04771490 c:Non-currentFinancialInstruments c:AfterOneYear 2024-03-31 04771490 c:UKTax 2024-04-01 2025-03-31 04771490 c:UKTax 2023-04-01 2024-03-31 04771490 c:ShareCapital 2024-04-01 2025-03-31 04771490 c:ShareCapital 2025-03-31 04771490 c:ShareCapital 2024-03-31 04771490 c:ShareCapital 2023-04-01 04771490 c:RetainedEarningsAccumulatedLosses 2024-04-01 2025-03-31 04771490 c:RetainedEarningsAccumulatedLosses 2025-03-31 04771490 c:RetainedEarningsAccumulatedLosses 2023-04-01 2024-03-31 04771490 c:RetainedEarningsAccumulatedLosses 2024-03-31 04771490 c:RetainedEarningsAccumulatedLosses 2023-04-01 04771490 c:TaxLossesCarry-forwardsDeferredTax 2025-03-31 04771490 c:TaxLossesCarry-forwardsDeferredTax 2024-03-31 04771490 d:OrdinaryShareClass1 2024-04-01 2025-03-31 04771490 d:OrdinaryShareClass1 2025-03-31 04771490 d:OrdinaryShareClass1 2024-03-31 04771490 d:FRS101 2024-04-01 2025-03-31 04771490 d:Audited 2024-04-01 2025-03-31 04771490 d:FullAccounts 2024-04-01 2025-03-31 04771490 d:PrivateLimitedCompanyLtd 2024-04-01 2025-03-31 04771490 c:Subsidiary1 2024-04-01 2025-03-31 04771490 c:Subsidiary1 1 2024-04-01 2025-03-31 04771490 c:Subsidiary2 2024-04-01 2025-03-31 04771490 c:Subsidiary2 1 2024-04-01 2025-03-31 04771490 6 2024-04-01 2025-03-31 04771490 c:NetGoodwill 2025-03-31 04771490 c:NetGoodwill 2024-03-31 04771490 e:PoundSterling 2024-04-01 2025-03-31 iso4217:GBP xbrli:shares xbrli:pure

Registered number: 04771490 SOUTH EAST WATER (HOLDINGS) LIMITED Annual report and financial statements for the year ended 31 March 2025
SOUTH EAST WATER (HOLDINGS) LIMITED
Contents
| Pages
Company information | 1
Strategic report | 2
Directors' report | 3 - 4
Independent auditors' report | 5 - 7
Statement of comprehensive income | 8
Statement of financial position | 9
Statement of changes in equity | 10
Notes to the financial statements | 11 - 21
SOUTH EAST WATER (HOLDINGS) LIMITED
Company Information
Directors | P Minguell Maria
| M McArdle
Company secretary | N Truillet
Registered number | 04771490
Registered office | Rocfort Road
| Snodland
| Kent
| ME6 5AH
Independent auditors | PricewaterhouseCoopers LLP
| Chartered Accountants and Statutory Auditors
| 1 Embankment Place
| London
| WC2N 6RH
Bankers | HSBC Bank plc
| 60 Queen Victoria Street
| London
| EC4N 4TR
Page 1
SOUTH EAST WATER (HOLDINGS) LIMITED
Strategic report for the year ended 31 March 2025
Introduction
The company is a wholly-owned subsidiary of Hastings Water (UK) Limited ("HWUK"). This Strategic report covers a review of the business and a description of the principal risks and uncertainties facing the company.
Business review
The company is a private company limited by shares. The company is domiciled and incorporated in England and Wales, part of the United Kingdom. The company’s principal activity during the year and for the foreseeable future is that of an intermediate holding company. Its subsidiaries are South East Water Limited ("SEWL") and South East Water (Finance) Limited ("SEWF"). The audited financial statements for the year ended 31 March 2025 are set out on pages 8 to 21. The loss after taxation for the year was £7.2 million (2024: £2.9 million) and net assets were £349.4 million (2024: £281.6 million).
Principal risks and uncertainties
The directors consider that liquidity risk is the principal risk facing the company. The company is financed by dividends paid by its subsidiary, SEWL. SEWL has been unable to pay dividends in the year and paid only limited dividends in the prior year. The companies’ financial liabilities are all due to HWUK, the company’s immediate parent company. As part of the intercompany loan agreement, the company is permitted to defer the payment of interest and add the interest deferred to the principal value of the loan outstanding. The company has taken advantage of this clause in the agreement to mitigate the non-receipt of dividends from SEWL. Additionally, the company has stopped paying dividends to its own parent company, and no dividends were paid in the year (2024: £1.0 million). As the principal financial assets and liabilities of the company are due from or to other companies within the HDF (UK) Holdings Limited ("HDF") group, the management of risks is undertaken at group level. Management has also considered the current economic uncertainty associated with various factors including inflation, pressures on household finances, supply chain constraints, uncertainity around political and regulated evnvironment and the impact this has had on its subsidiary company, SEWL, and any potential threat to the dividends received from that company. SEWL considered the potential impact on its operations and finances under various scenarios as part of its long-term viability statement.
Section 172(1) statement
As a non-trading intermediate holding company with no employees, the directors are mindful in making decisions that are in the best interests of the members of the company, taking into account the long-term consequences of their decisions and the impact on suppliers and others and on the environment. This is demonstrated by the makeup of the Board which includes a number of shareholder appointed directors. This report was approved by the board and signed by its order of the board by:.
N Truillet Secretary
Date: 3 December 2025
Page 2
SOUTH EAST WATER (HOLDINGS) LIMITED
Directors' report for the year ended 31 March 2025 The directors present their report and the audited financial statements for the year ended 31 March 2025.
Results and Dividends
The audited financial statements for the year ended 31 March 2025 are set out on pages 8 to 21. The loss for the year after tax was £7.2 million (2024: £2.9 million). The increased losses in the current year compared to the prior year is mainly attributable to the absence of dividend income from its subsidiary South East Water Limited. No dividends were paid during the year (2024: £1.0 million). The future prospects of the Company and its financial risks relating to dividends have been assessed in the Strategic report. Going Concern In adopting the going concern basis of preparation for these financial statements, the directors have considered the liquidity position, financial forecasts, and stress-testing of principal risks and uncertainties for the company and the wider HDF group, and the impact of these stress tests on committed funding facilities levels and applicable covenants. The directors have a reasonable expectation that the company has sufficient resources to continue in operation for the foreseeable future and therefore continue to adopt the going concern basis of accounting in preparing the financial statements. Note 1.4 on page 11 sets out further information on how the going concern assessment has been undertaken.
Directors
The directors of the compnay who were in the office during the year and up to the date of signing the financial statements were:
A N Le Gal (appointed 25 January 2024, resigned 24 September 2024)
P Minguell Maria (appointed 24 September 2024)
M McArdle
Qualifying third party indemnity provisions
The group has granted an indemnity to one or more of its directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. Such qualifying third party indemnity provision remains in force during the year and as at the date of approving the Directors' report.
Disclosure of information to auditors
Each of the persons who are directors at the time when this Directors' report is approved has confirmed that: ∙so far as the director is aware, there is no relevant audit information of which the company's auditor are unaware, and ∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditor are aware of that information.
Independent Auditors
PricewaterhouseCoopers LLP have expressed their willingness to continue in office as auditors and a resolution to reappoint them will be proposed at the forthcoming meeting of the board. Page 3
SOUTH EAST WATER (HOLDINGS) LIMITED
Directors' report (continued) for the year ended 31 March 2025
Directors' responsibilities statement
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare the financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: ∙select suitable accounting policies and then apply them consistently; ∙make judgements and accounting estimates that are reasonable and prudent; ∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; ∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. This report was approved by the board and signed on its behalf.
N Truillet Secretary
Date: 3 December 2025
Page 4
SOUTH EAST WATER (HOLDINGS) LIMITED
Independent auditors' report to the members of SOUTH EAST WATER (HOLDINGS) LIMITED Report on the audit of the financial statements Opinion In our opinion, South East Water (Holdings) Limited's financial statements: ∙give a true and fair view of the state of the company’s affairs as at 31 March 2025 and of its loss for the year then ended; ∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable law); and ∙have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements, included within the Annual Report and Financial Statements (the “Annual Report”), which comprise: the statement of financial position as at 31 March 2025; the statement of comprehensive income and statement of changes in equity for the year then ended; and the notes to the financial statements, comprising material accounting policy information and other explanatory information. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Conclusions relating to going concern Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company's ability to continue as a going concern. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Reporting on other information The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other Page 5
SOUTH EAST WATER (HOLDINGS) LIMITED
Independent auditors' report to the members of SOUTH EAST WATER (HOLDINGS) LIMITED information, we are required to report that fact. We have nothing to report based on these responsibilities. With respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included. Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below. Strategic report and Directors' Report In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' Report for the year ended 31 March 2025 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements. In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report and Directors' Report. Responsibilities for the financial statements and the audit Responsibilities of the directors for the financial statements As explained more fully in the Directors' responsibilities statement, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. Auditors' responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to UK tax legislation and the Companies Act 2006, and we considered the extent to which non-compliance might have a material effect on the financial statements. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting of inappropriate journal entries.. Audit procedures performed by the engagement team included: ∙Discussions with management, including consideration of known or suspected instances of non-compliance with laws, regulations and fraud; ∙Evaluation of Management's controls to prevent and detect irregularities; and ∙testing of journals to supporting documentation to identify any inappropriate adjustments; There are inherent limitations in the audit procedures described above. We are less likely to become aware of Page 6
SOUTH EAST WATER (HOLDINGS) LIMITED
Independent auditors' report to the members of SOUTH EAST WATER (HOLDINGS) LIMITED instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report. Use of this report This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Other required reporting Companies Act 2006 exception reporting Under the Companies Act 2006 we are required to report to you if, in our opinion: ∙we have not obtained all the information and explanations we require for our audit; or ∙adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or ∙certain disclosures of directors’ remuneration specified by law are not made; or ∙the financial statements are not in agreement with the accounting records and returns We have no exceptions to report arising from this responsibility. Andy Grimbly (Senior statutory auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors 1 Embankment Place London WC2N 6RH 4 December 2025 Page 7
SOUTH EAST WATER (HOLDINGS) LIMITED
Statement of comprehensive income for the year ended 31 March 2025
| 2025 | 2024
Note | £000 | £000
Income from shares in group undertakings | 5 | - | 2,250
Interest receivable and similar income |  | - | 1
Interest payable and similar expenses | 6 | (9,566) | (9,005)
Loss before tax |  | (9,566) | (6,754)
Taxation | 7 | 2,392 | 3,896
Loss for the financial year |  | (7,174) | (2,858)
There was no other comprehensive income for 2025 (2024:£NIL).
The notes on pages 11 to 21 form part of these financial statements.
Total comprehensive loss for the year £7.2 million (2024: £2.9 million)
Page 8
SOUTH EAST WATER (HOLDINGS) LIMITED Registered number:04771490
Statement of financial position as at 31 March 2025
| 2025 | 2024
Note | £000 | £000
Non current assets |  |  |
Investments | 10 | 436,421 | 361,421
Deferred tax | 8 | 3,265 | 3,195
Debtors | 11 | 3,023 | -
|  | 442,709 | 364,616
Current assets |  |  |
Debtors amounts falling due within one year | 11 | - | 701
Cash at bank and in hand |  | 2 | 2
|  | 2 | 703
Total assets less current liabilities |  | 442,711 | 365,319
Creditors: amounts falling due after more than one year | 12 | (93,265) | (83,699)
Net assets |  | 349,446 | 281,620
Capital and reserves |  |  |
Called up share capital | 13 | 220,408 | 145,408
Profit and loss account | 14 | 129,038 | 136,212
Total equity |  | 349,446 | 281,620
The financial statements on pages 9 to 20 were approved and authorised for issue by the board on 3 December 2025 and were signed on its behalf by:
P Minguell Maria | M McArdle
Director | Director
Date: 3 December 2025 |
The notes on pages 11 to 21 form part of these financial statements. Page 9
SOUTH EAST WATER (HOLDINGS) LIMITED
Statement of changes in equity for the year ended 31 March 2025
| Called up share capital | Profit and loss account | Total equity
| £000 | £000 | £000
At 1 April 2023 | 145,408 | 140,070 | 285,478
Total comprehensive loss | - | (2,858) | (2,858)
Dividends (see note: 9) | - | (1,000) | (1,000)
At 31 March 2024 | 145,408 | 136,212 | 281,620
Total comprehensive loss | - | (7,174) | (7,174)
Shares issued during the year | 75,000 | - | 75,000
At 31 March 2025 | 220,408 | 129,038 | 349,446
| The notes on pages 11 to 21 form part of these financial statements.
Page 10
SOUTH EAST WATER (HOLDINGS) LIMITED
Notes to the financial statements for the year ended 31 March 2025 1.Accounting policies
| 1.1 | Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' and the Companies Act 2006. The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 2). The principal accounting policies applied in the preparation of these financial statements are set out below. They have all been applied consistently to all the years presented, unless otherwise stated. The company has adopted the following accounting standards and amendments with mandatory adoption date on or before 01 April 2024: ∙Presentation of financial statements on non-current liabilities with covenants - IAS 1 (amended) The amendments listed above did not have any impact on the amounts recognised in current and prior year and are not expected to significantly affect the future years.
| 1.2 | Financial Reporting Standard 101 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemptions under FRS 101: ∙the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii), B66 and B67 of IFRS 3 Business Combinations ∙the requirements of IFRS 7 Financial Instruments: Disclosures ∙the requirements of IAS 7 Statement of Cash Flows ∙the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors ∙the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member ∙the requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d)-134(f) and 135(c)-135(e) of IAS 36 Impairment of Assets.
| 1.3 | Exemption from preparing consolidated financial statements
The company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006. Page 11
SOUTH EAST WATER (HOLDINGS) LIMITED
Notes to the financial statements for the year ended 31 March 2025 1.Accounting policies (continued)
| 1.4 | Going concern
The company reviews and considers the risks to which the business is exposed and potential impacts on viability on an ongoing basis. This includes structured, systems-based risk identification processes and management controls, robust budgeting and forecasting and continuous sensitivity analysis. This also includes consideration of the risks to which related party entities, including the parent company and subsidiary companies, are exposed. The company is financed by interest and dividends received from its subsidiary company, South East Water Limited (SEWL) and pays dividends and interest to its parent company, Hastings Water (UK) Limited (HWUK). In the event that SEWL does not pay interest and/or dividends, SEWH may be unable to pay interest to HWUK. In the absence of other protections, this might result in SEWH no longer being considered a going concern. However, the terms of the intercompany loan from HWUK to SEWH specifically protect the regulatory ring-fence by allowing SEWH to roll up any interest that it is unable to pay and for this to be added to the principal outstanding. The loan agreement further sets out that SEWH will not be in default of its obligations under the loan agreement solely by virtue of its inability to make payment of any deferred interest amount. As the company is part of the wider HDF group, the directors have assessed the going concern review that has been completed for that group. The PR24 business plan is the group’s most ambitious business plan ever. The proposed investment over the five years 2025 to 2030 amounts to £2.1 billion with goals to improve customer service, reduce customer supply interruptions and strengthen network resilience. A significant investment in environmental schemes is also proposed. As a result of the higher operating and capital expenditure proposed in the business plan, the group has forecasted a net cash outflow position before financing inflows over the going concern period of 12 months to September 2026. The group has raised sufficient additional liquidity to cover the going concern period as required. In August 2024 the group secured £50 million in a new loan. In December 2024 the ultimate shareholders provided £75 million of new equity to reduce gearing and enable the extension of the £120 million loan. In May 2025 the shareholders provided a further £200 million of equity which enabled the group to further reduce gearing, subsequently repaying both the £120 million loan and the outstanding balance on the group’s revolving credit facility of £69 million. In August 2025, the £125 million revolving credit facility which had been due to mature in September 2026 was renewed. The replacement revolving credit facility of £150 million matures in August 2028. In addition, in August 2025 the group entered into a new £30 million term loan, also maturing in August 2028. Under the terms of its banking arrangements, the financing group (comprising South East Water Limited, South East Water (Finance) Limited and South East Water (Holdings) Limited), has to comply with a number of financial covenants based on interest cover and gearing ratios, both on a retrospective and a prospective basis. Breach of these covenants can result in either a Trigger Event or an Event of Default. A Trigger Event activates initial creditor protections under the terms of the financing group’s securitised financing arrangements, which are designed to maintain South East Water’s creditworthiness without disrupting its ability to trade. The Trigger Event operates to prevent cash payments out of the ring-fence group (comprising South East Water Limited, South East Water (Finance) Limited and South East Water (Holdings) Limited) to affiliated entities, providing a degree of protection to these companies and specifically to the operation of the regulated business of South East Water. The Trigger Event preserves the value of the ring-fence group, which is in the interests of creditors and customers. We continue to comply with our financial covenants under the terms of our securitised financing arrangements. SEW’s credit rating as at 31 March 2025 was BBB- (CreditWatch) with S&P and Baa3 (Negative Outlook) with Moody’s. Following the £200m equity injection into South East Water Limited in May 2025, SEW’s credit rating was changed to BBB- (Negative Outlook) with S&P and Baa3 (Stable Outlook) with Moody’s. SEW continues to be in cash lock-up under its instrument of appointment and unable to pay a dividend without Ofwat’s approval. SEW retains two investment-grade credit ratings. Page 12
SOUTH EAST WATER (HOLDINGS) LIMITED
Notes to the financial statements for the year ended 31 March 2025 1.Accounting policies (continued)
| 1.4 | Going concern (continued)
Under the base case the financing group remains compliant with all its financial covenants. Following the cash lock-up in SEW, SEWH will not have sufficient cash to pay interest due on its loans from HWUK. In the absence of other protections, this might result in SEWH no longer being considered a going concern. However, and as described above, the terms of the loan provide protection to SEWH in these circumstances. SEWH has minimal other outgoings and sufficient cash to continue to meet its obligations as they fall due over the going concern period. In forming their view on going concern, the directors are aware that the financial statements of South East Water Limited for the year ended 31 March 2025 contained a material uncertainty in respect of going concern. At the date of signing of the South East Water Limited financial statements on 14 July 2025, the renewal of the revolving credit facility which was due to mature in September 2026 had not been legally committed. Since that time, on 15 August 2025, South East Water Limited entered into a new revolving credit facility with a maturity of 15 August 2028, and also entered into a new £30 million term loan with a maturity of 15 August 2028. As a consequence of the renewal of the revolving credit facility and the new £30 million term loan, the company and group forecast base case does not indicate an additional requirement for financing in the going concern period. In adopting the going concern basis of preparation for these financial statements, the directors have assessed the HDF group’s overall financial position and the latest cash flow forecast shared with the board. The directors have also noted that the group has no drawn debt maturities until August 2028. Based on the above, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, being a period of at least one year from the date of approval of the financial statements and to meet its obligations as they fall due. For this reason the board considers it appropriate to continue to adopt the going concern basis of accounting in preparing the financial statements.
| 1.5 | Finance costs
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
| 1.6 | Current and deferred taxation
Current tax, being UK Corporation Tax, is provided at amounts expected to be paid (or recovered) using tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Tax relating to items recognised directly in equity is also recognised directly in equity and not in the income statement. Deferred tax is calculated using the balance sheet method for all temporary differences. We recognise a deferred tax asset only when it is probable that there will be sufficient future taxable profits to utilise it. We measure deferred tax assets and liabilities at the tax rates expected to apply when they reverse, and they are not discounted. Deferred tax assets and liabilities are offset when they relate to the same taxing authority, and we have a legally enforceable right to offset them.
| 1.7 | Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. Page 13
SOUTH EAST WATER (HOLDINGS) LIMITED
Notes to the financial statements for the year ended 31 March 2025 1.Accounting policies (continued)
| 1.8 | Valuation of investments
Investments are recognised at historical cost. Where the directors are of the opinion that there has been impairment in the value of investments, the carrying amount of such investments is written down to the recoverable amount.
| 1.9 | Debtors
Debtors are measured at transaction price, less any impairment. Impairments are calculated in accordance with the methodology stated below. Impairment At each reporting date an assessment is carried out to determine whether there is any indication that debtors may be impaired. If there is an indication of impairment, the recoverable amount of debtors or respective cash-generating unit is compared to the carrying amount. Where the recoverable amount is less than the carrying amount, the debtor value is reduced to the recoverable amount with an impairment loss recognised as an operating cost in the income statement in the year in which the respective assessment takes place.
| 1.10 | Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
| 1.11 | Creditors
Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
| 1.12 | Financial instruments
Interest bearing loans and borrowings All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing. Interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement. Page 14
SOUTH EAST WATER (HOLDINGS) LIMITED
Notes to the financial statements for the year ended 31 March 2025
2. | Judgements in applying accounting policies and key sources of estimation uncertainty
Key judgements The preparation of financial statements requires the application of judgements by management which may affect the balances of assets and liabilities at the balance sheet date and income and expenditure for the year. The directors consider that there are no judgements which have a significant effect on the company's financial statements. Key sources of estimation uncertainty Estimates are required to be made by management when preparing the financial statements. These estimates affect the value of assets and liabilities at the balance sheet date. The estimates and underlying assumptions are reviewed on an ongoing basis with any revisions to accounting estimates recognised in the year in which the estimate is revised and future years where the revision affects both current and future years. The actual results may differ from those arrived at based on management's estimates. The valuation of the company’s investments is a key source of estimation uncertainty. At the reporting date, the company performed an impairment review of its investment in its subsidiary, SEWL by comparing the Regulatory Capital Value (RCV) of SEWL, to the book value of this investment. This assessment required management to exercise significant judgment regarding the appropriate premium to RCV to use in the valuation. This judgment was informed by an analysis of recent, historic transactions within the water industry and a comparison of SEW's performance against its peers. Based on these considerations and the premium levels observed in market transactions, the directors concluded that the investment in subsidiaries is not impaired, and accordingly, no impairment was recognised in the income statement. This conclusion is also supported by the recent willingness of the company’s ultimate shareholders to inject additional equity into the wider group, demonstrating their confidence in SEWL’s value. The recoverability of the debtor balances owed by the ultimate parent company, HDF, and another group company, Swan Group, is a key area of estimation uncertainty. Management reviewed the amounts owed by each company and concluded that these amounts are fully recoverable in the longer term. HDF is funded by dividends paid up through the group. Although SEWL is in cash lock-up and dividends are not currently being paid within the group, HDF has minimal outgoings other than intercompany debt and has sufficient cash to meet this debt. Similarly, Swan Group has no debt other than that owed to the Company. Swan Group is funded by interest on its loan to HDF and there is sufficient accumulated interest owed by HDF to cover this debt.
3. | Auditors' remuneration
| During the year, the company obtained the following services from the company's auditors:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Fees payable to the company's auditors for the audit of the company's financial statements, were borne by HDF (UK) Holdings Limited, ultimate parent company. | 6 | 6
4. | Employees
| The company had no employees and no remuneration was paid to the directors for their services during the current or previous financial years.
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SOUTH EAST WATER (HOLDINGS) LIMITED
Notes to the financial statements for the year ended 31 March 2025
5. | Income from shares in group undertakings
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Income from shares in group companies | - | 2,250
|  | - | 2,250
6. | Interest payable and similar expenses
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Interest on loans from group undertakings | 9,566 | 9,005
|  | 9,566 | 9,005
7. | Taxation
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Corporation tax |  |
| Current tax on profits for the year | (2,322) | (701)
| Total current tax credit | (2,322) | (701)
| Deferred tax |  |
| Origination and reversal of timing differences | (70) | (3,195)
| Total deferred tax | (70) | (3,195)
| Taxation on loss on ordinary activities | (2,392) | (3,896)
| Total tax credit above includes of a tax credit of £Nil (2024: £1,645,000) in respect of the deferred tax adjustment not recognised in the prior year.
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SOUTH EAST WATER (HOLDINGS) LIMITED
Notes to the financial statements for the year ended 31 March 2025 7.Taxation (continued)
| Factors affecting tax charge for the year
| The tax assessed for the year is the same as (2024 - lower than) the standard rate of corporation tax in the UK of 25% (2024 - 25%). The differences are explained below:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Loss on ordinary activities before tax | (9,566) | (6,754)
| Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%) | (2,392) | (1,689)
| Effects of: |  |
| Dividends from UK companies | - | (562)
| Adjustments to deferred tax credit in respect of prior year | - | (1,645)
| Total tax credit for the year | (2,392) | (3,896)
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SOUTH EAST WATER (HOLDINGS) LIMITED
Notes to the financial statements for the year ended 31 March 2025
8. | Deferred tax
|  | 2025 | 2024
|  | £000 | £000
| At beginning of year | 3,195 | -
| Charged to profit or loss | 70 | 3,195
| At end of year | 3,265 | 3,195
| The deferred tax balance is made up as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Tax losses carried forward | 3,265 | 3,195
|  | 3,265 | 3,195
9. | Dividends
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| First interim dividend of Nil (2024: 0.413p) | - | 600
| Second interim dividend of Nil (2024: 0.275p) | - | 400
|  | - | 1,000
10. | Investments
|  | Investments in subsidiary companies
|  | £000
| Cost or valuation |
| At 1 April 2024 | 361,421
| Additions | 75,000
| At 31 March 2025 | 436,421
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SOUTH EAST WATER (HOLDINGS) LIMITED
Notes to the financial statements for the year ended 31 March 2025
| Subsidiary undertakings
| The following were subsidiary undertakings of the company:
| Name | Registered office | Principal activity | Class of shares | Holding
| South East Water Limited | Rocfort Road, Snodland, Kent, ME6 5AH | Supply and distribution of water | Ordinary Shares | 100%
| South East Water (Finance) Limited | PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands | Raising finance and lending to group companies | Ordinary Shares | 100%
| SEWL is a wholly-owned subsidiary of the company, which owns 100% of the voting rights, and is incorporated in Great Britain and registered in England and Wales. Its registered address is Rocfort Road, Snodland, Kent, ME6 5AH. SEWF is wholly-owned by South East Water Limited, which owns 100% of the voting rights, and is incorporated and registered in the Cayman Islands. Its registered address is PO Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. The long-term debt of SEWL and SEWF is secured against the assets of SEWH and against the assets of its subsidiary companies, SEWL (as far as allowed by the Water Industry Act 1991 and SEWL's licence) and SEWF. It is not possible to quantify the value of property, assets, rights and undertakings pledged as security. In December 2024, the ultimate shareholders of the company provided additional equity to the group of £75 million. The proceeds from the equity issuance were used by the company to subscribe for 75 million new shares in its subsidiary, South East Water Limited.
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SOUTH EAST WATER (HOLDINGS) LIMITED
Notes to the financial statements for the year ended 31 March 2025
11. | Debtors
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Amounts falling due more than one year |  |
| Amounts owed by group companies | 3,023 | -
|  | 3,023 | -
| At 31 March 2025 amount owed by group companies due more than one year comprise of group tax relief. Previously, this balance was presented within amounts due within one year. However, following a review of expected repayment periods, the group has determined that the balance will not be settled within the next 12 months. To accurately reflect the nature and timing of the expected repayment, the group tax relief balance has been reclassified to amounts owed by group companies due in more than one year.
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Amounts falling due within one year |  |
| Amounts owed by group companies | - | 701
|  | - | 701
| At 31 March 2024 amount owed by group companies due with in one year comprise of group tax relief.
12. | Creditors: Amounts falling due after more than one year
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Amount owed to group undertakings | 82,152 | 82,152
| Deferred interest at the start of the year | 1,547 | -
| Deferred interest during the year | 9,566 | 1,547
|  | 93,265 | 83,699
| The above balance comprises the following loan: £93.3 million (2024: £83.7 million) due to the company’s parent company, HWUK, bearing interest at the rate of SONIA plus 6%. The interest is payable quarterly on this loan. Under the terms of the loan, the company is able to defer payment of interest and the amount so deferred is added to the principal amount of the loan. The deferred interest amount subsequently accrues interest at the rate applicable to the original loan. The amount of interest deferred during the year and added to the principal amount of the loan is £9.5 million (2024: £1.5 million). The loan is due for repayment on 27 July 2053. The loan is unsecured and may be redeemed earlier at the option of the company only.
Page 20
SOUTH EAST WATER (HOLDINGS) LIMITED
Notes to the financial statements for the year ended 31 March 2025
13. | Called up share capital
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
|  | Allotted, called up and fully paid |  |
|  | 220,407,527 (2024 - 145,407,527) Ordinary Shares of £1.00 each | 220,408 | 145,408
In December 2024, the ultimate shareholders of the company provided additional equity to the group of £75 million. The company issued 75 million new shares to its immediate parent, Hastings Water (UK) Limited, at par. The proceeds from the equity issuance were used by the company to subscribe for 75 million new shares in its subsidiary, South East Water Limited. As a result of this share issue, the company's issued share capital has increase from £145.4 million to £220.4 million as at 31 March 2025.
14. | Reserves
Profit and loss account Retained earnings represent cumulative profits and losses, net of dividends paid.
15. | Related party transactions
| As a wholly-owned subsidiary of HDF at the balance sheet date, the company has taken advantage of the exemption under FRS 101 not to provide information on related party transactions with other wholly-owned companies within the HDF group.
16. | Post balance sheet events
In May 2025, the ultimate shareholders of the company provided additional equity to the group of £200 million. The company issued 200 million new shares to its immediate parent, Hastings Water (UK) Limited, at par. The proceeds from the equity issuance were used by the company to subscribe for 200 million new shares in its subsidiary, South East Water Limited.
17. | Controlling party
Utilities of Australia Pty Limited as Trustee for the Utilities Trust of Australia (“UTA”), NatWest Pension Trustees Limited as Trustee for the NatWest Group Pension Fund (“NWPF”), Régime de Rentes du Mouvement Desjardins (“RRMD”), Desjardins Financial Security Life Assurance Company (“DFSL”) and Certas Home and Auto Insurance Company (“Certas”) are the company’s joint ultimate holding companies. UTA is resident in Australia. NWPF is resident in the United Kingdom, RRMD, DFSL and Certas are resident in Canada. It is the directors’ belief that there is no single ultimate controlling party and that the joint ultimate holding companies control the company jointly. The immediate parent company is Hastings Water (UK) Limited. The smallest and largest group of companies into which results of the company are consolidated is that headed by HDF (UK) Holdings Limited, a company which is incorporated in Great Britain and registered in England and Wales. The financial statements of HDF may be obtained from Company Secretary at the company’s registered office at Rocfort Road, Snodland, Kent, ME6 5AH.
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