##### Table of Contents



---

---

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




---

Form 10-Q

(Mark One)

|  |  |                                                                                                                                       
|- |  | --------------------------------------------------------------------------------------------------------------------------------------
|x |  | Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2003.

|  |  |                                                                                                                                                 
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|o |  | Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
For the transition period from                      to

Commission File Number: 0-19889



---

South Hertfordshire United Kingdom Fund, Ltd.

Exact name of registrant as specified in charter


|                      |  |                      
|--------------------- |  | ---------------------
|Colorado              |  | 84-1145140           
|State of organization |  | I.R.S. employer I.D.#

NTL House, Bartley Wood Business Park, Hook, Hampshire, RG27 9UP, England
Address of principal executive office

011 44 1256 752000
Registrants telephone number

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act) Yes o No x

The number of limited partnership units of the registrant outstanding as
of June 30, 2003 was 56,935.



---

---





---

TABLE OF CONTENTS



|                              |                                                                                               |                                                      |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                              |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS               
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS     
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                              |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                              | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                              | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                              | ITEM 4. CONTROLS AND PROCEDURES                                                              
|RISK FACTORS                 
|PART II. OTHER INFORMATION   
|                              | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.                                                    
|SIGNATURES                   
|CERTIFICATION                
|CERTIFICATION                



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003

INDEX

|                              |                                                                                               |  |                                                                                             |    |        |   | 
|----------------------------- | --------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------- | -- | ------ | - | 
|                              |                                                                                               |  |                                                                                             |    | Page  
|                              |                                                                                               |  |                                                                                             |    | Number
|                              |                                                                                               |  |                                                                                             |    |       
|PART I. FINANCIAL INFORMATION |                                                                                               |  |                                                                                             |   
|                              |                                                                                               |  |                                                                                             |   
|                              | Item 1. Financial Statements                                                                  |  |                                                                                             |    |       
|                              |                                                                                               |  | Condensed Consolidated Balance Sheets as of June 30, 2003
(unaudited) and December 31, 2002 |    |        | 1 | 
|                              |                                                                                               |  | Condensed Consolidated Statements of Operations for the                                     |    |        |   | 
|                              |                                                                                               |  | Three and Six Months Ended June 30, 2003 and 2002
(unaudited)                               |    |        | 2 | 
|                              |                                                                                               |  | Condensed Consolidated Statements of Cash Flows for the                                     |    |        |   | 
|                              |                                                                                               |  | Six Months Ended June 30, 2003 and 2002 (unaudited)                                         |    |        | 3 | 
|                              |                                                                                               |  | Notes to Condensed Consolidated Financial
Statements (unaudited)                            |    |        | 4 | 
|                              |                                                                                               |  |                                                                                             |   
|                              | Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations |  |                                                                                             | 9  |       
|                              |                                                                                               |  |                                                                                             |   
|                              | Item 3. Quantitative and Qualitative Disclosures About Market Risk                            |  |                                                                                             | 16 |       
|                              |                                                                                               |  |                                                                                             |   
|                              | Item 4. Controls and Procedures                                                               |  |                                                                                             | 16 |       
|                              |                                                                                               |  |                                                                                             |   
|                              | Risk Factors                                                                                  |  |                                                                                             | 17 |       
|                              |                                                                                               |  |                                                                                             |   
|PART II. OTHER INFORMATION    |                                                                                               |  |                                                                                             |   
|                              |                                                                                               |  |                                                                                             |   
|                              | Item 5. Other Information                                                                     |  |                                                                                             | 24 |       
|                              |                                                                                               |  |                                                                                             |   
|                              | Item 6. Exhibits and Reports on Form 8-K                                                      |  |                                                                                             | 24 |       
|                              |                                                                                               |  |                                                                                             |   
|                              | SIGNATURES                                                                                    |  |                                                                                             | 24 |       





---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003




PART I. FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS




CONDENSED CONSOLIDATED BALANCE SHEETS

|                                        |                                                                                            |                         |            |             |            |              |            |             |            |  
|--------------------------------------- | ------------------------------------------------------------------------------------------ | ----------------------- | ---------- | ----------- | ---------- | ------------ | ---------- | ----------- | ---------- | -
|                                        |                                                                                            |                         |            | June 30,    |            | December 31,
|                                        |                                                                                            |                         |            | 2003        |            | 2002        
|                                        |                                                                                            |                         |            |             |            |             
|                                        |                                                                                            |                         |            | (unaudited) |            | (see Note)  
|                                        |                                                                                            |                         |            |             |            |             
|Assets                                  |                                                                                            |                         |            |             |            |              |            |            
|Fixed assets, net                       |                                                                                            | $                       | 57,195,993 |             |            | $            | 58,877,094 |            
|Other assets                            |                                                                                            |                         | 49,587     |             |            |              | 96,570     |            
|                                        |                                                                                            |                         |            |             |            |              |            |            
|Total assets                            |                                                                                            | $                       | 57,245,580 |             |            | $            | 58,973,664 |            
|                                        |                                                                                            |                         |            |             |            |              |            |            
|Liabilities and Partners Deficit       |                                                                                            |                         |            |             |            |              |            |            
|Current liabilities                     |                                                                                            |                         |            |             |            |              |            |            
|                                        | Accounts payable to affiliates and related parties                                         |                         | $          | 62,146,691  |            |              | $          | 62,691,338  |           
|                                        |                                                                                            |                         |            |             |            |              |            |            
|Total liabilities                       |                                                                                            |                         | 62,146,691 |             |            |              | 62,691,338 |            
|                                        |                                                                                            |                         |            |             |            |              |            |            
|Commitments and contingencies           |                                                                                            |                         |            |             |            |              |            |            
|Partners capital (deficit)             |                                                                                            |                         |            |             |            |              |            |            
|General Partner                         |                                                                                            |                         |            |             |            |              |            |            
|                                        | Contributed capital                                                                        |                         |            | 1,000       |            |              |            | 1,000       |           
|                                        | Accumulated deficit                                                                        |                         |            | (536,551    | )          |              |            | (525,377    | )         
|                                        |                                                                                            |                         |            |             |            |              |            |            
|                                        |                                                                                            |                         | (535,551   | )           |            |              | (524,377   | )          
|                                        |                                                                                            |                         |            |             |            |              |            |            
|Limited Partners                        |                                                                                            |                         |            |             |            |              |            |            
|                                        | Contributed capital, net (56,935 units outstanding
at June 30, 2003 and December 31, 2002) |                         |            | 48,817,997  |            |              |            | 48,817,997  |           
|                                        | Accumulated deficit                                                                        |                         |            | (52,837,403 | )          |              |            | (51,731,154 | )         
|                                        |                                                                                            |                         |            |             |            |              |            |            
|                                        |                                                                                            |                         | (4,019,406 | )           |            |              | (2,913,157 | )          
|                                        | Accumulated comprehensive loss                                                             |                         |            | (346,154    | )          |              |            | (280,140    | )         
|                                        |                                                                                            |                         |            |             |            |              |            |            
|                                        |                                                                                            | Total Partners deficit |            |             | (4,901,111 | )            |            |             | (3,717,674 | )
|                                        |                                                                                            |                         |            |             |            |              |            |            
|Total liabilities and Partners deficit |                                                                                            | $                       | 57,245,580 |             |            | $            | 58,973,664 |            
|                                        |                                                                                            |                         |            |             |            |              |            |            

Note: The balance sheet at December 31, 2002 has been derived from audited
financial statements at that date.

See accompanying notes.

1



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003




CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

|                                                                 |                  |   |                    |          |                  |   |            |          |      |   |             |            |   |   |             |            |  
|---------------------------------------------------------------- | ---------------- | - | ------------------ | -------- | ---------------- | - | ---------- | -------- | ---- | - | ----------- | ---------- | - | - | ----------- | ---------- | -
|                                                                 |                  |   | Three months ended |          | Six months ended
|                                                                 |                  |   | June 30,           |          | June 30,        
|                                                                 |                  |   |                    |          |                 
|                                                                 |                  |   | 2003               |          | 2002             |   | 2003       |          | 2002
|                                                                 |                  |   |                    |          |                  |   |            |          |     
|Revenues                                                         |                  | $ | 8,087,525          |          |                  | $ | 7,212,269  |          |      | $ | 15,930,219  |            |   | $ | 14,413,321  |           
|Costs and expenses                                               |                  |   |                    |          |                  |   |            |          |      |   |             |            |   |   |             |           
|Cost of goods sold (exclusive of items shown below)              |                  |   | (2,708,989         | )        |                  |   | (2,680,064 | )        |      |   | (5,419,161  | )          |   |   | (5,604,395  | )         
|Selling, general and administrative expenses                     |                  |   | (18,250            | )        |                  |   | (38,056    | )        |      |   | (36,500     | )          |   |   | (107,362    | )         
|Management fees and allocated overhead from
the General Partner  |                  |   | (3,411,241         | )        |                  |   | (3,084,218 | )        |      |   | (6,638,085  | )          |   |   | (5,969,412  | )         
|Depreciation                                                     |                  |   | (1,935,869         | )        |                  |   | (1,718,302 | )        |      |   | (3,979,999  | )          |   |   | (3,545,295  | )         
|                                                                 |                  |   |                    |          |                  |   |            |          |      |   |             |            |   |   |             |           
|Operating income (loss)                                          |                  |   | 13,176             |          |                  |   | (308,371   | )        |      |   | (143,526    | )          |   |   | (813,143    | )         
|Other expenses                                                   |                  |   |                    |          |                  |   |            |          |      |   |             |            |   |   |             |           
|Interest payable to general partner and affiliates               |                  |   | (447,488           | )        |                  |   | (357,031   | )        |      |   | (881,361    | )          |   |   | (693,059    | )         
|Other interest expense                                           |                  |   | (24,284            | )        |                  |   | (21,932    | )        |      |   | (48,324     | )          |   |   | (43,321     | )         
|Exchange losses                                                  |                  |   | (74,913            | )        |                  |   | (93,509    | )        |      |   | (44,212     | )          |   |   | (78,929     | )         
|                                                                 |                  |   |                    |          |                  |   |            |          |      |   |             |            |   |   |             |           
|Net loss before minority interests                               |                  |   | (533,509           | )        |                  |   | (780,843   | )        |      |   | (1,117,423  | )          |   |   | (1,628,452  | )         
|Minority interests                                               |                  |   |                   |          |                  |   | 202,268    |          |      |   |            |            |   |   | 451,601     |           
|                                                                 |                  |   |                    |          |                  |   |            |          |      |   |             |            |   |   |             |           
|Net loss                                                         |                  |   | ($533,509          | )        |                  |   | ($578,575  | )        |      |   | ($1,117,423 | )          |   |   | ($1,176,851 | )         
|                                                                 |                  |   |                    |          |                  |   |            |          |      |   |             |            |   |   |             |           
|Allocation of net loss                                           |                  |   |                    |          |                  |   |            |          |      |   |             |            |   |   |             |           
|                                                                 | General Partner  |   |                    | ($5,335  | )                |   |            | ($5,786  | )    |   |             | ($11,174   | ) |   |             | ($11,769   | )
|                                                                 | Limited Partners |   |                    | (528,174 | )                |   |            | (572,789 | )    |   |             | (1,106,249 | ) |   |             | (1,165,082 | )
|                                                                 |                  |   |                    |          |                  |   |            |          |      |   |             |            |   |   |             |           
|Net loss                                                         |                  |   | ($533,509          | )        |                  |   | ($578,575  | )        |      |   | ($1,117,423 | )          |   |   | ($1,176,851 | )         
|                                                                 |                  |   |                    |          |                  |   |            |          |      |   |             |            |   |   |             |           
|Net loss per Limited Partnership unit                            |                  |   | ($9.28             | )        |                  |   | ($10.06    | )        |      |   | ($19.43     | )          |   |   | ($20.46     | )         
|                                                                 |                  |   |                    |          |                  |   |            |          |      |   |             |            |   |   |             |           
|Weighted average number of Limited Partnership
units outstanding |                  |   | 56,935             |          |                  |   | 56,935     |          |      |   | 56,935      |            |   |   | 56,935      |           
|                                                                 |                  |   |                    |          |                  |   |            |          |      |   |             |            |   |   |             |           

See accompanying notes.

2



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                                               |                                               |                                           |             |                  |          |      |             |            |            |  
|------------------------------------------------------------------------------ | --------------------------------------------- | ----------------------------------------- | ----------- | ---------------- | -------- | ---- | ----------- | ---------- | ---------- | -
|                                                                               |                                               |                                           |             | Six months ended
|                                                                               |                                               |                                           |             | June 30,        
|                                                                               |                                               |                                           |             |                 
|                                                                               |                                               |                                           |             | 2003             |          | 2002
|                                                                               |                                               |                                           |             |                  |          |     
|Cash flows from operating activities                                           |                                               |                                           |             |                  |          |      |             |           
|Net loss                                                                       |                                               |                                           | ($1,117,423 | )                |          |      | ($1,176,851 | )         
|Adjustments to reconcile net loss to net cash provided by
operating activities |                                               |                                           |             |                  |          |      |             |           
|                                                                               | Minority interests                            |                                           |             |                 |          |      |             | (451,601   | )         
|                                                                               | Depreciation                                  |                                           |             | 3,979,999        |          |      |             | 3,545,295  |           
|Change in operating assets and liabilities                                     |                                               |                                           |             |                  |          |      |             |           
|                                                                               | Increase in prepaid expenses and other assets |                                           |             | 48,324           |          |      |             | 74,571     |           
|                                                                               | Decrease in accrued liabilities               |                                           |             | (2,103,280       | )        |      |             | (944,127   | )         
|                                                                               |                                               |                                           |             |                  |          |      |             |           
|                                                                               |                                               | Net cash provided by operating activities |             |                  | 807,620  |      |             |            | 1,047,287  |  
|                                                                               |                                               |                                           |             |                  |          |      |             |           
|Cash flows from investing activities                                           |                                               |                                           |             |                  |          |      |             |           
|                                                                               | Purchase of fixed assets                      |                                           |             | (807,620         | )        |      |             | (1,047,287 | )         
|                                                                               |                                               |                                           |             |                  |          |      |             |           
|                                                                               |                                               | Net cash used in investing activities     |             |                  | (807,620 | )    |             |            | (1,047,287 | )
|                                                                               |                                               |                                           |             |                  |          |      |             |           
|Movement in cash and cash equivalents                                          |                                               |                                           |            |                  |          |      |            |           
|Cash and cash equivalents at beginning of period                               |                                               |                                           |            |                  |          |      |            |           
|                                                                               |                                               |                                           |             |                  |          |      |             |           
|Cash and cash equivalents at end of period                                     |                                               | $                                         |            |                  |          | $    |            |           
|                                                                               |                                               |                                           |             |                  |          |      |             |           
|Supplemental disclosure of cash flow information                               |                                               |                                           |             |                  |          |      |             |           
|                                                                               | Cash paid during the period for interest      |                                           | $           |                 |          |      | $           |           |           
|                                                                               |                                               |                                           |             |                  |          |      |             |           

See accompanying notes.

3



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003




NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



|1 |  | Basis of Presentation
|- |  | ---------------------

We have prepared the accompanying unaudited condensed consolidated
financial statements in accordance with accounting principles in the United
States (US GAAP) generally accepted for interim financial information and
with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by US GAAP for complete financial statements. In the opinion of our management,
all adjustments (consisting only of normal recurring adjustments) considered
necessary for a fair presentation have been included. Results of operations for
the period ended June 30, 2003 are not necessarily indicative of results to be
expected for the full year ending December 31, 2003. For further information,
refer to the consolidated financial statements and footnotes thereto included
in our Annual Report on Form 10-K for the year ended December 31, 2002.

We are a limited partnership that holds 66.7% of the shares of ntl (South
Hertfordshire) Limited (NTL South Herts) principally engaged in the
development, construction, management and operation of broadband communications
networks for telephone, cable television and Internet services in the United
Kingdom (UK). As a result of our ownership of 66.7% of the shares of NTL
South Herts, for accounting purposes we have consolidated the results of NTL
South Herts with our results. NTL South Herts is a 33.3% indirect investment of
NTL Incorporated. NTL South Herts is reliant on the support of NTL
Incorporated, the ultimate parent company of the General Partner, to continue
its operations as a going concern. Throughout this report, NTL Incorporated
together with its consolidated subsidiaries are referred to as NTL.



|2 |  | NTLs Completed Restructuring
|- |  | -----------------------------

On May 8, 2002, NTL Incorporated (then known as NTL Communications Corp.),
the ultimate parent of our General Partner, NTL Europe, Inc. (then known as NTL
Incorporated and the former parent company of NTL Communications Corp.) and
certain of their subsidiaries filed a pre-arranged joint reorganization plan
under Chapter 11 of the US Bankruptcy Code. We were not included in the Chapter
11 filing, nor was our operating subsidiary or the other operating subsidiaries
of NTL Incorporated and NTL Europe, Inc. The Plan became effective on January
10, 2003, at which time NTL Incorporated, the indirect parent company of our
General Partner, emerged from Chapter 11 reorganization.

Pursuant to the Plan, the entity formerly known as NTL Incorporated and
its subsidiaries and affiliates were split into two separate groups, and NTL
Incorporated and NTL Europe, Inc. each emerged as independent public companies.
The entity formerly known as NTL Communications Corp. was renamed NTL
Incorporated and became the holding company for the former NTL groups
principal UK and Ireland assets and the ultimate parent company of our General
Partner. Prior to consummation of the Plan, NTL Incorporated was a wholly-owned
subsidiary of the entity then known as NTL Incorporated, which, pursuant to the
Plan, was renamed NTL Europe, Inc. and which became the holding company for
the former NTL groups continental European and certain other assets.

Background of Restructuring

Both the equity and debt capital markets experienced periods of
significant volatility in 2001 and 2002, particularly for securities issued by
telecommunications and technology companies. As a result, the ability of the
former ultimate parent company of our General Partner, then known as NTL
Incorporated (now NTL Europe, Inc.) and its subsidiaries to access those
markets as well as its ability to obtain financing from its bank lenders and
equipment suppliers became severely restricted. In addition, the former NTL
Incorporated and its subsidiaries had no further funds available, or were
unable to draw upon funds under its credit facilities. As a result of these
factors, together with its substantial leverage, on January 31, 2002, the
former NTL Incorporated announced that it had appointed professional advisors
to advise on strategic and recapitalization alternatives to strengthen its
balance sheet, reduce debt and put an appropriate capital structure in place
for its business.

Promptly upon obtaining the requisite waivers from the lenders under its
credit facilities, in March 2002, the former NTL Incorporated commenced
negotiations with a steering committee of the unofficial committee of its
bondholders and the committees legal and financial advisors.

4



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003

The former NTL Incorporated and its subsidiaries failed to make interest
payments on some of the outstanding notes starting on April 1, 2002. It also
failed to declare or pay dividends on certain series of its outstanding
preferred stock, owing to a lack of available surplus under Delaware law.

On April 16, 2002, the former NTL Incorporated announced that it and the
unofficial committee of its public bondholders had reached an agreement in
principle on a comprehensive recapitalization of the former NTL group. To
implement the proposed recapitalization plan, on May 8, 2002, the former NTL
Incorporated and certain of its subsidiaries, including the current ultimate
parent company of our General Partner, then known as NTL Communications Corp
(now NTL Incorporated) (collectively, the Debtors) filed cases and a
pre-arranged joint reorganization plan under Chapter 11 of the US Bankruptcy
Code. In connection with the filing, some members of the unofficial creditors
committee of bondholders entered into a credit facility agreement (referred to
as the DIP facility) committing to provide a wholly-owned subsidiary of the
current NTL Incorporated with up to $500 million in new debt financing (NTL
(Delaware), Inc committed to provide up to an additional $130 million under the
DIP facility).

As a result of the payment defaults as well as the voluntary filing under
Chapter 11 by the Debtors on May 8, 2002, there was an event of default under
all of the former NTL Incorporated and its subsidiaries credit facilities and
the indentures governing all of their publicly traded debt, other than debt of
NTL (Triangle) LLC.

The Bankruptcy Court confirmed the Plan on September 5, 2002. During the
fall of 2002, the former NTL Incorporated negotiated with a group of lenders to
enter into a new financing arrangement to repay the DIP facility, to repay
certain obligations and to provide liquidity to NTL. The Plan became effective
on January 10, 2003 (referred to as the Effective Date), at which time the
Debtors emerged from Chapter 11 reorganization. In connection with the Debtors
emergence from Chapter 11 reorganization, the current NTL Incorporated and
certain of its subsidiaries issued $558.249 million aggregate principal face
amount of 19% Senior Secured Notes due 2010 (the Exit Notes) on January 10,
2003. Initial purchasers of the Exit Notes also purchased 500,000 shares of the
current NTL Incorporateds common stock on that date. The gross proceeds from
the sale of the Exit Notes and such shares totaled $500 million. The proceeds
were used in part to repay all amounts outstanding under the DIP facility
(which was repaid on the Effective Date) and to purchase from NTL (Delaware),
Inc a £90 million note of NTL (UK) Group Inc. and to repay certain other
obligations. Also on January 10, 2003, NTL Incorporated and its lending banks
amended its existing credit facilities.



|3 |  | Recent Accounting Pronouncements
|- |  | --------------------------------

In April 2003, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities. SFAS No. 149
amends and clarifies financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. This statement is effective
for contracts entered into or modified after June 30, 2003. The adoption of
this statement is not expected to have a significant effect on our results of
operations, financial condition or cash flows.

In January 2003, the FASB issued FASB Interpretation No. 46,
Consolidation of Variable Interest Entities (FIN 46), which requires
variable interest entities to be consolidated by the primary beneficiary of the
entity if certain criteria are met. FIN 46 is effective immediately for all new
variable interest entities created or acquired after January 31, 2003. For
variable interest entities created or acquired prior to February 1, 2003, the
provisions of FIN 46 become effective for us during the third quarter of 2003.
At June 30, 2003, we have no unconsolidated affiliates.
Therefore, we do not expect the effectiveness of FIN 46 to impact our financial statements.

In November 2002, the Emerging Issues Task Force reached a consensus on
EITF No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF
00-21). EITF 00-21 provides guidance on how to account for arrangements that
involve the delivery or performance of multiple products, services and/or
rights to use assets. The provisions of EITF 00-21 will apply to revenue
arrangements entered into in fiscal periods beginning after June 15, 2003. The
adoption of EITF 00-21 is not expected to have a significant effect on our
results of operations, financial condition or cash flows.

5



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS No. 146 replaced EITF Issue
No. 94-3 Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring). SFAS No. 146 requires that a liability for costs associated
with an exit or disposal activity is recognized when the liability is incurred.
Under Issue No. 94-3, a liability for an exit cost as defined is recognized at
the date of a commitment to an exit or disposal plan. SFAS No. 146 is effective
for exit or disposal activities that are initiated after December 31, 2002. The
adoption of this standard did not have a significant effect on the results of
our operations, financial condition or cash flows.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations, effective for us on January 1, 2003. This Statement
addresses financial accounting and reporting for obligations associated with
the retirement of tangible fixed assets and the associated asset retirement
costs. The adoption of this standard did not have a significant effect on our
results of operations, financial condition or cash flows.



|4 |  | Comprehensive loss (unaudited)
|- |  | ------------------------------

Comprehensive loss includes net loss as well as other comprehensive loss.
Our other comprehensive loss consists of changes in cumulative translation
adjustment. Comprehensive loss comprises (unaudited):

|                                         |  |                    |           |                  |  |      |           |      |  |  |             |   |  |  |             |  
|---------------------------------------- |  | ------------------ | --------- | ---------------- |  | ---- | --------- | ---- |  |  | ----------- | - |  |  | ----------- | -
|                                         |  | Three months ended |           | Six months ended
|                                         |  | June 30,           |           | June 30,        
|                                         |  |                    |           |                 
|                                         |  | 2003               |           | 2002             |  | 2003 |           | 2002
|                                         |  |                    |           |                  |  |      |           |     
|Net loss                                 |  |                    | ($533,509 | )                |  |      | ($578,575 | )    |  |  | ($1,117,423 | ) |  |  | ($1,176,851 | )
|Foreign currency translation adjustments |  |                    | (103,291  | )                |  |      | 51,231    |      |  |  | (66,014     | ) |  |  | 16,529      |  
|                                         |  |                    |           |                  |  |      |           |      |  |  |             |   |  |  |             |  
|Comprehensive loss                       |  |                    | ($636,800 | )                |  |      | ($527,344 | )    |  |  | ($1,183,437 | ) |  |  | ($1,160,322 | )
|                                         |  |                    |           |                  |  |      |           |      |  |  |             |   |  |  |             |  



|5 |  | Investment in subsidiary
|- |  | ------------------------

We are a limited partnership that holds 66.7% of the shares of NTL South
Herts, which is principally engaged in the development, construction,
management and operation of broadband communications networks for telephone,
cable television and Internet services in the United Kingdom.

NTL South Herts is a United Kingdom corporation that owns and operates a
cable television/telephony system in the South Hertfordshire franchise area,
located adjacent to the northwest perimeter of Greater London, England (the
South Herts System).

NTL South Herts is owned 33.3% by NTL (B) Limited, an indirect subsidiary
of NTL Incorporated. The General Partner is an indirect wholly owned subsidiary
of NTL Incorporated. The General Partner provides consulting services to us and
may delegate some or all of the consulting services to NTL Incorporated or to
other affiliates.

NTL Incorporated, through its subsidiaries and its interest in NTL South
Herts, serves approximately 2.8 million residential cable television, internet
and telephony customers as at June 30, 2003.

6



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003



|6 |  | Transactions with affiliated parties
|- |  | ------------------------------------

Consulting and Management Fees

We pay a consulting fee to an affiliate of the General Partner. During the
construction phases of the South Herts System, this consulting fee was 2 per
cent of construction costs. Since completion of construction of each portion of
the system, the consulting fee for the completed portion has been 5 per cent of
the gross revenues, excluding revenues from the sale of cable
television/telephony systems. The consulting fee is calculated and payable
monthly. We paid consulting fees for the three months ended June 30, 2003 and
2002 of $404,376 and $367,380 respectively. We paid consulting fees for the six
months ended June 30, 2003 and 2002 of $796,510 and $741,612 respectively.
These amounts were expensed in the Unaudited Condensed Consolidated Statements
of Operations for each period.

Distribution Ratios and Reimbursement

Any distributions made by us from cash flow (defined as cash receipts
derived from routine operations, less debt principal and interest payments and
cash expenses) are allocated 99 percent to the limited partners and 1 percent
to the General Partner. Any distributions other than interest income on limited
partner subscriptions earned prior to the acquisition of our first cable
television system or from cash flow, such as from the sale or refinancing of a
system or upon our dissolution, will be made as follows: 99 percent to the
limited partners and 1 percent to the General Partner until any negative
balances in the limited partners capital accounts are reduced to zero; 100
percent to the General Partner until any negative balance in its capital
account is reduced to zero; 99 percent to the limited partners and 1 percent to
the General Partner until the balance in the limited partners capital accounts
is equal to their adjusted capital contribution plus a 12 percent return; 100
percent to the General Partner until the balance in its capital account is
equal to its adjusted capital contribution, and any remaining income or gain
shall be allocated 75 percent to the limited partners and 25 percent to the
General Partner.

The General Partner and its affiliates are entitled to reimbursement from
NTL South Herts for direct and indirect expenses allocable to the operation of
the South Herts System, and from us for direct and indirect expenses allocable
to our operations, which include, but are not limited to, rent, supplies,
telephone, travel, copying charges and salaries of any full or part-time
employees. The General Partner believes that the methodology used in allocating
these expenses is fair and reasonable. During the three months ended June 30,
2003 and 2002, reimbursements made by NTL South Herts to the General Partner or
its affiliates for any allocable direct and indirect expenses totaled
$3,006,865 and $2,715,098 respectively. During the six months ended June 30,
2003 and 2002, reimbursements made by NTL South Herts to the General Partner or
its affiliates for any allocable direct and indirect expenses totaled
$5,841,575 and $5,227,800 respectively.

The General Partner and its affiliates may make advances to, and defer
collection of fees and allocated expenses owed by us, although they are not
required to do so. We are charged interest on such advances and deferred
amounts at a rate equal to the General Partners or certain affiliates
weighted average cost of all debt financing from unaffiliated entities. For the
three months ended June 30, 2003 and 2002, interest on deferred fees of
$413,359 and $329,080 respectively, was charged by an affiliate of the General
Partner, and the General Partner respectively, charged interest on advances of
$34,129 and $27,951. For the six months ended June 30, 2003 and 2002, interest
on deferred fees of $814,048 and $638,763, respectively, was charged by an
affiliate of the General Partner, and the General Partner, respectively,
charged interest on advances of $67,312 and $54,296.

7



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003



|7 |  | Fixed assets
|- |  | ------------

Fixed assets consists of:

|                         |  |             |  |          |             |              |             |   |             |   |             |  
|------------------------ |  | ----------- |  | -------- | ----------- | ------------ | ----------- | - | ----------- | - | ----------- | -
|                         |  | Estimated   |  | June 30, |             | December 31,
|                         |  | Useful Life |  | 2003     |             | 2002        
|                         |  |             |  |          |             |             
|                         |  |             |  |          |             | (unaudited)  |             |   |             |  
|Operating equipment      |  | 3-40 years  |  | $        | 121,230,405 |              |             | $ | 116,110,470 |  
|Other equipment          |  | 3-50 years  |  |          | 7,144,745   |              |             |   | 6,978,494   |  
|Construction in progress |  |             |  |          |             |              |            |   |             |   | 1,129,834   |  
|                         |  |             |  |          |             |              |             |   |             |   |             |  
|                         |  |             |  |          |             |              | 128,375,150 |   |             |   | 124,218,798 |  
|Accumulated depreciation |  |             |  |          |             |              | (71,179,157 | ) |             |   | (65,341,704 | )
|                         |  |             |  |          |             |              |             |   |             |   |             |  
|                         |  |             |  |          |             | $            | 57,195,993  |   |             | $ | 58,877,094  |  
|                         |  |             |  |          |             |              |             |   |             |   |             |  

We are currently evaluating the remaining useful economic lives of our
fixed assets. We expect to adopt new lives when the evaluation is completed. At this time,
we are unable to quantify the likely impact on our depreciation charge upon the adoption of the new lives.



|8 |  | Commitments and contingent liabilities
|- |  | --------------------------------------

We had no significant contractual obligations and commercial commitments
as of June 30, 2003.

We are involved in legal proceedings and claims that arise in the ordinary
course of our business. In the opinion of the General Partner, the amount of
ultimate liability with respect to these actions will not materially affect the
financial position, results of our operations or liquidity.

8



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003




ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Overview

We are a limited partnership that holds 66.7% of the shares of ntl (South
Hertfordshire) Limited (NTL South Herts), which is principally engaged in the
development, construction, management and operation of broadband communications
networks for telephone, cable television and Internet services in the United
Kingdom. NTL South Herts is a 33.3% indirect subsidiary of NTL Incorporated.
Throughout this report, NTL Incorporated together with its consolidated
subsidiaries are referred to as NTL.

NTLs Completed Restructuring

On May 8, 2002, NTL Incorporated (then known as NTL Communications Corp.),
the ultimate parent of our General Partner, NTL Europe, Inc. (then known as NTL
Incorporated and the former parent company of NTL Communications Corp.) and
certain of their subsidiaries filed a pre-arranged joint reorganization plan
under Chapter 11 of the US Bankruptcy Code. We were not included in the Chapter
11 filing, nor was our operating subsidiary or the other operating subsidiaries
of NTL Incorporated and NTL Europe, Inc. The Plan became effective on January
10, 2003, at which time NTL Incorporated, the indirect parent company of our
General Partner, emerged from Chapter 11 reorganization.

Pursuant to the Plan, the entity formerly known as NTL Incorporated and
its subsidiaries and affiliates were split into two separate groups, and NTL
Incorporated and NTL Europe, Inc. each emerged as independent public companies.
The entity formerly known as NTL Communications Corp. was renamed NTL
Incorporated and became the holding company for the former NTL groups
principal UK and Ireland assets and the ultimate parent company of our General
Partner. Prior to consummation of the Plan, NTL Incorporated was a wholly-owned
subsidiary of the entity then known as NTL Incorporated, which, pursuant to the
Plan, was renamed NTL Europe, Inc. and which became the holding company for
the former NTL groups continental European and certain other assets.

Background of Restructuring

Both the equity and debt capital markets experienced periods of
significant volatility in 2001 and 2002, particularly for securities issued by
telecommunications and technology companies. As a result, the ability of the
former ultimate parent company of our General Partner, then known as NTL
Incorporated (now NTL Europe, Inc.) and its subsidiaries to access those
markets as well as its ability to obtain financing from its bank lenders and
equipment suppliers became severely restricted. In addition, the former NTL
Incorporated and its subsidiaries had no further funds available, or were
unable to draw upon funds under its credit facilities. As a result of these
factors, together with its substantial leverage, on January 31, 2002, the
former NTL Incorporated announced that it had appointed professional advisors
to advise on strategic and recapitalization alternatives to strengthen its
balance sheet, reduce debt and put an appropriate capital structure in place
for its business.

Promptly upon obtaining the requisite waivers from the lenders under its
credit facilities, in March 2002, the former NTL Incorporated commenced
negotiations with a steering committee of the unofficial committee of its
bondholders and the committees legal and financial advisors.

The former NTL Incorporated and its subsidiaries failed to make interest
payments on some of the outstanding notes starting on April 1, 2002. It also
failed to declare or pay dividends on certain series of its outstanding
preferred stock, due to a lack of available surplus under Delaware law.

On April 16, 2002, the former NTL Incorporated announced that it and the
unofficial committee of its public bondholders had reached an agreement in
principle on a comprehensive recapitalization of the former NTL group. To
implement the proposed recapitalization plan, on May 8, 2002, the former NTL
Incorporated and certain of its subsidiaries, including the current ultimate
parent company of our General Partner, then known as NTL Communication (now NTL
Incorporated) (collectively, the Debtors) filed cases and a pre-arranged
joint reorganization plan under Chapter 11 of the US Bankruptcy Code. In
connection with the filing, some members of the unofficial creditors committee
of bondholders entered into a credit facility agreement (referred to as the
DIP facility) committing to provide

9



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003

a wholly-owned subsidiary of the current NTL Incorporated with up to $500
million in new debt financing (NTL (Delaware), Inc committed to provide up to
an additional $130 million under the DIP facility).

As a result of the payment defaults as well as the voluntary filing under
Chapter 11 by the Debtors on May 8, 2002, there was an event of default under
all of the former NTL Incorporated and its subsidiaries credit facilities and
the indentures governing all of their publicly traded debt, other than debt of
NTL (Triangle) LLC.

The Bankruptcy Court confirmed the Plan on September 5, 2002. During the
fall of 2002, the former NTL Incorporated negotiated with a group of lenders to
enter into a new financing arrangement to repay the DIP facility, to repay
certain obligations and to provide liquidity to NTL. The Plan became effective
on January 10, 2003 (referred to as the Effective Date), at which time the
Debtors emerged from Chapter 11 reorganization. In connection with the Debtors
emergence from Chapter 11 reorganization, the current NTL Incorporated and
certain of its subsidiaries issued $558.249 million aggregate principal face
amount of 19% Senior Secured Notes due 2010 (the Exit Notes) on January 10,
2003. Initial purchasers of the Exit Notes also purchased 500,000 shares of the
current NTL Incorporateds common stock on that date. The gross proceeds from
the sale of the Exit Notes and such shares totaled $500 million. The proceeds
were used in part to repay all amounts outstanding under the DIP facility
(which was repaid on the Effective Date) and to purchase from NTL (Delaware),
Inc a £90 million note of NTL (UK) Group Inc. and to repay certain other
obligations. Also on January 10, 2003, NTL Incorporated and its lending banks
amended its existing credit facilities.

Liquidity and Capital Resources

Our source of cash has been the net proceeds of our offerings of limited
partnership interests. Historically, our principal uses of cash have been
capital contributions to NTL South Herts in order to fund our proportionate
share of the construction costs of the South Herts System. As of June 30, 2003,
we had current liabilities of $2,854,417 due to NTL Group companies, and
consolidated current liabilities of $62,146,689 due to NTL Group companies.

Accordingly, until such time as NTL South Herts begins to pay dividends on
its ordinary shares (which is not expected in the foreseeable future) we will
be required to fund our administrative expenses by additional issuances of
limited partnership interests or from borrowings. It is unlikely that we will
be able to sell debt or equity securities in the public markets at least in the
short term or to obtain financing from commercial banks. Accordingly, we are
dependent on NTL for funds to cover operating expenses, and will continue to be
dependent upon NTL to meet our liquidity requirements for the foreseeable
future. We expect that cash from our operations will be utilized fully for the
purchase of fixed assets in the twelve months from July 1, 2003 to June 30,
2004.

Financing

On April 18, 1995, NTL South Herts entered into an agreement with two
major banks to provide a £25,000,000 revolving and term loan credit facility
agreement maturing on December 31, 2003 (the South Herts Credit Agreement).
On October 18, 1996, £5,000,000 was cancelled and the facility reduced to
£20,000,000.

The facility was repaid in full with funding from NTL on February 21,
2001. Thereafter, NTL South Herts is reliant upon the support of NTL to
continue its operations as a going concern.

Condensed Consolidated Statement of Cash Flows

In the six months ended June 30, 2003, we generated $807,620 from our
operating activities ($1,047,287 in the six months ended June 30, 2002) and
used it all to buy property and equipment. Our cash from operations has
reduced because of the timing of payments we make to a subsidiary of NTL
Incorporated in reimbursement of costs it incurs on our behalf.

10



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003

Selected Operating Data

We set forth in the following table certain data concerning our franchise
at June 30, 2003 and December 31, 2002:

|                                 |  |          |        |             |  |  |        |  
|-------------------------------- |  | -------- | ------ | ----------- |  |  | ------ | -
|                                 |  | June 30, |        | December 31
|                                 |  | 2003     |        | 2002       
|                                 |  |          |        |            
|Homes passed (1)                 |  |          | 91,975 |             |  |  | 91,749 |  
|Homes marketed (2)               |  |          | 91,975 |             |  |  | 91,749 |  
|Total customers                  |  |          | 32,573 |             |  |  | 32,018 |  
|Digital cable subscribers        |  |          | 20,740 |             |  |  | 20,681 |  
|Analog cable subscribers         |  |          | 4,491  |             |  |  | 5,023  |  
|Broadband internet subscribers   |  |          | 8,767  |             |  |  | 5,741  |  
|Penetration (homes marketed) (3) |  |          | 35.4   | %           |  |  | 34.9   | %
|Annualized Churn (4)             |  |          | 10.7   | %           |  |  | 12.9   | %



|1. |  | Homes passed is the number of homes that have had ducting buried outside.                                                                
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Homes marketed is the number of homes for which the initial marketing
phase (including door to door direct marketing) has been completed.
|  
|3. |  | Penetration rate is calculated by dividing the number of total customers
by the number of homes marketed.                                
|  
|4. |  | Churn is the number of customers not continuing with any of our products
expressed as a percentage of the total number of customers.     

Results of Operations

We provide a broad range of telecommunication services, including
telephony, analog and digital television, Internet access and interactive
services. We derive our revenue principally from monthly fees and usage
charges. Our packaging and pricing are designed to encourage our customers to
use multiple services such as dual telephone and broadband, dual telephone and
television or triple telephone, television and Internet access.

The principal components of our expenses include (1) costs to connect our
network to other networks (referred to as interconnection); (2) television
programming costs; (3) payroll and other employee related costs; (4) repairs
and maintenance; (5) facility related costs, such as rent, utilities and rates;
(6) marketing and selling costs; and (7) provisions for doubtful accounts. Our
expenses include certain costs that are charged by a subsidiary of NTL for the
provision of network services and support, the use of NTLs national backbone
telephony network for carriage of our telephony traffic, as well as the
provision of technical infrastructure and network capacity by NTL for our
subscription Internet service and digital cable services, the provision of
corporate services, including finance, legal, human resources and facility
services, and for the provision of IT services, including our use of the
related IT equipment.

We continue to focus on improving our customer service and increasing our
service offering to customers in an effort to curtail and control churn. NTL is
in the process of integrating its various billing systems and customer
databases in an effort to improve one of the main tools they use to provide
customer service. This effort is at a relatively early stage although they
have continued to make progress through June 30, 2003. Although the new system
does not yet support NTLs full suite of services, NTL expects to complete the
project substantially by the third quarter of 2004. The total project cost is
estimated to be approximately £75.0 million, of which NTL has incurred £36.6
million through June 30, 2003. NTL cannot be certain that this project will be
successful. If the full integration is not successful, we could experience an
adverse effect on our customer service, our churn rate and our share of the
costs of maintaining these systems going forward. We could also experience
operational failures related to billing and collecting revenue from our
11Table of ContentsSOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003customers, which, depending upon on the severity of the failure, could have a
material adverse effect on our business.Our plan
to control churn and to increase average revenue per customer
(referred to as ARPU) includes an increase in broadband services to our
existing customers. We believe that our triple play offering of telephony,
broadband access to the Internet and digital television will continue to prove
attractive to our existing customer base, which will result in higher ARPU as
revenues per existing customer increase. However, there is still significant
competition in our markets, through digital satellite and digital terrestrial
television and through alternative Internet access media, such as DSL offered
by BT. If in the future we are unable to charge the prices for these services
that we anticipate in our business plan in response to competition or if our
competition is able to attract our customers, our results of operations will be
adversely affected.Three Months Ended June 30, 2003 and 2002We present below summarized consolidated financial information for the
three months ended June 30:

|                                             |  |                    |            |                     |  |   |            |   |  |  |          |   |  |  |        |  
|-------------------------------------------- |  | ------------------ | ---------- | ------------------- |  | - | ---------- | - |  |  | -------- | - |  |  | ------ | -
|                                             |  | Three months ended |            |                     |  |   |            |   |  | 
|                                             |  | June 30,           |            | Increase (decrease)
|                                             |  |                    |            |                    
|                                             |  | 2003               |            | 2002                |  | $ |            | %
|                                             |  |                    |            |                     |  |   |            |  
|Revenues                                     |  | $                  | 8,087,525  |                     |  | $ | 7,212,269  |   |  |  | 875,256  |   |  |  | 12.1   |  
|Cost of goods sold                           |  |                    | (2,708,989 | )                   |  |   | (2,680,064 | ) |  |  | 28,925   |   |  |  | 1.1    |  
|Selling, general and administrative expenses |  |                    | (18,250    | )                   |  |   | (38,056    | ) |  |  | (19,806  | ) |  |  | (52.0  | )
|Management fees and allocated overhead       |  |                    | (3,411,241 | )                   |  |   | (3,084,218 | ) |  |  | 327,023  |   |  |  | 10.6   |  
|Depreciation                                 |  |                    | (1,935,869 | )                   |  |   | (1,718,302 | ) |  |  | 217,567  |   |  |  | 12.7   |  
|                                             |  |                    |            |                     |  |   |            |   |  |  |          |   |  |  |        |  
|Operating income (loss)                      |  |                    | 13,176     |                     |  |   | (308,371   | ) |  |  | 321,547  |   |  |  | 104.3  |  
|Interest expense                             |  |                    | (24,284    | )                   |  |   | (21,932    | ) |  |  | 2,352    |   |  |  | 10.7   |  
|Interest expense to affiliate                |  |                    | (447,488   | )                   |  |   | (357,031   | ) |  |  | 90,457   |   |  |  | 25.3   |  
|Exchange losses                              |  |                    | (74,913    | )                   |  |   | (93,509    | ) |  |  | (18,596  | ) |  |  | (19.9  | )
|                                             |  |                    |            |                     |  |   |            |   |  |  |          |   |  |  |        |  
|Net loss before minority interests           |  |                    | (533,509   | )                   |  |   | (780,843   | ) |  |  | (247,334 | ) |  |  | (31.7  | )
|Minority interests                           |  |                    |           |                     |  |   | 202,268    |   |  |  | (202,268 | ) |  |  | (100.0 | )
|                                             |  |                    |            |                     |  |   |            |   |  |  |          |   |  |  |        |  
|Net loss                                     |  |                    | ($533,509  | )                   |  |   | ($578,575  | ) |  |  | (45,066  | ) |  |  | (7.8   | )
|                                             |  |                    |            |                     |  |   |            |   |  |  |          |   |  |  |        |  

We have increased our revenues through price increases and an increase in
the number of broadband customers served by the South Herts System. At June 30,
2003, we served 8,767 broadband customers compared with 2,940 at June 30, 2002.
We intend to drive the majority of revenue growth from increasing revenue from
existing customers rather than through the addition of new customers. This
allows us to achieve our revenue targets, have a lower capital requirement
owing to fewer installations, and improve our results as we reduce costs.

Costs of goods sold have increased owing to the rise in our revenues.

We have made savings in selling, general and administrative costs through
negotiated reductions in investor relations costs and insurance.

Management fees and allocated overhead to us from the General Partner have
increased owing to our increased revenues. Management fees and allocated
overhead are charged as a percentage of our revenues.

Depreciation charge has increased as a result of further purchases of
fixed assets. We are currently evaluating the remaining useful economic lives
of our fixed assets. We expect to adopt new lives when the evaluation
is completed. At this
time, we are unable to quantify the likely impact on our depreciation charge
upon the adoption of the new lives.

12



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003

We incur interest on deferred charges paid on our behalf by the General
Partner. The increase in interest expense is owing to the increase in the level
of unpaid management fee as well as foreign exchange movements.

The change in exchange losses is primarily attributable to fluctuations in
the valuation of the US Dollar on certain of our assets and transactions, which
are denominated in UK Pounds Sterling. Our results of operations will continue
to be affected by exchange rate fluctuations.

At June 30, 2003 NTL South Herts liabilities exceeded its assets. We have
not recognized the resulting minority interest asset since such an asset is not
recoverable. Under UK law, the shareholders of a UK limited company are
protected from the companys liabilities.

Six Months Ended June 30, 2003 and 2002

We present below summarized consolidated financial information for the six
months ended June 30:

|                                             |  |                  |             |                     |  |   |             |   |  |  |           |   |  |  |        |  
|-------------------------------------------- |  | ---------------- | ----------- | ------------------- |  | - | ----------- | - |  |  | --------- | - |  |  | ------ | -
|                                             |  | Six months ended |             |                     |  |   |             |   |  | 
|                                             |  | June 30,         |             | Increase (decrease)
|                                             |  |                  |             |                    
|                                             |  | 2003             |             | 2002                |  | $ |             | %
|                                             |  |                  |             |                     |  |   |             |  
|Revenues                                     |  | $                | 15,930,219  |                     |  | $ | 14,413,321  |   |  |  | 1,516,898 |   |  |  | 10.5   |  
|Cost of goods sold                           |  |                  | (5,419,161  | )                   |  |   | (5,604,395  | ) |  |  | (185,234  | ) |  |  | (3.3   | )
|Selling, general and administrative expenses |  |                  | (36,500     | )                   |  |   | (107,362    | ) |  |  | (70,862   | ) |  |  | (66.0  | )
|Management fees and allocated overhead       |  |                  | (6,638,085  | )                   |  |   | (5,969,412  | ) |  |  | 668,673   |   |  |  | 11.2   |  
|Depreciation                                 |  |                  | (3,979,999  | )                   |  |   | (3,545,295  | ) |  |  | 434,704   |   |  |  | 12.3   |  
|                                             |  |                  |             |                     |  |   |             |   |  |  |           |   |  |  |        |  
|Operating loss                               |  |                  | (143,526    | )                   |  |   | (813,143    | ) |  |  | (669,617  | ) |  |  | (82.3  | )
|Interest expense                             |  |                  | (48,324     | )                   |  |   | (43,321     | ) |  |  | 5,003     |   |  |  | 11.5   |  
|Interest expense to affiliate                |  |                  | (881,361    | )                   |  |   | (693,059    | ) |  |  | 188,302   |   |  |  | 27.2   |  
|Exchange losses                              |  |                  | (44,212     | )                   |  |   | (78,929     | ) |  |  | (34,717   | ) |  |  | (44.0  | )
|                                             |  |                  |             |                     |  |   |             |   |  |  |           |   |  |  |        |  
|Net loss before minority interests           |  |                  | (1,117,423  | )                   |  |   | (1,628,452  | ) |  |  | (511,029  | ) |  |  | (31.4  | )
|Minority interests                           |  |                  |            |                     |  |   | 451,601     |   |  |  | (451,601  | ) |  |  | (100.0 | )
|                                             |  |                  |             |                     |  |   |             |   |  |  |           |   |  |  |        |  
|Net loss                                     |  |                  | ($1,117,423 | )                   |  |   | ($1,176,851 | ) |  |  | (59,428   | ) |  |  | (5.0   | )
|                                             |  |                  |             |                     |  |   |             |   |  |  |           |   |  |  |        |  

We have increased our revenues through price increases and an increase in
the number of broadband customers served by the South Herts System. At June 30,
2003, we served 8,767 broadband customers compared with 2,940 at June 30, 2002.
We intend to drive the majority of revenue growth from increasing revenue from
existing customers rather than through the addition of new customers. This
allows us to achieve our revenue targets, have a lower capital requirement
owing to fewer installations, and improve our results as we reduce costs.

Costs of goods sold have reduced owing to the benefits we have gained from
the efficiencies and cost reductions achieved by NTL.

We have made savings in selling, general and administrative costs through
negotiated reductions in investor relations costs and insurance.

Management fees and allocated overhead to us from the General Partner have
increased owing to our increased revenues. Management fees and allocated
overhead are charged as a percentage of our revenues.

Depreciation charge has increased as a result of further purchases of
fixed assets. We are currently evaluating the remaining useful economic lives
of our fixed assets. We expect to adopt new lives when the evaluation
is completed. At this
time, we are unable to quantify the likely impact on our depreciation charge
upon the adoption of the new lives.

13



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003

We incur interest on deferred charges paid on our behalf by the General
Partner. The increase in interest expense is owing to the increase in the level
of unpaid management fee as well as foreign exchange movements.

The change in exchange losses is primarily attributable to fluctuations in
the valuation of the US Dollar on certain of our assets and transactions, which
are denominated in UK Pounds Sterling. Our results of operations will
continue to be affected by exchange rate fluctuations.

At June 30, 2003 NTL South Herts liabilities exceeded its assets. We have
not recognized the resulting minority interest asset since such an asset is not
recoverable. Under UK law, the shareholders of a UK limited company are
protected from the companys liabilities.

Recent Accounting Pronouncements

In April 2003, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities. SFAS No.149
amends and clarifies financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. This statement is effective
for contracts entered into or modified after June 30, 2003. The adoption of
this statement is not expected to have a significant effect on our results of
operations, financial condition or cash flows.

In January 2003, the FASB issued FASB Interpretation No. 46,
Consolidation of Variable Interest Entities (FIN 46), which requires
variable interest entities to be consolidated by the primary beneficiary of the
entity if certain criteria are met. FIN 46 is effective immediately for all new
variable interest entities created or acquired after January 31, 2003. For
variable interest entities created or acquired prior to February 1, 2003, the
provisions of FIN 46 become effective for us during the third quarter of 2003.
At June 30, 2003, we have no unconsolidated affiliates.
Therefore, we do not expect the effectiveness of FIN 46 to
impact our financial statements.

In November 2002, the Emerging Issues Task Force reached a consensus on
EITF No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF
00-21). EITF 00-21 provides guidance on how to account for arrangements that
involve the delivery or performance of multiple products, services and/or
rights to use assets. The provisions of EITF 00-21 will apply to revenue
arrangements entered into in fiscal periods beginning after June 15, 2003. The
adoption of EITF 00-21 is not expected to have a significant effect on our
results of operations, financial condition or cash flows.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS No. 146 replaced EITF Issue
No. 94-3 Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring). SFAS No. 146 requires that a liability for costs associated
with an exit or disposal activity is recognized when the liability is incurred.
Under Issue No. 94-3, a liability for an exit cost as defined is recognized at
the date of a commitment to an exit or disposal plan. SFAS No. 146 is effective
for exit or disposal activities that are initiated after December 31, 2002. The
adoption of this standard did not have a significant effect on the results of
our operations, financial condition or cash flows.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations, effective for us on January 1, 2003. This Statement
addresses financial accounting and reporting for obligations associated with
the retirement of tangible fixed assets and the associated asset retirement
costs. The adoption of this standard did not have a significant effect on our
results of operations, financial condition or cash flows.

14



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Certain statements contained herein constitute forward-looking
statements as that term is defined under the Private Securities Litigation
Reform Act of 1995. When used herein, the words, believe, anticipate,
should, intend, plan, will, expects, estimates, projects,
positioned, strategy, and similar expressions identify such forward-looking
statements. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance
or achievements, or industry results, to be materially different from those
contemplated, projected, forecasted, estimated or budgeted, whether expressed
or implied, by such forward-looking statements. Such factors include, among
others, those set forth under the caption Risk Factors in this Form 10-Q as
well as: the impact of our organizational restructuring and integration
actions; our ability to maintain contracts that are critical to our operations;
potential adverse developments with respect to our liquidity or results of
operations; our ability to fund and execute our business plan; our ability to
attract, retain and compensate key executives and associates; our ability to
attract and retain customers; general economic and business conditions;
technological developments; our ability to continue to design networks, install
facilities, obtain and maintain any required governmental licenses or approvals
and finance construction and development, all in a timely manner at reasonable
costs and on satisfactory terms and conditions; assumptions about customer
acceptance, churn rates, overall market penetration and competition from
providers of alternative services; the impact of new business opportunities
requiring significant up-front investment; and interest rate and currency
exchange rate fluctuations. We assume no obligation to update the
forward-looking statements contained herein to reflect actual results, changes
in assumptions or changes in factors affecting such statements.

15



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The functional currency of NTL South Herts is UK pounds sterling and all
revenue and significantly all costs are incurred in UK pounds sterling. We
report in US dollars. Therefore, we are exposed to fluctuations in the UK pound
sterling US dollar exchange rate. The aggregate potential loss from a
hypothetical one percent fall in the UK£/US$ exchange rate is $9,364 for the
six months ended June 30, 2003.

We have no debt other than amounts due to affiliates. Consequently, we
have little interest rate risk. As of June 30, 2003, we had approximately $62.1
million due to affiliates.




ITEM 4. CONTROLS AND PROCEDURES

(a)  Disclosure Controls and Procedures. Our management, with the
participation of the Directors of the General Partner who serve as Chief
Executive Officer and Chief Financial Officer of NTL Incorporated*, the
indirect parent of the General Partner, has evaluated the effectiveness of our
disclosure controls and procedures (as such term is defined in Rule 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the
Exchange Act)) as of the end of the period covered by this report. Based on
such evaluation, the Directors of the General Partner have concluded that, as
of the end of such period, our disclosure controls and procedures are effective
in recording, processing, summarizing and reporting, on a timely basis,
information required to be disclosed by us in the reports that we file or
submit under the Exchange Act.

(b)  Internal Control over Financial Reporting. There have not been any
changes in our internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fiscal quarter to which this report relates that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.



---

|* |  | We have no Chief Executive Officer or Chief Financial Officer. Barclay
Knapp and Scott E. Schubert are Directors of Fawnspring Limited, our
General Partner, and are Chief Executive Officer and Chief Financial
Officer, respectively, of NTL Incorporated, the indirect parent of
Fawnspring Limited.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003




RISK FACTORS

The following risk factors concern both our business and, in most cases,
NTLs business generally. Because we rely on NTL and its subsidiaries, those
risks are pertinent to us.

We have historically relied on NTL and its subsidiaries to meet our funding
needs. NTLs business is capital intensive and it has historically incurred
losses and generated negative cash flows and there can be no assurance that NTL
will be profitable in the future or that it will have sufficient liquidity to
meet our cash flow needs, fund its working capital and capital expenditures and
to meet its obligations under its existing debt instruments.

We do not generate sufficient cash flow from our operations to fund our
operational expenses and interest payments. We have historically met our cash
requirements through debt or equity from NTL Incorporated and other
subsidiaries of NTL Incorporated. Thus, we are dependent on NTLs financial
health for our own.

NTLs business is very capital intensive and has always required
significant amounts of cash. Historically, construction, operating expenditures
and interest costs have resulted in negative cash flow. NTL has also incurred
and expects to continue to incur substantial losses. NTL cannot be certain that
it will achieve or sustain profitability in the future. Failure to achieve
profitability could diminish NTLs ability to meet our cash flow needs, sustain
operations, meet financial covenants, obtain additional required funds and make
required payments on any indebtedness it has incurred or may incur.

NTL had net losses for the six months ended June 30, 2003 of $537.2
million, and for the years ended December 31:



| |  |  | 2002: $2,375.8 million                                                            
| | - |  | ----------------------------------------------------------------------------------
|
| |  |  | 2001: $11,837.0 million (including an asset impairment charge of
$8,160.6 million)
|
| |  |  | 2000: $2,388.1 million                                                            
|
| |  |  | 1999: $716.5 million                                                              
|
| |  |  | 1998: $534.6 million                                                              

As of December 31, 2002, NTLs accumulated deficit was $18.6 billion.

Moreover, NTL currently expects that it will require between £5.0 million
and £15.0 million to fund its working capital including debt service and
capital expenditures, net of cash from operations, in the twelve months from
July 1, 2003 to June 30, 2004. NTL believes that its cash and cash equivalents
on hand of $594.0 million as of June 30, 2003 will be sufficient for its cash
requirements during the twelve months from July 1, 2003 to June 30, 2004.

In addition, beginning in 2005, a series of principal payments will come
due on NTLs existing debt instruments as they approach their respective
maturity dates. NTLs ability to make these payments and meet our cash flow
needs and its other ongoing funding requirements is dependent upon a number of
factors, including NTLs existing cash balances, the cash flow generated by its
operating subsidiaries, and its ability to obtain additional financing in the
future. Failure to achieve profitability or maintain or achieve various other
financial performance levels could in the future diminish NTLs ability to meet
our cash flow needs, sustain operations, meet financial covenants, obtain
additional funds, and make required payments on its indebtedness.

We are operationally completely integrated into NTL and thus are reliant on
NTLs management entirely for our business.

Because we are operated as a fully integrated part of NTL, we are entirely
dependant upon NTLs management to manage our business. Thus, the success or
lack of success of NTLs management team as a whole will be directly

17



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003

correlated to our success or failure. If there is a material adverse
effect on NTLs business as a whole, it is likely we would experience such a
material adverse effect as well.

NTLs substantial leverage could adversely affect its financial health.

NTL is, and, for the foreseeable future will continue to be, highly
leveraged. As of June 30, 2003, the accreted value of NTLs total long-term
indebtedness less unamortized discount of $6,487.7 million represents 72.3% of
its total capitalization.

NTLs substantial indebtedness, coupled with the relatively high effective
interest rate on its Exit Notes, could adversely affect its financial health
by, among other things:



| |  |  | increasing its vulnerability to adverse changes in general economic
conditions or increases in prevailing interest rates particularly for
any borrowings at variable interest rates,    
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | limiting its ability to obtain additional financing, if needed, and                                                                                                                     
|
| |  |  | requiring it to dedicate a substantial portion of its cash flow from
operations to service its debt, which reduces the funds available for
operations and future business opportunities.

NTL Incorporated is subject to restrictive debt covenants pursuant to its
indebtedness.

As part of the implementation of the Plan, NTL Incorporated issued
$558.249 million principal amount of Exit Notes to certain of its creditors
under the terms of an indenture. In addition, it amended the terms of its
existing Senior Credit Facility and Working Capital Credit Facility.

The indentures governing NTL Incorporateds outstanding notes, including
its Exit Notes, among other things, significantly restrict and, in some cases,
prohibit its ability and the ability of most of its subsidiaries to:



| |  |  | incur additional debt;                                                               
| | - |  | -------------------------------------------------------------------------------------
|
| |  |  | create or incur liens;                                                               
|
| |  |  | pay dividends or make other equity distributions;                                    
|
| |  |  | purchase or redeem share capital;                                                    
|
| |  |  | create restrictions on the payment of dividends or other amounts
by its subsidiaries;
|
| |  |  | make investments;                                                                    
|
| |  |  | sell assets;                                                                         
|
| |  |  | issue or sell share capital of certain subsidiaries;                                 
|
| |  |  | engage in transactions with affiliates; and                                          
|
| |  |  | effect a merger or consolidation of, or sell all or
substantially all of its assets. 

Similar restrictive covenants are contained in the Senior Credit Facility
and Working Capital Credit Facility that are applicable to NTL Incorporated and
most of its subsidiaries. In addition, under its credit facilities, NTL
Incorporated and its subsidiaries must comply with certain financial covenants
specifying various financial performance levels that they are required to meet.
In the event they were to fail to meet any of these covenant and were unable to
cure such breach or otherwise renegotiate such covenants, the lenders under
those facilities would have significant rights to seize control of

18



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003

most of NTLs assets. Such a default, or a breach of any of the other
obligations in the indenture governing the Exit Notes, could also trigger a
default under the Exit Notes.

The covenants in NTL Incorporateds credit facilities and the indentures
governing its outstanding notes and any future debt may significantly restrict
NTLs future operations. Furthermore, upon the occurrence of any event of
default under the indentures governing NTL Incorporateds notes, credit
facilities or the agreements governing any other debt of its subsidiaries, the
lenders could elect to declare all amounts outstanding under such indentures,
credit facilities or agreements, together with accrued interest, to be
immediately due and payable. If those lenders accelerate the payment of those
amounts, there can be no assurance that the assets of NTL Incorporated and its
subsidiaries will be sufficient to repay in full those amounts.

The telecommunications industry is subject to rapid technological changes and
we cannot predict the effect of any changes on our businesses.

The telecommunications industry is subject to rapid and significant
changes in technology and the effect of technological changes on our businesses
cannot be predicted. Our core offerings may become outdated due to
technological breakthroughs rendering our products out of date.

We are subject to significant competition in each of our business areas and we
expect that competition will intensify  if we are unable to compete
successfully, our financial conditions and results of operations could be
adversely affected.

We face significant competition from established and new competitors in
each of our businesses. In particular, in two of our three key lines of
business  telephony and television  the markets are dominated by our
competitors (BT and BSkyB, respectively), who have very large market shares and
generally have less financial and operating constraints than we do. Moreover,
we may also be required to reduce prices if our competitors reduce prices, or
as a result of any other downward pressure on prices for telecommunications
services, which could have an adverse effect on us.

In addition, BSkyB has access to various movie and sports programming
content, with which they create some of the most popular pay TV channels in the
UK. We carry several of those channels on our systems. Although there are
competing channel providers, the position of programming supplier to NTL
undoubtedly is an advantage to BSkyB, not only because the Sky brand is a
feature of our cable TV service, but also because we are dependant upon the
supply of these Sky premium channels allowing BSkyB to influence pricing and
bundling. Thus far, regulators have not disturbed the pricing arrangements
imposed on us by BSkyB.

If we are unable to compete successfully, our financial condition and
results of operations could be adversely affected.

NTL remains subject to the risks of successfully integrating the acquisitions
through which it has historically grown its business. In particular, NTL is in
the process of integrating its various billing and operation platforms  if it
does not complete this integration, NTL could experience an adverse effect on
its customer service, churn rate and operating costs.

NTL has historically grown its business through acquisitions. This has
resulted in its exposure to the risk of failing to successfully integrate those
acquisitions, in particular, workforce, management, network and systems. A
significant result of NTLs growth through acquisitions is that it has
inherited a variety of distinct billing and customer service systems from
various companies that it has acquired. NTL is in the process of integrating
its various billing systems and customer databases in an effort to improve one
of the main tools it uses to provide customer service; however, it does not as
yet have an integrated billing and operational platform. There can be no
assurance that this integration project will be successful. If the full
integration of NTLs billing and customer service systems is not successful,
NTL could experience an adverse effect on its customer service, churn rate and
costs of maintaining these systems going forward. NTL could also experience
operational failures related to billing and collecting revenue from its
customers, which, depending on the severity of the failure, could have a
material adverse effect on its business.

Moreover, the integration process has involved a number of internal
reorganizations of NTLs business as NTL continues to strive for better
performance. These reorganizations have typically involved, among other things,
the termination of employees made redundant as a result of the process. It is
likely these internal reorganizations have

19



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003

negatively impacted employee morale. However, the results of the recent
employee survey indicated that an increasing number of employees are proud to
work for NTL and would recommend NTL as an employer. Negative effects on
employee morale can have a negative effect on NTLs operations generally.

One of NTLs key strategies
is to control customer churn. However there can be
no assurance that NTL will successfully accomplish this or that its churn rate
will not increase.

In order
to control churn in the future, NTL aims to improve customer service. This
improvement will be difficult to obtain without an integrated billing system
and a customer database across NTLs entire network. If the integration of
NTLs various billing systems is not successful, it could experience an adverse
effect on customer service and, in turn, its churn rate.

NTL plans to increase its customer base and revenue generating units
(referred to in this quarterly report as RGUs) in 2003. If demand for NTLs
products and services is greater than anticipated, its customer service call
centers could experience a higher than expected volume of calls. If customer
service suffered as a result, it could contribute to churn. NTLs business plan
also includes the migration of its customers from analog to digital service.
The migration process could also increase churn levels.

NTLs
ability to control churn could also be adversely affected by the
availability of competing services in the UK, such as the digital satellite and
digital terrestrial television services offered by BSkyB and the BBC, and
telephone, Internet and broadband services offered by BT. BT and BSkyB have
regularly launched strong direct and indirect win-back campaigns to entice
NTLs customers to churn and move to these competing services.

Another
part of our strategy to control churn is to increase take up of
broadband services by our existing customers. If this increased level of take
up does not materialize we may have difficulties in controlling churn levels,
which would adversely impact our results of operations.

NTLs prospects will depend in part on its ability to control its costs while
maintaining and improving service levels.

NTLs prospects will depend in part on its ability to control costs and
operate more efficiently, while maintaining and improving existing service
levels. In particular, in order to reduce costs we are in the process of
negotiating with several of our vendors for better terms under existing and
future agreements. We cannot be certain that such negotiations will conclude
successfully.

Failure to market broadband successfully to NTLs existing customer base will
adversely impact NTLs revenue and results of operations.

A significant component of NTLs strategy is to market broadband products
successfully to its existing consumer customer base. NTL believes that its
triple play offering of telephony, broadband access to the Internet and
digital television will prove attractive to its existing customer base and
allow it to increase its average revenue per user. However, NTL faces
significant competition in these markets, through digital satellite and digital
terrestrial television and through alternative Internet access media, such as
the DSL service offered by BT and Freeserve. Additionally, some of NTLs
competitors have substantially greater financial and technical resources than
NTL does. If NTL is unable to charge the prices for broadband services that are
anticipated in its business plan in response to competition or if NTLs
competition offers a better product to its customers, NTLs results of
operations will be adversely affected.

Our actual results of operations and financial condition may differ from our
reported results of operations and financial condition due to the use of
estimates and assumptions in the preparation of our financial statements.

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Such estimates and assumptions impact, among
others, the following: the amount of uncollectible accounts receivable, the
amount to be paid to terminate certain agreements included in restructuring
costs, the amount to be paid for other liabilities, estimates related to the
amount of costs to be capitalized in connection with the

20



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003

construction and installation of our network and facilities and estimates
related to the value of long-lived assets and goodwill.

NTL is dependent upon a small number of key personnel.

A small number of key executive officers manage NTLs businesses. The loss
of one or more of these executive officers could have a material adverse effect
on NTL. NTL believes that its future success will depend in large part on its
continued ability to attract and retain highly skilled and qualified personnel.
Although NTL has entered into employment contracts with all of its executive
officers, those contracts cannot prevent such individuals from resigning. If an
individual does resign, he or she is bound by certain non-compete clauses which
may or may not discourage the individual from leaving.

NTLs principal businesses are subject to government regulation, including
pricing regulation, and changes in current regulations may adversely affect it.

NTLs principal business activities are regulated and supervised by
various governmental bodies. Changes in laws, regulations or governmental
policy or the interpretations of those laws or regulations affecting our
activities and those of NTLs competitors, such as licensing requirements,
changes in price regulation and deregulation of interconnection arrangements,
could have a material adverse effect on NTL.

NTL is also subject to regulatory initiatives of the European Commission.
Changes in EU Directives may reduce NTLs range of programming and increase the
costs of purchasing television programming or require NTL to provide access to
our cable network infrastructure to other service providers, which could have a
material adverse effect on NTL.

NTL is dependent upon many critical systems and processes, many of which are
dependent upon hardware that is concentrated in a small number of locations. If
a catastrophe were to occur at one or more of those locations, it could have a
material adverse effect on NTLs business.

NTLs business is dependent on many sophisticated critical systems, which
support all of the various aspects of its operations from its network to its
billing and customer service systems. The hardware supporting a large number of
critical systems is housed in a relatively small number of locations. If one or
more of these locations were to be subject to fire, natural disaster,
terrorism, power loss, or other catastrophe, it could have a material adverse
effect on and cause irreparable harm to NTLs business. NTL is currently
studying ways to improve its disaster recovery to prevent or mitigate such a
potential failure. However, despite any disaster recovery, security and service
continuity protection measures NTL has or may in the future undertake, there
can be no assurance that these measures will be sufficient. In addition,
although NTL builds its network in resilient rings to ensure the continuity of
network availability in the event of any damage to its underground fibers,
should any ring be cut twice in different locations, it is likely that no
transmission signals will be able to pass, which could cause significant damage
to NTLs business. This is especially so in relation to NTLs Sirius undersea
ring connecting the UK to the Republic of Ireland: any simultaneous cut of the
Northern and Southern routes would isolate NTLs Irish networks from its UK
networks for an extended period.

NTL does not insure the underground portion of our cable network.

NTL obtains insurance of the type and in the amounts that it believes are
customary for similar companies. Consistent with this practice, NTL does not
insure the underground portion of its cable network. Substantially all of NTLs
cable network is constructed underground. Any catastrophe that affects NTLs
underground cable network could result in substantial uninsured losses.

We and NTL are subject to currency risk because we obtained significant
financing and may in the future obtain additional financing in U.S. dollars but
generally generate revenues and incur expenses in pounds sterling and Euros.

We and NTL encounter currency exchange rate risks because we generate
revenues and incur construction and operating expenses in pounds sterling and
Euros while we pay interest and principal obligations with respect to a
significant amount of our existing indebtedness in U.S. dollars. There can be
no assurance that any hedging transactions we might enter into will be
successful or that shifts in the currency exchange rates will not have a
material adverse effect

21



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003

on us. For example, to the extent that the pound sterling declines in
value against the U.S. dollar, and we have not fully hedged against such
declines, the effective cost of servicing our U.S. dollar debt will be higher
and we will incur currency losses.

NTLs broadcast services and carrier telecommunications businesses are
dependent upon ITV and other contracts.

NTLs broadcast services business has contracts for the provision of
television broadcasting transmission services with the ITV national network of
15 affiliated television stations, Channel 4/S4C and Channel 5. The majority of
the prices that NTL may charge these companies for transmission services are
subject to regulation by the Office of the Director of Telecommunications (referred to in
this quarterly report as OFTEL). Although, historically, the ITV companies and
Channel 4/S4C have renewed their contracts with NTL, there can be no assurance
that they will do so upon expiration of the current contracts, that they will
not negotiate terms for provision of transmission services by NTL on a basis
less favorable to it or that they would not seek to obtain from third parties a
portion of the transmission services that NTL currently provides.

Other contracts important to NTLs broadcast services business include a
contract for the provision of communication services to the Metropolitan
Police. This contract is subject to renewal and there can be no assurance that
the renewal will be on the same basis, or that the Metropolitan Police will not
seek other parties to provide the services.

NTLs carrier services and mobile business has a contract with Orange plc
for the design, build and operation of elements of its mobile network. The minimum term
of this contract is scheduled to expire in 2006 and there can be no assurance
that it will be renewed.

In addition, NTLs carrier services and mobile business currently has a
contract with Vodafone for the supply of mobile transmission services,
including core inter-switch and backhaul network capacity. This contract is
scheduled to terminate in October 2004 and there are no present indications
that it will be renewed.

The loss of any one of these contracts could have a material adverse
effect on the relevant NTL business division.

NTLs broadcast services business is dependent upon site sharing arrangements
with its principal competitor.

As a result of, among other factors, a natural shortage of potential
transmission sites and the difficulties in obtaining planning permission for
erection of further masts, Crown Castle U.K. Ltd. and NTL have made
arrangements to share a large number of tower sites. There can be no assurance
that the site sharing arrangements will not be terminated. Termination of the
site sharing arrangements would have a material adverse effect on NTL.

Under the present arrangements for analog broadcast services, one of the
parties is the owner, lessor or licensor of each site and the other party is
entitled to request a license to use specified facilities at that site. Each
site license granted pursuant to the site sharing agreement is for an initial
period expiring on December 31, 2005, subject to title to the site and to the
continuation in force of the site sharing agreement. Each site sharing
agreement provides that, if requested by the sharing party, it will be extended
for further periods. Either party may terminate the agreement by giving 5
years written notice until December 31, 2005 or at any date, which is a date
10 years or a multiple of 10 years after December 31, 2005. With respect to
digital broadcast services, NTL and Crown Castle U.K. Ltd. are negotiating a
formal arrangement pending finalization of a separate digital site sharing
agreement which is envisaged to be on terms similar to the existing analog site
sharing agreement. Presently the parties are operating under an informal
arrangement pending finalization of the formal arrangement. Although NTL
believes that such formalization will be concluded successfully, it cannot be
certain of that conclusion.

Some provisions of the agreements governing the indebtedness of NTL
Incorporated, us and our respective subsidiaries, certain provisions of our
respective certificates of incorporation and NTL Incorporateds stockholder
rights plan could delay or prevent transactions involving a change of control
of us or NTL Incorporated.

We and NTL Incorporated may, under some circumstances involving a change
of control, be obligated to offer to repurchase substantially all of our
respective outstanding notes, and repay other indebtedness (including bank
facilities).

22



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003

There can be no assurance that we or NTL Incorporated, as the case may be,
will have available financial resources necessary to repurchase such notes or
indebtedness in those circumstances.

If NTL Incorporated cannot repurchase and repay this indebtedness in the
event of a change of control, the failure to do so would constitute an event of
default under the indentures and agreements under which that indebtedness was
incurred and could result in a cross-default under other indebtedness. The
threat of this could have the effect of delaying or preventing transactions
involving a change of control of NTL Incorporated, including transactions in
which stockholders might otherwise receive a substantial premium for their
shares over then current market prices, and may limit the ability of its
stockholders to approve transactions that they may deem to be in their best
interest.

NTL Incorporateds stockholder rights plan and certain provisions of its
certificate of incorporation may have the effect, alone or in combination with
each other or with the existence of authorized but unissued common stock and
preferred stock, of preventing or making more difficult transactions involving
a change of control of NTL Incorporated. Certain provisions of our certificate
of incorporation may have a similar effect with respect to a change of control
involving us.

23



---



##### Table of Contents



SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED
(A LIMITED PARTNERSHIP)
QUARTER ENDED JUNE 30, 2003




PART II. OTHER INFORMATION

ITEM 5. OTHER INFORMATION

On August 12, 2003, NTL
Incorporated announced that Barclay Knapp, President and Chief
Executive Officer has decided to step down from this current role.
Simon Duffy, who is currently NTLs Chief Operating Officer, will
become Chief Executive Officer effective as of close of business on
August 15, 2003.




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.



| | a) |  | Exhibits
| | -- |  | --------



| | 31 |  | Certification of CEO and CFO pursuant to Rule 13a-14(a) under
the Securities Exchange Act of 1934.                                   
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------
|
| | 32 |  | Certification of CEO and CFO pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002



| | b) |  | Reports on Form 8-K
| | -- |  | -------------------
|
| |    |  | None               




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

| |  |                                              
| |  | ---------------------------------------------
| |  | SOUTH HERTFORDSHIRE UNITED
KINGDOM FUND, LTD.
| |  | a Colorado limited partnership               
| |  |                                              
| |  | BY: FAWNSPRING LIMITED                       
| |  | its General Partner                          
| |  |                                              
| |  | BY: /s/ Barclay Knapp                        
| |  |                                              
| |  | Barclay Knapp                                
| |  | Director                                     
| |  | August 13, 2003                              
| |  |                                              
| |  | BY: /s/ Scott E. Schubert                    
| |  |                                              
| |  | Scott E. Schubert                            
| |  | Director                                     
| |  | August 13, 2003                              

24