National Grid 2004 Annual Report Download - page 35

24. Commitments and contingencies
a) Future capital expenditure
As at 31 March 2004, the Group had placed contracts for capital expenditure (tangible fixed assets) amounting to £76m (2003: £148m).
b) Lease commitments
At 31 March 2004, the Group’s operating lease commitments for the financial year ending 31 March 2005 amounted to £21m (2003 commitments for
2004: £27m) and are analysed by lease expiry date as follows:
Land and buildings Other Total
2004 2003 2004 2003 2004 2003
At 31 March £m £m £m £m £m £m
Expiring:
In one year or less 122537
In more than one year, but not more than five years 2–4767
In more than five years 12 13 ––12 13
15 15 612 21 27
Total commitments under non-cancellable operating leases were as follows:
2004 2003
At 31 March £m £m
Amounts due:
In one year or less 21 27
In more than one year, but not more than two years 17 20
In more than two years, but not more than three years 15 14
In more than three years, but not more than four years 12 13
In more than four years, but not more than five years 12 13
In more than five years 72 87
149 174
c) Third party contingencies
Transco has outstanding BG Group related commitments and contingencies amounting to £13m at 31 March 2004 (2003: £13m), arising from the
restructuring of BG Group in 1999. BG Group has been working with the Group since early 1999 to remove all the relevant guarantees or to find
an alternative guarantor which is not part of the Group. For any guarantees that have not been replaced, the Group will continue to provide such
guarantees on an arm’s length basis until they are removed or replaced.
d) Other commitments and contingencies
The value of other Group commitments and contingencies at 31 March 2004 amounted to £69m (2003: £73m), including a performance guarantee
of £24m (2003: £24m) relating to certain property obligations of a National Grid Transco Group undertaking.
e) Parent company loan guarantees on behalf of Group undertakings
The Company has guaranteed the repayment of principal sums, any associated premium and interest on specific loans due from its financial
subsidiary undertakings to third parties. At 31 March 2004, the sterling equivalent amounted to £1,222m (2003: £1,816m).
f) Larkhall prosecution
As a result of a fatal accident at Larkhall, Lanarkshire in December 1999 in which four people died, the Company faces charges alleging breaches of
sections 3 and 33 of the Health and Safety at Work Act 1974. The case is currently listed for trial in Edinburgh commencing on 27 September 2004.
The maximum penalty for breach of either of the above sections is an unlimited fine.
25. Ultimate parent company
Transco plc’s immediate parent company is Transco Holdings plc. The ultimate parent company, and controlling party, is National Grid Transco plc,
which is registered in England and Wales. Both Transco Holdings plc and National Grid Transco plc consolidate the accounts of Transco plc.
Copies of the consolidated accounts of Transco Holdings plc and copies of the consolidated accounts of National Grid Transco plc may be obtained
from the Company Secretary, 1-3 Strand, London WC2N 5EH.
26. Principal subsidiary undertakings
The principal subsidiary undertakings included in the Group accounts at 31 March 2004 are listed below. These undertakings are wholly-owned.
Country of operation
as at 31 March 2004 and incorporation Principal activity
Transco Metering Services Limited UK Gas metering services
British Transco International Finance B.V. The Netherlands Financing
British Transco Finance Inc. USA Financing
British Transco Capital Inc. USA Financing
A full list of all Group and associated undertakings will be attached to the Company’s Annual Return to be filed with the Registrar of Companies.
Notes to the Accounts_continued
Annual Report and Accounts 2003/04_Transco plc 33