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National Grid Electricity Transmission plc Annual Report and Accounts 2006/07
32. Related party transactions
The following information is provided in accordance with IAS 24, Related Party Disclosures, as being material transactions with related
parties during the year. These transactions are with joint ventures and a pension plan and were in the normal course of business
and are summarised below:
Transactions with related parties were in the normal course of business and are summarised below:
2007
2006
£m
£m
Sales:
Services supplied
5
1
Purchases:
Services received
14
15
It is not practical to identify the intercompany trading transactions for all related parties because the intercompany balances
are transferred to an intercompany loan with National Grid Holdings One plc, the parent of the Company's immediate parent
company, on a monthly basis. This is as a result of transfer pricing rules which require that intercompany transactions
must be accounted for on an arms length financing basis.
At 31 March 2007, amounts receivable from and payable to fellow subsidiaries amounted to £731m (2006: £302m) and £581m
(2006: £328m) respectively and had amounts payable to pension funds amounting to £2m (2006: £2m). Employer contributions
made to the Electricity Supply Pension Scheme are set out in note 8.
The Company has been given a guarantee by National Grid Holdings One plc for £20m to £40m in respect of costs to be
incurred in relation to the UK Netherlands interconnector planned to be constructed by BritNed Development Limited, which is a joint
venture owned by National Grid plc and TenneT. This guarantee is unlikely to be called, hence no provision is required.
Details of key management compensation are provided in note 6(c) .
33. Commitments and contingencies
a) Future capital expenditure
2007 2006
£m
£m
Contracted for but not provided
665
337
b) Lease commitments
Total commitments under non-cancellable operating leases were as follows:
2007
2006
£m
£m
In one year or less
4
3
In more than one year, but not more than two years
4
3
In more than two years, but not more than three years
4
3
In more than three years, but not more than four years
4
3
In more than four years, but not more than five years
4
3
In more than five years
57
13
77
28
The total of future minimum sublease payments expected to be received under non-cancellable subleases is £4m (2006: £5m).
c) Guarantees and performance bonds
Performance bonds have been issued in the ordinary course of business amounting to £5m (2006: £5m) and guarantees in respect
of the performance of a third party up to £14m (2006: £14m).
34. Ultimate parent company
The Company's ultimate parent company and controlling party is National Grid plc. The immediate parent company is National
Grid Holdings Limited. Both companies are incorporated in Great Britain and consolidate the accounts of National Grid Electricity
Transmission plc. Copies of their consolidated financial statements can be obtained from the Company Secretary at National Grid
plc, 1-3 Strand, London, WC2N 5EH.
35. Group undertakings
The principal Group undertaking included in the Group accounts, the issued share capital of which is held by the Company, is NG
Leasing Limited. This undertaking, whose principal activity is that of a vehicle leasing company, is wholly-owned and is incorporated
in Great Britain. Apart from NG Leasing, the only other Group undertakings (both wholly owned and incorporated in Great Britain)
are NGC Employee Shares Trustee Limited (dormant sharesave trustee company) and Elexon Limited, which the Company holds
in a purely nominal capacity and over which it exercises no control.
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