TIDMNTEA
RNS Number : 8830K
Northern Electric PLC
28 August 2012
The following regulated information, disseminated pursuant to
DTR 6.3.5, comprises the Half-Yearly Financial Report of Northern
Electric plc for the six months ended 30 June 2012.
Pursuant to LR 14.3.6, the document has been submitted to the
National Storage Mechanism and will shortly be available for
inspection at:
www.hemscott.com/nsm.do
The Half-Yearly Financial Report for the six months ended 30
June 2012 is also available on the website
www.northernpowergrid.com
Enquiries:
John Elliott 0191 223 5103
NORTHERN ELECTRIC plc
HALF-YEARLY FINANCIAL REPORT
SIX MONTHS ENDED 30 JUNE 2012
NORTHERN ELECTRIC plc:
INTERIM MANAGEMENT REPORT
Registered Number: 2366942
Registered Office: Lloyds Court, 78 Grey Street, Newcastle upon
Tyne, NE1 6AF
Cautionary Statement
This interim management report has been prepared solely to
provide additional information to shareholders to assess the
strategies of Northern Electric plc (the "Company") and its
subsidiaries (the "Group") and the potential for those strategies
to succeed and should not be relied on by any other party or for
any other purpose.
Operations
The principal activity of the Company during the six months to
30 June 2012 was to act as a holding company, with its main
operating subsidiaries being Northern Powergrid (Northeast) Limited
("Northern Powergrid") and Integrated Utility Services Limited
("IUS"). Northern Powergrid holds an electricity distribution
licence and serves an area of approximately 14,400 square
kilometres in the north east of England. The Company's distribution
system of transformers, switchgear and overhead and underground
cablesreceives electricity from generators connected to its
electricity distribution network and from the National Grid's
transmission system and distributes it to approximately 1.6 million
customers at voltages of up to 132kV. Northern Powergrid is subject
to regulation by the Gas and Electricity Markets Authority, which
acts through the Office of Gas and Electricity Markets ("Ofgem").
IUS provides engineering contracting services to a range of
clients.
During the six months to 30 June 2012, Northern Powergrid
distributed electricity to customers in its distribution services
area and continued to target its investment strategy at delivering
improvements in the overall performance of its electricity
distribution network in an efficient and cost-effective manner.
Northern Powergrid's capital expenditure programme included
activities to refurbish, replace and construct assets such as
substations, transformers, switchgear, overhead and underground
cables and associated equipment. IUS continued to operate its
engineering contracting business, including the provision of
connections services to electricity distribution networks.
Northern Powergrid's priorities during the six-month period to
June 2012 continued to include improving customer service by taking
action aimed at improving performance in its contact centre
services, web services and stakeholder engagement, customer service
competencies and complaints handling processes. In addition,
Northern Powergrid's investment strategy delivered improvements in
an efficient and cost-effective manner in order to improve the
network's resilience by seeking to minimise the number of power
cuts that occur, reducing the average number of customers affected
by a power cut and providing a quicker restoration service in the
event of a power cut.
Although IUS continued to experience challenging trading
conditions in the six-month period to June 2012 with the prevailing
economic environment meaning that there was strong competition for
the available opportunities, IUS successfully secured a number of
new contracts for the provision of engineering services, including
the largest such contract secured for a number of years.
NORTHERN ELECTRIC plc:
REGISTERED NUMBER: 2366942
INTERIM MANAGEMENT REPORT (CONTINUED)
Operations (continued)
Although confirmation of certain adjustments due to
weather-related incidents is awaited as at the date of this
half-yearly report, Northern Powergrid's reported performance for
the regulatory year ended 31 March 2012 in respect of its key
customer service performance indicators of customer interruptions
("CI"), customer minutes lost ("CML") and customer satisfaction
targets was as follows:
Year to 31 March 2012 Year to 31 March 2011
Actual Target Actual Target
CML: 67.4 71.1 71.1 71.3
CI: 66.8 68.2 65.2 68.3
Customer satisfaction: 89.8% 90.0% 86.6% 90.0%
In respect of these key customer service performance indicators,
the goal is to achieve performance that is below Ofgem's target
number in respect of CML and CI and more than the target number in
respect of customer satisfaction.
The safety of its employees continued to be of paramount
importance to the Group, with the on-going focus being on the goal
that no employees should be injured during their working time.
In this respect, during the six months to 30 June 2012, the
Group experienced two lost time accidents (six months to 30 June
2011: 2), against an annual target of three for the Northern
Powergrid Holdings Company group of companies (the "Northern
Powergrid Group") and five preventable vehicle accidents (six
months to 30 June 2011: 6) against an annual target of 26 for the
Northern Powergrid Group. Although that performance was similar to
the same period in 2011, it was encouraging to note that the
incidents experienced did not result in serious injuries to the
employees concerned. Nevertheless, work continues to reduce the
accident rates, with the lessons learned from such incidents being
incorporated into the Northern Powergrid Group's safety and health
improvement plan and road risk management programme.
In 2012 Northern Powergrid received a President's Award from the
Royal Society for the Prevention of Accidents for achieving eleven
consecutive Gold Awards, which have been presented in recognition
of achievements in 2011 and continued or improving standards of
health and safety over a sustained period. Northern Powergrid also
continued to maintain its occupational health and safety management
system and retained its OHSAS 18001 certification.
NORTHERN ELECTRIC plc:
REGISTERED NUMBER: 2366942
INTERIM MANAGEMENT REPORT (CONTINUED)
Results for the six months ended 30 June 2012
The half-yearly accounts for the six months ended 30 June 2012
consolidate the results of the Company and its subsidiaries and are
prepared under International Financial Reporting Standards. The
half-yearly accounts do not comprise statutory accounts required to
be delivered to the Registrar of Companies under the Companies Act
2006 and have not been subject to audit or review by the Group's
auditors. The Group will deliver its statutory accounts for the
current financial year ending on 31 December 2012 to the Registrar
of Companies by 30 April 2013.
The Group delivered a pleasing performance for the six months
ended 30 June 2012, mainly due to increased revenue as a result of
higher distribution tariffs and continued good cost control. A
summary of the key financial results is set out below:
Key financials
Revenue
Revenue at GBP162.1m was GBP15.1m higher than for the six months
ended 30 June 2011 mainly due to higher distribution tariffs.
Cash flow
Cash and cash equivalents as at 30 June 2012 were GBP224.2m,
representing a reduction of GBP5.4m when compared with the position
at 31 December 2011.
The Group has access to short-term borrowing facilities provided
by Yorkshire Electricity Group plc, a related party, and to
committed revolving credit facilities of GBP75.0m provided by
Lloyds TSB Bank plc, Royal Bank of Scotland plc and Abbey National
Treasury Services plc.
Financial position
Profit before tax at GBP75.8m was GBP14.4m higher than the six
months ended 30 June 2011 mainly as a result of increased
revenues.
Dividends
No ordinary dividends were paid in the period resulting in
GBP62.4m being transferred to reserves.
Related party transactions
The Company provides certain corporate functions to the Northern
Powergrid Group, including financial and management accounting,
financial planning, treasury, taxation, procurement, pensions,
internal audit, legal advice, insurance management, claims handling
and litigation services. Further details of the related party
transactions entered into by the Group and the Company and changes
therein are included in Note 3 to this half-yearly financial
report.
NORTHERN ELECTRIC plc:
REGISTERED NUMBER: 2366942
INTERIM MANAGEMENT REPORT (CONTINUED)
Risks and uncertainties
Regulation
One of the principal risks facing Northern Powergrid relates to
possible changes in its allowed income as a result of modifications
to the price control formulae that are set out within the special
conditions of the electricity distribution licence. However, all of
the changes to those special conditions required to give effect to
Ofgem's final proposals in respect of the Distribution Price
Control Review 5 period were agreed and implemented with effect
from 1 April 2010 for the five-year period ending on 31 March 2015.
Given the regulatory environment in which Northern Powergrid
operates, the financial risks to Northern Powergrid during the term
of the price control, are that changes in most categories of cost
incurred by Northern Powergrid will have a direct impact on its
financial results.
Financial
The principal risks associated with the regulatory environment,
within which Northern Powergrid operates are mentioned above. As
IUS' business is primarily in the competitive engineering
contracting market, it contnues to be subject to the issues created
by the general economic downturn and associated trading conditions.
Consequently, demand for IUS' services has varied more
significantly recently than in previous years and there continues
to be an enhanced risk of counter-party default, with the
associated increase in the potential for IUS to be exposed to bad
debt. It is anticpated that these conditions will continue for the
remainder of 2012.
The Group addresses interest rate risk by having a policy of
providing a stable, low cost of financing over time whilst
observing approved risk parameters being financed by long-term
borrowings at fixed rates and having access to short-term borrowing
facilities at floating rates of interest.
As at 30 June 2012, 100% of the Group's long-term borrowings
were at fixed rates and the average maturity for these borrowings
was 17 years. Despite this position, the Group remains mindful of
the current economic climate and the associated potential impact on
the cost of its short-term borrowings. No material currency risks
are faced by the Group and it is policy that no trading in
financial instruments should be undertaken.
Further information on the principal long term risks and
uncertainties and the internal control system are included in the
Company's latest annual report for the year to 31 December 2011,
which is available at www.northernpowergrid.com.
NORTHERN ELECTRIC plc:
REGISTERED NUMBER: 2366942
INTERIM MANAGEMENT REPORT (CONTINUED)
Risks and uncertainties (continued)
Going concern
In the Company's latest annual report and accounts for the year
to 31 December 2011 the directors set out a number of factors they
took into account when they considered continuing to adopt the
going concern basis in preparing those annual report and accounts
and would confirm that no events have occurred during the six
months to 30 June 2012 to alter the view expressed in the annual
report and accounts.
Future strategy and objectives
The Company will continue to develop its business as a holding
company in a manner that concentrates on the Group's core skills of
electricity distribution and engineering contracting.
Northern Powergrid will continue to operate its business with
the goal of out-performing the allowances in the distribution price
control, while efficiently investing in its electricity
distribution system with the aim of improving the quality of supply
and service provided to its customers. The majority of Northern
Powergrid's distribution revenues for the period to 31 March 2015
have been set by Ofgem.
IUS will look to develop further its engineering contracting
business by delivering a high standard of service to its existing
clients and pursuing opportunities in other sectors.
Responsibility Statement
We confirm that to the best of our knowledge:
(a) the condensed set of finanical statements has been prepared
in accordance with IAS 34, "Interim Financial Reporting", and gives
a true and fair view of the assets, liabilities, financial position
and profit of the Group for the six months to 30 June 2012;
(b) the interim management report contains a fair review of the
information required by DTR 4.2.7 (indication of important events
during the first six months of the year and description of the
principal risks and uncertainties for the remaining six months of
the year); and
(c) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
By order of the board
T E Fielden
Director
17 August 2012
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE
2012
CONSOLIDATED INCOME STATEMENT
6 Months 6 Months Year ended
ended 30 ended 30 31 December
June 2012 June 2011 2011
Unaudited Unaudited Audited
GBPm GBPm GBPm
Revenue 162.1 147.0 301.4
Cost of sales (12.4) (11.6) (24.0)
----------- ----------- -------------
Gross profit 149.7 135.4 277.4
Distribution costs (32.6) (30.9) (77.6)
Administrative expenses (23.8) (25.4) (28.6)
----------- ----------- -------------
Operating profit 93.3 79.1 171.2
Other gains 0.2 0.2 0.4
Finance income 0.9 0.8 1.9
Finance costs (18.6) (18.7) (37.6)
----------- ----------- -------------
Profit before tax 75.8 61.4 135.9
Income tax expense (13.4) (10.8) (19.7)
----------- ----------- -------------
Profit from ordinary activities
after tax 62.4 50.6 116.2
----------- ----------- -------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - SIX MONTHS
ENDED 30 JUNE 2012
There is no other comprehensive income for the Group for the six
months to 30 June 2012, the comparative six month period in 2011 or
the year ended 31 December 2011, other than the profits reported
above.
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE
2012
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Capital
Share Premium Redemption Retained Total
Capital Account Reserve Earnings Equity
GBPm GBPm GBPm GBPm GBPm
Balance at 1 January
2012 (audited) 72.2 158.8 6.2 539.4 776.6
Comprehensive income
for the period (unaudited) - - - 62.4 62.4
Balance at 30 June
2012 (unaudited) 72.2 158.8 6.2 601.8 839.0
-------- -------- ----------- --------- -------
Share Capital
Share Premium Redemption Retained Total
Capital Account Reserve Earnings Equity
GBPm GBPm GBPm GBPm GBPm
Balance at 1 January
2011 (audited) 72.2 158.8 6.2 453.2 690.4
Comprehensive income
for the period (unaudited) - - - 50.6 50.6
Balance at 30 June
2011 (unaudited) 72.2 158.8 6.2 503.8 741.0
-------- -------- ----------- --------- -------
Share Capital
Share Premium Redemption Retained Total
Capital Account Reserve Earnings Equity
GBPm GBPm GBPm GBPm GBPm
Balance at 1 January
2011 (audited) 72.2 158.8 6.2 453.2 690.4
Dividends - - - (30.0) (30.0)
Comprehensive income
for the year (audited) - - - 116.2 116.2
Balance at 31 December
2011 (audited) 72.2 158.8 6.2 539.4 776.6
-------- -------- ----------- --------- ----------
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE
2012
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 30 June 31 December
2012 2011 2011
Unaudited Unaudited Audited
GBPm GBPm GBPm
Non-current assets
Property, plant and equipment 1,565.6 1,468.2 1,515.9
Intangibles 5.5 3.9 4.2
Investments 3.2 3.2 3.3
Retirement benefit asset 221.3 175.2 201.8
Trade and other receivables 3.8 4.6 3.8
---------- ----------- ------------
1,799.4 1,655.1 1,729.0
---------- ----------- ------------
Current assets
Inventories 14.0 12.2 13.4
Trade and other receivables 60.4 43.8 54.9
Cash and cash equivalents 224.2 231.5 229.6
---------- ----------- ------------
298.6 287.5 297.9
---------- ----------- ------------
Total assets 2,098.0 1,942.6 2,026.9
---------- ----------- ------------
Current liabilities
Trade and other payables (104.2) (86.9) (97.8)
Current income tax liabilities (15.4) (13.8) (12.9)
Deferred revenue (23.0) (14.1) (15.8)
Borrowings (24.3) (12.3) (37.8)
Provisions (1.0) (1.5) (1.0)
---------- ----------- ------------
(167.9) (128.6) (165.3)
---------- ----------- ------------
Net current assets 130.7 158.9 132.6
---------- ----------- ------------
Non-current liabilities
Borrowings (468.7) (468.6) (468.6)
Deferred income tax liabilities (170.4) (176.4) (172.1)
Retirement benefit obligations (1.4) (1.4) (1.5)
Deferred revenue (449.2) (425.2) (441.7)
Provisions (1.4) (1.4) (1.1)
---------- ----------- ------------
(1,091.1) (1,073.0) (1,085.0)
---------- ----------- ------------
Total liabilities (1,259.0) (1,201.6) (1,250.3)
---------- ----------- ------------
Net assets 839.0 741.0 776.6
---------- ----------- ------------
EQUITY
Share capital 72.2 72.2 72.2
Share premium account 158.8 158.8 158.8
Retained earnings 601.8 503.8 539.4
Other reserves 6.2 6.2 6.2
---------- ----------- ------------
Total equity 839.0 741.0 776.6
---------- ----------- ------------
The interim accounts were approved by the board of directors and
authorised for issue on 17 August 2012 and were signed on its
behalf by:
T E Fielden
Director
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE
2012
CONSOLIDATED CASH FLOW STATEMENT
6 Months 6 Months Year ended
ended ended 31 December
30 June 30 June 2011
2012 2011
Unaudited Unaudited Audited
GBPm GBPm GBPm
Net cash from operating activities 56.9 77.9 124.4
---------- ---------- -------------
Investing activities
Dividends received from joint venture 0.1 0.3 0.4
Proceeds from disposal of property,
plant and equipment 0.1 0.1 0.8
Purchase of property, plant and equipment (79.2) (56.9) (131.2)
Purchase of intangible assets (1.7) (0.8) (2.7)
Receipt of customer contributions 28.4 24.7 57.8
---------- ---------- -------------
Net cash used in investing activities (52.3) (32.6) (74.9)
---------- ---------- -------------
Financing activities
Movement in loan from parent undertaking - - 1.7
Movement in external loans (10.0) 119.0 141.2
Equity dividends paid - - (30.0)
---------- ---------- -------------
Net cash (used in)/generated from financing
activities (10.0) 119.0 112.9
---------- ---------- -------------
Net (decrease)/increase in cash and
cash equivalents (5.4) 164.3 162.4
Cash and cash equivalents at beginning
of period 229.6 67.2 67.2
---------- ---------- -------------
Cash and cash equivalents at end of
period 224.2 231.5 229.6
---------- ---------- -------------
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE
2012
NOTES TO THE ACCOUNTS
1. REVENUE AND SEGMENTAL ANALYSIS
The Group operates in the principal area of activity of the
distribution of electricity in the United Kingdom.
6 Months Ended 30 June 2012 (Unaudited)
Consolidation
Distribution Other Adjustments Total
GBPm GBPm GBPm GBPm
REVENUE
External sales 147.7 14.4 - 162.1
Inter-segment sales 0.3 2.3 (2.6) -
--------------- -------- ------------------ --------------
Total Revenue 148.0 16.7 (2.6) 162.1
--------------- -------- ------------------ --------------
SEGMENT RESULTS
Operating profit 78.7 (3.0) 17.6 93.3
--------
Other gains 0.2
Finance income 0.9
Finance costs (18.6)
--------------
Profit before tax 75.8
--------------
OTHER INFORMATION
Capital additions 76.5 - (1.2) 75.3
Depreciation and
amortisation 26.6 - (0.7) 25.9
Amortisation of
deferred
revenue (7.2) - - (7.2)
--------------- -------- ------------------ --------------
"Other" comprises Engineering Contracting and business support
units.
Sales and purchases between the different segments are made at
commercial prices.
External sales to RWE Npower plc of GBP45.9 m are included
within the Distribution Segment.
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE
2012
NOTES TO THE ACCOUNTS (CONTINUED)
1. REVENUE AND SEGMENTAL ANALYSIS (CONTINUED)
6 Months Ended 30 June 2011 (Unaudited)
Consolidation
Distribution Other Adjustments Total
GBPm GBPm GBPm GBPm
REVENUE
External sales 135.7 11.3 - 147.0
Inter-segment sales 0.2 3.5 (3.7) -
--------------- -------- ------------------ ---------
Total Revenue 135.9 14.8 (3.7) 147.0
--------------- -------- ------------------ ---------
SEGMENT RESULTS
Operating profit 63.6 1.2 14.3 79.1
--------------- -------- ------------------
Other gains 0.2
Finance income 0.8
Finance costs (18.7)
Profit before tax 61.4
---------
OTHER INFORMATION
Capital additions 54.3 - (1.2) 53.1
Depreciation and
amortisation 25.9 - (0.4) 25.5
Amortisation of
deferred revenue (7.2) - - (7.2)
--------------- -------- ------------------ ---------
"Other" comprises Engineering Contracting and business support
units.
Sales and purchases between the different segments are made at
commercial prices.
External sales to RWE Npower plc of GBP40.9m are included within
the Distribution Segment.
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE
2012
NOTES TO THE ACCOUNTS (CONTINUED)
1. REVENUE AND SEGMENTAL ANALYSIS (CONTINUED)
Year ended 31 December 2011(Audited)
Consolidation
Distribution Other Adjustments Total
GBPm GBPm GBPm GBPm
REVENUE
External sales 277.1 24.3 - 301.4
Inter-segment sales 0.5 6.6 (7.1) -
--------------- -------- -------------- ---------
Total revenue 277.6 30.9 (7.1) 301.4
--------------- -------- -------------- ---------
SEGMENT RESULTS
Operating profit 129.0 4.2 38.0 171.2
--------------- -------- --------------
Other gains 0.4
Finance income 1.9
Finance costs (37.6)
---------
Profit before tax 135.9
---------
OTHER INFORMATION
Capital additions 128.2 0.2 - 128.4
Depreciation and
amortisation 51.5 0.2 - 51.7
Amortisation of
deferred revenue (13.3) - - (13.3)
--------------- -------- -------------- ---------
"Other" comprises Engineering Contracting and business support
units.
Sales and purchases between the different segments are made at
commercial prices.
External sales to RWE Npower plc of GBP77.6m are included within
the Distribution segment.
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE
2012
NOTES TO THE ACCOUNTS (CONTINUED)
1. REVENUE AND SEGMENTAL ANALYSIS (CONTINUED)
The accounting policies of the reportable segments are the same
as the Group's accounting policies which are described in the
Group's latest annual financial statements. The segment results
represent the profit earned by each segment without allocation of
the share of profits of joint ventures, finance income and finance
costs, and income tax expense. This is the measure reported to the
Group's President and Chief Executive Officer for the purposes of
assessment of segment performance.
Segment net assets
30 June
30 June 2012 2011 31 December 2011
GBPm GBPm GBPm
Unaudited Unaudited Audited
Distribution 1,090.4 1,044.7 1,077.5
Other 275.1 249.8 216.4
Consolidation Adjustments (71.9) (113.9) (55.5)
(______________) (______________) (______________)
Total net assets by segment 1,293.6 1,180.6 1,238.4
(______________) (______________) (______________)
Unallocated net corporate liabilities (454.6) (439.6) (461.8)
(______________) (______________) (______________)
Total net assets 839.0 741.0 776.6
(============) (============) (============)
Segment assets in "Other" include investments held by Northern
Electric plc in its subsidiary companies totaling GBP203.1m (June
2011: GBP203.1m, December 2011: GBP203.1m), which are eliminated in
Consolidation Adjustments.
Consolidation Adjustments also include a GBP17.5m credit to
operating profit (June 2011: GBP15.8m, December 2011: GBP41.6m),
the recognition of the GBP221.3m retirement benefit asset (June
2011: GBP175.2m, December 2011: GBP201.8m) and a GBP28.4m reduction
in cumulative capitalised costs (June 2011: GBP23.8m, December
2011: GBP25.8m) as a consequence of the Distribution division
accounting for retirement benefits on a cash accrued basis.
Unallocated net corporate liabilities include cash and cash
equivalents, borrowings and taxation.
For the purposes of monitoring segment performance and
allocating resources between segments, the Group's President and
Chief Executive Officer monitors the tangible, intangible and
financial assets attributable to each segment. All assets and
liabilities are allocated to reportable segments with the exception
of long-term and short-term borrowings and current and deferred tax
balances.
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE
2012
NOTES TO THE ACCOUNTS (CONTINUED)
2. INCOME TAX EXPENSE
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2012 2011 2011
Unaudited Unaudited Audited
GBPm GBPm GBPm
Current tax 15.1 12.3 25.6
Deferred tax (1.7) (1.5) (5.9)
Total income tax
expense 13.4 10.8 19.7
--------------- --------------- -------------
The underlying tax for the interim period is calculated by
applying the effective average tax rate of 25% on profit before
preference dividends accrued.
The Finance Act 2012 includes a provision that the standard rate
of corporation tax in the United Kingdom will reduce from 25% to
24% from April 2012. Accordingly, this rate has been applied when
calculating deferred tax assets and liabilities throughout the
Group as at 30 June 2012.
3. RELATED PARTY TRANSACTIONS
GROUP
Details of transactions between the Group and other related
parties are disclosed below.
Loans
The Group has made loans to companies in the Northern Powergrid
Group. The total interest included in finance income in the income
statement for the six months ended 30 June 2012 was GBP0.9m (six
month ended 30 June 2011: GBP0.8m, year ended 31 December 2011:
GBP1.5m). Included within cash and cash equivalents is GBP224.2m as
at 30 June 2012 (30 June 2011: GBP231.5m, 31 December 2011:
GBP229.6m) in respect of these loans.
The Group has received loans from companies in the Northern
Powergrid Group. The total interest included in finance costs in
the income statement for the six months ended 30 June 2012 was
GBP2.8m (six months ended 30 June 2011: GBP5.9m, year ended 31
December 2011: GBP6.4m). Included within borrowings is GBP102.9m as
at 30 June 2012 (30 June 2011: GBP102.9m, 31 December 2011:
GBP104.3m) in respect of these loans.
Interest on loans to/from Group companies is charged at a
commercial rate of interest.
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE
2012
NOTES TO THE ACCOUNTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS (CONTINUED)
GROUP (CONTINUED)
Trading transactions
During the year, Group entities entered into the following
trading transactions with related parties that are not members of
the Group:
Purchases Amounts Owed
Sales to from Related to
Related Party Related Party
Related Party Party
GBPm GBPm GBPm
June 2012:
CE Insurance Services Limited - 0.3 -
CE UK Gas Holdings Limited 0.1 - -
Integrated Utility Services
Limited (Registered in Eire) - 0.5 0.1
Vehicle Lease and Service
Limited - 1.7 0.1
Northern Powergrid (Yorkshire)
plc 9.5 4.0 -
June 2011:
CE Insurance Services Limited - 0.3 -
CE UK Gas Holdings Limited 0.1 - -
Integrated Utility Services
Limited (Registered in Eire) - 0.5 0.1
Vehicle Lease and Service
Limited - 1.6 0.1
Northern Powergrid (Yorkshire)
plc 9.7 3.9 -
----------- -------------- ---------------
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE
2012
NOTES TO THE ACCOUNTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS (CONTINUED)
GROUP (CONTINUED)
Trading transactions (Continued)
Purchases Amounts
Sales to from Related Owed to
Related Party Party Related
Related Party Party
GBPm GBPm GBPm
December 2011:
CE Insurance Services
Limited - 0.5 -
CE UK Gas Holdings Limited 0.2 - -
Integrated Utility Services
Limited (Registered in
Eire) - 0.9 0.1
Vehicle Lease and Service
Limited - 3.6 0.4
Northern Powergrid (Yorkshire)
plc 18.5 8.8 -
---------------- -------------- ---------
Sales and purchases from related parties were made at commercial
prices.
The amounts outstanding are unsecured and will be settled in
cash. No guarantees have been given or received. No provisions have
been made for doubtful debts in respect of amounts owed by related
parties.
During 2012, 3 directors (30 June 2011: 3, 31 December 2011: 3)
and 8 key personnel (30 June 2011: 8, 31 December 2011: 8) utilised
the services provided by Northern Transport Finance Limited, a
company in the Group.
The amounts included in finance lease receivables owed by these
directors and key personnel total GBP0.1m (30 June 2011: GBP0.1m,
31 December 2011: GBP0.1m) in respect of non-current receivables
and GBP0.1m (30 June 2011: GBP0.1m, 31 December 2011: GBP0.1m) in
respect of current receivables.
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE
2012
NOTES TO THE ACCOUNTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS (CONTINUED)
COMPANY
Details of transactions between the Company and other related
parties are disclosed below.
Loans
The Company has made loans to companies in the Northern
Powergrid Group. The total interest included in finance income in
the income statement for the period ended 30 June 2012 was GBP0.4m
(six months ended 30 June 2011: GBP0.4m, year ended 31 December
2011: GBP1.0m). Included within cash and cash equivalents is
GBP224.2m as at 30 June 2012 (30 June 2011: GBP231.5m, 31 December
2011: GBP229.6m) in respect of these loans.
The Company has received loans from companies in the Northern
Powergrid Group. The total interest included in finance costs in
the income statement for the period ended 30 June 2012 was GBPnil
(six months ended 30 June 2011: GBPnil, year ended 31 December
2011: GBP0.6m). Included within borrowings is GBPnil as at 30 June
2012 (30 June 2011: GBPnil, 31 December 2011: GBPnil) in respect of
these loans.
Interest on loans to/from Group companies is charged at a
commercial rate of interest.
Trading transactions
During the year, the Company entered into the following trading
transactions with other members of the Northern Powergrid
Group:
Sales Purchases Dividends
to from received
Related Party Related Related from
Party Party Related Party
GBPm GBPm GBPm
June 2012:
CE UK Gas Holdings Limited 0.2 - -
Integrated Utility Services
Limited 0.2 - -
Northern Powergrid (Northeast)
Limited 2.5 0.1 -
Vehicle Lease and Service
Limited - - 0.4
Northern Powergrid (Yorkshire)
plc 2.3 - -
--------- ---------- ---------------
June 2011:
CE UK Gas Holdings Limited 0.2 - -
Integrated Utility Services
Limited 0.2 - -
Northern Powergrid (Northeast)
Limited 1.6 0.1 -
Vehicle Lease and Service
Limited - - 0.3
Northern Powergrid (Yorkshire)
plc 1.7 - -
--------- ---------- ---------------
NORTHERN ELECTRIC plc
REGISTERED NUMBER: 2366942
CONDENSED FINANCIAL STATEMENTS - SIX MONTHS ENDED 30 JUNE
2012
NOTES TO THE ACCOUNTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS (CONTINUED)
COMPANY (CONTINUED)
Sales Purchases Dividends
to from received
Related Party Related Related from
Party Party Related Party
GBPm GBPm GBPm
December 2011:
Integrated Utility Services
Limited 0.5 - -
Northern Powergrid (Northeast)
Limited 3.7 0.2 30.0
Vehicle Lease and Service
Limited - - 0.4
Northern Powergrid (Yorkshire)
plc 3.2 - -
--------- ---------- ---------------
Sales and purchases from related parties were made at commercial
prices.
There are no amounts outstanding to other members of the
Northern Powergrid Group.
No dividends were received from Integrated Utility Services
Limited in the period to June 2012.
4. ACCOUNTING POLICIES
The Group's accounting policies are the same as the accounting
policies which are described in the Group's latest annual report
and accounts for the year to 31 December 2011.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUCCRUPPUBR
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