Directors’ Reports
Directors’ Report
- Incorporation
- Activities
- Directors
- Material interests
- Post balance sheet events
- Dividends
- Research and development
- Share buy-back
- Political donations
- Charitable donations
- Policy on payment of creditors
- Substantial shareholders
- Employment policy
- Employee share ownership
- Annual General Meeting
- Extraordinary General Meeting
Incorporation
National Grid Transco plc was first incorporated on 11 July 2000. The Company is registered in England and Wales with its registered office at 1-3 Strand, London WC2N 5EH (telephone +44 (0)20 7004 3000) and company number 4031152.
Activities
The Company's principal activity is as the ultimate holding company of a group of companies involved in the transmission and distribution of energy, the provision of wireless infrastructure and other businesses in related markets.
More detailed information about the Group's businesses, activities and the financial performance of the Group can be found in the Operating and Financial Review.
The Responsibility section of our website provides more detailed information on the non-financial performance of the Group (www.ngtgroup.com/responsibility).
Directors
Biographical details of those Directors currently serving on the Board are in Board of Directors. Details of Directors who served during the year and of their interests in shares and share options can be found in the Directors' Remuneration Report.
The Company arranges Directors' and Officers' liability insurance cover, which the Board regards as appropriate and adequate.
Material interests
At no time during the year did any Director have any material interest in a contract within the Group, being a contract of any significance in relation to the Group's business.
Post balance sheet events
There have been no material events between 31 March 2005 and the date of this report which are required to be brought to the attention of shareholders.
Dividends
An interim dividend of 8.5 pence per share (US$0.7865 per ADS) was paid
on
24 January 2005.
The Directors are recommending that a final dividend of 15.2 pence per share (US$1.3869 per ADS) be paid on 24 August 2005. The payment of the final dividend is subject to shareholder approval at the Annual General Meeting. This would bring the total dividend for 2004/05 to 23.7 pence per share (US$2.1734 per ADS).
Research and development
Expenditure on research and development in 2004/05 was £9 million, compared with £10 million in 2003/04 and £18 million in 2002/03.
Share buy-back
National Grid Transco has authority from shareholders to repurchase up to 10% of its own ordinary shares. This authority was not used during 2004/05, nor in the period to 18 May 2005.
The Board intends to seek shareholder approval to renew this authority at the Extraordinary General Meeting which immediately follows the Annual General Meeting.
Companies are now permitted to hold repurchased shares as treasury shares rather than cancelling them. The Board has no current intention to hold repurchased shares as treasury shares, other than as required for share schemes.
Political donations
The Group made no political donations in the UK or European Union during the year (including donations as defined for the purposes of the Political Parties, Elections and Referendums Act 2000).
Our US businesses contributed a total of US$20,000 (£10,695) in connection with the Democratic and Republican national conventions held in the summer of 2004 in Massachusetts and New York, in addition to the US$50,000 (£29,762) reported in last year's Directors' Report. No money was donated to either political party, and all of these contributions were compliant with US state and federal law.
Charitable donations
During 2004/05 approximately £7,296,000 was spent in support of community initiatives and relationships across Group operations. Within this figure direct donations to charitable organisations amounted to approximately £1,352,000 in the UK (2003/04 £1,228,000) and £1,847,000 ($3,454,000) in the US (2003/04 £1,868,000 ($3,139,000)).
We used the London Benchmarking Group model to assess our total community contributions. Our application of the model has been independently assured by the Corporate Citizenship Company. In addition to our charitable donations substantial financial support was provided for our Affordable Warmth Programme, Environmental Centres, Young Offender training programme and university research.
To support employees' fundraising activities the Group operates a matched giving scheme. In the UK this scheme matches every pound donated or raised for charities and local community groups up to £400 per employee per year. In the US the programme assists voluntary support of eligible non-profit organisations by employees. Qualifying gifts of up to $3,500 per employee may be matched in any one year.
Policy on payment of creditors
National Grid Transco is a signatory to the Better Payment Practice Code, details of which can be found at www.payontime.co.uk.
The average creditor payment period at 31 March 2005 for the Group's principal operations in the UK was 28 days (26 days at 31 March 2004).
Substantial shareholders
As at 18 May 2005, the Group had been notified of the following beneficial interests in 3% or more of its issued share capital:
| | % of issued share capital |
|---|---|
| The Capital Group Companies, Inc. | 7.98 |
| Legal & General Investment Management Ltd | 3.88 |
| Barclays plc | 3.47 |
| Credit Suisse First Boston group | 3.24 |
No further notifications have been received.
Employment policy
Information on the Group's employee policies is included in Executive Reports under the heading Investing in our People and in the Operating responsibly section of the Operating Review under the headings 'Valuing people through inclusion', 'Business ethics', 'Leadership development' and 'Employee engagement'.
The Group uses multiple channels to communicate with its staff. These include email, Group intranets, cascade briefings, employee telephone information lines and in-house magazines. Additionally, regular consultation with employees and their trade unions takes place using both formal and informal mechanisms.
Employee share ownership
The Group facilitates share ownership amongst its employees by the operation of both sharesave and share incentive plans in the UK. In the US, employees are able to invest in the Group through employee incentive thrift plans.
In the UK, approximately 10,300 employees participate in sharesave schemes, representing about 64% of employees at the year-end. There are also 3,775 participants in the current share incentive plan, holding shares purchased on a monthly basis. In the US, 6,773 employees held ADSs in the employee incentive thrift plans at 31 March 2005, representing approximately 82% of employees.
Annual General Meeting
National Grid Transco's 2005 Annual General Meeting will be held on Monday
25 July 2005. Details are set out in a separate Notice of Annual
General Meeting.
Extraordinary General Meeting
National Grid Transco will be holding an Extraordinary General Meeting immediately after its 2005 Annual General Meeting. The Extraordinary General Meeting seeks approvals principally in respect of the proposed return of cash to shareholders following the sales of four of our UK Gas Distribution networks.
On behalf of the Board
Helen Mahy
Group Company Secretary and General Counsel
18 May 2005
National Grid Transco plc
Registered office:
1-3 Strand, London WC2N 5EH
Registered in England and Wales: No. 4031152