¨
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended 31 March 2018
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OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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¨
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of event requiring this shell company report
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For the transition period from
to
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Title of each class
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Name of each exchange on which registered
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Ordinary Shares of 12 204/473 pence each
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The New York Stock Exchange*
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American Depositary Shares, each representing five
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The New York Stock Exchange
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Ordinary Shares of 12 204/473 pence each
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6.625% Guaranteed Notes due 2018
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The New York Stock Exchange
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Preferred Stock ($100 par value-cumulative):
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3.90% Series
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The New York Stock Exchange
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3.60% Series
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The New York Stock Exchange
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*
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Not for trading, but only in connection with the registration of American Depositary Shares representing Ordinary Shares pursuant to the requirements of the Securities and Exchange Commission.
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Large accelerated filer
þ
Non-accelerated filer
¨
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Accelerated filer
¨
Emerging growth company
¨
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Item
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Form 20-F caption
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Location in the document
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Page(s)
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1
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Identity of directors, senior management and advisors
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Not applicable
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–
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2
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Offer statistics and expected timetable
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Not applicable
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–
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3
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Key Information
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3A Selected financial data
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“Additional Information—Summary consolidated financial information”
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217
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“Strategic Report—Financial review”
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22-25
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“Financial Statements—Consolidated statement of financial position”
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99
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“Financial Statements Consolidated statement of financial position—Unaudited commentary on consolidated statement of financial position—Net debt”
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100
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“Financial Statements—Consolidated cash flow statement—Unaudited commentary on the consolidated cash flow statement—Reconciliation of cash flow to net debt”
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102
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“Additional Information—Other unaudited financial information—Alternative performance measures/non-IFRS reconciliations”
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206-211
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“Additional Information—Shareholder information—Exchange rates”
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199
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“Exchange Rates”
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“Further Information”
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3B Capitalization and indebtedness
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Not applicable
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–
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3C Reasons for the offer and use of proceeds
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Not applicable
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–
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3D Risk Factors
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“Additional Information—Internal control and risk factors—Risk factors”
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193-196
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4
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Information on the company
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4A History and development of the company
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“Want more information or help?”
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223
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“Additional Information—The business in detail—Key milestones”
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184
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“Strategic Report—About National Grid”
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2-3
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“Strategic Report—Chairman’s statement”
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8-9
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“Strategic Report—Chief Executive’s review”
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10-11
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“Strategic Report—Our purpose, vision, values and strategy”
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12-13
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“Strategic Report—Our business environment”
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4-5
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“Strategic Report—Progress against our strategy—Capital investment ”
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16
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“Strategic Report—Financial position and capital investment—Capital investment”
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24
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“Additional Information—Shareholder information—Articles of Association”
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197-198
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“Additional Information—Other unaudited financial information—Alternative performance measures/non-IFRS reconciliations—Capital investment”
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210
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“Financial Statements—Consolidated statement of financial position—Unaudited commentary on consolidated statement of financial position—Property, plant and equipment”
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100
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“Financial Statements—Consolidated cash flow statement—Unaudited commentary on the consolidated cash flow statement—Net capital investment”
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103
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Item
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Form 20-F caption
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Location in the document
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Page(s)
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“Financial Statements—Notes to the consolidated financial statements—2. Segmental analysis—(c) Capital expenditure”
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110
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“Financial Statements—Notes to the consolidated financial statements—9. Discontinued operations”
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125-126
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“Additional Information—The business in detail—UK Regulation”; “US Regulation” and “—Summary of US price controls and rate plans”
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186-191
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4B Business overview
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“Additional Information—The business in detail”
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185
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“Strategic Report”
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1-3
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“Strategic Report—Our purpose, vision, values and strategy”
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12
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“Strategic Report—Our business environment”
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4-5
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“Strategic Report—Progress against our strategy”
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14-17
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“Strategic Report— Financial review”
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22-25
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“Strategic Report—Principal operations—UK”; “—US”; and “— NGV and other non-regulated activities”
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28-33
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“Financial Statements—Notes to the consolidated financial statements—2. Segmental analysis” and “—unaudited commentary on the results of our principal operations by segment – continuing operations”
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108-111
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“Financial Statements—Notes to the consolidated financial statements—16. Derivative financial instruments—(b) Commodity risk”
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136-137
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“Additional Information—The business in detail—UK Regulation”; “—US Regulation”; and “—Summary of US price controls and rate plans”
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186-191
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4C Organizational structure
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“Financial Statements—Notes to the consolidated financial statements—32. Subsidiary undertakings, joint ventures and associates”
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166-168
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4D Property, plants and equipment
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“Strategic Report—Progress against our strategy—How we assess progress”
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16
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“Additional Information—The business in detail” and
“—Other disclosures—Property, plant and equipment”
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185, 204
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“Financial Statements—Consolidated statement of financial position—Unaudited commentary on consolidated statement of financial position—Property, plant and equipment”
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100
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“Additional Information—Other disclosures—Property, plant and equipment”
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204
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“Financial Statements—Notes to the consolidated financial statements—12. Property, plant and equipment”
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129-130
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“Financial Statements—Notes to the consolidated financial statements—20. Borrowings”
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140-141
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“Additional Information—Other unaudited financial information—Capital investment”
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210
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4A
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Unresolved staff comments
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“Additional Information—Other disclosures—Unresolved SEC staff comments”
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205
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5
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Operating and financial review and prospects
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5A Operating results
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“Strategic Report—Financial review”
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22-25
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“Strategic Report—Our business environment”
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4-5
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“Additional Information—The business in detail—UK regulation”; “—US regulation”; and “—Summary of US price controls and rate plans”
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186-191
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Item
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Form 20-F caption
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Location in the document
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Page(s)
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“Strategic Report—Principal operations—UK”; “—US”; and “—NGV and other non-regulated activities”
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28-33
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“Financial Statements—Consolidated income statement—Unaudited commentary on the consolidated income statement”
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96
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“Financial Statements—Notes to the consolidated financial statements—2. Segmental analysis—Unaudited commentary on the results of our principal operations by segment – continuing operations”
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111
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“Additional Information—Commentary on consolidated financial statements”
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215-216
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“Financial Statements—Notes to the consolidated financial statements—30. Financial risk management—(d) Currency risk”
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162
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“Additional Information—Internal control and risk factors—Risk factors—Law, regulation and political and economic uncertainty”
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194
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5B Liquidity and capital resources
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“Strategic Report—Financial review”
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22-25
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“Financial Statements—Notes to the consolidated financial statements—1.A Going concern”
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104
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“Financial Statements—Consolidated cash flow statement” and “—Unaudited commentary on the consolidated cash flow statement”
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101-103
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“Additional Information—Internal control and risk factors—Risk factors—Financing and liquidity—An inability to access capital markets at commercially acceptable interest rates could affect how we maintain and grow our businesses”
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196
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“Financial Statements—Notes to the consolidated financial statements—2. Segmental analysis—Unaudited commentary on the results of our principal operations by segment – continuing operations”
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111
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“Financial Statements—Notes to the consolidated financial statements—16. Derivative financial instruments”
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135-138
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“Financial Statements—Notes to the consolidated financial statements—19. Cash and cash equivalents”
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140
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“Financial Statements—Notes to the consolidated financial statements—20. Borrowings”
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140-141
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“Financial Statements—Notes to the consolidated financial statements—27. Net debt”
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155-156
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“Financial Statements—Notes to the consolidated financial statements—28. Commitments and contingencies”
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157
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“Financial Statements—Notes to the consolidated financial statements—30. Financial risk management—(b) Liquidity risk”
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161
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“Financial Statements—Notes to the consolidated financial statements—30. Financial risk management—(d) Currency risk”
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162
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“Financial Statements—Notes to the consolidated financial statements—30. Financial risk management—(e) Capital risk management”
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163
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“Financial Statements—Notes to the consolidated financial statements—31. Borrowing facilities”
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165
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5C Research and development, patents and licenses, etc.
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“Additional Information—Other disclosures—Research and development and innovation activity”
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204-205
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5D Trend information
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“Strategic Report—Financial review”
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22-25
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Item
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Form 20-F caption
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Location in the document
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Page(s)
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“Strategic Report—Principal operations—UK”; “—US”; and “—NGV and other non-regulated activities”
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28-33
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“Strategic Report—Our business environment”
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4-5
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5E Off-balance sheet arrangements
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“Financial Statements—Unaudited commentary on consolidated statement of financial condition—Off balance sheet items”
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100
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5F Tabular disclosure of contractual obligations
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“Financial Statements—Notes to the consolidated financial statements—28. Commitments and contingencies”
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157
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5G Safe Harbor
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“Want more information or help?—Cautionary statement”
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224
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6
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Directors, senior management and employees
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6A Directors and senior management
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“Corporate Governance—Our Board”
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42-43
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6B Compensation
|
“Corporate Governance—Annual statement from the Remuneration Committee chairman” and “Corporate Governance—Directors Remuneration Report—Annual report on remuneration”
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63-79
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“Financial Statements—Notes to the consolidated financial statements—3. Operating costs—(c) Key management compensation”
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113
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“Financial Statements—Notes to the consolidated financial statements—23. Pensions and other post-retirement benefits”
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142-150
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6C Board practices
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“Additional Information—Other disclosures—Conflict of interest”; and “—Director’s indemnity”
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203
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“Corporate Governance—Our board”; “—Board Composition”; “—Management committees”; “—Governance Framework Structure and responsibilities”; “—Our Board and its committees”; “—Directors’ induction and training”; “—Performance evaluation”; “—Investor engagement”; “—Audit Committee”; “—Finance Committee”; “—Safety, Environment and Health Committee”; “—Nominations Committee”; “—Our Executive Committee”; and “—Statement of compliance with and application of the UK Corporate Governance Code”
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42-62
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“Corporate Governance—Annual statement from the Remuneration Committee chairman”
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63-65
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“Corporate Governance Directors’ remuneration policy – approved by shareholders in 2017”
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67
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|
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“Corporate Governance—At a glance” and
“—Directors Remuneration Policy—Approved policy table – Executive Directors”
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66-68
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“Corporate Governance— Directors’ Remuneration Policy—Approved policy table – Non-executive Directors (NEDs)”
|
69
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|
|
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“Corporate Governance— Directors Remuneration Policy—Service contracts”; and “—Payments for loss of office (audited information)”
|
70, 75
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|
“Additional Information—Shareholder Information—Articles of Association—Directors”
|
197
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|
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6D Employees
|
“Financial Statements—Notes to the consolidated financial statements—3. Operating costs—(b) Number of employees”
|
112
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|
|
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“Additional Information—Other disclosures—Employees”
|
203
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Item
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Form 20-F caption
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Location in the document
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Page(s)
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6E Share ownership
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“Corporate Governance—Directors Remuneration—Annual report on remuneration —Statement of Directors’ shareholdings and share interests (audited information)”
|
76
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|
|
|
“Corporate Governance— Directors Remuneration Report—Annual report on remuneration”
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70-79
|
|
|
|
“Additional Information——Shareholder information—Material interests in shares”
|
199
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|
|
|
“Additional Information—Other disclosures—All-employee share plans”
|
203
|
|
|
|
“Share ownership”
|
“Further Information”
|
|
7
|
Major shareholders and related party transactions
|
|
|
|
|
7A Major shareholders
|
“Additional Information—Shareholder information—Material interests in shares”
|
199
|
|
|
|
“Material interests in shares” and “Material interest in American Depositary Shares”
|
“Further Information”
|
|
|
7B Related party transactions
|
“Financial Statements—Notes to the consolidated financial statements—29. Related party transactions”
|
158
|
|
|
|
“Material interests in shares”
|
“Further Information”
|
|
|
|
“Financial Statements—Notes to the consolidated financial statements—28. Commitment and contingencies”
|
157
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|
|
7C Interests of experts and counsel
|
Not applicable
|
–
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|
8
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Financial information
|
|
|
|
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8A Consolidated statements and other financial information
|
|
|
|
|
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“Reports of Independent Registered Public Accounting Firms—Audit opinions for Form 20-F”
|
“Further Information”
|
|
|
|
“Financial Statements—Notes to the consolidated financial statements—1. Basis of preparation and recent accounting developments”
|
104-107
|
|
|
|
“Financial Statements—Consolidated income statement”; “—Consolidated statement of comprehensive income”; “—Consolidated statement of changes in equity”; “—Consolidated statement of financial position”; and “—Consolidated cash flow statement”
|
94-103
|
|
|
|
“Financial Statements—Notes to the consolidated financial statements—analysis of items in the primary statements”
|
104-156
|
|
|
|
“Financial Statements—Notes to the consolidated financial statements—supplementary information”
|
157-177
|
|
|
|
“Strategic Report—Chairman’s statement”
|
8-9
|
|
|
|
“Strategic Report—Financial Review—Other performance measures—Dividend growth”
|
25
|
|
|
8B Significant changes
|
“Subsequent Events”
|
“Further Information”
|
|
9
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The offer and listing
|
|
|
|
|
9A Offer and listing details
|
“Additional Information—Shareholder information—Exchange Rates”; “—Share price”; and “— Price History”
|
199-200
“Further Information”
|
|
|
9B Plan of distribution
|
Not applicable
|
|
|
|
9C Markets
|
“Additional Information—Shareholder information—Share price”
|
200
|
|
|
9D Selling shareholders
|
Not applicable
|
–
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|
Item
|
Form 20-F caption
|
Location in the document
|
Page(s)
|
|
|
9E Dilution
|
Not applicable
|
–
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|
|
9F Expenses of the issue
|
Not applicable
|
–
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|
10
|
Additional information
|
|
|
|
|
10A Share capital
|
Not applicable
|
–
|
|
|
10B Memorandum and articles of association
|
“Additional Information—Shareholder Information—Articles of Association”
|
197-198
|
|
|
|
“Additional Information—Other disclosures—Corporate governance practices: differences from New York Stock Exchange (NYSE) listing standards”
|
203
|
|
|
|
“Additional Information—Shareholder information—Share capital”
|
199
|
|
|
10C Material contracts
|
“Additional Information—Other disclosures—Material contracts”
|
204
|
|
|
10D Exchange controls
|
“Additional Information—Shareholder information—Exchange controls”
|
198
|
|
|
10E Taxation
|
“Additional Information——Shareholder information—Taxation”
|
200-202
|
|
|
10F Dividends and paying agents
|
Not applicable
|
–
|
|
|
10G Statement by experts
|
Not applicable
|
–
|
|
|
10H Documents on display
|
“Additional Information—Shareholder information—Documents on display”
|
198
|
|
|
10I Subsidiary information
|
Not applicable
|
–
|
|
11
|
Quantitative and qualitative disclosures about market risk
|
|
|
|
|
11A Quantitative information about market risk
|
“Financial Statements—Notes to the consolidated financial statements—16. Derivative financial instruments”
|
135-138
|
|
|
|
“Financial Statements—Notes to the consolidated financial statements—33. Sensitivities”
|
169-170
|
|
|
|
“Financial Statements—Notes to the consolidated financial statements—30. Financial risk management—(a) Credit risk”; “—(b) Liquidity risk”; “—(c) Interest rate risk”; “—(d) Currency risk”; “—(e) Capital risk management”; and “—(f) Fair value analysis”
|
159-164
|
|
|
|
“Strategic Report—Financial review”
|
22-25
|
|
|
11B Qualitative information about market risk
|
“Financial Statements—Notes to the consolidated financial statements—16. Derivative financial instruments”
|
135-138
|
|
|
|
“Financial Statements—Notes to the consolidated financial statements—30. Financial risk management—(a) Credit risk”; “—(b) Liquidity risk”; “—(c) Interest rate risk”; “—(d) Currency risk”; “—(e) Capital risk management”; and “—(f) Fair value analysis”
|
159-164
|
|
|
|
“Strategic Report—Financial review”
|
22-25
|
|
|
|
“Additional Information—Internal Control and Risk factors—Risk Factors”
|
193-196
|
|
12
|
Description of securities other than equity securities
|
|
|
|
|
12A Debt securities
|
Not applicable
|
–
|
|
|
12B Warrants and rights
|
Not applicable
|
–
|
|
|
12C Other securities
|
Not applicable
|
–
|
|
|
12D American depositary shares
|
“Additional Information—Shareholder information—Description of securities other than equity securities: depositary fees and charges”
|
198
|
|
|
|
“Additional Information—Shareholder information—Depositary payments to the Company”
|
198
|
|
Item
|
Form 20-F caption
|
Location in the document
|
Page(s)
|
|
|
|
“Additional Information—Definitions and glossary of terms”
|
218-222
|
|
13
|
Defaults, dividend arrearages and delinquencies
|
Not applicable
|
–
|
|
14
|
Material modifications to the rights of security holders and use of proceeds
|
Not applicable
|
–
|
|
15
|
Controls and procedures
|
“Strategic Report—Internal control and risk management—Our internal control process”, “—Reviewing the effectiveness of our internal control and risk management” and “Internal control over financial reporting”
|
21
|
|
|
|
“Additional Information—Internal control and risk factors—Disclosure controls” and “—Internal control over financial reporting”
|
193
|
|
|
|
“Corporate Governance—Audit Committee”
|
49-55
|
|
|
|
“Reports of Independent Registered Public Accounting Firms—Audit opinions for Form 20-F”
|
“Further Information”
|
|
16
|
16A Audit committee financial expert
|
“Corporate Governance—Board and committee membership and attendance”
|
44-45
|
|
|
16B Code of ethics
|
“Additional Information—Other disclosures—Code of Ethics”
|
203
|
|
|
16C Principal accountant fees and services
|
“Corporate Governance—Audit Committee—External audit”
|
54-55
|
|
|
|
“Financial Statements—Notes to the consolidated financial statements—3. Operating costs—(e) Auditors’ remuneration”
|
113
|
|
|
16D Exemptions from the listing standards for audit committees
|
Not applicable
|
–
|
|
|
16E Purchases of equity securities by the issuer and affiliated purchasers
|
“Additional Information—Shareholder information—Authority to purchase shares”
|
199
|
|
|
16F Change in registrant’s certifying accountant
|
|
–
|
|
|
16G Corporate governance
|
“Additional Information—Other disclosures—Corporate governance practices: differences from New York Stock Exchange (NYSE) listing standards”
|
203
|
|
|
16H Mine safety disclosure
|
Not applicable
|
–
|
|
17
|
Financial statements
|
Not applicable
|
–
|
|
18
|
Financial statements
|
“Financial Statements—Company accounting policies”
|
178-179
|
|
|
|
“Financial Statements—Notes to the consolidated financial statements—1. Basis of preparation and recent accounting developments”
|
104-107
|
|
|
|
“Financial Statements—Consolidated income statement”; “—Consolidated statement of comprehensive income”; “—Consolidated statement of changes in equity”; “—Consolidated statement of financial position”; and “—Consolidated cash flow statement”
|
94-103
|
|
|
|
“Financial Statements—Notes to the consolidated financial statements—analysis of items in the primary statements”
|
104-156
|
|
|
|
“Financial Statements—Notes to the consolidated financial statements– supplementary information”
|
157-177
|
|
|
|
“Reports of Independent Registered Public Accounting Firms—Audit opinions for Form 20-F”
|
“Further Information”
|
|
19
|
Exhibits
|
Filed with the SEC
|
–
|
|
2018
|
Notes
|
|
Before exceptional items and remeasurements
£m
|
|
Exceptional items and remeasurements
(see note 4)
£m
|
|
Total
£m
|
|
|
Continuing operations
|
|
|
|
|
|
||||
Revenue
|
2(a)
|
|
15,250
|
|
—
|
|
15,250
|
|
|
Operating costs
|
3,4
|
|
(11,793
|
)
|
36
|
|
(11,757
|
)
|
|
Operating profit
|
2(b)
|
|
3,457
|
|
36
|
|
3,493
|
|
|
Finance income
|
5
|
|
154
|
|
—
|
|
154
|
|
|
Finance costs
|
4,5
|
|
(1,128
|
)
|
229
|
|
(899
|
)
|
|
Share of post-tax results of joint ventures and associates
|
15,4
|
|
167
|
|
(207
|
)
|
(40
|
)
|
|
Profit before tax
|
2(b),4
|
|
2,650
|
|
58
|
|
2,708
|
|
|
Tax
|
4,6
|
|
(589
|
)
|
1,473
|
|
884
|
|
|
Profit after tax from continuing operations
|
4
|
|
2,061
|
|
1,531
|
|
3,592
|
|
|
Loss after tax from discontinued operations
|
9
|
|
—
|
|
(41
|
)
|
(41
|
)
|
|
Total profit for the year (continuing and discontinued)
|
|
|
2,061
|
|
1,490
|
|
3,551
|
|
|
Attributable to:
|
|
|
|
|
|
||||
Equity shareholders of the parent
|
|
|
2,060
|
|
1,490
|
|
3,550
|
|
|
Non-controlling interests
1
|
|
|
1
|
|
—
|
|
1
|
|
|
Earnings per share (pence)
|
|
|
|
|
|
||||
Basic earnings per share (continuing)
|
7
|
|
|
|
103.8
|
|
|||
Diluted earnings per share (continuing)
|
7
|
|
|
|
103.3
|
|
|||
Basic earnings per share (continuing and discontinued)
|
7
|
|
|
|
102.6
|
|
|||
Diluted earnings per share (continuing and discontinued)
|
7
|
|
|
|
102.1
|
|
1.
|
The non-controlling interests for the year ended 31 March 2018 relate to continuing operations.
|
2017¹
|
Notes
|
|
Before exceptional items and remeasurements
£m
|
|
Exceptional items and remeasurements
(see note 4)
£m
|
|
Total
£m
|
|
|
Continuing operations
|
|
|
|
|
|
||||
Revenue
|
2(a)
|
|
15,035
|
|
—
|
|
15,035
|
|
|
Operating costs
|
3,4
|
|
(11,262
|
)
|
(565
|
)
|
(11,827
|
)
|
|
Operating profit
|
2(b)
|
|
3,773
|
|
(565
|
)
|
3,208
|
|
|
Finance income
|
5
|
|
53
|
|
—
|
|
53
|
|
|
Finance costs
|
4,5
|
|
(1,082
|
)
|
(58
|
)
|
(1,140
|
)
|
|
Share of post-tax results of joint ventures and associates
|
15
|
|
63
|
|
—
|
|
63
|
|
|
Profit before tax
|
2(b),4
|
|
2,807
|
|
(623
|
)
|
2,184
|
|
|
Tax
|
6
|
|
(666
|
)
|
292
|
|
(374
|
)
|
|
Profit after tax from continuing operations
|
4
|
|
2,141
|
|
(331
|
)
|
1,810
|
|
|
Profit after tax from discontinued operations
|
9
|
|
606
|
|
5,378
|
|
5,984
|
|
|
Total profit for the year (continuing and discontinued)
|
|
|
2,747
|
|
5,047
|
|
7,794
|
|
|
Attributable to:
|
|
|
|
|
|
||||
Equity shareholders of the parent
|
|
|
2,747
|
|
5,048
|
|
7,795
|
|
|
Non-controlling interests
2
|
|
|
—
|
|
(1
|
)
|
(1
|
)
|
|
Earnings per share (pence)
|
|
|
|
|
|
||||
Basic earnings per share (continuing)
|
7
|
|
|
|
48.1
|
|
|||
Diluted earnings per share (continuing)
|
7
|
|
|
|
47.9
|
|
|||
Basic earnings per share (continuing and discontinued)
|
7
|
|
|
|
207.1
|
|
|||
Diluted earnings per share (continuing and discontinued)
|
7
|
|
|
|
206.2
|
|
1.
|
Comparatives have been re-presented to reflect the change to a columnar format (see note 1).
|
2.
|
The non-controlling interests for the year ended 31 March 2017 relate to discontinued operations.
|
2016¹
|
Notes
|
|
Before exceptional items and remeasurements
£m
|
|
Exceptional items and remeasurements
(see note 4)
£m
|
|
Total
£m
|
|
|
Continuing operations
|
|
|
|
|
|
||||
Revenue
|
2(a)
|
|
13,212
|
|
—
|
|
13,212
|
|
|
Operating costs
|
3,4
|
|
(9,998
|
)
|
11
|
|
(9,987
|
)
|
|
Operating profit
|
2(b)
|
|
3,214
|
|
11
|
|
3,225
|
|
|
Finance income
|
5
|
|
22
|
|
—
|
|
22
|
|
|
Finance costs
|
4,5
|
|
(878
|
)
|
(99
|
)
|
(977
|
)
|
|
Share of post-tax results of joint ventures and associates
|
|
|
59
|
|
—
|
|
59
|
|
|
Profit before tax
|
2(b),4
|
|
2,417
|
|
(88
|
)
|
2,329
|
|
|
Tax
|
6
|
|
(604
|
)
|
177
|
|
(427
|
)
|
|
Profit after tax from continuing operations
|
4
|
|
1,813
|
|
89
|
|
1,902
|
|
|
Profit after tax from discontinued operations
|
9
|
|
576
|
|
116
|
|
692
|
|
|
Total profit for the year (continuing and discontinued)
|
|
|
2,389
|
|
205
|
|
2,594
|
|
|
Attributable to:
|
|
|
|
|
|
||||
Equity shareholders of the parent
|
|
|
2,386
|
|
205
|
|
2,591
|
|
|
Non-controlling interests
2
|
|
|
3
|
|
—
|
|
3
|
|
|
Earnings per share (pence)
|
|
|
|
|
|
||||
Basic earnings per share (continuing)
|
7
|
|
|
|
50.4
|
|
|||
Diluted earnings per share (continuing)
|
7
|
|
|
|
50.2
|
|
|||
Basic earnings per share (continuing and discontinued)
|
7
|
|
|
|
68.7
|
|
|||
Diluted earnings per share (continuing and discontinued)
|
7
|
|
|
|
68.4
|
|
1.
|
Comparatives have been re-presented to reflect the change to a columnar format (see note 1).
|
2.
|
The non-controlling interests for the year ended 31 March 2016 relate to both continuing and discontinued operations.
|
The consolidated income statement shows income earned and expenditure for the year, with the difference being the overall profit for the year.
The commentary below relates to continuing operations only.
|
1.
|
Adjusted earnings and adjusted EPS are attributable to equity shareholders of the parent.
|
|
2017/18
|
2016/17
|
% change
|
|
Weighted average (income statement)
|
1.36
|
1.28
|
6
|
%
|
Year-end (statement of financial position)
|
1.40
|
1.25
|
12
|
%
|
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
Notes
|
|
£m
|
|
£m
|
|
£m
|
|
Profit after tax from continuing operations
|
|
|
3,592
|
|
1,810
|
|
1,902
|
|
Other comprehensive income from continuing operations
|
|
|
|
|
|
|||
Items from continuing operations that will never be reclassified to profit or loss:
|
|
|
|
|
|
|||
Remeasurement gains of pension assets and post-retirement benefit obligations
|
23
|
|
1,313
|
|
423
|
|
410
|
|
Share of other comprehensive income of associates, net of tax
1
|
|
|
142
|
|
—
|
|
—
|
|
Tax on items that will never be reclassified to profit or loss
|
6
|
|
(530
|
)
|
(277
|
)
|
(95
|
)
|
Total items from continuing operations that will never be reclassified to profit or loss
|
|
|
925
|
|
146
|
|
315
|
|
Items from continuing operations that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|||
Exchange adjustments
|
|
|
(505
|
)
|
346
|
|
69
|
|
Net gains in respect of cash flow hedges
|
|
|
19
|
|
70
|
|
88
|
|
Transferred to profit or loss in respect of cash flow hedges
|
|
|
(3
|
)
|
(6
|
)
|
26
|
|
Net (losses)/gains on available-for-sale investments
|
|
|
(30
|
)
|
81
|
|
43
|
|
Transferred to profit or loss on sale of available-for-sale investments
|
|
|
(73
|
)
|
(25
|
)
|
—
|
|
Share of other comprehensive income of associates, net of tax
1
|
|
|
5
|
|
—
|
|
—
|
|
Tax on items that may be reclassified subsequently to profit or loss
|
6
|
|
33
|
|
(34
|
)
|
(39
|
)
|
Total items from continuing operations that may be reclassified subsequently to profit or loss
|
|
|
(554
|
)
|
432
|
|
187
|
|
Other comprehensive income for the year, net of tax from continuing operations
|
|
|
371
|
|
578
|
|
502
|
|
Other comprehensive income for the year, net of tax from discontinued operations
|
9
|
|
—
|
|
42
|
|
71
|
|
Other comprehensive income for the year, net of tax
|
|
|
371
|
|
620
|
|
573
|
|
Total comprehensive income for the year from continuing operations
|
|
|
3,963
|
|
2,388
|
|
2,404
|
|
Total comprehensive income for the year from discontinued operations
|
9
|
|
(41
|
)
|
6,026
|
|
763
|
|
Total comprehensive income for the year
|
|
|
3,922
|
|
8,414
|
|
3,167
|
|
Attributable to:
|
|
|
|
|
|
|||
Equity shareholders of the parent
|
|
|
|
|
|
|||
From continuing operations
|
|
|
3,963
|
|
2,389
|
|
2,403
|
|
From discontinued operations
|
|
|
(41
|
)
|
6,026
|
|
761
|
|
|
|
|
3,922
|
|
8,415
|
|
3,164
|
|
Non-controlling interests
|
|
|
|
|
|
|||
From continuing operations
|
|
|
—
|
|
(1
|
)
|
1
|
|
From discontinued operations
|
|
|
—
|
|
—
|
|
2
|
|
|
|
|
—
|
|
(1
|
)
|
3
|
|
1.
|
The share of other comprehensive income of associates relates to items of other comprehensive income of Cadent (investment through Quadgas HoldCo Limited), comprising
£142 million
(
2017
: £
nil
;
2016
: £
nil
) remeasurement gains on pension assets and post-retirement benefit obligations and a
£5 million
(
2017
: £
nil
;
2016
: £
nil
) net gain in respect of cash flow hedges. Both items are shown net of tax.
|
The consolidated statement of comprehensive income records certain items as prescribed by the accounting rules. For us, the majority of the income or expense included here relates to movements in actuarial assumptions on defined benefit pension schemes and the associated tax impact. These items are not part of profit for the year, yet are important to allow the reader to gain a more comprehensive picture of our performance as a whole.
|
|
Share
capital
£m
|
|
Share
premium account
£m
|
|
Retained
earnings
£m
|
|
Other equity reserves
1
£m
|
|
|
Total shareholders’
equity
£m
|
|
Non-
controlling interests
£m
|
|
|
Total
equity
£m
|
|
At 31 March 2015
|
443
|
|
1,331
|
|
14,870
|
|
(4,682
|
)
|
|
11,962
|
|
12
|
|
|
11,974
|
|
Profit for the year
|
—
|
|
—
|
|
2,591
|
|
—
|
|
|
2,591
|
|
3
|
|
|
2,594
|
|
Other comprehensive income for the year
|
—
|
|
—
|
|
414
|
|
159
|
|
|
573
|
|
—
|
|
|
573
|
|
Total comprehensive income for the year
|
—
|
|
—
|
|
3,005
|
|
159
|
|
|
3,164
|
|
3
|
|
|
3,167
|
|
Equity dividends
|
—
|
|
—
|
|
(1,337
|
)
|
—
|
|
|
(1,337
|
)
|
—
|
|
|
(1,337
|
)
|
Scrip dividend-related share issue
2
|
4
|
|
(5
|
)
|
—
|
|
—
|
|
|
(1
|
)
|
—
|
|
|
(1
|
)
|
Purchase of treasury shares
|
—
|
|
—
|
|
(267
|
)
|
—
|
|
|
(267
|
)
|
—
|
|
|
(267
|
)
|
Issue of treasury shares
|
—
|
|
—
|
|
16
|
|
—
|
|
|
16
|
|
—
|
|
|
16
|
|
Purchase of own shares
|
—
|
|
—
|
|
(6
|
)
|
—
|
|
|
(6
|
)
|
—
|
|
|
(6
|
)
|
Other movements in non-controlling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(5
|
)
|
|
(5
|
)
|
Share-based payments
|
—
|
|
—
|
|
22
|
|
—
|
|
|
22
|
|
—
|
|
|
22
|
|
Tax on share-based payments
|
—
|
|
—
|
|
2
|
|
—
|
|
|
2
|
|
—
|
|
|
2
|
|
At 31 March 2016
|
447
|
|
1,326
|
|
16,305
|
|
(4,523
|
)
|
|
13,555
|
|
10
|
|
|
13,565
|
|
Profit/(loss) for the year
|
—
|
|
—
|
|
7,795
|
|
—
|
|
|
7,795
|
|
(1
|
)
|
|
7,794
|
|
Other comprehensive income for the year
|
—
|
|
—
|
|
84
|
|
536
|
|
|
620
|
|
—
|
|
|
620
|
|
Total comprehensive income/(loss) for the year
|
—
|
|
—
|
|
7,879
|
|
536
|
|
|
8,415
|
|
(1
|
)
|
|
8,414
|
|
Equity dividends
|
—
|
|
—
|
|
(1,463
|
)
|
—
|
|
|
(1,463
|
)
|
—
|
|
|
(1,463
|
)
|
Scrip dividend-related share issue
2
|
2
|
|
(2
|
)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
Purchase of treasury shares
|
—
|
|
—
|
|
(189
|
)
|
—
|
|
|
(189
|
)
|
—
|
|
|
(189
|
)
|
Issue of treasury shares
|
—
|
|
—
|
|
18
|
|
—
|
|
|
18
|
|
—
|
|
|
18
|
|
Purchase of own shares
|
—
|
|
—
|
|
(6
|
)
|
—
|
|
|
(6
|
)
|
—
|
|
|
(6
|
)
|
Other movements in non-controlling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
7
|
|
|
7
|
|
Share-based payments
|
—
|
|
—
|
|
35
|
|
—
|
|
|
35
|
|
—
|
|
|
35
|
|
Tax on share-based payments
|
—
|
|
—
|
|
3
|
|
—
|
|
|
3
|
|
—
|
|
|
3
|
|
At 31 March 2017
|
449
|
|
1,324
|
|
22,582
|
|
(3,987
|
)
|
|
20,368
|
|
16
|
|
|
20,384
|
|
Profit for the year
|
—
|
|
—
|
|
3,550
|
|
—
|
|
|
3,550
|
|
1
|
|
|
3,551
|
|
Other comprehensive income/(loss) for the year
|
—
|
|
—
|
|
925
|
|
(553
|
)
|
|
372
|
|
(1
|
)
|
|
371
|
|
Total comprehensive income/(loss) for the year
|
—
|
|
—
|
|
4,475
|
|
(553
|
)
|
|
3,922
|
|
—
|
|
|
3,922
|
|
Equity dividends
|
—
|
|
—
|
|
(4,487
|
)
|
—
|
|
|
(4,487
|
)
|
—
|
|
|
(4,487
|
)
|
Scrip dividend-related share issue
2
|
3
|
|
(3
|
)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
Purchase of treasury shares
|
—
|
|
—
|
|
(1,017
|
)
|
—
|
|
|
(1,017
|
)
|
—
|
|
|
(1,017
|
)
|
Issue of treasury shares
|
—
|
|
—
|
|
33
|
|
—
|
|
|
33
|
|
—
|
|
|
33
|
|
Purchase of own shares
|
—
|
|
—
|
|
(5
|
)
|
—
|
|
|
(5
|
)
|
—
|
|
|
(5
|
)
|
Share-based payments
|
—
|
|
—
|
|
16
|
|
—
|
|
|
16
|
|
—
|
|
|
16
|
|
Tax on share-based payments
|
—
|
|
—
|
|
2
|
|
—
|
|
|
2
|
|
—
|
|
|
2
|
|
At 31 March 2018³
|
452
|
|
1,321
|
|
21,599
|
|
(4,540
|
)
|
|
18,832
|
|
16
|
|
|
18,848
|
|
1.
|
For further details of other equity reserves, see note 26.
|
2.
|
Included within the share premium account are costs associated with scrip dividends.
|
3.
|
Refer to note 7 for the effect of the share consolidation and the special dividend.
|
The consolidated statement of changes in equity shows additions and reductions to equity. For us, the main items are profit earned and dividends paid in the year.
|
|
|
|
2018
|
|
2017¹
|
|
|
Notes
|
|
£m
|
|
£m
|
|
Non-current assets
|
|
|
|
|
||
Goodwill
|
10
|
|
5,444
|
|
6,096
|
|
Other intangible assets
|
11
|
|
899
|
|
923
|
|
Property, plant and equipment
|
12
|
|
39,853
|
|
39,825
|
|
Other non-current assets
|
13
|
|
115
|
|
69
|
|
Pension assets
|
23
|
|
1,409
|
|
603
|
|
Financial and other investments
|
14
|
|
899
|
|
1,100
|
|
Investments in joint ventures and associates
|
15
|
|
2,168
|
|
2,083
|
|
Derivative financial assets
|
16
|
|
1,319
|
|
1,567
|
|
Total non-current assets
|
|
|
52,106
|
|
52,266
|
|
Current assets
|
|
|
|
|
||
Inventories and current intangible assets
|
17
|
|
341
|
|
403
|
|
Trade and other receivables
|
18
|
|
2,798
|
|
2,728
|
|
Current tax assets
|
|
|
114
|
|
317
|
|
Financial and other investments
|
14
|
|
2,694
|
|
8,741
|
|
Derivative financial assets
|
16
|
|
405
|
|
246
|
|
Cash and cash equivalents
|
19
|
|
329
|
|
1,139
|
|
Total current assets
|
|
|
6,681
|
|
13,574
|
|
Total assets
|
|
|
58,787
|
|
65,840
|
|
Current liabilities
|
|
|
|
|
||
Borrowings
|
20
|
|
(4,447
|
)
|
(5,496
|
)
|
Derivative financial liabilities
|
16
|
|
(401
|
)
|
(1,147
|
)
|
Trade and other payables
|
21
|
|
(3,453
|
)
|
(3,345
|
)
|
Current tax liabilities
|
|
|
(123
|
)
|
(107
|
)
|
Provisions
|
24
|
|
(273
|
)
|
(416
|
)
|
Total current liabilities
|
|
|
(8,697
|
)
|
(10,511
|
)
|
Non-current liabilities
|
|
|
|
|
||
Borrowings
|
20
|
|
(22,178
|
)
|
(23,142
|
)
|
Derivative financial liabilities
|
16
|
|
(660
|
)
|
(1,246
|
)
|
Other non-current liabilities
|
22
|
|
(1,317
|
)
|
(1,370
|
)
|
Deferred tax liabilities
|
6
|
|
(3,636
|
)
|
(4,479
|
)
|
Pensions and other post-retirement benefit obligations
|
23
|
|
(1,672
|
)
|
(2,536
|
)
|
Provisions
|
24
|
|
(1,779
|
)
|
(2,172
|
)
|
Total non-current liabilities
|
|
|
(31,242
|
)
|
(34,945
|
)
|
Total liabilities
|
|
|
(39,939
|
)
|
(45,456
|
)
|
Net assets
|
|
|
18,848
|
|
20,384
|
|
Equity
|
|
|
|
|
||
Share capital
|
25
|
|
452
|
|
449
|
|
Share premium account
|
|
|
1,321
|
|
1,324
|
|
Retained earnings
|
|
|
21,599
|
|
22,582
|
|
Other equity reserves
|
26
|
|
(4,540
|
)
|
(3,987
|
)
|
Total shareholders’ equity
|
|
|
18,832
|
|
20,368
|
|
Non-controlling interests
|
|
|
16
|
|
16
|
|
Total equity
|
|
|
18,848
|
|
20,384
|
|
1.
|
Comparative amounts have been represented to reflect the reclassification of commodity derivative contracts from trade and other receivables and payables, and from other non-current assets and liabilities to derivative financial assets and derivative financial liabilities (see note 16).
|
The consolidated statement of financial position shows all the Group’s assets and liabilities at the year end. As a capital-intensive business, we have significant amounts of physical assets and corresponding borrowings.
|
Net plan surplus/(deficit)
|
UK
£m
|
|
|
US
£m
|
|
|
Total
£m
|
|
As at 1 April 2017
|
(156
|
)
|
|
(1,777
|
)
|
|
(1,933
|
)
|
Exchange movements
|
—
|
|
|
175
|
|
|
175
|
|
Current service cost
|
(49
|
)
|
|
(144
|
)
|
|
(193
|
)
|
Net interest cost
|
(3
|
)
|
|
(62
|
)
|
|
(65
|
)
|
Curtailments and other
|
(15
|
)
|
|
(20
|
)
|
|
(35
|
)
|
Actuarial gains/(losses)
|
|
|
|
|
|
|||
– on plan assets
|
103
|
|
|
465
|
|
|
568
|
|
– on plan liabilities
|
1,074
|
|
|
(329
|
)
|
|
745
|
|
Employer contributions
|
150
|
|
|
325
|
|
|
475
|
|
As at 31 March 2018
|
1,104
|
|
|
(1,367
|
)
|
|
(263
|
)
|
Represented by:
|
|
|
|
|
|
|||
Plan assets
|
15,330
|
|
|
8,528
|
|
|
23,858
|
|
Plan liabilities
|
(14,226
|
)
|
|
(9,895
|
)
|
|
(24,121
|
)
|
|
1,104
|
|
|
(1,367
|
)
|
|
(263
|
)
|
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
|
Notes
|
|
|
£m
|
|
£m
|
|
£m
|
|
Cash flows from operating activities
|
|
|
|
|
|
||||
Total operating profit from continuing operations
|
2(b)
|
|
|
3,493
|
|
3,208
|
|
3,225
|
|
Adjustments for:
|
|
|
|
|
|
||||
Exceptional items and remeasurements
|
4
|
|
|
(36
|
)
|
565
|
|
(11
|
)
|
Depreciation, amortisation and impairment
|
|
|
1,530
|
|
1,481
|
|
1,311
|
|
|
Share-based payments charge
|
|
|
16
|
|
32
|
|
21
|
|
|
Gain on exchange of associate for available-for-sale investment
|
|
|
—
|
|
—
|
|
(49
|
)
|
|
Changes in working capital
|
|
|
118
|
|
151
|
|
416
|
|
|
Changes in provisions
|
|
|
(206
|
)
|
(181
|
)
|
(58
|
)
|
|
Changes in pensions and other post-retirement benefit obligations
|
|
|
(239
|
)
|
(768
|
)
|
(293
|
)
|
|
Cash flows relating to exceptional items
|
|
|
26
|
|
(36
|
)
|
(40
|
)
|
|
Cash generated from operations – continuing operations
|
|
|
4,702
|
|
4,452
|
|
4,522
|
|
|
Tax recovered/(paid)
|
|
|
8
|
|
(132
|
)
|
(230
|
)
|
|
Net cash inflow from operating activities – continuing operations
|
|
|
4,710
|
|
4,320
|
|
4,292
|
|
|
Net cash (used in)/inflow from operating activities – discontinued operations
|
9
|
|
|
(207
|
)
|
909
|
|
1,076
|
|
Cash flows from investing activities
|
|
|
|
|
|
||||
Acquisition of investments
|
|
|
(2
|
)
|
—
|
|
—
|
|
|
Investments in joint ventures and associates
|
|
|
(129
|
)
|
(76
|
)
|
(116
|
)
|
|
Loans to joint ventures and associates
|
|
|
(68
|
)
|
(61
|
)
|
—
|
|
|
Disposal of investments
|
|
|
134
|
|
—
|
|
—
|
|
|
Disposal of UK Gas Distribution
|
9,15
|
|
(20
|
)
|
5,454
|
|
—
|
|
|
Purchases of intangible assets
|
|
|
(173
|
)
|
(223
|
)
|
(196
|
)
|
|
Purchases of property, plant and equipment
|
|
|
(3,738
|
)
|
(3,296
|
)
|
(2,855
|
)
|
|
Disposals of property, plant and equipment
|
|
|
10
|
|
18
|
|
4
|
|
|
Dividends received from joint ventures and associates
|
|
|
213
|
|
99
|
|
72
|
|
|
Interest received
|
|
|
57
|
|
51
|
|
23
|
|
|
Net movements in short-term financial investments
1
|
|
|
5,953
|
|
(5,600
|
)
|
(391
|
)
|
|
Net cash flow from/(used in) investing activities – continuing operations
|
|
|
2,237
|
|
(3,634
|
)
|
(3,459
|
)
|
|
Net cash flow used in investing activities – discontinued operations
|
|
|
—
|
|
(680
|
)
|
(577
|
)
|
|
Cash flows from financing activities
|
|
|
|
|
|
||||
Purchase of treasury shares
|
|
|
(1,017
|
)
|
(189
|
)
|
(267
|
)
|
|
Proceeds from issue of treasury shares
|
|
|
33
|
|
18
|
|
16
|
|
|
Purchase of own shares
|
|
|
(5
|
)
|
(6
|
)
|
(6
|
)
|
|
Proceeds received from loans
|
|
|
1,941
|
|
2,463
|
|
2,726
|
|
|
Repayment of loans
|
|
|
(2,156
|
)
|
(1,616
|
)
|
(896
|
)
|
|
Net movements in short-term borrowings and derivatives
|
|
|
(772
|
)
|
90
|
|
(730
|
)
|
|
Interest paid
|
|
|
(853
|
)
|
(839
|
)
|
(711
|
)
|
|
Dividends paid to shareholders
|
|
|
(4,487
|
)
|
(1,463
|
)
|
(1,337
|
)
|
|
Net cash flow used in financing activities – continuing operations
|
|
|
(7,316
|
)
|
(1,542
|
)
|
(1,205
|
)
|
|
Net cash flow (used in)/from financing activities – discontinued operations
|
|
|
(231
|
)
|
1,611
|
|
(123
|
)
|
|
Net (decrease)/increase in cash and cash equivalents
|
27(a)
|
|
|
(807
|
)
|
984
|
|
4
|
|
Disposal of bank overdraft in UK Gas Distribution
|
|
|
—
|
|
15
|
|
—
|
|
|
Exchange movements
|
|
|
(3
|
)
|
16
|
|
4
|
|
|
Net cash and cash equivalents at start of year
|
|
|
1,139
|
|
124
|
|
116
|
|
|
Net cash and cash equivalents at end of year
1
|
19
|
|
|
329
|
|
1,139
|
|
124
|
|
1.
|
Net of bank overdrafts of
£nil
(
2017
:
£nil
;
2016
:
£3 million
).
|
The consolidated cash flow statement shows how the cash balance has moved during the year. Cash inflows and outflows are presented to allow users to understand how they relate to the day-to-day operations of the business (Operating activities); the money that has been spent or earned on assets in the year, including acquisitions of physical assets or other businesses and the disposal of UK Gas Distribution (Investing activities); and the cash raised from debt, share issues or share buybacks, restructuring of borrowings for the disposal of UK Gas Distribution and other loan borrowings or repayments (Financing activities).
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Cash generated from continuing operations
|
4,702
|
|
4,452
|
|
Cash generated from discontinued operations
|
(207
|
)
|
987
|
|
|
4,495
|
|
5,439
|
|
Net capital investment – continuing operations
|
(4,098
|
)
|
(3,638
|
)
|
Net capital investment – discontinued operations
|
—
|
|
(605
|
)
|
|
(4,098
|
)
|
(4,243
|
)
|
Business net cash flow
|
397
|
|
1,196
|
|
Net interest paid – continuing operations
|
(796
|
)
|
(788
|
)
|
Net interest paid – discontinued operations
|
—
|
|
(1,167
|
)
|
|
(796
|
)
|
(1,955
|
)
|
Tax recovered/(paid) – continuing operations
|
8
|
|
(132
|
)
|
Tax paid – discontinued operations
|
—
|
|
(78
|
)
|
|
8
|
|
(210
|
)
|
Ordinary dividends paid and scrip buybacks
|
(1,494
|
)
|
(1,652
|
)
|
Return of capital
|
(4,010
|
)
|
—
|
|
Disposal of UK Gas Distribution
|
(20
|
)
|
11,344
|
|
Other cash movements
|
239
|
|
110
|
|
Non-cash movements
|
1,948
|
|
(2,782
|
)
|
(Increase)/decrease in net debt
|
(3,728
|
)
|
6,051
|
|
Opening net debt
|
(19,274
|
)
|
(25,325
|
)
|
Closing net debt
|
(23,002
|
)
|
(19,274
|
)
|
Accounting policies describe our approach to recognising and measuring transactions and balances in the year. Accounting policies applicable across the financial statements are shown below. Accounting policies that are specific to a component of the financial statements have been incorporated into the relevant note.
This section also shows areas of judgement and key sources of estimation uncertainty in these financial statements. In addition, we summarise new IASB and EU endorsed accounting standards, amendments and interpretations and whether these are effective in 2019 or later years, explaining how significant changes are expected to affect our reported results.
|
•
|
categorisation of certain items as exceptional items and the definition of adjusted earnings see notes 4 and 7.
|
•
|
valuation of liabilities for pensions and other post-retirement benefits see note 23; and
|
•
|
the discount rate and cash flows applied in determining the environmental provisions see note 24.
|
•
|
Presentational formats: we use the nature of expense method for our income statement and aggregate our statement of financial position to net assets and total equity. In the income statement, we present subtotals of total operating profit, profit before tax and profit after tax from continuing operations, together with additional subtotals excluding exceptional items and remeasurements as a result of the three columnar layout described earlier. Exceptional items and remeasurements are presented in a separate column on the face of the income statement.
|
•
|
Customer contributions: contributions received prior to 1 July 2009 towards capital expenditure are recorded as deferred income and amortised in line with the depreciation on the associated asset.
|
•
|
Financial instruments: we normally opt to apply hedge accounting in most circumstances where this is permitted. For net investment hedges, we have chosen to use the spot rate method, rather than the alternative forward rate method.
|
•
|
annual improvements to IFRSs 2014-2016 Cycle;
|
•
|
amendments to IAS 7 ‘Statement of cash flows’; and
|
•
|
amendments to IAS 12 ‘Income taxes’.
|
•
|
There are certain pass-through revenues (principally revenues collected on behalf of the Scottish and Offshore transmission operators) where the principal/agency assessment changes on transition to IFRS 15. In moving from a risk and reward model to a control model, we will no longer record our revenues collected on behalf of the Scottish and Offshore transmission operators as principal as we do not control the Scottish or Offshore transmission networks. If we had adopted IFRS 15 in 2017/18, both revenues and operating costs would have been
£1,056 million
lower, with no impact to profit as a result of this change. There will be no transition adjustment as a result of this change; and
|
•
|
Across our subsidiaries in the UK and the US, our customers provide contributions for certain capital works (e.g. connections) which we continue to own on completion of the works. In our electricity business in the UK, we currently recognise customer contributions for connections over time as we have an ongoing contractual condition to maintain connections over their lives. In our UK Gas Transmission business, we recognise customer contributions when the connection is completed (the contractual conditions of the connection agreement do not explicitly require connections to be maintained over the life of the connection). In the US, revenue is also recognised when the connection is completed.
|
•
|
Amendments to IFRS 2 ‘Share-based payment’;
|
•
|
IFRIC 22 ‘Foreign Currency Transactions and Advance Consideration’;
|
•
|
IFRIC 23 ‘Uncertainty over Income Tax Treatments’;
|
•
|
Amendments to IAS 40 ‘Investment Property’;
|
•
|
Amendments to IAS 28: 'Investments in associates' – Long-term interests in associates and joint ventures;
|
•
|
Annual Improvements to IFRS Standards 2015-2017 Cycle;
|
•
|
IFRS 17 ‘Insurance Contracts’; and
|
•
|
Amendments to IAS 19 ‘Employee Benefits’.
|
This note sets out the financial performance for the year split into the different parts of the business (operating segments). The performance of these operating segments is monitored and managed on a day-to-day basis. Revenue and the results of the business are analysed by operating segment, based on the information the Board of Directors uses internally for the purposes of evaluating the performance of operating segments and determining resource allocation between operating segments. The Board is National Grid’s chief operating decision maker (as defined by IFRS 8 ‘Operating Segments’) and assesses the profitability of operations principally on the basis of operating profit before exceptional items and remeasurements (see note 4). As a matter of course, the Board also considers profitability by segment, excluding the effect of timing. However, the measure of profit disclosed in this note is operating profit before exceptional items and remeasurements as this is the measure that is most consistent with the IFRS results reported within these financial statements.
Our strategy in action
The Group owns a portfolio of businesses that range from businesses with high levels of investment and growth to cash generative developed assets with lower investment requirements (such as National Grid Metering, included within NGV and Other). The majority of revenue is generated from regulated operating segments in the UK and US. The Group works with its regulators to obtain agreements that balance the risks faced with the opportunity to deliver reasonable returns for investors. When investing in NGV and Other, the Group aims to leverage its core capabilities to deliver higher returns for investors. The regulated businesses earn revenue for the transmission, distribution and generation services they have provided during the year. In any one year, the revenue recognised may differ from that allowed under the Group’s regulatory agreements and any such timing differences are adjusted through future prices. NGV and Other businesses earn revenue in line with their contractual terms.
|
UK Electricity Transmission
|
High-voltage electricity transmission networks in England and Wales
|
UK Gas Transmission
|
High-pressure gas transmission networks in Great Britain and LNG storage activities
|
US Regulated
|
Gas distribution networks, electricity distribution networks and high-voltage electricity transmission networks in New York and New England and electricity generation facilities in New York
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||
|
Total
sales £m |
|
Sales
between segments £m |
|
Sales
to third parties £m |
|
|
Total
sales £m |
Sales
between segments £m |
|
Sales
to third parties £m |
|
|
Total
sales £m |
|
Sales
between segments £m |
|
Sales
to third parties £m |
Operating segments – continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
UK Electricity Transmission
|
4,154
|
|
(28
|
)
|
4,126
|
|
|
4,439
|
(29)
|
4,410
|
|
|
3,977
|
|
(20)
|
|
3,957
|
|
UK Gas Transmission
|
1,091
|
|
(9
|
)
|
1,082
|
|
|
1,080
|
(99)
|
981
|
|
|
1,047
|
|
(109)
|
|
938
|
|
US Regulated
|
9,272
|
|
—
|
|
9,272
|
|
|
8,931
|
—
|
|
8,931
|
|
|
7,493
|
|
—
|
|
7,493
|
NGV and Other
1
|
776
|
|
(6
|
)
|
770
|
|
|
713
|
—
|
|
713
|
|
|
824
|
|
—
|
|
824
|
Total revenue from continuing operations
|
15,293
|
|
(43
|
)
|
15,250
|
|
|
15,163
|
(128)
|
15,035
|
|
|
13,341
|
|
(129)
|
|
13,212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Split by geographical areas – continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
UK
|
|
|
5,938
|
|
|
|
|
6,064
|
|
|
|
|
5,619
|
|||||
US
|
|
|
9,312
|
|
|
|
|
8,971
|
|
|
|
|
7,593
|
|||||
|
|
|
15,250
|
|
|
|
|
15,035
|
|
|
|
|
13,212
|
1.
|
Included within NGV and Other is
£593 million
(
2017
:
£604 million
;
2016
:
£719 million
) of revenue relating to NGV.
|
|
Before exceptional items
and remeasurements |
|
After exceptional items
and remeasurements |
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Operating segments – continuing operations:
|
|
|
|
|
|
|
|
||||||
UK Electricity Transmission
|
1,041
|
|
1,372
|
|
1,173
|
|
|
1,041
|
|
1,361
|
|
1,173
|
|
UK Gas Transmission
|
487
|
|
511
|
|
486
|
|
|
487
|
|
507
|
|
486
|
|
US Regulated
|
1,698
|
|
1,713
|
|
1,185
|
|
|
1,734
|
|
1,278
|
|
1,196
|
|
NGV and Other
1
|
231
|
|
177
|
|
370
|
|
|
231
|
|
62
|
|
370
|
|
Total operating profit from continuing operations
|
3,457
|
|
3,773
|
|
3,214
|
|
|
3,493
|
|
3,208
|
|
3,225
|
|
|
|
|
|
|
|
|
|
||||||
Split by geographical area – continuing operations:
|
|
|
|
|
|
|
|
||||||
UK
|
1,840
|
|
2,118
|
|
2,007
|
|
|
1,840
|
|
1,988
|
|
2,007
|
|
US
|
1,617
|
|
1,655
|
|
1,207
|
|
|
1,653
|
|
1,220
|
|
1,218
|
|
|
3,457
|
|
3,773
|
|
3,214
|
|
|
3,493
|
|
3,208
|
|
3,225
|
|
Reconciliation to profit before tax:
|
|
|
|
|
|
|
|
||||||
Operating profit from continuing operations
|
3,457
|
|
3,773
|
|
3,214
|
|
|
3,493
|
|
3,208
|
|
3,225
|
|
Finance income
|
154
|
|
53
|
|
22
|
|
|
154
|
|
53
|
|
22
|
|
Finance costs
|
(1,128
|
)
|
(1,082
|
)
|
(878
|
)
|
|
(899
|
)
|
(1,140
|
)
|
(977
|
)
|
|
|
|
|
|
|
|
|
||||||
Share of post-tax results of joint ventures and associates:
|
|
|
|
|
|
|
|
||||||
Cadent
2
|
123
|
|
—
|
|
—
|
|
|
(89
|
)
|
—
|
|
—
|
|
NGV and Other
|
44
|
|
63
|
|
59
|
|
|
49
|
|
63
|
|
59
|
|
Profit before tax from continuing operations
|
2,650
|
|
2,807
|
|
2,417
|
|
|
2,708
|
|
2,184
|
|
2,329
|
|
1.
|
Included within NGV and Other is
£234 million
(
2017
:
£239 million
;
2016
:
£394 million
) of operating profit (both before and after exceptional items and remeasurements) relating to NGV.
|
2.
|
Investment held through Quadgas HoldCo Limited.
|
1.
|
Represents additions to property, plant and equipment and non-current intangibles but excludes additional investments in and loans to joint ventures and associates.
|
2.
|
Included within NGV and Other are assets with a net book value of
£1,454 million
(
2017
:
£1,432 million
;
2016
:
£1,482 million
), capital expenditure of
£186 million
(
2017
:
£98 million
;
2016
:
£93 million
) and depreciation and amortisation of
£143 million
(
2017
:
£143 million
;
2016
:
£144 million
) relating to NGV.
|
Below we summarise the results of our operating segments. This analysis has been prepared based on adjusted operating profit (operating profit before exceptional items and remeasurements) as set out in note 2(b).
|
Below we have presented separately certain items included in our operating costs from continuing operations. These include a breakdown of payroll costs (including disclosure of amounts paid to key management personnel) and fees paid to our auditors.
|
|
Before exceptional items
and remeasurements
|
|
Exceptional items
and remeasurements
|
|
Total
|
|||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Depreciation and amortisation
|
1,530
|
|
1,481
|
|
1,311
|
|
|
—
|
|
—
|
|
—
|
|
|
1,530
|
|
1,481
|
|
1,311
|
|
Payroll costs
|
1,648
|
|
1,578
|
|
1,337
|
|
|
—
|
|
—
|
|
—
|
|
|
1,648
|
|
1,578
|
|
1,337
|
|
Purchases of electricity
|
1,299
|
|
1,143
|
|
1,304
|
|
|
(14
|
)
|
(46
|
)
|
8
|
|
|
1,285
|
|
1,097
|
|
1,312
|
|
Purchases of gas
|
1,539
|
|
1,241
|
|
986
|
|
|
4
|
|
(22
|
)
|
(19
|
)
|
|
1,543
|
|
1,219
|
|
967
|
|
Rates and property taxes
|
1,057
|
|
1,042
|
|
899
|
|
|
—
|
|
—
|
|
—
|
|
|
1,057
|
|
1,042
|
|
899
|
|
Balancing Services Incentive Scheme
|
1,012
|
|
1,120
|
|
907
|
|
|
—
|
|
—
|
|
—
|
|
|
1,012
|
|
1,120
|
|
907
|
|
Payments to other UK network owners
|
1,043
|
|
1,008
|
|
971
|
|
|
—
|
|
—
|
|
—
|
|
|
1,043
|
|
1,008
|
|
971
|
|
Other
|
2,665
|
|
2,649
|
|
2,283
|
|
|
(26
|
)
|
633
|
|
—
|
|
|
2,639
|
|
3,282
|
|
2,283
|
|
|
11,793
|
|
11,262
|
|
9,998
|
|
|
(36
|
)
|
565
|
|
(11
|
)
|
|
11,757
|
|
11,827
|
|
9,987
|
|
Operating costs include:
|
|
|
|
|
||||||||||||||||
Inventory consumed
|
|
367
|
|
296
|
|
274
|
|
|||||||||||||
Operating leases
|
|
102
|
|
98
|
|
91
|
|
|||||||||||||
Research and development expenditure
|
|
13
|
|
14
|
|
19
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
Wages and salaries
1
|
1,998
|
|
1,852
|
|
1,553
|
|
Social security costs
|
157
|
|
145
|
|
120
|
|
Defined contribution scheme costs
|
65
|
|
58
|
|
47
|
|
Defined benefit pension costs (see note 23)
|
156
|
|
151
|
|
154
|
|
Share-based payments
|
16
|
|
32
|
|
21
|
|
Severance costs (excluding pension costs)
|
7
|
|
5
|
|
4
|
|
|
2,399
|
|
2,243
|
|
1,899
|
|
Less: payroll costs capitalised
|
(751
|
)
|
(665
|
)
|
(562
|
)
|
Total payroll costs
|
1,648
|
|
1,578
|
|
1,337
|
|
|
31 March 2018
|
Monthly
average 2018 |
31 March 2017
|
Monthly
average 2017 |
31 March 2016
|
Monthly
average 2016 |
UK
|
6,517
|
6,431
|
6,265
|
6,291
|
6,224
|
6,067
|
US
|
16,506
|
16,274
|
15,867
|
15,752
|
14,830
|
14,775
|
Total number of employees
|
23,023
|
22,705
|
22,132
|
22,043
|
21,054
|
20,842
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
Short-term employee benefits
|
8
|
|
8
|
|
9
|
|
Post-employment benefits
|
1
|
|
1
|
|
1
|
|
Share-based payments
|
3
|
|
6
|
|
4
|
|
Total key management compensation
|
12
|
|
15
|
|
14
|
|
1.
|
Deloitte LLP became the Group’s principal auditor for the year ended
31 March 2018
. PricewaterhouseCoopers LLP (PwC) was the principal auditor for the years ended
31 March 2017
and
31 March 2016
.
|
2.
|
Audit fees in each year represent fees for the audit of the Company’s financial statements and regulatory reporting for the years ended
31 March 2018
,
2017
and
2016
.
|
3.
|
Other services supplied represent fees payable for services in relation to other statutory filings or engagements that are required to be carried out by the auditors. In particular, this includes fees for reports under section 404 of the US Public Company Accounting Reform and Investor Protection Act of 2002 (Sarbanes-Oxley), audit reports on regulatory returns and the review of interim financial statements for the six-month periods ended 30 September 2017, 2016 and 2015 respectively.
|
4.
|
There were
no
audit related fees as described in Item 16C(b) of Form 20-F.
|
5.
|
Principally amounts relating to assurance services provided in relation to comfort letters for debt issuances. In 2016/17, amounts represented assurance services undertaken by PwC in relation to the sale of UK Gas Distribution and data assurance work in respect of financial information included in US rate filings.
|
6.
|
Vendor due diligence and other transaction services in relation to the sale of UK Gas Distribution.
|
7.
|
Fees for other non-audit services – projects including services provided to the UK Property business, relating to evaluating possible options for the use of property assets. In 2016/17, services related principally to PwC assisting the Company with separation activities in relation to the sale of UK Gas Distribution.
|
To monitor our financial performance, we use a profit measure that excludes certain income and expenses. We call that measure ‘business performance’ or ‘adjusted profit’. We exclude items from business performance because, if included, these items could distort understanding of our performance for the year and the comparability between periods. This note analyses these items, which are included in our results for the year but are excluded from business performance.
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
Included within operating profit
|
|
|
|
|||
Exceptional items:
|
|
|
|
|||
Environmental charges
|
—
|
|
(526
|
)
|
—
|
|
Gas holder demolition costs
|
—
|
|
(107
|
)
|
—
|
|
Final settlement of LIPA MSA Transition
|
26
|
|
—
|
|
—
|
|
|
26
|
|
(633
|
)
|
—
|
|
Remeasurements – commodity contract derivatives
|
10
|
|
68
|
|
11
|
|
|
36
|
|
(565
|
)
|
11
|
|
Included within finance costs
|
|
|
|
|||
Remeasurements – net gains/(losses) on derivative financial instruments
|
229
|
|
(58
|
)
|
(99
|
)
|
Included within share of post-tax results of joint ventures and associates
|
|
|
|
|||
Remeasurements – net gains on financial instruments
|
1
|
|
—
|
|
—
|
|
Exceptional items:
|
|
|
|
|||
Deferred tax arising on the reduction in US corporation tax rate
|
5
|
|
—
|
|
—
|
|
Impairment of investment in Quadgas HoldCo Limited
|
(213
|
)
|
—
|
|
—
|
|
|
(207
|
)
|
—
|
|
—
|
|
Total included within profit before tax
|
58
|
|
(623
|
)
|
(88
|
)
|
Included within tax
|
|
|
|
|||
Exceptional items – credits arising on items not included in profit before tax:
|
|
|
|
|||
Deferred tax arising on the reduction in the UK corporation tax rate
|
—
|
|
94
|
|
162
|
|
Deferred tax arising on the reduction in the US corporation tax rate
|
1,510
|
|
—
|
|
—
|
|
Tax on exceptional items
|
(9
|
)
|
227
|
|
—
|
|
Tax on remeasurements
|
(28
|
)
|
(29
|
)
|
15
|
|
|
1,473
|
|
292
|
|
177
|
|
Total exceptional items and remeasurements after tax
|
1,531
|
|
(331
|
)
|
89
|
|
Analysis of total exceptional items and remeasurements after tax
|
|
|
|
|||
Exceptional items after tax
|
1,319
|
|
(312
|
)
|
162
|
|
Remeasurements after tax
|
212
|
|
(19
|
)
|
(73
|
)
|
Total exceptional items and remeasurements after tax
|
1,531
|
|
(331
|
)
|
89
|
|
This note details the interest income generated by our financial assets and interest expense incurred on our financial liabilities. It also includes the net interest on our pensions and other post-retirement assets. In reporting business performance, we adjust net financing costs to exclude any net gains or losses on derivative financial instruments included in remeasurements. In addition, significant debt redemption costs are typically treated as exceptional (see note 4).
|
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
Notes
|
|
£m
|
|
£m
|
|
£m
|
|
Finance income
|
|
|
|
|
|
|||
Interest income on financial instruments:
|
|
|
|
|
|
|||
Bank deposits and other financial assets
|
|
|
81
|
|
28
|
|
22
|
|
Gains on disposal of available-for-sale investments
|
|
|
73
|
|
25
|
|
—
|
|
|
|
|
154
|
|
53
|
|
22
|
|
Finance costs
|
|
|
|
|
|
|||
Net interest on pensions and other post-retirement benefit obligations
|
23
|
|
(65
|
)
|
(107
|
)
|
(111
|
)
|
Interest expense on financial liabilities held at amortised cost:
|
|
|
|
|
|
|||
Bank loans and overdrafts
|
|
|
(87
|
)
|
(59
|
)
|
(28
|
)
|
Other borrowings
|
|
|
(1,030
|
)
|
(927
|
)
|
(792
|
)
|
Derivatives
|
|
|
12
|
|
(8
|
)
|
37
|
|
Unwinding of discount on provisions
|
24
|
|
(75
|
)
|
(73
|
)
|
(69
|
)
|
Other interest
|
|
|
(11
|
)
|
(17
|
)
|
(27
|
)
|
Less: interest capitalised
1
|
|
|
128
|
|
109
|
|
112
|
|
|
|
|
(1,128
|
)
|
(1,082
|
)
|
(878
|
)
|
Remeasurements
|
|
|
|
|
|
|||
Net gains/(losses) on derivative financial instruments included in remeasurements
2
:
|
|
|
|
|
|
|||
Ineffectiveness on derivatives designated as:
|
|
|
|
|
|
|||
Fair value hedges
3
|
|
|
34
|
|
33
|
|
39
|
|
Cash flow hedges
|
|
|
10
|
|
(12
|
)
|
(15
|
)
|
Net investment hedges – undesignated forward rate risk
|
|
|
5
|
|
60
|
|
(34
|
)
|
Derivatives not designated as hedges or ineligible for hedge accounting
4
|
|
|
180
|
|
(139
|
)
|
(89
|
)
|
|
|
|
229
|
|
(58
|
)
|
(99
|
)
|
|
|
|
(899
|
)
|
(1,140
|
)
|
(977
|
)
|
|
|
|
|
|
|
|||
Net finance costs from continuing operations
|
|
|
(745
|
)
|
(1,087
|
)
|
(955
|
)
|
1.
|
Interest on funding attributable to assets in the course of construction in the current year was capitalised at a rate of
4.1%
(
2017
:
3.4%
;
2016
:
3.3%
). In the UK, capitalised interest qualifies for a current year tax deduction with tax relief claimed of
£20 million
(
2017
:
£18 million
;
2016
:
£19 million
). In the US, capitalised interest is added to the cost of plant and qualifies for tax depreciation allowances.
|
2.
|
Includes a net foreign exchange loss on financing activities of
£314 million
(
2017
:
£264 million
loss;
2016
:
£407 million
loss) offset by foreign exchange gains and losses on derivative financial instruments measured at fair value.
|
3.
|
Includes a net loss on instruments designated as fair value hedges of
£90 million
(
2017
:
£27 million
loss;
2016
:
£34 million
gain) and a net gain of
£124 million
(
2017
:
£60 million
gain;
2016
:
£5 million
gain) arising from fair value adjustments to the carrying value of debt.
|
4.
|
Includes
£110 million
gain on the Further Acquisition Agreement (FAA) derivative financial instrument relating to the put/call option over a
14%
interest in Quadgas HoldCo Limited. Further details can be found in note 15.
|
Tax is payable in the territories where we operate, mainly the UK and the US. This note gives further details of the total tax charge and tax liabilities, including current and deferred tax. The current tax charge is the tax payable on this year’s taxable profits. Deferred tax is an accounting adjustment to provide for tax that is expected to arise in the future due to differences in the accounting and tax bases.
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
Tax before exceptional items and remeasurements
|
589
|
|
666
|
|
604
|
|
Exceptional tax on items not included in profit before tax (see note 4)
|
(1,510
|
)
|
(94
|
)
|
(162
|
)
|
Tax on other exceptional items and remeasurements
|
37
|
|
(198
|
)
|
(15
|
)
|
Tax on total exceptional items and remeasurements
|
(1,473
|
)
|
(292
|
)
|
(177
|
)
|
Total tax (credit)/charge from continuing operations
|
(884
|
)
|
374
|
|
427
|
|
|
2018
|
|
2017
|
2016
|
|
%
|
|
%
|
%
|
Before exceptional items and remeasurements – continuing operations
|
22.2
|
|
23.7
|
25.0
|
After exceptional items and remeasurements – continuing operations
|
(32.6
|
)
|
17.1
|
18.3
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
Current tax:
|
|
|
|
|||
UK corporation tax at 19% (2017: 20%; 2016: 20%)
|
205
|
|
225
|
|
239
|
|
UK corporation tax adjustment in respect of prior years
|
(18
|
)
|
(47
|
)
|
(5
|
)
|
|
187
|
|
178
|
|
234
|
|
Overseas corporation tax
|
15
|
|
—
|
|
38
|
|
Overseas corporation tax adjustment in respect of prior years
|
(4
|
)
|
1
|
|
(19
|
)
|
|
11
|
|
1
|
|
19
|
|
Total current tax from continuing operations
|
198
|
|
179
|
|
253
|
|
Deferred tax:
|
|
|
|
|||
UK deferred tax
|
65
|
|
(9
|
)
|
(80
|
)
|
UK deferred tax adjustment in respect of prior years
|
(2
|
)
|
(18
|
)
|
24
|
|
|
63
|
|
(27
|
)
|
(56
|
)
|
Overseas deferred tax
|
(1,155
|
)
|
224
|
|
229
|
|
Overseas deferred tax adjustment in respect of prior years
|
10
|
|
(2
|
)
|
1
|
|
|
(1,145
|
)
|
222
|
|
230
|
|
Total deferred tax from continuing operations
|
(1,082
|
)
|
195
|
|
174
|
|
|
|
|
|
|||
Total tax (credit)/charge from continuing operations
|
(884
|
)
|
374
|
|
427
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
Current tax:
|
|
|
|
|||
Share-based payments
|
(3
|
)
|
(4
|
)
|
(1
|
)
|
Available-for-sale investments
|
(11
|
)
|
6
|
|
5
|
|
Deferred tax:
|
|
|
|
|||
Available-for-sale investments
|
(18
|
)
|
8
|
|
12
|
|
Cash flow hedges
|
(4
|
)
|
20
|
|
22
|
|
Share-based payments
|
1
|
|
1
|
|
—
|
|
Remeasurements of gains of pension assets and post-retirement benefit obligations
1
|
530
|
|
277
|
|
95
|
|
|
495
|
|
308
|
|
133
|
|
Total tax recognised in the statements of comprehensive income from continuing operations
|
497
|
|
311
|
|
134
|
|
Total tax recognised in the statements of comprehensive income from discontinued operations
|
—
|
|
10
|
|
23
|
|
Total tax relating to share-based payments recognised directly in equity from continuing operations
|
(2
|
)
|
(3
|
)
|
(1
|
)
|
Total tax relating to share-based payments recognised directly in equity from discontinued operations
|
—
|
|
—
|
|
(1
|
)
|
|
495
|
|
318
|
|
155
|
|
1.
|
Remeasurements of gains of pension assets and post-retirement benefit obligations includes a deferred tax charge of
£281 million
arising on the reduction in the US corporation tax rate.
|
|
Before
exceptional
items and
remeasurements
|
|
After
exceptional
items and
remeasurements
|
|
Before
exceptional
items and
remeasurements
|
|
After
exceptional
items and
remeasurements
|
|
Before
exceptional
items and
remeasurements
|
|
After
exceptional
items and
remeasurements
|
|
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
2016
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
Profit before tax from continuing operations
|
|
|
|
|
|
|
||||||
Before exceptional items and remeasurements
|
2,650
|
|
2,650
|
|
2,807
|
|
2,807
|
|
2,417
|
|
2,417
|
|
Exceptional items and remeasurements
|
—
|
|
58
|
|
—
|
|
(623
|
)
|
—
|
|
(88
|
)
|
Profit before tax from continuing operations
|
2,650
|
|
2,708
|
|
2,807
|
|
2,184
|
|
2,417
|
|
2,329
|
|
Profit before tax from continuing operations multiplied by UK corporation tax rate of 19% (2017: 20%; 2016: 20%)
|
503
|
|
515
|
|
561
|
|
437
|
|
483
|
|
465
|
|
Effect of:
|
|
|
|
|
|
|
||||||
Adjustments in respect of prior years
1
|
(22
|
)
|
(14
|
)
|
(67
|
)
|
(67
|
)
|
2
|
|
1
|
|
Expenses not deductible for tax purposes
2
|
20
|
|
21
|
|
35
|
|
442
|
|
25
|
|
114
|
|
Non-taxable income
2
|
(16
|
)
|
(47
|
)
|
(24
|
)
|
(425
|
)
|
(25
|
)
|
(112
|
)
|
Adjustment in respect of foreign tax rates
|
153
|
|
157
|
|
180
|
|
104
|
|
124
|
|
129
|
|
Deferred tax impact of change in UK tax rate
|
(7
|
)
|
(7
|
)
|
—
|
|
(94
|
)
|
—
|
|
(162
|
)
|
Deferred tax impact of change in US tax rate due to Tax Reform
|
—
|
|
(1,510
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
Other
3
|
(42
|
)
|
1
|
|
(19
|
)
|
(23
|
)
|
(5
|
)
|
(8
|
)
|
Total tax charge/(credit) from continuing operations
|
589
|
|
(884
|
)
|
666
|
|
374
|
|
604
|
|
427
|
|
|
|
|
|
|
|
|
||||||
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
Effective tax rate – continuing operations
|
22.2
|
|
(32.6
|
)
|
23.7
|
|
17.1
|
|
25.0
|
|
18.3
|
|
1.
|
Prior year adjustment is primarily due to agreement of prior period tax returns.
|
2.
|
For the years ended 31 March 2017 and prior, the adjustments after exceptional items and remeasurements primarily represent the impact of the Group’s net investment hedging following significant US dollar currency fluctuations.
|
3.
|
Other primarily comprises tax on joint ventures and associates.
|
|
Accelerated
tax depreciation |
|
Share-
based payments |
|
Pensions
and other post- retirement benefits |
|
Financial
instruments |
|
Other net
temporary differences 1 |
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
Deferred tax liabilities/(assets)
|
|
|
|
|
|
|
||||||
At 1 April 2016
|
7,063
|
|
(14
|
)
|
(1,038
|
)
|
(53
|
)
|
(1,324
|
)
|
4,634
|
|
Exchange adjustments and other
2
|
681
|
|
1
|
|
(144
|
)
|
(7
|
)
|
(50
|
)
|
481
|
|
Charged/(credited) to income statement
|
402
|
|
—
|
|
177
|
|
23
|
|
(481
|
)
|
121
|
|
Charged to other comprehensive income and equity
|
—
|
|
1
|
|
264
|
|
46
|
|
5
|
|
316
|
|
Disposal of UK Gas Distribution
|
(1,072
|
)
|
—
|
|
(6
|
)
|
—
|
|
5
|
|
(1,073
|
)
|
At 1 April 2017
|
7,074
|
|
(12
|
)
|
(747
|
)
|
9
|
|
(1,845
|
)
|
4,479
|
|
Exchange adjustments and other
2
|
(559
|
)
|
—
|
|
69
|
|
1
|
|
221
|
|
(268
|
)
|
(Credited)/charged to income statement
|
(1,641
|
)
|
2
|
|
(55
|
)
|
12
|
|
598
|
|
(1,084
|
)
|
Charged/(credited) to other comprehensive income and equity
|
—
|
|
1
|
|
530
|
|
(1
|
)
|
(21
|
)
|
509
|
|
At 31 March 2018
|
4,874
|
|
(9
|
)
|
(203
|
)
|
21
|
|
(1,047
|
)
|
3,636
|
|
1.
|
The deferred tax asset of
£1,047 million
as at
31 March 2018
in respect of other net temporary differences primarily relates to US net operating losses (
£390 million
) and environmental provisions (
£378 million
).
|
2.
|
Exchange adjustments and other comprises of foreign exchange arising on translation of the US dollar deferred tax balances together with a reclassification of
£43 million
(2017:
£143 million
) being the opening deferred tax balance in respect of US net operating losses to offset against US current tax liabilities.
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Capital losses
|
510
|
|
362
|
|
Non-trade deficits
|
4
|
|
4
|
|
Trading losses
|
4
|
|
9
|
|
|
|
|
£m
|
|
|
1. VAT
|
2
|
|
|
|
|
|
|
2. PAYE and NIC
|
52
|
|
|
|
|
|
|
3. UK corporation tax
|
37
|
|
|
|
|
|
|
4. Business rates
|
222
|
|
|
|
|
|
|
5. Other
|
23
|
|
|
|
|
|
|
Total
|
336
|
|
|
|
|
|
|
|
|
|
|
|
£m
|
|
|
1. VAT
|
478
|
|
|
|
|
|
|
2. PAYE and NIC
|
125
|
|
|
|
|
|
|
|
|
|
|
Total
|
603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended 31 March
|
|||
|
2018
|
|
2017
|
|
Reconciliation on continuing operations of UK total tax charge to UK corporation tax paid
|
£m
|
|
£m
|
|
Total UK tax charge (current tax £187m
(2017: £178m) and deferred tax charge £63m (2017: credit £27m)) |
250
|
|
151
|
|
Adjustment for non-cash deferred tax
(charge)/credit |
(63
|
)
|
27
|
|
Adjustments for current tax credit in respect of prior years
|
18
|
|
47
|
|
UK current tax charge
|
205
|
|
225
|
|
UK corporation tax instalment payments not payable until the following year
|
(101
|
)
|
(216
|
)
|
UK corporation tax instalment (refunds)/payments in respect of prior years paid in current year
|
(67
|
)
|
120
|
|
UK corporation tax paid
|
37
|
|
129
|
|
EPS is the amount of post-tax profit attributable to each ordinary share. Basic EPS is calculated on profit for the year attributable to equity shareholders divided by the weighted average number of shares in issue during the year. Diluted EPS shows what the impact would be if all outstanding share options were exercised and treated as ordinary shares at year end. The weighted average number of shares is increased by additional shares issued as scrip dividends and reduced by shares repurchased by the Company during the year. The earnings per share calculations are based on profit after tax attributable to equity shareholders of the Company which excludes non-controlling interests.
|
|
Earnings
|
|
Earnings
per share
|
|
Earnings
|
|
Earnings
per share
|
|
Earnings
|
|
Earnings
per share
|
|
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
2016
|
|
2016
|
|
|
£m
|
|
pence
|
|
£m
|
|
pence
|
|
£m
|
|
pence
|
|
Adjusted earnings from continuing operations
|
2,060
|
|
59.5
|
|
2,141
|
|
56.9
|
|
1,812
|
|
48.0
|
|
Exceptional items after tax from continuing operations
|
1,319
|
|
38.1
|
|
(312
|
)
|
(8.3
|
)
|
162
|
|
4.3
|
|
Remeasurements after tax from continuing operations
|
212
|
|
6.2
|
|
(19
|
)
|
(0.5
|
)
|
(73
|
)
|
(1.9
|
)
|
Earnings from continuing operations
|
3,591
|
|
103.8
|
|
1,810
|
|
48.1
|
|
1,901
|
|
50.4
|
|
Adjusted earnings from discontinued operations
|
—
|
|
—
|
|
607
|
|
16.1
|
|
574
|
|
15.2
|
|
Exceptional items and remeasurements after tax from discontinued operations
|
(41
|
)
|
(1.2
|
)
|
5,378
|
|
142.9
|
|
116
|
|
3.1
|
|
Earnings from discontinued operations
|
(41
|
)
|
(1.2
|
)
|
5,985
|
|
159.0
|
|
690
|
|
18.3
|
|
Total adjusted earnings
|
2,060
|
|
59.5
|
|
2,748
|
|
73.0
|
|
2,386
|
|
63.2
|
|
Total exceptional items and remeasurements after tax (including discontinued operations)
|
1,490
|
|
43.1
|
|
5,047
|
|
134.1
|
|
205
|
|
5.5
|
|
Total earnings
|
3,550
|
|
102.6
|
|
7,795
|
|
207.1
|
|
2,591
|
|
68.7
|
|
|
|
|
|
|
|
|
||||||
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
|
|
millions
|
|
|
millions
|
|
|
millions
|
|
|||
Weighted average number of ordinary shares – basic
|
|
3,461
|
|
|
3,763
|
|
|
3,774
|
|
|
Earnings
|
|
Earnings
per share
|
|
Earnings
|
|
Earnings
per share
|
|
Earnings
|
|
Earnings
per share
|
|
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
2016
|
|
2016
|
|
|
£m
|
|
pence
|
|
£m
|
|
pence
|
|
£m
|
|
pence
|
|
Adjusted earnings from continuing operations
|
2,060
|
|
59.3
|
|
2,141
|
|
56.7
|
|
1,812
|
|
47.8
|
|
Exceptional items after tax from continuing operations
|
1,319
|
|
37.9
|
|
(312
|
)
|
(8.3
|
)
|
162
|
|
4.3
|
|
Remeasurements after tax from continuing operations
|
212
|
|
6.1
|
|
(19
|
)
|
(0.5
|
)
|
(73
|
)
|
(1.9
|
)
|
Earnings from continuing operations
|
3,591
|
|
103.3
|
|
1,810
|
|
47.9
|
|
1,901
|
|
50.2
|
|
Adjusted earnings from discontinued operations
|
—
|
|
—
|
|
607
|
|
16.0
|
|
574
|
|
15.1
|
|
Exceptional items and remeasurements after tax from discontinued operations
|
(41
|
)
|
(1.2
|
)
|
5,378
|
|
142.3
|
|
116
|
|
3.1
|
|
Earnings from discontinued operations
|
(41
|
)
|
(1.2
|
)
|
5,985
|
|
158.3
|
|
690
|
|
18.2
|
|
Total adjusted earnings
|
2,060
|
|
59.3
|
|
2,748
|
|
72.7
|
|
2,386
|
|
62.9
|
|
Total exceptional items and remeasurements after tax (including discontinued operations)
|
1,490
|
|
42.8
|
|
5,047
|
|
133.5
|
|
205
|
|
5.5
|
|
Total earnings
|
3,550
|
|
102.1
|
|
7,795
|
|
206.2
|
|
2,591
|
|
68.4
|
|
|
|
|
|
|
|
|
||||||
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
|
|
millions
|
|
|
millions
|
|
|
millions
|
|
|||
Weighted average number of ordinary shares – diluted
|
|
3,476
|
|
|
3,780
|
|
|
3,790
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
millions
|
|
millions
|
|
millions
|
|
Weighted average number of ordinary shares – basic
|
3,461
|
|
3,763
|
|
3,774
|
|
Effect of dilutive potential ordinary shares – employee share plans
|
15
|
|
17
|
|
16
|
|
Weighted average number of ordinary shares – diluted
|
3,476
|
|
3,780
|
|
3,790
|
|
Dividends represent the return of profits to shareholders. Dividends are paid as an amount per ordinary share held. We retain part of the profits generated in the year to meet future growth plans and pay out the remainder in accordance with our dividend policy.
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||
|
Pence
per share
|
Cash
dividend
paid
£m
|
|
Scrip dividend
£m
|
|
|
Pence
per share
|
|
Cash
dividend
paid
£m
|
|
Scrip
dividend
£m
|
|
|
Pence
per share
|
|
Cash
dividend
paid
£m
|
|
Scrip
dividend
£m
|
|
Interim dividend in respect of the current year
|
15.49
|
346
|
|
176
|
|
|
15.17
|
|
540
|
|
32
|
|
|
15.00
|
|
532
|
|
31
|
|
Special dividend
|
84.375
|
3,171
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Final dividend in respect of the prior year
|
29.10
|
970
|
|
33
|
|
|
28.34
|
|
923
|
|
151
|
|
|
28.16
|
|
805
|
|
248
|
|
|
128.965
|
4,487
|
|
209
|
|
|
43.51
|
|
1,463
|
|
183
|
|
|
43.16
|
|
1,337
|
|
279
|
|
Our results and cash flows of significant assets or businesses sold during the year are shown separately from our continuing operations. Assets and businesses are classified as held for sale when their carrying amounts are recovered through sale rather than through continuing use. It only meets the held for sale condition when the assets are ready for immediate sale in their present condition, management is committed to the sale and it is highly probable that the sale will complete within one year. Depreciation ceases on assets and businesses when they are classified as held for sale and the assets and businesses are impaired if the proceeds less sale costs fall short of the carrying value.
As a result of the sale of a 61% controlling interest in UK Gas Distribution on 31 March 2017, we are required to report our earnings for the Group excluding UK Gas Distribution (‘continuing operations’) separately from the results of that business, which we report within ‘discontinued operations’. The gain recognised by the Group on sale is analysed in the detail of the note below. All costs associated with the transaction, including those associated with separation and setting up UK Gas Distribution are shown as a deduction from the proceeds received. Any adjustments arising as part of the completion adjustments finalised within the measurement period would result in a further gain or loss on disposal to be reported within discontinued operations in the current period.
|
1.
|
2016 includes sale preparation costs of
£22 million
in respect of the disposal of the UK Gas Distribution business. 2017 costs have been included as part of transaction costs in determining the gain on disposal.
|
|
|
2017
|
|
2016
|
|
|
Notes
|
£m
|
|
£m
|
|
Profit after tax from discontinued operations
|
|
5,984
|
|
692
|
|
|
|
|
|
||
Other comprehensive (loss)/income
|
|
|
|
||
Items that will never be reclassified to profit or loss:
|
|
|
|
||
Remeasurement (losses)/gains of pension assets and post-retirement benefit obligations
|
23
|
(75
|
)
|
129
|
|
Tax on items that will never be reclassified to profit or loss
|
6
|
13
|
|
(30
|
)
|
Total items from discontinued operations that will never be reclassified to profit or loss
|
|
(62
|
)
|
99
|
|
Items that may be reclassified subsequently to profit or loss:
|
|
|
|
||
Net losses in respect of cash flow hedges
|
|
(106
|
)
|
(38
|
)
|
Transferred to profit or loss in respect of cash flow hedges
|
|
233
|
|
3
|
|
Tax on items that may be reclassified subsequently to profit or loss
|
6
|
(23
|
)
|
7
|
|
Total items from discontinued operations that may be reclassified subsequently to profit or loss
|
|
104
|
|
(28
|
)
|
Other comprehensive income/(loss) for the year, net of tax from discontinued operations
|
|
42
|
|
71
|
|
Total comprehensive income for the year from discontinued operations
|
|
6,026
|
|
763
|
|
Goodwill represents the excess of what we paid to acquire businesses over the fair value of their net assets at the acquisition date. We assess whether goodwill is recoverable each year by performing an impairment review.
|
Other intangible assets include software which is written down (amortised) over the length of period we expect to receive a benefit from the asset.
|
|
Years
|
|
Software
|
3 to 10
|
|
|
|
|
|
Software
£m
|
|
Cost at 1 April 2016
|
1,744
|
|
Exchange adjustments
|
105
|
|
Additions
|
234
|
|
Disposals
|
(43
|
)
|
Disposal of UK Gas Distribution
|
(304
|
)
|
Reclassifications
1
|
(4
|
)
|
Cost at 31 March 2017
|
1,732
|
|
Exchange adjustments
|
(98
|
)
|
Additions
|
173
|
|
Disposals
|
(18
|
)
|
Reclassifications
1
|
8
|
|
Cost at 31 March 2018
|
1,797
|
|
Accumulated amortisation at 1 April 2016
|
(857
|
)
|
Exchange adjustments
|
(43
|
)
|
Amortisation charge for the year
|
(164
|
)
|
Accumulated amortisation of disposals
|
40
|
|
Disposal of UK Gas Distribution
|
215
|
|
Accumulated amortisation at 31 March 2017
|
(809
|
)
|
Exchange adjustments
|
43
|
|
Amortisation charge for the year
|
(138
|
)
|
Accumulated amortisation of disposals
|
6
|
|
Accumulated amortisation at 31 March 2018
|
(898
|
)
|
Net book value at 31 March 2018²
|
899
|
|
Net book value at 31 March 2017
|
923
|
|
1.
|
Reclassifications includes amounts transferred (to)/from property, plant and equipment (see note 12).
|
2.
|
Included in software is
£160 million
relating to the US ERP system, which still has a remaining amortisation period of
six
years.
|
The following note shows the physical assets controlled by us. The cost of these assets primarily represents the amount initially paid for them. This includes both their purchase price and the construction and other costs associated with getting them ready for operation. A depreciation expense is charged to the income statement to reflect annual wear and tear and the reduced value of the asset over time. Depreciation is calculated by estimating the number of years we expect the asset to be used (useful economic life) and charging the cost of the asset to the income statement equally over this period.
Our strategy in action
We operate an energy networks business and therefore have a significant physical asset base. We continue to invest in our networks to maintain reliability, create new customer connections and ensure our networks are flexible and resilient. Our business plan envisages these additional investments will be funded through a mixture of cash generated from operations and the issue of new debt.
|
|
Years
|
Freehold and leasehold buildings
|
up to 101
|
Plant and machinery:
|
|
Electricity transmission plant and wires
|
15 to 10
0
|
Electricity distribution plant
|
29 to 75
|
Electricity generation plant
|
20 to 93
|
Interconnector plant and other
|
5 to 60
|
Gas plant – mains, services and regulating equipment
|
10 to 95
|
Gas plant – storage
|
5 to 65
|
Gas plant – meters
|
7 to 65
|
Motor vehicles and office equipment
|
up to 29
|
|
Land and
buildings
£m
|
|
Plant and
machinery
£m
|
|
Assets
in the
course of
construction
£m
|
|
Motor
vehicles
and office
equipment
£m
|
|
Total
£m
|
|
Cost at 1 April 2016
|
2,758
|
|
54,772
|
|
3,874
|
|
1,171
|
|
62,575
|
|
Exchange adjustments
|
196
|
|
3,157
|
|
93
|
|
76
|
|
3,522
|
|
Additions
|
55
|
|
822
|
|
3,080
|
|
132
|
|
4,089
|
|
Disposals
1
|
(22
|
)
|
(572
|
)
|
(70
|
)
|
(204
|
)
|
(868
|
)
|
Disposal of UK Gas Distribution
|
(112
|
)
|
(11,861
|
)
|
(88
|
)
|
(300
|
)
|
(12,361
|
)
|
Reclassifications
2
|
104
|
|
2,913
|
|
(2,938
|
)
|
(41
|
)
|
38
|
|
Cost at 31 March 2017
|
2,979
|
|
49,231
|
|
3,951
|
|
834
|
|
56,995
|
|
Exchange adjustments
|
(169
|
)
|
(2,862
|
)
|
(89
|
)
|
(67
|
)
|
(3,187
|
)
|
Additions
|
38
|
|
430
|
|
3,358
|
|
75
|
|
3,901
|
|
Disposals
1
|
(16
|
)
|
(216
|
)
|
(21
|
)
|
(34
|
)
|
(287
|
)
|
Reclassifications
2
|
98
|
|
2,791
|
|
(2,926
|
)
|
49
|
|
12
|
|
Cost at 31 March 2018
|
2,930
|
|
49,374
|
|
4,273
|
|
857
|
|
57,434
|
|
Accumulated depreciation at 1 April 2016
|
(640
|
)
|
(17,828
|
)
|
—
|
|
(743
|
)
|
(19,211
|
)
|
Exchange adjustments
|
(29
|
)
|
(780
|
)
|
—
|
|
(44
|
)
|
(853
|
)
|
Depreciation charge for the year
|
(84
|
)
|
(1,338
|
)
|
—
|
|
(113
|
)
|
(1,535
|
)
|
Disposals
1
|
42
|
|
545
|
|
—
|
|
203
|
|
790
|
|
Disposal of UK Gas Distribution
|
29
|
|
3,425
|
|
—
|
|
207
|
|
3,661
|
|
Reclassifications
2
|
(2
|
)
|
(20
|
)
|
—
|
|
—
|
|
(22
|
)
|
Accumulated depreciation at 31 March 2017
|
(684
|
)
|
(15,996
|
)
|
—
|
|
(490
|
)
|
(17,170
|
)
|
Exchange adjustments
|
28
|
|
695
|
|
—
|
|
36
|
|
759
|
|
Depreciation charge for the year
|
(28
|
)
|
(1,276
|
)
|
—
|
|
(88
|
)
|
(1,392
|
)
|
Disposals
1
|
10
|
|
199
|
|
—
|
|
33
|
|
242
|
|
Reclassifications
2
|
—
|
|
(20
|
)
|
—
|
|
—
|
|
(20
|
)
|
Accumulated depreciation at 31 March 2018
|
(674
|
)
|
(16,398
|
)
|
—
|
|
(509
|
)
|
(17,581
|
)
|
Net book value at 31 March 2018
|
2,256
|
|
32,976
|
|
4,273
|
|
348
|
|
39,853
|
|
Net book value at 31 March 2017
|
2,295
|
|
33,235
|
|
3,951
|
|
344
|
|
39,825
|
|
1.
|
Includes the reversal of assets with cost of
£51 million
(
2017
:
£107 million
) and accumulated depreciation of
£51 million
(
2017
:
£107 million
) disposed in previous years that remain in use in the Group. It also includes
£334 million
of adjustments from accumulated depreciation to cost for historical disposals relating to assets acquired as part of the KeySpan acquisition in 2008 which were disposed of in subsequent periods. Both of these adjustments have a
nil
net book value impact.
|
2.
|
Represents amounts transferred between categories, (to)/from other intangible assets (see note 11), reclassifications from inventories and reclassifications between cost and accumulated depreciation.
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Information in relation to property, plant and equipment
|
|
|
||
Capitalised interest included within cost
|
1,861
|
|
1,749
|
|
Net book value of assets held under finance leases (all relating to motor vehicles and office equipment)
|
253
|
|
289
|
|
Additions to assets held under finance leases (all relating to motor vehicles and office equipment)
|
58
|
|
98
|
|
Contributions to cost of property, plant and equipment included within:
|
|
|
||
Trade and other payables
|
85
|
|
89
|
|
Non-current liabilities
|
844
|
|
839
|
|
Other non-current assets include assets that do not fall into any other non-current asset category (such as goodwill or property, plant and equipment) where the benefit to be received from the asset is not due to be received until after 31 March 2019.
|
|
2018
|
|
2017¹
|
|
|
£m
|
|
£m
|
|
Other receivables
|
36
|
|
45
|
|
Non-current tax assets
|
51
|
|
—
|
|
Prepayments and accrued income
|
28
|
|
24
|
|
|
115
|
|
69
|
|
1.
|
Comparative amounts have been represented to reflect the reclassification of commodity derivative contracts from other non-current assets to derivatives (see note 16).
|
Financial and other investments include three main categories. Assets classified as available-for-sale typically represent investments in short-term money funds and quoted investments in equities or bonds of other companies. The second category comprises long-term loans to our associates and joint ventures. The third category is other loans and receivables which includes bank deposits with a maturity of greater than three months, and cash balances that cannot be readily used in operations, principally collateral pledged against derivative holdings.
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Non-current
|
|
|
||
Available-for-sale investments
|
417
|
|
605
|
|
Loans to joint ventures and associates
1
|
482
|
|
495
|
|
|
899
|
|
1,100
|
|
Current
|
|
|
||
Available-for-sale investments
|
2,304
|
|
7,432
|
|
Other loans and receivables
|
390
|
|
1,309
|
|
|
2,694
|
|
8,741
|
|
|
3,593
|
|
9,841
|
|
Financial and other investments include the following:
|
|
|
||
Investments in short-term money funds
2
|
1,999
|
|
6,899
|
|
Managed investments in equity and bonds
3
|
530
|
|
939
|
|
Cash surrender value of life insurance policies
|
198
|
|
202
|
|
Loans to joint ventures and associates
|
482
|
|
495
|
|
Restricted balances:
|
|
|
||
Collateral
4
|
335
|
|
1,262
|
|
Other
|
49
|
|
44
|
|
|
3,593
|
|
9,841
|
|
1.
|
Comprises
£352 million
(
2017
:
£434 million
) relating to a shareholder loan to Quadgas HoldCo Limited, and the remainder is a loan to a joint venture.
|
2.
|
Includes
£69 million
(
2017
:
£14 million
) held by insurance captives and therefore restricted.
|
3.
|
Includes restricted amounts of
£301 million
(
2017
:
£434 million
) held by insurance captives and
£214 million
(
2017
:
£225 million
) relating to US non-qualified plan investments.
|
4.
|
Refers to collateral placed with counterparties with whom we have entered into a credit support annex to the ISDA (International Swaps and Derivatives Association) Master Agreement.
|
Investments in joint ventures and associates represent businesses we do not control, but instead exercise joint control or significant influence.
|
|
2018
|
|
2017
|
||||||||||
|
Associates
£m
|
|
Joint
ventures
£m
|
|
Total
£m
|
|
|
Associates
£m
|
|
Joint
ventures
£m
|
|
Total
£m
|
|
Share of net assets at 1 April
|
1,776
|
|
307
|
|
2,083
|
|
|
84
|
|
313
|
|
397
|
|
Exchange adjustments
|
(19
|
)
|
7
|
|
(12
|
)
|
|
16
|
|
19
|
|
35
|
|
Additions
|
65
|
|
64
|
|
129
|
|
|
74
|
|
63
|
|
137
|
|
Acquisition of stake in Quadgas HoldCo Limited
|
—
|
|
—
|
|
—
|
|
|
1,611
|
|
—
|
|
1,611
|
|
Capitalisation of shareholder loan to Quadgas HoldCo Limited
|
69
|
|
—
|
|
69
|
|
|
—
|
|
—
|
|
—
|
|
Impairment charge against investment in Quadgas HoldCo Limited
|
(213
|
)
|
—
|
|
(213
|
)
|
|
—
|
|
—
|
|
—
|
|
Share of post-tax results for the year
|
147
|
|
26
|
|
173
|
|
|
15
|
|
48
|
|
63
|
|
Share of other comprehensive income of associates, net of tax
|
147
|
|
—
|
|
147
|
|
|
—
|
|
—
|
|
—
|
|
Dividends received
|
(170
|
)
|
(43
|
)
|
(213
|
)
|
|
(24
|
)
|
(75
|
)
|
(99
|
)
|
Other movements
|
5
|
|
—
|
|
5
|
|
|
—
|
|
(61
|
)
|
(61
|
)
|
Share of net assets at 31 March
|
1,807
|
|
361
|
|
2,168
|
|
|
1,776
|
|
307
|
|
2,083
|
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Statement of financial position – BritNed Development Limited
|
|
|
||
Non-current assets
|
390
|
|
392
|
|
Cash and cash equivalents
|
50
|
|
45
|
|
All other current assets
|
4
|
|
1
|
|
Non-current liabilities
|
(10
|
)
|
(10
|
)
|
Current liabilities
|
(28
|
)
|
(20
|
)
|
Equity
|
406
|
|
408
|
|
Carrying amount of the Group’s investment (National Grid ownership 50%)
|
203
|
|
204
|
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Income statement – BritNed Development Limited
|
|
|
||
Revenue
|
429
|
|
399
|
|
Depreciation and amortisation
|
(13
|
)
|
(13
|
)
|
Other costs
|
(324
|
)
|
(257
|
)
|
Operating profit
|
92
|
|
129
|
|
Income tax expense
|
(20
|
)
|
(23
|
)
|
Profit for the year
|
72
|
|
106
|
|
Group’s share of profit (National Grid ownership 50%)
|
36
|
|
53
|
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Statement of financial position – Quadgas HoldCo Limited
|
|
|
||
Non-current assets
|
16,735
|
|
16,047
|
|
Current assets
|
427
|
|
299
|
|
Non-current liabilities
|
(11,195
|
)
|
(10,864
|
)
|
Current liabilities
|
(534
|
)
|
(551
|
)
|
Equity
|
5,433
|
|
4,931
|
|
Proportion of the Group’s ownership interest in associate
|
2,119
|
|
1,923
|
|
Discount for non-controlling interest (arising on initial acquisition)
|
(312
|
)
|
(312
|
)
|
Impairment charge against investment
|
(213
|
)
|
—
|
|
Carrying amount of the Group’s interest in associate (National Grid ownership 39%)
|
1,594
|
|
1,611
|
|
|
2018
|
|
|
£m
|
|
Income statement – Quadgas HoldCo Limited
|
|
|
Revenue
|
1,468
|
|
Depreciation and amortisation
|
(378
|
)
|
Other costs
|
(423
|
)
|
Operating profit
|
667
|
|
Net interest payable
|
(272
|
)
|
Income tax expense
|
(76
|
)
|
Profit for the year
|
319
|
|
Group’s share of profit (National Grid ownership 39%)
|
124
|
|
Derivatives are financial instruments that derive their value from the price of an underlying item such as interest rates, foreign exchange rates, credit spreads, commodities, equity or other indices. In accordance with Board approved policies, derivatives are transacted generally to manage our exposure to fluctuations in interest rate, foreign exchange and our operational market risks from our commodity activities. Our derivatives are split into the broad categories analysed below:
• derivatives managing risks to interest rate and foreign exchange rate. Specifically we use these derivatives to manage risks from the financing portfolio, to optimise the overall cost of accessing the debt capital markets, managing the exposure to holdings in foreign operations and other contractual operational cash flows; and
• derivatives managing our price and supply risks from our commodity activity.
|
|
2018
|
|
2017
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
Financing derivatives
|
1,545
|
|
(945
|
)
|
600
|
|
|
1,707
|
|
(2,223
|
)
|
(516
|
)
|
Commodity derivatives
1
|
69
|
|
(116
|
)
|
(47
|
)
|
|
106
|
|
(170
|
)
|
(64
|
)
|
Further Acquisition Agreement derivative
2
|
110
|
|
—
|
|
110
|
|
|
—
|
|
—
|
|
—
|
|
|
1,724
|
|
(1,061
|
)
|
663
|
|
|
1,813
|
|
(2,393
|
)
|
(580
|
)
|
1.
|
Comparative amounts have been re-presented to reflect the reclassification of commodity derivative contracts from trade and other receivables (
31 March 2017
:
£54 million
), trade and other payables (
31 March 2017
:
£93 million
), other non-current assets (
31 March 2017
:
£52 million
) and other non-current liabilities (
31 March 2017
:
£77 million
), to current and non-current derivative financial assets and derivative financial liabilities.
|
2.
|
This year a further derivative category has been added for the Further Acquisition Agreement (FAA) derivative. This relates to the put/call option over a
14%
interest in Quadgas HoldCo Limited. Refer to note 15 for further details.
|
|
2018
|
|
2017
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
Interest rate swaps
|
678
|
|
(457
|
)
|
221
|
|
|
849
|
|
(657
|
)
|
192
|
|
Cross-currency interest rate swaps
|
687
|
|
(207
|
)
|
480
|
|
|
676
|
|
(909
|
)
|
(233
|
)
|
Foreign exchange forward contracts
1
|
174
|
|
(2
|
)
|
172
|
|
|
160
|
|
(113
|
)
|
47
|
|
Inflation linked swaps
|
5
|
|
(278
|
)
|
(273
|
)
|
|
7
|
|
(529
|
)
|
(522
|
)
|
Equity options
|
1
|
|
(1
|
)
|
—
|
|
|
15
|
|
(15
|
)
|
—
|
|
|
1,545
|
|
(945
|
)
|
600
|
|
|
1,707
|
|
(2,223
|
)
|
(516
|
)
|
1.
|
Included within the foreign exchange forward contracts balance is
£67 million
(
2017
:
£69 million
) of derivatives in relation to hedging of capital expenditure.
|
|
2018
|
|
2017
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m |
|
Current
|
|
|
|
|
|
|
|
||||||
Less than 1 year
|
375
|
|
(325
|
)
|
50
|
|
|
192
|
|
(1,054
|
)
|
(862
|
)
|
|
375
|
|
(325
|
)
|
50
|
|
|
192
|
|
(1,054
|
)
|
(862
|
)
|
Non-current
|
|
|
|
|
|
|
|
||||||
In 1 to 2 years
|
83
|
|
(88
|
)
|
(5
|
)
|
|
199
|
|
(305
|
)
|
(106
|
)
|
In 2 to 3 years
|
25
|
|
(27
|
)
|
(2
|
)
|
|
122
|
|
(160
|
)
|
(38
|
)
|
In 3 to 4 years
|
418
|
|
(5
|
)
|
413
|
|
|
39
|
|
(83
|
)
|
(44
|
)
|
In 4 to 5 years
|
12
|
|
—
|
|
12
|
|
|
419
|
|
(36
|
)
|
383
|
|
More than 5 years
|
632
|
|
(500
|
)
|
132
|
|
|
736
|
|
(585
|
)
|
151
|
|
|
1,170
|
|
(620
|
)
|
550
|
|
|
1,515
|
|
(1,169
|
)
|
346
|
|
|
1,545
|
|
(945
|
)
|
600
|
|
|
1,707
|
|
(2,223
|
)
|
(516
|
)
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Interest rate swaps
|
(8,390
|
)
|
(9,469
|
)
|
Cross-currency interest rate swaps
|
(6,925
|
)
|
(8,631
|
)
|
Foreign exchange forward contracts
|
(5,793
|
)
|
(8,253
|
)
|
Inflation linked swaps
|
(1,191
|
)
|
(1,423
|
)
|
Equity options
|
(800
|
)
|
(800
|
)
|
|
(23,099
|
)
|
(28,576
|
)
|
|
2018
|
|
2017
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m |
|
Liabilities
£m
|
|
Total
£m
|
|
Commodity purchase contracts accounted for as derivative contracts
|
|
|
|
|
|
|
|
||||||
Forward purchases of electricity
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(10
|
)
|
(10
|
)
|
Forward purchases of gas
|
60
|
|
(64
|
)
|
(4
|
)
|
|
82
|
|
(97
|
)
|
(15
|
)
|
Derivative financial instruments linked to commodity prices
|
|
|
|
|
|
|
|
||||||
Electricity capacity
|
1
|
|
—
|
|
1
|
|
|
2
|
|
—
|
|
2
|
|
Electricity swaps
|
7
|
|
(46
|
)
|
(39
|
)
|
|
11
|
|
(61
|
)
|
(50
|
)
|
Electricity options
|
—
|
|
(1
|
)
|
(1
|
)
|
|
—
|
|
—
|
|
—
|
|
Gas swaps
|
1
|
|
(4
|
)
|
(3
|
)
|
|
11
|
|
(2
|
)
|
9
|
|
Gas options
|
—
|
|
(1
|
)
|
(1
|
)
|
|
—
|
|
—
|
|
—
|
|
|
69
|
|
(116
|
)
|
(47
|
)
|
|
106
|
|
(170
|
)
|
(64
|
)
|
|
2018
|
|
2017
|
|||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
Liabilities
£m
|
Total
£m
|
Current
|
|
|
|
|
|
|
|
|||
Less than one year
|
30
|
|
(76
|
)
|
(46
|
)
|
|
54
|
(93)
|
(39)
|
|
30
|
|
(76
|
)
|
(46
|
)
|
|
54
|
(93)
|
(39)
|
Non-current
|
|
|
|
|
|
|
|
|||
In 1 to 2 years
|
6
|
|
(17
|
)
|
(11
|
)
|
|
8
|
(36)
|
(28)
|
In 2 to 3 years
|
6
|
|
(11
|
)
|
(5
|
)
|
|
7
|
(9)
|
(2)
|
In 3 to 4 years
|
6
|
|
(3
|
)
|
3
|
|
|
6
|
(7)
|
(1)
|
In 4 to 5 years
|
5
|
|
(2
|
)
|
3
|
|
|
6
|
(5)
|
1
|
More than 5 years
|
16
|
|
(7
|
)
|
9
|
|
|
25
|
(20)
|
5
|
|
39
|
|
(40
|
)
|
(1
|
)
|
|
52
|
(77)
|
(25)
|
|
69
|
|
(116
|
)
|
(47
|
)
|
|
106
|
(170)
|
(64)
|
|
2018
|
2017
|
Forward purchases of electricity
1
|
0 GWh
|
159 GWh
|
Forward purchases of gas
2
|
54m Dth
|
54m Dth
|
Electricity swaps
|
12,839 GWh
|
12,776 GWh
|
Electricity options
|
13,897 GWh
|
17,793 GWh
|
Electricity capacity
|
0.6 GWm
|
0.7 GWm
|
Gas swaps
|
100m Dth
|
83m Dth
|
Gas options
|
7m Dth
|
9m Dth
|
NYMEX gas futures
3
|
0 Dth
|
3m Dth
|
1.
|
Forward electricity purchases expired on 30 September 2017. The contractual obligations under these contracts are
£nil
(
2017
:
£15 million
).
|
2.
|
Forward gas purchases have terms up to
three years
. The contractual obligations under these contracts are
£96 million
(
2017
:
£131 million
).
|
3.
|
NYMEX gas futures have been offset with related margin accounts (see note 30(a)).
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Cross-currency interest rate/interest rate swaps
|
496
|
|
548
|
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Cross-currency interest rate/interest rate swaps
|
138
|
|
(180
|
)
|
Foreign exchange forward contracts
|
66
|
|
69
|
|
|
204
|
|
(111
|
)
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Cross-currency interest rate/interest rate swaps
|
(104
|
)
|
(544
|
)
|
Foreign exchange forward contracts
|
87
|
|
(56
|
)
|
|
(17
|
)
|
(600
|
)
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Cross-currency interest rate/interest rate swaps
|
171
|
|
135
|
|
Foreign exchange forward contracts
|
19
|
|
34
|
|
Inflation linked swaps
|
(273
|
)
|
(522
|
)
|
Equity options
|
—
|
|
—
|
|
Commodity derivatives (all categories)
|
(47
|
)
|
(64
|
)
|
Further Acquisition Agreement derivative
|
110
|
|
—
|
|
|
(20
|
)
|
(417
|
)
|
Inventories represent assets that we intend to use in order to generate revenue in the short-term, either by selling the asset itself (for example, fuel stocks) or by using it to fulfil a service to a customer or to maintain our network (consumables).
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Fuel stocks
|
78
|
|
101
|
|
Raw materials and consumables
|
190
|
|
191
|
|
Work in progress
|
—
|
|
8
|
|
Current intangible assets – emission allowances
|
73
|
|
103
|
|
|
341
|
|
403
|
|
Trade and other receivables are amounts which are due from our customers for services we have provided. Other receivables also include prepayments made by us, for example, property lease rentals paid in advance.
|
1.
|
Comparative amounts have been represented to reflect the reclassification of commodity contract derivatives from trade and other receivables to derivatives (see note 16).
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
At 1 April
|
424
|
|
349
|
|
Exchange adjustments
|
(42
|
)
|
51
|
|
Charge for the year, net of recoveries
|
36
|
|
147
|
|
Uncollectible amounts written off against receivables
|
(109
|
)
|
(121
|
)
|
Disposal of UK Gas Distribution
|
—
|
|
(2
|
)
|
At 31 March
|
309
|
|
424
|
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Up to 3 months past due
|
271
|
|
238
|
|
3 to 6 months past due
|
73
|
|
67
|
|
Over 6 months past due
|
131
|
|
143
|
|
|
475
|
|
448
|
|
Cash and cash equivalents include cash balances, together with short-term investments with an original maturity of less than three months that are readily convertible to cash.
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Cash at bank
|
54
|
|
199
|
|
Short-term deposits
|
275
|
|
940
|
|
Cash and cash equivalents
|
329
|
|
1,139
|
|
We borrow money primarily in the form of bonds and bank loans. These are for a fixed term and may have fixed or floating interest rates or are linked to RPI. As indicated in note 16, we use derivatives to manage risks associated with interest rates and foreign exchange. Further details on our net debt can be found in note 27.
Our strategy in action
Our price controls and rate plans require us to fund our networks within a certain ratio of debt to equity and, as a result, we have issued a significant amount of debt. As we continue to invest in our networks, the value of debt is expected to increase over time. To maintain a strong balance sheet and to allow us to access capital markets at commercially acceptable interest rates, we balance the amount of debt we issue with the value of our assets, and take account of certain other metrics used by credit rating agencies.
|
Trade and other payables include amounts owed to suppliers, tax authorities and other parties which are due to be settled within 12 months. The total also includes deferred income, which represents monies received from customers but for which we have not yet delivered the associated service. These amounts are recognised as revenue when the service is provided.
|
|
2018
|
|
2017¹
|
|
|
£m
|
|
£m
|
|
Trade payables
|
1,977
|
|
2,135
|
|
Deferred income
2
|
440
|
|
298
|
|
Social security and other taxes
|
173
|
|
136
|
|
Other payables
|
863
|
|
776
|
|
|
3,453
|
|
3,345
|
|
1.
|
Comparative amounts have been represented to reflect the reclassification of commodity derivative contracts from trade and other payables to derivatives (see note 16).
|
2.
|
Included within deferred income is
£85 million
(
2017
:
£89 million
) relating to customer contributions.
|
Other non-current liabilities include deferred income which will not be recognised as income until after 31 March 2019. It also includes payables that are not due until after that date.
|
|
2018
|
|
2017¹
|
|
|
£m
|
|
£m
|
|
Deferred income
2
|
958
|
|
1,032
|
|
Other payables
|
359
|
|
338
|
|
|
1,317
|
|
1,370
|
|
1.
|
Comparative amounts have been represented to reflect the reclassification of commodity derivative contracts from other non-current liabilities to derivatives (see note 16).
|
2.
|
Included within deferred income is
£844 million
(
2017
:
£839 million
) relating to customer contributions.
|
The majority of employees are either members of a DB (defined benefit) or a DC (defined contribution) pension scheme. In the US we also provide healthcare and life insurance benefits to eligible retired US employees.
The fair value of associated scheme assets and present value of DB obligations are updated annually in accordance with IAS 19 (revised).
We separately present our UK and US pension schemes to show geographical split. Below we provide a more detailed analysis of the amounts recorded in the primary financial statements and the actuarial assumptions used to value the DB obligations.
|
|
Section A of NGUKPS
|
|
Section B of NGUKPS
|
|
NGEG of ESPS
|
|
|||
Latest full actuarial valuation
|
31 March 2017
|
|
31 March 2017
|
|
31 March 2016
|
|
|||
Actuary
|
Willis Towers Watson
|
|
Willis Towers Watson
|
|
Aon Hewitt
|
|
|||
Market value of scheme assets at latest valuation
|
|
£6,716
|
m
|
|
£5,849
|
m
|
|
£2,553
|
m
|
Actuarial value of benefits due to members
|
|
£6,627
|
m
|
|
£6,057
|
m
|
|
£3,053
|
m
|
Market value as percentage of benefits
|
101%
|
|
97%
|
|
84%
|
|
|||
Funding surplus/(deficit)
|
|
£89
|
m
|
|
(£208m)
|
|
|
(£500m)
|
|
Funding surplus/(deficit) net of tax
|
|
£74
|
m
|
|
(£173m)
|
|
|
(£415m)
|
|
•
|
Section A of NGUKPS:
£315 million
, National Grid plc and National Grid UK Limited;
|
•
|
Section B of NGUKPS:
£179 million
, National Grid Gas plc (NGG); and
|
•
|
NGEG of ESPS:
£250 million
, National Grid Electricity Transmission plc (NGET).
|
•
|
Section B of NGUKPS: The assets will be paid to Section B if NGG is given notice of less than
12 months
that Ofgem intends to revoke its licence under the Gas Act 1986, or if NGG grants any charges over its assets other than where agreed with the Trustee.
|
•
|
NGEG of ESPS: The asset and an amount in respect of the deficit (to a maximum of
£500 million
) will be paid to the scheme if NGET ceases to hold a licence granted under the Electricity Act 1989.
|
•
|
Section A of NGUKPS:
£72 million
(increased in line with RPI).
|
•
|
Section B of NGUKPS:
£65 million
(increased in line with RPI).
|
•
|
NGEG of ESPS: A maximum of
£500 million
in respect of the deficit.
|
•
|
Asset volatility: The schemes invest in a variety of asset classes, principally: equities, government securities, corporate bonds and property. Consequently actual returns will differ from the underlying discount rate adopted, impacting on the net balance sheet asset or liability. Each scheme seeks to balance the level of investment return sought with the aim of reducing volatility and risk by means of liability matching asset strategies, diversification of asset portfolios, interest rate hedging and management of foreign exchange exposure. In taking this approach, reference is made to both the maturity of liabilities and the funding level of that scheme.
|
•
|
Changes in bond yields: Liabilities are calculated using discount rates set with reference to yields on high-quality corporate bonds prevailing in the US and UK debt markets and will fluctuate as yields change.
|
•
|
Inflation risk: Changes in inflation will affect current and future pensions, but are partially mitigated though investing in inflation matching assets and hedging instruments.
|
•
|
Member longevity: Longevity is a key driver of liabilities and changes in expected mortality will have a direct impact on liabilities. In aggregate, the liabilities are relatively mature which mitigates the risk to a certain extent. The NGEG of ESPS holds a longevity insurance contract which covers exposure to improvements in longevity, providing long-term protection and income to the scheme in the event that members live longer than currently expected.
|
1.
|
The discount rates for pension liabilities have been determined by reference to appropriate yields on high-quality corporate bonds prevailing in the UK debt markets at the reporting date.
|
2.
|
In the UK for 2018, National Grid has adopted a different discount rate assumption by increasing the duration of the scheme liabilities to
25 years
for future service obligations. This has led to a future service discount rate in the UK of
2.65%
for both the 2017 and 2018 year-ends. The 2017 discount rate was
2.40%
based on an expected duration of scheme liabilities of
17 years
.
|
3.
|
A promotional scale has also been used where appropriate. The UK assumption stated is that relating to service prior to 1 April 2013. The UK assumption for the rate of increase in salaries for past service after this date is
2.20%
(2017:
2.20%
; 2016:
2.10%
) and for future service
2.15%
(2017:
2.20%
; 2016:
2.10%
). The rates of increase stated are not indicative of historical increases awarded or a guarantee of future increases, but merely an appropriate assumption utilised in assessing DB liabilities.
|
4.
|
This is the key assumption that determines assumed increases in pensions in payment and deferment in the UK only. Consistent with the derivation of the discount rate, the RPI assumption reflects the duration of the active liabilities to be adopted in the calculation of the future service obligations. This approach leads to a RPI assumption for the future service rate of
3.10%
p.a. at reporting date (2017:
3.15%
; 2016:
2.90%
), as compared to the 2017 published assumption of
3.20%
for both past service and future service.
|
|
US pensions
|
|
US other post-retirement benefits
|
||||
|
2018
|
2017
|
2016
|
|
2018
|
2017
|
2016
|
|
%
|
%
|
%
|
%
|
%
|
%
|
|
Discount rate
1
|
4.00
|
4.25
|
4.25
|
|
4.00
|
4.25
|
4.25
|
Rate of increase in salaries
|
3.50
|
3.50
|
3.50
|
|
3.50
|
3.50
|
3.50
|
Initial healthcare cost trend rate
|
n/a
|
n/a
|
n/a
|
|
7.50
|
7.00
|
7.50
|
Ultimate healthcare cost trend rate
2
|
n/a
|
n/a
|
n/a
|
|
4.50
|
4.50
|
4.50
|
1.
|
The discount rates for pension liabilities have been determined by reference to appropriate yields on high-quality corporate bonds prevailing in the US debt markets at the reporting date with an expected duration of plan liabilities of
17 years
.
|
2.
|
The ultimate healthcare cost trend rate will reach the ultimate trend in 2026/28 (2017 and 2016: 2024/25).
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
Present value of funded obligations
1
|
(23,747
|
)
|
(25,890
|
)
|
(28,648
|
)
|
Fair value of plan assets
|
23,858
|
|
24,375
|
|
26,434
|
|
|
111
|
|
(1,515
|
)
|
(2,214
|
)
|
Present value of unfunded obligations
|
(307
|
)
|
(340
|
)
|
(304
|
)
|
Other post-employment liabilities
|
(67
|
)
|
(78
|
)
|
(67
|
)
|
Net defined benefit liability
|
(263
|
)
|
(1,933
|
)
|
(2,585
|
)
|
Represented by:
|
|
|
|
|||
Liabilities
|
(1,672
|
)
|
(2,536
|
)
|
(2,995
|
)
|
Assets
|
1,409
|
|
603
|
|
410
|
|
|
(263
|
)
|
(1,933
|
)
|
(2,585
|
)
|
|
UK Pensions
|
|
US Pensions
|
|
US other post-retirement benefits
|
|||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
||
Present value of funded obligations
1
|
(14,152
|
)
|
(15,565
|
)
|
(19,341
|
)
|
|
(6,349
|
)
|
(6,790
|
)
|
(5,916
|
)
|
|
(3,246
|
)
|
(3,535
|
)
|
(3,391
|
)
|
Fair value of plan assets
|
15,330
|
|
15,489
|
|
19,401
|
|
|
6,030
|
|
6,322
|
|
5,136
|
|
|
2,498
|
|
2,564
|
|
1,897
|
|
|
1,178
|
|
(76
|
)
|
60
|
|
|
(319
|
)
|
(468
|
)
|
(780
|
)
|
|
(748
|
)
|
(971
|
)
|
(1,494
|
)
|
Present value of unfunded obligations
|
(74
|
)
|
(80
|
)
|
(75
|
)
|
|
(233
|
)
|
(260
|
)
|
(229
|
)
|
|
—
|
|
—
|
|
—
|
|
Other post-employment liabilities
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(67
|
)
|
(78
|
)
|
(67
|
)
|
Net defined benefit asset/(liability)
|
1,104
|
|
(156
|
)
|
(15
|
)
|
|
(552
|
)
|
(728
|
)
|
(1,009
|
)
|
|
(815
|
)
|
(1,049
|
)
|
(1,561
|
)
|
Represented by:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Liabilities
|
(74
|
)
|
(536
|
)
|
(300
|
)
|
|
(783
|
)
|
(951
|
)
|
(1,134
|
)
|
|
(815
|
)
|
(1,049
|
)
|
(1,561
|
)
|
Assets
|
1,178
|
|
380
|
|
285
|
|
|
231
|
|
223
|
|
125
|
|
|
—
|
|
—
|
|
—
|
|
|
1,104
|
|
(156
|
)
|
(15
|
)
|
|
(552
|
)
|
(728
|
)
|
(1,009
|
)
|
|
(815
|
)
|
(1,049
|
)
|
(1,561
|
)
|
1.
|
Present value of funded obligations split approximately as follows:
|
•
|
UK pensions at
31 March 2018
:
10%
active members (
2017
:
12%
;
2016
:
12%
);
18%
deferred members (
2017
:
19%
;
2016
:
18%
);
72%
pensioner members (
2017
:
69%
;
2016
:
70%
)
|
•
|
US pensions at
31 March 2018
:
38%
active members (2017:
38%
;
2016
:
39%
);
8%
deferred members (
2017
:
9%
;
2016
:
9%
);
54%
pensioner members (
2017
:
53%
;
2016
:
52%
)
|
•
|
US other post-retirement benefits at
31 March 2018
:
38%
active members (
2017
:
39%
;
2016
:
41%
);
0%
deferred members (
2017
:
0%
;
2016
:
0%
);
62%
pensioner members (
2017
:
61%
;
2016
:
59%
)
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
Included within operating costs
|
|
|
|
|||
Administration costs
|
16
|
|
16
|
|
16
|
|
Included within payroll costs
|
|
|
|
|||
Defined benefit scheme costs:
|
|
|
|
|||
Current service cost
|
193
|
|
232
|
|
221
|
|
Past service cost – augmentations
|
1
|
|
1
|
|
3
|
|
Past service credit – redundancies
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
Special termination benefit cost – redundancies
|
9
|
|
7
|
|
11
|
|
|
202
|
|
239
|
|
234
|
|
Included within finance income and costs
|
|
|
|
|||
Net interest cost
|
65
|
|
105
|
|
112
|
|
Included within gain on disposal of discontinued operations
|
|
|
|
|||
Administration costs
|
—
|
|
5
|
|
2
|
|
Disposal of UK Gas Distribution
|
—
|
|
34
|
|
—
|
|
|
—
|
|
39
|
|
2
|
|
Total included in income statement
1, 2
|
283
|
|
399
|
|
364
|
|
Remeasurement gains of pension assets and post-retirement benefit obligations
|
1,313
|
|
348
|
|
539
|
|
Exchange adjustments
|
175
|
|
(345
|
)
|
(81
|
)
|
Total included in the statement of other comprehensive income
2
|
1,488
|
|
3
|
|
458
|
|
1.
|
Amounts recognised in the income statement include operating costs of
£nil
(
2017
:
£1 million
;
2016
:
£1 million
); payroll costs of
£nil
(
2017
:
£35 million
;
2016
:
£28 million
); and net interest of
£nil
(
2017
:
£2 million
income;
2016
:
£1 million
cost) presented within profit from discontinued operations. These amounts all relate to UK pensions.
|
2.
|
Amounts recognised in the statement of other comprehensive income include remeasurements of pension assets and post-retirement benefit obligations of
£nil
(
2017
:
£75 million
loss;
2016
:
£129 million
gain) presented within discontinued operations. These amounts all relate to UK pensions.
|
|
UK Pensions
|
|
US Pensions
|
|
US other post-retirement benefits
|
|||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Included within operating costs
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Administration costs
|
6
|
|
6
|
|
9
|
|
|
9
|
|
9
|
|
6
|
|
|
1
|
|
1
|
|
1
|
|
Included within payroll costs
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Defined benefit scheme costs:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Current service cost
|
49
|
|
76
|
|
74
|
|
|
98
|
|
103
|
|
95
|
|
|
46
|
|
53
|
|
52
|
|
Past service cost – augmentations
|
1
|
|
1
|
|
3
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Past service credit – redundancies
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Special termination benefit cost – redundancies
|
9
|
|
7
|
|
11
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
58
|
|
83
|
|
87
|
|
|
98
|
|
103
|
|
95
|
|
|
46
|
|
53
|
|
52
|
|
Included within finance income and costs
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net interest cost
|
3
|
|
—
|
|
18
|
|
|
27
|
|
43
|
|
36
|
|
|
35
|
|
62
|
|
58
|
|
Included within gain on disposal of discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Administration costs
|
—
|
|
5
|
|
2
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Disposal of UK Gas Distribution
|
—
|
|
34
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
39
|
|
2
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Total included in income statement
|
67
|
|
128
|
|
116
|
|
|
134
|
|
155
|
|
137
|
|
|
82
|
|
116
|
|
111
|
|
Remeasurement gains/(losses) of pension assets and post retirement benefit obligations
|
1,177
|
|
(541
|
)
|
534
|
|
|
27
|
|
319
|
|
(67
|
)
|
|
109
|
|
570
|
|
72
|
|
Exchange adjustments
|
—
|
|
—
|
|
—
|
|
|
75
|
|
(140
|
)
|
(33
|
)
|
|
100
|
|
(205
|
)
|
(48
|
)
|
Total included in the statement of other comprehensive income
|
1,177
|
|
(541
|
)
|
534
|
|
|
102
|
|
179
|
|
(100
|
)
|
|
209
|
|
365
|
|
24
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening net defined benefit liability
|
(1,933
|
)
|
(2,585
|
)
|
(3,258
|
)
|
Cost recognised in the income statement
|
(283
|
)
|
(399
|
)
|
(364
|
)
|
Remeasurement and foreign exchange effects recognised in the statement of other comprehensive income
|
1,488
|
|
3
|
|
458
|
|
Employer contributions
|
475
|
|
1,073
|
|
587
|
|
Other movements
|
(10
|
)
|
(25
|
)
|
(8
|
)
|
Closing net defined benefit liability
|
(263
|
)
|
(1,933
|
)
|
(2,585
|
)
|
|
UK pensions
|
|
US pensions
|
|
US other post-retirement benefits
|
|||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening net defined benefit liability
|
(156
|
)
|
(15
|
)
|
(672
|
)
|
|
(728
|
)
|
(1,009
|
)
|
(1,003
|
)
|
|
(1,049
|
)
|
(1,561
|
)
|
(1,583
|
)
|
Cost recognised in the income statement
|
(67
|
)
|
(128
|
)
|
(116
|
)
|
|
(134
|
)
|
(155
|
)
|
(137
|
)
|
|
(82
|
)
|
(116
|
)
|
(111
|
)
|
Remeasurement and foreign exchange effects recognised in the statement of other comprehensive income
|
1,177
|
|
(541
|
)
|
534
|
|
|
102
|
|
179
|
|
(100
|
)
|
|
209
|
|
365
|
|
24
|
|
Employer contributions
|
150
|
|
528
|
|
239
|
|
|
208
|
|
257
|
|
231
|
|
|
117
|
|
288
|
|
117
|
|
Other movements
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(10
|
)
|
(25
|
)
|
(8
|
)
|
Closing net defined benefit
asset/(liability) |
1,104
|
|
(156
|
)
|
(15
|
)
|
|
(552
|
)
|
(728
|
)
|
(1,009
|
)
|
|
(815
|
)
|
(1,049
|
)
|
(1,561
|
)
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening defined benefit obligations
|
(26,230
|
)
|
(28,952
|
)
|
(29,592
|
)
|
Current service cost
|
(193
|
)
|
(232
|
)
|
(221
|
)
|
Interest cost
|
(775
|
)
|
(1,057
|
)
|
(1,026
|
)
|
Actuarial (losses)/gains – experience
|
(100
|
)
|
166
|
|
659
|
|
Actuarial gains – demographic assumptions
|
671
|
|
225
|
|
—
|
|
Actuarial gains/(losses) – financial assumptions
|
174
|
|
(3,377
|
)
|
218
|
|
Past service credit – redundancies
|
1
|
|
1
|
|
1
|
|
Special termination benefit cost – redundancies
|
(9
|
)
|
(7
|
)
|
(11
|
)
|
Past service cost – augmentations
|
(1
|
)
|
(1
|
)
|
(3
|
)
|
Medicare subsidy received
|
(21
|
)
|
(14
|
)
|
(15
|
)
|
Obligations transferred on disposal of UK Gas Distribution
|
—
|
|
6,970
|
|
—
|
|
Employee contributions
|
(1
|
)
|
(1
|
)
|
(2
|
)
|
Benefits paid
|
1,285
|
|
1,443
|
|
1,348
|
|
Exchange adjustments
|
1,145
|
|
(1,394
|
)
|
(308
|
)
|
Closing defined benefit obligations
|
(24,054
|
)
|
(26,230
|
)
|
(28,952
|
)
|
|
UK pensions
|
|
US pensions
|
|
US other post-retirement benefits
|
|||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening defined benefit obligations
|
(15,645
|
)
|
(19,416
|
)
|
(20,125
|
)
|
|
(7,050
|
)
|
(6,145
|
)
|
(6,055
|
)
|
|
(3,535
|
)
|
(3,391
|
)
|
(3,412
|
)
|
Current service cost
|
(49
|
)
|
(76
|
)
|
(74
|
)
|
|
(98
|
)
|
(103
|
)
|
(95
|
)
|
|
(46
|
)
|
(53
|
)
|
(52
|
)
|
Interest cost
|
(366
|
)
|
(615
|
)
|
(649
|
)
|
|
(273
|
)
|
(285
|
)
|
(242
|
)
|
|
(136
|
)
|
(157
|
)
|
(135
|
)
|
Actuarial (losses)/gains – experience
|
(95
|
)
|
106
|
|
552
|
|
|
(38
|
)
|
(2
|
)
|
15
|
|
|
33
|
|
62
|
|
92
|
|
Actuarial gains – demographic assumptions
|
565
|
|
214
|
|
—
|
|
|
30
|
|
2
|
|
—
|
|
|
76
|
|
9
|
|
—
|
|
Actuarial gains/(losses) – financial assumptions
|
604
|
|
(3,751
|
)
|
—
|
|
|
(279
|
)
|
37
|
|
120
|
|
|
(151
|
)
|
337
|
|
98
|
|
Past service credit – redundancies
|
1
|
|
1
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Special termination benefit cost – redundancies
|
(9
|
)
|
(7
|
)
|
(11
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Past service cost – augmentations
|
(1
|
)
|
(1
|
)
|
(3
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Medicare subsidy received
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(21
|
)
|
(14
|
)
|
(15
|
)
|
Obligations transferred on disposal of UK Gas Distribution
|
—
|
|
6,970
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Employee contributions
|
(1
|
)
|
(1
|
)
|
(2
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Benefits paid
|
770
|
|
931
|
|
895
|
|
|
362
|
|
349
|
|
310
|
|
|
153
|
|
163
|
|
143
|
|
Exchange adjustments
|
—
|
|
—
|
|
—
|
|
|
764
|
|
(903
|
)
|
(198
|
)
|
|
381
|
|
(491
|
)
|
(110
|
)
|
Closing defined benefit obligations
|
(14,226
|
)
|
(15,645
|
)
|
(19,416
|
)
|
|
(6,582
|
)
|
(7,050
|
)
|
(6,145
|
)
|
|
(3,246
|
)
|
(3,535
|
)
|
(3,391
|
)
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening fair value of plan assets
|
24,375
|
|
26,434
|
|
26,408
|
|
Interest income
|
710
|
|
952
|
|
914
|
|
Return on plan assets in excess of/(less than) interest
|
568
|
|
3,334
|
|
(338
|
)
|
Administration costs
|
(16
|
)
|
(21
|
)
|
(18
|
)
|
Employer contributions
|
475
|
|
1,073
|
|
587
|
|
Employee contributions
|
1
|
|
1
|
|
2
|
|
Benefits paid
|
(1,285
|
)
|
(1,443
|
)
|
(1,348
|
)
|
Exchange adjustments
|
(970
|
)
|
1,049
|
|
227
|
|
Assets transferred on disposal of UK Gas Distribution
|
—
|
|
(7,004
|
)
|
—
|
|
Closing fair value of plan assets
|
23,858
|
|
24,375
|
|
26,434
|
|
Actual return on plan assets
|
1,278
|
|
4,286
|
|
576
|
|
Expected contributions to plans in the following year
|
363
|
|
491
|
|
686
|
|
|
UK pensions
|
|
US pensions
|
|
US other post-retirement benefits
|
|||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening fair value of plan assets
|
15,489
|
|
19,401
|
|
19,453
|
|
|
6,322
|
|
5,136
|
|
5,052
|
|
|
2,564
|
|
1,897
|
|
1,903
|
|
Interest income
|
363
|
|
615
|
|
631
|
|
|
246
|
|
242
|
|
206
|
|
|
101
|
|
95
|
|
77
|
|
Return on plan assets in excess
of/(less than) interest |
103
|
|
2,890
|
|
(18
|
)
|
|
314
|
|
282
|
|
(202
|
)
|
|
151
|
|
162
|
|
(118
|
)
|
Administration costs
|
(6
|
)
|
(11
|
)
|
(11
|
)
|
|
(9
|
)
|
(9
|
)
|
(6
|
)
|
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
Employer contributions
|
150
|
|
528
|
|
239
|
|
|
208
|
|
257
|
|
231
|
|
|
117
|
|
288
|
|
117
|
|
Employee contributions
|
1
|
|
1
|
|
2
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Benefits paid
|
(770
|
)
|
(931
|
)
|
(895
|
)
|
|
(362
|
)
|
(349
|
)
|
(310
|
)
|
|
(153
|
)
|
(163
|
)
|
(143
|
)
|
Exchange adjustments
|
—
|
|
—
|
|
—
|
|
|
(689
|
)
|
763
|
|
165
|
|
|
(281
|
)
|
286
|
|
62
|
|
Assets transferred on disposal of UK Gas Distribution
|
—
|
|
(7,004
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Closing fair value of plan assets
|
15,330
|
|
15,489
|
|
19,401
|
|
|
6,030
|
|
6,322
|
|
5,136
|
|
|
2,498
|
|
2,564
|
|
1,897
|
|
Actual return on plan assets
|
466
|
|
3,505
|
|
613
|
|
|
560
|
|
524
|
|
4
|
|
|
252
|
|
257
|
|
(41
|
)
|
Expected contributions to plans in the following year
|
140
|
|
128
|
|
228
|
|
|
221
|
|
229
|
|
220
|
|
|
2
|
|
134
|
|
238
|
|
|
UK pensions
1
|
US pensions
2
|
US other
post-retirement
benefits
3
|
|
%
|
%
|
%
|
Equities
|
14.6
|
42.0
|
60.9
|
Corporate bonds
|
25.8
|
24.8
|
1.0
|
Government securities
|
36.7
|
16.2
|
20.4
|
Property
|
6.3
|
4.6
|
—
|
Diversified alternatives
|
5.1
|
10.3
|
12.2
|
Liability matching assets
|
7.7
|
—
|
—
|
Other
|
3.8
|
2.1
|
5.5
|
|
100.0
|
100.0
|
100.0
|
1.
|
Of total assets at year-end date,
57.8%
is invested in the UK,
18.4%
in the US and
23.7%
in other countries, including the EU.
|
2.
|
Of total assets at year-end date,
88.5%
is invested in the US,
1.2%
in the UK and
10.3%
in other countries.
|
3.
|
Of total assets at year-end date,
91.8%
is invested within the US,
0.2%
in the UK and
8.0%
in other countries.
|
•
|
After taking advice from professional investment advisers and consultation with the sponsoring employers, set the key principles, including expected returns, risk and liquidity requirements, after taking into account expected contributions, maturity of the pension liabilities and in the UK, the strength of the covenant.
|
•
|
Formulate an investment strategy to manage risk through diversification, including the use of liability matching assets, which move in line with long-term liabilities of the scheme, return seeking assets, some of which are designed to mitigate downside risk and exposure. Where appropriate, the strategies may include interest rate and inflation hedging instruments, and currency hedging to hedge foreign holdings.
|
•
|
Review the investment strategies’ performance and risk regularly and amend the portfolios if required.
|
•
|
Appoint investment managers with the necessary skills, expertise and credit worthiness to manage the investments. On a regular basis, the performance of the asset managers and their adherence to the investment strategies will be reviewed.
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Equities
1
|
1,420
|
|
813
|
|
2,233
|
|
|
2,624
|
|
596
|
|
3,220
|
|
|
3,272
|
|
962
|
|
4,234
|
|
Corporate bonds
2
|
3,949
|
|
—
|
|
3,949
|
|
|
3,526
|
|
—
|
|
3,526
|
|
|
5,601
|
|
—
|
|
5,601
|
|
Government securities
|
5,629
|
|
—
|
|
5,629
|
|
|
5,406
|
|
—
|
|
5,406
|
|
|
6,059
|
|
—
|
|
6,059
|
|
Property
|
129
|
|
834
|
|
963
|
|
|
90
|
|
708
|
|
798
|
|
|
90
|
|
1,081
|
|
1,171
|
|
Diversified alternatives
3
|
99
|
|
690
|
|
789
|
|
|
250
|
|
628
|
|
878
|
|
|
159
|
|
505
|
|
664
|
|
Liability matching assets
4
|
1,174
|
|
—
|
|
1,174
|
|
|
1,162
|
|
—
|
|
1,162
|
|
|
1,020
|
|
—
|
|
1,020
|
|
Other
5
|
211
|
|
382
|
|
593
|
|
|
63
|
|
436
|
|
499
|
|
|
649
|
|
3
|
|
652
|
|
|
12,611
|
|
2,719
|
|
15,330
|
|
|
13,121
|
|
2,368
|
|
15,489
|
|
|
16,850
|
|
2,551
|
|
19,401
|
|
1.
|
Included within equities at
31 March 2018
were ordinary shares of National Grid plc with a value of
£nil
(
2017
:
£2 million
;
2016
:
£7 million
).
|
2.
|
Included within corporate bonds at
31 March 2018
was an investment in a number of bonds issued by subsidiary undertakings with a value of
£nil
(
2017
:
£nil
;
2016
:
£70 million
).
|
3.
|
Includes return seeking non-conventional asset classes which include hedge funds, private debt, mezzanine debt, infrastructure debt and fixed income debt instruments.
|
4.
|
Includes liability-driven investment vehicles.
|
5.
|
Includes cash and cash type instruments.
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Equities
|
577
|
|
1,954
|
|
2,531
|
|
|
698
|
|
1,915
|
|
2,613
|
|
|
625
|
|
1,508
|
|
2,133
|
|
Corporate bonds
|
1,085
|
|
413
|
|
1,498
|
|
|
1,130
|
|
537
|
|
1,667
|
|
|
954
|
|
483
|
|
1,437
|
|
Government securities
|
414
|
|
565
|
|
979
|
|
|
872
|
|
71
|
|
943
|
|
|
711
|
|
—
|
|
711
|
|
Property
|
—
|
|
279
|
|
279
|
|
|
—
|
|
335
|
|
335
|
|
|
—
|
|
276
|
|
276
|
|
Diversified alternatives
1
|
198
|
|
421
|
|
619
|
|
|
209
|
|
433
|
|
642
|
|
|
163
|
|
334
|
|
497
|
|
Other
2
|
20
|
|
104
|
|
124
|
|
|
31
|
|
91
|
|
122
|
|
|
—
|
|
82
|
|
82
|
|
|
2,294
|
|
3,736
|
|
6,030
|
|
|
2,940
|
|
3,382
|
|
6,322
|
|
|
2,453
|
|
2,683
|
|
5,136
|
|
1.
|
Includes return seeking non-conventional asset classes which include hedge funds, real estate debt and limited partnerships.
|
2.
|
Includes collateral, liquid investments and cash deposits, debtors and creditors.
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Equities
|
412
|
|
1,110
|
|
1,522
|
|
|
405
|
|
1,162
|
|
1,567
|
|
|
281
|
|
853
|
|
1,134
|
|
Corporate bonds
|
24
|
|
—
|
|
24
|
|
|
19
|
|
—
|
|
19
|
|
|
37
|
|
1
|
|
38
|
|
Government securities
|
508
|
|
2
|
|
510
|
|
|
520
|
|
1
|
|
521
|
|
|
390
|
|
—
|
|
390
|
|
Diversified alternatives
1
|
161
|
|
144
|
|
305
|
|
|
166
|
|
149
|
|
315
|
|
|
122
|
|
104
|
|
226
|
|
Other
2
|
—
|
|
137
|
|
137
|
|
|
—
|
|
142
|
|
142
|
|
|
—
|
|
109
|
|
109
|
|
|
1,105
|
|
1,393
|
|
2,498
|
|
|
1,110
|
|
1,454
|
|
2,564
|
|
|
830
|
|
1,067
|
|
1,897
|
|
1.
|
Includes return seeking non-conventional asset classes which include hedge funds, real estate debt and limited partnerships.
|
2.
|
Includes collateral, liquid investments and cash deposits, debtors and creditors.
|
We make provisions when an obligation exists, resulting from a past event and it is probable that cash will be paid to settle it, but the exact amount of cash required can only be estimated.
The main estimates relate to environmental remediation and decommissioning costs for various sites we own or have owned and other provisions, including restructuring plans and lease contracts we have entered into that are now loss making. The evaluation of the likelihood of the contingent events has required best judgement by management regarding the probability of exposure to potential loss. Should circumstances change following unforeseeable developments, the likelihood could alter.
Our strategy in action
We are committed to the protection and enhancement of the environment. However, we have acquired, owned and operated a number of businesses which have, during the course of their operations, created an environmental impact. Therefore we have a provision that reflects the expected cost to remediate these sites. Current operations will seldom result in new sites with significant expected costs being added to the provision.
|
|
Environmental
£m
|
|
Decommissioning
£m
|
|
Restructuring
£m
|
|
Emissions
£m
|
|
Other
£m
|
|
Total
provisions
£m
|
|
At 1 April 2016
|
1,169
|
|
141
|
|
30
|
|
18
|
|
361
|
|
1,719
|
|
Exchange adjustments
|
137
|
|
13
|
|
—
|
|
2
|
|
36
|
|
188
|
|
Additions
|
572
|
|
107
|
|
16
|
|
12
|
|
308
|
|
1,015
|
|
Unused amounts reversed
|
(75
|
)
|
—
|
|
(5
|
)
|
—
|
|
(6
|
)
|
(86
|
)
|
Unwinding of discount
|
60
|
|
—
|
|
1
|
|
—
|
|
12
|
|
73
|
|
Utilised
|
(110
|
)
|
(19
|
)
|
(25
|
)
|
—
|
|
(73
|
)
|
(227
|
)
|
Disposal of UK Gas Distribution
|
(32
|
)
|
(21
|
)
|
—
|
|
—
|
|
(41
|
)
|
(94
|
)
|
At 31 March 2017
|
1,721
|
|
221
|
|
17
|
|
32
|
|
597
|
|
2,588
|
|
Exchange adjustments
|
(158
|
)
|
(9
|
)
|
—
|
|
(2
|
)
|
(26
|
)
|
(195
|
)
|
Additions
|
27
|
|
2
|
|
10
|
|
12
|
|
23
|
|
74
|
|
Unused amounts reversed
1
|
(45
|
)
|
(19
|
)
|
(6
|
)
|
—
|
|
(37
|
)
|
(107
|
)
|
Unwinding of discount
|
61
|
|
5
|
|
1
|
|
—
|
|
8
|
|
75
|
|
Utilised
2
|
(75
|
)
|
(6
|
)
|
(7
|
)
|
(34
|
)
|
(146
|
)
|
(268
|
)
|
Transfers
3
|
—
|
|
—
|
|
(12
|
)
|
—
|
|
(103
|
)
|
(115
|
)
|
At 31 March 2018
|
1,531
|
|
194
|
|
3
|
|
8
|
|
316
|
|
2,052
|
|
|
2018
|
|
|
2017
|
|
|
£m
|
|
|
£m
|
|
Current
|
273
|
|
|
416
|
|
Non-current
|
1,779
|
|
|
2,172
|
|
|
2,052
|
|
|
2,588
|
|
1.
|
Unused amounts reversed from other provisions include
£16 million
in relation to discontinued operations.
|
2.
|
Utilised amounts for other provisions include
£77 million
in relation to discontinued operations.
|
3.
|
Represents net amounts transferred to trade and other payables (see note 21) of
£115 million
(
2017
:
£nil
).
|
|
2018
|
|
2017
|
||||||||||||||
|
Discounted
£m
|
|
|
Undiscounted
£m
|
|
|
Real
discount
rate
|
|
|
Discounted
£m
|
|
|
Undiscounted
£m
|
|
|
Real
discount
rate
|
|
UK sites
|
213
|
|
|
235
|
|
|
1
|
%
|
|
242
|
|
|
270
|
|
|
1
|
%
|
US sites
|
1,318
|
|
|
1,410
|
|
|
1
|
%
|
|
1,479
|
|
|
1,619
|
|
|
1
|
%
|
|
1,531
|
|
|
1,645
|
|
|
|
|
1,721
|
|
|
1,889
|
|
|
|
•
|
£50 million
(
2017
:
£143 million
) in respect of business restructuring costs following the sale of UK Gas Distribution. We expect the majority of this provision to be utilised within one year; and
|
•
|
Last year, other provisions included
£150 million
voluntary distribution to be made for the benefit of energy customers on the successful sale of UK Gas Distribution. During the year, this was transferred to trade and other payables and has a closing balance of
£117 million
.
|
•
|
Amounts provided in respect of onerous lease commitments and rates payable on surplus properties of
£48 million
(
2017
:
£84 million
) with expenditure expected to be incurred until
2043
;
|
•
|
£152 million
(
2017
:
£166 million
) of estimated liabilities in respect of past events insured by insurance subsidiary undertakings, including employer liability claims. In accordance with insurance industry practice, these estimates are based on experience from previous years and there is, therefore, no identifiable payment date; and
|
•
|
£13 million
(
2017
:
£13 million
) in respect of obligations associated with investments in joint ventures and associates.
|
Ordinary share capital represents the total number of shares issued which are publicly traded. We also disclose the number of treasury shares the Company holds, which are shares that the Company has bought itself, predominately to actively manage scrip issuances and employee share option plan liabilities.
|
|
Allotted, called up and fully paid
|
|||
|
million
|
|
£m
|
|
At 1 April 2016
|
3,924
|
|
447
|
|
Issued during the year in lieu of dividends
1
|
19
|
|
2
|
|
At 31 March 2017
|
3,943
|
|
449
|
|
|
|
|
||
Effect of share consolidation
2
|
(328
|
)
|
—
|
|
Issued during the year in lieu of dividends
1
|
23
|
|
3
|
|
At 31 March 2018
|
3,638
|
|
452
|
|
1.
|
The issue of shares under the scrip dividend programme is considered to be a bonus issue under the terms of the Companies Act 2006 and the nominal value of the shares is charged to the share premium account.
|
2.
|
On 22 May 2017 the ordinary share capital was consolidated with 11 new ordinary shares of
12
204
/
473
pence nominal value issued for every 12 existing ordinary shares of
11
17
/
43
pence nominal value. This consolidation was completed to maintain the comparability of the Company’s share price before and after the special dividend.
|
1.
|
During the year, the Company completed a share repurchase programme as part of the return of cash to shareholders following the sale of UK Gas Distribution in addition to the management of the dilutive effect of share issuances under the scrip dividend programme. As a result the Company repurchased
114 million
(
2017
:
20 million
) ordinary shares for aggregate consideration of
£1,017 million
(
2017
:
£189 million
), including transaction costs. The shares repurchased had a nominal value of
£14 million
(
2017
:
£2 million
) and represented approximately
3.1%
(
2017
:
0.5%
) of the ordinary shares in issue as at
31 March 2018
.
|
2.
|
During the year,
3 million
(
2017
:
3 million
) treasury shares were gifted to National Grid Employee Share Trusts and
5 million
(
2017
:
3 million
) treasury shares were re-issued in relation to employee share schemes, in total representing approximately
0.2%
(
2017
:
0.2%
) of the ordinary shares in issue as at
31 March 2018
. The nominal value of these shares was
£1 million
(
2017
:
£1 million
) and the total proceeds received were
£33 million
(
2017
:
£18 million
).
|
3.
|
During the year, the Company made payments totalling
£5 million
(
2017
:
£6 million
) to National Grid Employee Share Trusts, outside its share repurchase programme, to enable the trustees to make purchases of National Grid plc shares in order to satisfy the requirements of employee share option and reward plans.
|
Other equity reserves are different categories of equity as required by accounting standards and represent the impact of a number of our historical transactions.
|
|
Translation
£m
|
|
Cash flow
hedge
£m
|
|
Available-
for-sale
£m
|
|
Capital
redemption
£m
|
|
Merger
£m
|
|
Total
£m
|
|
At 1 April 2015
|
479
|
|
(109
|
)
|
94
|
|
19
|
|
(5,165
|
)
|
(4,682
|
)
|
Exchange adjustments
1
|
69
|
|
—
|
|
—
|
|
—
|
|
—
|
|
69
|
|
Net gains taken to equity
|
—
|
|
50
|
|
43
|
|
—
|
|
—
|
|
93
|
|
Transferred to profit or loss
|
—
|
|
29
|
|
—
|
|
—
|
|
—
|
|
29
|
|
Tax
|
—
|
|
(15
|
)
|
(17
|
)
|
—
|
|
—
|
|
(32
|
)
|
At 31 March 2016
|
548
|
|
(45
|
)
|
120
|
|
19
|
|
(5,165
|
)
|
(4,523
|
)
|
Exchange adjustments
1
|
346
|
|
—
|
|
—
|
|
—
|
|
—
|
|
346
|
|
Net (losses)/gains taken to equity
|
—
|
|
(36
|
)
|
81
|
|
—
|
|
—
|
|
45
|
|
Transferred to/(from) profit or loss
|
—
|
|
227
|
|
(25
|
)
|
—
|
|
—
|
|
202
|
|
Tax
|
—
|
|
(43
|
)
|
(14
|
)
|
—
|
|
—
|
|
(57
|
)
|
At 31 March 2017
|
894
|
|
103
|
|
162
|
|
19
|
|
(5,165
|
)
|
(3,987
|
)
|
Exchange adjustments
1
|
(504
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(504
|
)
|
Net gains/(losses) taken to equity
|
—
|
|
19
|
|
(30
|
)
|
—
|
|
—
|
|
(11
|
)
|
Share of net gains taken to equity of associates
|
—
|
|
5
|
|
—
|
|
—
|
|
—
|
|
5
|
|
Transferred from profit or loss
|
—
|
|
(3
|
)
|
(73
|
)
|
—
|
|
—
|
|
(76
|
)
|
Tax
|
—
|
|
4
|
|
29
|
|
—
|
|
—
|
|
33
|
|
At 31 March 2018
|
390
|
|
128
|
|
88
|
|
19
|
|
(5,165
|
)
|
(4,540
|
)
|
1.
|
The exchange adjustments recorded in the translation reserve comprise a loss of
£1,304 million
(
2017
: gain of
£1,364 million
;
2016
: gain of
£275 million
) relating to the translation of foreign operations offset by a gain of
£800 million
(
2017
: loss of
£1,018 million
;
2016
: loss of
£206 million
) relating to borrowings, cross-currency swaps and foreign exchange forward contracts used to hedge the net investment in the non-sterling denominated subsidiaries.
|
Net debt represents the amount of borrowings and overdrafts less cash, financial investments and related financing derivatives.
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
(Decrease)/increase in cash and cash equivalents
|
(807
|
)
|
984
|
|
4
|
|
(Decrease)/increase in financial investments
|
(5,953
|
)
|
5,675
|
|
391
|
|
Decrease/(increase) in borrowings and related derivatives
1
|
1,209
|
|
(3,715
|
)
|
(1,100
|
)
|
Net interest paid on the components of net debt
2
|
808
|
|
1,955
|
|
810
|
|
Change in debt resulting from cash flows
|
(4,743
|
)
|
4,899
|
|
105
|
|
Changes in fair value of financial assets and liabilities and exchange movements
|
2,098
|
|
(2,273
|
)
|
(515
|
)
|
Net interest charge on the components of net debt
|
(1,017
|
)
|
(2,401
|
)
|
(913
|
)
|
Disposal of UK Gas Distribution
|
—
|
|
5,890
|
|
—
|
|
Other non-cash movements
|
(66
|
)
|
(64
|
)
|
(87
|
)
|
Movement in net debt (net of related derivative financial instruments) in the year
|
(3,728
|
)
|
6,051
|
|
(1,410
|
)
|
Net debt (net of related derivative financial instruments) at start of year
|
(19,274
|
)
|
(25,325
|
)
|
(23,915
|
)
|
Net debt (net of related derivative financial instruments) at end of year
|
(23,002
|
)
|
(19,274
|
)
|
(25,325
|
)
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
Cash, cash equivalents and financial investments
|
3,023
|
|
9,880
|
|
3,125
|
|
Borrowings and bank overdrafts
|
(26,625
|
)
|
(28,638
|
)
|
(28,344
|
)
|
Financing derivatives
1
|
600
|
|
(516
|
)
|
(106
|
)
|
|
(23,002
|
)
|
(19,274
|
)
|
(25,325
|
)
|
1.
|
The financing derivatives balance included in net debt excludes the commodity derivatives and the Further Acquisition Agreement (FAA) derivative (see note 16). Included within the financing derivatives balance is
£12 million
(
2017
:
£18 million
;
2016
:
£(16) million
) of derivative cash flows in relation to capital expenditure. This is included within investing activities and not financing activities in the cash flow statement.
|
2.
|
Excludes
£27 million
(
2017
:
£nil
;
2016
:
£nil
) cash interest from the Quadgas HoldCo Limited shareholder loan included within interest received in the cash flow statement.
|
|
Cash
and cash
equivalents
£m
|
|
Bank
overdrafts
£m
|
|
|
Net cash
and cash
equivalents
£m
|
|
Financial
investments
£m
|
|
Borrowings
£m
|
|
Financing
derivatives
£m
|
|
|
Total
1
£m
|
|
At 1 April 2016
|
127
|
|
(3
|
)
|
|
124
|
|
2,998
|
|
(28,341
|
)
|
(106
|
)
|
|
(25,325
|
)
|
Cash flow
|
1,001
|
|
(17
|
)
|
|
984
|
|
5,624
|
|
(2,196
|
)
|
487
|
|
|
4,899
|
|
Fair value gains and losses and exchange movements
|
16
|
|
—
|
|
|
16
|
|
141
|
|
(1,527
|
)
|
(903
|
)
|
|
(2,273
|
)
|
Interest income/(charges)
2
|
—
|
|
—
|
|
|
—
|
|
53
|
|
(2,221
|
)
|
(233
|
)
|
|
(2,401
|
)
|
Other non-cash movements
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(294
|
)
|
230
|
|
|
(64
|
)
|
Disposal
|
(5
|
)
|
20
|
|
|
15
|
|
(75
|
)
|
5,941
|
|
9
|
|
|
5,890
|
|
At 31 March 2017
|
1,139
|
|
—
|
|
|
1,139
|
|
8,741
|
|
(28,638
|
)
|
(516
|
)
|
|
(19,274
|
)
|
Cash flow
2
|
(807
|
)
|
—
|
|
|
(807
|
)
|
(5,983
|
)
|
2,108
|
|
(61
|
)
|
|
(4,743
|
)
|
Fair value gains and losses and exchange movements
|
(3
|
)
|
—
|
|
|
(3
|
)
|
(149
|
)
|
1,088
|
|
1,162
|
|
|
2,098
|
|
Interest income/(charges)
2
|
—
|
|
—
|
|
|
—
|
|
85
|
|
(1,117
|
)
|
15
|
|
|
(1,017
|
)
|
Other non-cash movements
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(66
|
)
|
—
|
|
|
(66
|
)
|
At 31 March 2018
|
329
|
|
—
|
|
|
329
|
|
2,694
|
|
(26,625
|
)
|
600
|
|
|
(23,002
|
)
|
Balances at 31 March 2018 comprise:
|
|
|
|
|
|
|
|
|
|
|||||||
Non-current assets
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
1,170
|
|
|
1,170
|
|
Current assets
|
329
|
|
—
|
|
|
329
|
|
2,694
|
|
—
|
|
375
|
|
|
3,398
|
|
Current liabilities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(4,447
|
)
|
(620
|
)
|
|
(5,067
|
)
|
Non-current liabilities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(22,178
|
)
|
(325
|
)
|
|
(22,503
|
)
|
|
329
|
|
—
|
|
|
329
|
|
2,694
|
|
(26,625
|
)
|
600
|
|
|
(23,002
|
)
|
1.
|
Includes accrued interest at
31 March 2018
of
£197 million
(
2017
:
£210 million
;
2016
:
£243 million
).
|
2.
|
An exceptional income of
£3 million
(
2017
:
£1,313 million
expense;
2016
:
£nil
) is included in net interest charge on the components of net debt and an exceptional cash outflow of
£231 million
(
2017
:
£1,052 million
;
2016
:
£nil
) is included in cash flow on the components of net debt.
|
Commitments are those amounts that we are contractually required to pay in the future as long as the other party meets its obligations. These commitments primarily relate to operating lease rentals, energy purchase agreements and contracts for the purchase of assets which, in many cases, extend over a long period of time. We also disclose any contingencies, which include guarantees that companies have given, where we pledge assets against current obligations that will remain for a specific period.
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Future capital expenditure
|
|
|
||
Contracted for but not provided
1
|
1,843
|
|
1,913
|
|
Operating lease commitments
|
|
|
||
Less than 1 year
|
68
|
|
95
|
|
In 1 to 2 years
|
44
|
|
82
|
|
In 2 to 3 years
|
40
|
|
58
|
|
In 3 to 4 years
|
37
|
|
56
|
|
In 4 to 5 years
|
35
|
|
54
|
|
More than 5 years
|
219
|
|
274
|
|
|
443
|
|
619
|
|
Energy purchase commitments
2
|
|
|
||
Less than 1 year
|
1,237
|
|
1,325
|
|
In 1 to 2 years
|
700
|
|
744
|
|
In 2 to 3 years
|
563
|
|
587
|
|
In 3 to 4 years
|
449
|
|
507
|
|
In 4 to 5 years
|
410
|
|
436
|
|
More than 5 years
|
1,969
|
|
2,100
|
|
|
5,328
|
|
5,699
|
|
Guarantees
|
|
|
||
Guarantee of sublease for US property (expires 2040)
|
178
|
|
225
|
|
Guarantees of certain obligations of Grain LNG Import Terminal (expire up to 2028)
|
46
|
|
100
|
|
Guarantees of certain obligations for construction of HVDC West Coast Link (expires 2018)
|
213
|
|
281
|
|
Guarantees of certain obligations of Nemo Link Limited (various expiry dates)
|
63
|
|
140
|
|
Guarantees of certain obligations of National Grid North Sea Link Limited (various expiry dates)
3
|
1,009
|
|
1,059
|
|
Guarantees of certain obligations of St William Homes LLP (various expiry dates)
4
|
98
|
|
147
|
|
Guarantees of certain obligations for construction of IFA 2 SAS (expected expiry 2021)
3
|
729
|
|
354
|
|
Other guarantees and letters of credit (various expiry dates)
|
333
|
|
474
|
|
|
2,669
|
|
2,780
|
|
1.
|
Following a review in the year, the basis on which we disclose capital commitments has been refined.
|
2.
|
Energy purchase commitments relate to contractual commitments to purchase electricity or gas that are used to satisfy physical delivery requirements to our customers or for energy that we use ourselves (i.e. normal purchase, sale or usage) and hence are accounted for as ordinary purchase contracts. Details of commodity contract derivatives that do not meet the normal purchase, sale or usage criteria, and hence are accounted for as derivative contracts, are shown in note 16(b).
|
3.
|
Included within total guarantees are guarantees to both joint ventures and EPC contractors regarding the construction of interconnectors of
£739 million
(2017:
£555 million
).
|
4.
|
Includes guarantees to related parties.
|
Related parties include joint ventures, associates, investments and key management personnel.
|
|
2018
|
|
2017
|
|
2016
|
|
|
£m
|
|
£m
|
|
£m
|
|
Sales: Goods and services supplied to a pension plan
|
3
|
|
3
|
|
3
|
|
Sales: Goods and services supplied to joint ventures
1
|
14
|
|
78
|
|
9
|
|
Sales: Goods and services supplied to associates
2
|
220
|
|
—
|
|
4
|
|
Purchases: Goods and services received from joint ventures
3
|
135
|
|
168
|
|
183
|
|
Purchases: Goods and services received from associates
3
|
160
|
|
169
|
|
83
|
|
|
|
|
|
|||
Receivable from joint ventures
4
|
160
|
|
64
|
|
7
|
|
Receivable from associates
4
|
376
|
|
457
|
|
—
|
|
Payable to joint ventures
5
|
—
|
|
84
|
|
96
|
|
Payable to associates
|
17
|
|
27
|
|
7
|
|
Interest income from joint ventures
|
4
|
|
—
|
|
—
|
|
Interest income from associates
|
27
|
|
—
|
|
—
|
|
|
|
|
|
|||
Dividends received from joint ventures
6
|
43
|
|
75
|
|
48
|
|
Dividends received from associates
7
|
170
|
|
24
|
|
24
|
|
1.
|
In 2018
£5 million
(2017:
£68 million
) of property sites were sold to joint venture St William Homes LLP.
|
2.
|
Sales in the year relate to transactions with Quadgas HoldCo Limited. Within this is other income of
£54 million
relating to a Transitional Service Agreement following the sale of the UK Gas Distribution business to Quadgas HoldCo Limited.
|
3.
|
During the year the Group received goods and services from a number of US associates, both for the transportation of gas and for pipeline services in the US. Additionally, goods and services were received from UK joint ventures for the construction of a transmission link in the UK.
|
4.
|
Amounts receivable from associates includes a loan receivable balance from Quadgas HoldCo Limited of
£352 million
(2017:
£434 million
) and a loan receivable balance of
£130 million
(2017:
£61 million
) from Nemo Link Limited (a joint venture).
|
5.
|
In previous years the amounts payable to joint ventures include deposits received for National Grid property sites from St William Homes LLP which have been settled during the year.
|
6.
|
Dividends in respect of joint ventures were received from BritNed Development Limited.
|
7.
|
Within dividends received from associates in 2018,
£144 million
(2017:
£nil
) was from Quadgas HoldCo Limited.
|
Our activities expose us to a variety of financial risks including currency risk, interest rate risk, commodity price risk, credit risk, capital risk and liquidity risk. Our risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential volatility of financial performance from these risks. We use financial instruments, including derivative financial instruments, to manage risks of this type.
This note describes our approach to managing risk, including an analysis of assets and liabilities by currency type and an analysis of interest rate category for our net debt. We are required by accounting standards to also include a number of specific disclosures (such as a maturity analysis of contractual undiscounted cash flows) and have included these requirements below.
|
•
|
credit risk;
|
•
|
liquidity risk;
|
•
|
interest rate risk;
|
•
|
currency risk; and
|
•
|
capital risk.
|
|
Maximum limit
£m |
|
Long-term limit
£m |
|
Triple ‘A’ G7 sovereign entities (AAA)
|
1,853
|
|
927
|
|
Triple ‘A’ vehicles (AAA)
|
500
|
|
—
|
|
Triple ‘A’ range institutions and non G7 sovereign entities (AAA)
|
1,011
|
|
506
|
|
Double ‘A+’ G7 sovereign entities (AA+)
|
1,685
|
|
843
|
|
Double ‘A’ range institutions (AA)
|
674 to 843
|
|
337 to 421
|
|
Single ‘A’ range institutions (A)
|
236 to 337
|
|
118 to 169
|
|
|
|
|
|
Related amounts
available to be offset but not offset in statement of financial position |
|
|||||||
At 31 March 2018
|
Gross
carrying amounts
£m
|
|
Gross
amounts offset
£m
|
|
Net amount
presented in statement of financial position
£m
|
|
Financial instruments
£m
|
|
Cash
collateral received/ pledged
£m
|
|
Net amount
£m
|
|
Assets
|
|
|
|
|
|
|
||||||
Financing derivatives
|
1,545
|
|
—
|
|
1,545
|
|
(523
|
)
|
(772
|
)
|
250
|
|
Commodity contract derivatives
|
69
|
|
—
|
|
69
|
|
(16
|
)
|
—
|
|
53
|
|
Further Acquisition Agreement derivative
1
|
110
|
|
—
|
|
110
|
|
—
|
|
—
|
|
110
|
|
|
1,724
|
|
—
|
|
1,724
|
|
(539
|
)
|
(772
|
)
|
413
|
|
Liabilities
|
|
|
|
|
|
|
||||||
Financing derivatives
|
(945
|
)
|
—
|
|
(945
|
)
|
523
|
|
326
|
|
(96
|
)
|
Commodity contract derivatives
|
(116
|
)
|
—
|
|
(116
|
)
|
16
|
|
7
|
|
(93
|
)
|
|
(1,061
|
)
|
—
|
|
(1,061
|
)
|
539
|
|
333
|
|
(189
|
)
|
|
|
|
|
|
|
|
||||||
|
663
|
|
—
|
|
663
|
|
—
|
|
(439
|
)
|
224
|
|
1.
|
The Group held a put/call option as at 31 March 2017. The fair value was £nil.
|
|
|
|
|
Related amounts
available to be offset but not offset in statement of financial position |
|
|||||||
At 31 March 2017
|
Gross
carrying amounts
£m
|
|
Gross
amounts offset
£m
|
|
Net amount
presented in statement of financial position
£m
|
|
Financial instruments
£m
|
|
Cash
collateral received/ pledged
£m
|
|
Net amount
£m
|
|
Assets
|
|
|
|
|
|
|
||||||
Financing derivatives
|
1,707
|
|
—
|
|
1,707
|
|
(718
|
)
|
(692
|
)
|
297
|
|
Commodity contract derivatives
|
106
|
|
—
|
|
106
|
|
(25
|
)
|
—
|
|
81
|
|
|
1,813
|
|
—
|
|
1,813
|
|
(743
|
)
|
(692
|
)
|
378
|
|
Liabilities
|
|
|
|
|
|
|
||||||
Financing derivatives
|
(2,223
|
)
|
—
|
|
(2,223
|
)
|
718
|
|
1,230
|
|
(275
|
)
|
Commodity contract derivatives
|
(170
|
)
|
—
|
|
(170
|
)
|
25
|
|
18
|
|
(127
|
)
|
|
(2,393
|
)
|
—
|
|
(2,393
|
)
|
743
|
|
1,248
|
|
(402
|
)
|
|
|
|
|
|
|
|
||||||
|
(580
|
)
|
—
|
|
(580
|
)
|
—
|
|
556
|
|
(24
|
)
|
At 31 March 2018
|
Less than
1 year
£m
|
|
1 to 2
years
£m
|
|
2 to 3
years
£m
|
|
More than
3 years
£m
|
|
Total
£m
|
|
Non-derivative financial liabilities
|
|
|
|
|
|
|||||
Borrowings, excluding finance lease liabilities
|
(4,099
|
)
|
(1,642
|
)
|
(2,325
|
)
|
(18,023
|
)
|
(26,089
|
)
|
Interest payments on borrowings
1
|
(730
|
)
|
(692
|
)
|
(629
|
)
|
(12,897
|
)
|
(14,948
|
)
|
Finance lease liabilities
|
(60
|
)
|
(60
|
)
|
(45
|
)
|
(148
|
)
|
(313
|
)
|
Other non interest-bearing liabilities
|
(2,840
|
)
|
(359
|
)
|
—
|
|
—
|
|
(3,199
|
)
|
Derivative financial liabilities
|
|
|
|
|
|
|||||
Derivative contracts – receipts
|
1,069
|
|
601
|
|
130
|
|
250
|
|
2,050
|
|
Derivative contracts – payments
|
(890
|
)
|
(263
|
)
|
(188
|
)
|
(529
|
)
|
(1,870
|
)
|
Commodity contract derivatives
|
(80
|
)
|
(33
|
)
|
(26
|
)
|
1
|
|
(138
|
)
|
|
(7,630
|
)
|
(2,448
|
)
|
(3,083
|
)
|
(31,346
|
)
|
(44,507
|
)
|
At 31 March 2017
|
Less than
1 year
£m
|
|
1 to 2
years
£m
|
|
2 to 3
years
£m
|
|
More than
3 years
£m
|
|
Total
£m
|
|
Non-derivative financial liabilities
|
|
|
|
|
|
|||||
Borrowings, excluding finance lease liabilities
|
(5,142
|
)
|
(1,864
|
)
|
(1,750
|
)
|
(19,245
|
)
|
(28,001
|
)
|
Interest payments on borrowings
1
|
(767
|
)
|
(707
|
)
|
(670
|
)
|
(12,975
|
)
|
(15,119
|
)
|
Finance lease liabilities
|
(66
|
)
|
(58
|
)
|
(61
|
)
|
(183
|
)
|
(368
|
)
|
Other non interest-bearing liabilities
|
(2,989
|
)
|
(260
|
)
|
—
|
|
—
|
|
(3,249
|
)
|
Derivative financial liabilities
|
|
|
|
|
|
|||||
Derivative contracts – receipts
|
571
|
|
961
|
|
572
|
|
234
|
|
2,338
|
|
Derivative contracts – payments
|
(1,551
|
)
|
(959
|
)
|
(304
|
)
|
(610
|
)
|
(3,424
|
)
|
Commodity contract derivatives
|
(15
|
)
|
(18
|
)
|
(8
|
)
|
—
|
|
(41
|
)
|
|
(9,959
|
)
|
(2,905
|
)
|
(2,221
|
)
|
(32,779
|
)
|
(47,864
|
)
|
1.
|
The interest on borrowings is calculated based on borrowings held at 31 March without taking account of future issues. Floating rate interest is estimated using a forward interest rate curve as at 31 March. Payments are included on the basis of the earliest date on which the Company can be required to settle.
|
|
2018
|
|
2017
|
||||||||||||||||||
|
Fixed rate
£m
|
|
Floating
rate
£m
|
|
Inflation
linked
£m
|
|
Other
1
£m
|
|
Total
£m
|
|
|
Fixed rate
£m
|
|
Floating
rate
£m
|
|
Inflation
linked
£m
|
|
Other
1
£m
|
|
Total
£m
|
|
Cash and cash equivalents
|
—
|
|
302
|
|
—
|
|
27
|
|
329
|
|
|
940
|
|
199
|
|
—
|
|
—
|
|
1,139
|
|
Financial investments
|
31
|
|
2,625
|
|
—
|
|
38
|
|
2,694
|
|
|
44
|
|
8,691
|
|
—
|
|
6
|
|
8,741
|
|
Borrowings
|
(16,144
|
)
|
(3,191
|
)
|
(7,290
|
)
|
—
|
|
(26,625
|
)
|
|
(17,681
|
)
|
(3,917
|
)
|
(7,040
|
)
|
—
|
|
(28,638
|
)
|
Pre-derivative position
|
(16,113
|
)
|
(264
|
)
|
(7,290
|
)
|
65
|
|
(23,602
|
)
|
|
(16,697
|
)
|
4,973
|
|
(7,040
|
)
|
6
|
|
(18,758
|
)
|
Derivative effect
|
1,735
|
|
(1,237
|
)
|
102
|
|
—
|
|
600
|
|
|
1,424
|
|
(1,785
|
)
|
(155
|
)
|
—
|
|
(516
|
)
|
Net debt position
|
(14,378
|
)
|
(1,501
|
)
|
(7,188
|
)
|
65
|
|
(23,002
|
)
|
|
(15,273
|
)
|
3,188
|
|
(7,195
|
)
|
6
|
|
(19,274
|
)
|
1.
|
Represents financial instruments which are not directly affected by interest rate risk, such as investments in equity or other similar financial instruments.
|
|
2018
|
|
2017
|
||||||||||||||||||
|
Sterling
£m
|
|
Euro
£m
|
|
Dollar
£m
|
|
Other
£m
|
|
Total
£m
|
|
|
Sterling
£m
|
|
Euro
£m
|
|
Dollar
£m
|
|
Other
£m
|
|
Total
£m
|
|
Cash and cash equivalents
|
294
|
|
2
|
|
33
|
|
—
|
|
329
|
|
|
1,110
|
|
—
|
|
29
|
|
—
|
|
1,139
|
|
Financial investments
|
1,471
|
|
69
|
|
1,125
|
|
29
|
|
2,694
|
|
|
6,824
|
|
98
|
|
1,753
|
|
66
|
|
8,741
|
|
Borrowings
|
(10,912
|
)
|
(3,794
|
)
|
(11,068
|
)
|
(851
|
)
|
(26,625
|
)
|
|
(11,099
|
)
|
(5,373
|
)
|
(10,729
|
)
|
(1,437
|
)
|
(28,638
|
)
|
Pre-derivative position
|
(9,147
|
)
|
(3,723
|
)
|
(9,910
|
)
|
(822
|
)
|
(23,602
|
)
|
|
(3,165
|
)
|
(5,275
|
)
|
(8,947
|
)
|
(1,371
|
)
|
(18,758
|
)
|
Derivative effect
|
3,748
|
|
3,793
|
|
(7,992
|
)
|
1,051
|
|
600
|
|
|
2,310
|
|
6,241
|
|
(10,708
|
)
|
1,641
|
|
(516
|
)
|
Net debt position
|
(5,399
|
)
|
70
|
|
(17,902
|
)
|
229
|
|
(23,002
|
)
|
|
(855
|
)
|
966
|
|
(19,655
|
)
|
270
|
|
(19,274
|
)
|
|
2018
|
|
2017
|
||||||||||||||||||
|
Sterling
£m
|
|
Euro
£m
|
|
Dollar
£m
|
|
Other
£m
|
|
Total
£m
|
|
|
Sterling
£m
|
|
Euro
£m
|
|
Dollar
£m
|
|
Other
£m
|
|
Total
£m
|
|
Trade and other receivables
|
253
|
|
—
|
|
1,528
|
|
—
|
|
1,781
|
|
|
83
|
|
—
|
|
1,660
|
|
—
|
|
1,743
|
|
Trade and other payables
|
(1,124
|
)
|
—
|
|
(1,793
|
)
|
—
|
|
(2,917
|
)
|
|
(1,209
|
)
|
—
|
|
(1,795
|
)
|
—
|
|
(3,004
|
)
|
Other non-current liabilities
|
(144
|
)
|
—
|
|
(254
|
)
|
—
|
|
(398
|
)
|
|
(100
|
)
|
—
|
|
(315
|
)
|
—
|
|
(415
|
)
|
•
|
dividends must be approved in advance by the relevant US state regulatory commission;
|
•
|
the subsidiary must have at least two recognised rating agency credit ratings of at least investment grade;
|
•
|
dividends must be limited to cumulative retained earnings, including pre-acquisition retained earnings;
|
•
|
National Grid plc must maintain an investment grade credit rating and if that rating is the lowest investment grade bond rating it cannot have a negative watch/review for downgrade notice by a credit rating agency;
|
•
|
the subsidiary must not carry on any activities other than those permitted by the licences;
|
•
|
the subsidiary must not create any cross-default obligations or give or receive any intra-group cross-subsidies; and
|
•
|
the percentage of equity compared with total capital of the subsidiary must remain above certain levels.
|
|
2018
|
|
2017
|
||||||||||||||
|
Level 1
£m
|
|
Level 2
£m
|
|
Level 3
£m
|
|
Total
£m
|
|
|
Level 1
£m
|
|
Level 2
£m
|
|
Level 3
£m
|
|
Total
£m
|
|
Assets
|
|
|
|
|
|
|
|
|
|
||||||||
Investments – available-for-sale
|
2,406
|
|
310
|
|
5
|
|
2,721
|
|
|
7,717
|
|
315
|
|
5
|
|
8,037
|
|
Investments – joint ventures and associates
|
—
|
|
—
|
|
79
|
|
79
|
|
|
—
|
|
—
|
|
41
|
|
41
|
|
Financing derivatives
|
—
|
|
1,544
|
|
1
|
|
1,545
|
|
|
—
|
|
1,692
|
|
15
|
|
1,707
|
|
Commodity contract derivatives
|
—
|
|
8
|
|
61
|
|
69
|
|
|
—
|
|
22
|
|
84
|
|
106
|
|
Further Acquisition Agreement derivative
|
—
|
|
—
|
|
110
|
|
110
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2,406
|
|
1,862
|
|
256
|
|
4,524
|
|
|
7,717
|
|
2,029
|
|
145
|
|
9,891
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||
Financing derivatives
|
—
|
|
(725
|
)
|
(220
|
)
|
(945
|
)
|
|
—
|
|
(1,743
|
)
|
(480
|
)
|
(2,223
|
)
|
Commodity contract derivatives
|
—
|
|
(54
|
)
|
(62
|
)
|
(116
|
)
|
|
—
|
|
(70
|
)
|
(100
|
)
|
(170
|
)
|
|
—
|
|
(779
|
)
|
(282
|
)
|
(1,061
|
)
|
|
—
|
|
(1,813
|
)
|
(580
|
)
|
(2,393
|
)
|
|
2,406
|
|
1,083
|
|
(26
|
)
|
3,463
|
|
|
7,717
|
|
216
|
|
(435
|
)
|
7,498
|
|
Level 1:
|
Financial instruments with quoted prices for identical instruments in active markets.
|
|
|
Level 2:
|
Financial instruments with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets, and financial instruments valued using models where all significant inputs are based directly or indirectly on observable market data.
|
|
|
Level 3:
|
Financial instruments valued using valuation techniques where one or more significant inputs are based on unobservable market data.
|
|
Financing derivatives/
Further Acquisition Agreement derivative
|
|
Commodity contract
derivatives
|
|
Investments in associates and available-for-sale investments
|
|
Total
|
||||||||||||
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
At 1 April
|
(465
|
)
|
(196
|
)
|
|
(16
|
)
|
(27
|
)
|
|
46
|
|
—
|
|
|
(435
|
)
|
(223
|
)
|
Net gains/(losses) for the year
1,2
|
125
|
|
(35
|
)
|
|
8
|
|
(2
|
)
|
|
—
|
|
—
|
|
|
133
|
|
(37
|
)
|
Purchases
|
—
|
|
—
|
|
|
27
|
|
15
|
|
|
41
|
|
46
|
|
|
68
|
|
61
|
|
Settlements
|
231
|
|
—
|
|
|
(20
|
)
|
(2
|
)
|
|
(3
|
)
|
—
|
|
|
208
|
|
(2
|
)
|
Reclassification into level 3
|
—
|
|
(234
|
)
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
(234
|
)
|
At 31 March
|
(109
|
)
|
(465
|
)
|
|
(1
|
)
|
(16
|
)
|
|
84
|
|
46
|
|
|
(26
|
)
|
(435
|
)
|
1.
|
Gain of
£125 million
(
2017
:
£35 million
loss) is attributable to derivative financial instruments held at the end of the reporting period and has been recognised in finance costs in the income statement.
|
2.
|
Gain of
£35 million
(
2017
:
£21 million
loss) is attributable to commodity contract derivative financial instruments held at the end of the reporting period.
|
|
Financing derivatives
|
|
Commodity contract derivatives
|
||||||
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
10% increase in commodity prices
1
|
—
|
|
—
|
|
|
(1
|
)
|
1
|
|
10% decrease in commodity prices
1
|
—
|
|
—
|
|
|
3
|
|
—
|
|
Volume forecast uplift
2
|
—
|
|
—
|
|
|
—
|
|
(1
|
)
|
Volume forecast reduction
2
|
—
|
|
—
|
|
|
—
|
|
1
|
|
+10% market area price change
|
—
|
|
—
|
|
|
(6
|
)
|
(13
|
)
|
-10% market area price change
|
—
|
|
—
|
|
|
5
|
|
9
|
|
+20 basis points change in Limited Price Inflation (LPI) market curve
3
|
(84
|
)
|
(93
|
)
|
|
—
|
|
—
|
|
-20 basis points change in LPI market curve
3
|
82
|
|
88
|
|
|
—
|
|
—
|
|
1.
|
Level 3 commodity price sensitivity is included within the sensitivity analysis disclosed in note 33.
|
2.
|
Volumes were flexed using maximum and minimum historical averages, or by >
10%
where historical averages were not available.
|
3.
|
A reasonably possible change in assumption of other level 3 derivative financial instruments is unlikely to result in a material change in fair values.
|
To support our long-term liquidity requirements and provide backup to commercial paper and other borrowings, we agree loan facilities with financial institutions over and above the value of borrowings that may be required. These facilities have never been drawn, and our undrawn amounts are listed below.
|
While we present consolidated results in these financial statements as if we were one company, our legal structure is such that there are a number of different operating and holding companies that contribute to the overall result. This structure has evolved through acquisitions as well as regulatory requirements to have certain activities within separate legal entities.
|
1.
|
Registered office: Shire Hall, PO Box 9, Warwick CV34 4RL, UK
|
*
|
Change of name effective from 2 May 2017
|
1.
|
Registered office: Corporation Service Company, 84 State Street, Boston MA 02109, Suffolk County, USA.
|
2.
|
Registered office: Corporation Service Company, 10 Ferry Street, Suite 313, Concord NH 03301, Merrimack County, USA.
|
3.
|
Registered office: Corporation Service Company, 80 State Street, Albany NY 12207-2543, Albany County, USA.
|
4.
|
Registered office: Corporation Service Company, 222 Jefferson Boulevard, Suite 200, Warwick RI 02888, Kent County, USA.
|
5.
|
Registered office: Heritage Court, 41 Athol Street, Douglas, IM99 1HN, Isle of Man, UK.
|
*
|
In liquidation.
|
1.
|
Registered office: Friars House, Manor House Drive, Coventry CV1 2TE, UK.
|
2.
|
Registered office: Berkeley House, 19 Portsmouth Road, Cobham, Surrey KT11 1JG, UK.
|
3.
|
Registered office: Corporation Trust Company, 1209 Orange, Wilmington DE 19808, New Castle County, USA.
|
4.
|
Registered office: Carla Pizzella, 362 Injun Hollow Road, East Hampton CT 06424, USA.
|
5.
|
Registered office: 507 Plum Street, PO Box 5001, Syracuse NY 13250, USA.
|
6.
|
Registered office: Harvard Business Services, Inc., 16192 Coastal Highway, Lewes DE 19958, Sussex County, USA.
|
7.
|
Registered office: De Maximus Inc., 135 Beaver Street, 4th Floor, Waltham MA 02452, USA.
|
8.
|
Registered office: Joseph D Fay, 321 Old Ferry Road, Wiscasset ME 04578, USA.
|
9.
|
Registered office: Corporation Service Company, 80 State Street, Albany NY 12207, USA.
|
10.
|
Registered office: Brian Smith, 49 Yankee Road, Rowe MA 01367, USA.
|
*
|
National Grid Interconnector Holdings Limited owns 284,500,000 €0.20 C Ordinary shares and one £1.00 Ordinary A share.
|
**
|
National Grid Gas plc owns all £1.00 A Ordinary shares.
|
***
|
National Grid Green Homes Inc owns 1,000 Class A Membership Interests.
|
†
|
National Grid Electricity Transmission plc owns 50 £1.00 A Ordinary shares.
|
‡
|
In administration.
|
In order to give a clearer picture of the impact on our results or financial position of potential changes in significant estimates and assumptions, the following sensitivities are presented. These sensitivities are hypothetical, as they are based on assumptions and conditions prevailing at the year-end, and should be used with caution. The effects provided are not necessarily indicative of the actual effects that would be experienced because our actual exposures are constantly changing.
|
|
2018
|
|
2017
|
||||||
|
Income
statement
£m
|
|
Net
assets
£m
|
|
|
Income
statement
£m
|
|
Net
assets
£m
|
|
Pensions and other post-retirement benefits
1
(pre-tax):
|
|
|
|
|
|
||||
UK discount rate change of 0.5%
2
|
8
|
|
1,075
|
|
|
9
|
|
1,305
|
|
US discount rate change of 0.5%
2
|
15
|
|
623
|
|
|
17
|
|
669
|
|
UK RPI rate change of 0.5%
3
|
5
|
|
965
|
|
|
8
|
|
1,114
|
|
UK long-term rate of increase in salaries change of 0.5%
4
|
—
|
|
61
|
|
|
2
|
|
80
|
|
US long-term rate of increase in salaries change of 0.5%
|
3
|
|
44
|
|
|
3
|
|
51
|
|
UK change of one year to life expectancy at age 65
|
2
|
|
588
|
|
|
2
|
|
673
|
|
US change of one year to life expectancy at age 65
|
4
|
|
359
|
|
|
4
|
|
365
|
|
Assumed US healthcare cost trend rates change of 1%
|
31
|
|
448
|
|
|
37
|
|
510
|
|
|
|
|
|
|
|
||||
Environmental provision:
|
|
|
|
|
|
||||
10% change in estimated future cash flows
|
154
|
|
154
|
|
|
175
|
|
175
|
|
0.5% change in discount rate
|
56
|
|
56
|
|
|
67
|
|
67
|
|
1.
|
The changes shown are a change in the annual pension or other post-retirement benefit service charge and change in the defined benefit obligations.
|
2.
|
A change in the discount rate is likely to occur as a result of changes in bond yields and as such would be expected to be offset to a significant degree by a change in the value of the bond assets held by the plans.
|
3.
|
The projected impact resulting from a change in RPI reflects the underlying effect on pensions in payment, pensions in deferment and resultant increases in salary assumptions.
|
4.
|
This change has been applied to both the pre 1 April 2014 and post 1 April 2014 rate of increase in salary assumption.
|
•
|
the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives portfolio, and the proportion of financial instruments in foreign currencies are all constant and on the basis of the hedge designations in place at
31 March 2018
and
2017
respectively;
|
•
|
the statement of financial position sensitivity to interest rates relates only to derivative financial instruments and available-for-sale investments, as debt and other deposits are carried at amortised cost and so their carrying value does not change as interest rates move;
|
•
|
the sensitivity of accrued interest to movements in interest rates is calculated on net floating rate exposures on debt, deposits and derivative instruments;
|
•
|
changes in the carrying value of derivatives from movements in interest rates of designated cash flow hedges are assumed to be recorded fully within equity; and
|
•
|
changes in the carrying value of derivative financial instruments designated as net investment hedges from movements in interest rates are recorded in the income statement as they are designated using the spot rather than the forward translation method. The impact of movements in the dollar to sterling exchange rate are recorded directly in equity.
|
|
2018
|
|
2017
|
||||||
|
Income
statement
£m
|
|
Other equity
reserves
£m
|
|
|
Income
statement
£m
|
|
Other equity
reserves
£m
|
|
Financial risk (post-tax)
1
:
|
|
|
|
|
|
||||
UK RPI change of 0.5%
2
|
30
|
|
—
|
|
|
28
|
|
—
|
|
UK interest rates change of 0.5%
|
43
|
|
26
|
|
|
64
|
|
35
|
|
US interest rates change of 0.5%
|
39
|
|
17
|
|
|
61
|
|
22
|
|
US dollar exchange rate change of 10%
3
|
48
|
|
479
|
|
|
46
|
|
604
|
|
1.
|
Excludes sensitivities to the Further Acquisition Agreement derivative. Further details on sensitivities are provided in note 30(f).
|
2.
|
Excludes sensitivities to LPI curve. Further details on sensitivities are provided in note 30(f).
|
3.
|
The other equity reserves impact does not reflect the exchange translation in our US subsidiaries’ net assets. It is estimated this would change by
£1,040 million
(
2017
:
£988 million
) in the opposite direction if the dollar exchange rate changed by
10%
.
|
|
2018
|
|
2017
|
||||||
|
Income
statement
£m
|
|
Net
assets
£m
|
|
|
Income
statement
£m
|
|
Net
assets
£m
|
|
Commodity risk
1
(post-tax):
|
|
|
|
|
|
||||
10% increase in commodity prices
|
23
|
|
23
|
|
|
28
|
|
28
|
|
10% decrease in commodity prices
|
(23
|
)
|
(23
|
)
|
|
(29
|
)
|
(29
|
)
|
|
|
|
|
|
|
||||
Assets and liabilities carried at fair value (pre-tax)
2
:
|
|
|
|
|
|
||||
10% fair value change in derivative financial instruments
3
|
60
|
|
60
|
|
|
(52
|
)
|
(52
|
)
|
10% fair value change in commodity contract derivative liabilities
|
(5
|
)
|
(5
|
)
|
|
(6
|
)
|
(6
|
)
|
1.
|
Represents potential impact on fair values of commodity contract derivatives only.
|
2.
|
Excludes sensitivities to the Further Acquisition Agreement derivative. Further details on sensitivities are provided in note 30(f).
|
3.
|
The effect of a 10% change in fair value assumes no hedge accounting.
|
We have three debt issuances (including preferred shares) that are listed on a US national securities exchange and are guaranteed by other companies in the Group. These guarantors commit to honour any liabilities should the company issuing the debt have any financial difficulties. In order to provide debt holders with information on the financial stability of the companies providing the guarantees, we are required to disclose individual financial information for these companies. We have chosen to include this information in the Group financial statements rather than submitting separate stand-alone financial statements.
|
|
Parent
guarantor
|
|
Issuer of notes
|
|
Subsidiary
guarantor
|
|
|
|
|
|||||||||
|
National
Grid plc
£m
|
|
|
Niagara
Mohawk
Power
Corporation
£m
|
|
British
Transco
Finance Inc.
£m
|
|
|
National
Grid Gas
plc
£m
|
|
|
Other
subsidiaries
£m
|
|
Consolidation
adjustments
£m
|
|
National
Grid
consolidated
£m
|
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
—
|
|
|
2,416
|
|
—
|
|
|
1,430
|
|
|
11,495
|
|
(91
|
)
|
15,250
|
|
|
Operating costs:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortisation
|
—
|
|
|
(190
|
)
|
—
|
|
|
(245
|
)
|
|
(1,095
|
)
|
—
|
|
(1,530
|
)
|
|
Payroll costs
|
—
|
|
|
(318
|
)
|
—
|
|
|
(122
|
)
|
|
(1,208
|
)
|
—
|
|
(1,648
|
)
|
|
Purchases of electricity
|
—
|
|
|
(537
|
)
|
—
|
|
|
—
|
|
|
(748
|
)
|
—
|
|
(1,285
|
)
|
|
Purchases of gas
|
—
|
|
|
(166
|
)
|
—
|
|
|
—
|
|
|
(1,377
|
)
|
—
|
|
(1,543
|
)
|
|
Rates and property tax
|
—
|
|
|
(183
|
)
|
—
|
|
|
(94
|
)
|
|
(780
|
)
|
—
|
|
(1,057
|
)
|
|
Balancing Service Incentive Scheme
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(1,012
|
)
|
—
|
|
(1,012
|
)
|
|
Payments to other UK network owners
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(1,043
|
)
|
—
|
|
(1,043
|
)
|
|
Other operating costs
|
—
|
|
|
(397
|
)
|
—
|
|
|
(331
|
)
|
|
(2,002
|
)
|
91
|
|
(2,639
|
)
|
|
|
—
|
|
|
(1,791
|
)
|
—
|
|
|
(792
|
)
|
|
(9,265
|
)
|
91
|
|
(11,757
|
)
|
|
Total operating profit
|
—
|
|
|
625
|
|
—
|
|
|
638
|
|
|
2,230
|
|
—
|
|
3,493
|
|
|
Net finance income/(costs)
|
889
|
|
|
(100
|
)
|
—
|
|
|
(174
|
)
|
|
(1,360
|
)
|
—
|
|
(745
|
)
|
|
Dividends receivable
|
950
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
(950
|
)
|
—
|
|
|
Interest in equity accounted affiliates
|
1,672
|
|
|
—
|
|
—
|
|
|
8
|
|
|
(40
|
)
|
(1,680
|
)
|
(40
|
)
|
|
Profit before tax
|
3,511
|
|
|
525
|
|
—
|
|
|
472
|
|
|
830
|
|
(2,630
|
)
|
2,708
|
|
|
Tax
|
40
|
|
|
321
|
|
—
|
|
|
(103
|
)
|
|
626
|
|
—
|
|
884
|
|
|
Profit after tax from discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
17
|
|
|
(58
|
)
|
—
|
|
(41
|
)
|
|
Profit for the year
|
3,551
|
|
|
846
|
|
—
|
|
|
386
|
|
|
1,398
|
|
(2,630
|
)
|
3,551
|
|
|
Amounts recognised in other comprehensive income from continuing operations
2
|
371
|
|
|
1
|
|
—
|
|
|
272
|
|
|
604
|
|
(877
|
)
|
371
|
|
|
Total comprehensive income for the year
|
3,922
|
|
|
847
|
|
—
|
|
|
658
|
|
|
2,002
|
|
(3,507
|
)
|
3,922
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity shareholders
|
3,922
|
|
|
847
|
|
—
|
|
|
658
|
|
|
2,002
|
|
(3,507
|
)
|
3,922
|
|
|
Non-controlling interests
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
|
3,922
|
|
|
847
|
|
—
|
|
|
658
|
|
|
2,002
|
|
(3,507
|
)
|
3,922
|
|
|
Parent
guarantor
|
|
Issuer of notes
|
|
Subsidiary
guarantor
|
|
|
|
|
|||||||||
|
National
Grid plc
£m
|
|
|
Niagara
Mohawk
Power
Corporation
£m
|
|
British
Transco
Finance Inc.
£m
|
|
|
National
Grid Gas
plc
£m
|
|
|
Other
subsidiaries
£m
|
|
Consolidation
adjustments
£m
|
|
National
Grid
consolidated
£m
|
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
—
|
|
|
2,388
|
|
—
|
|
|
1,376
|
|
|
11,435
|
|
(164
|
)
|
15,035
|
|
|
Operating costs:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortisation
|
—
|
|
|
(193
|
)
|
—
|
|
|
(256
|
)
|
|
(1,032
|
)
|
—
|
|
(1,481
|
)
|
|
Payroll costs
|
—
|
|
|
(326
|
)
|
—
|
|
|
(114
|
)
|
|
(1,138
|
)
|
—
|
|
(1,578
|
)
|
|
Purchases of electricity
|
—
|
|
|
(511
|
)
|
—
|
|
|
—
|
|
|
(586
|
)
|
—
|
|
(1,097
|
)
|
|
Purchases of gas
|
—
|
|
|
(140
|
)
|
—
|
|
|
(67
|
)
|
|
(1,012
|
)
|
—
|
|
(1,219
|
)
|
|
Rates and property tax
|
—
|
|
|
(188
|
)
|
—
|
|
|
(101
|
)
|
|
(753
|
)
|
—
|
|
(1,042
|
)
|
|
Balancing Service Incentive Scheme
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(1,120
|
)
|
—
|
|
(1,120
|
)
|
|
Payments to other UK network owners
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(1,008
|
)
|
—
|
|
(1,008
|
)
|
|
Other operating costs
|
—
|
|
|
(435
|
)
|
—
|
|
|
(394
|
)
|
|
(2,617
|
)
|
164
|
|
(3,282
|
)
|
|
|
—
|
|
|
(1,793
|
)
|
—
|
|
|
(932
|
)
|
|
(9,266
|
)
|
164
|
|
(11,827
|
)
|
|
Total operating profit
|
—
|
|
|
595
|
|
—
|
|
|
444
|
|
|
2,169
|
|
—
|
|
3,208
|
|
|
Net finance income/(costs)
|
8,177
|
|
|
(101
|
)
|
—
|
|
|
(253
|
)
|
|
(8,910
|
)
|
—
|
|
(1,087
|
)
|
|
Dividends receivable
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
8,100
|
|
(8,100
|
)
|
—
|
|
|
Interest in equity accounted affiliates
|
(401
|
)
|
|
—
|
|
—
|
|
|
—
|
|
|
63
|
|
401
|
|
63
|
|
|
Profit before tax
|
7,776
|
|
|
494
|
|
—
|
|
|
191
|
|
|
1,422
|
|
(7,699
|
)
|
2,184
|
|
|
Tax
|
19
|
|
|
(181
|
)
|
—
|
|
|
16
|
|
|
(228
|
)
|
—
|
|
(374
|
)
|
|
Profit after tax from discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
4,633
|
|
|
1,351
|
|
—
|
|
5,984
|
|
|
Profit for the year
|
7,795
|
|
|
313
|
|
—
|
|
|
4,840
|
|
|
2,545
|
|
(7,699
|
)
|
7,794
|
|
|
Amounts recognised in other comprehensive income from continuing operations
2
|
578
|
|
|
—
|
|
—
|
|
|
114
|
|
|
177
|
|
(291
|
)
|
578
|
|
|
Amounts recognised in other comprehensive income from discontinued operations
2
|
42
|
|
|
—
|
|
—
|
|
|
51
|
|
|
(62
|
)
|
11
|
|
42
|
|
|
Total comprehensive income for the year
|
8,415
|
|
|
313
|
|
—
|
|
|
5,005
|
|
|
2,660
|
|
(7,979
|
)
|
8,414
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity shareholders
|
8,415
|
|
|
313
|
|
—
|
|
|
5,005
|
|
|
2,661
|
|
(7,979
|
)
|
8,415
|
|
|
Non-controlling interests
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
—
|
|
(1
|
)
|
|
|
8,415
|
|
|
313
|
|
—
|
|
|
5,005
|
|
|
2,660
|
|
(7,979
|
)
|
8,414
|
|
1.
|
Profit for the year for British Transco Finance Inc. is £
nil
as interest payable to external bond holders is offset by interest receivable on loans to National Grid Gas plc.
|
2.
|
Includes other comprehensive income relating to interest in equity accounted affiliates.
|
|
Parent
guarantor
|
|
Issuer of notes
|
|
Subsidiary
guarantor
|
|
|
|
|
|||||||||
|
National
Grid plc
£m
|
|
|
Niagara
Mohawk
Power
Corporation
£m
|
|
British
Transco
Finance Inc.
£m
|
|
|
National
Grid Gas
plc
re-presented
1
£m
|
|
|
Other
subsidiaries
re-presented
1
£m
|
|
Consolidation
adjustments
1
£m
|
|
National
Grid
consolidated
£m
|
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
—
|
|
|
2,027
|
|
—
|
|
|
1,244
|
|
|
10,069
|
|
(128
|
)
|
13,212
|
|
|
Operating costs:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortisation
|
—
|
|
|
(162
|
)
|
—
|
|
|
(255
|
)
|
|
(894
|
)
|
—
|
|
(1,311
|
)
|
|
Payroll costs
|
—
|
|
|
(260
|
)
|
—
|
|
|
(115
|
)
|
|
(962
|
)
|
—
|
|
(1,337
|
)
|
|
Purchases of electricity
|
—
|
|
|
(484
|
)
|
—
|
|
|
—
|
|
|
(828
|
)
|
—
|
|
(1,312
|
)
|
|
Purchases of gas
|
—
|
|
|
(86
|
)
|
—
|
|
|
(75
|
)
|
|
(806
|
)
|
—
|
|
(967
|
)
|
|
Rates and property tax
|
—
|
|
|
(155
|
)
|
—
|
|
|
(101
|
)
|
|
(643
|
)
|
—
|
|
(899
|
)
|
|
Balancing Service Incentive Scheme
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(907
|
)
|
—
|
|
(907
|
)
|
|
Payments to other UK network owners
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(971
|
)
|
—
|
|
(971
|
)
|
|
Other operating costs
|
—
|
|
|
(433
|
)
|
—
|
|
|
(173
|
)
|
|
(1,805
|
)
|
128
|
|
(2,283
|
)
|
|
|
—
|
|
|
(1,580
|
)
|
—
|
|
|
(719
|
)
|
|
(7,816
|
)
|
128
|
|
(9,987
|
)
|
|
Total operating profit
|
—
|
|
|
447
|
|
—
|
|
|
525
|
|
|
2,253
|
|
—
|
|
3,225
|
|
|
Net finance income/(costs)
|
701
|
|
|
(87
|
)
|
—
|
|
|
(132
|
)
|
|
(1,437
|
)
|
—
|
|
(955
|
)
|
|
Dividends receivable
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
620
|
|
(620
|
)
|
—
|
|
|
Interest in equity accounted affiliates
|
1,843
|
|
|
—
|
|
—
|
|
|
33
|
|
|
59
|
|
(1,876
|
)
|
59
|
|
|
Profit before tax
|
2,544
|
|
|
360
|
|
—
|
|
|
426
|
|
|
1,495
|
|
(2,496
|
)
|
2,329
|
|
|
Tax
|
47
|
|
|
(141
|
)
|
—
|
|
|
(56
|
)
|
|
(277
|
)
|
—
|
|
(427
|
)
|
|
Profit after tax from discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
735
|
|
|
(43
|
)
|
—
|
|
692
|
|
|
Profit for the year
|
2,591
|
|
|
219
|
|
—
|
|
|
1,105
|
|
|
1,175
|
|
(2,496
|
)
|
2,594
|
|
|
Amounts recognised in other comprehensive income from continuing operations
3
|
502
|
|
|
(1
|
)
|
—
|
|
|
8
|
|
|
426
|
|
(433
|
)
|
502
|
|
|
Amounts recognised in other comprehensive income from discontinued operations
3
|
71
|
|
|
—
|
|
—
|
|
|
(13
|
)
|
|
153
|
|
(140
|
)
|
71
|
|
|
Total comprehensive income for the year
|
3,164
|
|
|
218
|
|
—
|
|
|
1,100
|
|
|
1,754
|
|
(3,069
|
)
|
3,167
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Equity shareholders
|
3,164
|
|
|
218
|
|
—
|
|
|
1,100
|
|
|
1,751
|
|
(3,069
|
)
|
3,164
|
|
|
Non-controlling interests
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
3
|
|
—
|
|
3
|
|
|
|
3,164
|
|
|
218
|
|
—
|
|
|
1,100
|
|
|
1,754
|
|
(3,069
|
)
|
3,167
|
|
1.
|
Amounts have been re-presented to reflect the classification of the UK Gas Distribution business as a discontinued operation.
|
2.
|
Profit for the year for British Transco Finance Inc. is £
nil
as interest payable to external bond holders is offset by interest receivable on loans to National Grid Gas plc.
|
3.
|
Includes other comprehensive income relating to interest in equity accounted affiliates.
|
|
Parent
guarantor |
|
Issuer of notes
|
|
Subsidiary guarantor
|
|
|
|
|
||||||||
|
National
Grid plc
£m
|
|
|
Niagara
Mohawk
Power
Corporation
£m
|
|
British
Transco
Finance Inc.
£m
|
|
|
National
Grid Gas
plc
£m
|
|
|
Other
subsidiaries
£m
|
|
Consolidation
adjustments
£m
|
|
National
Grid
consolidated
£m
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|||||||
Goodwill
|
—
|
|
|
691
|
|
—
|
|
|
—
|
|
|
4,753
|
|
—
|
|
5,444
|
|
Other intangible assets
|
—
|
|
|
3
|
|
—
|
|
|
107
|
|
|
789
|
|
—
|
|
899
|
|
Property, plant and equipment
|
—
|
|
|
6,148
|
|
—
|
|
|
4,433
|
|
|
29,272
|
|
—
|
|
39,853
|
|
Other non-current assets
|
—
|
|
|
3
|
|
—
|
|
|
94
|
|
|
18
|
|
—
|
|
115
|
|
Amounts owed by subsidiary undertakings
|
350
|
|
|
—
|
|
—
|
|
|
3,426
|
|
|
2,593
|
|
(6,369
|
)
|
—
|
|
Pension assets
|
—
|
|
|
231
|
|
—
|
|
|
412
|
|
|
766
|
|
—
|
|
1,409
|
|
Financial and other investments
|
21,708
|
|
|
30
|
|
—
|
|
|
101
|
|
|
12,340
|
|
(31,112
|
)
|
3,067
|
|
Derivative financial assets
|
18
|
|
|
2
|
|
—
|
|
|
591
|
|
|
708
|
|
—
|
|
1,319
|
|
Total non-current assets
|
22,076
|
|
|
7,108
|
|
—
|
|
|
9,164
|
|
|
51,239
|
|
(37,481
|
)
|
52,106
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|||||||
Inventories and current intangible assets
|
—
|
|
|
36
|
|
—
|
|
|
22
|
|
|
283
|
|
—
|
|
341
|
|
Trade and other receivables
|
1
|
|
|
515
|
|
—
|
|
|
276
|
|
|
2,006
|
|
—
|
|
2,798
|
|
Current tax assets
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
307
|
|
(193
|
)
|
114
|
|
Amounts owed by subsidiary undertakings
|
11,254
|
|
|
130
|
|
220
|
|
|
708
|
|
|
11,253
|
|
(23,565
|
)
|
—
|
|
Financial and other investments
|
938
|
|
|
15
|
|
—
|
|
|
863
|
|
|
878
|
|
—
|
|
2,694
|
|
Derivative financial assets
|
308
|
|
|
7
|
|
—
|
|
|
46
|
|
|
—
|
|
44
|
|
405
|
|
Cash and cash equivalents
|
—
|
|
|
4
|
|
—
|
|
|
271
|
|
|
54
|
|
—
|
|
329
|
|
Total current assets
|
12,501
|
|
|
707
|
|
220
|
|
|
2,186
|
|
|
14,781
|
|
(23,714
|
)
|
6,681
|
|
Total assets
|
34,577
|
|
|
7,815
|
|
220
|
|
|
11,350
|
|
|
66,020
|
|
(61,195
|
)
|
58,787
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||||
Borrowings
|
(781
|
)
|
|
(51
|
)
|
(218
|
)
|
|
(675
|
)
|
|
(2,722
|
)
|
—
|
|
(4,447
|
)
|
Derivative financial liabilities
|
(187
|
)
|
|
(36
|
)
|
—
|
|
|
(68
|
)
|
|
(66
|
)
|
(44
|
)
|
(401
|
)
|
Trade and other payables
|
(62
|
)
|
|
(318
|
)
|
—
|
|
|
(347
|
)
|
|
(2,726
|
)
|
—
|
|
(3,453
|
)
|
Amounts owed to subsidiary undertakings
|
(11,809
|
)
|
|
—
|
|
—
|
|
|
(624
|
)
|
|
(11,132
|
)
|
23,565
|
|
—
|
|
Current tax liabilities
|
—
|
|
|
(202
|
)
|
—
|
|
|
(26
|
)
|
|
(88
|
)
|
193
|
|
(123
|
)
|
Provisions
|
—
|
|
|
(23
|
)
|
—
|
|
|
(66
|
)
|
|
(184
|
)
|
—
|
|
(273
|
)
|
Total current liabilities
|
(12,839
|
)
|
|
(630
|
)
|
(218
|
)
|
|
(1,806
|
)
|
|
(16,918
|
)
|
23,714
|
|
(8,697
|
)
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||||
Borrowings
|
(773
|
)
|
|
(2,087
|
)
|
—
|
|
|
(3,635
|
)
|
|
(15,683
|
)
|
—
|
|
(22,178
|
)
|
Derivative financial liabilities
|
(41
|
)
|
|
(18
|
)
|
—
|
|
|
(157
|
)
|
|
(444
|
)
|
—
|
|
(660
|
)
|
Other non-current liabilities
|
—
|
|
|
(281
|
)
|
—
|
|
|
(181
|
)
|
|
(855
|
)
|
—
|
|
(1,317
|
)
|
Amounts owed to subsidiary undertakings
|
(2,091
|
)
|
|
—
|
|
—
|
|
|
(500
|
)
|
|
(3,778
|
)
|
6,369
|
|
—
|
|
Deferred tax liabilities
|
(1
|
)
|
|
(626
|
)
|
—
|
|
|
(441
|
)
|
|
(2,568
|
)
|
—
|
|
(3,636
|
)
|
Pensions and other post-retirement benefit obligations
|
—
|
|
|
(765
|
)
|
—
|
|
|
—
|
|
|
(907
|
)
|
—
|
|
(1,672
|
)
|
Provisions
|
—
|
|
|
(248
|
)
|
—
|
|
|
(129
|
)
|
|
(1,402
|
)
|
—
|
|
(1,779
|
)
|
Total non-current liabilities
|
(2,906
|
)
|
|
(4,025
|
)
|
—
|
|
|
(5,043
|
)
|
|
(25,637
|
)
|
6,369
|
|
(31,242
|
)
|
Total liabilities
|
(15,745
|
)
|
|
(4,655
|
)
|
(218
|
)
|
|
(6,849
|
)
|
|
(42,555
|
)
|
30,083
|
|
(39,939
|
)
|
Net assets
|
18,832
|
|
|
3,160
|
|
2
|
|
|
4,501
|
|
|
23,465
|
|
(31,112
|
)
|
18,848
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|||||||
Share capital
|
452
|
|
|
133
|
|
—
|
|
|
45
|
|
|
182
|
|
(360
|
)
|
452
|
|
Share premium account
|
1,321
|
|
|
2,194
|
|
—
|
|
|
204
|
|
|
9,032
|
|
(11,430
|
)
|
1,321
|
|
Retained earnings
|
21,599
|
|
|
830
|
|
2
|
|
|
2,929
|
|
|
14,217
|
|
(17,978
|
)
|
21,599
|
|
Other equity reserves
|
(4,540
|
)
|
|
3
|
|
—
|
|
|
1,323
|
|
|
18
|
|
(1,344
|
)
|
(4,540
|
)
|
Shareholders’ equity
|
18,832
|
|
|
3,160
|
|
2
|
|
|
4,501
|
|
|
23,449
|
|
(31,112
|
)
|
18,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Non-controlling interests
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
16
|
|
—
|
|
16
|
|
Total equity
|
18,832
|
|
|
3,160
|
|
2
|
|
|
4,501
|
|
|
23,465
|
|
(31,112
|
)
|
18,848
|
|
|
Parent
guarantor |
|
Issuer of notes
|
|
Subsidiary guarantor
|
|
|
|
|
||||||||
|
National
Grid plc
£m
|
|
|
Niagara
Mohawk
Power
Corporation
1
£m
|
|
British
Transco
Finance Inc.
£m
|
|
|
National
Grid Gas
plc
£m
|
|
|
Other
subsidiaries
1
£m
|
|
Consolidation
adjustments
£m
|
|
National
Grid
consolidated
1
£m
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|||||||
Goodwill
|
—
|
|
|
763
|
|
—
|
|
|
—
|
|
|
5,333
|
|
—
|
|
6,096
|
|
Other intangible assets
|
—
|
|
|
—
|
|
—
|
|
|
125
|
|
|
798
|
|
—
|
|
923
|
|
Property, plant and equipment
|
—
|
|
|
6,553
|
|
—
|
|
|
4,358
|
|
|
28,914
|
|
—
|
|
39,825
|
|
Other non-current assets
|
—
|
|
|
5
|
|
—
|
|
|
9
|
|
|
55
|
|
—
|
|
69
|
|
Amounts owed by subsidiary undertakings
|
342
|
|
|
—
|
|
239
|
|
|
3,426
|
|
|
2,576
|
|
(6,583
|
)
|
—
|
|
Pension assets
|
—
|
|
|
223
|
|
—
|
|
|
45
|
|
|
335
|
|
—
|
|
603
|
|
Financial and other investments
|
17,689
|
|
|
31
|
|
—
|
|
|
95
|
|
|
12,429
|
|
(27,061
|
)
|
3,183
|
|
Derivative financial assets
|
149
|
|
|
2
|
|
—
|
|
|
813
|
|
|
603
|
|
—
|
|
1,567
|
|
Total non-current assets
|
18,180
|
|
|
7,577
|
|
239
|
|
|
8,871
|
|
|
51,043
|
|
(33,644
|
)
|
52,266
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|||||||
Inventories and current intangible assets
|
—
|
|
|
38
|
|
—
|
|
|
20
|
|
|
345
|
|
—
|
|
403
|
|
Trade and other receivables
|
—
|
|
|
494
|
|
—
|
|
|
360
|
|
|
1,874
|
|
—
|
|
2,728
|
|
Current tax assets
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
317
|
|
—
|
|
317
|
|
Amounts owed by subsidiary undertakings
|
12,734
|
|
|
505
|
|
6
|
|
|
1,965
|
|
|
12,083
|
|
(27,293
|
)
|
—
|
|
Financial and other investments
|
5,471
|
|
|
29
|
|
—
|
|
|
1,835
|
|
|
1,406
|
|
—
|
|
8,741
|
|
Derivative financial assets
|
202
|
|
|
13
|
|
—
|
|
|
51
|
|
|
174
|
|
(194
|
)
|
246
|
|
Cash and cash equivalents
|
1,090
|
|
|
4
|
|
—
|
|
|
(9
|
)
|
|
54
|
|
—
|
|
1,139
|
|
Total current assets
|
19,497
|
|
|
1,083
|
|
6
|
|
|
4,222
|
|
|
16,253
|
|
(27,487
|
)
|
13,574
|
|
Total assets
|
37,677
|
|
|
8,660
|
|
245
|
|
|
13,093
|
|
|
67,296
|
|
(61,131
|
)
|
65,840
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||||
Borrowings
|
(1,120
|
)
|
|
(55
|
)
|
(5
|
)
|
|
(833
|
)
|
|
(3,483
|
)
|
—
|
|
(5,496
|
)
|
Derivative financial liabilities
|
(533
|
)
|
|
(42
|
)
|
—
|
|
|
(185
|
)
|
|
(581
|
)
|
194
|
|
(1,147
|
)
|
Trade and other payables
|
(46
|
)
|
|
(311
|
)
|
—
|
|
|
(342
|
)
|
|
(2,646
|
)
|
—
|
|
(3,345
|
)
|
Amounts owed to subsidiary undertakings
|
(12,012
|
)
|
|
—
|
|
—
|
|
|
(2,151
|
)
|
|
(13,130
|
)
|
27,293
|
|
—
|
|
Current tax liabilities
|
(3
|
)
|
|
(156
|
)
|
—
|
|
|
(9
|
)
|
|
61
|
|
—
|
|
(107
|
)
|
Provisions
|
—
|
|
|
—
|
|
—
|
|
|
(184
|
)
|
|
(232
|
)
|
—
|
|
(416
|
)
|
Total current liabilities
|
(13,714
|
)
|
|
(564
|
)
|
(5
|
)
|
|
(3,704
|
)
|
|
(20,011
|
)
|
27,487
|
|
(10,511
|
)
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||||
Borrowings
|
(1,262
|
)
|
|
(2,345
|
)
|
(239
|
)
|
|
(3,879
|
)
|
|
(15,417
|
)
|
—
|
|
(23,142
|
)
|
Derivative financial liabilities
|
(272
|
)
|
|
(26
|
)
|
—
|
|
|
(234
|
)
|
|
(714
|
)
|
—
|
|
(1,246
|
)
|
Other non-current liabilities
|
—
|
|
|
(324
|
)
|
—
|
|
|
(204
|
)
|
|
(842
|
)
|
—
|
|
(1,370
|
)
|
Amounts owed to subsidiary undertakings
|
(2,058
|
)
|
|
—
|
|
—
|
|
|
(756
|
)
|
|
(3,769
|
)
|
6,583
|
|
—
|
|
Deferred tax liabilities
|
(3
|
)
|
|
(1,178
|
)
|
—
|
|
|
(369
|
)
|
|
(2,929
|
)
|
—
|
|
(4,479
|
)
|
Pensions and other post-retirement benefit obligations
|
—
|
|
|
(889
|
)
|
—
|
|
|
—
|
|
|
(1,647
|
)
|
—
|
|
(2,536
|
)
|
Provisions
|
—
|
|
|
(298
|
)
|
—
|
|
|
(104
|
)
|
|
(1,770
|
)
|
—
|
|
(2,172
|
)
|
Total non-current liabilities
|
(3,595
|
)
|
|
(5,060
|
)
|
(239
|
)
|
|
(5,546
|
)
|
|
(27,088
|
)
|
6,583
|
|
(34,945
|
)
|
Total liabilities
|
(17,309
|
)
|
|
(5,624
|
)
|
(244
|
)
|
|
(9,250
|
)
|
|
(47,099
|
)
|
34,070
|
|
(45,456
|
)
|
Net assets
|
20,368
|
|
|
3,036
|
|
1
|
|
|
3,843
|
|
|
20,197
|
|
(27,061
|
)
|
20,384
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|||||||
Share capital
|
449
|
|
|
149
|
|
—
|
|
|
45
|
|
|
182
|
|
(376
|
)
|
449
|
|
Share premium account
|
1,324
|
|
|
2,431
|
|
—
|
|
|
204
|
|
|
8,033
|
|
(10,668
|
)
|
1,324
|
|
Retained earnings
|
22,582
|
|
|
456
|
|
1
|
|
|
2,268
|
|
|
11,914
|
|
(14,639
|
)
|
22,582
|
|
Other equity reserves
|
(3,987
|
)
|
|
—
|
|
—
|
|
|
1,326
|
|
|
52
|
|
(1,378
|
)
|
(3,987
|
)
|
Shareholders’ equity
|
20,368
|
|
|
3,036
|
|
1
|
|
|
3,843
|
|
|
20,181
|
|
(27,061
|
)
|
20,368
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Non-controlling interests
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
16
|
|
—
|
|
16
|
|
Total equity
|
20,368
|
|
|
3,036
|
|
1
|
|
|
3,843
|
|
|
20,197
|
|
(27,061
|
)
|
20,384
|
|
1.
|
Consistent with the presentation of the Group balance sheet we have re-presented commodity derivatives from current and non-current receivables and payables to derivative financial assets and liabilities.
|
|
Parent
guarantor |
|
Issuer of notes
|
|
Subsidiary guarantor
|
|
|
|
|
||||||||
|
National
Grid plc
£m
|
|
|
Niagara
Mohawk
Power
Corporation
£m
|
|
British
Transco
Finance Inc.
£m
|
|
|
National
Grid Gas
plc
£m
|
|
|
Other
subsidiaries
£m
|
|
Consolidation
adjustments
£m
|
|
National
Grid
consolidated
£m
|
|
Year ended 31 March 2018
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net cash flow from operating activities – continuing operations
|
35
|
|
|
662
|
|
—
|
|
|
888
|
|
|
3,125
|
|
—
|
|
4,710
|
|
Net cash flow from operating activities – discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
(98
|
)
|
|
(109
|
)
|
—
|
|
(207
|
)
|
Net cash flow from/(used in) investing activities – continuing operations
|
4,660
|
|
|
(473
|
)
|
15
|
|
|
656
|
|
|
(1,759
|
)
|
(862
|
)
|
2,237
|
|
Net cash flow from/(used in) investing activities – discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Net cash flow (used in)/from financing activities – continuing operations
|
(5,785
|
)
|
|
(189
|
)
|
(15
|
)
|
|
(1,041
|
)
|
|
(1,148
|
)
|
862
|
|
(7,316
|
)
|
Net cash flow (used in)/from financing activities – discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
(125
|
)
|
|
(106
|
)
|
—
|
|
(231
|
)
|
Net increase/(decrease) in cash and cash equivalents in the year
|
(1,090
|
)
|
|
—
|
|
—
|
|
|
280
|
|
|
3
|
|
—
|
|
(807
|
)
|
Year ended 31 March 2017
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net cash flow from operating activities – continuing operations
|
53
|
|
|
757
|
|
—
|
|
|
918
|
|
|
2,592
|
|
—
|
|
4,320
|
|
Net cash flow from operating activities – discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
450
|
|
|
459
|
|
—
|
|
909
|
|
Net cash flow from/(used in) investing activities – continuing operations
|
4,181
|
|
|
(469
|
)
|
15
|
|
|
215
|
|
|
(1,118
|
)
|
(6,458
|
)
|
(3,634
|
)
|
Net cash flow from/(used in) investing activities – discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
5,618
|
|
|
(6,298
|
)
|
—
|
|
(680
|
)
|
Net cash flow (used in)/from financing activities – continuing operations
|
(3,146
|
)
|
|
(288
|
)
|
(15
|
)
|
|
(8,322
|
)
|
|
3,771
|
|
6,458
|
|
(1,542
|
)
|
Net cash flow (used in)/from financing activities – discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
1,120
|
|
|
491
|
|
—
|
|
1,611
|
|
Net increase/(decrease) in cash and cash equivalents in the year
|
1,088
|
|
|
—
|
|
—
|
|
|
(1
|
)
|
|
(103
|
)
|
—
|
|
984
|
|
Year ended 31 March 2016
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net cash flow from operating activities – continuing operations
|
57
|
|
|
580
|
|
—
|
|
|
599
|
|
|
3,056
|
|
—
|
|
4,292
|
|
Net cash flow from operating activities – discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
1,144
|
|
|
(68
|
)
|
—
|
|
1,076
|
|
Net cash flow from/(used in) investing activities – continuing operations
|
502
|
|
|
(440
|
)
|
13
|
|
|
56
|
|
|
(1,721
|
)
|
(1,869
|
)
|
(3,459
|
)
|
Net cash flow from/(used in) investing activities – discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
(562
|
)
|
|
(15
|
)
|
—
|
|
(577
|
)
|
Net cash flow (used in)/from financing activities – continuing operations
|
(555
|
)
|
|
(148
|
)
|
(13
|
)
|
|
(1,185
|
)
|
|
(1,173
|
)
|
1,869
|
|
(1,205
|
)
|
Net cash flow (used in)/from financing activities – discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
(63
|
)
|
|
(60
|
)
|
—
|
|
(123
|
)
|
Net (decrease)/increase in cash and cash equivalents in the year
|
4
|
|
|
(8
|
)
|
—
|
|
|
(11
|
)
|
|
19
|
|
—
|
|
4
|
|
We are required to include the stand-alone balance sheet of our ultimate parent Company, National Grid plc, under the Companies Act 2006. This is because the publicly traded shares are actually those of National Grid plc (the Company) and the following disclosures provide additional information to shareholders.
|
•
|
a cash flow statement and related notes;
|
•
|
disclosures in respect of transactions with wholly-owned subsidiaries;
|
•
|
disclosures in respect of capital management; and
|
•
|
the effects of new but not yet effective IFRSs.
|
|
|
|
2018
|
|
2017
|
|
|
Notes
|
|
£m
|
|
£m
|
|
Fixed assets
|
|
|
|
|
||
Investments
|
1
|
|
9,896
|
|
8,880
|
|
|
|
|
|
|
||
Current assets
|
|
|
|
|
||
Debtors (amounts falling due within one year)
|
2
|
|
11,563
|
|
12,936
|
|
Debtors (amounts falling due after more than one year)
|
2
|
|
368
|
|
491
|
|
Investments
|
5
|
|
938
|
|
5,471
|
|
Cash at bank and in hand
|
|
|
—
|
|
1,090
|
|
Total current assets
|
|
|
12,869
|
|
19,988
|
|
|
|
|
|
|
||
Creditors (amounts falling due within one year)
|
3
|
|
(12,839
|
)
|
(13,714
|
)
|
Net current assets
|
|
|
30
|
|
6,274
|
|
Total assets less current liabilities
|
|
|
9,926
|
|
15,154
|
|
|
|
|
|
|
||
Creditors (amounts falling due after more than one year)
|
3
|
|
(2,906
|
)
|
(3,595
|
)
|
Net assets
|
|
|
7,020
|
|
11,559
|
|
|
|
|
|
|
||
Equity
|
|
|
|
|
||
Share capital
|
7
|
|
452
|
|
449
|
|
Share premium account
|
|
|
1,321
|
|
1,324
|
|
Cash flow hedge reserve
|
|
|
2
|
|
11
|
|
Other equity reserves
|
|
|
353
|
|
337
|
|
Profit and loss account
|
8
|
|
4,892
|
|
9,438
|
|
Total shareholders’ equity
|
|
|
7,020
|
|
11,559
|
|
|
Share
capital
£m
|
|
Share
premium account
£m
|
|
Cash flow
hedge reserve
£m
|
|
Other
equity reserves
£m
|
|
Profit
and loss
account
£m
|
|
Total shareholders’
equity
£m
|
|
At 1 April 2016
|
447
|
|
1,326
|
|
17
|
|
302
|
|
2,880
|
|
4,972
|
|
Profit for the year
|
—
|
|
—
|
|
—
|
|
—
|
|
8,197
|
|
8,197
|
|
Other comprehensive loss for the year
|
|
|
|
|
|
|
||||||
Transferred from equity in respect of cash flow hedges (net of tax)
|
—
|
|
—
|
|
(6
|
)
|
—
|
|
—
|
|
(6
|
)
|
Total comprehensive (loss)/income for the year
|
—
|
|
—
|
|
(6
|
)
|
—
|
|
8,197
|
|
8,191
|
|
Other equity movements
|
|
|
|
|
|
|
||||||
Scrip dividend-related share issue
1
|
2
|
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
Purchase of treasury shares
|
—
|
|
—
|
|
—
|
|
—
|
|
(189
|
)
|
(189
|
)
|
Issue of treasury shares
|
—
|
|
—
|
|
—
|
|
—
|
|
18
|
|
18
|
|
Purchase of own shares
|
—
|
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
(5
|
)
|
Share awards to employees of subsidiary undertakings
|
—
|
|
—
|
|
—
|
|
35
|
|
—
|
|
35
|
|
Equity dividends
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,463
|
)
|
(1,463
|
)
|
At 31 March 2017
|
449
|
|
1,324
|
|
11
|
|
337
|
|
9,438
|
|
11,559
|
|
Profit for the year
|
—
|
|
—
|
|
—
|
|
—
|
|
930
|
|
930
|
|
Other comprehensive loss for the year
|
|
|
|
|
|
|
||||||
Transferred from equity in respect of cash flow hedges (net of tax)
|
—
|
|
—
|
|
(9
|
)
|
—
|
|
—
|
|
(9
|
)
|
Total comprehensive (loss)/income for the year
|
—
|
|
—
|
|
(9
|
)
|
—
|
|
930
|
|
921
|
|
Other equity movements
|
|
|
|
|
|
|
||||||
Scrip dividend-related share issue
1
|
3
|
|
(3
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
Purchase of treasury shares
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,017
|
)
|
(1,017
|
)
|
Issue of treasury shares
|
—
|
|
—
|
|
—
|
|
—
|
|
33
|
|
33
|
|
Purchase of own shares
|
—
|
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
(5
|
)
|
Share awards to employees of subsidiary undertakings
|
—
|
|
—
|
|
—
|
|
16
|
|
—
|
|
16
|
|
Equity dividends
|
—
|
|
—
|
|
—
|
|
—
|
|
(4,487
|
)
|
(4,487
|
)
|
At 31 March 2018
|
452
|
|
1,321
|
|
2
|
|
353
|
|
4,892
|
|
7,020
|
|
1.
|
Included within the share premium account are costs associated with scrip dividends.
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Amounts falling due within one year
|
|
|
||
Derivative financial instruments (see note 4)
|
308
|
|
202
|
|
Amounts owed by subsidiary undertakings
|
11,254
|
|
12,734
|
|
Prepayments and accrued income
|
1
|
|
—
|
|
|
11,563
|
|
12,936
|
|
Amounts falling due after more than one year
|
|
|
||
Derivative financial instruments (see note 4)
|
18
|
|
149
|
|
Amounts owed by subsidiary undertakings
|
350
|
|
342
|
|
|
368
|
|
491
|
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Amounts falling due within one year
|
|
|
||
Borrowings (see note 6)
|
781
|
|
1,120
|
|
Derivative financial instruments (see note 4)
|
187
|
|
533
|
|
Amounts owed to subsidiary undertakings
|
11,809
|
|
12,012
|
|
Corporation tax payable
|
—
|
|
3
|
|
Other creditors
|
62
|
|
46
|
|
|
12,839
|
|
13,714
|
|
Amounts falling due after more than one year
|
|
|
||
Borrowings (see note 6)
|
773
|
|
1,262
|
|
Derivative financial instruments (see note 4)
|
41
|
|
272
|
|
Amounts owed to subsidiary undertakings
|
2,091
|
|
2,058
|
|
Deferred tax
|
1
|
|
3
|
|
|
2,906
|
|
3,595
|
|
Amounts owed to subsidiary undertakings falling due after more than one year are repayable as follows:
|
|
|
||
In 2 to 3 years
|
1,095
|
|
—
|
|
In 3 to 4 years
|
—
|
|
1,062
|
|
More than 5 years
|
996
|
|
996
|
|
|
2,091
|
|
2,058
|
|
|
2018
|
|
2017
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
Amounts falling due within one year
|
308
|
|
(187
|
)
|
121
|
|
|
202
|
|
(533
|
)
|
(331
|
)
|
Amounts falling due after more than one year
|
18
|
|
(41
|
)
|
(23
|
)
|
|
149
|
|
(272
|
)
|
(123
|
)
|
|
326
|
|
(228
|
)
|
98
|
|
|
351
|
|
(805
|
)
|
(454
|
)
|
1.
|
The notional contract amounts of derivatives indicate the gross nominal value of transactions outstanding at the balance sheet date.
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Investments in short-term money funds
|
919
|
|
4,981
|
|
Managed investments in bonds
|
10
|
|
100
|
|
Restricted balances – collateral
|
9
|
|
390
|
|
|
938
|
|
5,471
|
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
Amounts falling due within one year
|
|
|
||
Bank overdrafts
|
—
|
|
1
|
|
Bank loans
|
230
|
|
—
|
|
Bonds
|
551
|
|
22
|
|
Commercial paper
|
—
|
|
1,097
|
|
|
781
|
|
1,120
|
|
Amounts falling due after more than one year
|
|
|
||
Bonds
|
773
|
|
1,262
|
|
|
1,554
|
|
2,382
|
|
|
High
|
Low
|
May 2018*…………………………………………………………………………
|
1.3599
|
1.3269
|
*
|
For the period to 31 May 2018.
|
|
Ordinary
Share (Pence)
|
ADS ($)
|
||
|
High
|
Low
|
High
|
Low
|
May 2018*…………………………………………………………………………
|
895.01
|
824.01
|
59.82
|
56.25
|
*
|
For the period to 31 May 2018, the latest practicable date.
|
|
Description
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by Reference
|
||
|
|
|
|
|
Incorporated by Reference
|
||
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
|
Incorporated by reference
|
|
|
|
|
|
8
|
List of subsidiaries - The list of the Company’s significant subsidiaries as of 31 March 2018 is incorporated by reference to “Financial Statements—Notes to the consolidated financial statements—32. Subsidiary undertakings, joint venture and associates—Subsidiary undertakings” on pages 166-168 included in the Annual Report on Form 20-F for the financial year ended 31 March 2018. This list excludes subsidiaries that do not, in aggregate, constitute a “significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X as at 31 March 2018.
|
|
Incorporated by reference
|
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
Filed herewith
|
||
|
Filed herewith
|
|
NATIONAL GRID PLC
|
|
|
Date: 4 June 2018
|
/s/
Andrew Bonfield
|
|
Andrew Bonfield
|
|
Title: Finance Director
|
|
National Grid plc
|
•
|
provides effective business leadership of the Company within a framework of prudent and effective controls which enable risk to be assessed and managed;
|
•
|
sets the Company's strategic aims, ensures that the necessary financial and human resources are in place for the Company to meet its objectives, and reviews management performance; and
|
•
|
sets the Company's values and standards and ensures that its obligations to its shareholders and others are understood and met.
|
•
|
Strategy:
Non-executive Directors should constructively challenge and contribute to the development of strategy;
|
•
|
Performance:
Non-executive Directors should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance;
|
•
|
Risk:
Non-executive Directors should satisfy themselves that the financial function of the Company is professionally managed and that financial controls and systems of risk management are robust and defensible; and
|
•
|
People:
Non-executive Directors are responsible for determining appropriate levels of remuneration for Executive Directors and have a prime role in appointing, and where necessary removing, senior management, and in succession planning.
|
•
|
be accurate, clear, comprehensive and up-to-date;
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•
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contain a summary of the contents of any paper; and
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•
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inform the director what is expected of them on that issue.
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1.
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I have reviewed this annual report on Form 20-F of National Grid plc;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
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4.
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The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the company and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
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5.
|
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
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Date: 4 June 2018
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/s/
John Pettigrew
|
|
John Pettigrew
|
|
Title: Chief Executive
|
|
National Grid plc
|
1.
|
I have reviewed this annual report on Form 20-F of National Grid plc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
Date: 4 June 2018
|
/s/
Andrew Bonfield
|
|
Andrew Bonfield
|
|
Title: Finance Director
|
|
National Grid plc
|
Date: 4 June 2018
|
/s/
John Pettigrew
|
|
John Pettigrew
|
|
Title: Chief Executive
|
|
National Grid plc
|
Date: 4 June 2018
|
/s/
Andrew Bonfield
|
|
Andrew Bonfield
|
|
Title: Finance Director
|
|
National Grid plc
|