¨
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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 2019
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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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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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237
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“Strategic Report-Financial review”
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25-33
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“Financial Statements-Consolidated income statement”
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103-104
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|
|
“Financial Statements-Consolidated statement of comprehensive income”
|
105
|
|
|
“Financial Statements-Consolidated statement of financial position”
|
107
|
|
|
“Financial Statements-Consolidated cash flow statement”
|
108
|
|
|
“Strategic Report-Financial Review -Cash flow, net debt and funding”
|
31
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|
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“Additional Information-Other unaudited financial information-Alternative performance measures/non-IFRS reconciliations”
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225-230
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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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212-215
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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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“Additional Information-Want more information or help?”
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243
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|
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“Additional Information-The business in detail-Key milestones”
|
197
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|
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“Strategic Report-Business Model: what we do”
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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 business environment”
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12-13
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“Strategic Report-Our Strategy”
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14-15
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“Additional Information-Other unaudited financial information-Alternative performance measures/non-IFRS reconciliations-Capital investment”
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229
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|
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“Additional Information-Shareholder information-Articles of Association”
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216-217
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“Strategic Report-Financial Review-Summary of Group financial performance for the year ended 31 March 2019”
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26
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|
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“Strategic Report-Financial Review-Capital Investment, asset growth and value added” and “ Strategic Report-Financial Review-Financial Position”
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30-31, 31
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“Financial Statements-Notes to the consolidated financial statements-2. Segmental analysis-(c) Capital expenditure”
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113
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|
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“Financial Statements-Notes to the consolidated financial statements-10. Discontinued operations” and “-Strategic report-Financial Review, Discontinued operations”
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128-129, 29
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|
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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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199-209
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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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“Additional Information-Shareholder Information- Documents on display”
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217
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4B Business overview
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“Additional Information-The business in detail”
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197-209
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“Strategic Report-Business Model: What we do” and “-how we operate”
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2-7
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|
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“Strategic Report-Our business environment”
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12-13
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|
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“Strategic Report-Our strategy”
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14-15
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|
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“Strategic Report-Progress against our strategy”
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16-19
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“Strategic Report- Financial Review”
|
25-33
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|
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“Strategic Report-Principal operations-UK”; “-US”; and “-National Grid Ventures and other activities”
|
34-39
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|
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“Financial Statements-Notes to the consolidated financial statements-2. Segmental analysis”
|
112-113
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|
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“Financial Statements-Notes to the consolidated financial statements-17. Derivative financial instruments-(b) Commodity contract derivatives”
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138-139
|
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4C Organizational structure
|
“Financial Statements-Notes to the consolidated financial statements-34. Subsidiary undertakings, joint ventures and associates”
|
174-176
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4D Property, plants and equipment
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“Strategic Report-Financial Review-Financial Position” and Financial Statements- Notes to the consolidated financial statements-13. Property, plant and equipment
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31, 132-133
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“Additional Information-The business in detail: Where we operate” and “-Other disclosures-Property, plant and equipment”
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198, 222
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|
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“Financial Statements-Consolidated statement of financial position”
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107
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|
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“Financial Statements-Notes to the consolidated financial statements-21. Borrowings”
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141-143
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“Additional Information-Other unaudited financial information-Capital investment”
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229
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4A
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Unresolved staff comments
|
“Additional Information-Other disclosures-Unresolved SEC staff comments”
|
224
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5
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Operating and financial review and prospects
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|
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5A Operating results
|
“Strategic Report-Financial review”
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25-33
|
|
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“Strategic Report-Our business environment”
|
12-13
|
|
|
“Additional Information-The business in detail-UK regulation”; “-US regulation”; and “-Summary of US price controls and rate plans”
|
199-209
|
|
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“Strategic Report-Principal operations-UK”; “-US”; and “-National Grid Ventures and other activities”
|
34-39
|
|
|
“Financial Statements-Notes to the consolidated financial statements-2. Segmental analysis”
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112-113
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|
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“Additional Information-Commentary on consolidated financial statements”
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235-236
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|
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“Financial Statements-Notes to the consolidated financial statements-32. Financial risk management-(c) Currency risk”
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166
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|
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“Additional Information-Internal control and risk factors-Risk factors-Law, regulation and political and economic uncertainty”
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213
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5B Liquidity and capital resources
|
“Strategic Report-Financial review”
|
25-33
|
|
|
“Financial Statements-Notes to the consolidated financial statements-1.A Going concern”
|
109
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|
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“Financial Statements-Consolidated cash flow statement”
|
108
|
|
|
“Additional Information-Internal control and risk factors-Risk factors-Financing and liquidity”
|
215
|
|
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“Financial Statements-Notes to the consolidated financial statements-17. Derivative financial instruments”
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137-139
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“Financial Statements-Notes to the consolidated financial statements-20. Cash and cash equivalents”
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141
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|
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“Financial Statements-Notes to the consolidated financial statements-21. Borrowings”
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141-143
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Item
|
Form 20-F caption
|
Location in the document
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Page(s)
|
|
|
“Financial Statements-Notes to the consolidated financial statements-29. Net debt”
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159-160
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“Financial Statements-Notes to the consolidated financial statements-30. Commitments and contingencies”
|
161
|
|
|
“Financial Statements-Notes to the consolidated financial statements-32. Financial risk management”
|
162-172
|
|
|
“Financial Statements-Notes to the consolidated financial statements-33. Borrowing facilities”
|
173
|
|
5C Research and development, patents and licenses, etc.
|
“Strategic Report-Progress against our strategy-Research and Development” and “Additional Information-Other disclosures-Research, development and innovation activity”
|
19, 223-224
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5D Trend information
|
“Strategic Report-Financial review”
|
25-33
|
|
|
“Strategic Report-Principal operations-UK”; “-US”; and “-National Grid Ventures and other activities”
|
34-39
|
|
|
“Strategic Report-Our business environment”
|
12-13
|
|
5E Off-balance sheet arrangements
|
“Strategic Report-Financial review-Off Balance Sheet Items”
|
31
|
|
5F Tabular disclosure of contractual obligations
|
“Financial Statements-Notes to the consolidated financial statements-30. Commitments and contingencies”
|
161
|
|
5G Safe Harbor
|
“Cautionary statement”
|
244
|
6
|
Directors, senior management and employees
|
|
|
|
6A Directors and senior management
|
“Corporate Governance-Our Board”
|
48-49
|
|
6B Compensation
|
“Corporate Governance-Directors’ Remuneration Report-Annual statement from the Remuneration Committee Chairman” and “Corporate Governance-Directors’ Remuneration Report-Statement of implementation of remuneration policy in 2018/19”
|
69-90
|
|
|
“Financial Statements-Notes to the consolidated financial statements-4. Operating costs-(c) Key management compensation”
|
117
|
|
|
“Financial Statements-Notes to the consolidated financial statements-25. Pensions and other post-retirement benefits”
|
145-154
|
|
6C Board practices
|
“Corporate Governance-Our board”; “- Corporate Governance Overview”, “-Our Executive Committee, “- Matters considered by the Board, “- Our Culture, “-How we create value for our stakeholders; “-Performance evaluation”; “-Directors’ induction and training, “-Audit Committee”; “-Finance Committee”; “-Safety, Environment and Health Committee”; “-Nominations Committee”; and “-Statement of application of and compliance with the UK Corporate Governance Code”
|
48-68
|
|
|
“Corporate Governance-Directors’ Remuneration Report-Annual statement from the Remuneration Committee Chairman”
|
69-72
|
|
|
“Corporate Governance-Directors’ Remuneration Report-Directors’ remuneration policy - for approval by shareholders in 2019”
|
74-78
|
|
|
“Corporate Governance-At a glance - 2018/19”
|
73
|
|
|
“Corporate Governance- Directors’ Remuneration Report- Statement of implementation of remuneration policy in 2018/19-Single total figure of remuneration- Non-executive Directors”
|
84
|
|
|
“Corporate Governance- Directors Remuneration Report- Statement of implementation of remuneration policy in 2018/2019- Policy on payment for loss of office”; and “-Payments for loss of office”
|
77-78, 85
|
|
|
“Corporate Governance-Directors Remuneration Report-Statement of implementation of remuneration policy in 2018/19”
|
79-90
|
|
|
“Additional Information-Shareholder Information-Articles of Association-Directors”
|
216
|
|
6D Employees
|
“Financial Statements-Notes to the consolidated financial statements-4. Operating costs-(b) Number of employees”
|
116
|
Item
|
Form 20-F caption
|
Location in the document
|
Page(s)
|
|
|
“Strategic Report-Our commitment to being a responsible business-Total headcount”
|
43
|
|
|
“Additional Information-Other disclosures-Employees”
|
222
|
|
6E Share ownership
|
“Corporate Governance-Directors’ Remuneration Report-Statement of implementation of remuneration policy in 2018/19 -Statement of Directors’ shareholdings and share interests ”
|
86
|
|
|
“Corporate Governance- Directors’ Remuneration Report-Statement of implementation of remuneration policy in 2018/19”
|
79-90
|
|
|
“Additional Information-Other disclosures-All-employee share plans”
|
221
|
|
|
“Share ownership”
|
“Further Information”
|
7
|
Major shareholders and related party transactions
|
|
|
|
7A Major shareholders
|
“Additional Information-Shareholder information-Material interests in shares”
|
218
|
|
|
“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-31. Related party transactions”
|
162
|
|
|
“Material interests in shares”
|
“Further Information”
|
|
|
“Financial Statements-Notes to the consolidated financial statements-30. Commitment and contingencies”
|
161
|
|
7C Interests of experts and counsel
|
Not applicable
|
-
|
8
|
Financial information
|
|
|
|
8A Consolidated statements and other financial information
|
|
|
|
|
“Reports of Independent Registered Public Accounting Firms-Audit opinions for Form 20-F”
|
“Further Information”
|
|
|
“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”
|
103-108
|
|
|
“Financial Statements-Notes to the consolidated financial statements”
|
109-188
|
|
|
“Strategic Report-Chairman’s statement”
|
8-9
|
|
|
“Strategic Report-Financial Review-Our investment proposition”
|
25
|
|
|
“Strategic Report-Financial Review-Dividend”
|
33
|
|
|
“Corporate Governance-Audit Committee-Significant issues relating to the financial statements-Significant issues considered by the Committee-Application of the Group’s exceptional items framework to certain events in the period”
|
59
|
|
8B Significant changes
|
“Strategic Report-Financial Review-Post balance sheet events”, “Additional Information-Shareholder Information-Events after the reporting period”, and “Subsequent events”
|
33, 218, “Further Information”
|
9
|
The offer and listing
|
|
|
|
9A Offer and listing details
|
“Additional Information-Shareholder Information-Share information”
|
219
|
|
9B Plan of distribution
|
Not applicable
|
|
|
9C Markets
|
“Additional Information-Shareholder information-Share Information”
|
219
|
|
9D Selling shareholders
|
Not applicable
|
-
|
|
9E Dilution
|
Not applicable
|
-
|
|
9F Expenses of the issue
|
Not applicable
|
-
|
10
|
Additional information
|
|
|
|
10A Share capital
|
Not applicable
|
-
|
|
10B Memorandum and articles of association
|
“Additional Information-Shareholder Information-Articles of Association”
|
216-217
|
Item
|
Form 20-F caption
|
Location in the document
|
Page(s)
|
|
|
“Additional Information-Other disclosures-Corporate governance practices: differences from New York Stock Exchange (NYSE) listing standards”
|
221
|
|
|
“Additional Information-Shareholder information-Share capital”
|
218-219
|
|
10C Material contracts
|
“Additional Information-Other disclosures-Material contracts”
|
222
|
|
10D Exchange controls
|
“Additional Information-Shareholder information-Exchange controls”
|
218
|
|
10E Taxation
|
“Additional Information--Shareholder information-Taxation”
|
219-220
|
|
10F Dividends and paying agents
|
Not applicable
|
-
|
|
10G Statement by experts
|
Not applicable
|
-
|
|
10H Documents on display
|
“Additional Information-Shareholder information-Documents on display”
|
217
|
|
10I Subsidiary information
|
Not applicable
|
-
|
11
|
Quantitative and qualitative disclosures about market risk
|
|
|
|
11(a) Quantitative information about market risk
|
“Financial Statements-Notes to the consolidated financial statements-17. Derivative financial instruments”
|
137-139
|
|
|
“Financial Statements-Notes to the consolidated financial statements-35. Sensitivities”
|
177-178
|
|
|
“Financial Statements-Notes to the consolidated financial statements-32. Financial risk management”
|
162-172
|
|
|
“Strategic Report-Financial review”
|
25-33
|
|
11(b) Qualitative information about market risk
|
“Financial Statements-Notes to the consolidated financial statements-17. Derivative financial instruments”
|
137-139
|
|
|
“Financial Statements-Notes to the consolidated financial statements-32. Financial risk management-(a) Credit risk”; “-(b) Liquidity risk”; “-(c) Currency risk”; “-(d) Interest rate risk”; “-(g) Fair value analysis”; and “-(h) Capital risk management””
|
162-172
|
|
|
“Strategic Report-Financial review”
|
25-33
|
|
|
“Additional Information-Internal Control and Risk factors-Risk Factors”
|
212-215
|
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-Depositary payments to the Company”
|
217
|
|
|
“Additional Information-Definitions and glossary of terms”
|
238-242
|
|
|
“Material interest in American Depositary Shares”
|
“Further Information”
|
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
|
“Additional Information-Internal control and risk factors-Disclosure controls” and “-Internal control over financial reporting”
|
212
|
|
|
“Corporate Governance-Audit Committee”
|
58-62
|
|
|
“Report of Independent Registered Public Accounting Firm-Audit opinions for Form 20-F”
|
“Further Information”
|
16
|
16A Audit committee financial expert
|
“Corporate Governance-Audit Committee”
|
58
|
|
16B Code of ethics
|
“Additional Information-Other disclosures-Code of Ethics”
|
221
|
|
16C Principal accountant fees and services
|
“Corporate Governance-Audit Committee-External audit”
|
61-62
|
|
|
“Financial Statements-Notes to the consolidated financial statements-4. Operating costs-(e) Auditors’ remuneration”
|
117
|
Item
|
Form 20-F caption
|
Location in the document
|
Page(s)
|
|
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-Share capital-Authority to purchase shares”
|
218
|
|
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”
|
221
|
|
16H Mine safety disclosure
|
Not applicable
|
-
|
17
|
Financial statements
|
Not applicable
|
-
|
18
|
Financial statements
|
“Financial Statements-Company accounting policies”
|
189-190
|
|
|
“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”
|
103-108
|
|
|
“Financial Statements-Notes to the consolidated financial statements”
|
109-188
|
|
|
“Financial Statements- Reports of Independent Registered Public Accounting Firms-Audit opinions for Form 20-F”
|
93-102
“Further Information”
|
19
|
Exhibits
|
Filed with the SEC
|
-
|
2019
|
Notes
|
|
Before exceptional items and remeasurements
£m
|
|
Exceptional items and remeasurements
(see note 5)
£m
|
|
Total
£m
|
|
|
Continuing operations
|
|
|
|
|
|
||||
Revenue
|
2(a),3
|
|
14,933
|
|
—
|
|
14,933
|
|
|
Operating costs
|
4,5
|
|
(11,491
|
)
|
(572
|
)
|
(12,063
|
)
|
|
Operating profit
|
2(b)
|
|
3,442
|
|
(572
|
)
|
2,870
|
|
|
Finance income
|
5,6
|
|
73
|
|
15
|
|
88
|
|
|
Finance costs
|
5,6
|
|
(1,066
|
)
|
(91
|
)
|
(1,157
|
)
|
|
Share of post-tax results of joint ventures and associates
|
16,10
|
|
40
|
|
—
|
|
40
|
|
|
Profit before tax
|
2(b),5
|
|
2,489
|
|
(648
|
)
|
1,841
|
|
|
Tax
|
5,7
|
|
(488
|
)
|
149
|
|
(339
|
)
|
|
Profit after tax from continuing operations
|
5
|
|
2,001
|
|
(499
|
)
|
1,502
|
|
|
Profit after tax from discontinued operations
|
10
|
|
57
|
|
(45
|
)
|
12
|
|
|
Total profit for the year (continuing and discontinued)
|
|
|
2,058
|
|
(544
|
)
|
1,514
|
|
|
Attributable to:
|
|
|
|
|
|
||||
Equity shareholders of the parent
|
|
|
2,055
|
|
(544
|
)
|
1,511
|
|
|
Non-controlling interests¹
|
|
|
3
|
|
—
|
|
3
|
|
|
Earnings per share (pence)
|
|
|
|
|
|
||||
Basic earnings per share (continuing)
|
8
|
|
|
|
44.3
|
|
|||
Diluted earnings per share (continuing)
|
8
|
|
|
|
44.1
|
|
|||
Basic earnings per share (continuing and discontinued)
|
8
|
|
|
|
44.6
|
|
|||
Diluted earnings per share (continuing and discontinued)
|
8
|
|
|
|
44.4
|
|
1.
|
The non-controlling interests for the year ended 31 March 2019 relate to continuing operations.
|
2018¹
|
Notes
|
|
Before exceptional items and remeasurements
£m
|
|
Exceptional items and remeasurements
(see note 5)
£m
|
|
Total
£m
|
|
|
Continuing operations
|
|
|
|
|
|
||||
Revenue
|
2(a)
|
|
15,250
|
|
—
|
|
15,250
|
|
|
Operating costs
|
4,5
|
|
(11,793
|
)
|
36
|
|
(11,757
|
)
|
|
Operating profit
|
2(b)
|
|
3,457
|
|
36
|
|
3,493
|
|
|
Finance income
|
6
|
|
127
|
|
—
|
|
127
|
|
|
Finance costs
|
5,6
|
|
(1,128
|
)
|
119
|
|
(1,009
|
)
|
|
Share of post-tax results of joint ventures and associates
|
16,10
|
|
44
|
|
5
|
|
49
|
|
|
Profit before tax
|
2(b),5
|
|
2,500
|
|
160
|
|
2,660
|
|
|
Tax
|
5,7
|
|
(584
|
)
|
1,473
|
|
889
|
|
|
Profit after tax from continuing operations
|
5
|
|
1,916
|
|
1,633
|
|
3,549
|
|
|
Profit after tax from discontinued operations
|
10
|
|
145
|
|
(143
|
)
|
2
|
|
|
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 interests²
|
|
|
1
|
|
—
|
|
1
|
|
|
Earnings per share (pence)
|
|
|
|
|
|
||||
Basic earnings per share (continuing)
|
8
|
|
|
|
102.5
|
|
|||
Diluted earnings per share (continuing)
|
8
|
|
|
|
102.1
|
|
|||
Basic earnings per share (continuing and discontinued)
|
8
|
|
|
|
102.6
|
|
|||
Diluted earnings per share (continuing and discontinued)
|
8
|
|
|
|
102.1
|
|
1.
|
Comparatives for 2018 only have been re-presented to reflect the classification of our retained interest in Quadgas HoldCo Limited as a discontinued operation in the current period (see note 1C and note 10).
|
2.
|
The non-controlling interests for the year ended 31 March 2018 relate to continuing operations.
|
2017
|
Notes
|
|
Before exceptional items and remeasurements
£m
|
|
Exceptional items and remeasurements
(see note 5)
£m
|
|
Total
£m
|
|
|
Continuing operations
|
|
|
|
|
|
||||
Revenue
|
2(a)
|
|
15,035
|
|
—
|
|
15,035
|
|
|
Operating costs
|
4,5
|
|
(11,262
|
)
|
(565
|
)
|
(11,827
|
)
|
|
Operating profit
|
2(b)
|
|
3,773
|
|
(565
|
)
|
3,208
|
|
|
Finance income
|
6
|
|
53
|
|
—
|
|
53
|
|
|
Finance costs
|
5,6
|
|
(1,082
|
)
|
(58
|
)
|
(1,140
|
)
|
|
Share of post-tax results of joint ventures and associates
|
|
|
63
|
|
—
|
|
63
|
|
|
Profit before tax
|
2(b),5
|
|
2,807
|
|
(623
|
)
|
2,184
|
|
|
Tax
|
5,7
|
|
(666
|
)
|
292
|
|
(374
|
)
|
|
Profit after tax from continuing operations
|
5
|
|
2,141
|
|
(331
|
)
|
1,810
|
|
|
Profit after tax from discontinued operations
|
10
|
|
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 interests¹
|
|
|
—
|
|
(1
|
)
|
(1
|
)
|
|
Earnings per share (pence)
|
|
|
|
|
|
||||
Basic earnings per share (continuing)
|
8
|
|
|
|
48.1
|
|
|||
Diluted earnings per share (continuing)
|
8
|
|
|
|
47.9
|
|
|||
Basic earnings per share (continuing and discontinued)
|
8
|
|
|
|
207.1
|
|
|||
Diluted earnings per share (continuing and discontinued)
|
8
|
|
|
|
206.2
|
|
1.
|
The non-controlling interests for the year ended 31 March 2017 relate to discontinued operations.
|
|
|
|
2019
|
|
2018¹
|
|
2017
|
|
|
Notes
|
|
£m
|
|
£m
|
|
£m
|
|
Profit after tax from continuing operations
|
|
|
1,502
|
|
3,549
|
|
1,810
|
|
Other comprehensive income from continuing operations
|
|
|
|
|
|
|||
Items from continuing operations that will never be reclassified to profit or loss:
|
|
|
|
|
|
|||
Remeasurement gains on pension assets and post-retirement benefit obligations
|
25
|
|
68
|
|
1,313
|
|
423
|
|
Net gains on financial liability designated at fair value through profit and loss attributable to changes in own credit risk
|
|
|
7
|
|
—
|
|
—
|
|
Net losses in respect of cash flow hedging of capital expenditure
|
|
|
(13
|
)
|
—
|
|
—
|
|
Tax on items that will never be reclassified to profit or loss
|
7
|
|
(15
|
)
|
(530
|
)
|
(277
|
)
|
Total items from continuing operations that will never be reclassified to profit or loss
|
|
|
47
|
|
783
|
|
146
|
|
Items from continuing operations that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|||
Exchange adjustments
|
|
|
347
|
|
(505
|
)
|
346
|
|
Net (losses)/gains in respect of cash flow hedges and cost of hedging
|
|
|
(147
|
)
|
19
|
|
70
|
|
Transferred from/(to) profit or loss in respect of cash flow hedges and cost of hedging
|
|
|
41
|
|
(3
|
)
|
(6
|
)
|
Net (losses)/gains on available-for-sale investments
|
|
|
—
|
|
(30
|
)
|
81
|
|
Transferred to profit or loss on sale of available-for-sale investments
|
|
|
—
|
|
(73
|
)
|
(25
|
)
|
Net gains on investment in debt instruments measured at fair value through other comprehensive income
|
|
|
2
|
|
—
|
|
—
|
|
Share of other comprehensive income of associates, net of tax
|
|
|
1
|
|
—
|
|
—
|
|
Tax on items that may be reclassified subsequently to profit or loss
|
7
|
|
12
|
|
33
|
|
(34
|
)
|
Total items from continuing operations that may be reclassified subsequently to profit or loss
|
|
|
256
|
|
(559
|
)
|
432
|
|
Other comprehensive income for the year, net of tax from continuing operations
|
|
|
303
|
|
224
|
|
578
|
|
Other comprehensive income for the year, net of tax from discontinued operations²
|
10
|
|
36
|
|
147
|
|
42
|
|
Other comprehensive income for the year, net of tax
|
|
|
339
|
|
371
|
|
620
|
|
Total comprehensive income for the year from continuing operations
|
|
|
1,805
|
|
3,773
|
|
2,388
|
|
Total comprehensive income for the year from discontinued operations
|
10
|
|
48
|
|
149
|
|
6,026
|
|
Total comprehensive income for the year
|
|
|
1,853
|
|
3,922
|
|
8,414
|
|
Attributable to:
|
|
|
|
|
|
|||
Equity shareholders of the parent
|
|
|
|
|
|
|||
From continuing operations
|
|
|
1,801
|
|
3,773
|
|
2,389
|
|
From discontinued operations
|
|
|
48
|
|
149
|
|
6,026
|
|
|
|
|
1,849
|
|
3,922
|
|
8,415
|
|
Non-controlling interests
|
|
|
|
|
|
|||
From continuing operations
|
|
|
4
|
|
—
|
|
(1
|
)
|
1.
|
Comparatives for 2018 only have been re-presented to reflect the classification of our retained interest in Quadgas HoldCo Limited as a discontinued operation in the current period (see note 1C and note 10).
|
2.
|
The other comprehensive income from discontinued operations relates to the items of other comprehensive income of Cadent (investment through Quadgas HoldCo Limited), comprising mainly
£35 million
(
2018
:
£142 million
;
2017
: £
nil
) remeasurement gains on pension assets and post-retirement benefit obligations and a
£1 million
(
2018
:
£5 million
;
2017
: £
nil
) net gain in respect of cash flow hedges. Both items are shown net of tax.
|
|
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 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 issue²
|
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 issue²
|
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 2018 (as previously reported)
|
452
|
|
1,321
|
|
21,599
|
|
(4,540
|
)
|
|
18,832
|
|
16
|
|
|
18,848
|
|
Impact of transition to IFRS 9 and IFRS 15³
|
—
|
|
—
|
|
(268
|
)
|
72
|
|
|
(196
|
)
|
—
|
|
|
(196
|
)
|
At 1 April 2018 (as restated)
|
452
|
|
1,321
|
|
21,331
|
|
(4,468
|
)
|
|
18,636
|
|
16
|
|
|
18,652
|
|
Profit for the year
|
—
|
|
—
|
|
1,511
|
|
—
|
|
|
1,511
|
|
3
|
|
|
1,514
|
|
Other comprehensive income for the year
|
—
|
|
—
|
|
89
|
|
249
|
|
|
338
|
|
1
|
|
|
339
|
|
Total comprehensive income for the year
|
—
|
|
—
|
|
1,600
|
|
249
|
|
|
1,849
|
|
4
|
|
|
1,853
|
|
Equity dividends
|
—
|
|
—
|
|
(1,160
|
)
|
—
|
|
|
(1,160
|
)
|
—
|
|
|
(1,160
|
)
|
Scrip dividend-related share issue²
|
6
|
|
(7
|
)
|
—
|
|
—
|
|
|
(1
|
)
|
—
|
|
|
(1
|
)
|
Issue of treasury shares
|
—
|
|
—
|
|
18
|
|
—
|
|
|
18
|
|
—
|
|
|
18
|
|
Purchase of own shares
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
|
(2
|
)
|
—
|
|
|
(2
|
)
|
Share-based payments
|
—
|
|
—
|
|
27
|
|
—
|
|
|
27
|
|
—
|
|
|
27
|
|
Cash flow hedges transferred to the statement of financial position, net of tax
|
—
|
|
—
|
|
—
|
|
(18
|
)
|
|
(18
|
)
|
—
|
|
|
(18
|
)
|
At 31 March 2019
|
458
|
|
1,314
|
|
21,814
|
|
(4,237
|
)
|
|
19,349
|
|
20
|
|
|
19,369
|
|
1.
|
For further details of other equity reserves, see note 28.
|
2.
|
Included within the share premium account are costs associated with scrip dividends.
|
3.
|
For further details of the impact of the transition to IFRS 9 and IFRS 15, see note 37.
|
|
|
|
2019
|
|
2018
|
|
|
Notes
|
|
£m
|
|
£m
|
|
Non-current assets
|
|
|
|
|
||
Goodwill
|
11
|
|
5,869
|
|
5,444
|
|
Other intangible assets
|
12
|
|
1,084
|
|
899
|
|
Property, plant and equipment
|
13
|
|
43,913
|
|
39,853
|
|
Other non-current assets
|
14
|
|
264
|
|
115
|
|
Pension assets
|
25
|
|
1,567
|
|
1,409
|
|
Financial and other investments
|
15
|
|
667
|
|
899
|
|
Investments in joint ventures and associates
|
16
|
|
608
|
|
2,168
|
|
Derivative financial assets
|
17
|
|
1,045
|
|
1,319
|
|
Total non-current assets
|
|
|
55,017
|
|
52,106
|
|
Current assets
|
|
|
|
|
||
Inventories and current intangible assets
|
18
|
|
370
|
|
341
|
|
Trade and other receivables
|
19
|
|
3,153
|
|
2,798
|
|
Current tax assets
|
|
|
126
|
|
114
|
|
Financial and other investments
|
15
|
|
1,981
|
|
2,694
|
|
Derivative financial assets
|
17
|
|
108
|
|
405
|
|
Cash and cash equivalents
|
20
|
|
252
|
|
329
|
|
Assets held for sale
|
10
|
|
1,956
|
|
—
|
|
Total current assets
|
|
|
7,946
|
|
6,681
|
|
Total assets
|
|
|
62,963
|
|
58,787
|
|
Current liabilities
|
|
|
|
|
||
Borrowings
|
21
|
|
(4,472
|
)
|
(4,447
|
)
|
Derivative financial liabilities
|
17
|
|
(350
|
)
|
(401
|
)
|
Trade and other payables
|
22
|
|
(3,769
|
)
|
(3,453
|
)
|
Contract liabilities
|
23
|
|
(61
|
)
|
—
|
|
Current tax liabilities
|
|
|
(161
|
)
|
(123
|
)
|
Provisions
|
26
|
|
(316
|
)
|
(273
|
)
|
Total current liabilities
|
|
|
(9,129
|
)
|
(8,697
|
)
|
Non-current liabilities
|
|
|
|
|
||
Borrowings
|
21
|
|
(24,258
|
)
|
(22,178
|
)
|
Derivative financial liabilities
|
17
|
|
(833
|
)
|
(660
|
)
|
Other non-current liabilities
|
24
|
|
(808
|
)
|
(1,317
|
)
|
Contract liabilities
|
23
|
|
(933
|
)
|
—
|
|
Deferred tax liabilities
|
7
|
|
(3,965
|
)
|
(3,636
|
)
|
Pensions and other post-retirement benefit obligations
|
25
|
|
(1,785
|
)
|
(1,672
|
)
|
Provisions
|
26
|
|
(1,883
|
)
|
(1,779
|
)
|
Total non-current liabilities
|
|
|
(34,465
|
)
|
(31,242
|
)
|
Total liabilities
|
|
|
(43,594
|
)
|
(39,939
|
)
|
Net assets
|
|
|
19,369
|
|
18,848
|
|
Equity
|
|
|
|
|
||
Share capital
|
27
|
|
458
|
|
452
|
|
Share premium account
|
|
|
1,314
|
|
1,321
|
|
Retained earnings
|
|
|
21,814
|
|
21,599
|
|
Other equity reserves
|
28
|
|
(4,237
|
)
|
(4,540
|
)
|
Total shareholders’ equity
|
|
|
19,349
|
|
18,832
|
|
Non-controlling interests
|
|
|
20
|
|
16
|
|
Total equity
|
|
|
19,369
|
|
18,848
|
|
|
|
|
2019
|
|
2018¹
|
|
2017
|
|
|
|
Notes
|
|
|
£m
|
|
£m
|
|
£m
|
|
Cash flows from operating activities
|
|
|
|
|
|
||||
Total operating profit from continuing operations
|
2(b)
|
|
|
2,870
|
|
3,493
|
|
3,208
|
|
Adjustments for:
|
|
|
|
|
|
||||
Exceptional items and remeasurements
|
5
|
|
|
572
|
|
(36
|
)
|
565
|
|
Depreciation, amortisation and impairment
|
|
|
1,588
|
|
1,530
|
|
1,481
|
|
|
Share-based payments
|
|
|
27
|
|
16
|
|
32
|
|
|
Changes in working capital
|
|
|
40
|
|
118
|
|
151
|
|
|
Changes in provisions
|
|
|
(110
|
)
|
(206
|
)
|
(181
|
)
|
|
Changes in pensions and other post-retirement benefit obligations
|
|
|
(123
|
)
|
(239
|
)
|
(768
|
)
|
|
Cash flows relating to exceptional items
|
|
|
(400
|
)
|
26
|
|
(36
|
)
|
|
Cash generated from operations – continuing operations
|
|
|
4,464
|
|
4,702
|
|
4,452
|
|
|
Tax (paid)/recovered
|
|
|
(75
|
)
|
8
|
|
(132
|
)
|
|
Net cash inflow from operating activities – continuing operations
|
|
|
4,389
|
|
4,710
|
|
4,320
|
|
|
Net cash (used in)/inflow from operating activities – discontinued operations
|
10
|
|
|
(71
|
)
|
(207
|
)
|
909
|
|
Cash flows from investing activities
|
|
|
|
|
|
||||
Acquisition of financial investments
|
|
|
(89
|
)
|
(2
|
)
|
—
|
|
|
Investments in joint ventures and associates
|
|
|
(143
|
)
|
(129
|
)
|
(76
|
)
|
|
Loans to joint ventures and associates
|
|
|
(31
|
)
|
(68
|
)
|
(61
|
)
|
|
Disposal of financial investments
|
|
|
18
|
|
134
|
|
—
|
|
|
Disposal of 61% interest in UK Gas Distribution
|
|
|
—
|
|
(20
|
)
|
5,454
|
|
|
Purchases of intangible assets
|
|
|
(306
|
)
|
(173
|
)
|
(223
|
)
|
|
Purchases of property, plant and equipment
|
|
|
(3,635
|
)
|
(3,738
|
)
|
(3,296
|
)
|
|
Disposals of property, plant and equipment
|
|
|
38
|
|
10
|
|
18
|
|
|
Dividends received from joint ventures and associates
|
|
|
68
|
|
69
|
|
99
|
|
|
Interest received
|
|
|
68
|
|
30
|
|
51
|
|
|
Net movements in short-term financial investments
|
|
|
822
|
|
5,953
|
|
(5,600
|
)
|
|
Net cash flow (used in)/from investing activities – continuing operations
|
|
|
(3,190
|
)
|
2,066
|
|
(3,634
|
)
|
|
Net cash flow from/(used in) investing activities – discontinued operations
2
|
10
|
|
|
156
|
|
171
|
|
(680
|
)
|
Cash flows from financing activities
|
|
|
|
|
|
||||
Purchase of treasury shares
|
|
|
—
|
|
(1,017
|
)
|
(189
|
)
|
|
Proceeds from issue of treasury shares
|
|
|
17
|
|
33
|
|
18
|
|
|
Purchase of own shares
|
|
|
(2
|
)
|
(5
|
)
|
(6
|
)
|
|
Proceeds received from loans
|
|
|
2,932
|
|
1,941
|
|
2,463
|
|
|
Repayment of loans
|
|
|
(1,969
|
)
|
(2,156
|
)
|
(1,616
|
)
|
|
Net movements in short-term borrowings and derivatives
|
|
|
(268
|
)
|
(772
|
)
|
90
|
|
|
Interest paid
|
|
|
(914
|
)
|
(853
|
)
|
(839
|
)
|
|
Dividends paid to shareholders
|
|
|
(1,160
|
)
|
(4,487
|
)
|
(1,463
|
)
|
|
Net cash flow used in financing activities – continuing operations
|
|
|
(1,364
|
)
|
(7,316
|
)
|
(1,542
|
)
|
|
Net cash flow (used in)/from financing activities – discontinued operations
|
10
|
|
|
—
|
|
(231
|
)
|
1,611
|
|
Net (decrease)/increase in cash and cash equivalents
|
29(a)
|
|
|
(80
|
)
|
(807
|
)
|
984
|
|
Disposal of bank overdraft in UK Gas Distribution
|
|
|
—
|
|
—
|
|
15
|
|
|
Exchange movements
|
|
|
3
|
|
(3
|
)
|
16
|
|
|
Cash and cash equivalents at start of year
|
|
|
329
|
|
1,139
|
|
124
|
|
|
Cash and cash equivalents at end of year
|
20
|
|
|
252
|
|
329
|
|
1,139
|
|
1.
|
Comparatives for 2018 only have been re-presented to reflect the classification of our retained interest in Quadgas HoldCo Limited as a discontinued operation in the current period (see note 1C and note 10).
|
2.
|
Receipts of dividends from Quadgas HoldCo Limited of
£133 million
(2018:
£144 million
) and interest of
£23 million
(2018:
£27 million
).
|
Accounting policies describe our approach to recognising and measuring transactions and balances in the year. The accounting policies applicable across the financial statements are shown below, whereas 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 have summarised new International Accounting Standards Board (IASB) and EU endorsed accounting standards, amendments and interpretations and whether these are effective for this year end or in later years, explaining how significant changes are expected to affect our reported results.
|
•
|
Categorisation of certain items as exceptional items or remeasurements and the definition of adjusted earnings (see notes 5 and 8). In applying the Group’s exceptional items framework, we have considered a number of key matters, as detailed in note 5.
|
•
|
In addition, we have exercised our judgement in concluding that it is appropriate to classify our investment in and shareholder loan to Quadgas, along with the related Further Acquisition Agreement (FAA) and Remaining Acquisition Agreement (RAA) derivatives, as held for sale and as a discontinued operation, as detailed in note 10.
|
•
|
valuation of liabilities for pensions and other post-retirement benefits (see note 25); and
|
•
|
the cash flows applied in determining the environmental provisions (see
note
26).
|
•
|
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 presentation described earlier. Exceptional items and remeasurements are presented in a separate column on the face of the income statement.
|
•
|
Financial instruments: we normally opt to apply hedge accounting in
most
circumstances where this is permitted (see note 32(e)).
|
•
|
Annual improvements to IFRSs 2014-2016 Cycle;
|
•
|
Amendments to IFRS 2 ‘Share-based payment’; and
|
•
|
IFRIC 22 ‘Foreign Currency Transactions and Advance Consideration’.
|
•
|
IFRIC 23 ‘Uncertainty over Income Tax Treatments’;
|
•
|
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’;
|
•
|
Amendments to IAS 19 ‘Employee Benefits’;
|
•
|
Amendments to IFRS 3 ‘Business Combinations’;
|
•
|
Amendments to the References to the Conceptual Framework; and
|
•
|
Amendments to IAS 1 and IAS 8: Definition of material.
|
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 each operating segment and determining resource allocation between them. 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 5). 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.
|
UK Electricity Transmission
|
The high-voltage electricity transmission networks in England and Wales and Great Britain system operator.
|
UK Gas Transmission
|
The high-pressure gas transmission networks in Great Britain and system operator in Great Britain.
|
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.
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||
|
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
|
3,351
|
|
(20
|
)
|
3,331
|
|
|
4,154
|
(28)
|
|
4,126
|
|
|
4,439
|
|
(29)
|
|
4,410
|
UK Gas Transmission
|
896
|
|
(12
|
)
|
884
|
|
|
1,091
|
(9)
|
|
1,082
|
|
|
1,080
|
|
(99)
|
|
981
|
US Regulated
|
9,846
|
|
—
|
|
9,846
|
|
|
9,272
|
—
|
|
9,272
|
|
|
8,931
|
|
—
|
|
8,931
|
NGV and Other
1
|
876
|
|
(4
|
)
|
872
|
|
|
776
|
(6)
|
|
770
|
|
|
713
|
|
—
|
|
713
|
Total revenue from continuing operations
|
14,969
|
|
(36
|
)
|
14,933
|
|
|
15,293
|
(43)
|
|
15,250
|
|
|
15,163
|
|
(128)
|
|
15,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Split by geographical areas – continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
UK
|
|
|
5,045
|
|
|
|
|
5,938
|
|
|
|
|
6,064
|
|||||
US
|
|
|
9,888
|
|
|
|
|
9,312
|
|
|
|
|
8,971
|
|||||
|
|
|
14,933
|
|
|
|
|
15,250
|
|
|
|
|
15,035
|
1.
|
Included within NGV and Other is
£597 million
(
2018
:
£593 million
;
2017
:
£604 million
) of revenue relating to NGV.
|
|
Before exceptional items
and remeasurements |
|
After exceptional items
and remeasurements |
||||||||||
|
2019
|
|
2018¹
|
|
2017
|
|
|
2019
|
|
2018¹
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Operating segments – continuing operations:
|
|
|
|
|
|
|
|
||||||
UK Electricity Transmission
|
1,015
|
|
1,041
|
|
1,372
|
|
|
778
|
|
1,041
|
|
1,361
|
|
UK Gas Transmission
|
303
|
|
487
|
|
511
|
|
|
267
|
|
487
|
|
507
|
|
US Regulated
|
1,724
|
|
1,698
|
|
1,713
|
|
|
1,425
|
|
1,734
|
|
1,278
|
|
NGV and Other
2,3
|
400
|
|
231
|
|
177
|
|
|
400
|
|
231
|
|
62
|
|
Total operating profit from continuing operations
|
3,442
|
|
3,457
|
|
3,773
|
|
|
2,870
|
|
3,493
|
|
3,208
|
|
|
|
|
|
|
|
|
|
|
|
||||
Split by geographical area – continuing operations:
|
|
|
|
|
|
|
|
|
|
||||
UK
|
1,695
|
|
1,840
|
|
2,118
|
|
|
1,422
|
|
1,840
|
|
1,988
|
|
US
|
1,747
|
|
1,617
|
|
1,655
|
|
|
1,448
|
|
1,653
|
|
1,220
|
|
|
3,442
|
|
3,457
|
|
3,773
|
|
|
2,870
|
|
3,493
|
|
3,208
|
|
1.
|
Comparatives for 2018 only have been re-presented to reflect the classification of our retained interest in Quadgas as a discontinued operation in the current period (see note 1C and note 10).
|
2.
|
Included within NGV and Other is
£263 million
(
2018
:
£234 million
;
2017
:
£239 million
) of operating profit (both before and after exceptional items and remeasurements) relating to NGV. Also included in this balance for the year ended 31 March 2019 is
£181 million
(2018:
£84 million
; 2017:
£55 million
) of operating profit in relation to the Property business.
|
3.
|
NGV and Other includes gains of
£95 million
(2018: £
nil
; 2017: £
nil
) in relation to cash received in respect of
two
legal settlements.
|
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
£1,635 million
(
2018
:
£1,454 million
;
2017
:
£1,432 million
), capital expenditure of
£317 million
(
2018
:
£186 million
;
2017
:
£98 million
) and depreciation, amortisation and impairment of
£114 million
(
2018
:
£143 million
;
2017
:
£143 million
) relating to NGV.
|
Revenue arises in the course of the ordinary activities and principally comprises:
•
transmission services;
•
distribution services; and
•
generation services.
Transmission services, distribution services and certain other services (excluding rental income but including metering) fall within the scope of IFRS 15 ‘Revenue from Contracts with Customers’, whereas generation services are accounted for under the leasing standard as rental income, presented within revenue. Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties and value added tax. The Group recognises revenue when it transfers control over a product or service to a customer.
|
•
|
the supply of high-voltage electricity (including both transmission and system operator charges); and
|
•
|
construction work (principally for connections).
|
•
|
the supply of high-pressure gas (including both transmission and system operator charges); and
|
•
|
construction work (principally for connections).
|
•
|
Gas and electricity distribution: revenue is recognised based on usage (over time) by customers and billed monthly. Payment terms are 30 days; and
|
•
|
Connections: revenue is recognised over time, as we provide access to our network. Where payments are made upfront, they are deferred over the life of the asset.
|
•
|
Electricity transmission: revenue is recognised based on usage by customers (over time) and billed monthly. Payment terms are 30 days; and
|
•
|
Connections: revenue is recognised over time, as we provide access to our network. Where payments are made upfront, they are deferred over the life of the asset.
|
Revenue for the year ended 31 March 2019
|
UK Electricity Transmission
£m |
|
UK Gas Transmission
£m |
|
US Regulated
£m |
|
NGV and Other
£m |
|
Total
£m |
|
Revenue under IFRS 15
|
|
|
|
|
|
|
|
|
|
|
Transmission
|
3,325
|
|
833
|
|
370
|
|
313
|
|
4,841
|
|
Distribution
|
—
|
|
—
|
|
8,941
|
|
—
|
|
8,941
|
|
Other
|
—
|
|
—
|
|
—
|
|
284
|
|
284
|
|
Total IFRS 15 revenue
|
3,325
|
|
833
|
|
9,311
|
|
597
|
|
14,066
|
|
Other revenue
|
|
|
|
|
|
|
|
|
|
|
Generation
|
—
|
|
—
|
|
367
|
|
—
|
|
367
|
|
Other
|
6
|
|
51
|
|
168
|
|
275
|
|
500
|
|
Total other revenue
|
6
|
|
51
|
|
535
|
|
275
|
|
867
|
|
Total revenue from continuing operations
|
3,331
|
|
884
|
|
9,846
|
|
872
|
|
14,933
|
|
Geographical split for the year ended 31 March 2019
|
UK Electricity Transmission
£m
|
|
UK Gas Transmission
£m
|
|
US Regulated
£m
|
|
NGV and Other
£m
|
|
Total
£m
|
|
Revenue under IFRS 15
|
|
|
|
|
|
|||||
UK
|
3,325
|
|
833
|
|
—
|
|
585
|
|
4,743
|
|
US
|
—
|
|
—
|
|
9,311
|
|
12
|
|
9,323
|
|
Total IFRS 15 revenue
|
3,325
|
|
833
|
|
9,311
|
|
597
|
|
14,066
|
|
Other revenue
|
|
|
|
|
|
|
|
|
|
|
UK
|
6
|
|
51
|
|
—
|
|
245
|
|
302
|
|
US
|
—
|
|
—
|
|
535
|
|
30
|
|
565
|
|
Total other revenue
|
6
|
|
51
|
|
535
|
|
275
|
|
867
|
|
Total revenue from continuing operations
|
3,331
|
|
884
|
|
9,846
|
|
872
|
|
14,933
|
|
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
|
|||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Depreciation, amortisation and impairment
|
1,588
|
|
1,530
|
|
1,481
|
|
|
147
|
|
—
|
|
—
|
|
|
1,735
|
|
1,530
|
|
1,481
|
|
Payroll costs
|
1,703
|
|
1,648
|
|
1,578
|
|
|
149
|
|
—
|
|
—
|
|
|
1,852
|
|
1,648
|
|
1,578
|
|
Purchases of electricity
|
1,504
|
|
1,299
|
|
1,143
|
|
|
(50
|
)
|
(14
|
)
|
(46
|
)
|
|
1,454
|
|
1,285
|
|
1,097
|
|
Purchases of gas
|
1,644
|
|
1,539
|
|
1,241
|
|
|
(2
|
)
|
4
|
|
(22
|
)
|
|
1,642
|
|
1,543
|
|
1,219
|
|
Rates and property taxes
|
1,108
|
|
1,057
|
|
1,042
|
|
|
—
|
|
—
|
|
—
|
|
|
1,108
|
|
1,057
|
|
1,042
|
|
Balancing Services Incentive Scheme
|
1,196
|
|
1,012
|
|
1,120
|
|
|
—
|
|
—
|
|
—
|
|
|
1,196
|
|
1,012
|
|
1,120
|
|
Payments to other UK network owners
1
|
—
|
|
1,043
|
|
1,008
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
1,043
|
|
1,008
|
|
Other
|
2,748
|
|
2,665
|
|
2,649
|
|
|
328
|
|
(26
|
)
|
633
|
|
|
3,076
|
|
2,639
|
|
3,282
|
|
|
11,491
|
|
11,793
|
|
11,262
|
|
|
572
|
|
(36
|
)
|
565
|
|
|
12,063
|
|
11,757
|
|
11,827
|
|
Operating costs include:
|
|
|
|
|
||||||||||||||||
Inventory consumed
|
|
415
|
|
367
|
|
296
|
|
|||||||||||||
Operating leases
2
|
|
46
|
|
51
|
|
43
|
|
|||||||||||||
Research and development expenditure
|
|
19
|
|
13
|
|
14
|
|
1.
|
Under IFRS 15, for 2019 revenue and associated payments to other UK network owners are presented on a net basis. Refer to note 37.
|
2.
|
Following a review during the year, the comparatives have been refined to provide consistency with the current year.
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
Wages and salaries
1
|
2,084
|
|
1,998
|
|
1,852
|
|
Social security costs
|
156
|
|
157
|
|
145
|
|
Defined contribution scheme costs
|
72
|
|
65
|
|
58
|
|
Defined benefit pension costs
|
232
|
|
156
|
|
151
|
|
Share-based payments
|
27
|
|
16
|
|
32
|
|
Severance costs (excluding pension costs)
|
76
|
|
7
|
|
5
|
|
|
2,647
|
|
2,399
|
|
2,243
|
|
Less: payroll costs capitalised
|
(795
|
)
|
(751
|
)
|
(665
|
)
|
Total payroll costs
|
1,852
|
|
1,648
|
|
1,578
|
|
1.
|
Included within wages and salaries are US other post-retirement benefit costs of
£48 million
(
2018
:
£46 million
;
2017
:
£53 million
). For further information refer to note 25.
|
|
31 March
2019 |
|
Monthly
average 2019 |
|
31 March
2018 |
Monthly
average 2018 |
31 March
2017 |
Monthly
average 2017 |
UK
|
5,962
|
|
6,227
|
|
6,517
|
6,431
|
6,265
|
6,291
|
US
|
16,614
|
|
16,669
|
|
16,506
|
16,274
|
15,867
|
15,752
|
Total number of employees
|
22,576
|
|
22,896
|
|
23,023
|
22,705
|
22,132
|
22,043
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
Short-term employee benefits
|
7
|
|
8
|
|
8
|
|
Post-employment benefits
|
1
|
|
1
|
|
1
|
|
Share-based payments
|
3
|
|
3
|
|
6
|
|
Total key management compensation
|
11
|
|
12
|
|
15
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
Audit fees payable to the Parent Company’s auditors and their associates in respect of:
1
|
|
|
||||
Audit of the Parent Company’s individual and consolidated financial statements
2
|
1.6
|
|
2.7
|
|
1.5
|
|
The auditing of accounts of any associate of the Company
3
|
7.2
|
|
9.3
|
|
13.7
|
|
Other services supplied
4
|
5.2
|
|
3.9
|
|
4.6
|
|
|
14.0
|
|
15.9
|
|
19.8
|
|
Total other services
5
|
|
|
|
|||
Tax fees:
|
|
|
|
|||
Tax compliance services
|
—
|
|
0.3
|
|
0.4
|
|
Tax advisory services
|
—
|
|
—
|
|
0.1
|
|
All other fees:
|
|
|
|
|||
Other assurance services
6
|
1.1
|
|
0.7
|
|
4.6
|
|
Services relating to corporate finance transactions not covered above
7
|
—
|
|
—
|
|
5.9
|
|
Other non-audit services not covered above
8
|
2.2
|
|
0.9
|
|
6.3
|
|
|
3.3
|
|
1.9
|
|
17.3
|
|
Total auditors’ remuneration
|
17.3
|
|
17.8
|
|
37.1
|
|
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 year ended
31 March 2017
.
|
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 2019
,
2018
and
2017
.
|
3.
|
The 2018 comparative has been updated following finalisation of the 2018 audit fee with the Audit Committee.
|
4.
|
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 2018, 2017 and 2016 respectively.
|
5.
|
There were
no
audit related fees as described in Item 16C(b) of Form 20-F.
|
6.
|
Principally amounts relating to assurance services provided in relation to comfort letters for debt issuances. In 2017, 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.
|
7.
|
Vendor due diligence and other transaction services in relation to the sale of UK Gas Distribution.
|
8.
|
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 2017, 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’. Business performance (which excludes exceptional items and remeasurements as defined below) is used by management to monitor financial performance as it is considered that it aids the comparability of our reported financial performance from year to year. 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.
|
|
2019
|
|
2018¹
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
Included within operating profit
|
|
|
|
|||
Exceptional items:
|
|
|
|
|||
Cost efficiency and restructuring programmes
|
(204
|
)
|
—
|
|
—
|
|
Massachusetts Gas labour dispute
|
(283
|
)
|
—
|
|
—
|
|
Impairment of nuclear connection development costs
|
(137
|
)
|
—
|
|
—
|
|
Final settlement of LIPA MSA Transition
|
—
|
|
26
|
|
—
|
|
Environmental charges
|
—
|
|
—
|
|
(526
|
)
|
Gas holder demolition costs
|
—
|
|
—
|
|
(107
|
)
|
|
(624
|
)
|
26
|
|
(633
|
)
|
Remeasurements – commodity contract derivatives
|
52
|
|
10
|
|
68
|
|
|
(572
|
)
|
36
|
|
(565
|
)
|
Included within finance income and costs
|
|
|
|
|||
Remeasurements:
|
|
|
|
|||
Net (losses)/gains on derivative financial instruments
|
(40
|
)
|
119
|
|
(58
|
)
|
Net gains on financial assets at fair value through profit and loss
|
15
|
|
—
|
|
—
|
|
Net losses on financial liabilities at fair value through profit and loss
|
(51
|
)
|
—
|
|
—
|
|
|
(76
|
)
|
119
|
|
(58
|
)
|
Included within share of post-tax results of joint ventures and associates
|
|
|
|
|
|
|
Deferred tax arising on the reduction in US corporation tax rate
|
—
|
|
5
|
|
—
|
|
Total included within profit before tax
|
(648
|
)
|
160
|
|
(623
|
)
|
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
|
|
Deferred tax arising on the reduction in the US corporation tax rate
|
—
|
|
1,510
|
|
—
|
|
Tax on exceptional items
|
144
|
|
(9
|
)
|
227
|
|
Tax on remeasurements
|
5
|
|
(28
|
)
|
(29
|
)
|
|
149
|
|
1,473
|
|
292
|
|
Total exceptional items and remeasurements after tax
|
(499
|
)
|
1,633
|
|
(331
|
)
|
Analysis of total exceptional items and remeasurements after tax
|
|
|
|
|||
Exceptional items after tax
|
(480
|
)
|
1,532
|
|
(312
|
)
|
Remeasurements after tax
|
(19
|
)
|
101
|
|
(19
|
)
|
Total exceptional items and remeasurements after tax
|
(499
|
)
|
1,633
|
|
(331
|
)
|
1.
|
Comparatives for 2018 only have been re-presented to reflect the classification of our retained interest in Quadgas as a discontinued operation in the current period (see note 1C and note 10).
|
i.
|
Net gains/(losses) on commodity contract derivatives represent mark-to-market movements on certain physical and financial commodity contract obligations in the US. These contracts primarily relate to the forward purchase of energy for supply to customers, or to the economic hedging thereof, that are required to be measured at fair value and that do not qualify for hedge accounting. Under the existing rate plans in the US, commodity costs are recoverable from customers although the timing of recovery may differ from the pattern of costs incurred.
|
ii.
|
Net gains/(losses) on derivative financial instruments comprise gains/(losses) arising on derivative financial instruments reported in the consolidated income statement in relation to our debt financing and foreign exchange hedging of the investment funds held by our insurance captives. These exclude gains and losses for which hedge accounting has been effective, and have been recognised directly in the consolidated statement of other comprehensive income or are offset by adjustments to the carrying value of debt (see notes 17 and 32).
|
iii.
|
Net gains/(losses) on financial assets measured at FVTPL comprise gains/(losses) on the investment funds held by our insurance captives which are categorised as FVTPL (see note 15).
|
iv.
|
Net gains/(losses) on financial liabilities measured at FVTPL comprises the change in the fair value (excluding changes due to own credit risk) of a financial liability that has been designated at FVTPL on transition to IFRS 9 to reduce a measurement mismatch (see note 21).
|
This note details the interest income generated by our financial assets and interest expense incurred on our financial liabilities, primarily our financing portfolio (including our financing derivatives). 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 financial instruments included in remeasurements (see note 5). In addition, where debt redemptions relate to exceptional transactions they are typically treated as exceptional.
|
|
|
|
2019
|
|
2018¹
|
|
2017
|
|
|
Notes
|
|
£m
|
|
£m
|
|
£m
|
|
Finance income
|
|
|
|
|
|
|||
Interest income on financial instruments:
|
|
|
|
|
|
|||
Bank deposits and other financial assets
|
|
|
54
|
|
54
|
|
28
|
|
Dividends received on equities held at fair value through other comprehensive income
|
|
|
2
|
|
—
|
|
—
|
|
Gains on disposal of available-for-sale investments
|
|
|
—
|
|
73
|
|
25
|
|
Other income
|
|
|
17
|
|
—
|
|
—
|
|
|
|
|
73
|
|
127
|
|
53
|
|
Finance costs
|
|
|
|
|
|
|||
Net interest on pensions and other post-retirement benefit obligations
|
25
|
|
(22
|
)
|
(65
|
)
|
(107
|
)
|
Interest expense on financial liabilities held at amortised cost:
|
|
|
|
|
|
|||
Bank loans and overdrafts
|
|
|
(72
|
)
|
(87
|
)
|
(59
|
)
|
Other borrowings
|
|
|
(970
|
)
|
(1,030
|
)
|
(927
|
)
|
Interest expense on financial liabilities held at fair value through profit and loss
|
|
|
(20
|
)
|
—
|
|
—
|
|
Derivatives
|
|
|
(43
|
)
|
12
|
|
(8
|
)
|
Unwinding of discount on provisions
|
26
|
|
(74
|
)
|
(75
|
)
|
(73
|
)
|
Other interest
|
|
|
—
|
|
(11
|
)
|
(17
|
)
|
Less: interest capitalised
2
|
|
|
135
|
|
128
|
|
109
|
|
|
|
|
(1,066
|
)
|
(1,128
|
)
|
(1,082
|
)
|
Remeasurements – Finance income
|
|
|
|
|
|
|
|
|
Net gains on financial assets held at fair value through profit and loss
|
|
|
15
|
|
—
|
|
—
|
|
|
|
|
15
|
|
—
|
|
—
|
|
Remeasurements – Finance costs
|
|
|
|
|
|
|
|
|
Net losses on financial liabilities held at fair value through profit and loss
|
|
|
(51
|
)
|
—
|
|
—
|
|
Net (losses)/gains on derivative financial instruments
3
:
|
|
|
|
|
|
|||
Derivatives designated as hedges for hedge accounting
|
|
|
(37
|
)
|
49
|
|
81
|
|
Derivatives not designated as hedges for hedge accounting
|
|
|
(3
|
)
|
70
|
|
(139
|
)
|
|
|
|
(91
|
)
|
119
|
|
(58
|
)
|
Total remeasurements – Finance income and costs
|
|
|
(76
|
)
|
119
|
|
(58
|
)
|
|
|
|
|
|
|
|||
Finance income
|
|
|
88
|
|
127
|
|
53
|
|
Finance costs
|
|
|
(1,157
|
)
|
(1,009
|
)
|
(1,140
|
)
|
|
|
|
|
|
|
|
|
|
Net finance costs from continuing operations
|
|
|
(1,069
|
)
|
(882
|
)
|
(1,087
|
)
|
1.
|
Comparatives for 2018 only have been re-presented to reflect the classification of our retained interest in Quadgas as a discontinued operation in the current period (see note 1C and note 10).
|
2.
|
Interest on funding attributable to assets in the course of construction in the current year was capitalised at a rate of
3.9%
(
2018
:
4.1%
;
2017
:
3.4%
). In the UK, capitalised interest qualifies for a current year tax deduction with tax relief claimed of
£19 million
(
2018
:
£20 million
;
2017
:
£18 million
). In the US, capitalised interest is added to the cost of plant and qualifies for tax depreciation allowances.
|
3.
|
Includes a net foreign exchange gain on financing activities of
£264 million
(
2018
:
£314 million
loss;
2017
:
£264 million
loss) offset by foreign exchange losses and gains on derivative financial instruments measured at fair value.
|
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.
|
|
2019
|
|
2018¹
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
Tax before exceptional items and remeasurements
|
488
|
|
584
|
|
666
|
|
Exceptional tax on items not included in profit before tax (see note 5)
|
—
|
|
(1,510
|
)
|
(94
|
)
|
Tax on other exceptional items and remeasurements
|
(149
|
)
|
37
|
|
(198
|
)
|
Tax on total exceptional items and remeasurements
|
(149
|
)
|
(1,473
|
)
|
(292
|
)
|
Total tax charge/(credit) from continuing operations
|
339
|
|
(889
|
)
|
374
|
|
|
2019
|
2018¹
|
|
2017
|
|
%
|
%
|
|
%
|
Before exceptional items and remeasurements – continuing operations
|
19.6
|
23.4
|
|
23.7
|
After exceptional items and remeasurements – continuing operations
|
18.4
|
(33.4
|
)
|
17.1
|
1.
|
Comparatives for 2018 only have been re-presented to reflect the classification of our retained interest in Quadgas as a discontinued operation in the current period (see note 1C and note 10).
|
|
2019
|
|
2018¹
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
Current tax:
|
|
|
|
|||
UK corporation tax at 19% (2018: 19%; 2017: 20%)
|
132
|
|
200
|
|
225
|
|
UK corporation tax adjustment in respect of prior years
|
(12
|
)
|
(18
|
)
|
(47
|
)
|
|
120
|
|
182
|
|
178
|
|
Overseas corporation tax
|
8
|
|
15
|
|
—
|
|
Overseas corporation tax adjustment in respect of prior years
|
(40
|
)
|
(4
|
)
|
1
|
|
|
(32
|
)
|
11
|
|
1
|
|
Total current tax from continuing operations
|
88
|
|
193
|
|
179
|
|
Deferred tax:
|
|
|
|
|||
UK deferred tax
|
27
|
|
65
|
|
(9
|
)
|
UK deferred tax adjustment in respect of prior years
|
2
|
|
(2
|
)
|
(18
|
)
|
|
29
|
|
63
|
|
(27
|
)
|
Overseas deferred tax
|
208
|
|
(1,155
|
)
|
224
|
|
Overseas deferred tax adjustment in respect of prior years
|
14
|
|
10
|
|
(2
|
)
|
|
222
|
|
(1,145
|
)
|
222
|
|
Total deferred tax from continuing operations
|
251
|
|
(1,082
|
)
|
195
|
|
|
|
|
|
|||
Total tax charge/(credit) from continuing operations
|
339
|
|
(889
|
)
|
374
|
|
|
2019
|
|
2018¹
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
Current tax:
|
|
|
|
|
||
Available-for-sale investments
|
—
|
|
(11
|
)
|
6
|
|
Investments at fair value through other comprehensive income
|
—
|
|
—
|
|
—
|
|
Cash flow hedges, Cost of hedging and Own credit reserve
|
3
|
|
—
|
|
—
|
|
Share-based payments
|
—
|
|
(3
|
)
|
(4
|
)
|
Deferred tax:
|
|
|
|
|||
Available-for-sale investments
|
—
|
|
(18
|
)
|
8
|
|
Investments at fair value through other comprehensive income
|
—
|
|
—
|
|
—
|
|
Cash flow hedges, Cost of hedging and Own credit reserve
|
(12
|
)
|
(4
|
)
|
20
|
|
Remeasurements of gains of pension assets and post-retirement benefit obligations
2
|
12
|
|
530
|
|
277
|
|
Share-based payments
|
—
|
|
1
|
|
1
|
|
|
3
|
|
495
|
|
308
|
|
Total tax recognised in the statements of comprehensive income from continuing operations
|
3
|
|
497
|
|
311
|
|
Total tax recognised in the statements of comprehensive income from discontinued operations
|
—
|
|
—
|
|
10
|
|
Total tax relating to share-based payments recognised directly in equity from continuing operations
|
—
|
|
(2
|
)
|
(3
|
)
|
Total tax relating to share-based payments recognised directly in equity from discontinued operations
|
—
|
|
—
|
|
—
|
|
|
3
|
|
495
|
|
318
|
|
1.
|
Comparatives for 2018 only have been re-presented to reflect the classification of our retained interest in Quadgas as a discontinued operation in the current period (see note 1C and note 10).
|
2.
|
Remeasurements of gains on pension assets and post-retirement benefit obligations for the year ended 31 March 2018 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
|
|
|
2019
|
|
2019
|
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
Profit before tax from continuing operations
|
|
|
|
|
|
|
||||||
Before exceptional items and remeasurements
|
2,489
|
|
2,489
|
|
2,500
|
|
2,500
|
|
2,807
|
|
2,807
|
|
Exceptional items and remeasurements
|
—
|
|
(648
|
)
|
—
|
|
160
|
|
—
|
|
(623
|
)
|
Profit before tax from continuing operations
|
2,489
|
|
1,841
|
|
2,500
|
|
2,660
|
|
2,807
|
|
2,184
|
|
Profit before tax from continuing operations multiplied by UK corporation tax rate of 19% (2018: 19%; 2017: 20%)
|
473
|
|
350
|
|
475
|
|
506
|
|
561
|
|
437
|
|
Effect of:
|
|
|
|
|
|
|
||||||
Adjustments in respect of prior years
1
|
(36
|
)
|
(36
|
)
|
(22
|
)
|
(14
|
)
|
(67
|
)
|
(67
|
)
|
Expenses not deductible for tax purposes
2
|
22
|
|
28
|
|
20
|
|
21
|
|
35
|
|
442
|
|
Non-taxable income
2,3
|
(36
|
)
|
(36
|
)
|
(16
|
)
|
(26
|
)
|
(24
|
)
|
(425
|
)
|
Adjustment in respect of foreign tax rates
|
78
|
|
56
|
|
153
|
|
157
|
|
180
|
|
104
|
|
Deferred tax impact of change in UK tax rate
|
(3
|
)
|
(3
|
)
|
(7
|
)
|
(7
|
)
|
—
|
|
(94
|
)
|
Deferred tax impact of change in US tax rate due to Tax Reform
|
—
|
|
—
|
|
—
|
|
(1,510
|
)
|
—
|
|
—
|
|
Other
4
|
(10
|
)
|
(20
|
)
|
(19
|
)
|
(16
|
)
|
(19
|
)
|
(23
|
)
|
Total tax charge/(credit) from continuing operations
|
488
|
|
339
|
|
584
|
|
(889
|
)
|
666
|
|
374
|
|
|
|
|
|
|
|
|
||||||
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
Effective tax rate – continuing operations
|
19.6
|
|
18.4
|
|
23.4
|
|
(33.4
|
)
|
23.7
|
|
17.1
|
|
1.
|
Prior year adjustment is primarily due to agreement of prior period tax returns.
|
2.
|
For the year ended 31 March 2017, 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.
|
Includes gains on chargeable disposals which are offset by previously unrecognised capital losses.
|
4.
|
Other primarily comprises an adjustment in respect of post-tax profits of joint ventures and associates included within profit before tax from continuing operations.
|
|
Accelerated
tax depreciation £m |
|
Share-
based payments £m |
|
Pensions
and other post- retirement benefits £m |
|
Financial
instruments £m |
|
Other net
temporary
differences
1
£m
|
|
Total
£m |
|
Deferred tax liabilities/(assets)
|
|
|
|
|
|
|
||||||
At 1 April 2017
|
7,074
|
|
(12
|
)
|
(747
|
)
|
9
|
|
(1,845
|
)
|
4,479
|
|
Exchange adjustments and other²
|
(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 (as previously reported)
|
4,874
|
|
(9
|
)
|
(203
|
)
|
21
|
|
(1,047
|
)
|
3,636
|
|
Impact of transition to IFRS 9 and IFRS 15
|
19
|
|
—
|
|
—
|
|
(5
|
)
|
(93
|
)
|
(79
|
)
|
At 1 April 2018 (as restated)
|
4,893
|
|
(9
|
)
|
(203
|
)
|
16
|
|
(1,140
|
)
|
3,557
|
|
Exchange adjustments and other²
|
275
|
|
—
|
|
(31
|
)
|
(3
|
)
|
(76
|
)
|
165
|
|
(Credited)/charged to income statement
|
309
|
|
—
|
|
52
|
|
6
|
|
(124
|
)
|
243
|
|
Charged/(credited) to other comprehensive income and equity
|
—
|
|
—
|
|
12
|
|
(12
|
)
|
—
|
|
—
|
|
At 31 March 2019
|
5,477
|
|
(9
|
)
|
(170
|
)
|
7
|
|
(1,340
|
)
|
3,965
|
|
1.
|
The deferred tax asset of
£1,340 million
as at
31 March 2019
(2018:
£1,047 million
) in respect of other net temporary differences primarily relates to US net operating losses of
£423 million
(2018:
£390 million
) and environmental provisions of
£409 million
(2018:
£378 million
).
|
2.
|
Exchange adjustments and other comprises foreign exchange arising on translation of the US dollar deferred tax balances. In the prior period it also included reclassification of
£43 million
relating to offset of the opening deferred tax balance on US net operating losses against US current tax liabilities.
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Capital losses
|
1,470
|
|
510
|
|
Non-trade deficits
|
4
|
|
4
|
|
Trading losses
|
5
|
|
4
|
|
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
|
|
EPS
|
|
Earnings
|
|
EPS
|
|
Earnings
|
|
EPS
|
|
|
2019
|
|
2019
|
|
2018¹
|
|
2018¹
|
|
2017
|
|
2017
|
|
|
£m
|
|
pence
|
|
£m
|
|
pence
|
|
£m
|
|
pence
|
|
Adjusted earnings from continuing operations
|
1,998
|
|
59.0
|
|
1,915
|
|
55.3
|
|
2,141
|
|
56.9
|
|
Exceptional items and remeasurements after tax from continuing operations
|
(499
|
)
|
(14.7
|
)
|
1,633
|
|
47.2
|
|
(331
|
)
|
(8.8
|
)
|
Earnings from continuing operations
|
1,499
|
|
44.3
|
|
3,548
|
|
102.5
|
|
1,810
|
|
48.1
|
|
Adjusted earnings from discontinued operations
|
57
|
|
1.7
|
|
145
|
|
4.2
|
|
607
|
|
16.1
|
|
Exceptional items and remeasurements after tax from discontinued operations
|
(45
|
)
|
(1.4
|
)
|
(143
|
)
|
(4.1
|
)
|
5,378
|
|
142.9
|
|
Earnings from discontinued operations
|
12
|
|
0.3
|
|
2
|
|
0.1
|
|
5,985
|
|
159.0
|
|
Total adjusted earnings
|
2,055
|
|
60.7
|
|
2,060
|
|
59.5
|
|
2,748
|
|
73.0
|
|
Total exceptional items and remeasurements after tax (including discontinued operations)
|
(544
|
)
|
(16.1
|
)
|
1,490
|
|
43.1
|
|
5,047
|
|
134.1
|
|
Total earnings
|
1,511
|
|
44.6
|
|
3,550
|
|
102.6
|
|
7,795
|
|
207.1
|
|
|
|
|
|
|
|
|
||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
|
|
millions
|
|
|
millions
|
|
|
millions
|
|
|||
Weighted average number of ordinary shares – basic
|
|
3,386
|
|
|
3,461
|
|
|
3,763
|
|
|
Earnings
|
|
EPS
|
|
Earnings
|
|
EPS
|
|
Earnings
|
|
EPS
|
|
|
2019
|
|
2019
|
|
2018¹
|
|
2018¹
|
|
2017
|
|
2017
|
|
|
£m
|
|
pence
|
|
£m
|
|
pence
|
|
£m
|
|
pence
|
|
Adjusted earnings from continuing operations
|
1,998
|
|
58.8
|
|
1,915
|
|
55.1
|
|
2,141
|
|
56.7
|
|
Exceptional items and remeasurements after tax from continuing operations
|
(499
|
)
|
(14.7
|
)
|
1,633
|
|
47.0
|
|
(331
|
)
|
(8.8
|
)
|
Earnings from continuing operations
|
1,499
|
|
44.1
|
|
3,548
|
|
102.1
|
|
1,810
|
|
47.9
|
|
Adjusted earnings from discontinued operations
|
57
|
|
1.7
|
|
145
|
|
4.2
|
|
607
|
|
16.0
|
|
Exceptional items and remeasurements after tax from discontinued operations
|
(45
|
)
|
(1.4
|
)
|
(143
|
)
|
(4.2
|
)
|
5,378
|
|
142.3
|
|
Earnings from discontinued operations
|
12
|
|
0.3
|
|
2
|
|
0.0
|
|
5,985
|
|
158.3
|
|
Total adjusted earnings
|
2,055
|
|
60.5
|
|
2,060
|
|
59.3
|
|
2,748
|
|
72.7
|
|
Total exceptional items and remeasurements after tax (including discontinued operations)
|
(544
|
)
|
(16.1
|
)
|
1,490
|
|
42.8
|
|
5,047
|
|
133.5
|
|
Total earnings
|
1,511
|
|
44.4
|
|
3,550
|
|
102.1
|
|
7,795
|
|
206.2
|
|
|
|
|
|
|
|
|
||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
|
|
millions
|
|
|
millions
|
|
|
millions
|
|
|||
Weighted average number of ordinary shares – diluted
|
|
3,401
|
|
|
3,476
|
|
|
3,780
|
|
1.
|
Comparatives for 2018 only have been re-presented to reflect the classification of our retained interest in Quadgas as a discontinued operation in the current period (see note 1C and note 10).
|
|
2019
|
|
2018
|
|
2017
|
|
|
millions
|
|
millions
|
|
millions
|
|
Weighted average number of ordinary shares – basic
|
3,386
|
|
3,461
|
|
3,763
|
|
Effect of dilutive potential ordinary shares – employee share plans
|
15
|
|
15
|
|
17
|
|
Weighted average number of ordinary shares – diluted
|
3,401
|
|
3,476
|
|
3,780
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
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
|
16.08
|
450
|
|
94
|
|
|
15.49
|
|
346
|
|
176
|
|
|
15.17
|
|
540
|
|
32
|
|
|
Special dividend
|
—
|
|
—
|
|
—
|
|
|
84.375
|
|
3,171
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Final dividend in respect of the prior year
|
30.44
|
710
|
|
319
|
|
|
29.10
|
|
970
|
|
33
|
|
|
28.34
|
|
923
|
|
151
|
|
|
|
46.52
|
1,160
|
|
413
|
|
|
128.965
|
|
4,487
|
|
209
|
|
|
43.51
|
|
1,463
|
|
183
|
|
The 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. They only meet 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.
Following the decision that we will exercise our put option to sell the 39% equity interest we hold in Quadgas, and on the basis that we intend to dispose of our stake by 30 June 2019, we have met the criteria to classify our interests in Quadgas as a disposal group held for sale. The disposal group comprises our equity interests in Quadgas, the shareholder loan to Quadgas and the derivatives arising from the put/call agreements (described further below). The Group has classified the results of the disposal group as a discontinued operation for the year, and therefore they are presented in the income statement as a discontinued operation separately from the results of the rest of our business, in the same way as the results of the UK Gas Distribution business were disclosed following the sale of a 61% controlling stake in the business on 31 March 2017.
|
•
|
the shareholder loan receivable is valued at par of
£0.4 billion
;
|
•
|
the RAA derivative
1
is valued at
£nil
;
|
•
|
the FAA derivative asset
1
is valued at
£110 million
; and
|
•
|
the residual balance of
£1.5 billion
has been allocated to the investment in associate.
|
1.
|
The RAA and FAA are both level 3 financial instruments. No sensitivity analysis is provided in respect of the FAA and RAA derivatives. The price at which we will exit our interest in Quadgas is fixed and accordingly reflected in the aggregate carrying value of the disposal group. Any change in the fair value of these derivatives at 31 March would have been offset by equal and opposite adjustments to the carrying value of our equity interest, with nil net impact on profit and loss for the year. The notional value of the FAA was
£739 million
(2018:
£739 million
) and the notional value of the RAA was
£1,087 million
.
|
|
2019
|
|
2018¹
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
Revenue
|
—
|
|
—
|
|
1,887
|
|
Operating costs
2
|
(1
|
)
|
(41
|
)
|
(993
|
)
|
Operating (loss)/profit
|
(1
|
)
|
(41
|
)
|
894
|
|
Net finance income/(costs)
|
23
|
|
137
|
|
(152
|
)
|
Share of post-tax results of joint ventures and associates
3
|
(5
|
)
|
(89
|
)
|
—
|
|
Profit before tax from discontinued operations
|
17
|
|
7
|
|
742
|
|
Tax from discontinued operations
|
(5
|
)
|
(5
|
)
|
(79
|
)
|
Profit after tax from discontinued operations
|
12
|
|
2
|
|
663
|
|
Gain on disposal of UK Gas Distribution after tax
4
|
—
|
|
—
|
|
5,321
|
|
Total profit after tax from discontinued operations
5
|
12
|
|
2
|
|
5,984
|
|
1.
|
Comparatives for 2018 only have been re-presented to reflect the classification of our retained interest in Quadgas as a discontinued operation in the current period (see note 1C).
|
3.
|
For the year ended 31 March 2019, this is the net of
£43 million
impairment charge against investment in Quadgas (see note 16) and
£38 million
share of Quadgas post-tax profits recognised prior to classification as held for sale.
|
4.
|
The total gain on the disposal after tax of
£5,321 million
was comprised of total consideration of
£7,494 million
before transaction costs of
£1,837 million
and a tax credit of
£312 million
compared to net assets on disposal of
£648 million
.
|
5.
|
Of the total profit after tax from discontinued operations for the year ended 31 March 2019, the
£43 million
impairment charge against the investment in Quadgas, net operating costs of
£1 million
and the tax thereon are classified as exceptional items.
|
|
|
|
2019
|
|
2018¹
|
|
2017
|
|
|
Notes
|
|
£m
|
|
£m
|
|
£m
|
|
Profit after tax from discontinued operations
|
|
|
12
|
|
2
|
|
5,984
|
|
|
|
|
|
|
|
|||
Other comprehensive income/(loss)
|
|
|
|
|
|
|||
Items that will never be reclassified to profit or loss:
|
|
|
|
|
|
|||
Remeasurement losses of pension assets and post-retirement benefit obligations
|
25
|
|
—
|
|
—
|
|
(75
|
)
|
Share of other comprehensive income of associate, net of tax
|
|
|
36
|
|
142
|
|
—
|
|
Tax on items that will never be reclassified to profit or loss
|
|
|
—
|
|
—
|
|
13
|
|
Total items from discontinued operations that will never be reclassified to profit or loss
|
|
|
36
|
|
142
|
|
(62
|
)
|
Items that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|||
Net losses in respect of cash flow hedges
|
|
|
—
|
|
—
|
|
(106
|
)
|
Transferred to profit or loss in respect of cash flow hedges
|
|
|
—
|
|
—
|
|
233
|
|
Share of other comprehensive income of associate, net of tax
|
|
|
—
|
|
5
|
|
—
|
|
Tax on items that may be reclassified subsequently to profit or loss
|
|
|
—
|
|
—
|
|
(23
|
)
|
Total items from discontinued operations that may be reclassified subsequently to profit or loss
|
|
|
—
|
|
5
|
|
104
|
|
Other comprehensive income for the year, net of tax from discontinued operations
|
|
|
36
|
|
147
|
|
42
|
|
Total comprehensive income for the year from discontinued operations
|
|
|
48
|
|
149
|
|
6,026
|
|
1.
|
Comparatives for 2018 only have been re-presented to reflect the classification of our retained interest in Quadgas as a discontinued operation in the current period (see note 1C).
|
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 2017
|
1,732
|
|
Exchange adjustments
|
(98
|
)
|
Additions
|
173
|
|
Disposals
|
(18
|
)
|
Reclassifications
1
|
8
|
|
Cost at 31 March 2018
|
1,797
|
|
Exchange adjustments
|
70
|
|
Additions
|
306
|
|
Disposals
|
(15
|
)
|
Reclassifications
1
|
10
|
|
Cost at 31 March 2019
|
2,168
|
|
Accumulated amortisation at 1 April 2017
|
(809
|
)
|
Exchange adjustments
|
43
|
|
Amortisation charge for the year
|
(138
|
)
|
Accumulated amortisation of disposals
|
6
|
|
Accumulated amortisation at 31 March 2018
|
(898
|
)
|
Exchange adjustments
|
(26
|
)
|
Amortisation charge for the year
|
(175
|
)
|
Accumulated amortisation of disposals
|
15
|
|
Accumulated amortisation at 31 March 2019
|
(1,084
|
)
|
Net book value at 31 March 2019²
|
1,084
|
|
Net book value at 31 March 2018
|
899
|
|
1.
|
Reclassifications includes amounts transferred (to)/from property, plant and equipment (see note 13).
|
2.
|
Included in software is
£116 million
(2018:
£160 million
) relating to the US Enterprise Resource Planning system, which still has a remaining amortisation period of
four
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.
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 103
|
Plant and machinery:
|
|
Electricity transmission plant and wires
|
10 to 100
|
Electricity distribution plant
|
29 to 85
|
Electricity generation plant
|
15 to 93
|
Interconnector plant and other
|
5 to 65
|
Gas plant – mains, services and regulating equipment
|
10 to 95
|
Gas plant – storage
|
5 to 65
|
Gas plant – meters
|
7 to 62
|
Motor vehicles and office equipment
|
up to 30
|
|
Land and
buildings
£m
|
|
Plant and
machinery
£m
|
|
Assets
in the
course of
construction
1
£m
|
|
Motor
vehicles
and office
equipment
£m
|
|
Total
£m
|
|
Cost at 1 April 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
2
|
(16
|
)
|
(216
|
)
|
(21
|
)
|
(34
|
)
|
(287
|
)
|
Reclassifications
3
|
98
|
|
2,791
|
|
(2,926
|
)
|
49
|
|
12
|
|
Cost at 31 March 2018
|
2,930
|
|
49,374
|
|
4,273
|
|
857
|
|
57,434
|
|
Exchange adjustments
|
114
|
|
2,001
|
|
70
|
|
47
|
|
2,232
|
|
Additions
|
34
|
|
391
|
|
3,533
|
|
57
|
|
4,015
|
|
Disposals
2
|
(35
|
)
|
(357
|
)
|
(159
|
)
|
(44
|
)
|
(595
|
)
|
Reclassifications
3
|
295
|
|
2,974
|
|
(3,292
|
)
|
13
|
|
(10
|
)
|
Cost at 31 March 2019
|
3,338
|
|
54,383
|
|
4,425
|
|
930
|
|
63,076
|
|
Accumulated depreciation at 1 April 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
|
10
|
|
199
|
|
—
|
|
33
|
|
242
|
|
Reclassifications
3
|
—
|
|
(20
|
)
|
—
|
|
—
|
|
(20
|
)
|
Accumulated depreciation at 31 March 2018
|
(674
|
)
|
(16,398
|
)
|
—
|
|
(509
|
)
|
(17,581
|
)
|
Exchange adjustments
|
(19
|
)
|
(501
|
)
|
—
|
|
(25
|
)
|
(545
|
)
|
Depreciation charge for the year
|
(93
|
)
|
(1,229
|
)
|
(150
|
)
|
(101
|
)
|
(1,573
|
)
|
Disposals
|
7
|
|
335
|
|
150
|
|
44
|
|
536
|
|
Reclassifications
3
|
1
|
|
(1
|
)
|
—
|
|
—
|
|
—
|
|
Accumulated depreciation at 31 March 2019
|
(778
|
)
|
(17,794
|
)
|
—
|
|
(591
|
)
|
(19,163
|
)
|
Net book value at 31 March 2019
|
2,560
|
|
36,589
|
|
4,425
|
|
339
|
|
43,913
|
|
Net book value at 31 March 2018
|
2,256
|
|
32,976
|
|
4,273
|
|
348
|
|
39,853
|
|
1.
|
Included within disposals are UK nuclear connections development costs of
£150 million
(before
£13 million
of termination income) which were written off (2018:
£nil
). See note 5 for further details.
|
2.
|
In 2018, this included the reversal of assets with cost of
£51 million
and accumulated depreciation of
£51 million
disposed of in previous years that remain in use in the Group. It also included
£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.
|
3.
|
Represents amounts transferred between categories, (to)/from other intangible assets (see note 12), reclassifications from inventories and reclassifications between cost and accumulated depreciation.
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Information in relation to property, plant and equipment
|
|
|
||
Capitalised interest included within cost
|
1,995
|
|
1,861
|
|
Net book value of assets held under finance leases (all relating to motor vehicles and office equipment)
|
241
|
|
253
|
|
Additions to assets held under finance leases (all relating to motor vehicles and office equipment)
|
38
|
|
58
|
|
Contributions to cost of property, plant and equipment included within:
|
|
|
||
Trade and other payables
|
87
|
|
85
|
|
Non-current liabilities
|
372
|
|
844
|
|
Contract liabilities – current
|
61
|
|
—
|
|
Contract liabilities – non-current
|
933
|
|
—
|
|
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 2020.
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Other receivables
|
28
|
|
36
|
|
Non-current tax assets
|
56
|
|
51
|
|
Prepayments and accrued income
1
|
180
|
|
28
|
|
|
264
|
|
115
|
|
1.
|
Includes accrued income in relation to property sales to the St William joint venture.
|
The Group holds a range of financial and other investments. These investments include short-term money funds, quoted investments in equities or bonds of other companies, long-term loans to our associates and joint ventures and other loans and receivables. Other loans and receivables typically 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.
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Non-current
|
|
|
||
Debt investments at fair value through other comprehensive income
|
343
|
|
—
|
|
Equity investments at fair value through other comprehensive income
|
93
|
|
—
|
|
Investments at fair value through profit and loss
|
62
|
|
—
|
|
Available-for-sale investments
|
—
|
|
417
|
|
Loans to joint ventures and associates
1
|
169
|
|
482
|
|
|
667
|
|
899
|
|
Current
|
|
|
||
Investments at fair value through profit and loss
|
1,311
|
|
—
|
|
Available-for-sale investments
|
—
|
|
2,304
|
|
Other loans and receivables
|
670
|
|
390
|
|
|
1,981
|
|
2,694
|
|
|
2,648
|
|
3,593
|
|
Financial and other investments include the following:
|
|
|
||
Investments in short-term money funds
2
|
969
|
|
1,999
|
|
Insurance company fund investments
3
|
342
|
|
301
|
|
Equities
4
|
93
|
|
84
|
|
Bonds
4
|
122
|
|
145
|
|
Cash surrender value of life insurance policies
4
|
221
|
|
198
|
|
Loans to joint ventures and associates
|
169
|
|
482
|
|
Corporate venture capital and other
|
62
|
|
—
|
|
Restricted balances:
|
|
|
||
Collateral
5
|
637
|
|
335
|
|
Other
|
33
|
|
49
|
|
|
2,648
|
|
3,593
|
|
1.
|
Comprises a loan to a joint venture. In 2018,
£352 million
related to a shareholder loan to Quadgas, which has been re-classified to assets held for sale during the period.
|
2.
|
Includes
£6 million
(
2018
:
£69 million
) held as insurance company fund investments and
£22 million
(2018: £
nil
) US non-qualified plan investments, and therefore restricted.
|
3.
|
Includes restricted amounts of
£342 million
(2018:
£301 million
) held as insurance company fund investments.
|
4.
|
Primarily includes restricted amounts of
£436 million
(2018:
£411 million
) relating to US non-qualified plan investments.
|
5.
|
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 over which we exercise joint control or significant influence.
|
|
2019
|
|
2018
|
||||||||||
|
Associates
£m
|
|
Joint
ventures
£m
|
|
Total
£m
|
|
|
Associates
£m
|
|
Joint
ventures
£m
|
|
Total
£m
|
|
Share of net assets at 1 April
|
1,807
|
|
361
|
|
2,168
|
|
|
1,776
|
|
307
|
|
2,083
|
|
Exchange adjustments
|
17
|
|
(6
|
)
|
11
|
|
|
(19
|
)
|
7
|
|
(12
|
)
|
Additions
|
58
|
|
85
|
|
143
|
|
|
65
|
|
64
|
|
129
|
|
Capitalisation of shareholder loan to Quadgas
|
—
|
|
—
|
|
—
|
|
|
69
|
|
—
|
|
69
|
|
Impairment charge against investment in Quadgas
|
(43
|
)
|
—
|
|
(43
|
)
|
|
(213
|
)
|
—
|
|
(213
|
)
|
Transfer of interest in Quadgas to assets held for sale
|
(1,625
|
)
|
—
|
|
(1,625
|
)
|
|
—
|
|
—
|
|
—
|
|
Share of post-tax results for the year
|
67
|
|
11
|
|
78
|
|
|
147
|
|
26
|
|
173
|
|
Share of other comprehensive income of associates, net of tax
|
37
|
|
—
|
|
37
|
|
|
147
|
|
—
|
|
147
|
|
Dividends received
|
(38
|
)
|
(30
|
)
|
(68
|
)
|
|
(170
|
)
|
(43
|
)
|
(213
|
)
|
Other movements
1
|
11
|
|
(104
|
)
|
(93
|
)
|
|
5
|
|
—
|
|
5
|
|
Share of net assets at 31 March
|
291
|
|
317
|
|
608
|
|
|
1,807
|
|
361
|
|
2,168
|
|
1.
|
Other movements on joint ventures relate to reducing the carrying value of the investment in St William Homes LLP to reflect deferred income we expect to recognise over the next
10 years
.
|
|
BritNed Development Limited
|
|
Millennium Pipeline Company LLC
|
||||||
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
Statement of financial position
|
|
|
|
|
|
||||
Non-current assets
|
370
|
|
390
|
|
|
937
|
|
709
|
|
Cash and cash equivalents
|
59
|
|
50
|
|
|
35
|
|
15
|
|
All other current assets
|
2
|
|
4
|
|
|
22
|
|
28
|
|
Non-current liabilities
|
(11
|
)
|
(10
|
)
|
|
(326
|
)
|
(331
|
)
|
Current liabilities
|
(28
|
)
|
(28
|
)
|
|
(84
|
)
|
(64
|
)
|
Equity
|
392
|
|
406
|
|
|
584
|
|
357
|
|
Carrying amount of the Group’s investment
|
196
|
|
203
|
|
|
153
|
|
94
|
|
|
BritNed Development Limited
|
|
Millennium Pipeline Company LLC
|
||||||
|
2019
|
|
2018¹
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
Income statement
|
|
|
|
|
|
||||
Revenue
|
87
|
|
121
|
|
|
166
|
|
151
|
|
Depreciation and amortisation
|
(13
|
)
|
(13
|
)
|
|
(34
|
)
|
(31
|
)
|
Other costs
|
(10
|
)
|
(16
|
)
|
|
(35
|
)
|
(41
|
)
|
Operating profit
|
64
|
|
92
|
|
|
97
|
|
79
|
|
Income tax expense
|
(10
|
)
|
(20
|
)
|
|
—
|
|
—
|
|
Profit for the year
|
54
|
|
72
|
|
|
97
|
|
79
|
|
Group’s share of profit
|
27
|
|
36
|
|
|
25
|
|
21
|
|
1.
|
Comparatives for revenue and other costs have been re-presented on a net basis in line with current year classification.
|
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, equities or other indices. In accordance with Board-approved policies, derivatives are transacted generally to manage exposures to fluctuations in interest rates, foreign exchange rates and commodity prices. Our derivatives balances comprise two broad categories:
•
financing derivatives managing our exposure to interest rates and foreign exchange rates. Specifically we use these derivatives to manage our financing portfolio, holdings in foreign operations and contractual operational cash flows; and
•
commodity contract derivatives managing our US customers’ exposure to price and supply risks. Some forward contracts for the purchase of commodities meet the definition of derivatives and are included here.
We also enter into derivative financial instruments linked to commodity prices, including index futures, options and swaps. These are used to manage market price volatility.
|
|
2019
|
|
2018
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
Financing derivatives
|
1,052
|
|
(1,084
|
)
|
(32
|
)
|
|
1,545
|
|
(945
|
)
|
600
|
|
Commodity contract derivatives
|
101
|
|
(99
|
)
|
2
|
|
|
69
|
|
(116
|
)
|
(47
|
)
|
Further Acquisition Agreement derivative
1
|
—
|
|
—
|
|
—
|
|
|
110
|
|
—
|
|
110
|
|
|
1,153
|
|
(1,183
|
)
|
(30
|
)
|
|
1,724
|
|
(1,061
|
)
|
663
|
|
1.
|
The Further Acquisition Agreement derivative is a put/call option over a
14%
interest in Quadgas that has been reclassified as held for sale during the period (see note 10).
|
|
2019
|
|
2018
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
Interest rate swaps
|
539
|
|
(384
|
)
|
155
|
|
|
678
|
|
(457
|
)
|
221
|
|
Cross-currency interest rate swaps
|
470
|
|
(443
|
)
|
27
|
|
|
687
|
|
(207
|
)
|
480
|
|
Foreign exchange forward contracts
1
|
41
|
|
(41
|
)
|
—
|
|
|
174
|
|
(2
|
)
|
172
|
|
Inflation-linked swaps
|
—
|
|
(214
|
)
|
(214
|
)
|
|
5
|
|
(278
|
)
|
(273
|
)
|
Equity options
|
2
|
|
(2
|
)
|
—
|
|
|
1
|
|
(1
|
)
|
—
|
|
|
1,052
|
|
(1,084
|
)
|
(32
|
)
|
|
1,545
|
|
(945
|
)
|
600
|
|
1.
|
Included within the foreign exchange forward contracts balance is
£32 million
(
2018
:
£67 million
) of derivatives in relation to hedging of capital expenditure.
|
|
2019
|
|
2018
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m |
|
Current
|
|
|
|
|
|
|
|
||||||
Less than 1 year
|
56
|
|
(282
|
)
|
(226
|
)
|
|
375
|
|
(325
|
)
|
50
|
|
|
56
|
|
(282
|
)
|
(226
|
)
|
|
375
|
|
(325
|
)
|
50
|
|
Non-current
|
|
|
|
|
|
|
|
||||||
In 1 to 2 years
|
19
|
|
(193
|
)
|
(174
|
)
|
|
83
|
|
(88
|
)
|
(5
|
)
|
In 2 to 3 years
|
416
|
|
(1
|
)
|
415
|
|
|
25
|
|
(27
|
)
|
(2
|
)
|
In 3 to 4 years
|
11
|
|
—
|
|
11
|
|
|
418
|
|
(5
|
)
|
413
|
|
In 4 to 5 years
|
20
|
|
(14
|
)
|
6
|
|
|
12
|
|
—
|
|
12
|
|
More than 5 years
|
530
|
|
(594
|
)
|
(64
|
)
|
|
632
|
|
(500
|
)
|
132
|
|
|
996
|
|
(802
|
)
|
194
|
|
|
1,170
|
|
(620
|
)
|
550
|
|
|
1,052
|
|
(1,084
|
)
|
(32
|
)
|
|
1,545
|
|
(945
|
)
|
600
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Interest rate swaps
|
(6,299
|
)
|
(8,390
|
)
|
Cross-currency interest rate swaps
|
(6,700
|
)
|
(6,925
|
)
|
Foreign exchange forward contracts
|
(2,937
|
)
|
(5,793
|
)
|
Inflation-linked swaps
|
(500
|
)
|
(1,191
|
)
|
Equity options
|
(800
|
)
|
(800
|
)
|
|
(17,236
|
)
|
(23,099
|
)
|
1.
|
The notional contract amounts of derivatives indicate the gross nominal value of transactions outstanding at the reporting date.
|
|
2019
|
|
2018
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m |
|
Liabilities
£m
|
|
Total
£m
|
|
Commodity purchase contracts accounted for as derivative contracts
|
|
|
|
|
|
|
|
||||||
Forward purchases of gas
|
66
|
|
(78
|
)
|
(12
|
)
|
|
60
|
|
(64
|
)
|
(4
|
)
|
Derivative financial instruments linked to commodity prices
|
|
|
|
|
|
|
|
||||||
Electricity capacity
|
—
|
|
—
|
|
—
|
|
|
1
|
|
—
|
|
1
|
|
Electricity swaps
|
29
|
|
(19
|
)
|
10
|
|
|
7
|
|
(46
|
)
|
(39
|
)
|
Electricity options
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(1
|
)
|
(1
|
)
|
Gas swaps
|
5
|
|
(1
|
)
|
4
|
|
|
1
|
|
(4
|
)
|
(3
|
)
|
Gas options
|
1
|
|
(1
|
)
|
—
|
|
|
—
|
|
(1
|
)
|
(1
|
)
|
|
101
|
|
(99
|
)
|
2
|
|
|
69
|
|
(116
|
)
|
(47
|
)
|
|
2019
|
|
2018
|
|||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
Liabilities
£m
|
Total
£m
|
Current
|
|
|
|
|
|
|
|
|||
Less than one year
|
52
|
|
(68
|
)
|
(16
|
)
|
|
30
|
(76)
|
(46)
|
|
52
|
|
(68
|
)
|
(16
|
)
|
|
30
|
(76)
|
(46)
|
Non-current
|
|
|
|
|
|
|
|
|||
In 1 to 2 years
|
14
|
|
(9
|
)
|
5
|
|
|
6
|
(17)
|
(11)
|
In 2 to 3 years
|
9
|
|
(8
|
)
|
1
|
|
|
6
|
(11)
|
(5)
|
In 3 to 4 years
|
6
|
|
(4
|
)
|
2
|
|
|
6
|
(3)
|
3
|
In 4 to 5 years
|
6
|
|
(4
|
)
|
2
|
|
|
5
|
(2)
|
3
|
More than 5 years
|
14
|
|
(6
|
)
|
8
|
|
|
16
|
(7)
|
9
|
|
49
|
|
(31
|
)
|
18
|
|
|
39
|
(40)
|
(1)
|
|
101
|
|
(99
|
)
|
2
|
|
|
69
|
(116)
|
(47)
|
|
2019
|
2018
|
Forward purchases of gas
1
|
52m Dth
|
54m Dth
|
Electricity swaps
|
12,848 GWh
|
12,839 GWh
|
Electricity options
|
10,444 GWh
|
13,897 GWh
|
Electricity capacity
|
-
|
0.6 GWm
|
Gas swaps
|
87m Dth
|
100m Dth
|
Gas options
|
34m Dth
|
7m Dth
|
1.
|
Forward gas purchases have terms up to
two years
. The contractual obligations under these contracts are
£108 million
(
2018
:
£96 million
).
|
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).
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Fuel stocks
|
99
|
|
78
|
|
Raw materials and consumables
|
184
|
|
190
|
|
Current intangible assets – emission allowances
|
87
|
|
73
|
|
|
370
|
|
341
|
|
Trade and other receivables are amounts which are due from our customers for services we have provided.
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
At 1 April
|
309
|
|
424
|
|
Exchange adjustments
|
24
|
|
(42
|
)
|
Charge for the year, net of recoveries
|
181
|
|
36
|
|
Uncollectible amounts written off
|
(120
|
)
|
(109
|
)
|
At 31 March
|
394
|
|
309
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Up to 3 months past due
|
295
|
|
271
|
|
3 to 6 months past due
|
108
|
|
73
|
|
Over 6 months past due
|
160
|
|
131
|
|
|
563
|
|
475
|
|
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.
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Cash at bank
|
177
|
|
54
|
|
Short-term deposits
|
75
|
|
275
|
|
Cash and cash equivalents
|
252
|
|
329
|
|
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. We use derivatives to manage risks associated with interest rates and foreign exchange.
Our price controls and rate plans lead 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 we take account of certain other metrics used by credit rating agencies.
|
1.
|
In 2019 this includes a liability held at fair value through profit and loss of
£667 million
.
|
i)
|
the fair value of the liability was
£667 million
, which includes cumulative change in fair value attributable to changes in credit risk recognised in other comprehensive income, post tax of
£13 million
;
|
ii)
|
the amount repayable at maturity in November 2021 is
£943 million
; and
|
iii)
|
the difference between carrying amount and contractual amount at maturity is
£276 million
.
|
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 amounts, some of which represent 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.
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Trade payables
|
2,404
|
|
1,977
|
|
Deferred payables
|
217
|
|
355
|
|
Customer contributions
1
|
87
|
|
85
|
|
Social security and other taxes
|
159
|
|
173
|
|
Other payables
|
902
|
|
863
|
|
|
3,769
|
|
3,453
|
|
1.
|
From government-related entities.
|
Contract liabilities primarily relate to the advance consideration received from customers for construction contracts, mainly in relation to connections, for which revenue is recognised over the life of the asset.
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Current
|
61
|
|
—
|
|
Non-current
|
933
|
|
—
|
|
|
994
|
|
—
|
|
|
2019
|
|
|
£m
|
|
As at 1 April 2018 (see note 37)
|
866
|
|
Exchange adjustments
|
29
|
|
Revenue recognised that was included in the contract liability balance at the beginning of the period
|
(51
|
)
|
Increases due to cash received, excluding amounts recognised as revenue during the period
|
155
|
|
Changes due to amounts recognised as revenue
|
(5
|
)
|
At 31 March 2019
|
994
|
|
Other non-current liabilities include deferred income which will not be recognised as income until after 31 March 2020. It also includes payables that are not due until after that date.
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Deferred income
1
|
96
|
|
114
|
|
Customer contributions
2
|
372
|
|
844
|
|
Other payables
|
340
|
|
359
|
|
|
808
|
|
1,317
|
|
1.
|
Principally the deferral of profits relating to the sale of property, plant and equipment.
|
2.
|
From government-related entities.
|
All of our employees are eligible to participate in a pension plan. We have defined benefit (DB) and defined contribution (DC) pension plans. In the US we also provide healthcare and life insurance benefits to eligible employees, post-retirement. 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 –
£17 million
;
|
•
|
Section B of NGUKPS –
£12 million
; and
|
•
|
NGEG of ESPS –
£5 million
.
|
|
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
|
£6,716m
|
£5,849m
|
£2,553m
|
Actuarial value of benefits due to members
|
£6,627m
|
£6,057m
|
£3,053m
|
Market value as percentage of benefits
|
101%
|
97%
|
84%
|
Funding surplus/(deficit)
|
£89m
|
(£208m)
|
(£500m)
|
Funding surplus/(deficit) net of tax
|
£74m
|
(£173m)
|
(£415m)
|
|
Section A of NGUKPS
|
Section B of NGUKPS
|
NGEG of ESPS
|
Value of security arrangements at 31 March 2019
|
£315m
|
£179m
|
£250m
|
Principal supporting employers
|
National Grid plc and National Grid UK Limited
|
National Grid Gas plc (NGG)
|
National Grid Electricity Transmission plc (NGET)
|
Additional amounts payable
1
|
£72m
|
A maximum of £280m
|
A maximum of £500m
|
1.
|
These amounts are payable if certain trigger events occur which have been individually agreed between the schemes and their relevant supporting employers.
|
|
US pensions
|
|
US other post-retirement benefits
|
||||
|
2019
|
2018
|
2017
|
|
2019
|
2018
|
2017
|
|
%
|
%
|
%
|
%
|
%
|
%
|
|
Discount rate
|
3.95
|
4.00
|
4.25
|
|
3.95
|
4.00
|
4.25
|
Salary increases
|
3.50
|
3.50
|
3.50
|
|
3.50
|
3.50
|
3.50
|
Initial healthcare cost trend rate
|
n/a
|
n/a
|
n/a
|
|
7.25
|
7.50
|
7.00
|
Ultimate healthcare cost trend rate
|
n/a
|
n/a
|
n/a
|
|
4.50
|
4.50
|
4.50
|
•
|
UK pensions:
10%
active members (2018:
10%
; 2017:
12%
);
16%
deferred members (2018:
18%
; 2017:
19%
);
74%
pensioner members (2018:
72%
; 2017:
69%
);
|
•
|
US pensions:
37%
active members (2018:
38%
; 2017:
38%
);
9%
deferred members (2018:
8%
; 2017:
9%
);
54%
pensioner members (2018:
54%
; 2017:
53%
); and
|
•
|
US other post-retirement benefits:
39%
active members (2018:
38%
; 2017:
39%
);
0%
deferred members (2018:
0%
; 2017:
0%
);
61%
pensioner members (2018:
62%
; 2017:
61%
).
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
Included within operating costs
|
|
|
|
|||
Administration costs
|
14
|
|
16
|
|
16
|
|
Included within payroll costs
|
|
|
|
|||
Defined benefit scheme costs:
|
|
|
|
|||
Current service cost
|
193
|
|
193
|
|
232
|
|
Past service cost – augmentations
|
5
|
|
1
|
|
1
|
|
Past service credit – redundancies
|
(7
|
)
|
(1
|
)
|
(1
|
)
|
Special termination benefit cost – redundancies
|
55
|
|
9
|
|
7
|
|
Past service cost – plan amendments
|
34
|
|
—
|
|
—
|
|
|
280
|
|
202
|
|
239
|
|
Included within finance income and costs
|
|
|
|
|||
Net interest cost
|
22
|
|
65
|
|
105
|
|
Included within gain on disposal of discontinued operations
|
|
|
|
|||
Administration costs
|
—
|
|
—
|
|
5
|
|
Disposal of UK Gas Distribution
|
—
|
|
—
|
|
34
|
|
|
—
|
|
—
|
|
39
|
|
Total included in income statement
1,2
|
316
|
|
283
|
|
399
|
|
Remeasurement gains of pension assets and post-retirement benefit obligations
|
68
|
|
1,313
|
|
348
|
|
Exchange adjustments
|
(101
|
)
|
175
|
|
(345
|
)
|
Total included in the statement of other comprehensive income
2
|
(33
|
)
|
1,488
|
|
3
|
|
1.
|
Amounts recognised in the income statement include operating costs of
£nil
(2018:
£nil
; 2017:
£1 million
); payroll costs of
£nil
(2018:
£nil
; 2017:
£35 million
); and net interest of
£nil
(2018:
£nil
; 2017:
£2 million
income) presented within profit from discontinued operations. These amounts all relate to UK pensions. In addition there is a net charge of
£52 million
(2018:
£nil
; 2017:
£nil
) relating to redundancy pension costs in respect of the UK cost efficiency and restructuring programme included within exceptional items.
|
2.
|
Amounts recognised in the statement of other comprehensive income include remeasurements of pension assets and post-retirement benefit obligations of
£nil
(2018:
£nil
; 2017:
£75 million
loss) presented within discontinued operations. These amounts all relate to UK pensions.
|
|
UK Pensions
|
|
US Pensions
|
|
US other post-retirement benefits
|
|||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Included within operating costs
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Administration costs
|
6
|
|
6
|
|
6
|
|
|
7
|
|
9
|
|
9
|
|
|
1
|
|
1
|
|
1
|
|
Included within payroll costs
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Defined benefit scheme costs:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Current service cost
|
41
|
|
49
|
|
76
|
|
|
104
|
|
98
|
|
103
|
|
|
48
|
|
46
|
|
53
|
|
Past service cost – augmentations
|
5
|
|
1
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Past service credit – redundancies
|
(7
|
)
|
(1
|
)
|
(1
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Special termination benefit cost – redundancies
|
55
|
|
9
|
|
7
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Past service cost – plan amendments
|
34
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
128
|
|
58
|
|
83
|
|
|
104
|
|
98
|
|
103
|
|
|
48
|
|
46
|
|
53
|
|
Included within finance income and costs
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net interest cost
|
(31
|
)
|
3
|
|
—
|
|
|
21
|
|
27
|
|
43
|
|
|
32
|
|
35
|
|
62
|
|
Included within gain on disposal of discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Administration costs
|
—
|
|
—
|
|
5
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Disposal of UK Gas Distribution
|
—
|
|
—
|
|
34
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
39
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Total included in income statement
|
103
|
|
67
|
|
128
|
|
|
132
|
|
134
|
|
155
|
|
|
81
|
|
82
|
|
116
|
|
Remeasurement gains/(losses) of pension assets and post-retirement benefit obligations
|
57
|
|
1,177
|
|
(541
|
)
|
|
(14
|
)
|
27
|
|
319
|
|
|
25
|
|
109
|
|
570
|
|
Exchange adjustments
|
—
|
|
—
|
|
—
|
|
|
(42
|
)
|
75
|
|
(140
|
)
|
|
(59
|
)
|
100
|
|
(205
|
)
|
Total included in the statement of other comprehensive income
|
57
|
|
1,177
|
|
(541
|
)
|
|
(56
|
)
|
102
|
|
179
|
|
|
(34
|
)
|
209
|
|
365
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening net defined benefit liability
|
(263
|
)
|
(1,933
|
)
|
(2,585
|
)
|
Cost recognised in the income statement
|
(316
|
)
|
(283
|
)
|
(399
|
)
|
Remeasurement and foreign exchange effects recognised in the statement of other comprehensive income
|
(33
|
)
|
1,488
|
|
3
|
|
Employer contributions
|
419
|
|
475
|
|
1,073
|
|
Other movements
|
(25
|
)
|
(10
|
)
|
(25
|
)
|
Closing net defined benefit liability
|
(218
|
)
|
(263
|
)
|
(1,933
|
)
|
|
UK pensions
|
|
US pensions
|
|
US other post-retirement benefits
|
|||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening net defined benefit asset/(liability)
|
1,104
|
|
(156
|
)
|
(15
|
)
|
|
(552
|
)
|
(728
|
)
|
(1,009
|
)
|
|
(815
|
)
|
(1,049
|
)
|
(1,561
|
)
|
Cost recognised in the income statement
|
(103
|
)
|
(67
|
)
|
(128
|
)
|
|
(132
|
)
|
(134
|
)
|
(155
|
)
|
|
(81
|
)
|
(82
|
)
|
(116
|
)
|
Remeasurement and foreign exchange effects recognised in the statement of other comprehensive income
|
57
|
|
1,177
|
|
(541
|
)
|
|
(56
|
)
|
102
|
|
179
|
|
|
(34
|
)
|
209
|
|
365
|
|
Employer contributions
|
174
|
|
150
|
|
528
|
|
|
231
|
|
208
|
|
257
|
|
|
14
|
|
117
|
|
288
|
|
Other movements
|
(1
|
)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(24
|
)
|
(10
|
)
|
(25
|
)
|
Closing net defined benefit
asset/(liability) |
1,231
|
|
1,104
|
|
(156
|
)
|
|
(509
|
)
|
(552
|
)
|
(728
|
)
|
|
(940
|
)
|
(815
|
)
|
(1,049
|
)
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening defined benefit obligations
|
(24,054
|
)
|
(26,230
|
)
|
(28,952
|
)
|
Current service cost
|
(193
|
)
|
(193
|
)
|
(232
|
)
|
Interest cost
|
(771
|
)
|
(775
|
)
|
(1,057
|
)
|
Actuarial (losses)/gains – experience
|
(69
|
)
|
(100
|
)
|
166
|
|
Actuarial gains – demographic assumptions
|
266
|
|
671
|
|
225
|
|
Actuarial (losses)/gains – financial assumptions
|
(619
|
)
|
174
|
|
(3,377
|
)
|
Past service credit – redundancies
|
7
|
|
1
|
|
1
|
|
Special termination benefit cost – redundancies
|
(55
|
)
|
(9
|
)
|
(7
|
)
|
Past service cost – augmentations
|
(5
|
)
|
(1
|
)
|
(1
|
)
|
Past service cost – plan amendments
|
(34
|
)
|
—
|
|
—
|
|
Medicare subsidy received
|
(19
|
)
|
(21
|
)
|
(14
|
)
|
Obligations transferred on disposal of UK Gas Distribution
|
—
|
|
—
|
|
6,970
|
|
Employee contributions
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
Benefits paid
|
1,376
|
|
1,285
|
|
1,443
|
|
Exchange adjustments
|
(768
|
)
|
1,145
|
|
(1,394
|
)
|
Closing defined benefit obligations
|
(24,939
|
)
|
(24,054
|
)
|
(26,230
|
)
|
|
UK pensions
|
|
US pensions
|
|
US other post-retirement benefits
|
|||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening defined benefit obligations
|
(14,226
|
)
|
(15,645
|
)
|
(19,416
|
)
|
|
(6,582
|
)
|
(7,050
|
)
|
(6,145
|
)
|
|
(3,246
|
)
|
(3,535
|
)
|
(3,391
|
)
|
Current service cost
|
(41
|
)
|
(49
|
)
|
(76
|
)
|
|
(104
|
)
|
(98
|
)
|
(103
|
)
|
|
(48
|
)
|
(46
|
)
|
(53
|
)
|
Interest cost
|
(358
|
)
|
(366
|
)
|
(615
|
)
|
|
(277
|
)
|
(273
|
)
|
(285
|
)
|
|
(136
|
)
|
(136
|
)
|
(157
|
)
|
Actuarial (losses)/gains – experience
|
(56
|
)
|
(95
|
)
|
106
|
|
|
(52
|
)
|
(38
|
)
|
(2
|
)
|
|
39
|
|
33
|
|
62
|
|
Actuarial gains – demographic assumptions
|
224
|
|
565
|
|
214
|
|
|
—
|
|
30
|
|
2
|
|
|
42
|
|
76
|
|
9
|
|
Actuarial (losses)/gains – financial assumptions
|
(568
|
)
|
604
|
|
(3,751
|
)
|
|
(24
|
)
|
(279
|
)
|
37
|
|
|
(27
|
)
|
(151
|
)
|
337
|
|
Past service credit – redundancies
|
7
|
|
1
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Special termination benefit cost – redundancies
|
(55
|
)
|
(9
|
)
|
(7
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Past service cost – augmentations
|
(5
|
)
|
(1
|
)
|
(1
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Past service cost – plan amendments
|
(34
|
)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Medicare subsidy received
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(19
|
)
|
(21
|
)
|
(14
|
)
|
Obligations transferred on disposal of UK Gas Distribution
|
—
|
|
—
|
|
6,970
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Employee contributions
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Benefits paid
|
837
|
|
770
|
|
931
|
|
|
398
|
|
362
|
|
349
|
|
|
141
|
|
153
|
|
163
|
|
Exchange adjustments
|
—
|
|
—
|
|
—
|
|
|
(514
|
)
|
764
|
|
(903
|
)
|
|
(254
|
)
|
381
|
|
(491
|
)
|
Closing defined benefit obligations
|
(14,276
|
)
|
(14,226
|
)
|
(15,645
|
)
|
|
(7,155
|
)
|
(6,582
|
)
|
(7,050
|
)
|
|
(3,508
|
)
|
(3,246
|
)
|
(3,535
|
)
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening fair value of plan assets
|
23,858
|
|
24,375
|
|
26,434
|
|
Interest income
|
749
|
|
710
|
|
952
|
|
Return on plan assets in excess of interest
|
490
|
|
568
|
|
3,334
|
|
Administration costs
|
(14
|
)
|
(16
|
)
|
(21
|
)
|
Employer contributions
|
419
|
|
475
|
|
1,073
|
|
Employee contributions
|
1
|
|
1
|
|
1
|
|
Benefits paid
|
(1,377
|
)
|
(1,285
|
)
|
(1,443
|
)
|
Exchange adjustments
|
667
|
|
(970
|
)
|
1,049
|
|
Assets transferred on disposal of UK Gas Distribution
|
—
|
|
—
|
|
(7,004
|
)
|
Closing fair value of plan assets
|
24,793
|
|
23,858
|
|
24,375
|
|
Actual return on plan assets
|
1,239
|
|
1,278
|
|
4,286
|
|
Expected contributions to plans in the following year
|
307
|
|
363
|
|
491
|
|
|
UK pensions
|
|
US pensions
|
|
US other post-retirement benefits
|
|||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening fair value of plan assets
|
15,330
|
|
15,489
|
|
19,401
|
|
|
6,030
|
|
6,322
|
|
5,136
|
|
|
2,498
|
|
2,564
|
|
1,897
|
|
Interest income
|
389
|
|
363
|
|
615
|
|
|
256
|
|
246
|
|
242
|
|
|
104
|
|
101
|
|
95
|
|
Return on plan assets in excess
of/(less than) interest |
457
|
|
103
|
|
2,890
|
|
|
62
|
|
314
|
|
282
|
|
|
(29
|
)
|
151
|
|
162
|
|
Administration costs
|
(6
|
)
|
(6
|
)
|
(11
|
)
|
|
(7
|
)
|
(9
|
)
|
(9
|
)
|
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
Employer contributions
|
174
|
|
150
|
|
528
|
|
|
231
|
|
208
|
|
257
|
|
|
14
|
|
117
|
|
288
|
|
Employee contributions
|
1
|
|
1
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Benefits paid
|
(838
|
)
|
(770
|
)
|
(931
|
)
|
|
(398
|
)
|
(362
|
)
|
(349
|
)
|
|
(141
|
)
|
(153
|
)
|
(163
|
)
|
Exchange adjustments
|
—
|
|
—
|
|
—
|
|
|
472
|
|
(689
|
)
|
763
|
|
|
195
|
|
(281
|
)
|
286
|
|
Assets transferred on disposal of UK Gas Distribution
|
—
|
|
—
|
|
(7,004
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Closing fair value of plan assets
|
15,507
|
|
15,330
|
|
15,489
|
|
|
6,646
|
|
6,030
|
|
6,322
|
|
|
2,640
|
|
2,498
|
|
2,564
|
|
Actual return on plan assets
|
846
|
|
466
|
|
3,505
|
|
|
318
|
|
560
|
|
524
|
|
|
75
|
|
252
|
|
257
|
|
Expected contributions to plans in the following year
|
148
|
|
140
|
|
128
|
|
|
150
|
|
221
|
|
229
|
|
|
9
|
|
2
|
|
134
|
|
|
UK pensions
|
US pensions
|
US other post-retirement benefits
|
|
%
|
%
|
%
|
Equities
|
12.7
|
40.8
|
60.2
|
Corporate bonds
|
23.4
|
26.4
|
0.7
|
Government securities
|
39.4
|
16.0
|
20.6
|
Property
|
5.5
|
4.7
|
—
|
Diversified alternatives
|
5.0
|
10.1
|
12.9
|
Liability matching assets
|
11.1
|
—
|
—
|
Infrastructure
|
—
|
1.5
|
—
|
Cash and cash equivalents
|
1.9
|
0.3
|
—
|
Other
|
1.0
|
0.2
|
5.6
|
|
100.0
|
100.0
|
100.0
|
•
|
Return-seeking assets: equities, property and diversified funds where the objective is to achieve growth within the constraints of the schemes’ risk profiles. These assets should produce returns greater than the liability increase, so improving the funding position, and are assessed by reference to benchmarks and performance targets agreed with the investment managers; and
|
•
|
Liability-matching assets: liability-driven investment (LDI) funds and swaps, where the objective is to secure fixed or inflation-adjusted cash flows in future. These investments are generally expected to match the change in liability valuation, so protecting the funding position. Bonds and securities are also measured against certain market benchmarks.
|
•
|
Asset volatility – the schemes invest in a variety of asset classes, but principally in equities, government securities, corporate bonds and property. Consequently actual returns will differ from the underlying discount rate adopted, impacting on the funding position of the scheme through the net balance sheet asset or liability. Each scheme seeks to balance the level of investment return required with the risk that it can afford to take, to design the most appropriate investment portfolio. Volatility will be controlled through using liability-matching asset strategies, interest rate hedging and management of foreign exchange exposure, as well as diversification of the return-seeking assets;
|
•
|
Changes in bond yields – liabilities are calculated using discount rates set with reference to the yields in high-quality corporate bonds prevailing in the UK and US debt markets and will fluctuate as yields change;
|
•
|
Member longevity – longevity is a key driver of liabilities and changes in expected mortality 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 (swap) which covers exposure to improvement in longevity, providing long-term protection to the scheme in the event that members live longer than expected at the time the swap was entered into;
|
•
|
Deficit risk – the risk that the increase in the liability will outpace the growth in assets is managed through assessing the progress of the actual growth of the liabilities relative to the selected investment policy and adjusting the policy as required;
|
•
|
Manager risk – expected deviation of the return, relative to the benchmark, is carefully monitored, as is the process, team and expertise of the manager. Where appropriate, the Trustee or RPC will move assets under management to a more robust manager, whom they consider will have a better expectation of performing well in the future;
|
•
|
Currency risk – fluctuations in the value of foreign denominated assets due to exposure to currency exchange rates is managed through a combination of segregated currency hedging overlay and currency hedging carried out by some of the investment managers;
|
•
|
Interest rate and inflation risk – changes in inflation will affect the current and future pensions but are partially mitigated through investing in inflation-matching assets and hedging instruments;
|
•
|
Investment funds – the credit risk arising from investing in investment funds is mitigated by the underlying assets of the investment funds being ring-fenced from the fund managers, the regulatory environments in which the fund managers operate and diversification of investments among investment fund arrangements;
|
•
|
Political risk – an adverse influence on asset values arising from political intervention in a specific country or region is managed through regular review of the asset distribution and through ensuring geographical diversification of investments within the managers;
|
•
|
Counterparty risk – is managed by having a diverse range of counterparties and through having a strong collateralisation process. Measurement and management of counterparty risk is delegated to the relevant investment managers; and
|
•
|
Custodian risk – the creditworthiness and ability of the custodians to settle trades on time and provide secure safekeeping of the assets under custody is managed by ongoing monitoring of the custodial arrangements against pre-agreed service levels and credit ratings.
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Equities
1
|
1,181
|
|
784
|
|
1,965
|
|
|
1,420
|
|
813
|
|
2,233
|
|
|
2,624
|
|
596
|
|
3,220
|
|
Corporate bonds
|
3,625
|
|
—
|
|
3,625
|
|
|
3,949
|
|
—
|
|
3,949
|
|
|
3,526
|
|
—
|
|
3,526
|
|
Government securities
|
6,114
|
|
—
|
|
6,114
|
|
|
5,629
|
|
—
|
|
5,629
|
|
|
5,406
|
|
—
|
|
5,406
|
|
Property
|
108
|
|
749
|
|
857
|
|
|
129
|
|
834
|
|
963
|
|
|
90
|
|
708
|
|
798
|
|
Diversified alternatives
|
—
|
|
771
|
|
771
|
|
|
99
|
|
690
|
|
789
|
|
|
250
|
|
628
|
|
878
|
|
Liability-matching assets
|
1,751
|
|
(35
|
)²
|
1,716
|
|
|
1,174
|
|
—
|
|
1,174
|
|
|
1,162
|
|
—
|
|
1,162
|
|
Cash and cash equivalents
|
40
|
|
259
|
|
299
|
|
|
211
|
|
215
|
|
426
|
|
|
211
|
|
412
|
|
623
|
|
Other (including net current assets and liabilities)
|
—
|
|
160
|
|
160
|
|
|
—
|
|
167
|
|
167
|
|
|
(148
|
)
|
24
|
|
(124
|
)
|
|
12,819
|
|
2,688
|
|
15,507
|
|
|
12,611
|
|
2,719
|
|
15,330
|
|
|
13,121
|
|
2,368
|
|
15,489
|
|
1.
|
Included within equities at
31 March 2019
were ordinary shares of National Grid plc with a value of
£nil
(
2018
: £
nil
;
2017
:
£2 million
).
|
2.
|
Comprises the longevity insurance contract within the NGEG of the ESPS.
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Equities
|
533
|
|
2,178
|
|
2,711
|
|
|
577
|
|
1,954
|
|
2,531
|
|
|
698
|
|
1,915
|
|
2,613
|
|
Corporate bonds
|
1,329
|
|
425
|
|
1,754
|
|
|
1,085
|
|
413
|
|
1,498
|
|
|
1,130
|
|
537
|
|
1,667
|
|
Government securities
|
422
|
|
640
|
|
1,062
|
|
|
414
|
|
565
|
|
979
|
|
|
872
|
|
71
|
|
943
|
|
Property
|
—
|
|
316
|
|
316
|
|
|
—
|
|
279
|
|
279
|
|
|
—
|
|
335
|
|
335
|
|
Diversified alternatives
|
183
|
|
487
|
|
670
|
|
|
198
|
|
421
|
|
619
|
|
|
209
|
|
433
|
|
642
|
|
Infrastructure
|
—
|
|
99
|
|
99
|
|
|
—
|
|
77
|
|
77
|
|
|
—
|
|
79
|
|
79
|
|
Cash and cash equivalents
|
21
|
|
—
|
|
21
|
|
|
14
|
|
—
|
|
14
|
|
|
28
|
|
—
|
|
28
|
|
Other (including net current assets and liabilities)
|
(8
|
)
|
21
|
|
13
|
|
|
6
|
|
27
|
|
33
|
|
|
3
|
|
12
|
|
15
|
|
|
2,480
|
|
4,166
|
|
6,646
|
|
|
2,294
|
|
3,736
|
|
6,030
|
|
|
2,940
|
|
3,382
|
|
6,322
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Equities
|
404
|
|
1,184
|
|
1,588
|
|
|
412
|
|
1,110
|
|
1,522
|
|
|
405
|
|
1,162
|
|
1,567
|
|
Corporate bonds
|
19
|
|
—
|
|
19
|
|
|
24
|
|
—
|
|
24
|
|
|
19
|
|
—
|
|
19
|
|
Government securities
|
540
|
|
3
|
|
543
|
|
|
508
|
|
2
|
|
510
|
|
|
520
|
|
1
|
|
521
|
|
Diversified alternatives
|
175
|
|
166
|
|
341
|
|
|
161
|
|
144
|
|
305
|
|
|
166
|
|
149
|
|
315
|
|
Other
1
|
—
|
|
149
|
|
149
|
|
|
—
|
|
137
|
|
137
|
|
|
—
|
|
142
|
|
142
|
|
|
1,138
|
|
1,502
|
|
2,640
|
|
|
1,105
|
|
1,393
|
|
2,498
|
|
|
1,110
|
|
1,454
|
|
2,564
|
|
1.
|
Other primarily comprises insurance contracts.
|
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.
In the current year we recognised a charge to restructuring provisions, reflecting the review and reorganisation of our core regulated businesses in both the UK and US.
|
|
Environmental
£m
|
|
Decommissioning
£m
|
|
Restructuring
£m
|
|
Emissions
£m
|
|
Other
£m
|
|
Total
provisions
£m
|
|
At 1 April 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
|
|
Exchange adjustments
|
103
|
|
7
|
|
—
|
|
—
|
|
14
|
|
124
|
|
Additions
|
32
|
|
18
|
|
125
|
|
16
|
|
35
|
|
226
|
|
Unused amounts reversed
1
|
(36
|
)
|
(10
|
)
|
(3
|
)
|
(6
|
)
|
(10
|
)
|
(65
|
)
|
Unwinding of discount
|
62
|
|
5
|
|
—
|
|
—
|
|
7
|
|
74
|
|
Utilised
2
|
(53
|
)
|
(26
|
)
|
(42
|
)
|
(9
|
)
|
(79
|
)
|
(209
|
)
|
Transfers
3
|
—
|
|
—
|
|
—
|
|
—
|
|
(3
|
)
|
(3
|
)
|
At 31 March 2019
|
1,639
|
|
188
|
|
83
|
|
9
|
|
280
|
|
2,199
|
|
|
2019
|
|
|
2018
|
|
|
£m
|
|
|
£m
|
|
Current
|
316
|
|
|
273
|
|
Non-current
|
1,883
|
|
|
1,779
|
|
|
2,199
|
|
|
2,052
|
|
1.
|
Unused amounts reversed from other provisions include £
nil
(2018:
£16 million
) in relation to discontinued operations.
|
2.
|
Utilised amounts for other provisions include
£20 million
(2018:
£77 million
) in relation to discontinued operations.
|
3.
|
Represents net amounts transferred to trade and other payables (see note 22) of
£3 million
(
2018
:
£115 million
).
|
|
2019
|
|
2018
|
||||||||||||||
|
Discounted
£m
|
|
|
Undiscounted
£m
|
|
|
Real
discount
rate
|
|
|
Discounted
£m
|
|
|
Undiscounted
£m
|
|
|
Real
discount
rate
|
|
UK sites
|
189
|
|
|
210
|
|
|
1
|
%
|
|
213
|
|
|
235
|
|
|
1
|
%
|
US sites
|
1,450
|
|
|
1,555
|
|
|
1
|
%
|
|
1,318
|
|
|
1,410
|
|
|
1
|
%
|
|
1,639
|
|
|
1,765
|
|
|
|
|
1,531
|
|
|
1,645
|
|
|
|
•
|
£30 million
(
2018
:
£50 million
) in respect of legacy provisions recognised following the sale of UK Gas Distribution;
|
•
|
£29 million
(
2018
:
£48 million
) in respect of onerous lease commitments and rates payable on surplus properties with expenditure expected to be incurred until
2039
;
|
•
|
£164 million
(
2018
:
£152 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
(
2018
:
£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 settle employee share option and reward plan liabilities.
|
|
Allotted, called-up and fully paid
|
|||
|
million
|
|
£m
|
|
At 1 April 2017
|
3,943
|
|
449
|
|
Effect of share consolidation
1
|
(328
|
)
|
—
|
|
Issued during the year in lieu of dividends
2
|
23
|
|
3
|
|
At 31 March 2018
|
3,638
|
|
452
|
|
Issued during the year in lieu of dividends
2
|
49
|
|
6
|
|
At 31 March 2019
|
3,687
|
|
458
|
|
1.
|
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.
|
2.
|
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.
|
i)
|
During the year,
3 million
(
2018
:
3 million
) treasury shares were gifted to National Grid Employee Share Trusts and
3 million
(
2018
:
5 million
) treasury shares were re-issued in relation to employee share schemes, in total representing approximately
0.2%
(
2018
:
0.2%
) of the ordinary shares in issue as at
31 March 2019
. The nominal value of these shares was
£1 million
(
2018
:
£1 million
) and the total proceeds received were
£18 million
(
2018
:
£33 million
).
|
ii)
|
During the year, the Company made payments totalling
£2 million
(
2018
:
£5 million
) to National Grid Employee Share Trusts 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
|
|
Cost of hedging
£m
|
|
Available-
for-sale
£m
|
|
FVOCI equity
£m
|
|
FVOCI debt
£m
|
|
Own credit
£m
|
|
Capital
redemption
£m
|
|
Merger
£m
|
|
Total
£m
|
|
At 1 April 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 of associates taken to equity
|
—
|
|
5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
Transferred from profit or loss
|
—
|
|
(3
|
)
|
—
|
|
(73
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(76
|
)
|
Tax
|
—
|
|
4
|
|
—
|
|
29
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
33
|
|
At 31 March 2018 (as previously reported)
|
390
|
|
128
|
|
—
|
|
88
|
|
—
|
|
—
|
|
—
|
|
19
|
|
(5,165
|
)
|
(4,540
|
)
|
Transfer on transition to IFRS 9
|
—
|
|
(3
|
)
|
76
|
|
(88
|
)
|
34
|
|
46
|
|
7
|
|
—
|
|
—
|
|
72
|
|
At 1 April 2018 (as restated)
|
390
|
|
125
|
|
76
|
|
—
|
|
34
|
|
46
|
|
7
|
|
19
|
|
(5,165
|
)
|
(4,468
|
)
|
Exchange adjustments
1
|
346
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
346
|
|
Net (losses)/gains taken to equity
|
—
|
|
(40
|
)
|
(107
|
)
|
—
|
|
—
|
|
2
|
|
7
|
|
—
|
|
—
|
|
(138
|
)
|
Share of net gains of associates taken to equity
|
—
|
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
Transferred to profit or loss
|
—
|
|
—
|
|
41
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
41
|
|
Net losses in respect of cash flow hedging of capital expenditure
|
—
|
|
(13
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(13
|
)
|
Tax
|
—
|
|
6
|
|
7
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
12
|
|
Cash flow hedges transferred to the statement of financial position, net of tax
|
—
|
|
(18
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(18
|
)
|
At 31 March 2019
|
736
|
|
61
|
|
17
|
|
—
|
|
34
|
|
48
|
|
13
|
|
19
|
|
(5,165
|
)
|
(4,237
|
)
|
1.
|
The exchange adjustments recorded in the translation reserve comprise a gain of
£896 million
(
2018
: loss of
£1,304 million
;
2017
: gain of
£1,364 million
) relating to the translation of foreign operations offset by a loss of
£550 million
(
2018
: gain of
£800 million
;
2017
: loss of
£1,018 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, current financial investments and related financing derivatives.
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
(Decrease)/increase in cash and cash equivalents
|
(80
|
)
|
(807
|
)
|
984
|
|
(Decrease)/increase in financial investments
|
(822
|
)
|
(5,953
|
)
|
5,675
|
|
(Increase)/decrease in borrowings and related derivatives
1
|
(708
|
)
|
1,209
|
|
(3,715
|
)
|
Net interest paid on the components of net debt
2
|
866
|
|
808
|
|
1,955
|
|
Change in debt resulting from cash flows
|
(744
|
)
|
(4,743
|
)
|
4,899
|
|
Changes in fair value of financial assets and liabilities and exchange movements
|
(1,648
|
)
|
2,098
|
|
(2,273
|
)
|
Net interest charge on the components of net debt
|
(1,076
|
)
|
(1,017
|
)
|
(2,401
|
)
|
Disposal of UK Gas Distribution
|
—
|
|
—
|
|
5,890
|
|
Other non-cash movements
|
(27
|
)
|
(66
|
)
|
(64
|
)
|
Movement in net debt (net of related derivative financial instruments) in the year
|
(3,495
|
)
|
(3,728
|
)
|
6,051
|
|
Net debt (net of related derivative financial instruments) at start of year
|
(23,002
|
)
|
(19,274
|
)
|
(25,325
|
)
|
Impact of transition to IFRS 9
|
(32
|
)
|
—
|
|
—
|
|
Net debt (net of related derivative financial instruments) at end of year
|
(26,529
|
)
|
(23,002
|
)
|
(19,274
|
)
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
Cash, cash equivalents and financial investments
|
2,233
|
|
3,023
|
|
9,880
|
|
Borrowings and bank overdrafts
|
(28,730
|
)
|
(26,625
|
)
|
(28,638
|
)
|
Financing derivatives
1
|
(32
|
)
|
600
|
|
(516
|
)
|
|
(26,529
|
)
|
(23,002
|
)
|
(19,274
|
)
|
1.
|
The financing derivatives balance included in net debt excludes the commodity derivatives (see note 17).
|
2.
|
Excludes
£23 million
(
2018
:
£27 million
;
2017
:
£nil
) cash interest from the Quadgas shareholder loan included within discontinued operations 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
2
|
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)
3
|
—
|
|
—
|
|
|
—
|
|
53
|
|
(2,221
|
)
|
(233
|
)
|
|
(2,401
|
)
|
Other non-cash movements
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(294
|
)
|
230
|
|
|
(64
|
)
|
Disposal
|
(5
|
)
|
20
|
|
|
15
|
|
(75
|
)
|
5,941
|
|
9
|
|
|
5,890
|
|
At 1 April 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)
3
|
—
|
|
—
|
|
|
—
|
|
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
|
)
|
Impact of transition to IFRS 9
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(32
|
)
|
—
|
|
|
(32
|
)
|
At 1 April 2018 (as restated)
|
329
|
|
—
|
|
|
329
|
|
2,694
|
|
(26,657
|
)
|
600
|
|
|
(23,034
|
)
|
Cash flow
2
|
(80
|
)
|
—
|
|
|
(80
|
)
|
(846
|
)
|
(240
|
)
|
422
|
|
|
(744
|
)
|
Fair value gains and losses and exchange movements
|
3
|
|
—
|
|
|
3
|
|
93
|
|
(733
|
)
|
(1,011
|
)
|
|
(1,648
|
)
|
Interest income/(charges)
3
|
—
|
|
—
|
|
|
—
|
|
29
|
|
(1,062
|
)
|
(43
|
)
|
|
(1,076
|
)
|
Other non-cash movements
|
—
|
|
—
|
|
|
—
|
|
11
|
|
(38
|
)
|
—
|
|
|
(27
|
)
|
At 31 March 2019
|
252
|
|
—
|
|
|
252
|
|
1,981
|
|
(28,730
|
)
|
(32
|
)
|
|
(26,529
|
)
|
Balances at 31 March 2019 comprise:
|
|
|
|
|
|
|
|
|
|
|||||||
Non-current assets
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
996
|
|
|
996
|
|
Current assets
|
252
|
|
—
|
|
|
252
|
|
1,981
|
|
—
|
|
56
|
|
|
2,289
|
|
Current liabilities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(4,472
|
)
|
(282
|
)
|
|
(4,754
|
)
|
Non-current liabilities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(24,258
|
)
|
(802
|
)
|
|
(25,060
|
)
|
|
252
|
|
—
|
|
|
252
|
|
1,981
|
|
(28,730
|
)
|
(32
|
)
|
|
(26,529
|
)
|
1.
|
Includes accrued interest at
31 March 2019
of
£223 million
(
2018
:
£197 million
;
2017
:
£210 million
).
|
2.
|
Cash flow from financing activities relating to financing liabilities (proceeds and repayment of loans, net movement in short-term borrowings and derivatives and interest paid) includes cash outflow on non-debt-related items of
£24 million
(2018:
£12 million
; 2017:
£nil
) and excludes derivative cash inflow in relation to capital expenditure of
£13 million
(2018:
£12 million
; 2017:
£18 million
) and items relating to discontinued operations of
£nil
(2018:
£231 million
; 2017:
£(1,611) million
).
|
3.
|
An exceptional income of
£nil
(
2018
:
£3 million
income;
2017
:
£1,313 million
expense) is included in net interest charge 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.
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Future capital expenditure
|
|
|
||
Contracted for but not provided
|
1,973
|
|
1,843
|
|
Operating lease commitments
1
|
|
|
||
Less than 1 year
|
43
|
|
42
|
|
In 1 to 2 years
|
39
|
|
37
|
|
In 2 to 3 years
|
34
|
|
33
|
|
In 3 to 4 years
|
35
|
|
30
|
|
In 4 to 5 years
|
27
|
|
28
|
|
More than 5 years
|
123
|
|
122
|
|
|
301
|
|
292
|
|
Energy purchase commitments
2
|
|
|
||
Less than 1 year
|
1,353
|
|
1,237
|
|
In 1 to 2 years
|
779
|
|
700
|
|
In 2 to 3 years
|
651
|
|
563
|
|
In 3 to 4 years
|
827
|
|
449
|
|
In 4 to 5 years
|
862
|
|
410
|
|
More than 5 years
|
11,237
|
|
1,969
|
|
|
15,709
|
|
5,328
|
|
Guarantees
3
|
|
|
||
Guarantee of sublease for US property (expires 2040)
|
173
|
|
178
|
|
Guarantees of certain obligations of Grain LNG (expire up to 2025)
|
39
|
|
46
|
|
Guarantees of certain obligations for construction of HVDC West Coast Link (expires 2019)
|
139
|
|
213
|
|
Guarantees of certain obligations of Nemo Link Limited (various expiry dates)
|
19
|
|
63
|
|
Guarantees of certain obligations of National Grid North Sea Link Limited (various expiry dates)
3
|
865
|
|
1,009
|
|
Guarantees of certain obligations of St William Homes LLP (various expiry dates)
4
|
22
|
|
98
|
|
Guarantees of certain obligations for construction of IFA 2 (expected expiry 2021)
3
|
505
|
|
729
|
|
Guarantees of certain obligations of National Grid Viking Link Limited (expected expiry 2024)
|
872
|
|
—
|
|
Other guarantees and letters of credit (various expiry dates)
|
341
|
|
333
|
|
|
2,975
|
|
2,669
|
|
1.
|
Following a review during the year, the comparatives have been refined to provide consistency with the current year.
|
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 (see note 32(f)). 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 17(b).
|
3.
|
Included within total guarantees are guarantees to both joint ventures and Engineering, Procurement and Construction contractors regarding the construction of interconnectors of
£470 million
(2018:
£739 million
).
|
4.
|
Includes guarantees to related parties.
|
Related parties include joint ventures, associates, investments and key management personnel.
|
|
2019
|
|
2018
|
|
2017
|
|
|
£m
|
|
£m
|
|
£m
|
|
Sales: Goods and services supplied to a pension plan
|
5
|
|
3
|
|
3
|
|
Sales: Goods and services supplied to joint ventures
1
|
151
|
|
14
|
|
78
|
|
Sales: Goods and services supplied to associates
2
|
192
|
|
220
|
|
—
|
|
Purchases: Goods and services received from joint ventures
3
|
26
|
|
135
|
|
168
|
|
Purchases: Goods and services received from associates
3
|
141
|
|
160
|
|
169
|
|
|
|
|
|
|||
Receivable from joint ventures
4
|
584
|
|
160
|
|
64
|
|
Receivable from associates
4
|
368
|
|
376
|
|
457
|
|
Payable to joint ventures
5
|
8
|
|
—
|
|
84
|
|
Payable to associates
|
12
|
|
17
|
|
27
|
|
Interest income from joint ventures
|
5
|
|
4
|
|
—
|
|
Interest income from associates
|
23
|
|
27
|
|
—
|
|
|
|
|
|
|||
Dividends received from joint ventures
6
|
30
|
|
43
|
|
75
|
|
Dividends received from associates
7
|
171
|
|
170
|
|
24
|
|
1.
|
During the year,
£139 million
(2018:
£5 million
) of property sites were sold to joint venture St William Homes LLP.
|
2.
|
Sales in the year relate to transactions with Quadgas. Within this is other income of
£52 million
(2018:
£54 million
) relating to a Transitional Service Agreement following the sale of the UK Gas Distribution business to Quadgas.
|
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, in 2018, goods and services were received from UK joint ventures for the construction of an electricity transmission link in the UK.
|
4.
|
Amounts receivable from associates includes a loan receivable balance from Quadgas of
£352 million
(2018:
£352 million
) which is classified as held for sale as at 31 March 2019, a loan receivable balance of
£258 million
(2018:
£130 million
) from Nemo Link Limited (a joint venture) and
£325 million
(2018:
£24 million
) in relation to St William Homes LLP (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.
|
Includes
£133 million
(2018:
£144 million
) of dividend income from Quadgas.
|
Our activities expose us to a variety of financial risks including credit risk, liquidity risk, capital risk, currency risk, interest rate risk, inflation risk and commodity price 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 these risks.
|
•
|
credit risk;
|
•
|
liquidity risk;
|
•
|
currency risk;
|
•
|
interest rate risk;
|
•
|
commodity price risk; and
|
•
|
capital risk.
|
•
|
currency risk arising from our forecasted foreign currency transactions (capital expenditure or revenues) is designated in cash flow hedges;
|
•
|
currency risk arising from our net investments in foreign operations is designated in net investment hedges; and
|
•
|
currency and interest rate risk arising from borrowings are designated in cash flow or fair value hedges.
|
|
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 2019
|
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
|
1,052
|
|
—
|
|
1,052
|
|
(299
|
)
|
(551
|
)
|
202
|
|
Commodity contract derivatives
|
101
|
|
—
|
|
101
|
|
29
|
|
—
|
|
130
|
|
|
1,153
|
|
—
|
|
1,153
|
|
(270
|
)
|
(551
|
)
|
332
|
|
Liabilities
|
|
|
|
|
|
|
||||||
Financing derivatives
|
(1,084
|
)
|
—
|
|
(1,084
|
)
|
299
|
|
615
|
|
(170
|
)
|
Commodity contract derivatives
|
(99
|
)
|
—
|
|
(99
|
)
|
(29
|
)
|
—
|
|
(128
|
)
|
|
(1,183
|
)
|
—
|
|
(1,183
|
)
|
270
|
|
615
|
|
(298
|
)
|
|
|
|
|
|
|
|
||||||
|
(30
|
)
|
—
|
|
(30
|
)
|
—
|
|
64
|
|
34
|
|
|
|
|
|
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 derivative¹
|
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 is party to the Further Acquisition Agreement (FAA) and Remaining Acquisition Agreement (RAA) which contain put and call options over
14%
and
25%
respectively, of the equity and loan balances it holds in Cadent (through its investment in Quadgas). These are classified within the disposal group as at 31 March 2019 (see note 10).
|
At 31 March 2019
|
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
|
(4,129
|
)
|
(2,348
|
)
|
(1,998
|
)
|
(19,673
|
)
|
(28,148
|
)
|
Interest payments on borrowings
1
|
(800
|
)
|
(733
|
)
|
(721
|
)
|
(13,465
|
)
|
(15,719
|
)
|
Finance lease liabilities
|
(72
|
)
|
(63
|
)
|
(52
|
)
|
(123
|
)
|
(310
|
)
|
Other non-interest-bearing liabilities
|
(3,306
|
)
|
(340
|
)
|
—
|
|
—
|
|
(3,646
|
)
|
Derivative financial liabilities
|
|
|
|
|
|
|||||
Derivative contracts – receipts
2
|
3,045
|
|
1,703
|
|
163
|
|
2,560
|
|
7,471
|
|
Derivative contracts – payments
2
|
(3,421
|
)
|
(2,029
|
)
|
(223
|
)
|
(3,276
|
)
|
(8,949
|
)
|
Commodity contract derivatives
|
(73
|
)
|
(19
|
)
|
(2
|
)
|
(1
|
)
|
(95
|
)
|
Derivative financial assets
|
|
|
|
|
|
|||||
Derivative contracts – receipts
2
|
1,928
|
|
561
|
|
863
|
|
1,112
|
|
4,464
|
|
Derivative contracts – payments
2
|
(1,251
|
)
|
(459
|
)
|
(783
|
)
|
(875
|
)
|
(3,368
|
)
|
|
(8,079
|
)
|
(3,727
|
)
|
(2,753
|
)
|
(33,741
|
)
|
(48,300
|
)
|
At 31 March 2018³
|
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
2
|
1,111
|
|
424
|
|
441
|
|
268
|
|
2,244
|
|
Derivative contracts – payments
2
|
(1,468
|
)
|
(608
|
)
|
(547
|
)
|
(704
|
)
|
(3,327
|
)
|
Commodity contract derivatives
|
(80
|
)
|
(33
|
)
|
(26
|
)
|
1
|
|
(138
|
)
|
Derivative financial assets
|
|
|
|
|
|
|||||
Derivative contracts – receipts
2
|
6,536
|
|
2,225
|
|
1,726
|
|
3,134
|
|
13,621
|
|
Derivative contracts – payments
2
|
(6,000
|
)
|
(1,703
|
)
|
(1,678
|
)
|
(2,977
|
)
|
(12,358
|
)
|
|
(7,630
|
)
|
(2,448
|
)
|
(3,083
|
)
|
(31,346
|
)
|
(44,507
|
)
|
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.
|
2.
|
The financial derivative payments and receipts include the gross undiscounted cash flows for interest rate and cross currency derivatives. The cash flows for these derivatives are presented as gross payments and receipts where the cash flows are not net settled either due to timing or currency.
|
3.
|
The comparatives have been refined to provide consistency with the current period.
|
|
2019
|
|
2018
|
||||||||||||||||||
|
Sterling
£m
|
|
Euro
£m
|
|
Dollar
£m
|
|
Other
£m
|
|
Total
£m
|
|
|
Sterling
£m
|
|
Euro
£m
|
|
Dollar
£m
|
|
Other
£m
|
|
Total
£m
|
|
Cash and cash equivalents
|
97
|
|
2
|
|
153
|
|
—
|
|
252
|
|
|
294
|
|
2
|
|
33
|
|
—
|
|
329
|
|
Financial investments
|
965
|
|
—
|
|
1,016
|
|
—
|
|
1,981
|
|
|
1,471
|
|
69
|
|
1,125
|
|
29
|
|
2,694
|
|
Borrowings
|
(10,591
|
)
|
(4,787
|
)
|
(12,126
|
)
|
(1,226
|
)
|
(28,730
|
)
|
|
(10,912
|
)
|
(3,794
|
)
|
(11,068
|
)
|
(851
|
)
|
(26,625
|
)
|
Pre-derivative position
|
(9,529
|
)
|
(4,785
|
)
|
(10,957
|
)
|
(1,226
|
)
|
(26,497
|
)
|
|
(9,147
|
)
|
(3,723
|
)
|
(9,910
|
)
|
(822
|
)
|
(23,602
|
)
|
Derivative effect
|
(1,055
|
)
|
4,803
|
|
(5,245
|
)
|
1,465
|
|
(32
|
)
|
|
3,748
|
|
3,793
|
|
(7,992
|
)
|
1,051
|
|
600
|
|
Net debt position
|
(10,584
|
)
|
18
|
|
(16,202
|
)
|
239
|
|
(26,529
|
)
|
|
(5,399
|
)
|
70
|
|
(17,902
|
)
|
229
|
|
(23,002
|
)
|
|
2019
|
|
2018
|
||||||||||||||||||
|
Sterling
£m
|
|
Euro
£m
|
|
Dollar
£m
|
|
Other
£m
|
|
Total
£m
|
|
|
Sterling
£m
|
|
Euro
£m
|
|
Dollar
£m
|
|
Other
£m
|
|
Total
£m
|
|
Trade and other receivables
|
398
|
|
—
|
|
1,635
|
|
—
|
|
2,033
|
|
|
253
|
|
—
|
|
1,528
|
|
—
|
|
1,781
|
|
Trade and other payables
|
(1,221
|
)
|
—
|
|
(2,085
|
)
|
—
|
|
(3,306
|
)
|
|
(1,124
|
)
|
—
|
|
(1,793
|
)
|
—
|
|
(2,917
|
)
|
Other non-current liabilities
|
(93
|
)
|
—
|
|
(247
|
)
|
—
|
|
(340
|
)
|
|
(144
|
)
|
—
|
|
(254
|
)
|
—
|
|
(398
|
)
|
|
2019
|
|
2018
|
||||||||||||||||||
|
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
|
59
|
|
104
|
|
—
|
|
89
|
|
252
|
|
|
—
|
|
302
|
|
—
|
|
27
|
|
329
|
|
Financial investments
|
6
|
|
1,944
|
|
—
|
|
31
|
|
1,981
|
|
|
31
|
|
2,625
|
|
—
|
|
38
|
|
2,694
|
|
Borrowings
|
(19,043
|
)
|
(3,045
|
)
|
(6,642
|
)
|
—
|
|
(28,730
|
)
|
|
(16,144
|
)
|
(3,191
|
)
|
(7,290
|
)
|
—
|
|
(26,625
|
)
|
Pre-derivative position
|
(18,978
|
)
|
(997
|
)
|
(6,642
|
)
|
120
|
|
(26,497
|
)
|
|
(16,113
|
)
|
(264
|
)
|
(7,290
|
)
|
65
|
|
(23,602
|
)
|
Derivative effect
|
1,740
|
|
(1,559
|
)
|
(213
|
)
|
—
|
|
(32
|
)
|
|
1,735
|
|
(1,237
|
)
|
102
|
|
—
|
|
600
|
|
Net debt position
|
(17,238
|
)
|
(2,556
|
)
|
(6,855
|
)
|
120
|
|
(26,529
|
)
|
|
(14,378
|
)
|
(1,501
|
)
|
(7,188
|
)
|
65
|
|
(23,002
|
)
|
1.
|
Represents financial instruments which are not directly affected by interest rate risk, such as investments in equity or other similar financial instruments.
|
|
Fair value hedges of foreign currency and interest rate risk
|
|
Cash flow hedges of foreign currency and interest rate risk
|
|
Cash flow hedges of foreign currency risk
|
|
Net investment hedges
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
Consolidated statement of comprehensive income
|
|
|
|
|
||||
Net losses in respect of:
|
|
|
|
|
||||
Cash flow hedges
|
—
|
|
(40
|
)
|
(12
|
)
|
—
|
|
Cost of hedging
|
(6
|
)
|
(12
|
)
|
—
|
|
(90
|
)
|
|
|
|
|
|
||||
Transferred to profit or loss in respect of:
|
|
|
|
|
||||
Cash flow hedges
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
Cost of hedging
|
3
|
|
—
|
|
—
|
|
39
|
|
|
|
|
|
|
||||
Consolidated statement of changes in equity
|
|
|
|
|
||||
Other equity reserves – cost of hedging balances
|
(4
|
)
|
—
|
|
—
|
|
32
|
|
|
|
|
|
|
||||
Consolidated statement of financial position
|
|
|
|
|
||||
Derivatives – carrying value of hedging instruments
1
|
|
|
|
|
||||
Assets – current
|
17
|
|
—
|
|
9
|
|
—
|
|
Assets – non-current
|
168
|
|
78
|
|
23
|
|
—
|
|
Liabilities – current
|
(9
|
)
|
(28
|
)
|
(3
|
)
|
(43
|
)
|
Liabilities – non-current
|
(25
|
)
|
(134
|
)
|
(4
|
)
|
(249
|
)
|
|
|
|
|
|
||||
Profiles of the significant timing, price and rate information of hedging instruments
|
|
|
|
|
||||
Maturity range
|
Nov 2019 – May 2038
|
|
Aug 2019 – Feb 2039
|
|
Apr 2019 – Dec 2023
|
|
Mar 2020 – Jun 2025
|
|
Spot foreign exchange range:
|
|
|
|
|
||||
GBP:USD
|
1.64 – 1.65
|
|
1.52 – 1.66
|
|
1.29 – 1.41
|
|
1.49
|
|
GBP:EUR
|
1.19 – 1.24
|
|
1.14 – 1.24
|
|
1.07 – 1.32
|
|
1.15
|
|
EUR:USD
|
1.13 – 1.16
|
|
1.13 – 1.14
|
|
n/a
|
|
n/a
|
|
Interest rate range:
|
|
|
|
|
||||
GBP
|
Libor +30bps/+561bps
|
|
1.795% – 5.850%
|
|
n/a
|
|
n/a
|
|
USD
|
Libor -44bps/+115bps
|
|
1.103% – 3.864%
|
|
n/a
|
|
n/a
|
|
1.
|
The use of derivatives may entail a derivative transaction qualifying for more than one hedge type designation under IFRS 9. Therefore, the derivative amounts in the table above are grossed up by hedge type, whereas they are presented net at an instrument level in the statement of financial position.
|
1.
|
The carrying value of the hedged borrowings is
£1,810 million
, of which
£202 million
is current and
£1,608 million
is non-current.
|
Hedge type
|
|
|
Balance in cash flow hedge reserve
|
|
Change in value used for calculating ineffectiveness
|
|
|
||||||||
Hedging instrument notional
|
|
|
Continuing hedges
|
|
Discontinued hedges
|
|
|
Hedged item
|
|
Hedging instrument
|
|
|
Hedge ineffectiveness
|
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
|
Foreign currency and interest rate risk on borrowings
|
(3,804
|
)
|
|
(17
|
)
|
51
|
|
|
39
|
|
(39
|
)
|
|
—
|
|
Foreign currency risk on forecasted cash flows
|
(697
|
)
|
|
47
|
|
—
|
|
|
12
|
|
(12
|
)
|
|
—
|
|
|
2019
|
|
2018
|
||||||||||||||
|
Level 1
£m
|
|
Level 2
£m
|
|
Level 3
£m
|
|
Total
£m
|
|
|
Level 1
£m
|
|
Level 2
£m
|
|
Level 3
£m
|
|
Total
£m
|
|
Assets
|
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale investments
1
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2,406
|
|
310
|
|
5
|
|
2,721
|
|
Investments held at FVTPL
1
|
1,311
|
|
—
|
|
62
|
|
1,373
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Investments held at FVOCI
1
|
93
|
|
343
|
|
—
|
|
436
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Investments in associates
2
|
—
|
|
—
|
|
90
|
|
90
|
|
|
—
|
|
—
|
|
79
|
|
79
|
|
Financing derivatives
|
—
|
|
1,050
|
|
2
|
|
1,052
|
|
|
—
|
|
1,544
|
|
1
|
|
1,545
|
|
Commodity contract derivatives
|
—
|
|
33
|
|
68
|
|
101
|
|
|
—
|
|
8
|
|
61
|
|
69
|
|
Further Acquisition Agreement derivative
3
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
110
|
|
110
|
|
|
1,404
|
|
1,426
|
|
222
|
|
3,052
|
|
|
2,406
|
|
1,862
|
|
256
|
|
4,524
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||
Financing derivatives
|
—
|
|
(868
|
)
|
(216
|
)
|
(1,084
|
)
|
|
—
|
|
(725
|
)
|
(220
|
)
|
(945
|
)
|
Commodity contract derivatives
|
—
|
|
(32
|
)
|
(67
|
)
|
(99
|
)
|
|
—
|
|
(54
|
)
|
(62
|
)
|
(116
|
)
|
Liabilities held at fair value
4
|
(667
|
)
|
—
|
|
—
|
|
(667
|
)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(667
|
)
|
(900
|
)
|
(283
|
)
|
(1,850
|
)
|
|
—
|
|
(779
|
)
|
(282
|
)
|
(1,061
|
)
|
|
737
|
|
526
|
|
(61
|
)
|
1,202
|
|
|
2,406
|
|
1,083
|
|
(26
|
)
|
3,463
|
|
1.
|
The available-for-sale investments have been reclassified, with the adoption of IFRS 9 (see notes 15 and 37).
|
2.
|
Our Level 3 investments include investments relating to Sunrun Neptune 2016 LLC accounted for at fair value.
|
3.
|
The Group is party to the Further Acquisition Agreement (FAA) and Remaining Acquisition Agreement (RAA) which contain put and call options over the equity and loan balances it holds in Cadent (through its investment in Quadgas). These are classified within the disposal group as at 31 March 2019 (see note 10).
|
4.
|
On adoption of IFRS 9 the Group elected to change the measurement basis to fair value through profit and loss (see notes 21 and 37).
|
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
|
|
Commodity contract
derivatives
|
|
Other
3,4
|
|
Total
|
||||||||||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
At 1 April
|
(219
|
)
|
(465
|
)
|
|
(1
|
)
|
(16
|
)
|
|
194
|
|
46
|
|
|
(26
|
)
|
(435
|
)
|
Net gains/(losses) for the year
1,2
|
4
|
|
15
|
|
|
(16
|
)
|
8
|
|
|
15
|
|
110
|
|
|
3
|
|
133
|
|
Purchases
|
—
|
|
—
|
|
|
44
|
|
27
|
|
|
57
|
|
41
|
|
|
101
|
|
68
|
|
Settlements
|
1
|
|
231
|
|
|
(26
|
)
|
(20
|
)
|
|
(4
|
)
|
(3
|
)
|
|
(29
|
)
|
208
|
|
Reclassification to held for sale
3
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
(110
|
)
|
—
|
|
|
(110
|
)
|
—
|
|
At 31 March
|
(214
|
)
|
(219
|
)
|
|
1
|
|
(1
|
)
|
|
152
|
|
194
|
|
|
(61
|
)
|
(26
|
)
|
1.
|
Gain of
£4 million
(
2018
:
£15 million
gain) 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.
|
Loss of
£21 million
(
2018
:
£35 million
gain) is attributable to commodity contract derivative financial instruments held at the end of the reporting period.
|
3.
|
The Group is party to the Further Acquisition Agreement (FAA) and Remaining Acquisition Agreement (RAA) which contain put and call options over
14%
and
25%
respectively, of the equity and loan balances it holds in Cadent (through its investment in Quadgas). These were classified to held for sale as at 31 March 2019 (see note 10). The fair value was
£110 million
as at 31 March 2018.
|
4.
|
Other comprises our investments in Sunrun Neptune 2016 LLC and the investments made by the National Grid Partners accounted for at fair value through profit and loss.
|
|
Financing derivatives
|
|
Commodity contract derivatives
|
|
Other
3
|
|||||||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
10% increase in commodity prices
1
|
—
|
|
—
|
|
|
(1
|
)
|
(1
|
)
|
|
—
|
|
—
|
|
10% decrease in commodity prices
1
|
—
|
|
—
|
|
|
2
|
|
3
|
|
|
—
|
|
—
|
|
+10% market area price change
|
—
|
|
—
|
|
|
(10
|
)
|
(6
|
)
|
|
—
|
|
—
|
|
-10% market area price change
|
—
|
|
—
|
|
|
10
|
|
5
|
|
|
—
|
|
—
|
|
+20 basis points change in Limited Price Inflation (LPI) market curve
2
|
(88
|
)
|
(84
|
)
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
-20 basis points change in LPI market curve
2
|
83
|
|
82
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
+50 basis points change in discount rate
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
(3
|
)
|
(5
|
)
|
-50 basis points change in discount rate
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
3
|
|
6
|
|
1.
|
Level 3 commodity price sensitivity is included within the sensitivity analysis disclosed in note 35.
|
2.
|
A reasonably possible change in assumption of other Level 3 derivative financial instruments is unlikely to result in a material change in fair values.
|
3.
|
The investments acquired in the period were on market terms, and sensitivity is considered insignificant at
31 March 2019
.
|
•
|
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;
|
•
|
the securities of 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.
|
To support our 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 committed credit 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
|
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: 404 Wyman Street, Waltham MA 02451 USA.
|
*
|
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.
|
#
|
Quadgas HoldCo Limited is included in the financial statements from 30 June 2018 as an asset held for sale.
|
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 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.
|
|
2019
|
|
2018
|
||||||
|
Income
statement
£m
|
|
Net
assets
£m
|
|
|
Income
statement
£m
|
|
Net
assets
£m
|
|
Pensions and other post-retirement benefits (pre-tax):
1
|
|
|
|
|
|
||||
UK discount rate change of 0.5%
2
|
6
|
|
1,064
|
|
|
8
|
|
1,075
|
|
US discount rate change of 0.5%
2
|
16
|
|
688
|
|
|
15
|
|
623
|
|
UK RPI rate change of 0.5%
3
|
4
|
|
908
|
|
|
5
|
|
965
|
|
UK long-term rate of increase in salaries change of 0.5%
4
|
1
|
|
56
|
|
|
—
|
|
61
|
|
US long-term rate of increase in salaries change of 0.5%
4
|
2
|
|
46
|
|
|
3
|
|
44
|
|
UK change of one year to life expectancy at age 65
|
1
|
|
610
|
|
|
2
|
|
588
|
|
US change of one year to life expectancy at age 65
|
4
|
|
406
|
|
|
4
|
|
359
|
|
Assumed US healthcare cost trend rates change of 1%
|
32
|
|
503
|
|
|
31
|
|
448
|
|
|
|
|
|
|
|
||||
Environmental provision:
|
|
|
|
|
|
||||
10% change in estimated future cash flows
|
165
|
|
165
|
|
|
154
|
|
154
|
|
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 2019
and
2018
respectively;
|
•
|
the statement of financial position sensitivity to interest rates relates to items presented at their fair values: derivative financial instruments; our investments measured at fair value through profit and loss (FVTPL) and fair value through other comprehensive income; and our liability measured at FVTPL. Further debt and other deposits are carried at amortised cost and so their carrying value does not change as interest rates move;
|
•
|
the sensitivity of 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 presented in equity as costs of hedging, with a one-year release to the income statement. The impact of movements in the dollar to sterling exchange rate are recorded directly in equity.
|
|
2019
|
|
2018
|
||||||
|
Income
statement
£m
|
|
Other equity
reserves
£m
|
|
|
Income
statement
£m
|
|
Other equity
reserves
£m
|
|
Financial risk (post-tax):
|
|
|
|
|
|
||||
UK RPI change of 0.5%
1
|
27
|
|
—
|
|
|
30
|
|
—
|
|
UK interest rates change of 0.5%
|
16
|
|
13
|
|
|
43
|
|
26
|
|
US interest rates change of 0.5%
|
11
|
|
44
|
|
|
39
|
|
17
|
|
US dollar exchange rate change of 10%
2
|
53
|
|
246
|
|
|
48
|
|
479
|
|
1.
|
Excludes sensitivities to LPI curve. Further details on sensitivities are provided in note 32(g).
|
2.
|
The other equity reserves impact does not reflect the exchange translation in our US subsidiaries’ net assets. It is estimated this would change by
£1,119 million
(
2018
:
£1,040 million
) in the opposite direction if the dollar exchange rate changed by
10%
.
|
|
2019
|
|
2018
|
||||||
|
Income
statement
£m
|
|
Net
assets
£m
|
|
|
Income
statement
£m
|
|
Net
assets
£m
|
|
Commodity price risk (post-tax):
|
|
|
|
|
|
||||
10% increase in commodity prices
|
26
|
|
26
|
|
|
23
|
|
23
|
|
10% decrease in commodity prices
|
(27
|
)
|
(27
|
)
|
|
(23
|
)
|
(23
|
)
|
|
|
|
|
|
|
||||
Assets and liabilities carried at fair value (pre-tax):
1
|
|
|
|
|
|
||||
10% fair value change in derivative financial instruments
2
|
(3
|
)
|
(3
|
)
|
|
60
|
|
60
|
|
10% fair value change in commodity contract derivative liabilities
|
—
|
|
—
|
|
|
(5
|
)
|
(5
|
)
|
1.
|
Excludes sensitivities to the Further Acquisition Agreement derivative. These were classified to held for sale as at 31 March 2019 (see note 10).
|
2.
|
The effect of a 10% change in fair value assumes no hedge accounting.
|
We have 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
|
|
|
|
|
||||||
|
National
Grid plc
£m
|
|
|
Niagara
Mohawk
Power
Corporation
£m
|
|
|
Other
subsidiaries
£m
|
|
Consolidation
adjustments
£m
|
|
National
Grid
consolidated
£m
|
|
|
Continuing operations
|
|
|
|
|
|
|
|
||||||
Revenue
|
—
|
|
|
2,483
|
|
|
12,450
|
|
—
|
|
14,933
|
|
|
Operating costs:
|
|
|
|
|
|
|
|
||||||
Depreciation, amortisation and impairment
|
—
|
|
|
(216
|
)
|
|
(1,519
|
)
|
—
|
|
(1,735
|
)
|
|
Payroll costs
|
—
|
|
|
(360
|
)
|
|
(1,492
|
)
|
—
|
|
(1,852
|
)
|
|
Purchases of electricity
|
—
|
|
|
(559
|
)
|
|
(895
|
)
|
—
|
|
(1,454
|
)
|
|
Purchases of gas
|
—
|
|
|
(189
|
)
|
|
(1,453
|
)
|
—
|
|
(1,642
|
)
|
|
Rates and property taxes
|
—
|
|
|
(200
|
)
|
|
(908
|
)
|
—
|
|
(1,108
|
)
|
|
Balancing Services Incentive Scheme
|
—
|
|
|
—
|
|
|
(1,196
|
)
|
—
|
|
(1,196
|
)
|
|
Other operating costs
|
—
|
|
|
(569
|
)
|
|
(2,507
|
)
|
—
|
|
(3,076
|
)
|
|
|
—
|
|
|
(2,093
|
)
|
|
(9,970
|
)
|
—
|
|
(12,063
|
)
|
|
Total operating profit
|
—
|
|
|
390
|
|
|
2,480
|
|
—
|
|
2,870
|
|
|
Net finance costs
|
(252
|
)
|
|
(124
|
)
|
|
(693
|
)
|
—
|
|
(1,069
|
)
|
|
Interest in equity accounted affiliates
|
1,712
|
|
|
—
|
|
|
40
|
|
(1,712
|
)
|
40
|
|
|
Profit before tax
|
1,460
|
|
|
266
|
|
|
1,827
|
|
(1,712
|
)
|
1,841
|
|
|
Tax
|
50
|
|
|
(56
|
)
|
|
(333
|
)
|
—
|
|
(339
|
)
|
|
Profit after tax from discontinued operations
|
—
|
|
|
—
|
|
|
12
|
|
—
|
|
12
|
|
|
Profit for the year
|
1,510
|
|
|
210
|
|
|
1,506
|
|
(1,712
|
)
|
1,514
|
|
|
Amounts recognised in other comprehensive income from continuing operations
1
|
303
|
|
|
4
|
|
|
(45
|
)
|
41
|
|
303
|
|
|
Amounts recognised in other comprehensive income from discontinued operations
1
|
36
|
|
|
—
|
|
|
36
|
|
(36
|
)
|
36
|
|
|
Total comprehensive income for the year
|
1,849
|
|
|
214
|
|
|
1,497
|
|
(1,707
|
)
|
1,853
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
||||||
Equity shareholders
|
1,849
|
|
|
214
|
|
|
1,493
|
|
(1,707
|
)
|
1,849
|
|
|
Non-controlling interests
|
—
|
|
|
—
|
|
|
4
|
|
—
|
|
4
|
|
|
|
1,849
|
|
|
214
|
|
|
1,497
|
|
(1,707
|
)
|
1,853
|
|
1.
|
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
|
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
—
|
|
|
2,416
|
|
—
|
|
|
1,430
|
|
|
11,495
|
|
(91
|
)
|
15,250
|
|
|
Operating costs:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation, amortisation and impairment
|
—
|
|
|
(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 taxes
|
—
|
|
|
(183
|
)
|
—
|
|
|
(94
|
)
|
|
(780
|
)
|
—
|
|
(1,057
|
)
|
|
Balancing Services 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
|
)
|
|
(1,497
|
)
|
—
|
|
(882
|
)
|
|
Interest in equity accounted affiliates
|
2,622
|
|
|
—
|
|
—
|
|
|
8
|
|
|
49
|
|
(2,630
|
)
|
49
|
|
|
Profit before tax
|
3,511
|
|
|
525
|
|
—
|
|
|
472
|
|
|
782
|
|
(2,630
|
)
|
2,660
|
|
|
Tax
|
40
|
|
|
321
|
|
—
|
|
|
(103
|
)
|
|
631
|
|
—
|
|
889
|
|
|
Profit after tax from discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
17
|
|
|
(15
|
)
|
—
|
|
2
|
|
|
Profit for the year
|
3,551
|
|
|
846
|
|
—
|
|
|
386
|
|
|
1,398
|
|
(2,630
|
)
|
3,551
|
|
|
Amounts recognised in other comprehensive income from continuing operations
3
|
224
|
|
|
1
|
|
—
|
|
|
272
|
|
|
457
|
|
(730
|
)
|
224
|
|
|
Amounts recognised in other comprehensive income from discontinued operations
3
|
147
|
|
|
—
|
|
—
|
|
|
—
|
|
|
147
|
|
(147
|
)
|
147
|
|
|
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
|
|
1.
|
Comparatives have been re-presented to reflect the classification of our retained interest in Quadgas as a discontinued operation in the current period (see note 1C and note 10).
|
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
re-presented
£m
|
|
|
Other
subsidiaries
re-presented
£m
|
|
Consolidation
adjustments
£m
|
|
National
Grid
consolidated
£m
|
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
—
|
|
|
2,388
|
|
—
|
|
|
1,376
|
|
|
11,435
|
|
(164
|
)
|
15,035
|
|
|
Operating costs:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation, amortisation and impairment
|
—
|
|
|
(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 taxes
|
—
|
|
|
(188
|
)
|
—
|
|
|
(101
|
)
|
|
(753
|
)
|
—
|
|
(1,042
|
)
|
|
Balancing Services 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
|
|
|
|
|
|||||
|
National
Grid plc
£m
|
|
|
Niagara
Mohawk
Power
Corporation
£m
|
|
|
Other
subsidiaries
£m
|
|
Consolidation
adjustments
£m
|
|
National
Grid
consolidated
£m
|
|
Non-current assets
|
|
|
|
|
|
|
|
|||||
Goodwill
|
—
|
|
|
745
|
|
|
5,124
|
|
—
|
|
5,869
|
|
Other intangible assets
|
—
|
|
|
3
|
|
|
1,081
|
|
—
|
|
1,084
|
|
Property, plant and equipment
|
—
|
|
|
6,985
|
|
|
36,928
|
|
—
|
|
43,913
|
|
Other non-current assets
|
—
|
|
|
4
|
|
|
260
|
|
—
|
|
264
|
|
Amounts owed by subsidiary undertakings
|
358
|
|
|
—
|
|
|
2,073
|
|
(2,431
|
)
|
—
|
|
Pension assets
|
—
|
|
|
260
|
|
|
1,307
|
|
—
|
|
1,567
|
|
Financial and other investments
|
23,573
|
|
|
22
|
|
|
3,434
|
|
(25,754
|
)
|
1,275
|
|
Derivative financial assets
|
—
|
|
|
9
|
|
|
1,036
|
|
—
|
|
1,045
|
|
Total non-current assets
|
23,931
|
|
|
8,028
|
|
|
51,243
|
|
(28,185
|
)
|
55,017
|
|
Current assets
|
|
|
|
|
|
|
|
|||||
Inventories and current intangible assets
|
—
|
|
|
41
|
|
|
329
|
|
—
|
|
370
|
|
Trade and other receivables
|
1
|
|
|
535
|
|
|
2,617
|
|
—
|
|
3,153
|
|
Current tax assets
|
—
|
|
|
—
|
|
|
260
|
|
(134
|
)
|
126
|
|
Amounts owed by subsidiary undertakings
|
12,514
|
|
|
476
|
|
|
14,101
|
|
(27,091
|
)
|
—
|
|
Financial and other investments
|
895
|
|
|
13
|
|
|
1,073
|
|
—
|
|
1,981
|
|
Derivative financial assets
|
110
|
|
|
21
|
|
|
80
|
|
(103
|
)
|
108
|
|
Cash and cash equivalents
|
75
|
|
|
12
|
|
|
165
|
|
—
|
|
252
|
|
Assets held for sale
|
—
|
|
|
—
|
|
|
1,956
|
|
—
|
|
1,956
|
|
Total current assets
|
13,595
|
|
|
1,098
|
|
|
20,581
|
|
(27,328
|
)
|
7,946
|
|
Total assets
|
37,526
|
|
|
9,126
|
|
|
71,824
|
|
(55,513
|
)
|
62,963
|
|
Current liabilities
|
|
|
|
|
|
|
|
|||||
Borrowings
|
(1,275
|
)
|
|
(634
|
)
|
|
(2,563
|
)
|
—
|
|
(4,472
|
)
|
Derivative financial liabilities
|
(92
|
)
|
|
(15
|
)
|
|
(346
|
)
|
103
|
|
(350
|
)
|
Trade and other payables
|
(58
|
)
|
|
(413
|
)
|
|
(3,298
|
)
|
—
|
|
(3,769
|
)
|
Contract liabilities
|
—
|
|
|
(4
|
)
|
|
(57
|
)
|
—
|
|
(61
|
)
|
Amounts owed to subsidiary undertakings
|
(14,104
|
)
|
|
—
|
|
|
(12,987
|
)
|
27,091
|
|
—
|
|
Current tax liabilities
|
—
|
|
|
(148
|
)
|
|
(147
|
)
|
134
|
|
(161
|
)
|
Provisions
|
—
|
|
|
(24
|
)
|
|
(292
|
)
|
—
|
|
(316
|
)
|
Total current liabilities
|
(15,529
|
)
|
|
(1,238
|
)
|
|
(19,690
|
)
|
27,328
|
|
(9,129
|
)
|
Non-current liabilities
|
|
|
|
|
|
|
|
|||||
Borrowings
|
(346
|
)
|
|
(2,048
|
)
|
|
(21,864
|
)
|
—
|
|
(24,258
|
)
|
Derivative financial liabilities
|
(228
|
)
|
|
(8
|
)
|
|
(597
|
)
|
—
|
|
(833
|
)
|
Other non-current liabilities
|
—
|
|
|
(301
|
)
|
|
(507
|
)
|
—
|
|
(808
|
)
|
Contract liabilities
|
—
|
|
|
(181
|
)
|
|
(752
|
)
|
—
|
|
(933
|
)
|
Amounts owed to subsidiary undertakings
|
(2,074
|
)
|
|
—
|
|
|
(357
|
)
|
2,431
|
|
—
|
|
Deferred tax liabilities
|
—
|
|
|
(678
|
)
|
|
(3,287
|
)
|
—
|
|
(3,965
|
)
|
Pensions and other post-retirement benefit obligations
|
—
|
|
|
(872
|
)
|
|
(913
|
)
|
—
|
|
(1,785
|
)
|
Provisions
|
—
|
|
|
(271
|
)
|
|
(1,612
|
)
|
—
|
|
(1,883
|
)
|
Total non-current liabilities
|
(2,648
|
)
|
|
(4,359
|
)
|
|
(29,889
|
)
|
2,431
|
|
(34,465
|
)
|
Total liabilities
|
(18,177
|
)
|
|
(5,597
|
)
|
|
(49,579
|
)
|
29,759
|
|
(43,594
|
)
|
Net assets
|
19,349
|
|
|
3,529
|
|
|
22,245
|
|
(25,754
|
)
|
19,369
|
|
Equity
|
|
|
|
|
|
|
|
|||||
Share capital
|
458
|
|
|
144
|
|
|
180
|
|
(324
|
)
|
458
|
|
Share premium account
|
1,314
|
|
|
2,394
|
|
|
9,032
|
|
(11,426
|
)
|
1,314
|
|
Retained earnings
|
21,814
|
|
|
991
|
|
|
13,048
|
|
(14,039
|
)
|
21,814
|
|
Other equity reserves
|
(4,237
|
)
|
|
—
|
|
|
(35
|
)
|
35
|
|
(4,237
|
)
|
Shareholders’ equity
|
19,349
|
|
|
3,529
|
|
|
22,225
|
|
(25,754
|
)
|
19,349
|
|
|
|
|
|
|
|
|
|
|||||
Non-controlling interests
|
—
|
|
|
—
|
|
|
20
|
|
—
|
|
20
|
|
Total equity
|
19,349
|
|
|
3,529
|
|
|
22,245
|
|
(25,754
|
)
|
19,369
|
|
|
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
£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 2019
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net cash flow from operating activities – continuing operations
|
33
|
|
|
572
|
|
n/a
|
|
|
n/a
|
|
|
3,784
|
|
—
|
|
4,389
|
|
Net cash flow used in operating activities – discontinued operations
|
—
|
|
|
—
|
|
n/a
|
|
|
n/a
|
|
|
(71
|
)
|
—
|
|
(71
|
)
|
Net cash flow from/(used in) investing activities – continuing operations
|
121
|
|
|
(823
|
)
|
n/a
|
|
|
n/a
|
|
|
(3,570
|
)
|
1,082
|
|
(3,190
|
)
|
Net cash flow from investing activities – discontinued operations
|
—
|
|
|
—
|
|
n/a
|
|
|
n/a
|
|
|
156
|
|
—
|
|
156
|
|
Net cash flow (used in)/from financing activities – continuing operations
|
(79
|
)
|
|
259
|
|
n/a
|
|
|
n/a
|
|
|
(462
|
)
|
(1,082
|
)
|
(1,364
|
)
|
Net cash flow from financing activities – discontinued operations
|
—
|
|
|
—
|
|
n/a
|
|
|
n/a
|
|
|
—
|
|
—
|
|
—
|
|
Net increase/(decrease) in cash and cash equivalents in the year
|
75
|
|
|
8
|
|
n/a
|
|
|
n/a
|
|
|
(163
|
)
|
—
|
|
(80
|
)
|
Year ended 31 March 2018
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net cash flow from operating activities – continuing operations
|
35
|
|
|
662
|
|
—
|
|
|
888
|
|
|
3,125
|
|
—
|
|
4,710
|
|
Net cash flow used in operating activities – discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
(98
|
)
|
|
(109
|
)
|
—
|
|
(207
|
)
|
Net cash flow from/(used in) investing activities – continuing operations
|
4,660
|
|
|
(473
|
)
|
15
|
|
|
656
|
|
|
(1,930
|
)
|
(862
|
)
|
2,066
|
|
Net cash flow from investing activities – discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
171
|
|
—
|
|
171
|
|
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 financing activities – discontinued operations
|
—
|
|
|
—
|
|
—
|
|
|
(125
|
)
|
|
(106
|
)
|
—
|
|
(231
|
)
|
Net (decrease)/increase 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 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
|
|
Impact of transition
|
31 March 2018
As previously reported |
|
|
Transition adjustments
|
|
1 April 2018
|
|
|||
|
IFRS 9
|
|
IFRS 15
|
|
|
|||||
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
|
Non-current assets
|
|
|
|
|
|
|
||||
Goodwill
|
5,444
|
|
|
—
|
|
—
|
|
|
5,444
|
|
Other intangible assets
|
899
|
|
|
—
|
|
—
|
|
|
899
|
|
Property, plant and equipment
|
39,853
|
|
|
—
|
|
—
|
|
|
39,853
|
|
Other non-current assets
|
115
|
|
|
—
|
|
—
|
|
|
115
|
|
Pension assets
|
1,409
|
|
|
—
|
|
—
|
|
|
1,409
|
|
Financial and other investments
|
899
|
|
|
—
1
|
|
—
|
|
|
899
|
|
Investments in joint ventures and associates
|
2,168
|
|
|
—
|
|
—
|
|
|
2,168
|
|
Derivative financial assets
|
1,319
|
|
|
—
|
|
—
|
|
|
1,319
|
|
Total non-current assets
|
52,106
|
|
|
—
|
|
—
|
|
|
52,106
|
|
Current assets
|
|
|
|
|
|
|
||||
Inventories and current intangible assets
|
341
|
|
|
—
|
|
—
|
|
|
341
|
|
Trade and other receivables
|
2,798
|
|
|
—
2
|
|
(3
|
)
|
|
2,795
|
|
Current tax assets
|
114
|
|
|
—
|
|
—
|
|
|
114
|
|
Financial and other investments
|
2,694
|
|
|
—
1
|
|
—
|
|
|
2,694
|
|
Derivative financial assets
|
405
|
|
|
—
|
|
—
|
|
|
405
|
|
Cash and cash equivalents
|
329
|
|
|
—
|
|
—
|
|
|
329
|
|
Total current assets
|
6,681
|
|
|
—
|
|
(3
|
)
|
|
6,678
|
|
Total assets
|
58,787
|
|
|
—
|
|
(3
|
)
|
|
58,784
|
|
Current liabilities
|
|
|
|
|
|
|
||||
Borrowings
|
(4,447
|
)
|
|
—
|
|
—
|
|
|
(4,447
|
)
|
Derivative financial liabilities
|
(401
|
)
|
|
—
|
|
—
|
|
|
(401
|
)
|
Trade and other payables
|
(3,453
|
)
|
|
—
|
|
59
7
|
|
|
(3,394
|
)
|
Contract liabilities
|
—
|
|
|
—
|
|
(53)
7
|
|
|
(53
|
)
|
Current tax liabilities
|
(123
|
)
|
|
—
|
|
—
|
|
|
(123
|
)
|
Provisions
|
(273
|
)
|
|
—
|
|
—
|
|
|
(273
|
)
|
Total current liabilities
|
(8,697
|
)
|
|
—
|
|
6
|
|
|
(8,691
|
)
|
Non-current liabilities
|
|
|
|
|
|
|
||||
Borrowings
|
(22,178
|
)
|
|
(32)
3
|
|
—
|
|
|
(22,210
|
)
|
Derivative financial liabilities
|
(660
|
)
|
|
—
|
|
—
|
|
|
(660
|
)
|
Other non-current liabilities
|
(1,317
|
)
|
|
—
|
|
567
7
|
|
|
(750
|
)
|
Contract liabilities
|
—
|
|
|
—
|
|
(813)
7
|
|
|
(813
|
)
|
Deferred tax liabilities
|
(3,636
|
)
|
|
5
4
|
|
74
8
|
|
|
(3,557
|
)
|
Pensions and other post-retirement benefit obligations
|
(1,672
|
)
|
|
—
|
|
—
|
|
|
(1,672
|
)
|
Provisions
|
(1,779
|
)
|
|
—
|
|
—
|
|
|
(1,779
|
)
|
Total non-current liabilities
|
(31,242
|
)
|
|
(27
|
)
|
(172
|
)
|
|
(31,441
|
)
|
Total liabilities
|
(39,939
|
)
|
|
(27
|
)
|
(166
|
)
|
|
(40,132
|
)
|
Net assets
|
18,848
|
|
|
(27
|
)
|
(169
|
)
|
|
18,652
|
|
Equity
|
|
|
|
|
|
|
||||
Share capital
|
452
|
|
|
—
|
|
—
|
|
|
452
|
|
Share premium account
|
1,321
|
|
|
—
|
|
—
|
|
|
1,321
|
|
Retained earnings
|
21,599
|
|
|
(99)
5
|
|
(169)
9
|
|
|
21,331
|
|
Other equity reserves
|
(4,540
|
)
|
|
72
6
|
|
—
|
|
|
(4,468
|
)
|
Total shareholders’ equity
|
18,832
|
|
|
(27
|
)
|
(169
|
)
|
|
18,636
|
|
Non-controlling interests
|
16
|
|
|
—
|
|
—
|
|
|
16
|
|
Total equity
|
18,848
|
|
|
(27
|
)
|
(169
|
)
|
|
18,652
|
|
1.
|
The available-for-sale category for financial assets has been replaced with investments held at fair value through profit and loss (FVTPL) and investments held at fair value through other comprehensive income (FVOCI). Changes to the classification and measurement of financial assets have not altered the carrying value of any financial assets held by the Group. The net impact to retained earnings of the reclassification on transition was an
£8 million
gain.
|
•
|
Money market funds and fund investments held by captive insurance companies have been classified as financial assets at FVTPL because their contractual cash flows are not solely payments of principal and interest;
|
•
|
Investments in debt securities that have contractual payments that are solely payments of principal and interest, and which are held as part of the liquidity portfolio or to back employee benefit liabilities, have been classified as financial assets at FVOCI because they are held in a business model whose objective is to collect the contractual cash flows and to sell the debt instruments;
|
•
|
The Group has elected to hold investments in equity securities, which are held to back employee benefit liabilities, as financial assets at FVOCI as the Group does not believe that changes in their fair value is reflective of the financial performance of the Group; and
|
•
|
Loans to joint ventures and associates, cash at bank, and short-term deposits are classified at amortised cost as they have contractual cash flows which are solely payments of principal and interest and the Group holds them to collect contractual cash flows.
|
Financial asset/liability
|
Note
|
Original measurement category under IAS 39
|
New measurement category under IFRS 9
|
Original carrying amount under IAS 39
|
|
Change to measurement basis under IFRS 9
|
|
New carrying amount under IFRS 9
|
|
£m
|
|
£m
|
|
£m
|
|
||||
Money market funds and fund investments in equities and bonds
|
15
|
Available-for-sale investments
|
Financial assets at FVTPL
|
2,294
|
|
—
|
|
2,294
|
|
Cash surrender value of life insurance policies and investments in debt securities
|
15
|
Available-for-sale investments
|
Financial assets at FVOCI
|
343
|
|
—
|
|
343
|
|
Investments in equity securities
|
15
|
Available-for-sale investments
|
Financial assets at FVOCI (equity instruments)
|
84
|
|
—
|
|
84
|
|
Loans to joint ventures and associates and restricted balances
|
15
|
Loans and receivables
|
Financial assets at amortised cost
|
872
|
|
—
|
|
872
|
|
Borrowings
|
21
|
Financial liabilities at amortised cost
|
Financial liabilities at fair value through profit and loss
|
(570
|
)
|
(32
|
)
|
(602
|
)
|
2.
|
The change from the incurred loss impairment model of IAS 39 to the expected loss model in IFRS 9 has not had a material impact on the Group’s credit loss provision. The Group calculates its impairment provision on trade receivables using a sophisticated provisions matrix. The inclusion of forward-looking information has not had a significant impact on the matrix as the relevant short-term future economic conditions affecting our retail customers in the US are expected to be similar to recent experience.
|
3.
|
The Group elected to reclassify an existing liability with a carrying value of
£570 million
from amortised cost to fair value through profit and loss to reduce a measurement mismatch. At transition, the resultant impacts include an increase in the carrying value of the liability of
£32 million
, a reduction in retained earnings of
£40 million
and the establishment of an own credit reserve (within other equity reserves) of
£7 million
.
|
4.
|
Deferred tax is recognised on the adjustments recorded on the transition to IFRS 9. Reserve impacts are stated net of related deferred tax.
|
5.
|
Retained earnings includes the impact from adjustments 1, 3 and 6.
|
6.
|
The Group has adopted the hedge accounting requirements of IFRS 9, which more closely align with the Group’s risk management policies. On transition, it was concluded that all IAS 39 hedge relationships are qualifying IFRS 9 relationships with the treatment of the cost of hedging being the main change. The effect was a reclassification in reserves of a
£67 million
gain from retained earnings and a
£10 million
gain from the cash flow hedge reserve, into a new cost of hedging reserve (within other equity reserves). In this reserve, qualifying unrealised gains and losses excluded from hedging relationships are deferred and released systematically into profit or loss to match the timing of hedged items.
|
•
|
Certain pass-through revenues (principally revenues collected on behalf of the Scottish and Offshore transmission operators) will be recorded net of operating costs, whereas previously they were recognised gross of operating costs. Had we not adopted IFRS 15, our revenues and operating costs for the year ended 31 March 2019 would have been
£1,197 million
higher, with
no
impact to operating profits;
|
•
|
Contributions for capital works relating to connections for our customers are now deferred as contract liabilities on our consolidated statement of financial position and released over the life of the connection assets. This is a change for our US Regulated business and our UK Gas Transmission business, where previously revenues were recorded once the work was completed. Had we not adopted IFRS 15, our revenues and operating profit for the year ended 31 March 2019 would have been
£57 million
higher; and
|
•
|
In the UK, contributions for capital works relating to diversions are now recognised as the works are completed. This is a change for the UK regulated businesses where revenues were previously deferred over the life of the asset. Had we not adopted IFRS 15, our revenues and operating profit for the year ended 31 March 2019 would have been
£26 million
and
£23 million
lower, respectively.
|
7.
|
Deferred income from contributions for capital works have now been reclassified to contract liabilities. In addition, these liabilities for capital works relating to connections have increased as these capital contributions for connections are cumulatively adjusted for on 1 April 2018 and are now deferred and released over the life of the connection assets. This is a change for our US Regulated business and our UK Gas Transmission business where previously revenues were recorded once the work was completed.
|
8.
|
Deferred tax is recorded on the incremental amounts recorded against capital contributions and contract liabilities on the transition to IFRS 15. Deferred tax balances have been calculated at the rate substantially enacted at the balance sheet date.
|
9.
|
The transition adjustment reflects the net of adjustments 7 and 8 above.
|
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 IFRS standards.
|
|
|
|
2019
|
|
2018
|
|
|
Notes
|
|
£m
|
|
£m
|
|
Fixed assets
|
|
|
|
|
||
Investments
|
1
|
|
9,923
|
|
9,896
|
|
|
|
|
|
|
||
Current assets
|
|
|
|
|
||
Debtors (amounts falling due within one year)
|
2
|
|
12,625
|
|
11,563
|
|
Debtors (amounts falling due after more than one year)
|
2
|
|
358
|
|
368
|
|
Investments
|
5
|
|
895
|
|
938
|
|
Cash at bank and in hand
|
|
|
75
|
|
—
|
|
Total current assets
|
|
|
13,953
|
|
12,869
|
|
|
|
|
|
|
||
Creditors (amounts falling due within one year)
|
3
|
|
(15,529
|
)
|
(12,839
|
)
|
Net current (liabilities)/assets
|
|
|
(1,576
|
)
|
30
|
|
Total assets less current liabilities
|
|
|
8,347
|
|
9,926
|
|
|
|
|
|
|
||
Creditors (amounts falling due after more than one year)
|
3
|
|
(2,648
|
)
|
(2,906
|
)
|
Net assets
|
|
|
5,699
|
|
7,020
|
|
|
|
|
|
|
||
Equity
|
|
|
|
|
||
Share capital
|
7
|
|
458
|
|
452
|
|
Share premium account
|
|
|
1,314
|
|
1,321
|
|
Cash flow hedge reserve
|
|
|
1
|
|
2
|
|
Other equity reserves
|
|
|
380
|
|
353
|
|
Profit and loss account
|
8
|
|
3,546
|
|
4,892
|
|
Total shareholders’ equity
|
|
|
5,699
|
|
7,020
|
|
|
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 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
|
|
Loss for the year
|
—
|
|
—
|
|
—
|
|
—
|
|
(202
|
)
|
(202
|
)
|
Other comprehensive loss for the year
|
|
|
|
|
|
|
||||||
Transferred from equity in respect of cash flow hedges (net of tax)
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
(1
|
)
|
Total comprehensive loss for the year
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
(202
|
)
|
(203
|
)
|
Other equity movements
|
|
|
|
|
|
|
||||||
Scrip dividend-related share issue
1
|
6
|
|
(7
|
)
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
Issue of treasury shares
|
—
|
|
—
|
|
—
|
|
—
|
|
18
|
|
18
|
|
Purchase of own shares
|
—
|
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
(2
|
)
|
Share awards to employees of subsidiary undertakings
|
—
|
|
—
|
|
—
|
|
27
|
|
—
|
|
27
|
|
Equity dividends
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,160
|
)
|
(1,160
|
)
|
At 31 March 2019
|
458
|
|
1,314
|
|
1
|
|
380
|
|
3,546
|
|
5,699
|
|
1.
|
Included within the share premium account are costs associated with scrip dividends.
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Amounts falling due within one year
|
|
|
||
Derivative financial instruments (see note 4)
|
110
|
|
308
|
|
Amounts owed by subsidiary undertakings
|
12,514
|
|
11,254
|
|
Prepayments and accrued income
|
1
|
|
1
|
|
|
12,625
|
|
11,563
|
|
Amounts falling due after more than one year
|
|
|
||
Derivative financial instruments (see note 4)
|
—
|
|
18
|
|
Amounts owed by subsidiary undertakings
|
358
|
|
350
|
|
|
358
|
|
368
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Amounts falling due within one year
|
|
|
||
Borrowings (see note 6)
|
1,275
|
|
781
|
|
Derivative financial instruments (see note 4)
|
92
|
|
187
|
|
Amounts owed to subsidiary undertakings
|
14,104
|
|
11,809
|
|
Other creditors
|
58
|
|
62
|
|
|
15,529
|
|
12,839
|
|
Amounts falling due after more than one year
|
|
|
||
Borrowings (see note 6)
|
346
|
|
773
|
|
Derivative financial instruments (see note 4)
|
228
|
|
41
|
|
Amounts owed to subsidiary undertakings
|
2,074
|
|
2,091
|
|
Deferred tax
|
—
|
|
1
|
|
|
2,648
|
|
2,906
|
|
Amounts owed to subsidiary undertakings falling due after more than one year are repayable as follows:
|
|
|
||
In 1 to 2 years
|
1,077
|
|
—
|
|
In 2 to 3 years
|
—
|
|
1,095
|
|
More than 5 years
|
997
|
|
996
|
|
|
2,074
|
|
2,091
|
|
|
2019
|
|
2018
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
Amounts falling due within one year
|
110
|
|
(92
|
)
|
18
|
|
|
308
|
|
(187
|
)
|
121
|
|
Amounts falling due after more than one year
|
—
|
|
(228
|
)
|
(228
|
)
|
|
18
|
|
(41
|
)
|
(23
|
)
|
|
110
|
|
(320
|
)
|
(210
|
)
|
|
326
|
|
(228
|
)
|
98
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Interest rate swaps
|
(1,208
|
)
|
(2,501
|
)
|
Cross-currency interest rate swaps
|
(2,900
|
)
|
(3,613
|
)
|
Foreign exchange forward contracts
|
(7,920
|
)
|
(13,929
|
)
|
|
(12,028
|
)
|
(20,043
|
)
|
1.
|
The notional contract amounts of derivatives indicate the gross nominal value of transactions outstanding at the balance sheet date.
|
|
2019
|
2018
|
||
|
£m
|
|
£m
|
|
Investments in short-term money funds
|
672
|
|
919
|
|
Managed investments in bonds
|
—
|
|
10
|
|
Restricted balances – collateral
|
223
|
|
9
|
|
|
895
|
|
938
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
Amounts falling due within one year
|
|
|
||
Bank loans
|
—
|
|
230
|
|
Bonds
|
435
|
|
551
|
|
Commercial paper
|
840
|
|
—
|
|
|
1,275
|
|
781
|
|
Amounts falling due after more than one year
|
|
|
||
Bonds
|
346
|
|
773
|
|
|
1,621
|
|
1,554
|
|
|
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
|
||
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
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
|
||
|
|
|
|
|
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 2019 is incorporated by reference to “Financial Statements-Notes to the consolidated financial statements-34. Subsidiary undertakings, joint venture and associates-Subsidiary undertakings” on pages 174-176 included in the Annual Report on Form 20-F for the financial year ended 31 March 2019. 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 2019.
|
|
Incorporated by reference
|
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
Filed herewith
|
||
|
Filed herewith
|
|
NATIONAL GRID PLC
|
|
|
Date: 4 June 2019
|
/s/
AndrewAgg
|
|
Andrew Agg
|
|
Title: Chief Finance Officer
|
|
National Grid plc
|
|
|
EXHIBIT 4 (c).5
Dated 21 December 2018
|
|
NATIONAL GRID UK Limited
and
ANDREW AGG
|
|
SERVICE AGREEMENT
|
|
|
|
|
|
Linklaters LLP
One Silk Street
London EC2Y 8HQ
|
|
Telephone (44-20) 7456 2000
|
|
Facsimile (44-20) 7456 2222
|
|
|
|
|
|
(1)
|
NATIONAL GRID UK LIMITED
incorporated in the UK whose registered office is at 1-3 Strand, London WC2N 5EH (the “
Company
”); and
|
(2)
|
ANDREW AGG
of 13 Ox Lane, Harpenden, Hertfordshire AL5 4HH (the “
Executive
”).
|
1
|
Interpretation
|
1.1
|
Definitions
|
2
|
Commencement of Employment
|
2.1
|
The Employment will start on 1 January 2019 (the “
Commencement Date
”). The Employment will continue until termination in accordance with the provisions of this agreement. The Executive’s period of continuous service started on 15 September 2008.
|
2.2
|
The Executive warrants that:
|
2.2.1
|
he is not subject to any restrictions which prevent him from holding office as a director; and
|
2.2.1
|
he is not party to any employment contract, confidentiality agreement or other agreement that contains any restrictions that would prevent him from taking up the Employment under this Agreement
|
3
|
Appointment and Duties of the Executive
|
3.1
|
The Executive will serve as Executive Director with direct responsibility for Group Finance or in any other executive capacity as the Executive and the Company may agree from time to time.
In such capac
i
ty, the Executive shall as soon
as
practicable
f
ollowing
the
Commencement Date be appointed to the Board and. subject to the provisions of clause 13.6 below. shall be entitled to remain as a member of the Board throughout the Employment. The Board may require the Executive to be appointed to the boards of other Group Companies from time to time.
|
3.2
|
The Executive will:
|
3.2.1
|
devote the whole of his working time, attention and skill to the Employment;
|
3.2.2
|
properly perform his duties and exercise his powers;
|
3.2.3
|
accept any offices or directorships as reasonably required by the Board;
|
3.2.4
|
comply with all rules and regulations issued by the Company as amended from time to time, including without limitation, the Code of Employee Conduct and the Standards of Ethical Business Conduct;
|
3.2.5
|
comply with personal shareholding requirements and clawback and malus provisions applicable to variable remuneration as set out in the Executive’s reward letter from time to time (including where such requirements and provisions impose obligations that survive the termination of the Employment);
|
3.2.6
|
obey the reasonable directions of the Board; and
|
3.2.7
|
us his best endeavours to promote the interests and reputation of every Group Company
|
3.2.8
|
do such things as are necessary to ensure compliance by himself and the Company or any Group Company with all rules, requirements, recommendations or codes as amended, replaced or introduced from time to time including but not limited to those of the UK Listing Authority, the Financial Conduct Authority (including the Market Abuse Regulations), any internal share dealing code of the Company or the Group and the UK Corporate Governance Code to the extent applicable to the Employment;
|
3.2.9
|
not do anything that would cause him to be disqualified from acting as a director or have a negative impact on his own reputation or the reputation of the Company or any Group Company
|
3.3
|
The Executive accepts that with his consent (which he will not unreasonably withhold or delay):
|
3.3.1
|
the Company may require him to perform duties, consistent with his role and status, for any other Group Company whether for the whole or part of his working time. In performing those duties clause 3.2.4 will apply as if references to the Company are to the appropriate Group Company. The Company will remain responsible for the payments and benefits he is entitled to receive under this agreement;
|
3.3.2
|
the Company may appoint any other person to act jointly with him; and
|
3.3.3
|
the Company may transfer the Employment to any other Group Company.
|
3.4
|
The Executive will keep the Board (and, where appropriate the board of directors of any other Group Company) fully informed, in accordance with the reporting procedures prescribed by the Board (if any) and, in any event, in a prompt and timely manner having regard to the relevant facts and circumstances, of his conduct of the business, finances or affairs of the Company or any other Group Company. He will provide information to the Board in writing if requested.
|
3.5
|
The Executive will promptly disclose to the Board full details of any wrongdoing by any employee of any Group Company where the wrongdoing is material to that employee’s employment by the relevant company or to the interests or reputation of any Group Company.
|
3.6
|
At any time during the Employment the Company may require the Executive to undergo a medical examination by a medical practitioner appointed by the Company. The Executive authorises that medical practitioner to disclose to the Company any report or test results prepared or obtained as a result of that examination and discuss any matters arising out of the examination which are relevant to the Employment or which might prevent the Executive properly performing the duties of the Employment.
|
3.7
|
The Executive is required to comply with the Company’s policies and procedures which may be amended or introduced from time to time, these are available on the Company intranet. If there is any conflict between those polices and this agreement, the terms of this agreement shall prevail.
|
4
|
Hours
|
4.1
|
The Executive will comply with the Company’s normal hours of work and will also work any additional hours which may be reasonably necessary to perform his duties to the satisfaction of the Board. He will not receive any further remuneration for any hours worked in addition to the normal working hours.
|
4.2
|
The Executive and the Company agree that the Executive is a managing executive for the purposes of the Working Time Regulations 1998 (the “
Regulations
”) and is able to determine the duration of his working time himself. As such, the exemptions in Regulation 20 of the Regulations will apply to the Employment.
|
4.3
|
The Executive agrees to keep records of his working hours as reasonably required by the Company from time to time in order to comply with its obligations under the Regulations.
|
5
|
Interests of the Executive
|
5.1
|
The Executive will disclose promptly in writing to the Board all his interests (for example, shareholdings or directorships) whether or not of a commercial or business nature except his interests in any Group Company. The Executive confirms he has no such interests as as at the date of this Agreement.
|
5.2
|
Subject to clause 5.3, during the Employment the Executive will not be directly or indirectly engaged or concerned in the conduct of any activity which is similar to or competes with any activity carried on by any Group Company (except as a representative of the Company or with the written consent of the Board).
|
5.3
|
The Executive may not hold or be interested in investments which amount to more than three per cent of the issued investments of any class of any one company whether or not those investments are listed or quoted on any recognised Stock Exchange or dealt in on the Alternative Investments Market.
|
5.4
|
The Executive will (and will procure that his spouse and dependent children) comply with all rules of law, including Part V of the Criminal Justice Act 1993, the Market Abuse Regulations the share dealing code of the Company or in the Group as in force and as amended from time to time and rules or policies applicable to the Company or Group from time to time in relation to the holding or trading in securities and in relation to the disclosure of inside information.
|
6
|
Location
|
6.1
|
The Executive will be based at Company’s London Offices or anywhere else within the United Kingdom with his consent, which shall not be unreasonably withheld. He may be required to travel and work both within and outside the United Kingdom from time to time but, unless otherwise agreed with the Board, will not be required to live outside the United Kingdom.
|
7
|
Base salary and Benefits
|
7.1
|
From the Commencement Date the Company will pay the Executive a base salary of £595,000 per annum. Base salary will be paid in equal monthly instalments, partly in arrears and partly in advance, by bank credit transfer on or about the 15th day of each month and will accrue from day to day. Base salary will be reviewed annually. The review will usually take place in June, with the first such review for the Executive being in June 2020. The Company is under no obligation to award an increase following a salary review, There will be no review of salary after notice has been given by either party to terminate this agreement under clause 12.
|
7.2
|
The base salary referred to in clause 7.1 includes director’s fees from the Group Companies and any other companies in which the Executive is required to accept a directorship under the terms of this Employment. To achieve this:
|
7.2.1
|
the Executive will repay any fees he receives to the Company;
|
7.2.2
|
his base salary will be reduced by the amount of those fees; or
|
7.2.3
|
a combination of the methods set out in clauses 7.2.1 and 7.2.2 will be applied.
|
7.3
|
In the unlikely event of an accidental overpayment of remuneration for any reason, the Company may request the Executive to refund such overpayment to the Company and the Executive will remit such refund within one month of such request.
|
7.4
|
The Executive may at the discretion of the Remuneration Committee be invited to participate in any bonus and/or incentive plan operated by the Company and as introduced or amended from time to time. If so invited the Executive’s participation in such bonus and/ or incentive plan and the amount (if any) payable under it will be at the discretion of the Remuneration Committee and/or in accordance with the rules of any such plan in force from time to time. Participation in a bonus and/or incentive plan for one year does not entitle the Executive to participation in any bonus plan for any other year.
|
7.5
|
The Company will either:
|
7.5.1
|
provide a car for the Executive's use in accordance with the rules of the Company car scheme, as amended, from time to time; or
|
7.5.2
|
pay the Executive a taxable, non-pensionable car allowance of £12,000 per annum. The car allowance will be paid monthly, half in arrears and half in advance, and in the same manner as the Executive’s salary.
|
7.6
|
Pensions
|
7.6.1
|
The Company will provide a pension contribution allowance equal to 20% of the Executive's base salary (as referred to In clause 7.1, at the rale in force at the time such payment
is
made)
|
7.6.2
|
The Executive is eligible for membership of the defined contribution pension scheme offered by the Company (the National Grid YouPlan). Membership of the National Grid YouPlan is subject to minimum Executive and Company contributions. The minimum Executive Contribution to the National Grid YouPlan is 3% of the Executive's base salary. The minimum Company Contribution to the National Grid You Plan is 6% of the Executive's base salary. These amounts may be subject to change based on the pension scheme rules and/or legislation.
|
7.6.3
|
The entire, or remainder of the pension contribution allowance may be taken as a monthly cash payment, subject to deductions for income tax and national insurance. Where the Executive does not receive the entire allowance in cash, the remainder will be subject to the Company and the Executive meeting their minimum contributions levels as set out In clause 7.6.2 (or such minimum as applies from time to time).
|
7.6.4
|
If the Executive chooses not to participate in the Nalional Grid YouPlan, the Company is required by legislation to re-enrol the Executive into a pension scheme approximately every three years.
|
7.7
|
Subject to the arrangements regarding holiday which are set out at clause 7.11 below and which take precedence, the Executive is eligible to participate in the Company’s flexible benefits scheme as introduced or amended from time to time, currently “Your Flexible Benefits”, which provides access to a range of optional benefits. The Executive should note that some of the benefits provided under the scheme may be taxable benefits. The Executive should note the range of flexible benefits offered and the flexible benefits package itself does not form part of the Executive’s contract of employment and the Company reserves the right, at any time, to withdraw and/or amend the flexible benefits scheme and the benefits provided under it at its absolute discretion.
|
7.8
|
If the Executive complies with any eligibility requirements or other conditions set by the Company and any insurer appointed by the Company ("
Insurer
"), the Executive and his spouse and children under 21 years of age who reside with the Executive or in full time education up to the age of 24 may participate in the Company's private health insurance arrangements at the Company's expense and subject to the terms of those arrangements in force from time to time. The Company reserves the right at any time to withdraw this benefit or to amend the terms upon which it is provided (including, without limitation, to cease to allow the Executive’s spouse and children to participate in any such private health insurance arrangements). The Executive understands and agrees that if the Insurer fails or refuses to provide him with any benefit under the insurance arrangement provided by the Company, the Executive will have no right of action against the Company in respect of such failure or refusal.
|
7.9
|
The Company shall provide life insurance for the benefit of the Executive equal to four times the base salary from time to time payable hereunder.
|
7.10
|
If and whenever permanent health insurance is provided for the benefit of the executive directors of National Grid Plc , the Executive will also be afforded the benefit of such cover.
|
7.11
|
The Executive is entitled to 28 days’ paid holiday each year (in addition to English bank and other public holidays) subject to any election the Executive may choose to make pursuant to the Company’s flexible benefits scheme. Any election the Executive may choose to make pursuant to the Company’s flexible benefits scheme to increase his holiday entitlement will be subject to prior Board or Chief Executive approval. All holiday must
be taken at times approved in advance by the Board or by the Chief Executive. The Executive’s holiday year commences in the month of his birth and ends on the preceding month in the following year. Holidays may not be carried forward from one holiday year to the next without the Board’s prior approval. The Executive agrees the provisions of Regulations 15(1)-(4) inclusive of the Regulations (dates on which leave is taken) do not apply to the Employment.
|
7.12
|
The rules governing sickness absence are set out in the Company’s Sickness Absence Policy which is available on the intranet. The Executive must comply with these rules. Without prejudice to any right of the Company to terminate the Employment at any time pursuant to clause 12, if the Executive is absent from work as a result of sickness or injury then provided that the rules are complied with, the Executive shall be entitled to sick pay in accordance with the rules of the Company sick pay scheme as detailed below:
|
7.12.1
|
After the Executive has accrued at least twelve months’ continuous service:
|
(i)
|
an allowance equal to base salary will be paid for the first six months of such absence;
|
(ii)
|
after the expiration of the six month period, an allowance equal to half of base salary will be paid for a further period of up to six months.
|
7.12.2
|
The amount of any benefit which the Executive is entitled to claim during that period of absence under any Social Security or National Insurance Scheme in England and Wales and/or any scheme of which the Executive is a non-contributory member by virtue of the Employment will be deducted from any base salary paid to him. The Company will pay the Executive statutory sick pay under the Social Security Contributions and Benefits Act 1992 (as amended) (“
SSP
”) and any base salary paid to him will be deemed to include statutory sick pay. The Company reserves the right to offset the amount of these benefits against base salary paid to the Executive even if the Executive has not recovered them.
|
7.12.3
|
Any sick pay or allowances in excess of SSP paid after the end of the periods referred to above is entirely at the Company’s discretion.
|
7.13
|
If the Executive is absent from work due to sickness or injury which is caused by the fault of another person, and as a consequence recovers from that person or another person any sum representing compensation for loss of base salary under this agreement, the Executive will repay to the Company any money it has paid to him as base salary in respect of the same period of absence.
|
7.14
|
Notwithstanding any other provision in this agreement, any payments to be made, and benefits to be provided under this agreement or otherwise in relation to the Employment, may be subject to shareholder approval and will be subject to compliance with the Company’s remuneration policy as approved by shareholders from to time. To the extent that any such shareholder approval is needed, the Company will seek it at the next scheduled Annual General Meeting and any deadline in relation to the delivery of such payments or benefits will be delayed accordingly.
|
8
|
Directors' and Officers' protection
|
8.1
|
The Company will maintain appropriate directors' and officers' liability insurance for the benefit of the Executive in respect of his period as a director of the Company and any Group Company on terms no less favourable than those applied to any current director or officer of the Company.
|
9
|
Expenses
|
9.1
|
The Company will refund to the Executive all reasonable expenses properly incurred by him in performing his duties under this agreement, provided that these are incurred in accordance with Company policy in force from time to time. The Company will require the Executive to produce receipts or other documents as proof that he has incurred any expenses he claims.
|
9.2
|
If the Executive is provided with a credit or charge card by the Company this must normally be used for expenses which he incurs in performing the duties of the Employment. It may be used for personal expenses only in exceptional circumstances.
|
10
|
Confidentiality
|
10.1
|
Without prejudice to the common law duties which he owes to the Company the Executive agrees that he will not, except in the proper performance of his duties, copy, use or disclose to any person any of the Company’s trade secrets or confidential information. This restriction will continue to apply after the termination of the Employment without limit in time but will not apply to trade secrets or confidential information which become public other than through unauthorised disclosure by the Executive. The Executive will use all reasonable endeavours to prevent the unauthorised copying use or disclosure of such information.
|
10.2
|
In the course of the Employment the Executive is likely to obtain trade secrets and confidential information belonging or relating to other Group Companies and other persons. He will treat such information as if it falls within the terms of clause 10.1 and clause 10.1 will apply with any necessary amendments to such information. If requested to do so by the Company the Executive will enter into an agreement with other Group Companies and any other persons in the same terms as clause 10.1 with any amendments necessary to give effect to this provision.
|
10.3
|
Nothing in this agreement will prevent the Executive from making a “protected disclosure” in accordance with the provisions of the Employment Rights Act 1996.
|
11
|
Intellectual Property Rights
|
11.1
|
The Executive acknowledges that (i) it is part of his normal duties to develop the products and services of the Company; and (ii) because of the nature of her position he has a special obligation to further the interests of the Company. All Intellectual Property which the Executive develops or produces in the course of his employment duties, or outside such duties but relating to the business of the Company, will be owned by the Company to the fullest extent permitted by law. The Executive agrees, at the Company’s expense, to sign all documents and carry out all such acts as will be necessary to vest such Intellectual Property in the Company, and to obtain protection and enforce the Company's rights anywhere in the world. The Executive also hereby waives all moral rights in all Intellectual Property which is owned by the Company, or will be owned by the Company, further to this clause. The Executive will not copy, disclose or make use of any Intellectual Property belonging to the Company (whether or not subject to this clause) except to the extent necessary for the proper performance of his duties. Rights and obligations under this clause will continue after the termination of this agreement in respect of all Intellectual Property arising during the Employment.
|
11.2
|
The Executive must disclose immediately to the Company any discovery or invention, secret process or improvement in procedure made or discovered by the Executive during his employment in connection with or in any way affecting or relating to the business of the Company or any Group Company or capable of being used or adapted for use in or in connection with any such company ("
Inventions
") which Inventions will belong to and be the absolute property of the Company or such other person, firm, company or organisation as the Company may require.
|
11.3
|
If requested by the Board (whether during or after the termination of his employment) the Executive will, at the expense of the Company, apply or join in applying for letters patent or other similar protection in the United Kingdom or any other part of the world for all Inventions and will do everything necessary (including executing documents) for vesting letters patent or other similar protection when obtained; and all rights and title to and interest in all Inventions in the Company absolutely and as sole beneficial owner or in such other person, firm, company or organisation as the Company may require.
|
11.4
|
The Executive will (both during and after the termination of his employment) at the Company's expense anywhere in the world and at any time promptly do everything (including executing documents) that may be required by the Board to defend or protect for the benefit of the Company all Inventions and the right and title of the Company to them.
|
11.5
|
The provisions of clause 11.1 to 11.4 (inclusive) are without prejudice to the provisions of the Patents Act 1977.
|
11.6
|
The entire copyright and all similar rights (including future copyright, the right to register trade marks or service marks and the right to register designs and design rights) throughout the world in works of any description produced by the Executive in the course of or in connection with his employment ("
Works
") will vest in and belong to the Company absolutely throughout the world for the full periods of protection available in law including all renewals and extensions.
|
11.7
|
The Executive will (both during and after the termination of his employment) at the Company's request and expense anywhere in the world and at any time promptly do everything (including executing documents) that may be required by the Board to assure, defend or protect the rights of the Company in all Works.
|
11.8
|
For the purposes of this clause 11 the Executive hereby irrevocably and unconditionally waives in favour of the Company the moral rights conferred on the Executive by Chapter IV Part 1 of the Copyright Designs and Patents Act 1988 in respect of any Inventions or Works in which the copyright is vested in the Company under this clause 11 or otherwise.
|
11.9
|
The Executive will not make copies of any computer files belonging to any Group Company or their service providers and will not introduce any of his own computer files into any computer used by any Group Company in breach of any Group Company policy, unless he has obtained the consent of the Board.
|
11.10
|
By entering into this agreement the Executive irrevocably appoints the Company to act on his behalf to execute any document and do anything in his name for the purpose of giving the Company (or its nominee) the full benefit of the provision of clause 11 or the Company’s entitlement under statute. If there is any doubt as to whether such a document (or other thing) has been carried out within the authority conferred by this clause 11.10, a certificate in writing (signed by any director or the secretary of the Company) will be sufficient to prove that the act or thing falls within that authority.
|
12
|
Termination and Suspension
|
12.1
|
The Employment will continue until terminated by either party giving written notice as set out in clause 12.2.
|
12.2
|
Either party may terminate the Employment by giving not less than 12 months’ written notice to the other.
|
12.3
|
The Company may at its sole and absolute discretion pay base salary alone (as referred to in clause 7.1 at the rate in force at the time such payment is made) in lieu of any unexpired period of notice (less any deductions the Company is required by law to make). For the avoidance of doubt, the Executive is not entitled to participate in or benefit from any severance, termination or redundancy plan operated by any member of the Group. The Company may pay any sums to the Executive under this clause in equal monthly instalments until the date on which the notice period under clause 12.2 would have expired if full notice had been given. The Executive shall be under an obligation to seek alternative income during such period and to notify the Company of any alternative income received during this period derived from employment or the provision of services. Any monthly instalments shall be reduced by the amount of any such alternative income which the Executive receives during or in relation to such part.
|
12.4
|
The Company may terminate the Employment by giving written notice to take immediate effect whether or not the Executive’s entitlement to sick pay, contractual or otherwise, has been exhausted if the Executive does not perform the duties of the Employment for a period of 364 days (whether or not consecutive) in any period of 2 years. This notice can be given whilst the Executive continues not to perform his duties or on expiry of the 364 day period. In this clause, ‘days’ includes Saturdays, Sundays and public holidays.
|
12.5
|
The Company may terminate the Employment by giving written notice to take immediate effect if the Executive:
|
12.5.1
|
has not performed his duties under this agreement to the standard required by the Board;
|
12.5.2
|
commits any serious or persistent breach of his obligations under this agreement;
|
12.5.3
|
does not comply with any fundamental term of this agreement;
|
12.5.4
|
does not comply in a material respect with any lawful and reasonable order or direction given to his by the Board;
|
12.5.5
|
is guilty of any gross misconduct or conducts himself (whether in connection with the Employment or not) in a way which is harmful to any Group Company;
|
12.5.6
|
is guilty of or confesses to a dishonesty offence or is convicted of or confesses to any criminal offence (other than a motoring offence which does not result in imprisonment) whether in connection with the Employment or not;
|
12.5.7
|
commits (or is reasonably believed by the Board to have committed) a material breach of any legislation in force which may affect or relate to the business of any Group Company;
|
12.5.8
|
becomes of unsound mind, bankrupt or has a receiving order made against his or makes any general composition with his creditors or takes advantage of any statute affording relief for insolvent debtors;
|
12.5.9
|
becomes disqualified from being a director of a company or the Executive’s directorship of the Company terminates without the consent or concurrence of the Company; and/or
|
12.5.10
|
fails to maintain or becomes disqualified from maintaining registration with any regulatory body, membership of which is reasonably required by the Company for the Executive to carry out his duties.
|
12.6
|
Where the Company terminates the Employment by giving written notice to take immediate effect in accordance with either clause 12.4 or 12.5, for the avoidance of doubt there is no obligation to give notice as set out in clause 12.1 or any other period of notice or to make any payment in lieu of notice.
|
12.7
|
The Executive will have no claim for damages or any other remedy against the Company if the Employment is validly terminated for any of the reasons set out in clause 12.4 or 12.5.
|
12.8
|
When the Employment terminates the Company may deduct from any money due to the Executive (including remuneration) any amount which he owes to any Group Company.
|
12.9
|
The Company may suspend the Executive from the Employment on full base salary at any time for a reasonable period to investigate any matter in which the Executive is implicated or involved (whether directly or indirectly) and to conduct any related disciplinary proceedings.
|
13
|
Garden Leave
|
13.1
|
Neither the Company nor any Group Company is under any obligation to provide the Executive with any work. At any time after notice to terminate the Employment is given by either party under clause 12 above, or if the Executive resigns without giving due notice and the Company does not accept his resignation, the Company may, at its absolute discretion, require the Executive to take a period of absence called garden leave for a maximum period of 6 months (the “
Garden Leave Period
”). The provisions of this clause shall apply to any Garden Leave Period.
|
13.2
|
The Company may require that the Executive will not, without prior written consent of the Board, be employed or otherwise engaged in the conduct of any activity, whether or not of a business nature during the Garden Leave Period. Further, if so requested by the Company, the Executive will not:
|
13.2.1
|
enter or attend the premises of the Company or any other Group Company;
|
13.2.2
|
contact or have any communication with any customer or client of the Company or any other Group Company in relation to the business of the Company or any other Group Company (other than purely social contact);
|
13.2.3
|
contact or have any communication with any employee, officer, director, agent or consultant of the Company or any other Group Company in relation to the business of the Company or any other Group Company (other than purely social contact);
|
13.2.4
|
remain or become involved in any aspect of the business of the Company or any other Group Company except as required by such companies; and/or
|
13.2.5
|
access the Company’s or any Group Company’s information technology systems.
|
13.3
|
The Company may require the Executive during the Garden Leave Period:
|
13.3.1
|
to comply with the provisions of clause 16, save that he will not be required to return any Company car during any Garden Leave Period; and
|
13.3.2
|
to immediately resign from any directorship, trusteeships or other offices which he holds in any Group Company or any other company where such directorship or other office is held as a consequence or requirement of the Employment, unless he is required to perform duties to which any such directorship, trusteeship or other office relates in which case he may retain such directorships, trusteeships or other offices while those duties are ongoing. The Executive hereby irrevocably appoints the Company to be his attorney to execute any instrument and do anything in his name and on his behalf to effect his resignation if he fails to do so in accordance with this clause 13.3.2.
|
13.4
|
During the Garden Leave Period, the Executive will be entitled to receive his base salary and receive all contractual benefits in accordance with the terms of this agreement, save that he will not accrue any bonuses or be entitled to receive any new grants or awards under any long term incentive arrangements. Any unused holiday accrued at the commencement of the Garden Leave Period and any holiday accrued during any such period will be deemed to be taken by the Executive during the Garden Leave Period.
|
13.5
|
At the end of or at any time during the Garden Leave Period, the Company may, at its sole and absolute discretion, pay the Executive base salary alone (as defined in clause 7.1) in lieu of the balance of any period of notice given by the Company or the Executive (less any deductions the Company is required by law to make).
|
13.6
|
During the Garden Leave Period:
|
13.6.1
|
the Executive shall provide such assistance as the Company or any Group Company may require to effect an orderly handover of his responsibilities to any individual or individuals appointed by the Company or any Group Company to take over his role or responsibilities;
|
13.6.2
|
the Executive shall make himself available to deal with requests for information, provide assistance, be available for meetings and to advise on matters relating to work (unless the Company has agreed that the Executive may be unavailable for a period); and/or
|
13.6.3
|
the Company may appoint another person to carry out his duties either jointly with his or in substitution for the Executive.
|
13.7
|
All duties of the Employment (whether express or implied), including without limitation the Executive’s duties of fidelity, good faith and exclusive service, shall continue throughout the Garden Leave Period save as expressly varied by this clause 13.
|
13.8
|
The Executive agrees that the exercise by the Company of its rights during the Garden Leave Period pursuant to this clause 13 shall not entitle the Executive to claim that he has been constructively dismissed.
|
14
|
Restrictions after Termination of Employment
|
14.1
|
In this clause:
|
(i)
|
25% or more of its share capital, including where the acquisition is less than 25% but would bring the relevant Group Company's aggregate shareholding to 25% or above; or
|
(ii)
|
more than £50 million of its assets.
|
14.2
|
The Executive is likely to obtain trade secrets and confidential information and personal knowledge of and influence over customers clients and employees of the Group during the course of the Employment. To protect these interests of the Company, the Executive agrees with the Company that he will be bound by the following covenants:
|
14.2.1
|
during the Restricted Period he will not be engaged in, employed in, act as a consultant to or agent for or professional adviser of, or be a director or officer of, JP Morgan Chase & Co (and any of its subsidiary companies) or Barclays plc (and any of its subsidiary companies) where such position or role involves advising on or being involved in, whether directly or indirectly, making any investments into or in the Prohibited Area in the energy sector; and
|
14.2.2
|
during the Restricted Period he will not be engaged in, employed in, act as a consultant to or agent for or professional adviser of, or be a director or officer of any company engaged or interested in, in each case whether directly or indirectly, any of the Businesses; and
|
14.2.3
|
during the Restricted Period he will not (either on his own behalf or for or with any other person, whether directly or indirectly), entice or try to entice away from the Company or any other Group Company any person who was a Senior Employee of such a company at the Termination Date and who had been a Senior Employee at any time during the six months prior to the Relevant Date and with whom he had worked closely at any time during that period.
|
14.3
|
Each of the paragraphs contained in clause 14.2 constitutes an entirely separate and independent covenant. If any covenant is found to be invalid this will not affect the validity or enforceability of any of the other covenants.
|
14.4
|
Following the Termination Date, the Executive will not represent himself as being in any way connected with the businesses of the Company or of any other Group Company (except to the extent agreed by such a company).
|
14.5
|
Any benefit given or deemed to be given by the Executive to any Group Company under the terms of clause 14 is received and held on trust by the Company for the relevant Group Company. The Executive will enter into appropriate restrictive covenants directly with other Group Companies if asked to do so by the Company.
|
15
|
Offers on Liquidation
|
16
|
Return of Company Property
|
16.1
|
At any time during the Employment (at the request of the Company) and in any event when the Employment terminates, the Executive will immediately return to the Company:
|
16.1.1
|
all documents and other materials (whether originals or copies) made or compiled by or delivered to the Executive during the Employment and concerning all the Group Companies. The Executive will not retain any copies of any materials or other information; and
|
16.1.2
|
all other property belonging or relating to any of the Group Companies.
|
16.2
|
When the Employment terminates the Executive will immediately return to the Company any car provided to the Executive which is in the possession or under the control of the Executive. The Company car must be returned in good condition (allowing for fair wear and tear).
|
16.3
|
If the Executive commences Garden Leave in accordance with clause 13 he may be required to comply with the provisions of clause 16.1.
|
17
|
Directorships
|
17.1
|
The Executive’s office as a director of the Company or any other Group Company is subject to the Articles of Association of the relevant company (as amended from time to time). If the provisions of this agreement conflict with the provisions of the Articles of Association, the Articles of Association will prevail.
|
17.2
|
The Executive must promptly resign from any office held in any Group Company if he is asked to do so by the Company.
|
17.3
|
If the Executive does not resign as an officer of a Group Company, having been requested to do so in accordance with clause 17.2, the Company will be appointed as his attorney to effect his resignation. By entering into this agreement, the Executive irrevocably appoints the Company as his attorney to act on his behalf to execute any document or do anything in his name necessary to effect his resignation in accordance with clause 17.2. If there is any doubt as to whether such a document (or other thing) has been carried out within the authority conferred by this clause 17.3, a certificate in writing (signed by any director or the secretary of the Company) will be sufficient to prove the act or thing falls within that authority.
|
17.4
|
The termination of any directorship or other office held by the Executive will not terminate the Executive’s employment or amount to a breach of terms of this agreement by the Company.
|
17.5
|
During the Employment the Executive will not do anything which could cause him to be disqualified from continuing to act as a director of any Group Company.
|
17.6
|
The Executive must not resign his office as a director of any Group Company without the agreement of the Company.
|
18
|
Notices
|
18.1
|
Any notices given under this agreement must be given by letter or email. Notice to the Company must be addressed to its registered office at the time the notice is given. Notice to the Executive must be given to him personally or sent to his last known address.
|
18.2
|
Except for notices given by hand, notices given by post will be deemed to have been given on the next working day after the day of posting and notices given by fax will be deemed to have been given in the ordinary course of transmission.
|
19
|
Statutory Particulars
|
19.1
|
The written particulars of employment which the Executive is entitled to receive under the provisions of Part I of the Employment Rights Act 1996 are set out below, insofar as they are not set out elsewhere in this agreement.
|
19.1.1
|
The Company’s disciplinary rules and dismissal, disciplinary and grievance procedures as set out in the Staff Handbook and as amended from time to time are applicable to the Executive. The disciplinary rules are contractual. The dismissal, disciplinary and grievance procedures are non-contractual.
|
19.1.2
|
The Company’s normal hours of work are 9.00am to 5.00pm Monday to Friday.
|
19.1.3
|
There are no terms and conditions relating to collective agreements or to the requirement to work outside the United Kingdom.
|
20
|
Data Privacy
|
20.1
|
The Executive acknowledges that the Company will process his personal data and sensitive personal data relating to his Employment. The Executive can obtain a further copy of the Company's workplace privacy notice on request from the Human Resources department.
|
20.2
|
The Executive acknowledges that during his Employment he will have access to and process. or authorise the processing of. personal data and sensitive personal data relating to employees. customers and other individuals held and controlled by the Company. The Executive agrees to comply with the terms of the Company's data privacy policy in place from time to time.
|
21
|
Contracts (Rights of Third Parties) Act 1999
|
21.1
|
To the extent permitted by law, no person other than the parties to this agreement and the Group Companies shall have the right to enforce any term of this agreement under the Contracts (Rights of Third Parties) Act 1999. For the avoidance of doubt, save as expressly provided in this clause the application of the Contracts (Rights of Third Parties) Act 1999 is specifically excluded from this agreement, although this does not affect any other right or remedy of any third party which exists or is available other than under this Act.
|
22
|
Miscellaneous
|
22.1
|
This agreement may be entered into in any number of counterparts, all of which taken together shall constitute one and the same instrument. Any party may enter into this agreement by executing any such counterpart.
|
22.2
|
This agreement may only be modified by the written agreement of the parties.
|
22.3
|
The Executive cannot assign this agreement to anyone else.
|
22.4
|
References in this agreement to rules, regulations, policies, handbooks or other similar documents which supplement it, are referred to in it or describe any pensions or other benefits arrangement are references to the versions or forms of the relevant documents as amended or updated from time to time.
|
22.5
|
This agreement supersedes any previous written or oral agreement between the parties in relation to the matters dealt with in it. It (together with the Company rules and policies) contains the whole agreement between the parties relating to the Employment at the date the agreement was entered into (except for those terms implied by law which cannot be excluded by the agreement of the parties). The Executive acknowledges that he has not been induced to enter into this agreement by any representation, warranty or undertaking not expressly incorporated into it. The Executive agrees and acknowledges that his only rights and remedies in relation to any representation, warranty or undertaking made or given in connection with this agreement (unless such representation, warranty or undertaking was made fraudulently) will be for breach of the terms of this agreement, to the exclusion of all other rights and remedies (including those in tort or arising under statute).
|
22.6
|
Neither party’s rights or powers under this agreement will be affected if:
|
22.6.1
|
one party delays in enforcing any provision of this agreement; or
|
22.6.2
|
one party grants time to the other party.
|
22.7
|
The Interpretation Act 1978 shall apply to this agreement in the same way as it applies to an enactment.
|
22.8
|
References to any statutory provisions include any modifications or re-enactments of those provisions.
|
22.9
|
Headings will be ignored in construing this agreement.
|
22.10
|
If either party agrees to waive its rights under a provision of this agreement, that waiver will only be effective if it is in writing and it is signed by that party. A party’s agreement to waive any breach of any term or condition of this agreement will not be regarded as a waiver of any subsequent breach of the same term or condition or a different term or condition.
|
22.11
|
This agreement is governed by and will be interpreted in accordance with the laws of England and Wales. Each of the parties submits to the exclusive jurisdiction of the English Courts as regards any claim or matter arising under this agreement.
|
THE COMMON SEAL
of
NATIONAL GRID ELECTRICITY TRANSMISSION PLC
was affixed to this
DEED
in the presence of:
/s/ Megan Barnes
Authorised Signatory
Member of Board Sealing Committee
|
|
|
|
|
|
EXECUTED
as a
DEED
by
ANDREW AGG
in the presence of:
|
|
/s/ Andrew Agg
|
|
|
|
Witness’s signature /s/ Clive Burns
|
L Innes
|
|
Name Clive Burns
|
Lynne Innes
|
|
Address
Cheraton Lodge
Porters End
Kimpton Herts S948ER
|
18 Heron Lane
Stratford Upon Avon
|
|
Occupation
|
PA
|
|
Chartered Secretary
|
|
|
•
|
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
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•
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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.
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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.
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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):
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(a)
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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
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(b)
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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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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.
|
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;
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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;
|
(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
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(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
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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
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(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 2019
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/s/ John Pettigrew
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John Pettigrew
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Title: Chief Executive
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National Grid plc
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Date: 4 June 2019
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/s/ Andrew Agg
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Andrew Agg
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Title: Chief Financial Officer
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National Grid plc
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