¨
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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 2020
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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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Trading Symbol(s)
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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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NG
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The New York Stock Exchange*
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American Depositary Shares, each representing five
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NGG
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The New York Stock Exchange
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Preferred Stock ($100 par value-cumulative):
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3.90% Series
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NMK PR C
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The New York Stock Exchange
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3.60% Series
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NMK PR B
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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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253
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“Strategic Report—Financial review”
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28-37
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“Financial Statements—Consolidated income statement”
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121-122
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“Financial Statements—Consolidated statement of comprehensive income”
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123
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“Financial Statements—Consolidated statement of financial position”
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125
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“Financial Statements—Consolidated cash flow statement”
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126
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“Additional Information—Other unaudited financial information—Alternative performance measures/non-IFRS reconciliations”
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240-250
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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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227-230
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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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257
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“Additional Information—The business in detail—Key milestones”
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217
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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—Evolving our Strategy for the future”
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12
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“Strategic Report—Our business environment”
“Strategic Report—Progress against our Strategy”
“Strategic Report—Principal operations—UK”; “—US”; and “—National Grid Ventures and other activities”
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13-15
18-20
38-43
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“Additional Information—Other unaudited financial information—Alternative performance measures/non-IFRS reconciliations—Capital investment”
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244
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“Additional Information—Shareholder information—Articles of Association—General”
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231-232
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“Strategic Report—Financial Review—Summary of Group financial performance for the year ended 31 March 2020”
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28
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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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32-33, 33-34
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“Financial Statements—Notes to the consolidated financial statements—2. Segmental analysis—(c) Capital expenditure”
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131
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Item
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Form 20-F caption
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Location in the document
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Page(s)
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“Financial Statements—Notes to the consolidated financial statements—10. Discontinued operations and assets held for sale” and “—Strategic report—Financial Review—Discontinued operations”
“Financial Statements—Notes to the consolidated financial statements—38. Acquisition of Geronimo Energy LLC and Emerald Energy Venture LLC”
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147, 31
208
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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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219-226
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“Additional Information—Shareholder Information— Documents on display”
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232
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4B Business overview
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“Additional Information—The business in detail”
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217-226
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“Strategic Report—Business Model: What we do”, “—how we operate” and “—Chairman’s Statement”
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2-9
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“Strategic Report—Our business environment”
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13-15
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“Strategic Report—Evolving our strategy for the future”
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12
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“Strategic Report—Progress against our strategy”
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18-20
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“Strategic Report— Financial Review”
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28-37
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“Strategic Report—Principal operations—UK”; “—US”; and “—National Grid Ventures and other activities”
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38-43
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“Financial Statements—Notes to the consolidated financial statements—2. Segmental analysis”
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130-131
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“Financial Statements—Notes to the consolidated financial statements—17. Derivative financial instruments—(b) Commodity contract derivatives”
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157-158
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4C Organizational structure
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“Financial Statements—Notes to the consolidated financial statements—34. Subsidiary undertakings, joint ventures and associates”
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196-200
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4D Property, plants and equipment
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“Strategic Report—Progress against our strategy—Principal measures—NGV capital investment”; “Strategic Report—Financial Review—Financial Position”; and “Financial Statements— Notes to the consolidated financial statements—13. Property, plant and equipment”
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19, 33-34, 150-152
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“Additional Information—The business in detail: Where we operate” and “—Other disclosures—Property, plant and equipment”
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218, 237
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“Financial Statements—Consolidated statement of financial position”
“Financial Statements- Notes to the consolidated financial statements-5. Exceptional items and remeasurements-2020-Environmental charges”
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125
138
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“Financial Statements—Notes to the consolidated financial statements—21. Borrowings”
“Financial Statements—Notes to the consolidated financial statements—38. Acquisition of Geronimo Energy LLC and Emerald Energy Venture LLC”
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161-163
208
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“Additional Information—Other unaudited financial information—Capital investment”
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244
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4A
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Unresolved staff comments
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“Additional Information—Other disclosures—Unresolved SEC staff comments”
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239
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5
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Operating and financial review and prospects
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5A Operating results
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“Strategic Report—Financial review”
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28-37
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“Strategic Report—Our business environment”
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13-15
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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—The business in detail—UK regulation”; “—US regulation”; and “—Summary of US price controls and rate plans”
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219-226
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“Strategic Report—Principal operations—UK”; “—US”; and “—National Grid Ventures and other activities”
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38-43
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“Financial Statements—Notes to the consolidated financial statements—2. Segmental analysis”
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130-131
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“Additional Information—Commentary on consolidated financial statements”
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251-252
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“Financial Statements—Notes to the consolidated financial statements—32. Financial risk management—(c) Currency risk”
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186
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“Additional Information—Internal control and risk factors—Risk factors—Law, regulation and political and economic uncertainty”
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228
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5B Liquidity and capital resources
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“Strategic Report—Financial review”
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28-37
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“Financial Statements—Notes to the consolidated financial statements—1.A Going concern”
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127
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“Financial Statements—Consolidated cash flow statement”
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126
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“Additional Information—Internal control and risk factors—Risk factors—Financing and liquidity”
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230
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“Financial Statements—Notes to the consolidated financial statements—17. Derivative financial instruments”
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156-158
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“Financial Statements—Notes to the consolidated financial statements—20. Cash and cash equivalents”
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160
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“Financial Statements—Notes to the consolidated financial statements—21. Borrowings”
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161-163
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“Financial Statements—Notes to the consolidated financial statements—29. Net debt”
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178-180
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“Financial Statements—Notes to the consolidated financial statements—30. Commitments and contingencies”
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181
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“Financial Statements—Notes to the consolidated financial statements—32. Financial risk management”
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182-194
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“Financial Statements—Notes to the consolidated financial statements—33. Borrowing facilities”
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195
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5C Research and development, patents and licenses, etc.
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“Strategic Report—Innovation” and “Additional Information—Other disclosures—Research, development and innovation activity”
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21, 237-239
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5D Trend information
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“Strategic Report—Chief Executive’s review—Optimising performance”
“Strategic Report—Our business environment” “Strategic Report—Financial review”
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11
13-15
28-37
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“Strategic Report—Principal operations—UK”; “—US”; and “—National Grid Ventures and other activities”
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38-43
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5E Off-balance sheet arrangements
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“Strategic Report—Financial review—Off Balance Sheet Items”
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34
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5F Tabular disclosure of contractual obligations
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“Financial Statements—Notes to the consolidated financial statements—30. Commitments and contingencies”
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181
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5G Safe Harbor
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“Cautionary statement”
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258
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6
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Directors, senior management and employees
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6A Directors and senior management
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“Corporate Governance—Our Board”
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66-67
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6B Compensation
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“Corporate Governance—Directors’ Remuneration Report”
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88-107
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Item
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Form 20-F caption
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Location in the document
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Page(s)
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“Financial Statements—Notes to the consolidated financial statements—4. Operating costs—(c) Key management compensation”
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136
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“Financial Statements—Notes to the consolidated financial statements—25. Pensions and other post-retirement benefits”
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165-173
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6C Board practices
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“Corporate Governance—Our Board”
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66-67
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“Corporate Governance—Corporate Governance Overview”
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68-75
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“Corporate Governance—Audit Committee”
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76-81
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“Corporate Governance—Statement of application of and compliance with the UK Corporate Governance Code 2018”
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86-87
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“Corporate Governance—Directors’ Remuneration Report”
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88-107
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“Additional Information—Shareholder Information—Articles of Association—Directors”
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231-232
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6D Employees
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“Financial Statements—Notes to the consolidated financial statements—4. Operating costs—(b) Number of employees”
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135
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“Strategic Report—Our commitment to being a responsible business—Total headcount”
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54
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“Additional Information—Other disclosures—Employees”
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237
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6E Share ownership
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“Corporate Governance—Directors’ Remuneration Report—Statement of implementation of remuneration policy in 2019/20”
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96-106
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“Additional Information—Other disclosures—All-employee share plans”
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236
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“Share ownership”
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“Further Information”
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7
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Major shareholders and related party transactions
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7A Major shareholders
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“Additional Information—Shareholder information—Material interests in shares”
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233
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“Material interests in shares” and “Material interest in American Depositary Shares”
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“Further Information”
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7B Related party transactions
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“Financial Statements—Notes to the consolidated financial statements—31. Related party transactions”
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182
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“Material interests in shares”
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“Further Information”
|
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“Financial Statements—Notes to the consolidated financial statements—30. Commitment and contingencies”
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181
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7C Interests of experts and counsel
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Not applicable
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–
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8
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Financial information
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|
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8A Consolidated statements and other financial information
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“Reports of Independent Registered Public Accounting Firm—Audit opinions for Form 20-F”
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“Further Information”
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|
|
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“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”
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121-126
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|
|
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“Financial Statements—Notes to the consolidated financial statements”
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127-208
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|
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|
“Strategic Report—Chairman’s statement”
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8-9
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Item
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Form 20-F caption
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Location in the document
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Page(s)
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“Strategic Report—Financial Review—Dividend”
“Financial Statements—Notes to the consolidated financial statements—9. Dividends”
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37,146
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8B Significant changes
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“Strategic Report—Financial Review—Post balance sheet events”, “Additional Information—Shareholder Information—Events after the reporting period”, and “Subsequent events”; “Financial Statements— Notes to the consolidated financial statements—39. Post balance sheet events”
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37, 233, 208, “Further Information”
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9
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The offer and listing
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|
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9A Offer and listing details
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“Additional Information—Shareholder Information—Share information”
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234
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9B Plan of distribution
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Not applicable
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9C Markets
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“Additional Information—Shareholder information—Share Information”
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234
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9D Selling shareholders
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Not applicable
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–
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9E Dilution
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Not applicable
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–
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9F Expenses of the issue
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Not applicable
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–
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10
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Additional information
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10A Share capital
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Not applicable
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–
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10B Memorandum and articles of association
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“Additional Information—Shareholder Information—Articles of Association”
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231-232
|
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“Additional Information—Other disclosures—Corporate governance practices: differences from New York Stock Exchange (NYSE) listing standards”
“Additional Information—Shareholder Information—Other disclosures—Change of control provisions”
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236
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“Additional Information—Shareholder information—Share capital”
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233-234
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10C Material contracts
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“Additional Information—Other disclosures—Material contracts”
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237
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10D Exchange controls
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“Additional Information—Shareholder information—Exchange controls”
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233
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10E Taxation
|
“Additional Information——Shareholder information—Taxation”
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234-235
|
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10F Dividends and paying agents
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Not applicable
|
–
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|
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10G Statement by experts
|
Not applicable
|
–
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|
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10H Documents on display
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“Additional Information—Shareholder information—Documents on display”
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232
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10I Subsidiary information
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Not applicable
|
–
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11
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Quantitative and qualitative disclosures about market risk
|
|
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11(a) Quantitative information about market risk
|
“Financial Statements—Notes to the consolidated financial statements—17. Derivative financial instruments”
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156-158
|
|
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“Financial Statements—Notes to the consolidated financial statements—35. Sensitivities”
|
201-202
|
|
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|
“Financial Statements—Notes to the consolidated financial statements—32. Financial risk management”
|
182-194
|
|
|
|
“Strategic Report—Financial review”
|
28-37
|
|
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11(b) Qualitative information about market risk
|
“Financial Statements—Notes to the consolidated financial statements—17. Derivative financial instruments”
|
156-158
|
|
|
|
“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””
|
182-194
|
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Item
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Form 20-F caption
|
Location in the document
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Page(s)
|
|
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“Strategic Report—Financial review”
|
28-37
|
|
|
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“Additional Information—Internal Control and Risk factors—Risk Factors”
|
227-230
|
|
12
|
Description of securities other than equity securities
|
|
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12A Debt securities
|
Not applicable
|
–
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|
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12B Warrants and rights
|
Not applicable
|
–
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12C Other securities
|
Not applicable
|
–
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|
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12D American depositary shares
|
“Additional Information—Shareholder information—Depositary payments to the Company”
|
232
|
|
|
|
“Additional Information—Definitions and glossary of terms”
|
254-257
|
|
|
|
“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”
|
227
|
|
|
|
“Corporate Governance—Audit Committee”
|
76-81
|
|
|
|
“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”
|
76
|
|
|
16B Code of ethics
|
“Additional Information—Other disclosures—Code of Ethics”
|
236
|
|
|
16C Principal accountant fees and services
|
“Corporate Governance—Audit Committee—External audit”, “—Non-audit Services” and “—Audit and non-audit services (£m)”
|
81
|
|
|
|
“Financial Statements—Notes to the consolidated financial statements—4. Operating costs—(e) Auditors’ remuneration”
|
136
|
|
|
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”
|
233
|
|
|
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”
|
236
|
|
|
16H Mine safety disclosure
|
Not applicable
|
–
|
|
17
|
Financial statements
|
Not applicable
|
–
|
|
18
|
Financial statements
|
“Financial Statements—Company accounting policies”
|
209-210
|
|
|
|
“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”
|
121-126
|
|
|
|
“Financial Statements—Notes to the consolidated financial statements”
|
127-208
|
|
|
|
“Financial Statements— Reports of Independent Registered Public Accounting Firm—Audit opinions for Form 20-F”
|
“Further Information”
|
|
19
|
Exhibits
|
Filed with the SEC
|
–
|
|
2020
|
Notes
|
|
£m
|
|
|
Continuing operations
|
|
|
|
||
Revenue
|
2(a),3
|
|
14,540
|
|
|
Provision for bad and doubtful debts
|
4
|
|
(234
|
)
|
|
Other operating costs
|
4,5
|
|
(11,526
|
)
|
|
Operating profit/(loss)
|
2(b)
|
|
2,780
|
|
|
Finance income
|
5,6
|
|
54
|
|
|
Finance costs
|
5,6
|
|
(1,167
|
)
|
|
Share of post-tax results of joint ventures and associates
|
5,16
|
|
87
|
|
|
Profit/(loss) before tax
|
2(b),5
|
|
1,754
|
|
|
Tax
|
5,7
|
|
(480
|
)
|
|
Profit/(loss) after tax from continuing operations
|
5
|
|
1,274
|
|
|
Profit/(loss) after tax from discontinued operations
|
10
|
|
(9
|
)
|
|
Total profit/(loss) for the year (continuing and discontinued)
|
|
|
1,265
|
|
|
Attributable to:
|
|
|
|
||
Equity shareholders of the parent
|
|
|
1,264
|
|
|
Non-controlling interests from continuing operations
|
|
|
1
|
|
|
Earnings per share (pence)
|
|
|
|
||
Basic earnings per share (continuing)
|
8
|
|
36.8
|
|
|
Diluted earnings per share (continuing)
|
8
|
|
36.6
|
|
|
Basic earnings per share (continuing and discontinued)
|
8
|
|
36.5
|
|
|
Diluted earnings per share (continuing and discontinued)
|
8
|
|
36.3
|
|
2019
|
Notes
|
|
£m
|
|
|
Continuing operations
|
|
|
|
||
Revenue
|
2(a),3
|
|
14,933
|
|
|
Provision for bad and doubtful debts
|
4
|
|
(181
|
)
|
|
Other operating costs
|
4,5
|
|
(11,882
|
)
|
|
Operating profit/(loss)
|
2(b)
|
|
2,870
|
|
|
Finance income
|
5,6
|
|
88
|
|
|
Finance costs
|
5,6
|
|
(1,157
|
)
|
|
Share of post-tax results of joint ventures and associates
|
10,16
|
|
40
|
|
|
Profit/(loss) before tax
|
2(b),5
|
|
1,841
|
|
|
Tax
|
5,7
|
|
(339
|
)
|
|
Profit/(loss) after tax from continuing operations
|
5
|
|
1,502
|
|
|
Profit/(loss) after tax from discontinued operations
|
10
|
|
12
|
|
|
Total profit/(loss) for the year (continuing and discontinued)
|
|
|
1,514
|
|
|
Attributable to:
|
|
|
|
||
Equity shareholders of the parent
|
|
|
1,511
|
|
|
Non-controlling interests from continuing operations
|
|
|
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
|
|
2018
|
Notes
|
|
£m
|
|
|
Continuing operations
|
|
|
|
||
Revenue
|
2(a)
|
|
15,250
|
|
|
Provision for bad and doubtful debts
|
4
|
|
(36
|
)
|
|
Other operating costs
|
4,5
|
|
(11,721
|
)
|
|
Operating profit
|
2(b)
|
|
3,493
|
|
|
Finance income
|
6
|
|
127
|
|
|
Finance costs
|
5,6
|
|
(1,009
|
)
|
|
Share of post-tax results of joint ventures and associates
|
10
|
|
49
|
|
|
Profit before tax
|
2(b),5
|
|
2,660
|
|
|
Tax
|
5,7
|
|
889
|
|
|
Profit after tax from continuing operations
|
5
|
|
3,549
|
|
|
Profit/(loss) after tax from discontinued operations
|
10
|
|
2
|
|
|
Total profit for the year (continuing and discontinued)
|
|
|
3,551
|
|
|
Attributable to:
|
|
|
|
||
Equity shareholders of the parent
|
|
|
3,550
|
|
|
Non-controlling interests from continuing operations
|
|
|
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
|
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
Notes
|
|
£m
|
|
£m
|
|
£m
|
|
Profit after tax from continuing operations
|
|
|
1,274
|
|
1,502
|
|
3,549
|
|
Other comprehensive income from continuing operations
|
|
|
|
|
|
|||
Items from continuing operations that will never be reclassified to profit or loss:
|
|
|
|
|
|
|||
Remeasurement (losses)/gains on pension assets and post-retirement benefit obligations
|
25
|
|
(724
|
)
|
68
|
|
1,313
|
|
Net losses on equity instruments designated at fair value through other comprehensive income
|
|
|
(9
|
)
|
—
|
|
—
|
|
Net (losses)/gains on financial liability designated at fair value through profit and loss attributable to changes in own credit risk
|
|
|
(3
|
)
|
7
|
|
—
|
|
Net losses in respect of cash flow hedging of capital expenditure
|
|
|
(17
|
)
|
(13
|
)
|
—
|
|
Tax on items that will never be reclassified to profit or loss
|
7
|
|
212
|
|
(15
|
)
|
(530
|
)
|
Total items from continuing operations that will never be reclassified to profit or loss
|
|
|
(541
|
)
|
47
|
|
783
|
|
Items from continuing operations that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|||
Exchange adjustments
|
|
|
551
|
|
347
|
|
(505
|
)
|
Net (losses)/gains in respect of cash flow hedges
|
|
|
(128
|
)
|
(40
|
)
|
16
|
|
Net losses in respect of cost of hedging
|
|
|
(78
|
)
|
(66
|
)
|
—
|
|
Net losses on available-for-sale investments
|
|
|
—
|
|
—
|
|
(30
|
)
|
Transferred to profit or loss on sale of available-for-sale investments
|
|
|
—
|
|
—
|
|
(73
|
)
|
Net (losses)/gains on investment in debt instruments measured at fair value
through other comprehensive income |
|
|
(15
|
)
|
2
|
|
—
|
|
Share of other comprehensive (losses)/income of associates, net of tax
|
|
|
(5
|
)
|
1
|
|
—
|
|
Tax on items that may be reclassified subsequently to profit or loss
|
7
|
|
35
|
|
12
|
|
33
|
|
Total items from continuing operations that may be reclassified subsequently to profit or loss
|
|
|
360
|
|
256
|
|
(559
|
)
|
Other comprehensive (loss)/income for the year, net of tax from continuing operations
|
|
|
(181
|
)
|
303
|
|
224
|
|
Other comprehensive income for the year, net of tax from discontinued operations¹
|
10
|
|
6
|
|
36
|
|
147
|
|
Other comprehensive (loss)/income for the year, net of tax
|
|
|
(175
|
)
|
339
|
|
371
|
|
Total comprehensive income for the year from continuing operations
|
|
|
1,093
|
|
1,805
|
|
3,773
|
|
Total comprehensive (loss)/income for the year from discontinued operations
|
10
|
|
(3
|
)
|
48
|
|
149
|
|
Total comprehensive income for the year
|
|
|
1,090
|
|
1,853
|
|
3,922
|
|
Attributable to:
|
|
|
|
|
|
|||
Equity shareholders of the parent
|
|
|
|
|
|
|||
From continuing operations
|
|
|
1,091
|
|
1,801
|
|
3,773
|
|
From discontinued operations
|
|
|
(3
|
)
|
48
|
|
149
|
|
|
|
|
1,088
|
|
1,849
|
|
3,922
|
|
Non-controlling interests
|
|
|
|
|
|
|||
From continuing operations
|
|
|
2
|
|
4
|
|
—
|
|
1.
|
The other comprehensive income from discontinued operations relates to the items of other comprehensive income of Cadent (investment through Quadgas HoldCo Limited). Refer to note 10 for details.
|
|
Share
capital
£m
|
|
Share
premium account
£m
|
|
Retained
earnings
£m
|
|
Other equity reserves1
£m
|
|
|
Total shareholders’
equity
£m
|
|
Non-
controlling interests
£m
|
|
|
Total
equity
£m
|
|
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 15
|
—
|
|
—
|
|
(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 1 April 2019
|
458
|
|
1,314
|
|
21,814
|
|
(4,237
|
)
|
|
19,349
|
|
20
|
|
|
19,369
|
|
Profit for the year
|
—
|
|
—
|
|
1,264
|
|
—
|
|
|
1,264
|
|
1
|
|
|
1,265
|
|
Other comprehensive (loss)/income for the year
|
—
|
|
—
|
|
(509
|
)
|
333
|
|
|
(176
|
)
|
1
|
|
|
(175
|
)
|
Total comprehensive income for the year
|
—
|
|
—
|
|
755
|
|
333
|
|
|
1,088
|
|
2
|
|
|
1,090
|
|
Equity dividends
|
—
|
|
—
|
|
(892
|
)
|
—
|
|
|
(892
|
)
|
—
|
|
|
(892
|
)
|
Scrip dividend-related share issue²
|
12
|
|
(13
|
)
|
—
|
|
—
|
|
|
(1
|
)
|
—
|
|
|
(1
|
)
|
Issue of treasury shares
|
—
|
|
—
|
|
17
|
|
—
|
|
|
17
|
|
—
|
|
|
17
|
|
Purchase of own shares
|
—
|
|
—
|
|
(6
|
)
|
—
|
|
|
(6
|
)
|
—
|
|
|
(6
|
)
|
Share-based payments
|
—
|
|
—
|
|
19
|
|
—
|
|
|
19
|
|
—
|
|
|
19
|
|
Tax on share-based payments
|
—
|
|
—
|
|
3
|
|
—
|
|
|
3
|
|
—
|
|
|
3
|
|
Cash flow hedges transferred to the statement of financial position, net of tax
|
—
|
|
—
|
|
—
|
|
(15
|
)
|
|
(15
|
)
|
—
|
|
|
(15
|
)
|
At 31 March 2020
|
470
|
|
1,301
|
|
21,710
|
|
(3,919
|
)
|
|
19,562
|
|
22
|
|
|
19,584
|
|
1.
|
For further details of other equity reserves, see note 28.
|
2.
|
Included within the share premium account are costs associated with scrip dividends.
|
|
|
|
2020
|
|
2019
|
|
|
Notes
|
|
£m
|
|
£m
|
|
Non-current assets
|
|
|
|
|
||
Goodwill
|
11
|
|
6,233
|
|
5,869
|
|
Other intangible assets
|
12
|
|
1,295
|
|
1,084
|
|
Property, plant and equipment
|
13
|
|
48,770
|
|
43,913
|
|
Other non-current assets
|
14
|
|
354
|
|
264
|
|
Pension assets
|
25
|
|
1,849
|
|
1,567
|
|
Financial and other investments
|
15
|
|
543
|
|
667
|
|
Investments in joint ventures and associates
|
16
|
|
995
|
|
608
|
|
Derivative financial assets
|
17
|
|
1,249
|
|
1,045
|
|
Total non-current assets
|
|
|
61,288
|
|
55,017
|
|
Current assets
|
|
|
|
|
||
Inventories and current intangible assets
|
18
|
|
549
|
|
370
|
|
Trade and other receivables
|
19
|
|
2,986
|
|
3,153
|
|
Current tax assets
|
|
|
102
|
|
126
|
|
Financial and other investments
|
15
|
|
1,998
|
|
1,981
|
|
Derivative financial assets
|
17
|
|
93
|
|
108
|
|
Cash and cash equivalents
|
20
|
|
73
|
|
252
|
|
Assets held for sale
|
10
|
|
—
|
|
1,956
|
|
Total current assets
|
|
|
5,801
|
|
7,946
|
|
Total assets
|
|
|
67,089
|
|
62,963
|
|
Current liabilities
|
|
|
|
|
||
Borrowings
|
21
|
|
(4,072
|
)
|
(4,472
|
)
|
Derivative financial liabilities
|
17
|
|
(380
|
)
|
(350
|
)
|
Trade and other payables
|
22
|
|
(3,602
|
)
|
(3,769
|
)
|
Contract liabilities
|
23
|
|
(76
|
)
|
(61
|
)
|
Current tax liabilities
|
|
|
(86
|
)
|
(161
|
)
|
Provisions
|
26
|
|
(348
|
)
|
(316
|
)
|
Total current liabilities
|
|
|
(8,564
|
)
|
(9,129
|
)
|
Non-current liabilities
|
|
|
|
|
||
Borrowings
|
21
|
|
(26,722
|
)
|
(24,258
|
)
|
Derivative financial liabilities
|
17
|
|
(954
|
)
|
(833
|
)
|
Other non-current liabilities
|
24
|
|
(891
|
)
|
(808
|
)
|
Contract liabilities
|
23
|
|
(1,082
|
)
|
(933
|
)
|
Deferred tax liabilities
|
7
|
|
(4,184
|
)
|
(3,965
|
)
|
Pensions and other post-retirement benefit obligations
|
25
|
|
(2,802
|
)
|
(1,785
|
)
|
Provisions
|
26
|
|
(2,306
|
)
|
(1,883
|
)
|
Total non-current liabilities
|
|
|
(38,941
|
)
|
(34,465
|
)
|
Total liabilities
|
|
|
(47,505
|
)
|
(43,594
|
)
|
Net assets
|
|
|
19,584
|
|
19,369
|
|
Equity
|
|
|
|
|
||
Share capital
|
27
|
|
470
|
|
458
|
|
Share premium account
|
|
|
1,301
|
|
1,314
|
|
Retained earnings
|
|
|
21,710
|
|
21,814
|
|
Other equity reserves
|
28
|
|
(3,919
|
)
|
(4,237
|
)
|
Total shareholders’ equity
|
|
|
19,562
|
|
19,349
|
|
Non-controlling interests
|
|
|
22
|
|
20
|
|
Total equity
|
|
|
19,584
|
|
19,369
|
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
|
Notes
|
|
|
£m
|
|
£m
|
|
£m
|
|
Cash flows from operating activities
|
|
|
|
|
|
||||
Total operating profit from continuing operations
|
2(b)
|
|
|
2,780
|
|
2,870
|
|
3,493
|
|
Adjustments for:
|
|
|
|
|
|
||||
Depreciation, amortisation and impairment²
|
|
|
1,640
|
|
1,725
|
|
1,530
|
|
|
Share-based payments
|
|
|
19
|
|
27
|
|
16
|
|
|
Changes in working capital²
|
|
|
394
|
|
(36
|
)
|
108
|
|
|
Changes in provisions²
|
|
|
198
|
|
18
|
|
(206
|
)
|
|
Changes in pensions and other post-retirement benefit obligations
|
|
|
(117
|
)
|
(140
|
)
|
(239
|
)
|
|
Cash generated from operations – continuing operations
|
|
|
4,914
|
|
4,464
|
|
4,702
|
|
|
Tax (paid)/recovered
|
|
|
(199
|
)
|
(75
|
)
|
8
|
|
|
Net cash inflow from operating activities – continuing operations
|
|
|
4,715
|
|
4,389
|
|
4,710
|
|
|
Net cash used in operating activities – discontinued operations
|
10
|
|
|
(97
|
)
|
(71
|
)
|
(207
|
)
|
Cash flows from investing activities
|
|
|
|
|
|
||||
Acquisition of financial investments
|
|
|
(108
|
)
|
(89
|
)
|
(2
|
)
|
|
Acquisition of Geronimo and Emerald
|
38
|
|
|
(139
|
)
|
—
|
|
—
|
|
Investments in joint ventures and associates
|
|
|
(82
|
)
|
(143
|
)
|
(129
|
)
|
|
Loans to joint ventures and associates
|
|
|
—
|
|
(31
|
)
|
(68
|
)
|
|
Disposal of financial investments
|
|
|
63
|
|
18
|
|
134
|
|
|
Disposal of 61% interest in UK Gas Distribution
|
|
|
—
|
|
—
|
|
(20
|
)
|
|
Disposal of interests in Quadgas HoldCo Limited
|
10
|
|
|
1,965
|
|
—
|
|
—
|
|
Purchases of intangible assets
|
|
|
(317
|
)
|
(306
|
)
|
(173
|
)
|
|
Purchases of property, plant and equipment
|
|
|
(4,583
|
)
|
(3,635
|
)
|
(3,738
|
)
|
|
Disposals of property, plant and equipment
|
|
|
68
|
|
38
|
|
10
|
|
|
Dividends received from joint ventures and associates
|
|
|
75
|
|
68
|
|
69
|
|
|
Interest received
|
|
|
73
|
|
68
|
|
30
|
|
|
Net movements in short-term financial investments
|
|
|
7
|
|
822
|
|
5,953
|
|
|
Net movements in derivatives¹
|
|
|
(223
|
)
|
(412
|
)
|
330
|
|
|
Net cash flow (used in)/from investing activities – continuing operations
|
|
|
(3,201
|
)
|
(3,602
|
)
|
2,396
|
|
|
Net cash flow used in investing activities – discontinued operations
|
10
|
|
|
6
|
|
156
|
|
171
|
|
Cash flows from financing activities
|
|
|
|
|
|
||||
Purchase of treasury shares
|
|
|
—
|
|
—
|
|
(1,017
|
)
|
|
Proceeds from issue of treasury shares
|
|
|
16
|
|
17
|
|
33
|
|
|
Purchase of own shares
|
|
|
(6
|
)
|
(2
|
)
|
(5
|
)
|
|
Proceeds received from loans
|
29(c)
|
|
|
4,218
|
|
2,932
|
|
1,941
|
|
Repayment of loans
|
29(c)
|
|
|
(3,253
|
)
|
(1,969
|
)
|
(2,156
|
)
|
Payments of lease liabilities
|
29(c)
|
|
|
(121
|
)
|
(70
|
)
|
(71
|
)
|
Net movements in short-term borrowings
|
29(c)
|
|
|
(424
|
)
|
179
|
|
(764
|
)
|
Net movements in derivatives¹
|
29(c)
|
|
|
(187
|
)
|
35
|
|
(267
|
)
|
Interest paid
|
29(c)
|
|
|
(957
|
)
|
(914
|
)
|
(853
|
)
|
Dividends paid to shareholders
|
|
|
(892
|
)
|
(1,160
|
)
|
(4,487
|
)
|
|
Net cash flow used in financing activities – continuing operations
|
|
|
(1,606
|
)
|
(952
|
)
|
(7,646
|
)
|
|
Net cash flow (used in)/from financing activities – discontinued operations
|
10
|
|
|
—
|
|
—
|
|
(231
|
)
|
Net decrease in cash and cash equivalents
|
29(a)
|
|
|
(183
|
)
|
(80
|
)
|
(807
|
)
|
Exchange movements
|
|
|
4
|
|
3
|
|
(3
|
)
|
|
Cash and cash equivalents at start of year
|
|
|
252
|
|
329
|
|
1,139
|
|
|
Cash and cash equivalents at end of year
|
20
|
|
|
73
|
|
252
|
|
329
|
|
1.
|
Certain derivative balances have been represented for all periods presented to reflect a reclassification from financing activities to investing activities to reflect a change in accounting policy (see note 1 for details).
|
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) 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.
|
•
|
a significant reduction in cash collections over an extended 12-month period driven by lower customer demand and increased bad debt in our US businesses;
|
•
|
additional working capital required to fund payment term extensions and charge deferrals in the UK electricity market, intended to help customers and end-user consumers;
|
•
|
one-off increases in other costs such as cleaning, safety equipment and IT; offset by
|
◦
|
a reduction in non-essential capital expenditure across the Group driven by increased absenteeism, supply chain issues and difficulty in accessing sites; and
|
◦
|
a reduction in discretionary spend across all areas (e.g. recruitment, travel and consultancy spend).
|
•
|
further significant changes in the phasing of the Group’s capital programme with elements of non-essential works and programmes delayed beyond June 2021;
|
•
|
a number of further reductions in operating expenditure across the Group primarily related to workforce cost reductions in both the UK and the US; and
|
•
|
the payment of dividends to shareholders.
|
•
|
the judgement that notwithstanding legislation enacted and targets established during the year ended 31 March 2020 committing the UK, New York State and Massachusetts to achieving net zero greenhouse gas emissions by 2050, these do not trigger a reassessment of the remaining useful economic lives of our gas network assets (see estimate below and note 13); and
|
•
|
following the legal separation of the Electricity System Operator on 1 April 2019, we concluded that the Electricity System Operator acts as an agent in respect of certain Transmission Network Use of Service revenues, principally those collected on behalf of the Scottish and Offshore transmission operators, as detailed in note 3.
|
•
|
the valuation of liabilities for pensions and other post-retirement benefits (see note 25); and
|
•
|
the cash flows applied in determining the environmental provisions, in particular relating to three US Superfund sites (see note 26).
|
•
|
the valuation of certain pension assets, in particular unquoted equities, properties and diversified alternatives, in light of the volatile economic markets (see note 25); and
|
•
|
the recoverability of customer receivables, particularly in relation to US retail customers, in light of the suspension of debt collection activities and customer termination activities (see note 19).
|
•
|
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.
|
•
|
Financial instruments: we normally opt to apply hedge accounting in most circumstances where this is permitted (see note 32(e)).
|
•
|
Cash flow statement: Following a review in the year, we have changed our accounting policy in relation to the presentation of derivatives in the cash flow statement, which has resulted in £412 million of cash outflows for 2019 and £330 million of cash inflows from 2018 to be presented as investing activities rather than financing activities. The reclassified cash flows are in relation to derivatives associated with our net investment hedges, and given they are designated in a hedge relationship, the Group has decided to present them together with the underlying hedged item rather than as part of our overall financing activities.
|
•
|
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; and
|
•
|
Amendments to IAS 19 ‘Employee Benefits’.
|
•
|
IFRS 17 ‘Insurance Contracts’;
|
•
|
Amendments to IFRS 3 ‘Business Combinations’;
|
•
|
Amendments to the References to the Conceptual Framework;
|
•
|
Amendments to IAS 1 and IAS 8: Definition of material; and
|
•
|
Amendments to IAS 1 'Presentation of Financial Statements'.
|
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 independent 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.
|
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
|
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
|
3,702
|
|
(8
|
)
|
3,694
|
|
|
3,351
|
|
(20
|
)
|
3,331
|
|
|
4,154
|
|
(28
|
)
|
4,126
|
|
UK Gas Transmission
|
927
|
|
(16
|
)
|
911
|
|
|
896
|
|
(12
|
)
|
884
|
|
|
1,091
|
|
(9
|
)
|
1,082
|
|
US Regulated
|
9,205
|
|
—
|
|
9,205
|
|
|
9,846
|
|
—
|
|
9,846
|
|
|
9,272
|
|
—
|
|
9,272
|
|
NGV and Other¹
|
736
|
|
(6
|
)
|
730
|
|
|
876
|
|
(4
|
)
|
872
|
|
|
776
|
|
(6
|
)
|
770
|
|
Total revenue from continuing operations
|
14,570
|
|
(30
|
)
|
14,540
|
|
|
14,969
|
|
(36
|
)
|
14,933
|
|
|
15,293
|
|
(43
|
)
|
15,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Split by geographical areas – continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
UK
|
|
|
5,282
|
|
|
|
|
5,045
|
|
|
|
|
5,938
|
|
||||||
US
|
|
|
9,258
|
|
|
|
|
9,888
|
|
|
|
|
9,312
|
|
||||||
|
|
|
14,540
|
|
|
|
|
14,933
|
|
|
|
|
15,250
|
|
1.
|
Included within NGV and Other is £608 million (2019: £597 million; 2018: £593 million) of revenue relating to NGV.
|
|
Before exceptional items
and remeasurements |
|
After exceptional items
and remeasurements |
||||||||||
|
2020
|
|
2019
|
|
2018
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Operating segments – continuing operations:
|
|
|
|
|
|
|
|
||||||
UK Electricity Transmission
|
1,320
|
|
1,015
|
|
1,041
|
|
|
1,316
|
|
778
|
|
1,041
|
|
UK Gas Transmission
|
348
|
|
303
|
|
487
|
|
|
347
|
|
267
|
|
487
|
|
US Regulated
|
1,397
|
|
1,724
|
|
1,698
|
|
|
880
|
|
1,425
|
|
1,734
|
|
NGV and Other1,2
|
242
|
|
400
|
|
231
|
|
|
237
|
|
400
|
|
231
|
|
Total operating profit from continuing operations
|
3,307
|
|
3,442
|
|
3,457
|
|
|
2,780
|
|
2,870
|
|
3,493
|
|
|
|
|
|
|
|
|
|
|
|
||||
Split by geographical area – continuing operations:
|
|
|
|
|
|
|
|
|
|
||||
UK
|
1,925
|
|
1,695
|
|
1,840
|
|
|
1,915
|
|
1,422
|
|
1,840
|
|
US
|
1,382
|
|
1,747
|
|
1,617
|
|
|
865
|
|
1,448
|
|
1,653
|
|
|
3,307
|
|
3,442
|
|
3,457
|
|
|
2,780
|
|
2,870
|
|
3,493
|
|
Reconciliation to profit before tax:
|
|
|
|
|
|
|
|
||||||
Operating profit from continuing operations
|
3,307
|
|
3,442
|
|
3,457
|
|
|
2,780
|
|
2,870
|
|
3,493
|
|
Finance income
|
70
|
|
73
|
|
127
|
|
|
54
|
|
88
|
|
127
|
|
Finance costs
|
(1,119
|
)
|
(1,066
|
)
|
(1,128
|
)
|
|
(1,167
|
)
|
(1,157
|
)
|
(1,009
|
)
|
Share of post-tax results of joint ventures and associates
|
88
|
|
40
|
|
44
|
|
|
87
|
|
40
|
|
49
|
|
Profit before tax from continuing operations
|
2,346
|
|
2,489
|
|
2,500
|
|
|
1,754
|
|
1,841
|
|
2,660
|
|
1.
|
Included within NGV and Other is £269 million (2019: £263 million; 2018: £234 million) of operating profit before exceptional items and remeasurements and £268 million of operating profit after exceptional items and remeasurements (2019: £263 million; 2018: £234 million), relating to NGV.
|
2.
|
In 2019, NGV and Other included gains of £95 million in relation to cash received in respect of two legal settlements.
|
1.
|
Included within NGV and Other are assets with a net book value of £2,080 million (2019: £1,635 million; 2018: £1,454 million), capital expenditure of £550 million (2019: £317 million; 2018: £186 million) and depreciation, amortisation and impairment of £124 million (2019: £114 million; 2018: £143 million) relating to NGV.
|
2.
|
In 2020, US Regulated includes certain software assets and properties in the US which are outside the US rate base and operate for the benefit of our US regulated businesses. These assets were included within NGV and Other in 2019 and 2018. The assets had a net book value of £1,062 million in 2019 and £998 million in 2018, capital expenditure of £87 million in 2019 and £161 million in 2018 and depreciation, amortisation and impairment of £102 million in 2019 and £80 million in 2018.
|
Revenue arises in the course of 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 (which solely relate to the contract with the Long Island Power Authority (LIPA) in the US) are accounted for under the leasing standard as rental income, also 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 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.
|
•
|
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 2020
|
UK Electricity Transmission
£m |
|
UK Gas Transmission
£m |
|
US Regulated
£m |
|
NGV and Other
£m |
|
Total
£m |
|
Revenue under IFRS 15
|
|
|
|
|
|
|
|
|
|
|
Transmission
|
1,992
|
|
649
|
|
425
|
|
309
|
|
3,375
|
|
Distribution
|
—
|
|
—
|
|
8,319
|
|
—
|
|
8,319
|
|
System Operator
|
1,610
|
|
214
|
|
—
|
|
—
|
|
1,824
|
|
Other
|
69
|
|
15
|
|
12
|
|
296
|
|
392
|
|
Total IFRS 15 revenue
|
3,671
|
|
878
|
|
8,756
|
|
605
|
|
13,910
|
|
Other revenue
|
|
|
|
|
|
|
|
|
|
|
Generation
|
—
|
|
—
|
|
369
|
|
—
|
|
369
|
|
Other
|
23
|
|
33
|
|
80
|
|
125
|
|
261
|
|
Total other revenue
|
23
|
|
33
|
|
449
|
|
125
|
|
630
|
|
Total revenue from continuing operations
|
3,694
|
|
911
|
|
9,205
|
|
730
|
|
14,540
|
|
Geographical split for the year ended 31 March 2020
|
UK Electricity Transmission
£m
|
|
UK Gas Transmission
£m
|
|
US Regulated
£m
|
|
NGV and Other
£m
|
|
Total
£m
|
|
Revenue under IFRS 15
|
|
|
|
|
|
|||||
UK
|
3,671
|
|
878
|
|
—
|
|
567
|
|
5,116
|
|
US
|
—
|
|
—
|
|
8,756
|
|
38
|
|
8,794
|
|
Total IFRS 15 revenue
|
3,671
|
|
878
|
|
8,756
|
|
605
|
|
13,910
|
|
Other revenue
|
|
|
|
|
|
|
|
|
|
|
UK
|
23
|
|
33
|
|
—
|
|
110
|
|
166
|
|
US
|
—
|
|
—
|
|
449
|
|
15
|
|
464
|
|
Total other revenue
|
23
|
|
33
|
|
449
|
|
125
|
|
630
|
|
Total revenue from continuing operations
|
3,694
|
|
911
|
|
9,205
|
|
730
|
|
14,540
|
|
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
|
1,909
|
|
661
|
|
370
|
|
313
|
|
3,253
|
|
Distribution
|
—
|
|
—
|
|
8,941
|
|
—
|
|
8,941
|
|
System Operator
|
1,416
|
|
172
|
|
—
|
|
—
|
|
1,588
|
|
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.
|
|
|
|
|||||
|
|
2020
|
|
2019
|
|
2018
|
|
|
|
£m
|
|
£m
|
|
£m
|
|
Depreciation, amortisation and impairment
|
|
1,640
|
|
1,735
|
|
1,530
|
|
Payroll costs
|
|
1,684
|
|
1,852
|
|
1,648
|
|
Provision for bad and doubtful debts
|
|
234
|
|
181
|
|
36
|
|
Purchases of electricity
|
|
1,403
|
|
1,454
|
|
1,285
|
|
Purchases of gas
|
|
1,316
|
|
1,642
|
|
1,543
|
|
Property and other taxes
|
|
1,191
|
|
1,108
|
|
1,057
|
|
Balancing Services Incentive Scheme
|
|
1,317
|
|
1,196
|
|
1,012
|
|
Payments to other UK network owners¹
|
|
—
|
|
—
|
|
1,043
|
|
Other
|
|
2,975
|
|
2,895
|
|
2,603
|
|
|
|
11,760
|
|
12,063
|
|
11,757
|
|
Operating costs include:
|
|
|
|
|
|||
Inventory consumed
|
|
328
|
|
415
|
|
367
|
|
Research and development expenditure
|
|
14
|
|
19
|
|
13
|
|
1.
|
Under IFRS 15, with effect from 1 April 2018, revenue and associated payments to other UK network owners are presented on a net basis.
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Wages and salaries¹
|
2,188
|
|
2,084
|
|
1,998
|
|
Social security costs
|
168
|
|
156
|
|
157
|
|
Defined contribution scheme costs
|
75
|
|
72
|
|
65
|
|
Defined benefit pension costs
|
135
|
|
232
|
|
156
|
|
Share-based payments
|
19
|
|
27
|
|
16
|
|
Severance costs (excluding pension costs)
|
1
|
|
76
|
|
7
|
|
|
2,586
|
|
2,647
|
|
2,399
|
|
Less: payroll costs capitalised
|
(902
|
)
|
(795
|
)
|
(751
|
)
|
Total payroll costs
|
1,684
|
|
1,852
|
|
1,648
|
|
1.
|
Included within wages and salaries are US other post-retirement benefit costs of £45 million (2019: £48 million; 2018: £46 million). For further information refer to note 25.
|
|
31 March
2020 |
|
Monthly
average 2020 |
|
31 March
2019 |
Monthly
average 2019 |
31 March
2018 |
Monthly
average 2018 |
UK
|
6,321
|
|
6,151
|
|
5,962
|
6,227
|
6,517
|
6,431
|
US
|
16,748
|
|
16,679
|
|
16,614
|
16,669
|
16,506
|
16,274
|
Total number of employees
|
23,069
|
|
22,830
|
|
22,576
|
22,896
|
23,023
|
22,705
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Short-term employee benefits
|
7
|
|
7
|
|
8
|
|
Compensation for loss of office
|
1
|
|
—
|
|
—
|
|
Post-employment benefits
|
1
|
|
1
|
|
1
|
|
Share-based payments
|
3
|
|
3
|
|
3
|
|
Total key management compensation
|
12
|
|
11
|
|
12
|
|
1.
|
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 2020, 2019 and 2018.
|
2.
|
The 2019 comparative has been updated following finalisation of the 2019 audit fee with the Audit Committee.
|
3.
|
Other services supplied represent fees payable for services in relation to other statutory filings or engagements that are required to be carried out by the auditors. In particular, this includes fees for reports under section 404 of the US Public Company Accounting Reform and Investor Protection Act of 2002 (Sarbanes-Oxley), audit reports on regulatory returns and the review of interim financial statements for the six-month periods ended 30 September 2019, 2018 and 2017 respectively.
|
4.
|
There were no audit related fees as described in Item 16C(b) of Form 20-F.
|
5.
|
Principally amounts relating to assurance services provided in relation to comfort letters for debt issuances.
|
6.
|
In 2020, non-audit services include auction monitor work on Contracts for Difference, IT project assurance and a review of controls over our data on New York customers. In 2019 and 2018, non-audit services primarily related to the UK Property business in respect of the evaluation of possible options for the use of property assets.
|
To monitor our segmental 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.
|
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 financing derivative financial instruments comprise gains and losses arising on derivative financial instruments reported in the consolidated income statement in relation to risk management of interest rate and foreign exchange exposures. 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 and 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 was designated at FVTPL on transition to IFRS 9 to reduce a measurement mismatch (see note 21); and
|
v.
|
Unrealised net gains/(losses) on derivatives and other financial instruments within our joint ventures and associates.
|
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.
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
Notes
|
|
£m
|
|
£m
|
|
£m
|
|
Finance income
|
|
|
|
|
|
|||
Interest income on financial instruments:
|
|
|
|
|
|
|||
Bank deposits and other financial assets
|
|
|
48
|
|
54
|
|
54
|
|
Dividends received on equities held at fair value through other comprehensive income
|
|
|
2
|
|
2
|
|
—
|
|
Gains on disposal of available-for-sale investments
|
|
|
—
|
|
—
|
|
73
|
|
Other income
|
|
|
20
|
|
17
|
|
—
|
|
|
|
|
70
|
|
73
|
|
127
|
|
Finance costs
|
|
|
|
|
|
|||
Net interest on pensions and other post-retirement benefit obligations
|
25
|
|
(23
|
)
|
(22
|
)
|
(65
|
)
|
Interest expense on financial liabilities held at amortised cost:
|
|
|
|
|
|
|||
Bank loans and overdrafts
|
|
|
(73
|
)
|
(72
|
)
|
(87
|
)
|
Other borrowings¹
|
|
|
(997
|
)
|
(970
|
)
|
(1,030
|
)
|
Interest expense on financial liabilities held at fair value through profit and loss
|
|
|
(22
|
)
|
(20
|
)
|
—
|
|
Derivatives
|
|
|
(39
|
)
|
(43
|
)
|
12
|
|
Unwinding of discount on provisions
|
26
|
|
(77
|
)
|
(74
|
)
|
(75
|
)
|
Other interest
|
|
|
(10
|
)
|
—
|
|
(11
|
)
|
Less: interest capitalised²
|
|
|
122
|
|
135
|
|
128
|
|
|
|
|
(1,119
|
)
|
(1,066
|
)
|
(1,128
|
)
|
Remeasurements – Finance income
|
|
|
|
|
|
|||
Net (losses)/gains on financial assets held at fair value through profit and loss
|
|
|
(16
|
)
|
15
|
|
—
|
|
|
|
|
(16
|
)
|
15
|
|
—
|
|
Remeasurements – Finance costs
|
|
|
|
|
|
|
|
|
Net losses on financial liabilities held at fair value through profit and loss
|
|
|
(49
|
)
|
(51
|
)
|
—
|
|
Net (losses)/gains on financing derivatives³:
|
|
|
|
|
|
|||
Derivatives designated as hedges for hedge accounting
|
|
|
(13
|
)
|
(37
|
)
|
49
|
|
Derivatives not designated as hedges for hedge accounting
|
|
|
14
|
|
(3
|
)
|
70
|
|
|
|
|
(48
|
)
|
(91
|
)
|
119
|
|
Total remeasurements – Finance income and costs
|
|
|
(64
|
)
|
(76
|
)
|
119
|
|
|
|
|
|
|
|
|||
Finance income
|
|
|
54
|
|
88
|
|
127
|
|
Finance costs
|
|
|
(1,167
|
)
|
(1,157
|
)
|
(1,009
|
)
|
|
|
|
|
|
|
|
|
|
Net finance costs from continuing operations
|
|
|
(1,113
|
)
|
(1,069
|
)
|
(882
|
)
|
1.
|
Includes interest expense on lease liabilities (see note 13 for details).
|
2.
|
Interest on funding attributable to assets in the course of construction in the current year was capitalised at a rate of 3.6% (2019: 3.9%; 2018: 4.1%). In the UK, capitalised interest qualifies for a current year tax deduction with tax relief claimed of £15 million (2019: £19 million; 2018: £20 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 £66 million (2019: £264 million gain; 2018: £314 million loss) offset by foreign exchange losses and gains on financing derivatives 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Current tax:
|
|
|
|
|||
UK corporation tax at 19% (2019: 19%; 2018: 19%)
|
179
|
|
132
|
|
200
|
|
UK corporation tax adjustment in respect of prior years
|
(4
|
)
|
(12
|
)
|
(18
|
)
|
|
175
|
|
120
|
|
182
|
|
Overseas corporation tax
|
(2
|
)
|
8
|
|
15
|
|
Overseas corporation tax adjustment in respect of prior years
|
(41
|
)
|
(40
|
)
|
(4
|
)
|
|
(43
|
)
|
(32
|
)
|
11
|
|
Total current tax from continuing operations
|
132
|
|
88
|
|
193
|
|
Deferred tax:
|
|
|
|
|||
UK deferred tax
|
269
|
|
27
|
|
65
|
|
UK deferred tax adjustment in respect of prior years
|
6
|
|
2
|
|
(2
|
)
|
|
275
|
|
29
|
|
63
|
|
Overseas deferred tax
|
64
|
|
208
|
|
(1,155
|
)
|
Overseas deferred tax adjustment in respect of prior years
|
9
|
|
14
|
|
10
|
|
|
73
|
|
222
|
|
(1,145
|
)
|
Total deferred tax from continuing operations
|
348
|
|
251
|
|
(1,082
|
)
|
|
|
|
|
|||
Total tax charge/(credit) from continuing operations
|
480
|
|
339
|
|
(889
|
)
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Current tax:
|
|
|
|
|
||
Available-for-sale investments
|
—
|
|
—
|
|
(11
|
)
|
Cash flow hedges, cost of hedging and own credit reserve
|
—
|
|
3
|
|
—
|
|
Share-based payments
|
—
|
|
—
|
|
(3
|
)
|
Deferred tax:
|
|
|
|
|||
Available-for-sale investments
|
—
|
|
—
|
|
(18
|
)
|
Investments at fair value through other comprehensive income
|
(1
|
)
|
—
|
|
—
|
|
Cash flow hedges, cost of hedging and own credit reserve
|
(40
|
)
|
(12
|
)
|
(4
|
)
|
Remeasurements of pension assets and post-retirement benefit obligations¹
|
(206
|
)
|
12
|
|
530
|
|
Share-based payments
|
(3
|
)
|
—
|
|
1
|
|
|
(250
|
)
|
3
|
|
495
|
|
Total tax recognised in the statements of comprehensive income from continuing operations
|
(247
|
)
|
3
|
|
497
|
|
Total tax relating to share-based payments recognised directly in equity from continuing operations
|
(3
|
)
|
—
|
|
(2
|
)
|
|
(250
|
)
|
3
|
|
495
|
|
1.
|
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.
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Profit before tax from continuing operations
|
|
|
|
|||
Before exceptional items and remeasurements
|
2,346
|
|
2,489
|
|
2,500
|
|
Exceptional items and remeasurements
|
(592
|
)
|
(648
|
)
|
160
|
|
Profit before tax from continuing operations
|
1,754
|
|
1,841
|
|
2,660
|
|
Profit before tax from continuing operations multiplied by UK corporation tax rate of 19% (2019: 19%; 2018: 19%)
|
334
|
|
350
|
|
506
|
|
Effect of:
|
|
|
|
|||
Adjustments in respect of prior years¹
|
(30
|
)
|
(36
|
)
|
(14
|
)
|
Expenses not deductible for tax purposes
|
29
|
|
28
|
|
21
|
|
Non-taxable income²
|
(18
|
)
|
(36
|
)
|
(26
|
)
|
Adjustment in respect of foreign tax rates
|
18
|
|
56
|
|
157
|
|
Deferred tax impact of change in UK tax rate
|
192
|
|
(3
|
)
|
(7
|
)
|
Deferred tax impact of change in US tax rate due to Tax Reform
|
—
|
|
—
|
|
(1,510
|
)
|
Adjustment in respect of post-tax profits of joint ventures and associates included within profit before tax
|
(17
|
)
|
(8
|
)
|
(9
|
)
|
Other³
|
(28
|
)
|
(12
|
)
|
(7
|
)
|
Total tax charge/(credit) from continuing operations
|
480
|
|
339
|
|
(889
|
)
|
|
|
|
|
|||
|
%
|
|
%
|
|
%
|
|
Effective tax rate – continuing operations
|
27.4
|
|
18.4
|
|
(33.4
|
)
|
1.
|
Prior year adjustment is primarily due to agreement of prior period tax returns.
|
2.
|
Includes gains on chargeable disposals which are offset by previously unrecognised capital losses.
|
3.
|
Other primarily comprises a recognition of deferred tax on previously unrecognised capital losses and claims for land remediation relief.
|
|
Accelerated
tax depreciation £m |
|
Share-
based payments £m |
|
Pensions
and other post- retirement benefits £m |
|
Financial
instruments £m |
|
Other net
temporary
differences1
£m
|
|
Total
£m |
|
Deferred tax liabilities/(assets)
|
|
|
|
|
|
|
||||||
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 1 April 2019
|
5,477
|
|
(9
|
)
|
(170
|
)
|
7
|
|
(1,340
|
)
|
3,965
|
|
Exchange adjustments and other²
|
210
|
|
(30
|
)
|
(28
|
)
|
(3
|
)
|
(27
|
)
|
122
|
|
(Credited)/charged to income statement
|
613
|
|
(7
|
)
|
44
|
|
(13
|
)
|
(287
|
)
|
350
|
|
Charged/(credited) to other comprehensive income and equity
|
—
|
|
(2
|
)
|
(206
|
)
|
(46
|
)
|
1
|
|
(253
|
)
|
At 31 March 2020
|
6,300
|
|
(48
|
)
|
(360
|
)
|
(55
|
)
|
(1,653
|
)
|
4,184
|
|
1.
|
The deferred tax asset of £1,653 million as at 31 March 2020 (2019: £1,340 million) in respect of other net temporary differences primarily relates to net operating losses of £547 million (2019: £423 million) and US environmental provisions of £529 million (2019: £409 million).
|
2.
|
Exchange adjustments and other comprises foreign exchange arising on translation of the US dollar deferred tax balances. It also includes reclassification of £29 million from other temporary differences to share-based payments.
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Capital losses
|
1,626
|
|
1,470
|
|
Non-trade deficits
|
1
|
|
4
|
|
Trading losses
|
6
|
|
5
|
|
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
|
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2018
|
|
2018
|
|
|
£m
|
|
pence
|
|
£m
|
|
pence
|
|
£m
|
|
pence
|
|
Adjusted earnings from continuing operations
|
1,912
|
|
55.2
|
|
1,998
|
|
59.0
|
|
1,915
|
|
55.3
|
|
Exceptional items and remeasurements after tax from continuing operations
|
(639
|
)
|
(18.4
|
)
|
(499
|
)
|
(14.7
|
)
|
1,633
|
|
47.2
|
|
Earnings from continuing operations
|
1,273
|
|
36.8
|
|
1,499
|
|
44.3
|
|
3,548
|
|
102.5
|
|
Adjusted earnings from discontinued operations
|
5
|
|
0.2
|
|
57
|
|
1.7
|
|
145
|
|
4.2
|
|
Exceptional items and remeasurements after tax from discontinued operations
|
(14
|
)
|
(0.5
|
)
|
(45
|
)
|
(1.4
|
)
|
(143
|
)
|
(4.1
|
)
|
Earnings from discontinued operations
|
(9
|
)
|
(0.3
|
)
|
12
|
|
0.3
|
|
2
|
|
0.1
|
|
Total adjusted earnings
|
1,917
|
|
55.4
|
|
2,055
|
|
60.7
|
|
2,060
|
|
59.5
|
|
Total exceptional items and remeasurements after tax (including discontinued operations)
|
(653
|
)
|
(18.9
|
)
|
(544
|
)
|
(16.1
|
)
|
1,490
|
|
43.1
|
|
Total earnings
|
1,264
|
|
36.5
|
|
1,511
|
|
44.6
|
|
3,550
|
|
102.6
|
|
|
|
|
|
|
|
|
||||||
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
|||
|
|
millions
|
|
|
millions
|
|
|
millions
|
|
|||
Weighted average number of ordinary shares – basic
|
|
3,461
|
|
|
3,386
|
|
|
3,461
|
|
|
Earnings
|
|
EPS
|
|
Earnings
|
|
EPS
|
|
Earnings
|
|
EPS
|
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2018
|
|
2018
|
|
|
£m
|
|
pence
|
|
£m
|
|
pence
|
|
£m
|
|
pence
|
|
Adjusted earnings from continuing operations
|
1,912
|
|
55.0
|
|
1,998
|
|
58.8
|
|
1,915
|
|
55.1
|
|
Exceptional items and remeasurements after tax from continuing operations
|
(639
|
)
|
(18.4
|
)
|
(499
|
)
|
(14.7
|
)
|
1,633
|
|
47.0
|
|
Earnings from continuing operations
|
1,273
|
|
36.6
|
|
1,499
|
|
44.1
|
|
3,548
|
|
102.1
|
|
Adjusted earnings from discontinued operations
|
5
|
|
0.1
|
|
57
|
|
1.7
|
|
145
|
|
4.2
|
|
Exceptional items and remeasurements after tax from discontinued operations
|
(14
|
)
|
(0.4
|
)
|
(45
|
)
|
(1.4
|
)
|
(143
|
)
|
(4.2
|
)
|
Earnings from discontinued operations
|
(9
|
)
|
(0.3
|
)
|
12
|
|
0.3
|
|
2
|
|
—
|
|
Total adjusted earnings
|
1,917
|
|
55.1
|
|
2,055
|
|
60.5
|
|
2,060
|
|
59.3
|
|
Total exceptional items and remeasurements after tax (including discontinued operations)
|
(653
|
)
|
(18.8
|
)
|
(544
|
)
|
(16.1
|
)
|
1,490
|
|
42.8
|
|
Total earnings
|
1,264
|
|
36.3
|
|
1,511
|
|
44.4
|
|
3,550
|
|
102.1
|
|
|
|
|
|
|
|
|
||||||
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
|||
|
|
millions
|
|
|
millions
|
|
|
millions
|
|
|||
Weighted average number of ordinary shares – diluted
|
|
3,478
|
|
|
3,401
|
|
|
3,476
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
millions
|
|
millions
|
|
millions
|
|
Weighted average number of ordinary shares – basic
|
3,461
|
|
3,386
|
|
3,461
|
|
Effect of dilutive potential ordinary shares – employee share plans
|
17
|
|
15
|
|
15
|
|
Weighted average number of ordinary shares – diluted
|
3,478
|
|
3,401
|
|
3,476
|
|
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
|
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
|
16.57
|
335
|
|
241
|
|
|
16.08
|
|
450
|
|
94
|
|
|
15.49
|
|
346
|
|
176
|
|
|
Special dividend
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
84.375
|
|
3,171
|
|
—
|
|
Final dividend in respect of the prior year
|
31.26
|
557
|
|
517
|
|
|
30.44
|
|
710
|
|
319
|
|
|
29.10
|
|
970
|
|
33
|
|
|
|
47.83
|
892
|
|
758
|
|
|
46.52
|
|
1,160
|
|
413
|
|
|
128.965
|
|
4,487
|
|
209
|
|
The results and cash flows of significant assets or businesses sold during the year are shown separately from our continuing operations, and presented within discontinued operations in the income statement and cash flow statement. 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.
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Revenue
|
—
|
|
—
|
|
—
|
|
Operating costs¹
|
(23
|
)
|
(1
|
)
|
(41
|
)
|
Operating loss
|
(23
|
)
|
(1
|
)
|
(41
|
)
|
Net finance income
|
6
|
|
23
|
|
137
|
|
Share of post-tax results of joint ventures and associates²
|
—
|
|
(5
|
)
|
(89
|
)
|
(Loss)/profit before tax from discontinued operations
|
(17
|
)
|
17
|
|
7
|
|
Tax from discontinued operations
|
(1
|
)
|
(5
|
)
|
(5
|
)
|
(Loss)/profit after tax from discontinued operations
|
(18
|
)
|
12
|
|
2
|
|
Gain on disposal
|
9
|
|
—
|
|
—
|
|
Total (loss)/profit after tax from discontinued operations³
|
(9
|
)
|
12
|
|
2
|
|
1.
|
Operating costs for the year ended 31 March 2020 relate to final transaction costs and other expenses in relation to Quadgas. Operating costs of £41 million for the year ended 31 March 2018 related to amounts in respect of the disposal of the UK Gas Distribution business, primarily relating to the completion accounts settlement in November 2017.
|
2.
|
For the year ended 31 March 2019, the amount presented is the net of £43 million impairment charge against the investment in Quadgas (see note 16) and £38 million share of Quadgas post-tax profits recognised prior to classification as held for sale.
|
3.
|
Of the total profit after tax from discontinued operations, the £23 million of operating expenses and the £9 million gain on disposal are treated as exceptional. 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.
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
|
|
£m
|
|
£m
|
|
£m
|
|
(Loss)/profit after tax from discontinued operations
|
|
|
(9
|
)
|
12
|
|
2
|
|
|
|
|
|
|
|
|||
Other comprehensive income
|
|
|
|
|
|
|||
Items that will never be reclassified to profit or loss:
|
|
|
|
|
|
|||
Share of other comprehensive income of associate, net of tax
|
|
|
—
|
|
36
|
|
142
|
|
Total items from discontinued operations that will never be reclassified to profit or loss
|
|
|
—
|
|
36
|
|
142
|
|
Items that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|||
Net gains in respect of cash flow hedges
|
|
|
6
|
|
—
|
|
—
|
|
Share of other comprehensive income of associate, net of tax
|
|
|
—
|
|
—
|
|
5
|
|
Total items from discontinued operations that may be reclassified subsequently to profit or loss
|
|
|
6
|
|
—
|
|
5
|
|
Other comprehensive income for the year, net of tax from discontinued operations
|
|
|
6
|
|
36
|
|
147
|
|
Total comprehensive (loss)/income for the year from discontinued operations
|
|
|
(3
|
)
|
48
|
|
149
|
|
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 period we expect to receive a benefit from the asset.
|
|
Years
|
|
Software
|
1 to 10
|
|
|
|
|
|
Software
£m
|
|
Cost at 1 April 2018
|
1,797
|
|
Exchange adjustments
|
70
|
|
Additions
|
306
|
|
Disposals
|
(15
|
)
|
Reclassifications¹
|
10
|
|
Cost at 31 March 2019
|
2,168
|
|
Exchange adjustments
|
63
|
|
Additions
|
352
|
|
Disposals
|
—
|
|
Reclassifications¹
|
—
|
|
Cost at 31 March 2020
|
2,583
|
|
Accumulated amortisation at 1 April 2018
|
(898
|
)
|
Exchange adjustments
|
(26
|
)
|
Amortisation charge for the year
|
(175
|
)
|
Accumulated amortisation of disposals
|
15
|
|
Accumulated amortisation at 31 March 2019
|
(1,084
|
)
|
Exchange adjustments
|
(28
|
)
|
Amortisation charge for the year
|
(176
|
)
|
Accumulated amortisation of disposals
|
—
|
|
Accumulated amortisation at 31 March 2020
|
(1,288
|
)
|
Net book value at 31 March 2020²
|
1,295
|
|
Net book value at 31 March 2019
|
1,084
|
|
1.
|
Reclassifications includes amounts transferred from property, plant and equipment (see note 13).
|
2.
|
Included in software is £69 million (2019: £116 million) relating to the US Enterprise Resource Planning system, which still has a remaining amortisation period of three 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 or UEL) 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.
|
•
|
In the UK, the gas mains, services and regulating assets relating to the National Transmission System (NTS) were subject to a detailed review in January 2019. The most material components of these are our pipeline assets, which are due to be fully depreciated by 2070, with other assets being depreciated over various periods between now and then. That review was undertaken prior to the UK enacting legislation committing to net zero by 2050, but considered scenarios which included an extension of the emissions reduction targets (80% emissions reduction target at the time of the report). The review concluded that the most likely outcome was for the NTS network assets to remain in use beyond 2050, including in those scenarios where the greenhouse gas emissions of gas networks were largely eliminated.
|
•
|
With respect to our US gas distribution assets, asset lives are assessed as part of detailed depreciation studies completed as part of each separate rate proceeding. Depreciation studies consider the physical condition of assets and the expected operational life of an asset. We believe these assessments are our best estimate of the UEL of our gas network assets in the US.
|
|
|
|
|
Increase in depreciation expense
|
|||
|
|
|
|
UK regulated
£m
|
|
US regulated
£m
|
|
UELs limited to 2050
|
|
|
|
37
|
|
151
|
|
UELs limited to 2060
|
|
|
|
13
|
|
66
|
|
UELs limited to 2070
|
|
|
|
—
|
|
26
|
|
|
Land and
buildings
£m
|
|
Plant and
machinery
£m
|
|
Assets
in the
course of
construction1
£m
|
|
Motor
vehicles
and office
equipment
£m
|
|
Total
£m
|
|
Cost at 1 April 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
|
(35
|
)
|
(357
|
)
|
(159
|
)
|
(44
|
)
|
(595
|
)
|
Reclassifications²
|
295
|
|
2,974
|
|
(3,292
|
)
|
13
|
|
(10
|
)
|
Cost at 1 April 2019 (as previously reported)
|
3,338
|
|
54,383
|
|
4,425
|
|
930
|
|
63,076
|
|
Right-of-use assets recognised on transition to IFRS 16³
|
381
|
|
67
|
|
—
|
|
20
|
|
468
|
|
Cost at 1 April 2019 (as restated)
|
3,719
|
|
54,450
|
|
4,425
|
|
950
|
|
63,544
|
|
Exchange adjustments
|
98
|
|
1,511
|
|
53
|
|
33
|
|
1,695
|
|
Additions
|
130
|
|
464
|
|
4,029
|
|
104
|
|
4,727
|
|
Disposals
|
(79
|
)
|
(486
|
)
|
(9
|
)
|
(65
|
)
|
(639
|
)
|
Reclassifications2,4
|
29
|
|
4,303
|
|
(4,433
|
)
|
14
|
|
(87
|
)
|
Cost at 31 March 2020
|
3,897
|
|
60,242
|
|
4,065
|
|
1,036
|
|
69,240
|
|
Accumulated depreciation at 1 April 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
|
|
Reclassifications²
|
1
|
|
(1
|
)
|
—
|
|
—
|
|
—
|
|
Accumulated depreciation at 1 April 2019
|
(778
|
)
|
(17,794
|
)
|
—
|
|
(591
|
)
|
(19,163
|
)
|
Exchange adjustments
|
(16
|
)
|
(372
|
)
|
—
|
|
(20
|
)
|
(408
|
)
|
Depreciation charge for the year
|
(92
|
)
|
(1,252
|
)
|
—
|
|
(120
|
)
|
(1,464
|
)
|
Disposals
|
36
|
|
464
|
|
—
|
|
58
|
|
558
|
|
Reclassifications²
|
3
|
|
(7
|
)
|
—
|
|
11
|
|
7
|
|
Accumulated depreciation at 31 March 2020
|
(847
|
)
|
(18,961
|
)
|
—
|
|
(662
|
)
|
(20,470
|
)
|
Net book value at 31 March 2020
|
3,050
|
|
41,281
|
|
4,065
|
|
374
|
|
48,770
|
|
Net book value at 31 March 2019
|
2,560
|
|
36,589
|
|
4,425
|
|
339
|
|
43,913
|
|
1.
|
In 2019, included within disposals are UK nuclear connections development costs of £150 million (before £13 million of termination income) which were written off. See note 5 for further details.
|
2.
|
Represents amounts transferred between categories, (to)/from other intangible assets (see note 12), reclassifications from inventories and reclassifications between cost and accumulated depreciation.
|
3.
|
£468 million of additional right-of-use assets were recognised on transition to IFRS 16 on 1 April 2019. See note 37 for details.
|
4.
|
Comprises an £87 million reduction in gross cost of assets in the course of construction in our UK Electricity Transmission business for costs previously capitalised and accrued as due to a supplier that are no longer payable.
|
|
Land and
buildings
£m
|
|
Plant and
machinery
£m
|
|
Assets
in the
course of
construction
£m
|
|
Motor
vehicles
and office
equipment
£m
|
|
Total
£m |
|
Net book value at 31 March 2020
|
364
|
|
95
|
|
—
|
|
225
|
|
684
|
|
Additions
|
10
|
|
1
|
|
—
|
|
73
|
|
84
|
|
Depreciation charge for the year ended 31 March 2020
|
(29
|
)
|
(16
|
)
|
—
|
|
(72
|
)
|
(117
|
)
|
|
|
|
|
|
Total
£m |
|
Included within net finance income and costs:
|
|
|
|
|
|
|
Interest expense on lease liabilities
|
|
|
|
|
(26
|
)
|
Included within revenue:
|
|
|
|
|
|
|
Lease income
|
|
|
|
|
35
|
|
Included within operating expenses:
|
|
|
|
|
|
|
Expenses relating to low-value leases
|
|
|
|
|
(12
|
)
|
|
2020
|
|
2019
|
|
£m
|
|
£m
|
|
|
Information in relation to property, plant and equipment
|
|
|
||
Capitalised interest included within cost
|
2,118
|
|
1,995
|
|
Contributions to cost of property, plant and equipment included within:
|
|
|
||
Trade and other payables
|
84
|
|
87
|
|
Non-current liabilities
|
428
|
|
372
|
|
Contract liabilities – current
|
76
|
|
61
|
|
Contract liabilities – non-current
|
1,082
|
|
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 2021.
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Other receivables
|
35
|
|
28
|
|
Non-current tax assets
|
65
|
|
56
|
|
Prepayments
|
19
|
|
7
|
|
Accrued income¹
|
235
|
|
173
|
|
|
354
|
|
264
|
|
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 joint ventures, investments in our venture capital portfolio (National Grid Partners), 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.
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Non-current
|
|
|
||
Debt and other investments at fair value through other comprehensive income
|
352
|
|
343
|
|
Equity investments at fair value through other comprehensive income
|
83
|
|
93
|
|
Investments at fair value through profit and loss
|
108
|
|
62
|
|
Loans to joint ventures¹
|
—
|
|
169
|
|
|
543
|
|
667
|
|
Current
|
|
|
||
Investments at fair value through profit and loss
|
1,278
|
|
1,311
|
|
Financial assets at amortised cost
|
720
|
|
670
|
|
|
1,998
|
|
1,981
|
|
|
2,541
|
|
2,648
|
|
Financial and other investments include the following:
|
|
|
||
Investments in short-term money funds²
|
978
|
|
969
|
|
Insurance company fund investments³
|
300
|
|
342
|
|
Equities4
|
83
|
|
93
|
|
Bonds4
|
132
|
|
122
|
|
Cash surrender value of life insurance policies4
|
220
|
|
221
|
|
Loans to joint ventures
|
—
|
|
169
|
|
National Grid Partners and other investments5
|
108
|
|
62
|
|
Restricted balances:
|
|
|
||
Collateral6
|
685
|
|
637
|
|
Other
|
35
|
|
33
|
|
|
2,541
|
|
2,648
|
|
1.
|
As at 31 March 2019, this related to a loan to a joint venture, which was measured at amortised cost.
|
2.
|
Includes £1 million (2019: £6 million) held as insurance company fund investments and £26 million (2019: £22 million) US non-qualified plan investments, and therefore restricted.
|
3.
|
Includes restricted amounts of £300 million (2019: £342 million) held as insurance company fund investments.
|
4.
|
Includes restricted amounts of £435 million (2019: £436 million) relating to US non-qualified plan investments.
|
5.
|
This includes a series of small unquoted equity investments held by National Grid Partners of £97 million (2019: £51 million).
|
6.
|
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. They are accounted for using the equity method. A joint venture is an arrangement established to engage in economic activity, which the Group jointly controls with other parties and has rights to the net assets of the arrangement. An associate is an entity which is neither a subsidiary nor a joint venture, but over which the Group has significant influence.
|
|
2020
|
|
2019
|
||||||||||
|
Associates
£m
|
|
Joint
ventures
£m
|
|
Total
£m
|
|
|
Associates
£m
|
|
Joint
ventures
£m
|
|
Total
£m
|
|
Share of net assets at 1 April
|
291
|
|
317
|
|
608
|
|
|
1,807
|
|
361
|
|
2,168
|
|
Exchange adjustments
|
20
|
|
12
|
|
32
|
|
|
17
|
|
(6
|
)
|
11
|
|
Additions
|
16
|
|
156
|
|
172
|
|
|
58
|
|
85
|
|
143
|
|
Capitalisation of shareholder loan to Nemo Link Limited
|
—
|
|
176
|
|
176
|
|
|
—
|
|
—
|
|
—
|
|
Impairment charge against investment in Quadgas
|
—
|
|
—
|
|
—
|
|
|
(43
|
)
|
—
|
|
(43
|
)
|
Transfer of interest in Quadgas to assets held for sale
|
—
|
|
—
|
|
—
|
|
|
(1,625
|
)
|
—
|
|
(1,625
|
)
|
Share of post-tax results for the year
|
40
|
|
47
|
|
87
|
|
|
67
|
|
11
|
|
78
|
|
Share of other comprehensive income of associates, net of tax
|
1
|
|
—
|
|
1
|
|
|
37
|
|
—
|
|
37
|
|
Dividends received
|
(41
|
)
|
(34
|
)
|
(75
|
)
|
|
(38
|
)
|
(30
|
)
|
(68
|
)
|
Other movements¹
|
14
|
|
(20
|
)
|
(6
|
)
|
|
11
|
|
(104
|
)
|
(93
|
)
|
Share of net assets at 31 March
|
341
|
|
654
|
|
995
|
|
|
291
|
|
317
|
|
608
|
|
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
|
|
Nemo Link
Limited
|
|
Emerald Energy Venture LLC
|
||||||||||
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
|
Statement of financial position
|
|
|
|
|
|
|
|
|
|
|
|||||||
Non-current assets
|
399
|
|
370
|
|
|
971
|
|
937
|
|
|
582
|
|
537
|
|
|
435
|
|
Cash and cash equivalents
|
54
|
|
59
|
|
|
33
|
|
35
|
|
|
26
|
|
47
|
|
|
66
|
|
All other current assets
|
4
|
|
2
|
|
|
26
|
|
22
|
|
|
5
|
|
3
|
|
|
6
|
|
Non-current liabilities
|
(45
|
)
|
(11
|
)
|
|
(315
|
)
|
(326
|
)
|
|
(29
|
)
|
2
|
|
|
(232
|
)
|
Current liabilities
|
(16
|
)
|
(28
|
)
|
|
(43
|
)
|
(84
|
)
|
|
(10
|
)
|
(375
|
)
|
|
(2
|
)
|
Net assets
|
396
|
|
392
|
|
|
672
|
|
584
|
|
|
574
|
|
214
|
|
|
273
|
|
Group’s ownership interest in joint venture/associate
|
198
|
|
196
|
|
|
176
|
|
153
|
|
|
287
|
|
107
|
|
|
139
|
|
Group adjustment: elimination of profits on sales to joint venture
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
(10
|
)
|
Carrying amount of the Group’s investment
|
198
|
|
196
|
|
|
176
|
|
153
|
|
|
287
|
|
107
|
|
|
129
|
|
|
BritNed Development Limited
|
|
Millennium Pipeline Company LLC
|
|
Nemo Link
Limited
|
|
Emerald Energy Venture LLC
|
||||||||||
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
Income statement
|
|
|
|
|
|
|
|
|
|
|
|||||||
Revenue
|
80
|
|
87
|
|
|
206
|
|
166
|
|
|
45
|
|
12
|
|
|
19
|
|
Depreciation and amortisation
|
(14
|
)
|
(13
|
)
|
|
(46
|
)
|
(34
|
)
|
|
(23
|
)
|
(4
|
)
|
|
(7
|
)
|
Other costs
|
(10
|
)
|
(10
|
)
|
|
(20
|
)
|
(24
|
)
|
|
(8
|
)
|
(4
|
)
|
|
(10
|
)
|
Operating profit
|
56
|
|
64
|
|
|
140
|
|
108
|
|
|
14
|
|
4
|
|
|
2
|
|
Net interest expense
|
—
|
|
—
|
|
|
(22
|
)
|
(11
|
)
|
|
—
|
|
—
|
|
|
(3
|
)
|
Profit before tax
|
56
|
|
64
|
|
|
118
|
|
97
|
|
|
14
|
|
4
|
|
|
(1
|
)
|
Income tax expense
|
(10
|
)
|
(10
|
)
|
|
—
|
|
—
|
|
|
(2
|
)
|
—
|
|
|
—
|
|
Profit for the year
|
46
|
|
54
|
|
|
118
|
|
97
|
|
|
12
|
|
4
|
|
|
(1
|
)
|
Group’s share of profit/(loss)
|
23
|
|
27
|
|
|
31
|
|
25
|
|
|
6
|
|
2
|
|
|
(1
|
)
|
Group adjustment: Tax charge
|
—
|
|
—
|
|
|
(9
|
)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
Group’s share of post-tax results for the year
|
23
|
|
27
|
|
|
22
|
|
25
|
|
|
6
|
|
2
|
|
|
(1
|
)
|
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 policies approved by the Board, 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.
|
|
2020
|
|
2019
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
Financing derivatives
|
1,267
|
|
(1,134
|
)
|
133
|
|
|
1,052
|
|
(1,084
|
)
|
(32
|
)
|
Commodity contract derivatives
|
75
|
|
(200
|
)
|
(125
|
)
|
|
101
|
|
(99
|
)
|
2
|
|
|
1,342
|
|
(1,334
|
)
|
8
|
|
|
1,153
|
|
(1,183
|
)
|
(30
|
)
|
|
2020
|
|
2019
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
Interest rate swaps
|
556
|
|
(337
|
)
|
219
|
|
|
539
|
|
(384
|
)
|
155
|
|
Cross-currency interest rate swaps
|
643
|
|
(514
|
)
|
129
|
|
|
470
|
|
(443
|
)
|
27
|
|
Foreign exchange forward contracts¹
|
58
|
|
(39
|
)
|
19
|
|
|
41
|
|
(41
|
)
|
—
|
|
Inflation-linked swaps
|
—
|
|
(234
|
)
|
(234
|
)
|
|
—
|
|
(214
|
)
|
(214
|
)
|
Equity options
|
10
|
|
(10
|
)
|
—
|
|
|
2
|
|
(2
|
)
|
—
|
|
|
1,267
|
|
(1,134
|
)
|
133
|
|
|
1,052
|
|
(1,084
|
)
|
(32
|
)
|
1.
|
Included within the foreign exchange forward contracts balance is £(3) million (2019: £32 million) of derivatives in relation to hedging of capital expenditure.
|
|
2020
|
|
2019
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m |
|
Current
|
|
|
|
|
|
|
|
||||||
Less than 1 year
|
62
|
|
(254
|
)
|
(192
|
)
|
|
56
|
|
(282
|
)
|
(226
|
)
|
|
62
|
|
(254
|
)
|
(192
|
)
|
|
56
|
|
(282
|
)
|
(226
|
)
|
Non-current
|
|
|
|
|
|
|
|
||||||
In 1 to 2 years
|
480
|
|
(51
|
)
|
429
|
|
|
19
|
|
(193
|
)
|
(174
|
)
|
In 2 to 3 years
|
13
|
|
(5
|
)
|
8
|
|
|
416
|
|
(1
|
)
|
415
|
|
In 3 to 4 years
|
20
|
|
(28
|
)
|
(8
|
)
|
|
11
|
|
—
|
|
11
|
|
In 4 to 5 years
|
31
|
|
(109
|
)
|
(78
|
)
|
|
20
|
|
(14
|
)
|
6
|
|
More than 5 years
|
661
|
|
(687
|
)
|
(26
|
)
|
|
530
|
|
(594
|
)
|
(64
|
)
|
|
1,205
|
|
(880
|
)
|
325
|
|
|
996
|
|
(802
|
)
|
194
|
|
|
1,267
|
|
(1,134
|
)
|
133
|
|
|
1,052
|
|
(1,084
|
)
|
(32
|
)
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Interest rate swaps
|
(3,101
|
)
|
(6,299
|
)
|
Cross-currency interest rate swaps
|
(8,097
|
)
|
(6,700
|
)
|
Foreign exchange forward contracts
|
(3,284
|
)
|
(2,937
|
)
|
Inflation-linked swaps
|
(500
|
)
|
(500
|
)
|
Equity options
|
(800
|
)
|
(800
|
)
|
|
(15,782
|
)
|
(17,236
|
)
|
1.
|
The notional contract amounts of derivatives indicate the gross nominal value of transactions outstanding at the reporting date.
|
|
2020
|
|
2019
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m |
|
Liabilities
£m
|
|
Total
£m
|
|
Commodity purchase contracts accounted for as derivative contracts
|
|
|
|
|
|
|
|
||||||
Forward purchases of gas
|
64
|
|
(108
|
)
|
(44
|
)
|
|
66
|
|
(78
|
)
|
(12
|
)
|
Derivative financial instruments linked to commodity prices
|
|
|
|
|
|
|
|
||||||
Electricity swaps
|
4
|
|
(83
|
)
|
(79
|
)
|
|
29
|
|
(19
|
)
|
10
|
|
Gas swaps
|
7
|
|
(8
|
)
|
(1
|
)
|
|
5
|
|
(1
|
)
|
4
|
|
Gas options
|
—
|
|
(1
|
)
|
(1
|
)
|
|
1
|
|
(1
|
)
|
—
|
|
|
75
|
|
(200
|
)
|
(125
|
)
|
|
101
|
|
(99
|
)
|
2
|
|
|
2020
|
|
2019
|
|||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
Liabilities
£m
|
Total
£m
|
Current
|
|
|
|
|
|
|
|
|||
Less than one year
|
31
|
|
(126
|
)
|
(95
|
)
|
|
52
|
(68)
|
(16)
|
|
31
|
|
(126
|
)
|
(95
|
)
|
|
52
|
(68)
|
(16)
|
Non-current
|
|
|
|
|
|
|
|
|||
In 1 to 2 years
|
8
|
|
(35
|
)
|
(27
|
)
|
|
14
|
(9)
|
5
|
In 2 to 3 years
|
9
|
|
(24
|
)
|
(15
|
)
|
|
9
|
(8)
|
1
|
In 3 to 4 years
|
8
|
|
(12
|
)
|
(4
|
)
|
|
6
|
(4)
|
2
|
In 4 to 5 years
|
7
|
|
(1
|
)
|
6
|
|
|
6
|
(4)
|
2
|
More than 5 years
|
12
|
|
(2
|
)
|
10
|
|
|
14
|
(6)
|
8
|
|
44
|
|
(74
|
)
|
(30
|
)
|
|
49
|
(31)
|
18
|
|
75
|
|
(200
|
)
|
(125
|
)
|
|
101
|
(99)
|
2
|
|
2020
|
2019
|
Forward purchases of gas1
|
102m Dth
|
52m Dth
|
Electricity swaps
|
12,836 GWh
|
12,848 GWh
|
Electricity options
|
0 GWh
|
10,444 GWh
|
Gas swaps
|
89m Dth
|
87m Dth
|
Gas options
|
26m Dth
|
34m Dth
|
1.
|
Forward gas purchases have terms up to four years (2019: two years). The contractual obligations under these contracts are £128 million (2019: £108 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).
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Fuel stocks
|
151
|
|
99
|
|
Raw materials and consumables
|
265
|
|
184
|
|
Current intangible assets – emission allowances
|
133
|
|
87
|
|
|
549
|
|
370
|
|
Trade and other receivables are amounts which are due from our customers for services we have provided.
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
At 1 April
|
394
|
|
309
|
|
Exchange adjustments
|
20
|
|
24
|
|
Charge for the year, net of recoveries
|
234
|
|
181
|
|
Uncollectible amounts written off
|
(136
|
)
|
(120
|
)
|
At 31 March
|
512
|
|
394
|
|
|
As at 31 March 2020
|
|
As at 31 March 2019
|
|
||||||||
|
UK
|
|
US
|
|
Total
|
|
UK
|
|
US
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
Trade receivables
|
227
|
|
1,836
|
|
2,063
|
|
313
|
|
1,980
|
|
2,293
|
|
Accrued income
|
461
|
|
408
|
|
869
|
|
445
|
|
438
|
|
883
|
|
Provision for impairment of trade receivables
|
(40
|
)
|
(472
|
)
|
(512
|
)
|
(40
|
)
|
(354
|
)
|
(394
|
)
|
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.
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Cash at bank
|
73
|
|
177
|
|
Short-term deposits
|
—
|
|
75
|
|
Cash and cash equivalents
|
73
|
|
252
|
|
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.
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Current
|
|
|
||
Bank loans
|
1,244
|
|
641
|
|
Bonds
|
1,446
|
|
1,973
|
|
Commercial paper
|
1,269
|
|
1,792
|
|
Lease liabilities
|
112
|
|
65
|
|
Other loans
|
1
|
|
1
|
|
|
4,072
|
|
4,472
|
|
Non-current
|
|
|
||
Bank loans
|
2,819
|
|
2,599
|
|
Bonds¹
|
23,094
|
|
21,278
|
|
Lease liabilities
|
623
|
|
205
|
|
Other loans
|
186
|
|
176
|
|
|
26,722
|
|
24,258
|
|
Total borrowings
|
30,794
|
|
28,730
|
|
1.
|
Includes a liability held at fair value through profit and loss of £741 million (2019: £667 million).
|
i)
|
the fair value of the liability was £741 million (2019: £667 million), which includes cumulative change in fair value attributable to changes in credit risk recognised in other comprehensive income, post tax of £10 million (2019: £13 million);
|
ii)
|
the amount repayable at maturity in November 2021 is £759 million (2019: £724 million); and
|
iii)
|
the difference between carrying amount and contractual amount at maturity is £18 million (2019: £57 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.
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Trade payables
|
2,205
|
|
2,404
|
|
Deferred payables
|
137
|
|
217
|
|
Customer contributions¹
|
84
|
|
87
|
|
Social security and other taxes
|
202
|
|
159
|
|
Contingent consideration²
|
30
|
|
—
|
|
Other payables
|
944
|
|
902
|
|
|
3,602
|
|
3,769
|
|
1.
|
From government-related entities.
|
2.
|
Contingent consideration relates to the acquisition of Geronimo (see note 38).
|
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.
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Current
|
76
|
|
61
|
|
Non-current
|
1,082
|
|
933
|
|
|
1,158
|
|
994
|
|
Other non-current liabilities include deferred income which will not be recognised as income until after 31 March 2021. It also includes payables that are not due until after that date.
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Deferred income¹
|
101
|
|
96
|
|
Customer contributions²
|
428
|
|
372
|
|
Contingent consideration³
|
44
|
|
—
|
|
Other payables
|
318
|
|
340
|
|
|
891
|
|
808
|
|
1.
|
Principally the deferral of profits relating to the sale of property, which we expect to recognise in future years.
|
2.
|
From government-related entities.
|
3.
|
Contingent consideration relates to the acquisition of Geronimo (see note 38).
|
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 UK and the US. In the US we also provide healthcare and life insurance benefits to eligible employees, post-retirement. The fair value of associated plan assets and present value of DB obligations are updated annually in accordance with IAS 19 (revised). We separately present our UK and US pension plans 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.
National Grid’s UK pension arrangements are held in separate Trustee administered funds. The arrangements are managed by Trustee companies with boards consisting of company- and member-appointed directors. In the US, the assets of the plans are held in trusts and administered by the Retirement Plans Committee comprised of appointed employees of the Company.
|
|
Section A of NGUKPS
|
Section B of NGUKPS
|
NGEG of ESPS
|
Latest full actuarial valuation
|
31 March 2019
|
31 March 2019
|
31 March 2016
|
Actuary
|
Willis Towers Watson
|
Willis Towers Watson
|
Aon Hewitt
|
Market value of plan assets at latest valuation
|
£6,551 million
|
£5,765 million
|
£2,553 million
|
Actuarial value of benefits due to members
|
£6,502 million
|
£5,831 million
|
£3,053 million
|
Market value as percentage of benefits
|
101%
|
99%
|
84%
|
Funding surplus/(deficit)
|
£49 million
|
(£66 million)
|
(£500 million)
|
Funding surplus/(deficit) net of tax
|
£41 million
|
(£55 million)
|
(£415 million)
|
|
Section A of NGUKPS
|
Section B of NGUKPS
|
NGEG of ESPS
|
Value of security arrangements at 31 March 20201
|
£315 million
|
£180 million
|
£239 million
|
Principal supporting employers
|
National Grid plc and National Grid UK Limited
|
National Grid Gas plc (NGG)
|
National Grid Electricity Transmission plc (NGET)
|
Additional amounts payable2 at 31 March 2020
|
£72 million
|
A maximum of £280 million
|
A maximum of £500 million
|
1.
|
Following the completion of the March 2019 valuations for Sections A and B of NGUKPS, these amounts have changed to £186 million for Section A and to £nil for Section B.
|
2.
|
These amounts are payable if certain trigger events occur which have been individually agreed between the plans and their relevant supporting employers.
|
|
US pensions
|
|
US other post-retirement benefits
|
||||
|
2020
|
2019
|
2018
|
|
2020
|
2019
|
2018
|
|
%
|
%
|
%
|
%
|
%
|
%
|
|
Discount rate
|
3.30
|
3.95
|
4.00
|
|
3.30
|
3.95
|
4.00
|
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
|
|
7.00
|
7.25
|
7.50
|
Ultimate healthcare cost trend rate
|
n/a
|
n/a
|
n/a
|
|
4.50
|
4.50
|
4.50
|
•
|
UK pensions: 8% active members (2019: 10%; 2018: 10%); 14% deferred members (2019: 16%; 2018: 18%); 78% pensioner members (2019: 74%; 2018: 72%);
|
•
|
US pensions: 36% active members (2019: 37%; 2018: 38%); 9% deferred members (2019: 9%; 2018: 8%); 55% pensioner members (2019: 54%; 2018: 54%); and
|
•
|
US other post-retirement benefits: 35% active members (2019: 39%; 2018: 38%); 0% deferred members (2019: 0%; 2018: 0%); 65% pensioner members (2019: 61%; 2018: 62%).
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Included within operating costs
|
|
|
|
|||
Administration costs
|
16
|
|
14
|
|
16
|
|
Included within payroll costs
|
|
|
|
|||
Defined benefit plan costs:
|
|
|
|
|||
Current service cost
|
178
|
|
193
|
|
193
|
|
Past service cost – augmentations
|
—
|
|
5
|
|
1
|
|
Past service credit – redundancies
|
—
|
|
(7
|
)
|
(1
|
)
|
Special termination benefit cost – redundancies
|
2
|
|
55
|
|
9
|
|
Past service cost – plan amendments¹
|
—
|
|
34
|
|
—
|
|
|
180
|
|
280
|
|
202
|
|
Included within finance income and costs
|
|
|
|
|||
Net interest cost
|
23
|
|
22
|
|
65
|
|
Total included in income statement
|
219
|
|
316
|
|
283
|
|
Remeasurement (losses)/gains of pension assets and post-retirement benefit obligations²
|
(724
|
)
|
68
|
|
1,313
|
|
Exchange adjustments
|
(97
|
)
|
(101
|
)
|
175
|
|
Total included in the statement of other comprehensive income
|
(821
|
)
|
(33
|
)
|
1,488
|
|
1.
|
For the year ended 31 March 2019, the estimated cost of equalising for the impact of GMP under the most cost-effective permissible methodology (Section A of NGUKPS – £17 million; Section B of NGUKPS – £12 million; NGEG of ESPS – £5 million).
|
2.
|
For the year ended 31 March 2020, this includes an actuarial loss from the purchase of buy-in policies of £0.7 billion.
|
|
UK Pensions
|
|
US Pensions
|
|
US other post-retirement benefits
|
|||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Included within operating costs
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Administration costs
|
9
|
|
6
|
|
6
|
|
|
6
|
|
7
|
|
9
|
|
|
1
|
|
1
|
|
1
|
|
Included within payroll costs
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Defined benefit plan costs:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Current service cost
|
33
|
|
41
|
|
49
|
|
|
100
|
|
104
|
|
98
|
|
|
45
|
|
48
|
|
46
|
|
Past service cost – augmentations
|
—
|
|
5
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Past service credit – redundancies
|
—
|
|
(7
|
)
|
(1
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Special termination benefit cost – redundancies
|
2
|
|
55
|
|
9
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Past service cost – plan amendments
|
—
|
|
34
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
35
|
|
128
|
|
58
|
|
|
100
|
|
104
|
|
98
|
|
|
45
|
|
48
|
|
46
|
|
Included within finance income and costs
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net interest (income)/cost
|
(31
|
)
|
(31
|
)
|
3
|
|
|
21
|
|
21
|
|
27
|
|
|
33
|
|
32
|
|
35
|
|
Total included in income statement
|
13
|
|
103
|
|
67
|
|
|
127
|
|
132
|
|
134
|
|
|
79
|
|
81
|
|
82
|
|
Remeasurement gains/(losses) of pension assets and post-retirement benefit obligations¹
|
143
|
|
57
|
|
1,177
|
|
|
(588
|
)
|
(14
|
)
|
27
|
|
|
(279
|
)
|
25
|
|
109
|
|
Exchange adjustments
|
—
|
|
—
|
|
—
|
|
|
(42
|
)
|
(42
|
)
|
75
|
|
|
(55
|
)
|
(59
|
)
|
100
|
|
Total included in the statement of other comprehensive income
|
143
|
|
57
|
|
1,177
|
|
|
(630
|
)
|
(56
|
)
|
102
|
|
|
(334
|
)
|
(34
|
)
|
209
|
|
1.
|
For the year ended 31 March 2020, UK pensions is stated after an actuarial loss from the purchase of buy-in policies of £0.7 billion.
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening net defined benefit liability
|
(218
|
)
|
(263
|
)
|
(1,933
|
)
|
Cost recognised in the income statement
|
(219
|
)
|
(316
|
)
|
(283
|
)
|
Remeasurement and foreign exchange effects recognised in the statement of other comprehensive income
|
(821
|
)
|
(33
|
)
|
1,488
|
|
Employer contributions
|
327
|
|
419
|
|
475
|
|
Other movements
|
(22
|
)
|
(25
|
)
|
(10
|
)
|
Closing net defined benefit liability
|
(953
|
)
|
(218
|
)
|
(263
|
)
|
|
UK pensions
|
|
US pensions
|
|
US other post-retirement benefits
|
|||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening net defined benefit asset/(liability)
|
1,231
|
|
1,104
|
|
(156
|
)
|
|
(509
|
)
|
(552
|
)
|
(728
|
)
|
|
(940
|
)
|
(815
|
)
|
(1,049
|
)
|
Cost recognised in the income statement
|
(13
|
)
|
(103
|
)
|
(67
|
)
|
|
(127
|
)
|
(132
|
)
|
(134
|
)
|
|
(79
|
)
|
(81
|
)
|
(82
|
)
|
Remeasurement and foreign exchange effects recognised in the statement of other comprehensive income
|
143
|
|
57
|
|
1,177
|
|
|
(630
|
)
|
(56
|
)
|
102
|
|
|
(334
|
)
|
(34
|
)
|
209
|
|
Employer contributions
|
156
|
|
174
|
|
150
|
|
|
153
|
|
231
|
|
208
|
|
|
18
|
|
14
|
|
117
|
|
Other movements
|
3
|
|
(1
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(25
|
)
|
(24
|
)
|
(10
|
)
|
Closing net defined benefit
asset/(liability) |
1,520
|
|
1,231
|
|
1,104
|
|
|
(1,113
|
)
|
(509
|
)
|
(552
|
)
|
|
(1,360
|
)
|
(940
|
)
|
(815
|
)
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening defined benefit obligations
|
(24,939
|
)
|
(24,054
|
)
|
(26,230
|
)
|
Current service cost
|
(178
|
)
|
(193
|
)
|
(193
|
)
|
Interest cost
|
(751
|
)
|
(771
|
)
|
(775
|
)
|
Actuarial gains/(losses) – experience
|
148
|
|
(69
|
)
|
(100
|
)
|
Actuarial gains – demographic assumptions
|
452
|
|
266
|
|
671
|
|
Actuarial (losses)/gains – financial assumptions
|
(84
|
)
|
(619
|
)
|
174
|
|
Past service credit – redundancies
|
—
|
|
7
|
|
1
|
|
Special termination benefit cost – redundancies
|
(2
|
)
|
(55
|
)
|
(9
|
)
|
Past service cost – augmentations
|
—
|
|
(5
|
)
|
(1
|
)
|
Past service cost – plan amendments
|
—
|
|
(34
|
)
|
—
|
|
Medicare subsidy received
|
(22
|
)
|
(19
|
)
|
(21
|
)
|
Employee contributions
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
Benefits paid
|
1,282
|
|
1,376
|
|
1,285
|
|
Exchange adjustments
|
(531
|
)
|
(768
|
)
|
1,145
|
|
Closing defined benefit obligations
|
(24,626
|
)
|
(24,939
|
)
|
(24,054
|
)
|
|
UK pensions
|
|
US pensions
|
|
US other post-retirement benefits
|
|||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening defined benefit obligations
|
(14,276
|
)
|
(14,226
|
)
|
(15,645
|
)
|
|
(7,155
|
)
|
(6,582
|
)
|
(7,050
|
)
|
|
(3,508
|
)
|
(3,246
|
)
|
(3,535
|
)
|
Current service cost
|
(33
|
)
|
(41
|
)
|
(49
|
)
|
|
(100
|
)
|
(104
|
)
|
(98
|
)
|
|
(45
|
)
|
(48
|
)
|
(46
|
)
|
Interest cost
|
(335
|
)
|
(358
|
)
|
(366
|
)
|
|
(280
|
)
|
(277
|
)
|
(273
|
)
|
|
(136
|
)
|
(136
|
)
|
(136
|
)
|
Actuarial gains/(losses) – experience
|
113
|
|
(56
|
)
|
(95
|
)
|
|
(45
|
)
|
(52
|
)
|
(38
|
)
|
|
80
|
|
39
|
|
33
|
|
Actuarial gains – demographic assumptions
|
140
|
|
224
|
|
565
|
|
|
78
|
|
—
|
|
30
|
|
|
234
|
|
42
|
|
76
|
|
Actuarial gains/(losses) – financial assumptions
|
798
|
|
(568
|
)
|
604
|
|
|
(595
|
)
|
(24
|
)
|
(279
|
)
|
|
(287
|
)
|
(27
|
)
|
(151
|
)
|
Past service credit – redundancies
|
—
|
|
7
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Special termination benefit cost – redundancies
|
(2
|
)
|
(55
|
)
|
(9
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Past service cost – augmentations
|
—
|
|
(5
|
)
|
(1
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Past service cost – plan amendments
|
—
|
|
(34
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Medicare subsidy received
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(22
|
)
|
(19
|
)
|
(21
|
)
|
Employee contributions
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Benefits paid
|
752
|
|
837
|
|
770
|
|
|
374
|
|
398
|
|
362
|
|
|
156
|
|
141
|
|
153
|
|
Exchange adjustments
|
—
|
|
—
|
|
—
|
|
|
(362
|
)
|
(514
|
)
|
764
|
|
|
(169
|
)
|
(254
|
)
|
381
|
|
Closing defined benefit obligations
|
(12,844
|
)
|
(14,276
|
)
|
(14,226
|
)
|
|
(8,085
|
)
|
(7,155
|
)
|
(6,582
|
)
|
|
(3,697
|
)
|
(3,508
|
)
|
(3,246
|
)
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening fair value of plan assets
|
24,793
|
|
23,858
|
|
24,375
|
|
Interest income
|
728
|
|
749
|
|
710
|
|
Return on plan assets (less than)/in excess of interest¹
|
(1,240
|
)
|
490
|
|
568
|
|
Administration costs
|
(16
|
)
|
(14
|
)
|
(16
|
)
|
Employer contributions
|
327
|
|
419
|
|
475
|
|
Employee contributions
|
1
|
|
1
|
|
1
|
|
Benefits paid
|
(1,279
|
)
|
(1,377
|
)
|
(1,285
|
)
|
Exchange adjustments
|
434
|
|
667
|
|
(970
|
)
|
Closing fair value of plan assets
|
23,748
|
|
24,793
|
|
23,858
|
|
Actual return on plan assets
|
(512
|
)
|
1,239
|
|
1,278
|
|
Expected contributions to plans in the following year
|
269
|
|
307
|
|
363
|
|
1.
|
For the year ended 31 March 2020, this includes an actuarial loss from the purchase of buy-in policies of £0.7 billion.
|
|
UK pensions
|
|
US pensions
|
|
US other post-retirement benefits
|
|||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Opening fair value of plan assets
|
15,507
|
|
15,330
|
|
15,489
|
|
|
6,646
|
|
6,030
|
|
6,322
|
|
|
2,640
|
|
2,498
|
|
2,564
|
|
Interest income
|
366
|
|
389
|
|
363
|
|
|
259
|
|
256
|
|
246
|
|
|
103
|
|
104
|
|
101
|
|
Return on plan assets (less than)/
in excess of interest¹ |
(908
|
)
|
457
|
|
103
|
|
|
(26
|
)
|
62
|
|
314
|
|
|
(306
|
)
|
(29
|
)
|
151
|
|
Administration costs
|
(9
|
)
|
(6
|
)
|
(6
|
)
|
|
(6
|
)
|
(7
|
)
|
(9
|
)
|
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
Employer contributions
|
156
|
|
174
|
|
150
|
|
|
153
|
|
231
|
|
208
|
|
|
18
|
|
14
|
|
117
|
|
Employee contributions
|
1
|
|
1
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Benefits paid
|
(749
|
)
|
(838
|
)
|
(770
|
)
|
|
(374
|
)
|
(398
|
)
|
(362
|
)
|
|
(156
|
)
|
(141
|
)
|
(153
|
)
|
Exchange adjustments
|
—
|
|
—
|
|
—
|
|
|
320
|
|
472
|
|
(689
|
)
|
|
114
|
|
195
|
|
(281
|
)
|
Closing fair value of plan assets
|
14,364
|
|
15,507
|
|
15,330
|
|
|
6,972
|
|
6,646
|
|
6,030
|
|
|
2,412
|
|
2,640
|
|
2,498
|
|
Actual return on plan assets
|
(542
|
)
|
846
|
|
466
|
|
|
233
|
|
318
|
|
560
|
|
|
(203
|
)
|
75
|
|
252
|
|
Expected contributions to plans in the following year
|
137
|
|
148
|
|
140
|
|
|
125
|
|
150
|
|
221
|
|
|
7
|
|
9
|
|
2
|
|
1.
|
For the year ended 31 March 2020, UK pensions includes an actuarial loss from the purchase of buy-in policies of £0.7 billion.
|
|
2020
|
|
2019
|
|||||
|
UK pensions
|
US pensions
|
|
US other post-retirement benefits
|
|
UK pensions
|
US pensions
|
US other post-retirement benefits
|
|
%
|
%
|
|
%
|
|
%
|
%
|
%
|
Equities
|
10.2
|
36.0
|
|
57.6
|
|
12.7
|
40.8
|
60.2
|
Corporate bonds
|
26.7
|
31.0
|
|
0.6
|
|
23.4
|
26.4
|
0.7
|
Government securities
|
14.3
|
18.2
|
|
22.9
|
|
39.4
|
16.0
|
20.6
|
Property
|
4.8
|
4.4
|
|
—
|
|
5.5
|
4.7
|
—
|
Diversified alternatives
|
6.2
|
9.0
|
|
13.4
|
|
5.0
|
10.1
|
12.9
|
Liability matching assets
|
34.3
|
—
|
|
—
|
|
11.1
|
—
|
—
|
Infrastructure
|
—
|
1.7
|
|
—
|
|
—
|
1.5
|
—
|
Cash and cash equivalents
|
1.8
|
0.3
|
|
—
|
|
1.9
|
0.3
|
—
|
Other
|
1.7
|
(0.6
|
)
|
5.5
|
|
1.0
|
0.2
|
5.6
|
|
100.0
|
100.0
|
|
100.0
|
|
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 plans’ 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, buy-ins, government securities, corporate bonds 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 plans invest in a variety of asset classes, but principally in government securities, bulk annuities, corporate bonds, equities and property. Consequently, actual returns will differ from the underlying discount rate adopted, impacting on the funding position of the plan through the net balance sheet asset or liability. Each plan 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 including bulk annuities, as well as interest rate hedging and management of foreign exchange exposure, and 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 life expectancy have a direct impact on liabilities. The NGEG of ESPS holds a longevity insurance contract (“longevity swap”) and NGUKPS holds buy-in policies for both Sections A and B, which covers exposure to improvement in longevity, providing long-term protection in the event that members live longer than expected;
|
•
|
Counterparty risk – is managed by having a diverse range of counterparties and through having a strong collateralisation process (including for the longevity swap held by NGEG of ESPS). Measurement and management of counterparty risk is delegated to the relevant investment managers. For our bulk annuity policies, various termination provisions were introduced in the contracts, managing our exposure to counterparty risk. The insurers’ operational performance and financial strength are monitored on a regular basis;
|
•
|
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 as well as bulk annuity buy-in policies;
|
•
|
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; 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.
|
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Equities
|
732
|
|
732
|
|
1,464
|
|
|
1,181
|
|
784
|
|
1,965
|
|
|
1,420
|
|
813
|
|
2,233
|
|
Corporate bonds
|
3,837
|
|
—
|
|
3,837
|
|
|
3,625
|
|
—
|
|
3,625
|
|
|
3,949
|
|
—
|
|
3,949
|
|
Government securities
|
2,051
|
|
—
|
|
2,051
|
|
|
6,114
|
|
—
|
|
6,114
|
|
|
5,629
|
|
—
|
|
5,629
|
|
Property
|
103
|
|
585
|
|
688
|
|
|
108
|
|
749
|
|
857
|
|
|
129
|
|
834
|
|
963
|
|
Diversified alternatives
|
—
|
|
893
|
|
893
|
|
|
—
|
|
771
|
|
771
|
|
|
99
|
|
690
|
|
789
|
|
Liability-matching assets
|
1,704
|
¹
|
3,278
|
²
|
4,982
|
|
|
1,751
|
|
—
|
|
1,751
|
|
|
1,174
|
|
—
|
|
1,174
|
|
Longevity swap
|
—
|
|
(51
|
)
|
(51
|
)
|
|
—
|
|
(35
|
)
|
(35
|
)
|
|
—
|
|
—
|
|
—
|
|
Cash and cash equivalents
|
29
|
|
222
|
|
251
|
|
|
40
|
|
259
|
|
299
|
|
|
211
|
|
215
|
|
426
|
|
Other (including net current assets and liabilities)
|
—
|
|
249
|
|
249
|
|
|
—
|
|
160
|
|
160
|
|
|
—
|
|
167
|
|
167
|
|
|
8,456
|
|
5,908
|
|
14,364
|
|
|
12,819
|
|
2,688
|
|
15,507
|
|
|
12,611
|
|
2,719
|
|
15,330
|
|
1.
|
Consists of pooled funds which invests mainly in fixed interest securities.
|
2.
|
Comprises the buy-in policies held by NGUKPS.
|
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Equities
|
467
|
|
2,043
|
|
2,510
|
|
|
533
|
|
2,178
|
|
2,711
|
|
|
577
|
|
1,954
|
|
2,531
|
|
Corporate bonds
|
1,640
|
|
518
|
|
2,158
|
|
|
1,329
|
|
425
|
|
1,754
|
|
|
1,085
|
|
413
|
|
1,498
|
|
Government securities
|
535
|
|
732
|
|
1,267
|
|
|
422
|
|
640
|
|
1,062
|
|
|
414
|
|
565
|
|
979
|
|
Property
|
—
|
|
307
|
|
307
|
|
|
—
|
|
316
|
|
316
|
|
|
—
|
|
279
|
|
279
|
|
Diversified alternatives
|
162
|
|
464
|
|
626
|
|
|
183
|
|
487
|
|
670
|
|
|
198
|
|
421
|
|
619
|
|
Infrastructure
|
—
|
|
121
|
|
121
|
|
|
—
|
|
99
|
|
99
|
|
|
—
|
|
77
|
|
77
|
|
Cash and cash equivalents
|
24
|
|
—
|
|
24
|
|
|
21
|
|
—
|
|
21
|
|
|
14
|
|
—
|
|
14
|
|
Other (including net current assets and liabilities)
|
(44
|
)
|
3
|
|
(41
|
)
|
|
(8
|
)
|
21
|
|
13
|
|
|
6
|
|
27
|
|
33
|
|
|
2,784
|
|
4,188
|
|
6,972
|
|
|
2,480
|
|
4,166
|
|
6,646
|
|
|
2,294
|
|
3,736
|
|
6,030
|
|
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
Quoted
|
|
Unquoted
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
£m
|
|
Equities
|
353
|
|
1,037
|
|
1,390
|
|
|
404
|
|
1,184
|
|
1,588
|
|
|
412
|
|
1,110
|
|
1,522
|
|
Corporate bonds
|
15
|
|
—
|
|
15
|
|
|
19
|
|
—
|
|
19
|
|
|
24
|
|
—
|
|
24
|
|
Government securities
|
551
|
|
1
|
|
552
|
|
|
540
|
|
3
|
|
543
|
|
|
508
|
|
2
|
|
510
|
|
Diversified alternatives
|
162
|
|
161
|
|
323
|
|
|
175
|
|
166
|
|
341
|
|
|
161
|
|
144
|
|
305
|
|
Other¹
|
—
|
|
132
|
|
132
|
|
|
—
|
|
149
|
|
149
|
|
|
—
|
|
137
|
|
137
|
|
|
1,081
|
|
1,331
|
|
2,412
|
|
|
1,138
|
|
1,502
|
|
2,640
|
|
|
1,105
|
|
1,393
|
|
2,498
|
|
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.
|
|
Environmental
£m
|
|
Decommissioning
£m
|
|
Restructuring
£m
|
|
Emissions
£m
|
|
Other
£m
|
|
Total
provisions
£m
|
|
At 1 April 2018
|
1,531
|
|
194
|
|
3
|
|
8
|
|
316
|
|
2,052
|
|
Exchange adjustments
|
103
|
|
7
|
|
—
|
|
—
|
|
14
|
|
124
|
|
Additions¹
|
32
|
|
18
|
|
125
|
|
16
|
|
35
|
|
226
|
|
Unused amounts reversed
|
(36
|
)
|
(10
|
)
|
(3
|
)
|
(6
|
)
|
(10
|
)
|
(65
|
)
|
Unwinding of discount
|
62
|
|
5
|
|
—
|
|
—
|
|
7
|
|
74
|
|
Utilised²
|
(53
|
)
|
(26
|
)
|
(42
|
)
|
(9
|
)
|
(79
|
)
|
(209
|
)
|
Transfers³
|
—
|
|
—
|
|
—
|
|
—
|
|
(3
|
)
|
(3
|
)
|
At 31 March 2019
|
1,639
|
|
188
|
|
83
|
|
9
|
|
280
|
|
2,199
|
|
Exchange adjustments
|
82
|
|
5
|
|
—
|
|
1
|
|
9
|
|
97
|
|
Additions¹
|
437
|
|
93
|
|
7
|
|
12
|
|
40
|
|
589
|
|
Unused amounts reversed
|
(29
|
)
|
(16
|
)
|
(16
|
)
|
—
|
|
(9
|
)
|
(70
|
)
|
Unwinding of discount
|
65
|
|
5
|
|
—
|
|
—
|
|
7
|
|
77
|
|
Utilised²
|
(123
|
)
|
(21
|
)
|
(39
|
)
|
(5
|
)
|
(50
|
)
|
(238
|
)
|
At 31 March 2020
|
2,071
|
|
254
|
|
35
|
|
17
|
|
277
|
|
2,654
|
|
|
2020
|
|
|
2019
|
|
|
£m
|
|
|
£m
|
|
Current
|
348
|
|
|
316
|
|
Non-current
|
2,306
|
|
|
1,883
|
|
|
2,654
|
|
|
2,199
|
|
1.
|
For the year ended 31 March 2020, £402 million (2019: £nil) of additions relate to exceptional environmental provisions, of which £76 million relates to the impact of the change in the real discount rate from 1% to 0.5% during the year (see note 5 for details). Additions to other provisions include £15 million (2019: £nil) in relation to discontinued operations.
|
2.
|
Utilised amounts for other provisions include £8 million (2019: £20 million) in relation to discontinued operations.
|
3.
|
Represents net amounts transferred to trade and other payables (see note 22) of £nil (2019: £3 million).
|
|
2020
|
|
2019
|
||||||||||||||
|
Discounted
£m
|
|
|
Undiscounted
£m
|
|
|
Real
discount
rate
|
|
|
Discounted
£m
|
|
|
Undiscounted
£m
|
|
|
Real
discount
rate
|
|
UK sites
|
175
|
|
|
184
|
|
|
0.5
|
%
|
|
189
|
|
|
210
|
|
|
1
|
%
|
US sites
|
1,896
|
|
|
1,955
|
|
|
0.5
|
%
|
|
1,450
|
|
|
1,555
|
|
|
1
|
%
|
|
2,071
|
|
|
2,139
|
|
|
|
|
1,639
|
|
|
1,765
|
|
|
|
•
|
£37 million (2019: £30 million) in respect of legacy provisions recognised following the sale of UK Gas Distribution;
|
•
|
£31 million (2019: £29 million) in respect of onerous lease commitments and rates payable on surplus properties with expenditure expected to be incurred until 2039;
|
•
|
£164 million (2019: £164 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, but we currently expect that cash flows will be incurred until 2049; and
|
•
|
£nil (2019: £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, predominantly 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 2018
|
3,638
|
|
452
|
|
Issued during the year in lieu of dividends¹
|
49
|
|
6
|
|
At 31 March 2019
|
3,687
|
|
458
|
|
Issued during the year in lieu of dividends¹
|
93
|
|
12
|
|
At 31 March 2020
|
3,780
|
|
470
|
|
1.
|
The issue of shares under the scrip dividend programme is considered to be a bonus issue under the terms of the Companies Act 2006, and the nominal value of the shares is charged to the share premium account.
|
i)
|
During the year, 3 million (2019: 3 million) treasury shares were gifted to National Grid Employee Share Trusts and 2 million (2019: 3 million) treasury shares were re-issued in relation to employee share schemes, in total representing approximately 0.1% (2019: 0.2%) of the ordinary shares in issue as at 31 March 2020. The nominal value of these shares was £1 million (2019: £1 million) and the total proceeds received were £17 million (2019: £18 million). National Grid settles share awards under its Long Term Incentive Plan and the Save As You Earn scheme, by the transfer of treasury shares to its employee share trusts.
|
ii)
|
During the year, the Company made payments totalling £6 million (2019: £2 million) to National Grid Employee Share Trusts to enable the trustees to make purchases of National Grid plc shares to settle share awards in relation to all employee share plans and discretionary reward plans. The cost of such purchases is deducted from retained earnings in the period that the transaction occurs.
|
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 2017
|
894
|
|
103
|
|
—
|
|
162
|
|
—
|
|
—
|
|
—
|
|
19
|
|
(5,165
|
)
|
(3,987
|
)
|
Exchange adjustments¹
|
(504
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(504
|
)
|
Net gains/(losses) taken to equity²
|
—
|
|
296
|
|
—
|
|
(30
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
266
|
|
Share of net gains of associates taken to equity
|
—
|
|
5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
Transferred from profit or loss²
|
—
|
|
(280
|
)
|
—
|
|
(73
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(353
|
)
|
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 adjustments¹
|
346
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
346
|
|
Net (losses)/gains taken to equity²
|
—
|
|
(206
|
)
|
(107
|
)
|
—
|
|
—
|
|
2
|
|
7
|
|
—
|
|
—
|
|
(304
|
)
|
Share of net gains of associates taken to equity
|
—
|
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
Transferred to profit or loss²
|
—
|
|
166
|
|
41
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
207
|
|
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 1 April 2019
|
736
|
|
61
|
|
17
|
|
—
|
|
34
|
|
48
|
|
13
|
|
19
|
|
(5,165
|
)
|
(4,237
|
)
|
Exchange adjustments¹
|
550
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
550
|
|
Net losses taken to equity
|
—
|
|
(142
|
)
|
(33
|
)
|
—
|
|
(13
|
)
|
(15
|
)
|
(3
|
)
|
—
|
|
—
|
|
(206
|
)
|
Share of net losses of associates taken to equity
|
—
|
|
(5
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
Transferred to profit or loss
|
—
|
|
14
|
|
(45
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(31
|
)
|
Net losses in respect of cash flow hedging of capital expenditure
|
—
|
|
(17
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(17
|
)
|
Tax
|
—
|
|
29
|
|
11
|
|
—
|
|
4
|
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
42
|
|
Cash flow hedges transferred to the statement of financial position, net of tax
|
—
|
|
(15
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(15
|
)
|
At 31 March 2020
|
1,286
|
|
(75
|
)
|
(50
|
)
|
—
|
|
25
|
|
31
|
|
10
|
|
19
|
|
(5,165
|
)
|
(3,919
|
)
|
1.
|
The exchange adjustments recorded in the translation reserve comprise a gain of £545 million (2019: gain of £896 million; 2018: loss of £1,304 million) relating to the translation of foreign operations offset by a gain of £5 million (2019: loss of £550 million; 2018: gain of £800 million) relating to borrowings, cross-currency swaps and foreign exchange forward contracts used to hedge the net investment in non-sterling denominated subsidiaries.
|
2.
|
Following a review in the year, we have changed our presentation of spot foreign exchange movements on derivatives designated in cash flow hedges of foreign currency risk and interest rates. This has no net impact on the consolidated statement of comprehensive income. It has resulted in a prior year gross up to £166 million (2018: £277 million) to ‘Net losses taken to equity’ with an equal and offsetting gross up to ‘Transferred to profit or loss’.
|
Net debt represents the amount of borrowings and overdrafts less cash, current financial investments and related financing derivatives.
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Decrease in cash and cash equivalents
|
(183
|
)
|
(80
|
)
|
(807
|
)
|
Decrease in financial investments
|
(7
|
)
|
(822
|
)
|
(5,953
|
)
|
Increase/(decrease) in borrowings and related derivatives¹
|
(23
|
)
|
(708
|
)
|
1,209
|
|
Net interest paid on the components of net debt²
|
888
|
|
866
|
|
808
|
|
Change in debt resulting from cash flows
|
675
|
|
(744
|
)
|
(4,743
|
)
|
Changes in fair value of financial assets and liabilities and exchange movements
|
(1,081
|
)
|
(1,648
|
)
|
2,098
|
|
Net interest charge on the components of net debt
|
(1,097
|
)
|
(1,076
|
)
|
(1,017
|
)
|
Other non-cash movements
|
(84
|
)
|
(27
|
)
|
(66
|
)
|
Movement in net debt (net of related derivative financial instruments) in the year
|
(1,587
|
)
|
(3,495
|
)
|
(3,728
|
)
|
Net debt (net of related derivative financial instruments) at start of year
|
(26,529
|
)
|
(23,002
|
)
|
(19,274
|
)
|
Impact of transition to IFRS 16 (2019: IFRS 9)
|
(474
|
)
|
(32
|
)
|
—
|
|
Net debt (net of related derivative financial instruments) at end of year
|
(28,590
|
)
|
(26,529
|
)
|
(23,002
|
)
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Cash, cash equivalents and financial investments
|
2,071
|
|
2,233
|
|
3,023
|
|
Borrowings
|
(30,794
|
)
|
(28,730
|
)
|
(26,625
|
)
|
Financing derivatives¹
|
133
|
|
(32
|
)
|
600
|
|
|
(28,590
|
)
|
(26,529
|
)
|
(23,002
|
)
|
1.
|
The financing derivatives balance included in net debt excludes the commodity derivatives (see note 17).
|
2.
|
Excludes £6 million (2019: £23 million; 2018: £27 million) cash interest from the Quadgas shareholder loan included within discontinued operations in the cash flow statement.
|
|
|
|
|
Cash
and cash
equivalents
£m
|
|
Financial
investments
£m
|
|
Borrowings
£m
|
|
Financing
derivatives
£m
|
|
|
Total1
£m
|
|
At 1 April 2017
|
|
|
|
1,139
|
|
8,741
|
|
(28,638
|
)
|
(516
|
)
|
|
(19,274
|
)
|
Cash flow
|
|
|
|
(807
|
)
|
(5,983
|
)
|
2,108
|
|
(61
|
)
|
|
(4,743
|
)
|
Fair value gains and losses and exchange movements
|
|
|
|
(3
|
)
|
(149
|
)
|
1,088
|
|
1,162
|
|
|
2,098
|
|
Interest income/(charges)
|
|
|
|
—
|
|
85
|
|
(1,117
|
)
|
15
|
|
|
(1,017
|
)
|
Other non-cash movements
|
|
|
|
—
|
|
—
|
|
(66
|
)
|
—
|
|
|
(66
|
)
|
At 31 March 2018
|
|
|
|
329
|
|
2,694
|
|
(26,625
|
)
|
600
|
|
|
(23,002
|
)
|
Impact of transition to IFRS 9
|
|
|
|
—
|
|
—
|
|
(32
|
)
|
—
|
|
|
(32
|
)
|
At 1 April 2018 (as restated)
|
|
|
|
329
|
|
2,694
|
|
(26,657
|
)
|
600
|
|
|
(23,034
|
)
|
Cash flow
|
|
|
|
(80
|
)
|
(846
|
)
|
(240
|
)
|
422
|
|
|
(744
|
)
|
Fair value gains and losses and exchange movements
|
|
|
|
3
|
|
93
|
|
(733
|
)
|
(1,011
|
)
|
|
(1,648
|
)
|
Interest income/(charges)
|
|
|
|
—
|
|
29
|
|
(1,062
|
)
|
(43
|
)
|
|
(1,076
|
)
|
Other non-cash movements
|
|
|
|
—
|
|
11
|
|
(38
|
)
|
—
|
|
|
(27
|
)
|
At 1 April 2019
|
|
|
|
252
|
|
1,981
|
|
(28,730
|
)
|
(32
|
)
|
|
(26,529
|
)
|
Impact of transition to IFRS 16
|
|
|
|
—
|
|
—
|
|
(474
|
)
|
—
|
|
|
(474
|
)
|
Cash flow
|
|
|
|
(183
|
)
|
(42
|
)
|
450
|
|
450
|
|
|
675
|
|
Fair value gains and losses and exchange movements
|
|
|
|
4
|
|
25
|
|
(864
|
)
|
(246
|
)
|
|
(1,081
|
)
|
Interest income/(charges)
|
|
|
|
—
|
|
34
|
|
(1,092
|
)
|
(39
|
)
|
|
(1,097
|
)
|
Other non-cash movements
|
|
|
|
—
|
|
—
|
|
(84
|
)
|
—
|
|
|
(84
|
)
|
At 31 March 2020
|
|
|
|
73
|
|
1,998
|
|
(30,794
|
)
|
133
|
|
|
(28,590
|
)
|
Balances at 31 March 2020 comprise:
|
|
|
|
|
|
|
|
|
|
|||||
Non-current assets
|
|
|
|
—
|
|
—
|
|
—
|
|
1,205
|
|
|
1,205
|
|
Current assets
|
|
|
|
73
|
|
1,998
|
|
—
|
|
62
|
|
|
2,133
|
|
Current liabilities
|
|
|
|
—
|
|
—
|
|
(4,072
|
)
|
(254
|
)
|
|
(4,326
|
)
|
Non-current liabilities
|
|
|
|
—
|
|
—
|
|
(26,722
|
)
|
(880
|
)
|
|
(27,602
|
)
|
|
|
|
|
73
|
|
1,998
|
|
(30,794
|
)
|
133
|
|
|
(28,590
|
)
|
1.
|
Includes accrued interest at 31 March 2020 of £246 million (2019: £223 million; 2018: £197 million).
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Cash flows per financing activities section of cash flow statement:
|
|
|
|
|||
Proceeds received from loans
|
4,218
|
|
2,932
|
|
1,941
|
|
Repayment of loans
|
(3,253
|
)
|
(1,969
|
)
|
(2,156
|
)
|
Payments of lease liabilities
|
(121
|
)
|
(70
|
)
|
(71
|
)
|
Net movements in short-term borrowings
|
(424
|
)
|
179
|
|
(764
|
)
|
Net movements in derivatives
|
(187
|
)
|
35
|
|
(267
|
)
|
Interest paid
|
(957
|
)
|
(914
|
)
|
(853
|
)
|
Cash flows per financing activities section of cash flow statement
|
(724
|
)
|
193
|
|
(2,170
|
)
|
Adjustments:
|
|
|
|
|||
Non-net debt-related items
|
34
|
|
24
|
|
12
|
|
Derivative cash inflow in relation to capital expenditure
|
13
|
|
13
|
|
12
|
|
Derivative cash flows per investing section of cash flow statement
|
(223
|
)
|
(412
|
)
|
330
|
|
Discontinued operations
|
—
|
|
—
|
|
(231
|
)
|
Cash flows relating to financing liabilities within net debt
|
(900
|
)
|
(182
|
)
|
(2,047
|
)
|
|
|
|
|
|||
Analysis of changes in net debt:
|
|
|
|
|||
Borrowings
|
(450
|
)
|
240
|
|
(2,108
|
)
|
Financing derivatives
|
(450
|
)
|
(422
|
)
|
61
|
|
Cash flow movements relating to financing liabilities within net debt
|
(900
|
)
|
(182
|
)
|
(2,047
|
)
|
|
Borrowings
£m
|
|
Financing derivatives
£m
|
|
Total
£m
|
|
At 1 April 2017
|
(28,638
|
)
|
16
|
|
(28,622
|
)
|
Cash flow
|
2,108
|
|
281
|
|
2,389
|
|
Fair value gains and losses and exchange movements
|
1,088
|
|
222
|
|
1,310
|
|
Interest income/(charges)
|
(1,117
|
)
|
34
|
|
(1,083
|
)
|
Other non-cash movements
|
(66
|
)
|
—
|
|
(66
|
)
|
At 31 March 2018
|
(26,625
|
)
|
553
|
|
(26,072
|
)
|
Impact of transition to IFRS 9
|
(32
|
)
|
—
|
|
(32
|
)
|
At 1 April 2018 (as restated)
|
(26,657
|
)
|
553
|
|
(26,104
|
)
|
Cash flow
|
(240
|
)
|
23
|
|
(217
|
)
|
Fair value gains and losses and exchange movements
|
(733
|
)
|
(334
|
)
|
(1,067
|
)
|
Interest charges
|
(1,062
|
)
|
(14
|
)
|
(1,076
|
)
|
Other non-cash movements
|
(38
|
)
|
—
|
|
(38
|
)
|
At 1 April 2019
|
(28,730
|
)
|
228
|
|
(28,502
|
)
|
Impact of transition to IFRS 16
|
(474
|
)
|
—
|
|
(474
|
)
|
Cash flow
|
450
|
|
240
|
|
690
|
|
Fair value gains and losses and exchange movements
|
(864
|
)
|
(231
|
)
|
(1,095
|
)
|
Interest charges
|
(1,092
|
)
|
(9
|
)
|
(1,101
|
)
|
Other non-cash movements
|
(84
|
)
|
—
|
|
(84
|
)
|
At 31 March 2020
|
(30,794
|
)
|
228
|
|
(30,566
|
)
|
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 energy purchase agreements and contracts for the purchase of assets which, in many cases, extend over a long period of time. Commitments previously included operating lease commitments but on transition to IFRS 16, which was effective from 1 April 2019, substantially all lease commitments are included on the balance sheet as right-of-use assets (see note 13) and lease liabilities (see note 21). Therefore, only low-value leases and short-term leases are off-balance sheet commitments, both of which are immaterial. 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.
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Future capital expenditure
|
|
|
||
Contracted for but not provided
|
2,629
|
|
1,973
|
|
Energy purchase commitments¹
|
|
|
||
Less than 1 year
|
1,365
|
|
1,353
|
|
In 1 to 2 years
|
890
|
|
779
|
|
In 2 to 3 years
|
973
|
|
651
|
|
In 3 to 4 years
|
955
|
|
827
|
|
In 4 to 5 years
|
861
|
|
862
|
|
More than 5 years
|
11,314
|
|
11,237
|
|
|
16,358
|
|
15,709
|
|
Guarantees²
|
|
|
||
Guarantee of sublease for US property (expires 2040)
|
173
|
|
173
|
|
Guarantees of certain obligations of Grain LNG (expire up to 2025)
|
34
|
|
39
|
|
Guarantees of certain obligations for construction of HVDC West Coast Link (expected expiry 2020)
|
92
|
|
139
|
|
Guarantees of certain obligations of Nemo Link Limited (expired 2019)
|
—
|
|
19
|
|
Guarantees of certain obligations of National Grid North Sea Link Limited (various expiry dates)²
|
683
|
|
865
|
|
Guarantees of certain obligations of St William Homes LLP (various expiry dates)³
|
30
|
|
22
|
|
Guarantees of certain obligations for construction of IFA 2 (expected expiry 2022)²
|
564
|
|
505
|
|
Guarantees of certain obligations of National Grid Viking Link Limited (expected expiry 2024)
|
1,096
|
|
872
|
|
Other guarantees and letters of credit (various expiry dates)
|
150
|
|
341
|
|
|
2,822
|
|
2,975
|
|
|
|
2019
|
|
|
|
£m
|
|
Operating lease commitments
|
|
|
|
Less than 1 year
|
|
43
|
|
In 1 to 2 years
|
|
39
|
|
In 2 to 3 years
|
|
34
|
|
In 3 to 4 years
|
|
35
|
|
In 4 to 5 years
|
|
27
|
|
More than 5 years
|
|
123
|
|
|
|
301
|
|
1.
|
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).
|
2.
|
Included within total guarantees are guarantees to both joint ventures and Engineering, Procurement and Construction contractors regarding the construction of interconnectors of £358 million (2019: £470 million).
|
3.
|
Includes guarantees to related parties.
|
Related parties include joint ventures, associates, investments and key management personnel.
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Sales: Goods and services supplied to a pension plan
|
5
|
|
5
|
|
3
|
|
Sales: Goods and services supplied to joint ventures¹
|
101
|
|
151
|
|
14
|
|
Sales: Goods and services supplied to associates²
|
33
|
|
192
|
|
220
|
|
Purchases: Goods and services received from joint ventures³
|
61
|
|
26
|
|
135
|
|
Purchases: Goods and services received from associates³
|
56
|
|
141
|
|
160
|
|
|
|
|
|
|||
Receivable from joint ventures4
|
255
|
|
584
|
|
160
|
|
Receivable from associates4
|
1
|
|
368
|
|
376
|
|
Payable to joint ventures
|
72
|
|
8
|
|
—
|
|
Payable to associates
|
4
|
|
12
|
|
17
|
|
Interest income from joint ventures
|
2
|
|
5
|
|
4
|
|
Interest income from associates
|
8
|
|
23
|
|
27
|
|
|
|
|
|
|||
Dividends received from joint ventures5
|
34
|
|
30
|
|
43
|
|
Dividends received from associates6
|
41
|
|
171
|
|
170
|
|
1.
|
During the year, £38 million (2019: £139 million) of property sites were sold to a joint venture, St William Homes LLP. A further £32 million of sales were made to NGET/SPT Upgrades Limited in 2020.
|
2.
|
Sales relate to transactions with Quadgas, until the date it ceased to be a related party following the disposal of our 39% stake in June 2019 (see note 10). Included within this is other income of £31 million (2019: £52 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, most notably, £31 million (2019: £30 million) of purchases from Millennium Pipeline Company LLC. The Group also purchased capitalised assets of £58 million (2019: £26 million) from NGET/SPT Upgrades Limited (a joint venture).
|
4.
|
Amounts receivable from associates includes a loan receivable balance of £242 million (2019: £325 million) in relation to St William Homes LLP (a joint venture). There is no longer a loan receivable from Quadgas (2019: £352 million) and Nemo Link (a joint venture) (2019: £258 million). The loan receivable balance from Nemo Link was transferred to equity during 2020 (see note 16 for details).
|
5.
|
Dividends of £25 million (2019: £30 million) were received from BritNed Development Limited.
|
6.
|
Includes £32 million (2019: £24 million) of dividend income from Millennium Pipeline Company LLC. No dividends were received from Quadgas this year (2019: £133 million).
|
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)
|
2,049
|
|
1,024
|
|
Triple ‘A’ vehicles (AAA)
|
500
|
|
—
|
|
Triple ‘A’ range institutions and non-G7 sovereign entities (AAA)
|
1,118
|
|
559
|
|
Double ‘A+’ G7 sovereign entities (AA+)
|
1,863
|
|
931
|
|
Double ‘A’ range institutions (AA)
|
745 to 931
|
|
372 to 465
|
|
Single ‘A’ range institutions (A)
|
261 to 373
|
|
130 to 186
|
|
|
|
|
|
Related amounts
available to be offset but not offset in statement of financial position |
|
|||||||
At 31 March 2020
|
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
|
1,267
|
|
—
|
|
1,267
|
|
(351
|
)
|
(694
|
)
|
222
|
|
Commodity contract derivatives
|
75
|
|
—
|
|
75
|
|
(5
|
)
|
(3
|
)
|
67
|
|
|
1,342
|
|
—
|
|
1,342
|
|
(356
|
)
|
(697
|
)
|
289
|
|
Liabilities
|
|
|
|
|
|
|
||||||
Financing derivatives
|
(1,134
|
)
|
—
|
|
(1,134
|
)
|
351
|
|
646
|
|
(137
|
)
|
Commodity contract derivatives
|
(200
|
)
|
—
|
|
(200
|
)
|
5
|
|
8
|
|
(187
|
)
|
|
(1,334
|
)
|
—
|
|
(1,334
|
)
|
356
|
|
654
|
|
(324
|
)
|
|
|
|
|
|
|
|
||||||
|
8
|
|
—
|
|
8
|
|
—
|
|
(43
|
)
|
(35
|
)
|
|
|
|
|
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
|
|
At 31 March 2020
|
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 lease liabilities
|
(3,672
|
)
|
(2,150
|
)
|
(1,611
|
)
|
(22,214
|
)
|
(29,647
|
)
|
Interest payments on borrowings¹
|
(765
|
)
|
(750
|
)
|
(714
|
)
|
(12,002
|
)
|
(14,231
|
)
|
Lease liabilities
|
(132
|
)
|
(114
|
)
|
(99
|
)
|
(629
|
)
|
(974
|
)
|
Other non-interest-bearing liabilities
|
(3,149
|
)
|
(318
|
)
|
—
|
|
—
|
|
(3,467
|
)
|
Contingent consideration
|
(32
|
)
|
(16
|
)
|
(32
|
)
|
(16
|
)
|
(96
|
)
|
Derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
Financing derivatives – receipts²
|
2,249
|
|
986
|
|
1,208
|
|
3,510
|
|
7,953
|
|
Financing derivatives – payments²
|
(2,582
|
)
|
(1,136
|
)
|
(1,463
|
)
|
(4,067
|
)
|
(9,248
|
)
|
Commodity contract derivatives – receipts²
|
4
|
|
2
|
|
—
|
|
—
|
|
6
|
|
Commodity contract derivatives – payments²
|
(116
|
)
|
(50
|
)
|
(24
|
)
|
(12
|
)
|
(202
|
)
|
Derivative financial assets
|
|
|
|
|
|
|
|
|
|
|
Financing derivatives – receipts²
|
2,469
|
|
1,063
|
|
570
|
|
1,775
|
|
5,877
|
|
Financing derivatives – payments²
|
(2,271
|
)
|
(527
|
)
|
(375
|
)
|
(1,478
|
)
|
(4,651
|
)
|
Commodity contract derivatives – receipts²
|
20
|
|
1
|
|
1
|
|
—
|
|
22
|
|
Commodity contract derivatives – payments²
|
(21
|
)
|
—
|
|
—
|
|
—
|
|
(21
|
)
|
|
(7,998
|
)
|
(3,009
|
)
|
(2,539
|
)
|
(35,133
|
)
|
(48,679
|
)
|
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 lease liabilities
|
(4,129
|
)
|
(2,348
|
)
|
(1,998
|
)
|
(19,673
|
)
|
(28,148
|
)
|
Interest payments on borrowings¹
|
(800
|
)
|
(733
|
)
|
(721
|
)
|
(13,465
|
)
|
(15,719
|
)
|
Lease liabilities
|
(72
|
)
|
(63
|
)
|
(52
|
)
|
(123
|
)
|
(310
|
)
|
Other non-interest-bearing liabilities
|
(3,306
|
)
|
(340
|
)
|
—
|
|
—
|
|
(3,646
|
)
|
Derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
Financing derivatives – receipts²
|
3,045
|
|
1,703
|
|
163
|
|
2,560
|
|
7,471
|
|
Financing derivatives – payments²
|
(3,421
|
)
|
(2,029
|
)
|
(223
|
)
|
(3,276
|
)
|
(8,949
|
)
|
Commodity contract derivatives – receipts²
|
2
|
|
3
|
|
1
|
|
—
|
|
6
|
|
Commodity contract derivatives – payments²
|
(98
|
)
|
(26
|
)
|
(4
|
)
|
(1
|
)
|
(129
|
)
|
Derivative financial assets
|
|
|
|
|
|
|
|
|
|
|
Financing derivatives – receipts²
|
1,928
|
|
561
|
|
863
|
|
1,112
|
|
4,464
|
|
Financing derivatives – payments²
|
(1,251
|
)
|
(459
|
)
|
(783
|
)
|
(875
|
)
|
(3,368
|
)
|
Commodity contract derivatives – receipts²
|
23
|
|
9
|
|
2
|
|
—
|
|
34
|
|
Commodity contract derivatives – payments²
|
—
|
|
(5
|
)
|
(1
|
)
|
—
|
|
(6
|
)
|
|
(8,079
|
)
|
(3,727
|
)
|
(2,753
|
)
|
(33,741
|
)
|
(48,300
|
)
|
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 receipts and payments line items for derivatives comprise gross undiscounted future cash flows, after considering any contractual netting that applies within individual contracts. Where cash receipts and payments within a derivative contract are settled net, and the amount to be received/(paid) exceeds the amount to be paid/(received), the net amount is presented within derivative receipts/(payments).
|
|
2020
|
|
2019
|
||||||||||||||||||
|
Sterling
£m
|
|
Euro
£m
|
|
Dollar
£m
|
|
Other
£m
|
|
Total
£m
|
|
|
Sterling
£m
|
|
Euro
£m
|
|
Dollar
£m
|
|
Other
£m
|
|
Total
£m
|
|
Cash and cash equivalents
|
18
|
|
—
|
|
55
|
|
—
|
|
73
|
|
|
97
|
|
2
|
|
153
|
|
—
|
|
252
|
|
Financial investments
|
813
|
|
—
|
|
1,185
|
|
—
|
|
1,998
|
|
|
965
|
|
—
|
|
1,016
|
|
—
|
|
1,981
|
|
Borrowings
|
(12,407
|
)
|
(4,150
|
)
|
(13,217
|
)
|
(1,020
|
)
|
(30,794
|
)
|
|
(10,591
|
)
|
(4,787
|
)
|
(12,126
|
)
|
(1,226
|
)
|
(28,730
|
)
|
Pre-derivative position
|
(11,576
|
)
|
(4,150
|
)
|
(11,977
|
)
|
(1,020
|
)
|
(28,723
|
)
|
|
(9,529
|
)
|
(4,785
|
)
|
(10,957
|
)
|
(1,226
|
)
|
(26,497
|
)
|
Derivative effect
|
(1,169
|
)
|
4,341
|
|
(4,214
|
)
|
1,175
|
|
133
|
|
|
(1,055
|
)
|
4,803
|
|
(5,245
|
)
|
1,465
|
|
(32
|
)
|
Net debt position
|
(12,745
|
)
|
191
|
|
(16,191
|
)
|
155
|
|
(28,590
|
)
|
|
(10,584
|
)
|
18
|
|
(16,202
|
)
|
239
|
|
(26,529
|
)
|
|
2020
|
|
2019
|
||||||||||||||||||
|
Sterling
£m
|
|
Euro
£m
|
|
Dollar
£m
|
|
Other
£m
|
|
Total
£m
|
|
|
Sterling
£m
|
|
Euro
£m
|
|
Dollar
£m
|
|
Other
£m
|
|
Total
£m
|
|
Trade and other receivables
|
306
|
|
—
|
|
1,403
|
|
—
|
|
1,709
|
|
|
398
|
|
—
|
|
1,635
|
|
—
|
|
2,033
|
|
Trade and other payables
|
(1,177
|
)
|
—
|
|
(2,002
|
)
|
—
|
|
(3,179
|
)
|
|
(1,221
|
)
|
—
|
|
(2,085
|
)
|
—
|
|
(3,306
|
)
|
Other non-current liabilities
|
(85
|
)
|
—
|
|
(277
|
)
|
—
|
|
(362
|
)
|
|
(93
|
)
|
—
|
|
(247
|
)
|
—
|
|
(340
|
)
|
|
2020
|
|
2019
|
||||||||||||||||||
|
Fixed rate
£m
|
|
Floating
rate
£m
|
|
Inflation
linked
£m
|
|
Other1
£m
|
|
Total
£m
|
|
|
Fixed rate
£m
|
|
Floating
rate
£m
|
|
Inflation
linked
£m
|
|
Other1
£m
|
|
Total
£m
|
|
Cash and cash equivalents
|
71
|
|
10
|
|
—
|
|
(8
|
)
|
73
|
|
|
59
|
|
104
|
|
—
|
|
89
|
|
252
|
|
Financial investments
|
—
|
|
1,966
|
|
—
|
|
32
|
|
1,998
|
|
|
6
|
|
1,944
|
|
—
|
|
31
|
|
1,981
|
|
Borrowings
|
(20,969
|
)
|
(3,085
|
)
|
(6,740
|
)
|
—
|
|
(30,794
|
)
|
|
(19,043
|
)
|
(3,045
|
)
|
(6,642
|
)
|
—
|
|
(28,730
|
)
|
Pre-derivative position
|
(20,898
|
)
|
(1,109
|
)
|
(6,740
|
)
|
24
|
|
(28,723
|
)
|
|
(18,978
|
)
|
(997
|
)
|
(6,642
|
)
|
120
|
|
(26,497
|
)
|
Derivative effect
|
2,259
|
|
(1,892
|
)
|
(234
|
)
|
—
|
|
133
|
|
|
1,740
|
|
(1,559
|
)
|
(213
|
)
|
—
|
|
(32
|
)
|
Net debt position
|
(18,639
|
)
|
(3,001
|
)
|
(6,974
|
)
|
24
|
|
(28,590
|
)
|
|
(17,238
|
)
|
(2,556
|
)
|
(6,855
|
)
|
120
|
|
(26,529
|
)
|
1.
|
Represents financial instruments which are not directly affected by interest rate risk, such as investments in equity or other similar financial instruments.
|
Year ended 31 March 2020
|
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
|
|
|
(143
|
)
|
(17
|
)
|
—
|
|
Cost of hedging
|
5
|
|
(7
|
)
|
—
|
|
(30
|
)
|
|
|
|
|
|
||||
Transferred to profit or loss in respect of:
|
|
|
|
|
||||
Cash flow hedges
|
—
|
|
14
|
|
—
|
|
—
|
|
Cost of hedging
|
1
|
|
(1
|
)
|
—
|
|
(45
|
)
|
|
|
|
|
|
||||
Consolidated statement of changes in equity
|
|
|
|
|
||||
Other equity reserves – cost of hedging balances
|
2
|
|
(8
|
)
|
—
|
|
(43
|
)
|
|
|
|
|
|
||||
Consolidated statement of financial position
|
|
|
|
|
||||
Derivatives – carrying value of hedging instruments¹
|
|
|
|
|
||||
Assets – current
|
1
|
|
—
|
|
4
|
|
9
|
|
Assets – non-current
|
247
|
|
106
|
|
8
|
|
—
|
|
Liabilities – current
|
(1
|
)
|
(105
|
)
|
(8
|
)
|
(82
|
)
|
Liabilities – non-current
|
(39
|
)
|
(264
|
)
|
(12
|
)
|
(19
|
)
|
|
|
|
|
|
||||
Profiles of the significant timing, price and rate information of hedging instruments
|
|
|
|
|
||||
Maturity range
|
May 2020 – Feb 2040
|
|
Jul 2020 – Dec 2039
|
|
Apr 2020 – Dec 2024
|
|
Jun 2020 – Sep 2027
|
|
Spot foreign exchange range:
|
|
|
|
|
||||
GBP:USD
|
1.64
|
|
1.30 – 1.66
|
|
1.24 – 1.41
|
|
1.21 – 1.49
|
|
GBP:EUR
|
1.19 – 1.24
|
|
1.10 – 1.24
|
|
1.04 – 1.30
|
|
1.14
|
|
EUR:USD
|
1.13 – 1.17
|
|
1.13 – 1.14
|
|
n/a
|
|
n/a
|
|
Interest rate range:
|
|
|
|
|
||||
GBP
|
LIBOR +30bps/+408bps
|
|
1.331% – 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.
|
Year ended 31 March 2019
|
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 hedges¹
|
—
|
|
(206
|
)
|
(12
|
)
|
—
|
|
Cost of hedging
|
(6
|
)
|
(12
|
)
|
—
|
|
(90
|
)
|
|
|
|
|
|
||||
Transferred to profit or loss in respect of:
|
|
|
|
|
||||
Cash flow hedges¹
|
—
|
|
166
|
|
—
|
|
—
|
|
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 instruments²
|
|
|
|
|
||||
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.
|
Following a review in the year, we have changed our presentation of spot foreign exchange movements on derivatives designated in cash flow hedges of foreign currency risk and interest rates. This has no net impact on the consolidated statement of comprehensive income. It has resulted in a prior year gross up of £166 million to net losses in respect of cash flow hedges with an equal and offsetting gross up to transferred to profit and loss in respect of cash flow hedges.
|
2.
|
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 £1,883 million, of which £72 million is current and £1,811 million is non-current.
|
2.
|
Included within the hedging instrument notional balance is £1,675 million impacted by Interest Rate Benchmark Reform amendments.
|
1.
|
The carrying value of the hedged borrowings was £1,810 million, of which £202 million was current and £1,608 million was non-current. Following a review in the year, we have changed our presentation of spot foreign exchange movements on derivatives designated in fair value hedges of foreign currency risk and interest rates. It has resulted in a prior year equal and offsetting impact of £4 million to the balances used for the ‘Change in value used for calculating ineffectiveness’.
|
As at 31 March 2020
|
|
|
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
|
|
Hedge type
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
Foreign currency and interest rate risk on borrowings¹
|
(4,127
|
)
|
|
(69
|
)
|
(22
|
)
|
|
142
|
|
(143
|
)
|
|
(1
|
)
|
Foreign currency risk on forecasted cash flows
|
(794
|
)
|
|
8
|
|
—
|
|
|
17
|
|
(17
|
)
|
|
—
|
|
1.
|
Included within the hedging instrument notional balance is £176 million impacted by Interest Rate Benchmark Reform amendments.
|
As at 31 March 2019
|
|
|
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
|
|
Hedge type
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
Foreign currency and interest rate risk on borrowings¹
|
(3,804
|
)
|
|
(17
|
)
|
51
|
|
|
206
|
|
(206
|
)
|
|
—
|
|
Foreign currency risk on forecasted cash flows
|
(697
|
)
|
|
45
|
|
—
|
|
|
12
|
|
(12
|
)
|
|
—
|
|
1.
|
Following a review in the year, we have changed our presentation of spot foreign exchange movements on derivatives designated in cash flow hedges of foreign currency risk and interest rates. This has no net impact on the consolidated statement of comprehensive income. It has resulted in a prior year equal and offsetting impact of £167 million to the balances used for the ‘Change in value used for calculating ineffectiveness’.
|
1.
|
Included within the hedging instrument notional balance is £nil impacted by Interest Rate Benchmark Reform amendments.
|
|
2020
|
|
2019
|
||||||||||||||
|
Level 1
£m
|
|
Level 2
£m
|
|
Level 3
£m
|
|
Total
£m
|
|
|
Level 1
£m
|
|
Level 2
£m
|
|
Level 3
£m
|
|
Total
£m
|
|
Assets
|
|
|
|
|
|
|
|
|
|
||||||||
Investments held at FVTPL
|
1,278
|
|
—
|
|
108
|
|
1,386
|
|
|
1,311
|
|
—
|
|
62
|
|
1,373
|
|
Investments held at FVOCI
|
83
|
|
352
|
|
—
|
|
435
|
|
|
93
|
|
343
|
|
—
|
|
436
|
|
Investments in associates¹
|
—
|
|
—
|
|
103
|
|
103
|
|
|
—
|
|
—
|
|
90
|
|
90
|
|
Financing derivatives
|
—
|
|
1,257
|
|
10
|
|
1,267
|
|
|
—
|
|
1,050
|
|
2
|
|
1,052
|
|
Commodity contract derivatives
|
—
|
|
9
|
|
66
|
|
75
|
|
|
—
|
|
33
|
|
68
|
|
101
|
|
|
1,361
|
|
1,618
|
|
287
|
|
3,266
|
|
|
1,404
|
|
1,426
|
|
222
|
|
3,052
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||
Financing derivatives
|
—
|
|
(889
|
)
|
(245
|
)
|
(1,134
|
)
|
|
—
|
|
(868
|
)
|
(216
|
)
|
(1,084
|
)
|
Commodity contract derivatives
|
—
|
|
(136
|
)
|
(64
|
)
|
(200
|
)
|
|
—
|
|
(32
|
)
|
(67
|
)
|
(99
|
)
|
Liabilities held at fair value
|
(741
|
)
|
—
|
|
—
|
|
(741
|
)
|
|
(667
|
)
|
—
|
|
—
|
|
(667
|
)
|
Contingent consideration²
|
—
|
|
—
|
|
(74
|
)
|
(74
|
)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(741
|
)
|
(1,025
|
)
|
(383
|
)
|
(2,149
|
)
|
|
(667
|
)
|
(900
|
)
|
(283
|
)
|
(1,850
|
)
|
|
620
|
|
593
|
|
(96
|
)
|
1,117
|
|
|
737
|
|
526
|
|
(61
|
)
|
1,202
|
|
1.
|
Our Level 3 investments include investments relating to Sunrun Neptune 2016 LLC accounted for at FVTPL.
|
2.
|
Contingent consideration relates to the acquisition of Geronimo (see note 38).
|
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
|
|
Other3,4
|
|
Total
|
||||||||||||
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
At 1 April
|
(214
|
)
|
(219
|
)
|
|
1
|
|
(1
|
)
|
|
152
|
|
194
|
|
|
(61
|
)
|
(26
|
)
|
Net (losses)/gains for the year1,2
|
(20
|
)
|
4
|
|
|
6
|
|
(16
|
)
|
|
26
|
|
15
|
|
|
12
|
|
3
|
|
Purchases
|
—
|
|
—
|
|
|
26
|
|
44
|
|
|
51
|
|
57
|
|
|
77
|
|
101
|
|
Acquisition of Geronimo
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
(74
|
)
|
—
|
|
|
(74
|
)
|
—
|
|
Settlements
|
(1
|
)
|
1
|
|
|
(31
|
)
|
(26
|
)
|
|
(18
|
)
|
(4
|
)
|
|
(50
|
)
|
(29
|
)
|
Reclassification to held for sale³
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
(110
|
)
|
|
—
|
|
(110
|
)
|
At 31 March
|
(235
|
)
|
(214
|
)
|
|
2
|
|
1
|
|
|
137
|
|
152
|
|
|
(96
|
)
|
(61
|
)
|
1.
|
Loss of £20 million (2019: £4 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 £17 million (2019: £21 million loss) is attributable to commodity contract derivative financial instruments held at the end of the reporting period.
|
3.
|
Relates to our put and call options over our interests in Quadgas, that were classified as held for sale at 31 March 2019.
|
4.
|
Other comprises our investments in Sunrun Neptune 2016 LLC, Enbala and the investments made by National Grid Partners, which are accounted for at fair value through profit and loss as well as the contingent consideration arising from the acquisition of Geronimo (see note 38).
|
|
Financing derivatives
|
|
Commodity contract derivatives
|
|
Other3
|
|||||||||
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
10% increase in commodity prices¹
|
—
|
|
—
|
|
|
2
|
|
(1
|
)
|
|
—
|
|
—
|
|
10% decrease in commodity prices¹
|
—
|
|
—
|
|
|
—
|
|
2
|
|
|
—
|
|
—
|
|
+10% market area price change
|
—
|
|
—
|
|
|
(4
|
)
|
(10
|
)
|
|
—
|
|
—
|
|
-10% market area price change
|
—
|
|
—
|
|
|
4
|
|
10
|
|
|
—
|
|
—
|
|
+20 basis points change in Limited Price Inflation (LPI) market curve²
|
(95
|
)
|
(88
|
)
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
-20 basis points change in LPI market curve²
|
90
|
|
83
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
+50 basis points change in discount rate
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
(3
|
)
|
(3
|
)
|
-50 basis points change in discount rate
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
4
|
|
3
|
|
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 2020.
|
•
|
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: c/o KPMG, 15 Canada Square, London E14 5GL, UK
|
2.
|
Registered office: Shire Hall, PO Box 9, Warwick CV34 4RL, UK
|
*
|
In liquidation.
|
1.
|
Registered office: c/o Geronimo Energy LLC, 8400 Normandale Lake Bvld. Suite 1200, Bloomington, MN 55437, USA.
|
2.
|
Registered office: Corporation Service Company, 84 State Street, Boston MA 02109, USA.
|
3.
|
Registered office: Corporation Service Company, 251 Little Falls Drive, Wilmington DE 19808, USA.
|
4.
|
Registered office: Lawyers Incorporating Service, 10 Ferry Street, Suite 313, Concord NH 03301, USA.
|
5.
|
Registered office: National Registered Agents, Inc., 301 S. Bedford St. Suite 1 Madison, WI 53703, USA.
|
6.
|
Registered office: Corporation Service Company, 80 State Street, Albany NY 12207-2543, USA.
|
7.
|
Registered office: National Registered Agents, Inc., 30600 Telegraph Road, Suite2345, Bingham Farms, MI 48025-5720, USA.
|
8.
|
Registered office: 10710 Town Square Drive NE, Suite 201 Minneapolis, MN 55449, USA.
|
9.
|
Registered office: Corporation Service Company, 222 Jefferson Boulevard, Suite 200, Warwick RI 02888, USA.
|
*
|
In liquidation.
|
**
|
Entered liquidation 29 April 2020.
|
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: Harvard Business Services, Inc., 16192 Coastal Highway, Lewes DE 19958, Sussex County, USA.
|
6.
|
Registered office: De Maximus Inc., 135 Beaver Street, 4th Floor, Waltham MA 02452, USA.
|
7.
|
Registered office: Joseph D Fay, 321 Old Ferry Road, Wiscasset ME 04578, USA.
|
8.
|
Registered office: Corporation Service Company, 80 State Street, Albany NY 12207, USA.
|
9.
|
Registered office: Karen Sucharzewski, 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.
|
***
|
NGV US Distributed Energy Inc. owns 1,000 Class A Membership Interests.
|
†
|
National Grid Electricity Transmission plc owns 50 £1.00 A Ordinary shares.
|
‡
|
In administration.
|
In order to give a clearer picture of the impact on our results or financial position of potential changes in significant estimates and assumptions, the following sensitivities are presented. These sensitivities are 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.
|
|
2020
|
|
2019
|
||||||
|
Income
statement
£m
|
|
Net
assets
£m
|
|
|
Income
statement
£m
|
|
Net
assets
£m
|
|
Pensions and other post-retirement benefit liabilities (pre-tax)¹:
|
|
|
|
|
|
||||
UK discount rate change of 0.5%²
|
6
|
|
877
|
|
|
6
|
|
1,064
|
|
US discount rate change of 0.5%²
|
10
|
|
514
|
|
|
16
|
|
688
|
|
UK RPI rate change of 0.5%³
|
4
|
|
670
|
|
|
4
|
|
908
|
|
UK long-term rate of increase in salaries change of 0.5%
|
1
|
|
39
|
|
|
1
|
|
56
|
|
US long-term rate of increase in salaries change of 0.5%
|
2
|
|
47
|
|
|
2
|
|
46
|
|
UK change of one year to life expectancy at age 654
|
1
|
|
545
|
|
|
1
|
|
610
|
|
US change of one year to life expectancy at age 65
|
4
|
|
456
|
|
|
4
|
|
406
|
|
Assumed US healthcare cost trend rates change of 1%
|
31
|
|
507
|
|
|
32
|
|
503
|
|
|
|
|
|
|
|
||||
Pension assets:
|
|
|
|
|
|
||||
Change in value of unquoted equities by 10%
|
—
|
|
381
|
|
|
—
|
|
415
|
|
Change in value of unquoted properties by 10%
|
—
|
|
89
|
|
|
—
|
|
107
|
|
Change in value of unquoted diversified alternatives by 10%
|
—
|
|
152
|
|
|
—
|
|
142
|
|
|
|
|
|
|
|
||||
Environmental provision:
|
|
|
|
|
|
||||
10% change in estimated future cash flows
|
210
|
|
210
|
|
|
165
|
|
165
|
|
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. In the UK, there would also be a £205 million net assets offset from the buy-in policies purchased in the year, where the accounting value of the buy-in asset is set equal to the associated liabilities.
|
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. The buy-in policies purchased during the year would have a £152 million net assets offset to the above.
|
4.
|
In the UK, the buy-in policies purchased during the year, and the longevity swap entered into previously, would have a £223 million net assets offset to the above.
|
•
|
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 2020 and 2019 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.
|
|
2020
|
|
2019
|
||||||
|
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
|
|
—
|
|
|
27
|
|
—
|
|
UK interest rates change of 0.5%
|
14
|
|
47
|
|
|
16
|
|
13
|
|
US interest rates change of 0.5%
|
5
|
|
27
|
|
|
11
|
|
44
|
|
US dollar exchange rate change of 10%²
|
49
|
|
216
|
|
|
53
|
|
246
|
|
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 £1,319 million (2019: £1,119 million) in the opposite direction if the dollar exchange rate changed by 10%.
|
|
2020
|
|
2019
|
||||||
|
Income
statement
£m
|
|
Net
assets
£m
|
|
|
Income
statement
£m
|
|
Net
assets
£m
|
|
Commodity price risk (post-tax):
|
|
|
|
|
|
||||
10% increase in commodity prices
|
26
|
|
26
|
|
|
26
|
|
26
|
|
10% decrease in commodity prices
|
(27
|
)
|
(27
|
)
|
|
(27
|
)
|
(27
|
)
|
|
|
|
|
|
|
||||
Assets and liabilities carried at fair value (post-tax):
|
|
|
|
|
|
||||
10% fair value change in derivative financial instruments¹
|
12
|
|
12
|
|
|
(3
|
)
|
(3
|
)
|
10% fair value change in commodity contract derivative liabilities
|
9
|
|
9
|
|
|
—
|
|
—
|
|
1.
|
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.
|
|
National Grid plc and Niagara Mohawk Power Corporation combined
£m
|
|
|
Combined statement of financial position
|
|
||
Non-current loans to other subsidiaries
|
363
|
|
|
Non-current assets
|
8,939
|
|
|
Current loans to other subsidiaries
|
12,435
|
|
|
Current assets
|
1,378
|
|
|
Current loans from other subsidiaries
|
(16,226
|
)
|
|
Current liabilities
|
(1,648
|
)
|
|
Non-current loans from other subsidiaries
|
(2,105
|
)
|
|
Non-current liabilities
|
(5,460
|
)
|
|
Net liabilities¹
|
(2,324
|
)
|
|
Equity
|
(2,324
|
)
|
|
|
|
||
Combined income statement – continuing operations
|
|
||
Revenue
|
2,365
|
|
|
Operating costs
|
(2,131
|
)
|
|
Operating profit
|
234
|
|
|
Other income from other subsidiaries
|
3,888
|
|
|
Other income and costs, including taxation
|
(428
|
)
|
|
Profit after tax
|
3,694
|
|
1.
|
Excluded from net liabilities above are investments in other consolidated subsidiaries with a carrying value of £14,362 million.
|
Impact of transition
|
31 March 2019
As previously reported |
|
|
IFRS 16
transition adjustments |
|
|
1 April 2019
As restated |
|
£m
|
|
|
£m
|
|
|
£m
|
|
|
Property, plant and equipment – Right-of-use assets
|
|
|
|
|
|
|||
Land and buildings
|
2,560
|
|
|
381
|
|
|
2,941
|
|
Plant and machinery
|
36,589
|
|
|
67
|
|
|
36,656
|
|
Assets in the course of construction
|
4,425
|
|
|
—
|
|
|
4,425
|
|
Motor vehicles and office equipment
|
339
|
|
|
20
|
|
|
359
|
|
Total property, plant and equipment
|
43,913
|
|
|
468
|
|
|
44,381
|
|
Borrowings – Lease liabilities
|
|
|
|
|
|
|||
Current
|
(65
|
)
|
|
(48
|
)
|
|
(113
|
)
|
Non-current
|
(205
|
)
|
|
(426
|
)
|
|
(631
|
)
|
Total lease liabilities
|
(270
|
)
|
|
(474
|
)
|
|
(744
|
)
|
Other liabilities
|
|
|
|
|
|
|||
Trade and other payables
|
(3,769
|
)
|
|
3
|
|
|
(3,766
|
)
|
Other non-current liabilities
|
(808
|
)
|
|
3
|
|
|
(805
|
)
|
|
|
|
|
|
|
|||
Net assets
|
19,369
|
|
|
—
|
|
|
19,369
|
|
|
|
|
|
|
|
|||
Equity
|
|
|
|
|
|
|||
Total equity
|
19,369
|
|
|
—
|
|
|
19,369
|
|
Impact of transition
|
31 March 2018
As previously reported 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
|
)
|
|
—
|
|
597
|
|
|
(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
|
)
|
|
—
|
|
5677
|
|
|
(750
|
)
|
Contract liabilities
|
—
|
|
|
—
|
|
(813)7
|
|
|
(813
|
)
|
Deferred tax liabilities
|
(3,636
|
)
|
|
54
|
|
748
|
|
|
(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
|
)
|
|
726
|
|
—
|
|
|
(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 was 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 did not alter 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 were 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, were 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 did not have 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 did not have 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 included 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 was recognised on the adjustments recorded on the transition to IFRS 9. Reserve impacts are stated net of related deferred tax.
|
5.
|
Retained earnings included the impact from adjustments 1, 3 and 6.
|
6.
|
The Group 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) were 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 were deferred as contract liabilities on our consolidated statement of financial position on transition, and released over the life of the connection assets. This was 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 were recognised as the works are completed. This was 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 were reclassified to contract liabilities. In addition, these liabilities for capital works relating to connections have increased as these capital contributions for connections were cumulatively adjusted for on 1 April 2018 and are now deferred and released over the life of the connection assets. This was 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 was 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 reflected the net of adjustments 7 and 8 above.
|
|
£m
|
|
Intangible assets
|
5
|
|
Property, plant and equipment
|
1
|
|
Investment in joint venture – Emerald
|
90
|
|
Cash
|
2
|
|
Other identifiable assets and liabilities
|
30
|
|
Total identifiable assets
|
128
|
|
Goodwill
|
81
|
|
Total consideration transferred
|
209
|
|
|
|
|
Satisfied by:
|
|
|
Contingent consideration – Geronimo
|
70
|
|
Cash consideration – Geronimo
|
49
|
|
Cash consideration – Emerald
|
90
|
|
|
209
|
|
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.
|
|
|
|
2020
|
|
2019
|
|
|
Notes
|
|
£m
|
|
£m
|
|
Fixed assets
|
|
|
|
|
||
Investments
|
1
|
|
14,362
|
|
9,923
|
|
|
|
|
|
|
||
Current assets
|
|
|
|
|
||
Debtors (amounts falling due within one year)
|
2
|
|
12,427
|
|
12,625
|
|
Debtors (amounts falling due after more than one year)
|
2
|
|
398
|
|
358
|
|
Investments
|
5
|
|
752
|
|
895
|
|
Cash at bank and in hand
|
|
|
2
|
|
75
|
|
Total current assets
|
|
|
13,579
|
|
13,953
|
|
|
|
|
|
|
||
Creditors (amounts falling due within one year)
|
3
|
|
(16,836
|
)
|
(15,529
|
)
|
Net current liabilities
|
|
|
(3,257
|
)
|
(1,576
|
)
|
Total assets less current liabilities
|
|
|
11,105
|
|
8,347
|
|
|
|
|
|
|
||
Creditors (amounts falling due after more than one year)
|
3
|
|
(2,620
|
)
|
(2,648
|
)
|
Net assets
|
|
|
8,485
|
|
5,699
|
|
|
|
|
|
|
||
Equity
|
|
|
|
|
||
Share capital
|
7
|
|
470
|
|
458
|
|
Share premium account
|
|
|
1,301
|
|
1,314
|
|
Cash flow hedge reserve
|
|
|
(28
|
)
|
1
|
|
Cost of hedging reserve
|
|
|
(6
|
)
|
—
|
|
Other equity reserves
|
|
|
399
|
|
380
|
|
Profit and loss account
|
8
|
|
6,349
|
|
3,546
|
|
Total shareholders’ equity
|
|
|
8,485
|
|
5,699
|
|
|
Share
capital
£m
|
|
Share
premium account
£m
|
|
Cash flow
hedge reserve
£m
|
|
Cost of hedging reserve
£m
|
|
Other
equity reserves
£m
|
|
Profit
and loss
account
£m
|
|
Total shareholders’
equity
£m
|
|
At 1 April 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 (net of tax)
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
Total comprehensive loss for the year
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
(202
|
)
|
(203
|
)
|
Other equity movements
|
|
|
|
|
|
|
|
|||||||
Scrip dividend-related share issue¹
|
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
|
|
Profit for the year²
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,684
|
|
3,684
|
|
Other comprehensive (loss)/profit for the year
|
|
|
|
|
|
|
|
|||||||
Transferred from equity (net of tax)
|
—
|
|
—
|
|
(29
|
)
|
(6
|
)
|
—
|
|
—
|
|
(35
|
)
|
Total comprehensive (loss)/profit for the year
|
—
|
|
—
|
|
(29
|
)
|
(6
|
)
|
—
|
|
3,684
|
|
3,649
|
|
Other equity movements
|
|
|
|
|
|
|
|
|||||||
Scrip dividend-related share issue¹
|
12
|
|
(13
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
Issue of treasury shares
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
17
|
|
17
|
|
Purchase of own shares
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(6
|
)
|
(6
|
)
|
Share awards to employees of subsidiary undertakings
|
—
|
|
—
|
|
—
|
|
—
|
|
19
|
|
—
|
|
19
|
|
Equity dividends
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(892
|
)
|
(892
|
)
|
At 31 March 2020
|
470
|
|
1,301
|
|
(28
|
)
|
(6
|
)
|
399
|
|
6,349
|
|
8,485
|
|
1.
|
Included within the share premium account are costs associated with scrip dividends.
|
2.
|
Included within profit for the year is dividend income from subsidiaries of £3,887 million (2019: £nil).
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Amounts falling due within one year
|
|
|
||
Derivative financial instruments (see note 4)
|
37
|
|
110
|
|
Amounts owed by subsidiary undertakings
|
12,390
|
|
12,514
|
|
Prepayments and accrued income
|
—
|
|
1
|
|
|
12,427
|
|
12,625
|
|
Amounts falling due after more than one year
|
|
|
||
Derivative financial instruments (see note 4)
|
27
|
|
—
|
|
Amounts owed by subsidiary undertakings
|
363
|
|
358
|
|
Deferred tax
|
8
|
|
—
|
|
|
398
|
|
358
|
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Amounts falling due within one year
|
|
|
||
Borrowings (see note 6)
|
666
|
|
1,275
|
|
Derivative financial instruments (see note 4)
|
278
|
|
92
|
|
Amounts owed to subsidiary undertakings
|
15,834
|
|
14,104
|
|
Other creditors
|
58
|
|
58
|
|
|
16,836
|
|
15,529
|
|
Amounts falling due after more than one year
|
|
|
||
Borrowings (see note 6)
|
355
|
|
346
|
|
Derivative financial instruments (see note 4)
|
160
|
|
228
|
|
Amounts owed to subsidiary undertakings
|
2,105
|
|
2,074
|
|
|
2,620
|
|
2,648
|
|
Amounts owed to subsidiary undertakings falling due after more than one year are repayable as follows:
|
|
|
||
In 1 to 2 years
|
—
|
|
1,077
|
|
In 4 to 5 years
|
443
|
|
—
|
|
More than 5 years
|
1,662
|
|
997
|
|
|
2,105
|
|
2,074
|
|
|
2020
|
|
2019
|
||||||||||
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
|
Assets
£m
|
|
Liabilities
£m
|
|
Total
£m
|
|
Amounts falling due within one year
|
37
|
|
(278
|
)
|
(241
|
)
|
|
110
|
|
(92
|
)
|
18
|
|
Amounts falling due after more than one year
|
27
|
|
(160
|
)
|
(133
|
)
|
|
—
|
|
(228
|
)
|
(228
|
)
|
|
64
|
|
(438
|
)
|
(374
|
)
|
|
110
|
|
(320
|
)
|
(210
|
)
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Interest rate swaps
|
—
|
|
(1,208
|
)
|
Cross-currency interest rate swaps
|
(3,804
|
)
|
(2,900
|
)
|
Foreign exchange forward contracts
|
(7,886
|
)
|
(7,920
|
)
|
|
(11,690
|
)
|
(12,028
|
)
|
1.
|
The notional contract amounts of derivatives indicate the gross nominal value of transactions outstanding at the balance sheet date.
|
|
2020
|
2019
|
||
|
£m
|
|
£m
|
|
Investments in short-term money funds
|
572
|
|
672
|
|
Restricted balances – collateral
|
180
|
|
223
|
|
|
752
|
|
895
|
|
|
2020
|
|
2019
|
|
|
£m
|
|
£m
|
|
Amounts falling due within one year
|
|
|
||
Bank loans
|
46
|
|
—
|
|
Bonds
|
2
|
|
435
|
|
Commercial paper
|
618
|
|
840
|
|
|
666
|
|
1,275
|
|
Amounts falling due after more than one year
|
|
|
||
Bonds
|
355
|
|
346
|
|
|
1,021
|
|
1,621
|
|
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
|
Gross revenue
|
|
Pass- through costs
|
|
Net revenue
|
|
|
Gross revenue
|
|
Pass-through costs
|
|
Net revenue
|
|
|
Gross revenue
|
|
Pass-through costs
|
|
Net revenue
|
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|||||||||
UK Electricity Transmission
|
3,702
|
|
(1,528
|
)
|
2,174
|
|
|
3,351
|
|
(1,397
|
)
|
1,954
|
|
|
4,154
|
|
(2,243
|
)
|
1,911
|
|
UK Gas Transmission
|
927
|
|
(242
|
)
|
685
|
|
|
896
|
|
(227
|
)
|
669
|
|
|
1,091
|
|
(257
|
)
|
834
|
|
US Regulated
|
9,205
|
|
(3,460
|
)
|
5,745
|
|
|
9,846
|
|
(3,978
|
)
|
5,868
|
|
|
9,272
|
|
(3,804
|
)
|
5,468
|
|
NGV and Other
|
736
|
|
—
|
|
736
|
|
|
876
|
|
—
|
|
876
|
|
|
776
|
|
—
|
|
776
|
|
Sales between segments
|
(30
|
)
|
—
|
|
(30
|
)
|
|
(36
|
)
|
—
|
|
(36
|
)
|
|
(43
|
)
|
—
|
|
(43
|
)
|
Total
|
14,540
|
|
(5,230
|
)
|
9,310
|
|
|
14,933
|
|
(5,602
|
)
|
9,331
|
|
|
15,250
|
|
(6,304
|
)
|
8,946
|
|
Year ended 31 March 2020
|
Statutory
|
|
Exceptionals and remeasurements
|
|
Adjusted
|
|
Timing
|
|
Major storm costs
|
|
Underlying
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
UK Electricity Transmission
|
1,316
|
|
4
|
|
1,320
|
|
(146
|
)
|
—
|
|
1,174
|
|
UK Gas Transmission
|
347
|
|
1
|
|
348
|
|
54
|
|
—
|
|
402
|
|
US Regulated
|
880
|
|
517
|
|
1,397
|
|
239
|
|
—
|
|
1,636
|
|
NGV and Other
|
237
|
|
5
|
|
242
|
|
—
|
|
—
|
|
242
|
|
Total operating profit
|
2,780
|
|
527
|
|
3,307
|
|
147
|
|
—
|
|
3,454
|
|
Net finance costs
|
(1,113
|
)
|
64
|
|
(1,049
|
)
|
—
|
|
—
|
|
(1,049
|
)
|
Share of post-tax results of joint ventures and associates
|
87
|
|
1
|
|
88
|
|
—
|
|
—
|
|
88
|
|
Profit before tax
|
1,754
|
|
592
|
|
2,346
|
|
147
|
|
—
|
|
2,493
|
|
Tax
|
(480
|
)
|
47
|
|
(433
|
)
|
(45
|
)
|
—
|
|
(478
|
)
|
Profit after tax
|
1,274
|
|
639
|
|
1,913
|
|
102
|
|
—
|
|
2,015
|
|
Year ended 31 March 2019
|
Statutory
|
|
Exceptionals and remeasurements
|
|
Adjusted
|
|
Timing
|
|
Major storm
costs
|
|
Underlying
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
UK Electricity Transmission
|
778
|
|
237
|
|
1,015
|
|
77
|
|
—
|
|
1,092
|
|
UK Gas Transmission
|
267
|
|
36
|
|
303
|
|
38
|
|
—
|
|
341
|
|
US Regulated
|
1,425
|
|
299
|
|
1,724
|
|
(223
|
)
|
93
|
|
1,594
|
|
NGV and Other
|
400
|
|
—
|
|
400
|
|
—
|
|
—
|
|
400
|
|
Total operating profit
|
2,870
|
|
572
|
|
3,442
|
|
(108
|
)
|
93
|
|
3,427
|
|
Net finance costs
|
(1,069
|
)
|
76
|
|
(993
|
)
|
—
|
|
—
|
|
(993
|
)
|
Share of post-tax results of joint ventures and associates
|
40
|
|
—
|
|
40
|
|
—
|
|
—
|
|
40
|
|
Profit before tax
|
1,841
|
|
648
|
|
2,489
|
|
(108
|
)
|
93
|
|
2,474
|
|
Tax
|
(339
|
)
|
(149
|
)
|
(488
|
)
|
36
|
|
(24
|
)
|
(476
|
)
|
Profit after tax
|
1,502
|
|
499
|
|
2,001
|
|
(72
|
)
|
69
|
|
1,998
|
|
Year ended 31 March 2018
|
Statutory
|
|
Exceptionals and remeasurements
|
|
Adjusted
|
|
Timing
|
|
Major storm
costs
|
|
Underlying
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
UK Electricity Transmission
|
1,041
|
|
—
|
|
1,041
|
|
14
|
|
—
|
|
1,055
|
|
UK Gas Transmission
|
487
|
|
—
|
|
487
|
|
18
|
|
—
|
|
505
|
|
US Regulated
|
1,734
|
|
(36
|
)
|
1,698
|
|
(136
|
)
|
142
|
|
1,704
|
|
NGV and Other
|
231
|
|
—
|
|
231
|
|
—
|
|
—
|
|
231
|
|
Total operating profit
|
3,493
|
|
(36
|
)
|
3,457
|
|
(104
|
)
|
142
|
|
3,495
|
|
Net finance costs
|
(882
|
)
|
(119
|
)
|
(1,001
|
)
|
—
|
|
—
|
|
(1,001
|
)
|
Share of post-tax results of joint ventures and associates
|
49
|
|
(5
|
)
|
44
|
|
—
|
|
—
|
|
44
|
|
Profit before tax
|
2,660
|
|
(160
|
)
|
2,500
|
|
(104
|
)
|
142
|
|
2,538
|
|
Tax
|
889
|
|
(1,473
|
)
|
(584
|
)
|
42
|
|
(51
|
)
|
(593
|
)
|
Profit after tax
|
3,549
|
|
(1,633
|
)
|
1,916
|
|
(62
|
)
|
91
|
|
1,945
|
|
|
At constant currency
|
|||||||||||
Adjusted
at actual exchange rate
|
|
Constant currency adjustment
|
|
Adjusted
|
|
Timing
|
|
Major storm
costs
|
|
Underlying
|
|
|
Year ended 31 March 2019
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
UK Electricity Transmission
|
1,015
|
|
—
|
|
1,015
|
|
77
|
|
—
|
|
1,092
|
|
UK Gas Transmission
|
303
|
|
—
|
|
303
|
|
38
|
|
—
|
|
341
|
|
US Regulated
|
1,724
|
|
25
|
|
1,749
|
|
(226
|
)
|
94
|
|
1,617
|
|
NGV and Other
|
400
|
|
1
|
|
401
|
|
—
|
|
—
|
|
401
|
|
Total operating profit
|
3,442
|
|
26
|
|
3,468
|
|
(111
|
)
|
94
|
|
3,451
|
|
Net finance costs
|
(993
|
)
|
(11
|
)
|
(1,004
|
)
|
—
|
|
—
|
|
(1,004
|
)
|
Share of post-tax results of joint ventures and associates
|
40
|
|
—
|
|
40
|
|
—
|
|
—
|
|
40
|
|
Profit before tax
|
2,489
|
|
15
|
|
2,504
|
|
(111
|
)
|
94
|
|
2,487
|
|
|
At constant currency
|
|||||||||||
Adjusted
at actual exchange rate
|
|
Constant currency adjustment
|
|
Adjusted
|
|
Timing
|
|
Major storm
costs
|
|
Underlying
|
|
|
Year ended 31 March 2018
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
UK Electricity Transmission
|
1,041
|
|
—
|
|
1,041
|
|
14
|
|
—
|
|
1,055
|
|
UK Gas Transmission
|
487
|
|
—
|
|
487
|
|
18
|
|
—
|
|
505
|
|
US Regulated
|
1,698
|
|
94
|
|
1,792
|
|
(144
|
)
|
150
|
|
1,798
|
|
NGV and Other
|
231
|
|
(4
|
)
|
227
|
|
—
|
|
—
|
|
227
|
|
Total operating profit
|
3,457
|
|
90
|
|
3,547
|
|
(112
|
)
|
150
|
|
3,585
|
|
Net finance costs
|
(1,001
|
)
|
(38
|
)
|
(1,039
|
)
|
—
|
|
—
|
|
(1,039
|
)
|
Share of post-tax results of joint ventures and associates
|
44
|
|
1
|
|
45
|
|
—
|
|
—
|
|
45
|
|
Profit before tax
|
2,500
|
|
53
|
|
2,553
|
|
(112
|
)
|
150
|
|
2,591
|
|
|
Profit
after tax
|
|
Non-
controlling
interest
|
|
Profit after tax
attributable to
shareholders
|
|
Weighted average
number of shares
|
|
Earnings
per share
|
|
Year ended 31 March 2020
|
£m
|
|
£m
|
|
£m
|
|
millions
|
|
pence
|
|
Statutory
|
1,274
|
|
(1
|
)
|
1,273
|
|
3,461
|
|
36.8
|
|
Adjusted (also referred to as Headline)
|
1,913
|
|
(1
|
)
|
1,912
|
|
3,461
|
|
55.2
|
|
Underlying
|
2,015
|
|
(1
|
)
|
2,014
|
|
3,461
|
|
58.2
|
|
|
Profit
after tax
|
|
Non-
controlling
interest
|
|
Profit after tax
attributable to
shareholders
|
|
Weighted average
number of shares
|
|
Earnings
per share
|
|
Year ended 31 March 2019
|
£m
|
|
£m
|
|
£m
|
|
millions
|
|
pence
|
|
Statutory
|
1,502
|
|
(3
|
)
|
1,499
|
|
3,386
|
|
44.3
|
|
Adjusted (also referred to as Headline)
|
2,001
|
|
(3
|
)
|
1,998
|
|
3,386
|
|
59.0
|
|
Underlying
|
1,998
|
|
(3
|
)
|
1,995
|
|
3,386
|
|
58.9
|
|
|
Profit
after tax
|
|
Non-
controlling
interest
|
|
Profit after tax
attributable to
shareholders
|
|
Weighted average
number of shares
|
|
Earnings
per share
|
|
Year ended 31 March 2018
|
£m
|
|
£m
|
|
£m
|
|
millions
|
|
pence
|
|
Statutory
|
3,549
|
|
(1
|
)
|
3,548
|
|
3,461
|
|
102.5
|
|
Adjusted (also referred to as Headline)
|
1,916
|
|
(1
|
)
|
1,915
|
|
3,461
|
|
55.3
|
|
Underlying
|
1,945
|
|
(1
|
)
|
1,944
|
|
3,461
|
|
56.2
|
|
|
UK Electricity
Transmission
|
|
UK Gas
Transmission
|
|
US Regulated
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
1 April 2019 opening balance¹
|
(127
|
)
|
59
|
|
471
|
|
403
|
|
Over/(under) recovery
|
146
|
|
(54
|
)
|
(239
|
)
|
(147
|
)
|
31 March 2020 closing balance to (recover)/return³
|
19
|
|
5
|
|
232
|
|
256
|
|
|
UK Electricity
Transmission
|
|
UK Gas
Transmission
|
|
US Regulated
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
1 April 2018 opening balance¹
|
(41
|
)
|
97
|
|
245
|
|
301
|
|
Over/(under) recovery
|
(77
|
)
|
(38
|
)
|
226
|
|
111
|
|
31 March 2019 closing balance to (recover)/return2,3
|
(118
|
)
|
59
|
|
471
|
|
412
|
|
|
UK Electricity
Transmission
|
|
UK Gas
Transmission
|
|
US Regulated
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
1 April 2017 opening balance¹
|
(30
|
)
|
111
|
|
108
|
|
189
|
|
Over/(under) recovery
|
(14
|
)
|
(18
|
)
|
143
|
|
111
|
|
31 March 2018 closing balance to (recover)/return2,3
|
(44
|
)
|
93
|
|
251
|
|
300
|
|
1.
|
Opening balances have been restated to reflect the finalisation of calculated over/(under)-recoveries in the UK and the US.
|
2.
|
US over/(under) recovery and all US Regulated balances have been translated using the average exchange rate for the year ended 31 March 2020.
|
3.
|
The over-recovered closing balance at 31 March 2020 was £264 million (translated at the closing rate of $1.24:£1). 31 March 2019 was £407 million (translated at the closing rate of $1.30:£1).
|
Year ended 31 March
|
At actual exchange rates
|
|
At constant currency
|
||||||||||
|
2020
|
|
2019
|
|
% change
|
|
|
2020
|
|
2019
|
|
% change
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
||||
UK Electricity Transmission
|
1,043
|
|
925
|
|
13
|
|
|
1,043
|
|
925
|
|
13
|
|
UK Gas Transmission
|
249
|
|
308
|
|
(19
|
)
|
|
249
|
|
308
|
|
(19
|
)
|
US Regulated
|
3,228
|
|
2,650
|
|
22
|
|
|
3,228
|
|
2,688
|
|
20
|
|
NGV and Other
|
559
|
|
438
|
|
28
|
|
|
559
|
|
439
|
|
27
|
|
Group capital expenditure
|
5,079
|
|
4,321
|
|
18
|
|
|
5,079
|
|
4,360
|
|
16
|
|
Equity investment, funding contributions and loans to joint ventures and associates¹
|
56
|
|
127
|
|
(56
|
)
|
|
56
|
|
128
|
|
(56
|
)
|
Acquisition of Geronimo and Emerald
|
209
|
|
—
|
|
n/a
|
|
|
209
|
|
—
|
|
n/a
|
|
Increase in financial assets (National Grid Partners)
|
61
|
|
58
|
|
5
|
|
|
61
|
|
59
|
|
3
|
|
Group capital investment
|
5,405
|
|
4,506
|
|
20
|
|
|
5,405
|
|
4,547
|
|
19
|
|
1.
|
Excludes £15 million (2019: £47 million) equity contribution to the St William Homes LLP joint venture.
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
|
|
£m
|
|
£m
|
|
£m
|
|
Cash flows from operating activities
|
|
|
|
|
|
|||
Total operating profit from continuing operations
|
|
|
2,780
|
|
2,870
|
|
3,493
|
|
Adjustments for:
|
|
|
|
|
|
|||
Exceptional items and remeasurements
|
|
|
527
|
|
572
|
|
(36
|
)
|
Depreciation, amortisation and impairment
|
|
|
1,640
|
|
1,588
|
|
1,530
|
|
Share-based payments
|
|
|
19
|
|
27
|
|
16
|
|
Changes in working capital
|
|
|
269
|
|
40
|
|
118
|
|
Changes in provisions
|
|
|
(169
|
)
|
(110
|
)
|
(206
|
)
|
Changes in pensions and other post-retirement benefit obligations
|
|
|
(92
|
)
|
(123
|
)
|
(239
|
)
|
Cash flows relating to exceptional items
|
|
|
(60
|
)
|
(400
|
)
|
26
|
|
Cash generated from operations – continuing operations
|
|
|
4,914
|
|
4,464
|
|
4,702
|
|
Tax (paid)/recovered
|
|
|
(199
|
)
|
(75
|
)
|
8
|
|
Net cash inflow from operating activities – continuing operations
|
|
|
4,715
|
|
4,389
|
|
4,710
|
|
|
2020
|
|
2019¹
|
|
2018¹
|
|
Year ended 31 March
|
£m
|
|
£m
|
|
£m
|
|
Interest expense (income statement)
|
1,119
|
|
1,066
|
|
1,128
|
|
Hybrid interest reclassified as dividend
|
(39
|
)
|
(51
|
)
|
(51
|
)
|
Capitalised interest
|
122
|
|
135
|
|
128
|
|
Pensions interest adjustment
|
16
|
|
(4
|
)
|
(49
|
)
|
Interest on lease rentals adjustment
|
—
|
|
11
|
|
16
|
|
Unwinding of discount on provisions
|
(77
|
)
|
(74
|
)
|
(75
|
)
|
Other interest adjustments
|
—
|
|
1
|
|
12
|
|
Adjusted interest expense
|
1,141
|
|
1,084
|
|
1,109
|
|
Net cash inflow from operating activities
|
4,715
|
|
4,389
|
|
4,710
|
|
Interest received on financial instruments
|
73
|
|
68
|
|
57
|
|
Interest paid on financial instruments
|
(957
|
)
|
(914
|
)
|
(853
|
)
|
Dividends received
|
75
|
|
201
|
|
213
|
|
Working capital adjustment
|
(269
|
)
|
(40
|
)
|
(118
|
)
|
Excess employer pension contributions
|
176
|
|
260
|
|
211
|
|
Hybrid interest reclassified as dividend
|
39
|
|
51
|
|
51
|
|
Lease rentals
|
—
|
|
34
|
|
86
|
|
Difference in net interest expense in income statement to cash flow
|
(187
|
)
|
(186
|
)
|
(178
|
)
|
Difference in current tax in income statement to cash flow
|
67
|
|
(13
|
)
|
(206
|
)
|
Current tax related to prior periods
|
(45
|
)
|
(52
|
)
|
(22
|
)
|
Cash flow from discontinued operations
|
(97
|
)
|
(71
|
)
|
(207
|
)
|
Funds from operations (FFO)
|
3,590
|
|
3,727
|
|
3,744
|
|
FFO interest cover ((FFO + adjusted interest expense)/adjusted interest expense)
|
4.1
|
x
|
4.4
|
x
|
4.4
|
x
|
1.
|
Numbers for 2019 and 2018 reflect the calculations for the total Group as based on the published accounts for the respective years.
|
|
2020
|
|
2019
|
|
2018
|
|
Year ended 31 March
|
£m
|
|
£m
|
|
£m
|
|
Funds from operations (FFO)
|
3,590
|
|
3,727
|
|
3,744
|
|
Hybrid interest reclassified as dividend
|
(39
|
)
|
(51
|
)
|
(51
|
)
|
Ordinary dividends paid to shareholders
|
(892
|
)
|
(1,160
|
)
|
(1,316
|
)
|
RCF (excluding share buybacks)
|
2,659
|
|
2,516
|
|
2,377
|
|
Repurchase of shares
|
—
|
|
—
|
|
(178
|
)
|
RCF (net of share buybacks)
|
2,659
|
|
2,516
|
|
2,199
|
|
Borrowings
|
30,794
|
|
28,730
|
|
26,625
|
|
Less:
|
|
|
|
|||
50% hybrid debt
|
(1,054
|
)
|
(1,039
|
)
|
(1,050
|
)
|
Cash and cash equivalents
|
(73
|
)
|
(252
|
)
|
(329
|
)
|
Financial and other investments
|
(1,278
|
)
|
(1,311
|
)
|
(2,304
|
)
|
Underfunded pension obligations
|
1,442
|
|
845
|
|
857
|
|
Operating leases adjustment
|
—
|
|
248
|
|
408
|
|
Derivative balances removed from debt
|
(116
|
)
|
141
|
|
(479
|
)
|
Currency swaps
|
203
|
|
38
|
|
117
|
|
Nuclear decommissioning liabilities reclassified as debt
|
6
|
|
18
|
|
5
|
|
Collateral – cash received under collateral agreements
|
(785
|
)
|
(558
|
)
|
(878
|
)
|
Accrued interest removed from short-term debt
|
(246
|
)
|
(223
|
)
|
(195
|
)
|
Adjusted net debt (includes pension deficit)
|
28,893
|
|
26,637
|
|
22,777
|
|
RCF (excluding share buybacks)/adjusted net debt
|
9.2
|
%
|
9.4
|
%
|
10.4
|
%
|
RCF (net of share buybacks)/adjusted net debt
|
9.2
|
%
|
9.4
|
%
|
9.7
|
%
|
|
2020
|
|
2019
|
|
2018
|
|
Year ended 31 March
|
£m
|
|
£m
|
|
£m
|
|
Adjusted operating profit
|
1,320
|
|
1,015
|
|
1,041
|
|
Movement in regulatory ‘IOUs’
|
(99
|
)
|
174
|
|
51
|
|
Deferred taxation adjustment
|
63
|
|
64
|
|
70
|
|
RAV indexation (average 3% long-run inflation)
|
406
|
|
391
|
|
374
|
|
Regulatory vs IFRS depreciation difference
|
(459
|
)
|
(394
|
)
|
(377
|
)
|
Fast money/other
|
26
|
|
72
|
|
69
|
|
Pensions
|
(52
|
)
|
(51
|
)
|
(49
|
)
|
Performance RAV created
|
119
|
|
90
|
|
83
|
|
Regulated financial performance
|
1,324
|
|
1,361
|
|
1,262
|
|
|
2020
|
|
2019
|
|
2018
|
|
Year ended 31 March
|
£m
|
|
£m
|
|
£m
|
|
Adjusted operating profit
|
348
|
|
303
|
|
487
|
|
Movement in regulatory ‘IOUs’
|
67
|
|
68
|
|
(91
|
)
|
Deferred taxation adjustment
|
25
|
|
8
|
|
18
|
|
RAV indexation (average 3% long-run inflation)
|
185
|
|
179
|
|
173
|
|
Regulatory vs IFRS depreciation difference
|
(77
|
)
|
(42
|
)
|
(29
|
)
|
Fast money/other
|
(17
|
)
|
(10
|
)
|
(11
|
)
|
Pensions
|
(34
|
)
|
(33
|
)
|
(32
|
)
|
Performance RAV created
|
(24
|
)
|
(30
|
)
|
(16
|
)
|
Regulated financial performance
|
473
|
|
443
|
|
499
|
|
|
2020
|
|
2019
|
|
2018
|
|
Year ended 31 March
|
£m
|
|
£m
|
|
£m
|
|
Adjusted operating profit
|
1,397
|
|
1,724
|
|
1,698
|
|
Bad debt provision (COVID-19)¹
|
117
|
|
—
|
|
—
|
|
Major storm costs
|
—
|
|
93
|
|
142
|
|
Timing
|
239
|
|
(223
|
)
|
(136
|
)
|
US GAAP pension adjustment
|
(4
|
)
|
(80
|
)
|
(73
|
)
|
Regulated financial performance
|
1,749
|
|
1,514
|
|
1,631
|
|
Year ended 31 March
(£m at constant currency)
|
RAV, rate base or
other business assets
|
|
Total Regulated
and other balances
|
||||||
2020
|
|
2019¹
|
|
|
2020
|
|
2019¹
|
|
|
£m
|
|
£m
|
|
|
£m
|
|
£m
|
|
|
UK Electricity Transmission
|
14,133
|
|
13,537
|
|
|
13,769
|
|
13,291
|
|
UK Gas Transmission
|
6,298
|
|
6,155
|
|
|
6,305
|
|
6,099
|
|
US Regulated
|
20,644
|
|
18,407
|
|
|
22,435
|
|
20,394
|
|
Total regulated
|
41,075
|
|
38,099
|
|
|
42,509
|
|
39,784
|
|
NGV and other businesses
|
4,105
|
|
3,351
|
|
|
3,591
|
|
2,672
|
|
Total Group regulated and other balances
|
45,180
|
|
41,450
|
|
|
46,100
|
|
42,456
|
|
1.
|
Figures relating to prior periods have, where appropriate, been re-presented at constant currency, for opening balance adjustments following the completion of the UK regulatory reporting pack process in 2019, and finalisation of US balances.
|
•
|
adjusted interest removes interest on pensions, capitalised interest in regulated operations and unwind of discount rate on provisions;
|
•
|
adjusted taxation adjusts the Group taxation charge for differences between IFRS profit before tax and regulated financial performance less adjusted interest; and
|
•
|
equity investment in assets is calculated as the total opening UK regulatory asset value, the total opening US rate base plus goodwill plus opening net book value of National Grid Ventures and Other activities and our share of joint ventures and associates, minus opening net debt as reported under IFRS restated to the weighted average £/$ exchange rate for the year.
|
|
2020
|
|
2019
|
|
2018
|
|
Year ended 31 March
|
£m
|
|
£m
|
|
£m
|
|
Regulated financial performance
|
3,546
|
|
3,318
|
|
3,392
|
|
Operating profit of other activities
|
269
|
|
424
|
|
255
|
|
Group financial performance
|
3,815
|
|
3,742
|
|
3,647
|
|
Share of post-tax results of joint ventures and associates
|
88
|
|
40
|
|
238
|
|
Non-controlling interests
|
(1
|
)
|
(3
|
)
|
(1
|
)
|
Adjusted Group interest charge
|
(1,069
|
)
|
(1,037
|
)
|
(980
|
)
|
Group tax charge
|
(433
|
)
|
(488
|
)
|
(639
|
)
|
Tax on adjustments
|
(117
|
)
|
(34
|
)
|
27
|
|
Group financial performance after interest and tax
|
2,283
|
|
2,220
|
|
2,292
|
|
Opening rate base/RAV
|
37,459
|
|
35,045
|
|
32,446
|
|
Share of Cadent RAV
|
—
|
|
—
|
|
512
|
|
Opening other balances
|
3,304
|
|
2,298
|
|
1,787
|
|
Opening goodwill
|
5,938
|
|
5,852
|
|
5,626
|
|
Opening capital employed
|
46,701
|
|
43,195
|
|
40,371
|
|
Opening net debt
|
(27,194
|
)
|
(24,345
|
)
|
(21,770
|
)
|
Opening equity
|
19,507
|
|
18,850
|
|
18,601
|
|
Return on Equity
|
11.7
|
%
|
11.8
|
%
|
12.3
|
%
|
|
|
Achieved
Return on Equity
|
|
Base or Allowed
Return on Equity
|
||
Year ended 31 March
|
Regulatory
Debt: Equity assumption
|
2020
|
2019
|
|
2020
|
2019
|
%
|
%
|
|
%
|
%
|
||
UK Electricity Transmission
|
60/40
|
13.5
|
13.7
|
|
10.2
|
10.2
|
UK Gas Transmission
|
62.5/37.5
|
9.8
|
9.5
|
|
10.0
|
10.0
|
US Regulated
|
Avg. 50/50
|
9.3
|
8.8
|
|
9.4
|
9.4
|
|
2020
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
Underlying IFRS operating profit for US regulated segment
|
1,636
|
|
1,594
|
|
1,704
|
|
Weighted average £/$ exchange rate
|
$1.2868
|
$1.305
|
$1.358
|
|
2020
|
|
2019
|
|
2018
|
|
|
$m
|
|
$m
|
|
$m
|
|
Underlying IFRS operating profit for US regulated segment
|
2,105
|
|
2,081
|
|
2,313
|
|
Adjustments to convert to US GAAP as applied in our US OpCo entities
|
|
|
|
|||
Adjustment in respect of customer contributions
|
(50
|
)
|
(50
|
)
|
(151
|
)
|
Pension accounting differences¹
|
(13
|
)
|
(10
|
)
|
(101
|
)
|
Environmental charges recorded under US GAAP
|
(94
|
)
|
(117
|
)
|
(106
|
)
|
Storm costs and recoveries recorded under US GAAP
|
(9
|
)
|
(112
|
)
|
(113
|
)
|
Other regulatory deferrals, amortisation and other items
|
3
|
|
121
|
|
(146
|
)
|
Results for US regulated OpCo entities, aggregated under US GAAP²
|
1,942
|
|
1,913
|
|
1,696
|
|
Adjustments to determine regulatory operating profit used in US RoE
|
|
|
|
|||
Levelisation revenue adjustment
|
(122
|
)
|
(48
|
)
|
82
|
|
Adjustment for COVID-19 related provision for bad and doubtful debts³
|
150
|
|
—
|
|
—
|
|
Net other
|
51
|
|
(1
|
)
|
40
|
|
Regulatory operating profit
|
2,021
|
|
1,864
|
|
1,818
|
|
Pensions¹
|
19
|
|
(95
|
)
|
—
|
|
Regulatory interest charge
|
(491
|
)
|
(457
|
)
|
(395
|
)
|
Regulatory tax charge
|
(408
|
)
|
(345
|
)
|
(520
|
)
|
Regulatory earnings used to determine US RoE
|
1,141
|
|
967
|
|
903
|
|
1.
|
Following a change in US GAAP accounting rules, an element of the pensions charge is reported outside operating profit with effect from 2019.
|
2.
|
Based on US GAAP accounting policies as applied by our US regulated OpCo entities.
|
|
2020
|
|
2019
|
|
2018
|
|
|
$m
|
|
$m
|
|
$m
|
|
US equity base (average for the year)
|
12,331
|
|
11,045
|
|
10,092
|
|
US RoE
|
9.3
|
%
|
8.8
|
%
|
8.9
|
%
|
|
2020
|
|
2019
|
|
|
As at 31 March
|
£m
|
|
£m
|
|
|
UK RAV
|
20,431
|
|
19,692
|
|
|
US rate base
|
20,644
|
|
17,565
|
|
|
Other invested capital included in gearing calculation
|
4,105
|
|
2,815
|
|
|
Total assets included in gearing calculation
|
45,180
|
|
40,072
|
|
|
Net debt (including 100% of hybrid debt)
|
(28,590
|
)
|
(26,529
|
)
|
change
|
Group gearing (based on 100% of net debt)
|
63
|
%
|
66
|
%
|
3% pts
|
Group gearing (excluding 50% of hybrid debt from net debt)
|
61
|
%
|
64
|
%
|
3% pts
|
In compliance with SEC rules, we present a summarised analysis of movements in the income statement and an analysis of movements in adjusted operating profit (for the continuing group) by operating segment. This should be read in conjunction with the 31 March 2020 financial review included on pages 28 - 37.
|
|
2018/19
|
|
2017/18
|
|
% change
|
|
Weighted average (income statement)
|
1.31
|
|
1.36
|
|
4
|
%
|
Year-end (statement of financial position)
|
1.30
|
|
1.40
|
|
7
|
%
|
Summary income statement (£m)
|
2020
|
|
2019
|
|
2018¹
|
|
2017
|
|
2016²
|
|
Continuing operations
|
|
|
|
|
|
|||||
Revenue
|
14,540
|
|
14,933
|
|
15,250
|
|
15,035
|
|
13,212
|
|
Operating profit
|
2,780
|
|
2,870
|
|
3,493
|
|
3,208
|
|
3,225
|
|
Profit before tax
|
1,754
|
|
1,841
|
|
2,660
|
|
2,184
|
|
2,329
|
|
Profit after tax from continuing operations
|
1,274
|
|
1,502
|
|
3,549
|
|
1,810
|
|
1,902
|
|
(Loss)/profit after tax from discontinued operations
|
(9
|
)
|
12
|
|
2
|
|
5,984
|
|
692
|
|
Total profit for the year
|
1,265
|
|
1,514
|
|
3,551
|
|
7,794
|
|
2,594
|
|
Profit for the year attributable to equity shareholders
|
1,264
|
|
1,511
|
|
3,550
|
|
7,795
|
|
2,591
|
|
Earnings per share
|
|
|
|
|
|
|||||
Basic – continuing operations (pence)
|
36.8
|
|
44.3
|
|
102.5
|
|
48.1
|
|
50.4
|
|
Diluted – continuing operations (pence)
|
36.6
|
|
44.1
|
|
102.1
|
|
47.9
|
|
50.2
|
|
Basic – total (pence)
|
36.5
|
|
44.6
|
|
102.6
|
|
207.1
|
|
68.7
|
|
Diluted – total (pence)
|
36.3
|
|
44.4
|
|
102.1
|
|
206.2
|
|
68.4
|
|
Weighted average number of shares – basic (millions)
|
3,461
|
|
3,386
|
|
3,461
|
|
3,763
|
|
3,774
|
|
Weighted average number of shares – diluted (millions)
|
3,478
|
|
3,401
|
|
3,476
|
|
3,780
|
|
3,790
|
|
Dividends per ordinary share
|
|
|
|
|
|
|||||
Paid during the year (pence)
|
47.83
|
|
46.52
|
|
128.97
|
|
43.51
|
|
43.16
|
|
Approved or proposed during the year (pence)³
|
48.57
|
|
47.34
|
|
45.93
|
|
128.65
|
|
43.34
|
|
Paid during the year ($)
|
0.615
|
|
0.607
|
|
1.751
|
|
0.555
|
|
0.664
|
|
Approved or proposed during the year ($)
|
0.625
|
|
0.618
|
|
0.624
|
|
1.642
|
|
0.635
|
|
Summary statement of net assets (£m)
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
Non-current assets
|
61,288
|
|
55,017
|
|
52,106
|
|
52,266
|
|
52,622
|
|
Current assets
|
5,801
|
|
7,946
|
|
6,681
|
|
13,574
|
|
6,312
|
|
Total assets
|
67,089
|
|
62,963
|
|
58,787
|
|
65,840
|
|
58,934
|
|
Current liabilities
|
(8,564
|
)
|
(9,129
|
)
|
(8,697
|
)
|
(10,511
|
)
|
(7,721
|
)
|
Non-current liabilities
|
(38,941
|
)
|
(34,465
|
)
|
(31,242
|
)
|
(34,945
|
)
|
(37,648
|
)
|
Total liabilities
|
(47,505
|
)
|
(43,594
|
)
|
(39,939
|
)
|
(45,456
|
)
|
(45,369
|
)
|
Net assets
|
19,584
|
|
19,369
|
|
18,848
|
|
20,384
|
|
13,565
|
|
Total shareholders’ equity
|
19,562
|
|
19,349
|
|
18,832
|
|
20,368
|
|
13,555
|
|
•
|
reviewing potential strategic pathways to achieve net zero targets;
|
•
|
obtaining and reviewing government plans in the US and UK for achieving net zero which we compared to the potential strategic pathways;
|
•
|
reviewing information from the Group’s regulators, including price controls in the UK and rate cases in the US, to consider whether they presented any contradictory evidence;
|
•
|
performing an assessment of the likelihood of occurrence of alternative scenarios for achieving net zero targets;
|
•
|
considering the potential for re-purposing the Group’s gas networks for alternative uses, and in particular for transporting hydrogen; and
|
•
|
reviewing a number of external reports including: Hydrogen in a low-carbon economy and Net Zero – Technical report, produced by the Committee on Climate Change; the UK’s draft integrated National Energy and Climate Plan (NECP) produced by the Department for Business, Energy & Industrial Strategy; and searching for contradictory evidence in respect of management’s judgements.
|
|
Filed herewith
|
||
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
Incorporated by Reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Incorporated by reference
|
||
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
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 2020 is incorporated by reference to “Financial Statements—Notes to the consolidated financial statements—34. Subsidiary undertakings, joint venture and associates—Subsidiary undertakings” on pages 196-200 included in the Annual Report on Form 20-F for the financial year ended 31 March 2020. 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 2020.
|
|
Filed herewith
|
|
Filed herewith
|
||
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
|
Filed herewith
|
||
|
|
|
|
By:
|
/s/ Andrew Agg
Andrew Agg
Chief Financial Officer
|
|
|
|
|
|
||
Title of Each Class
|
|
Trading Symbol
|
|
Name of Each Exchange on Which Registered
|
||
Ordinary Shares of 12 204/473 pence each
American Depositary Shares, each representing five
|
|
NG
NGG
|
|
The New York Stock Exchange*
The New York Stock Exchange |
||
Preferred Stock ($100 par value-cumulative) – 3.90% Series
|
|
NMK PR C
|
|
The New York Stock Exchange
|
||
Preferred Stock ($100 par value-cumulative) – 3.60% Series
|
|
NMK PR B
|
|
The New York Stock Exchange
|
||
|
|
|
|
|
||
*
|
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.
|
|
Dated 30 July 2019
|
NATIONAL GRID plc
and
NATIONAL GRID ELECTRICITY TRANSMISSION plc
as Issuers
and
THE LAW DEBENTURE TRUST CORPORATION p.l.c.
as Trustee
AMENDED AND RESTATED TRUST DEED
relating to
National Grid plc and National Grid Electricity Transmission plc Euro 15,000,000,000 Euro Medium Term Note Programme
arranged by
HSBC Bank plc |
|
|
Ref: EXM/RAR/BB
|
|
Linklaters LLP
|
|
Contents
|
Page
|
|
1
|
Interpretation
|
|
2
|
Issue of Instruments and Covenant to Pay
|
|
3
|
Form of the Instruments
|
|
4
|
Stamp Duties and Taxes
|
|
5
|
Application of Moneys Received by the Trustee
|
|
6
|
Covenants
|
|
7
|
Remuneration and Indemnification of the Trustee
|
|
8
|
Provisions Supplemental to the Trustee Acts
|
|
9
|
Disapplication and Trustee Liability
|
|
10
|
Waiver and Proof of Default
|
|
11
|
Trustee not Precluded from Entering into Contracts
|
|
12
|
Modification and Substitution
|
|
13
|
Appointment, Retirement and Removal of the Trustee
|
|
14
|
Instruments held in Clearing Systems and Couponholders
|
|
15
|
Currency Indemnity
|
|
16
|
Enforcement
|
|
17
|
Communications
|
|
18
|
Governing Law and Jurisdiction
|
|
A39071248
|
i
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A39071248
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ii
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1.
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NATIONAL GRID plc (“National Grid”) AND NATIONAL GRID ELECTRICITY TRANSMISSION plc (“NGET”), (each an “Issuer” and together, the “Issuers”); and
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2.
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THE LAW DEBENTURE TRUST CORPORATION p.l.c., (the “Trustee”, which expression, where the meaning so admits, includes any other trustee for the time being of this Trust Deed).
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a.
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The Issuers propose to issue from time to time bearer debt instruments and Australian Domestic Instruments (as defined below) (collectively, the “Instruments”) in an aggregate nominal amount outstanding at any one time, including Instruments previously issued under the Programme, not exceeding the Programme Limit in accordance with the Dealer Agreement (the “Programme”) and to be constituted by this Trust Deed (other than the Australian Domestic Instruments, which are to be constituted by the Deed Poll).
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b.
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The Trustee has agreed to act as trustee of this Trust Deed on the following terms and conditions.
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c.
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For the purposes of the Programme, the Issuers and the Trustee entered into an amended and restated trust deed dated 21 September 2015 (the “Original Trust Deed”) and have agreed to make certain amendments to the Original Trust Deed.
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1
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Interpretation
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1.1
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Definitions
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2
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4
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1.2
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Construction of Certain References
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1.2.1
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the records of Euroclear and Clearstream, Luxembourg shall be to the records that each of Euroclear and Clearstream, Luxembourg holds for its customers which reflect the amount of such customers’ interests in the Instruments;
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1.2.2
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costs, charges, remuneration or expenses include any value added, turnover or similar tax charged in respect of them;
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1.2.3
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an action, remedy or method of judicial proceedings for the enforcement of creditors’ rights include references to the action, remedy or method of judicial proceedings in jurisdictions other than England as shall most nearly approximate to it;
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1.2.4
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the Trustee’s approval or consent shall, unless expressed otherwise, be subject to the requirement that any such approval or consent shall not be unreasonably withheld or delayed, such reasonableness to be determined by reference to acting in the interests of Instrumentholders as a whole; and
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1.2.5
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the appointment or employment of or delegation to any person by the Trustee shall be deemed to include a reference to, if in the opinion of the Trustee it is reasonably practicable, the prior notification of and consultation with the Issuers and, in any event, the notification forthwith of such appointment, employment or delegation, as the case may be.
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1.3
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Amendment and Restatement
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1.4
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Headings
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1.5
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Contracts
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1.6
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Schedules
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1.7
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Alternative Clearing System
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1.8
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Other Terms
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1.9
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Contracts (Rights of Third Parties) Act 1999
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2
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Issue of Instruments and Covenant to Pay
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2.1
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Issue of Instruments
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2.2
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Separate Series
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2.3
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Covenant to Pay
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2.4
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Discharge
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2.5
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Payment after a Default
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2.5.1
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by notice in writing to the relevant Issuer and the Paying Agents, require the Paying Agents, until notified by the Trustee to the contrary, so far as permitted by applicable law:
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(i)
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to act as Paying Agents of the Trustee under this Trust Deed and the Instruments (other than the Australian Domestic Instruments) on the terms of the Agency Agreement (with consequential amendments as necessary and except that the Trustee’s liability for the indemnification, remuneration and expenses of the Paying Agents shall be limited to the amounts for the time being held by the Trustee in respect of the Instruments (other than the Australian Domestic Instruments) on the terms of this Trust Deed) and thereafter to hold all Instruments (other than the Australian Domestic Instruments), Coupons and Talons and all moneys, documents and records held by them in respect of Instruments (other than the Australian Domestic Instruments), Coupons and Talons to the order of the Trustee; or
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(ii)
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to deliver all Instruments (other than the Australian Domestic Instruments), Coupons and Talons and all moneys, documents and records held by them in respect of the Instruments (other than the Australian Domestic Instruments),
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2.5.2
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2.5.2 by notice in writing to the relevant Issuer, require such Issuer to make all subsequent payments in respect of the Instruments (other than the Australian Domestic Instruments), Coupons and Talons to or to the order of the Trustee and not to the Issuing and Paying Agent or Canadian Paying Agent, as applicable, and with effect from the receipt of any such notice by such Issuer, until such notice is withdrawn, the first proviso to Clause 2.3 (Covenant to Pay) shall cease to have effect.
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2.6
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Rate of Interest after a Default
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3
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Form of the Instruments
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3.1
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The Global Instruments
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3.2
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The Definitive Instruments
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3.3
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Signature
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3.4
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Title
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4
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Stamp Duties and Taxes
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4.1
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Stamp Duties
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4.2
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Change of Taxing Jurisdiction
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5
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Application of Moneys Received by the Trustee
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5.1
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Declaration of Trust
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5.1.1
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first, in payment of all costs, charges, expenses and liabilities properly incurred by the Trustee (including remuneration payable to it) in carrying out its functions under this Trust Deed;
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5.1.2
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secondly, in payment of any amounts owing in respect of the relevant Instruments or Coupons pari passu and rateably; and
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5.1.3
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thirdly, in payment of any balance to such Issuer for itself.
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5.2
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Accumulation
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5.3
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Investment
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6
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Covenants
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6.1
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Books of Account
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6.2
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Notice of Events of Default
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6.3
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Information
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6.4
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Financial Statements etc.
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6.4.1
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send to the Trustee at the time of their issue and, in the case of annual financial statements, in any event within 180 days of the end of each financial year, three copies in English of every balance sheet, profit and loss account, report or other notice, statement or circular issued, or that legally or contractually should be issued, to the members or creditors (or any class of them) of the relevant Issuer or any parent undertaking of it generally in their capacity as such; and
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6.4.2
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National Grid shall, forthwith upon becoming aware of the occurrence of a National Grid Restructuring Event, provide or procure that the Reporting Accountants provide the Trustee with the Accountants’ Report.
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6.5
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Certificate of Director, etc.
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6.5.1
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send to the Trustee, within 14 days of its annual audited financial statements being made available to its members, and also within 21 days of any request by the Trustee a certificate of the relevant Issuer signed by a director that, having made all reasonable enquiries, to the best of the knowledge, information and belief of such Issuer as at a date (the “Certification Date”) not more than five days before the date of the certificate no Event of Default or Potential Event of Default had occurred (and, in the case of a Potential Event of Default, was continuing) since the Certification Date of the last such certificate or (if none) the date of this Trust Deed or, if such an event had occurred (and, in the case of a Potential Event of Default, was continuing), giving details of it and certifying that it has complied with its obligations under this Trust Deed or, to the extent that it has failed so to comply, stating such;
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6.5.2
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National Grid shall, forthwith upon becoming aware of the occurrence of a National Grid Restructuring Event, notify the Trustee in writing of the occurrence of an National Grid Restructuring Event and provide the Trustee with the directors’ Report; and
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6.5.3
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in relation to Instruments issued by it, National Grid shall give to the Trustee, as soon as reasonably practicable after the acquisition or disposal of any company which thereby becomes a Principal Subsidiary or after any transfer is made to any member of the National Grid Group (as defined in Condition 9(c)) which thereby becomes a Principal Subsidiary, a certificate by the auditors of National Grid at that time (the “Auditors”) addressed to the Trustee to such effect.
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6.6
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Notices to Instrumentholders
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6.7
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Further Acts
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6.8
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Notice of Late Payment
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6.9
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Listing
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6.10
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Change in Agents
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6.10.1
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Give at least 14 days’ prior notice to the Instrumentholders (other than holders of an Australian Domestic Instrument) in accordance with the Conditions of any future appointment, resignation or removal of an Agent or of any change by an Agent of its specified office; and
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6.10.2
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Give at least 14 days’ prior notice to the holders of Australian Domestic Instruments in accordance with the Conditions of any future appointment, resignation or removal of the Australian Issuing and Paying Agent or Australian Registrar.
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6.11
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Provision of Legal Opinions
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6.11.1
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from Allen & Overy LLP (or such other firm of legal advisers as may be agreed between the relevant Issuer and the Trustee) as to the laws of England before the first issue of Instruments occurring after each anniversary of this Trust Deed or, if later, 12 months after the date of delivery of the latest such legal opinion and on the date of any amendment to this Trust Deed;
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6.11.2
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from Herbert Smith Freehills (or such other firm of legal advisers as may be agreed between the relevant Issuer and the Trustee) as to the laws of New South Wales before the first issue of Australian Domestic Instruments occurring after the date of this Trust Deed and after each anniversary of this Trust Deed and on the date of any amendment to the Deed Poll or the Australian Agency and Registry Agreement;
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6.11.3
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unless the relevant Issuer has notified the Dealers and the Trustee in writing that it does not intend to issue Instruments under the Programme for the time being, from legal advisers reasonably acceptable to the Trustee as to such law as may reasonably be requested by the Trustee and in such form and with such content as the Trustee may require, on such occasions as the Trustee so requests on the basis that the Trustee considers it prudent in view of a change (or proposed change) in (or in the interpretation or application of) any applicable law, regulation or circumstance materially affecting the relevant Issuer, the Trustee, the relevant Instruments, the Coupons, the Talons, this Trust Deed or the Agency Agreement; and
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6.11.4
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on each occasion on which a legal opinion is given to any Dealer pursuant to the Dealer Agreement from the legal adviser giving such opinion;
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6.12
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Instruments Held by an Issuer
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6.13
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Obligations of Agents
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6.14
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Copies of Dealer Agreement
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7
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Remuneration and Indemnification of the Trustee
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7.1
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Normal Remuneration
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7.2
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Extra Remuneration
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7.3
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Expenses
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7.3.1
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in the case of payments made by the Trustee before such demand, carry interest from the date specified in the demand at the rate of Trustee’s cost of funding on the date on which the Trustee made such payments; and
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7.3.2
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in other cases, carry interest at such rate from 30 days after the date of the demand or (where the demand specifies that payment is to be made on an earlier date) from such earlier date provided that in such event no such interest shall accrue unless payment is actually made on such earlier date.
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7.4
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Notice of Costs
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7.5
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Indemnity
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7.6
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Continuing Effect
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7.7
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Determination of Series
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8
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Provisions Supplemental to the Trustee Acts
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8.1
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Advice
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8.2
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Trustee to Assume Performance
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8.3
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Resolutions of Instrumentholders
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8.4
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Certificate Signed by Directors, etc.
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8.5
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Deposit of Documents
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8.6
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Discretion
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8.7
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Agents
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8.8
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Delegation
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8.9
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Nominees
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8.10
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Forged Instruments
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8.11
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Confidentiality
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8.12
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Determinations Conclusive
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8.13
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Currency Conversion
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8.14
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Payment for and Delivery of Instruments
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8.15
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Trustee’s consent
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8.16
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Instruments Held by an Issuer etc.
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8.17
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Legal Opinions
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8.18
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Programme Limit
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8.19
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Events of Default
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8.20
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Appointment of Independent Financial Adviser
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8.20.1
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shall use its reasonable endeavours to identify and appoint the independent financial adviser but shall have no liability to any person if, having used its reasonable endeavours, it is unable to identify and appoint a suitable independent financial adviser;
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8.20.2
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shall not be responsible for carrying on the role of independent financial adviser itself during the time it is attempting to identify such independent financial adviser or thereafter if it is unable to find such independent financial adviser; and
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8.20.3
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shall not be required to take any action to find an independent financial adviser unless it has been previously indemnified and/or secured to its satisfaction or expend any of its own funds in the appointment of such an independent financial adviser.
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8.21
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Illegality
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9
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Disapplication and Trustee Liability
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9.1
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Disapplication
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9.2
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Trustee Liability
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10
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Waiver and Proof of Default
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10.1
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Waiver
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10.2
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Proof of Default
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11
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Trustee not Precluded from Entering into Contracts
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12
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Modification and Substitution
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12.1
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Modification
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12.2
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Substitution
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12.2.1
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The Trustee may, without the consent of the Instrumentholders or Couponholders, agree to the substitution of any other company (the “Substituted Obligor”) in place
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(i)
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a deed is executed or undertaking given by the Substituted Obligor to the Trustee, in form and manner satisfactory to the Trustee, agreeing to be bound by this Trust Deed (and, in the case of Australian Domestic Instruments, the Deed Poll) and the relevant Instruments, Coupons and Talons (with consequential amendments as the Trustee may deem appropriate) as if the Substituted Obligor had been named in this Trust Deed (and, in the case of Australian Domestic Instruments, the Deed Poll) and the relevant Instruments, Coupons and Talons as the principal debtor in place of such Issuer;
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(ii)
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if the Substituted Obligor is subject generally to the taxing jurisdiction of a territory or any authority of or in that territory with power to tax (the “Substituted Territory”) other than the territory to the taxing jurisdiction of which (or to any such authority of or in which) such Issuer is subject generally (the “Issuer’s Territory”), the Substituted Obligor shall (unless the Trustee otherwise agrees) give to the Trustee an undertaking satisfactory to the Trustee in terms corresponding to Condition 7 with the substitution for the references in that Condition to such Issuer’s Territory of references to the Substituted Territory whereupon the Trust Deed (and, in the case of Australian Domestic Instruments, the Deed Poll), and the relevant Instruments, Coupons and Talons shall be read accordingly;
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(iii)
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if any two directors of the Substituted Obligor certify that it will be solvent immediately after such substitution, the Trustee need not have regard to the Substituted Obligor’s financial condition, profits or prospects or compare them with those of such Issuer;
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(iv)
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such Issuer and the Substituted Obligor comply with such other requirements as the Trustee may direct in the interests of the relevant Instrumentholders; and
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(v)
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the Trustee is satisfied (i) the Substituted Obligor has obtained all necessary governmental and regulatory approvals and consents necessary for its assumption of liability as principal debtor in respect of the relevant Instruments in place of such Issuer (or a previous substitute), (ii) all necessary governmental and regulatory approvals and consents necessary for or in connection with the assumption by the Substituted Obligor of its obligations under the relevant Instruments and Coupons and (iii) such approvals and consents are at the time of substitution in full force and effect.
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12.2.2
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Release of Substituted Issuer
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12.2.3
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Completion of Substitution
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13
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Appointment, Retirement and Removal of the Trustee
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13.1
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Appointment
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13.2
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Retirement and Removal
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13.3
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Co-Trustees
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13.3.1
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if the Trustee considers the appointment to be in the interests of the Instrumentholders and/or the Couponholders;
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13.3.2
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to conform with a legal requirement, restriction or condition in a jurisdiction in which a particular act is to be performed; or
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13.3.3
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to obtain a judgment or to enforce a judgment or any provision of this Trust Deed in any jurisdiction.
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13.4
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Competence of a Majority of Trustees
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14
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Instruments held in Clearing Systems and Couponholders
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14.1
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Instruments Held in Clearing Systems
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14.1.1
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So long as any Global Instrument is held on behalf of a clearing system, in considering the interests of Instrumentholders, the Trustee may have regard to any information provided to it by the relevant clearing system or its operator as to the identity (either individually or by category) of its accountholders or participants with entitlements to any such Global Instrument and may consider such interests on the basis that such accountholders or participants were the holder(s) of such Global Instrument;
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14.1.2
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Subject to Clause 3.4, so long as any Australian Domestic Instrument is held in a clearing system, in considering the interests of Instrumentholders, the Trustee may have regard to any information provided to it by the relevant clearing system or its operator as to the identity (either individually or by category) of its accountholders or participants with entitlements to any such Australian Domestic Instrument and may consider such interests on the basis that such accountholders or participants were the holder(s) of such Australian Domestic Instrument.
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14.2
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Reliance on Instruments Held in Clearing Systems
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14.3
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Couponholders
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15
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Currency Indemnity
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15.1
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Currency of Account and Payment
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15.2
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Extent of Discharge
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15.3
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Indemnity
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15.4
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Indemnity Separate
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16
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Enforcement
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16.1
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Trustee to enforce
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16.2
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Trustee’s Indemnity
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16.3
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Legal proceedings
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16.3.1
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proof in such proceedings that as regards any specified Instrument such Issuer has made default in paying any principal or interest due to the relevant Instrumentholder shall (unless the contrary be proved) be sufficient evidence that such Issuer has made the same default as regards all other Instruments which are then repayable or, as the case may be, in respect of which interest is then payable; and
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16.3.2
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proof in such proceedings that as regards any specified Coupon such Issuer has made default in paying any sum due to the relevant Couponholder shall (unless the contrary be proved) be sufficient evidence that such Issuer has made the same default as regards all other Coupons which are then payable.
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16.4
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Powers additional to general powers
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17
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Communications
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17.1
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Method
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17.2
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Deemed Receipt
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18
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Governing Law and Jurisdiction
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18.1
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Governing Law
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18.2
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Jurisdiction
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18.3
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Australian Courts Jurisdiction
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1
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Interpretation and Definitions
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2
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Aggregate Nominal Amount
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3
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Promise to Pay
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4
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Exchange
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5
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Benefit of Conditions
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6
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Payments
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7
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Cancellation
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8
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Notices
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1
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Interpretation and Definitions
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2
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Aggregate Nominal Amount
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3
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Promise to Pay
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4
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Exchange
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5
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Benefit of Conditions
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6
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Payments
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7
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Prescription
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8
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Meetings
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9
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Cancellation
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10
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Purchase
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11
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Issuer’s Options
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12
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Instrumentholders’ Redemption Option [and Restructuring Redemption Option]
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13
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Notices
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14
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Negotiability
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(a)
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is freely transferable by delivery and such transfer shall operate to confer upon the transferee all rights and benefits appertaining to this permanent Global Instrument and to bind the transferee with all obligations appertaining to this permanent Global Instrument pursuant to the Conditions;
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(b)
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the holder of this permanent Global Instrument is and shall be absolutely entitled as against all previous holders to receive all amounts by way of amounts payable upon redemption, interest or otherwise payable in respect of this permanent Global
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(c)
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payment upon due presentation of this permanent Global Instrument as provided in this permanent Global Instrument shall operate as a good discharge against such holder and all previous holders of this permanent Global Instrument.
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Due date of payment
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Date of payment
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Amount of interest
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Notation made by or on behalf of the Issuing and Paying Agent
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Date of exercise
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Nominal amount of this permanent Global Instrument in respect of which exercise is made
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Date on which exercise of such option is effective
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Notation made by or on behalf of the Issuing and Paying Agent
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1
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Interpretation and Definitions
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2
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Aggregate Nominal Amount
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3
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Promise to Pay
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4
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Exchange
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5
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Benefit of Conditions
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6
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Payments
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7
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Prescription
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8
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Meetings
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9
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Cancellation
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10
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Purchase
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11
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Issuer’s Options
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12
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Instrumentholders’ Redemption Option [and Restructuring Redemption Option]
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13
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Notices
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14
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Negotiability
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(d)
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is freely transferable by delivery and such transfer shall operate to confer upon the transferee all rights and benefits appertaining to this permanent Global Instrument and to bind the transferee with all obligations appertaining to this permanent Global Instrument pursuant to the Conditions;
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(e)
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the holder of this permanent Global Instrument is and shall be absolutely entitled as against all previous holders to receive all amounts by way of amounts payable upon redemption, interest or otherwise payable in respect of this permanent Global Instrument and the Issuer has waived against such holder and any previous holder of this permanent Global Instrument all rights of set-off or counterclaim which would or might otherwise be available to it in respect of the obligations evidenced by this permanent Global Instrument; and
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(f)
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payment upon due presentation of this permanent Global Instrument as provided in this permanent Global Instrument shall operate as a good discharge against such holder and all previous holders of this permanent Global Instrument.
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Date
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Amount of increase/decrease in nominal amount of this permanent Global Instrument
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Reason for increase/decrease in nominal amount of this permanent Global Instrument (initial issue, exchange, cancellation, forfeiture or payment, stating amount of payment made)
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Nominal amount of this permanent Global Instrument on issue or following such increase/decrease
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Notation made by or on behalf of the Canadian Paying Agent
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Due date of payment
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Date of payment
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Amount of interest
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Notation made by or on behalf of the Canadian Paying Agent
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Date of exercise
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Nominal amount of this permanent Global Instrument in respect of which exercise is made
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Date on which exercise of such option is effective
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Notation made by or on behalf of the Canadian Paying Agent
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1
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Interpretation and Definitions
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2
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Aggregate Nominal Amount
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3
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Promise to Pay
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4
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Exchange
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5
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Benefit of Conditions
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6
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Payments
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7
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Cancellation
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8
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Notices
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1
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Interpretation and Definitions
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2
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Aggregate Nominal Amount
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3
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Promise to Pay
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4
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Exchange
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5
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Benefit of Conditions
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6
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Payments
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7
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Prescription
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8
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Meetings
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9
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Cancellation
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10
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Purchase
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11
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Issuer’s Options
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12
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Instrumentholders’ Options Option [and Restructuring Redemption Option]
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13
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Notices
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14
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Negotiability
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A39071248
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63
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A39071248
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64
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A39071248
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65
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A39071248
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66
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[Denomination]
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[ISIN]
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[Series]
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[Certif. No.]
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A39071248
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67
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A39071248
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68
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A39071248
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69
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A39071248
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70
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1
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Form, Denomination and Title
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(a)
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bearer form in the Specified Denomination(s) specified in the relevant Final Terms and are serially numbered; or
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(b)
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in the case of Australian Domestic Instruments, registered uncertificated (or inscribed) form and are constituted by the Australian Deed Poll,
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A39071248
|
71
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A39071248
|
72
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(a)
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the aggregate consideration payable by the transferee at the time of transfer is at least A$500,000 (disregarding moneys lent by the transferor or its associates) or the offer or invitation giving rise to the transfer otherwise does not require disclosure to investors in accordance with Part 6D.2 or Part 7.9 of the Corporations Act 2001 of Australia (“Australian Corporations Act”);
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(b)
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the transferee is not a “retail client” as defined in section 761G of the Australian Corporations Act;
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(c)
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the transfer is in compliance with all applicable laws, regulations and directives (including, without limitation, in the case of a transfer to or from Australia, the laws of the jurisdiction in which the transfer takes place); and
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(d)
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in the case of a transfer between persons outside Australia, if a transfer and acceptance form is signed outside Australia.
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A39071248
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73
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2
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Status and Negative Pledge
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2.1
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Status
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2.2
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Negative Pledge
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3
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Interest
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3.1
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Interest on Fixed Rate Instruments
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A39071248
|
74
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3.2
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Interest on Floating Rate Instruments and Index Linked Interest Instruments
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3.2.1
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Interest Payment Dates
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3.2.2
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Business Day Convention
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3.2.3
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Rate of Interest for Floating Rate Instruments
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(a)
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ISDA Determination: Where ISDA Determination is specified in the relevant Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Accrual Period shall be determined by the Calculation Agent as a rate equal to the relevant ISDA Rate. For the purposes of this sub-paragraph (a), “ISDA Rate” for an Interest Accrual Period means a rate equal to the Floating Rate which would be determined by the Calculation Agent under a Swap Transaction under the terms of an agreement incorporating the ISDA Definitions and under which:
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A39071248
|
75
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(i)
|
the Floating Rate Option is as specified in the relevant Final Terms;
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(ii)
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the Designated Maturity is a period specified in the relevant Final Terms; and
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(iii)
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the relevant Reset Date is the first day of that Interest Accrual Period unless otherwise specified in the relevant Final Terms.
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(b)
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Screen Rate Determination:
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(i)
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Where Screen Rate Determination is specified in the relevant Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Accrual Period will, subject as provided below, be either:
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(ii)
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If the Relevant Screen Page is not available or if, sub‑paragraph (i)(x) applies and no such offered quotation appears on the Relevant Screen Page or if sub-paragraph (i)(y) above applies and fewer than three such offered quotations appear on the Relevant Screen Page in each case as at the time specified above, subject as provided below, the Calculation Agent shall request, if the Reference Rate is LIBOR, the principal London office of each of the Reference Banks or, if the Reference Rate is EURIBOR, the principal Euro-zone office of each of the Reference Banks or, if the Reference Rate is AUD-BBR-BBSW, the principal office of each of the Reference Banks or, if the Reference Rate is CAD-BA-CDOR, the principal Toronto office of each of the Reference Banks or, if the Reference Rate is EUR-ISDA-EURIBOR
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A39071248
|
76
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(iii)
|
If paragraph (ii) above applies and the Calculation Agent determines that fewer than the specified number of Reference Banks are providing offered quotations, subject as provided below, the Rate of Interest shall be (1) in case the Reference Rate is either LIBOR or EURIBOR, the arithmetic mean of the rates per annum (expressed as a percentage) as communicated to (and at the request of) the Calculation Agent by the Reference Banks or any two or more of them, at which such banks were offered, if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time) or, if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time) on the relevant Interest Determination Date, deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate by leading banks in, if the Reference Rate is LIBOR, the London inter-bank market or, if the Reference Rate is EURIBOR, the Euro-zone inter-bank market, as the case may be, or, if fewer than two of the Reference Banks provide the Calculation Agent with such offered rates, the offered rate for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, or the arithmetic mean of the offered rates for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, at which, if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time) or, if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time), on the relevant Interest Determination Date, any one or more banks (which bank or banks is or are in the opinion of the Trustee and the Issuer suitable for such purpose) informs the Calculation Agent it is quoting to leading banks in, if the Reference Rate is LIBOR, the London inter-bank market or, if the Reference Rate is EURIBOR, the Euro-zone inter-bank market, as the case may be; (2) in case the Reference Rate is AUD-
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A39071248
|
77
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(iv)
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If the Reference Rate from time to time in respect of Floating Rate Instruments is specified in the applicable Final Terms as being “BBSW”, the Rate of Interest in respect of such Instruments for the relevant Interest Period shall be the average mid rate for Bills (having the meaning that term has in the Bills of Exchange Act 1909 of Australia) having a tenor closest to the relevant Interest Period displayed on the “BBSW” page of the Reuters Monitor System on the first day of that Interest Period, plus or minus (as indicated in the applicable Final Terms) the Margin (if any), all as determined by the Calculation Agent. However, if the average mid rate is not displayed by 10:30 am on that day, or if it is displayed but the Calculation Agent determines that there is an obvious error in that rate, the Rate of Interest in respect of such Instruments for the relevant Interest Period shall be determined by the Calculation Agent in good faith at approximately 10:30 am on that day, having regard, to the extent possible, to the mid rate of the rates otherwise bid and offered for bank accepted Bills of that tenor at or around that time.
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(c)
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Linear Interpolation: Where Linear Interpolation is specified in the relevant Final Terms as applicable in respect of an Interest Accrual Period, the Rate
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A39071248
|
78
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3.2.4
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Rate of Interest for Index Linked Interest Instruments
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3.3
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Zero Coupon Instruments
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3.4
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Accrual of Interest
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3.5
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Margin, Maximum/Minimum Rates of Interest, Redemption Amounts and Rounding
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(i)
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If any Margin is specified in the relevant Final Terms (either (x) generally, or (y) in relation to one or more Interest Accrual Periods), an adjustment shall be made to all Rates of Interest, in the case of (x), or the Rates of Interest for the specified Interest Accrual Periods, in the case of (y), calculated in accordance with Condition 3.2.3(b) above, by adding (if a positive number) or subtracting (if a negative number) the absolute value of such Margin, subject always to the next paragraph.
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A39071248
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79
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(ii)
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If any Maximum or Minimum Rate of Interest or Redemption Amount is specified in the relevant Final Terms, then any Rate of Interest or Redemption Amount shall be subject to such maximum or minimum, as the case may be.
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(iii)
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For the purposes of any calculations required pursuant to these Conditions (unless otherwise specified), (x) all percentages resulting from such calculations shall be rounded, if necessary, to the nearest one hundred thousandth of a percentage point (with halves being rounded up), (y) all figures shall be rounded to seven significant figures (with halves being rounded up) and (z) all currency amounts that fall due and payable shall be rounded to the nearest unit of such currency (with halves being rounded up), save in the case of yen, which shall be rounded down to the nearest yen. For these purposes “unit” means the lowest amount of such currency which is available as legal tender in the country of such currency.
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3.6
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Calculations
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3.7
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Determination and Publication of Rates of Interest, Interest Amounts, Final Redemption Amounts, Early Redemption Amounts and Optional Redemption Amounts
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A39071248
|
80
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3.8
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Definitions
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(a)
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in the case of a currency other than Euro, a day (other than a Saturday or Sunday) on which commercial banks and foreign exchange markets settle payments in the principal financial centre for such currency (which in the case of: (i) Canadian dollars is Toronto except when the Reference Rate is LIBOR, then the financial centres are London and Toronto; and (ii) in the case of Australian dollars is Sydney); and/or
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(b)
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in the case of Euro, a day on which the TARGET System is operating (a “TARGET Business Day”); and/or
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(c)
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in the case of a currency and/or one or more Business Centres as specified in the relevant Final Terms, a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments in such currency or, if no currency is indicated, generally in each of the Business Centres.
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(a)
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if “Actual/Actual” or “Actual/Actual-ISDA” is specified in the relevant Final Terms, the actual number of days in the Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in a leap year, the sum of (i) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (ii) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365);
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(b)
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if “Actual/365 (Fixed)” is specified in the relevant Final Terms, the actual number of days in the Calculation Period divided by 365;
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(c)
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if “Actual/360” is specified in the relevant Final Terms, the actual number of days in the Calculation Period divided by 360;
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A39071248
|
81
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(d)
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“if “30/360”, “360/360” or “Bond Basis” is specified in the relevant Final Terms, the number of days in the Calculation Period divided by 360 calculated on a formula basis as follows:
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(e)
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“if “30E/360” or “Eurobond Basis” is specified in the relevant Final Terms, the number of days in the Calculation Period divided by 360 calculated on a formula basis as follows:
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(f)
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“if “30E/360 (ISDA)” is specified in the relevant Final Terms, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
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A39071248
|
82
|
(g)
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if “Actual/Actual-ICMA” is specified in the relevant Final Terms:
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(i)
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if the Calculation Period is equal to or shorter than the Determination Period during which it falls, the actual number of days in the Calculation Period divided by the product of (x) the actual number of days in such Determination Period and (y) the number of Determination Periods in any year; and
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(ii)
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if the Calculation Period is longer than one Determination Period, the sum of:
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(1)
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the actual number of days in such Calculation Period falling in the Determination Period in which it begins divided by the product of (a) the actual number of days in such Determination Period and (b) the number of Determination Periods in any year; and
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(2)
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the actual number of days in such Calculation Period falling in the next Determination Period divided by the product of (a) the actual number of days in such Determination Period and (b) the number of Determination Periods in any year,
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(h)
|
if “RBA Bond Basis” or “Australian Bond Basis” is specified in the relevant Final Terms, one divided by the number of Interest Payment Dates in each 12 month period or, where the relevant period does not constitute an Interest Period, the product of:
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A39071248
|
83
|
(i)
|
one divided by the number of Interest Payment Dates in each 12 month period; and
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(ii)
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the number of days in the relevant period divided by the actual number of days in the Interest Period ending on the next Interest Payment Date; and
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(i)
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if “Actual/Actual Canadian Compound Method” is specified in the applicable Final Terms, whenever it is necessary to compute any amount of accrued interest in respect of the Instruments for a period of less than one full year, other than in respect of any specified Interest Amount, such interest will be calculated on the basis of the actual number of days in the Calculation Period and a year of 365 days.
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(i)
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in respect of an Interest Accrual Period, the amount of interest payable per Calculation Amount for that Interest Accrual Period and which, in the case of Fixed Rate Instruments, and unless otherwise specified in the relevant Final Terms, shall mean the Fixed Coupon Amount or Broken Amount specified in the relevant Final Terms as being payable on the Interest Payment Date ending the Interest Period of which such Interest Accrual Period forms part; and
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(ii)
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in respect of any other period, the amount of interest payable per Calculation Amount for that period.
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A39071248
|
84
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3.9
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Calculation Agent
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A39071248
|
85
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3.10
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Benchmark Discontinuation
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3.10.1
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Independent Adviser
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3.10.2
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Successor Rate or Alternative Rate
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A39071248
|
86
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(a)
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there is a Successor Rate, then such Successor Rate and the applicable Adjustment Spread shall subsequently be used in place of the Original Reference Rate to determine the Rate of Interest (or the relevant component part thereof) for all future payments of interest on the Instruments (subject to the operation of this Condition 3.10); or
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(b)
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there is no Successor Rate but that there is an Alternative Rate, then such Alternative Rate and the applicable Adjustment Spread shall subsequently be used in place of the Original Reference Rate to determine the Rate of Interest (or the relevant component part thereof) for all future payments of interest on the Instruments (subject to the operation of this Condition 3.10).
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3.10.3
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Adjustment Spread
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3.10.4
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Benchmark Amendments
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A39071248
|
87
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3.10.5
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Notices, etc.
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(a)
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confirming (i) that a Benchmark Event has occurred, (ii) the Successor Rate or, as the case may be, the Alternative Rate, (iii) the applicable Adjustment Spread and (iv) the specific terms of the Benchmark Amendments (if any), in each case as determined in accordance with the provisions of this Condition 3.10; and
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(b)
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certifying that the Benchmark Amendments (if any) are necessary to ensure the proper operation of such Successor Rate or Alternative Rate and (in either case) the applicable Adjustment Spread.
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3.10.6
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Survival of Original Reference Rate
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3.10.7
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Definitions
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A39071248
|
88
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(a)
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in the case of a Successor Rate, is formally recommended in relation to the replacement of the Original Reference Rate with the Successor Rate by any Relevant Nominating Body; or (if no such recommendation has been made, or in the case of an Alternative Rate)
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(b)
|
the Issuer, following consultation with the Independent Adviser or acting alone, as the case may be, determines is customarily applied to the relevant Successor Rate or the Alternative Rate (as the case may be) in international debt capital markets transactions to produce an industry-accepted replacement rate for the Original Reference Rate; or (if the Issuer determines that no such spread is customarily applied)
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(c)
|
the Issuer, following consultation with the Independent Adviser or acting alone, as the case may be, determines is recognised or acknowledged as being the industry standard for over-the-counter derivative transactions which reference the Original Reference Rate, where such rate has been replaced by the Successor Rate or the Alternative Rate (as the case may be).
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(1)
|
the Original Reference Rate ceasing to be published for a period of at least five Business Days or ceasing to exist; or
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(2)
|
a public statement by the administrator of the Original Reference Rate that it has ceased or that it will cease publishing the Original Reference Rate permanently or indefinitely (in circumstances where no successor administrator has been appointed that will continue publication of the Original Reference Rate); or
|
(3)
|
a public statement by the supervisor of the administrator of the Original Reference Rate that the Original Reference Rate has been or will be permanently or indefinitely discontinued; or
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(4)
|
a public statement by the supervisor of the administrator of the Original Reference Rate as a consequence of which the Original Reference Rate will be prohibited from being used either generally, or in respect of the Instruments; or
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(5)
|
a public statement by the regulatory supervisor for the administrator of the Original Reference Rate announcing that the Original Reference Rate is no longer representative or may no longer be used or
|
(6)
|
it has or will become unlawful for any Paying Agent, the Calculation Agent or the Issuer to calculate any payments due to be made to any Instrumentholders using the Original Reference Rate,
|
A39071248
|
89
|
(i)
|
the central bank for the currency to which the benchmark or screen rate (as applicable) relates, or any central bank or other supervisory authority which is responsible for supervising the administrator of the benchmark or screen rate (as applicable); or
|
(ii)
|
any working group or committee sponsored by, chaired or co-chaired by or constituted at the request of (a) the central bank for the currency to which the benchmark or screen rate (as applicable) relates, (b) any central bank or other supervisory authority which is responsible for supervising the administrator of the benchmark or screen rate (as applicable), (c) a group of the aforementioned central banks or other supervisory authorities or (d) the Financial Stability Board or any part thereof.
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4
|
Indexation
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4.1
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Definitions
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A39071248
|
90
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(i)
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applicable to the first calendar day of any month shall, subject as provided in Conditions 4.3 and 4.5, be construed as a reference to the Index Figure published in the second month prior to that particular month and relating to the month before that of publication; or
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(ii)
|
applicable to any other day in any month shall, subject as provided in Conditions 4.3 and 4.5, be calculated by linear interpolation between (x) the Index Figure applicable to the first calendar day of the month in which the day falls, calculated as specified in paragraph (i) above and (y) the Index Figure applicable to the first calendar day of the month following, calculated as specified in paragraph (i) above and rounded to the nearest fifth decimal place.
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(i)
|
applicable to the first calendar day of any month shall, subject as provided in Conditions 4.3 and 4.5, be construed as a reference to the Index Figure published in the second month prior to that particular month and relating to the month before that of publication; or
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(ii)
|
applicable to any other day in any month shall, subject as provided in Conditions 4.3 and 4.5, be calculated by linear interpolation between (x) the Index Figure applicable to the first calendar day of the month in which the day falls, calculated as specified in paragraph (i) above and (y) the Index Figure applicable to the first calendar day of the month following, calculated as specified in paragraph (i) above and rounded to the nearest fifth decimal place;
|
A39071248
|
91
|
(i)
|
applicable to a particular month, shall, subject as provided in Conditions 4.3 and 4.5, be construed as a reference to the Index Figure published in the seventh month prior to that particular month and relating to the month before that of publication; or
|
(ii)
|
applicable to the first calendar day of any month shall, subject as provided in Conditions 4.3 and 4.5, be construed as a reference to the Index Figure published
|
A39071248
|
92
|
(iii)
|
applicable to any other day in any month shall, subject as provided in Conditions 4.3 and 4.5, be calculated by linear interpolation between (x) the Index Figure applicable to the first calendar day of the month in which the day falls, calculated as specified in paragraph (ii) above and (y) the Index Figure applicable to the first calendar day of the month following, calculated as specified in paragraph (ii) above and rounded to the nearest fifth decimal place.
|
4.2
|
Application of the Index Ratio
|
4.3
|
Changes in Circumstances Affecting the Index
|
(i)
|
Change in base: If at any time and from time to time the Index is changed by the substitution of a new base therefor, then with effect from the month from and including that in which such substitution takes effect or the first date from and including that on which such substitution takes effect, as the case may be, (1) the definition of “Index” and “Index Figure” in Condition 4.1 shall be deemed to refer to the new date, or month or year (as applicable) in substitution for January 1987 (where RPI is specified as the Index in the relevant Final Terms) or 2015 (where CPI or CPIH is specified as the Index in the relevant Final Terms) (or, as the case may be, to such other date, month or year as may have been substituted therefor), and (2) the new Base Index Figure shall be the product of the existing Base Index Figure and the Index Figure for the date on which such substitution takes effect, divided by the Index Figure for the date immediately preceding the date on which such substitution takes effect.
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(ii)
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Delay in publication of RPI if paragraph (i) of the definition of Index Figure for RPI is applicable: If the Index Figure which is normally published in the seventh month and which relates to the eighth month (the “relevant month”) before the month in which a payment is due to be made is not published on or before the fourteenth business day before the date on which such payment is due (the “date for payment”), the Index Figure applicable to the month in which the date for payment falls shall be (1) such substitute index figure (if any) as the Trustee considers (acting solely on the advice of the Indexation Adviser) to have been published by the United Kingdom Debt Management Office or the Bank of England, as the case may be, (or such other body designated by the U.K. Government for such purpose) for the purposes of indexation of payments on the Reference Gilt or, failing such publication, on any one or more issues of index-linked Treasury Stock selected by an Indexation Adviser (and approved by the Trustee (acting solely on the advice of the Indexation Adviser)) or (2) if no such determination is made by such Indexation Adviser within seven days, the Index Figure last published (or, if later, the substitute index figure last determined pursuant to Condition 4.3(i)) before the date for payment.
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A39071248
|
93
|
(iii)
|
Delay in publication of relevant Index if paragraph (i) and/or (ii) of the definition of Index Figure for CPI or CPIH is applicable or if paragraph (ii) and/or (iii) of the definition of Index Figure for RPI is applicable: If the Index Figure relating to any month (the “calculation month”) which is required to be taken into account for the purposes of the determination of the Index Figure for any date is not published on or before the fourteenth business day before the date on which such payment is due (the “date for payment”), the Index Figure applicable for the relevant calculation month shall be (1) such substitute index figure (if any) as the Trustee considers (acting solely on the advice of the Indexation Adviser) to have been published by the United Kingdom Debt Management Office or the Bank of England, as the case may be, (or such other body designated by the U.K. Government for such purpose) for the purposes of indexation of payments on the Reference Gilt or the Indexed Benchmark Gilt (as applicable) or, failing such publication, on any one or more issues of index-linked Treasury Stock selected by an Indexation Adviser (and approved by the Trustee (acting solely on the advice of the Indexation Adviser)) or (2) if no such determination is made by such Indexation Adviser within seven days, the Index Figure last published (or, if later, the substitute index figure last determined pursuant to Condition 4.3(i)) before the date for payment.
|
4.4
|
Application of Changes
|
(i)
|
in relation to a payment of principal or interest in respect of such Instrument other than upon final redemption of such Instrument, the principal or interest (as the case may be) next payable after the date of such subsequent publication shall be increased or reduced, as the case may be, by an amount equal to the shortfall or excess, as the case may be, of the amount of the relevant payment made on the basis of the Index Figure applicable by virtue of Condition 4.3(ii)(2) or Condition 4.3(iii)(2) below or above the amount of the relevant payment that would have been due if the Index Figure subsequently published had been published on or before the fourteenth business day before the date for payment; and
|
(ii)
|
in relation to a payment of principal or interest upon final redemption, no subsequent adjustment to amounts paid will be made.
|
4.5
|
Material Changes to or Cessation of the Index
|
(iii)
|
Material changes to the relevant Index:
|
(a)
|
CPI and CPIH: Where CPI or CPIH is specified in the relevant Final Terms as the Index and:
|
(1)
|
if notice is published by Her Majesty’s Treasury, or on its behalf, following a change to the coverage or the basic calculation of such Index, then the Calculation Agent shall make any such adjustments to
|
A39071248
|
94
|
(2)
|
any change is made to the coverage or the basic calculation of such Index which constitutes a fundamental change which would, in the opinion of either the Issuer or the Trustee (acting solely on the advice of an Indexation Adviser), be materially prejudicial to the interests of the Issuer or the Instrumentholders, as the case may be, the Issuer or the Trustee (as applicable) shall give written notice of such occurrence to the other party.
|
(b)
|
RPI: Where RPI is specified in the relevant Final Terms as the Index and if notice is published by Her Majesty’s Treasury, or on its behalf, following a change to the coverage or the basic calculation of such Index, then the Calculation Agent shall make any such adjustments to the Index consistent with any adjustments made to the Index as applied to the Reference Gilt.
|
(ii)
|
Cessation of the relevant Index:
|
A39071248
|
95
|
(a)
|
if at any time a successor index has been designated by Her Majesty’s Treasury in respect of the Reference Gilt, such successor index shall be designated the “Successor Index” for the purposes of all subsequent Interest Payment Dates, notwithstanding that any other Successor Index may previously have been determined under paragraph (b) or (c) below. This provision will only be applicable when RPI is specified in the relevant Final Terms as the Index; or
|
(b)
|
the Issuer and the Trustee (acting solely on the advice of the Indexation Adviser) together shall seek to agree for the purpose of the Instruments one or more adjustments to the Index or a substitute index (with or without adjustments) with the intention that the same should leave the Issuer and the Instrumentholders in no materially better and no materially worse position than they would have been had the Index not ceased to be published. If the relevant Final Terms specify RPI as the Index then this paragraph (b) will only be applicable provided the Successor Index has not been determined under paragraph (a) above; or
|
(c)
|
if the Issuer and the Trustee (acting solely on the advice of the Indexation Adviser) fail to reach agreement as mentioned above within 20 business days following the giving of notice as mentioned in paragraph (ii), a bank or other person in London shall be appointed by the Issuer and the Trustee or, failing agreement on and the making of such appointment within 20 business days following the expiry of the 20 day period referred to above, by the Trustee (acting solely on the advice of the Indexation Adviser) (in each case, such bank or other person so appointed being referred to as the “Expert”), to determine for the purpose of the Instruments one or more adjustments to the Index or a substitute index (with or without adjustments) with the intention that the same should leave the Issuer and the Instrumentholders in no materially better and no materially worse position than they would have been had the Index not ceased to be published. Any Expert so appointed shall act as an expert and not as an arbitrator and all fees, costs and expenses of the Expert and of any Indexation Adviser and of any of the Issuer and the Trustee in connection with such appointment shall be borne by the Issuer.
|
(iii)
|
Adjustment or replacement: The Index shall be adjusted or replaced by a substitute index pursuant to the foregoing paragraphs, as the case may be, and references in these Conditions to the Index and to any Index Figure shall be deemed amended in such manner as the Trustee (acting solely on the advice of the Indexation Adviser) and the Issuer agree are appropriate to give effect to such adjustment or replacement. Such amendments shall be effective from the date of such notification and binding upon the Issuer, the Trustee and the Instrumentholders, and the Issuer shall give notice to the Instrumentholders in accordance with Condition 14 of such amendments as promptly as practicable following such notification or adjustment.
|
4.6
|
Redemption for Index Reasons
|
A39071248
|
96
|
4.7
|
HICP
|
A39071248
|
97
|
4.8
|
Application of the Index Ratio
|
4.9
|
Changes in Circumstances Affecting the Index
|
(i)
|
Delay in publication of Index
|
(a)
|
If the Index Level relating to any month (the “calculation month”) which is required to be taken into account for the purposes of the determination of the Index Level for any date (the “Relevant Level”) has not been published or announced by the day that is five Business Days before the date on which such payment is due (the “Affected Payment Date”), the Calculation Agent shall determine a Substitute Index Level (as defined below) (in place of such Relevant Level) by using the following methodology:
|
(1)
|
if applicable, the Calculation Agent will take the same action to determine the “Substitute Index Level” for the Affected Payment Date as that taken by the calculation agent (or any other party performing the function of a calculation agent (whatever such party’s title)) pursuant to the terms and conditions of the Related Instrument;
|
(2)
|
if (1) above does not result in a Substitute Index Level for the Affected Payment Date for any reason, then the Calculation Agent shall determine the Substitute Index Level as follows:
|
A39071248
|
98
|
(b)
|
If a Relevant Level is published or announced at any time after the day that is five Business Days prior to the next Interest Payment Date, such Relevant Level will not be used in any calculations. The Substitute Index Level so determined pursuant to this Condition 4.9(i) will be the definitive level for that calculation month.
|
(ii)
|
Cessation of publication: If the Index Level has not been published or announced for two consecutive months or Eurostat announces that it will no longer continue to publish or announce the Index then the Calculation Agent shall determine a successor index in lieu of any previously applicable Index (the “Successor Index”) by using the following methodology:
|
(a)
|
if at any time (other than after an Early Termination Event (as defined below) has been designated by the Calculation Agent pursuant to paragraph (e) below) a successor index has been designated by the calculation agent (or any other party performing the function of a calculation agent (whatever such party’s title)) pursuant to the terms and conditions of the Related Instrument, such successor index shall be designated the “Successor Index” for the purposes of all subsequent Interest Payment Dates, notwithstanding that any other Successor Index may previously have been determined under paragraph (b), (c) or (d) below; or
|
(b)
|
if a Successor Index has not been determined under paragraph (a) above (and there has been no designation of an Early Termination Event pursuant to paragraph (e) below), and a notice has been given or an announcement has been made by Eurostat (or any successor entity which publishes such index) specifying that the Index will be superseded by a replacement index specified by Eurostat (or any such successor), and the Calculation Agent determines that such replacement index is calculated using the same or substantially similar formula or method of calculation as used in the calculation of the previously applicable Index, such replacement index shall be the Index from the date that such replacement index comes into effect; or
|
A39071248
|
99
|
(c)
|
if a Successor Index has not been determined under paragraph (a) or (b) above (and there has been no designation of an Early Termination Event pursuant to paragraph (e) below), the Calculation Agent shall ask five leading independent dealers to state what the replacement index for the Index should be. If between four and five responses are received, and of those four or five responses, three or more leading independent dealers state the same index, this index will be deemed the “Successor Index”. If three responses are received, and two or more leading independent dealers state the same index, this index will be deemed the “Successor Index”. If fewer than three responses are received, the Calculation Agent will proceed to paragraph (d) below;
|
(d)
|
if no Successor Index has been determined under paragraph (a), (b) or (c) above on or before the fifth Index Business Day prior to the next Affected Payment Date the Calculation Agent will determine an appropriate alternative index for such Affected Payment Date, and such index will be deemed the “Successor Index”;
|
(e)
|
if the Calculation Agent determines that there is no appropriate alternative index, the Issuer and the Instrumentholders shall, in conjunction with the Calculation Agent, determine an appropriate alternative index. If the Issuer and the Instrumentholders, in conjunction with the Calculation Agent, do not reach agreement on an appropriate alternative index within a period of ten Business Days, then an Early Termination Event will be deemed to have occurred and the Issuer will redeem the Instruments pursuant to Condition 4.10.
|
(iii)
|
Rebasing of the Index: If the Calculation Agent determines that the Index has been or will be rebased at any time, the Index as so rebased (the “Rebased Index”) will be used for the purposes of determining each relevant Index Level from the date of such rebasing; provided, however, that the Calculation Agent shall make such adjustments as are made by the calculation agent (or any other party performing the function of a calculation agent (whatever such party’s title)) pursuant to the terms and conditions of the Related Instrument to the levels of the Rebased Index so that the Rebased Index levels reflect the same rate of inflation as the Index before it was rebased. Any such rebasing shall not affect any prior payments made.
|
(iv)
|
Material Modification Prior to Interest Payment Date: If, on or prior to the day that is five Business Days before an Interest Payment Date, Eurostat announces that it will make a material change to the Index then the Calculation Agent shall make any such adjustments to the Index consistent with adjustments made to the Related Instrument.
|
(v)
|
Manifest Error in Publication: If, within 30 days of publication, the Calculation Agent determines that Eurostat (or any successor entity which publishes such index) has corrected the level of the Index to remedy a manifest error in its original publication, the Calculation Agent will notify the parties of (a) that correction, (b) the amount that is payable as a result of that correction and (c) take such other action as it may deem necessary to give effect to such correction.
|
4.10
|
Redemption for Index Reasons
|
A39071248
|
100
|
5
|
Redemption, Purchase and Options
|
5.1
|
Final Redemption
|
5.2
|
Redemption for Taxation Reasons
|
5.3
|
Purchases
|
5.4
|
Early Redemption
|
A39071248
|
101
|
5.4.1
|
Zero Coupon Instruments
|
(i)
|
The Early Redemption Amount payable in respect of any Zero Coupon Instrument, the Early Redemption Amount of which is not linked to an index and/or a formula, upon redemption of such Instrument pursuant to Condition 5.2 or upon it becoming due and payable as provided in Condition 9 shall be the Amortised Face Amount (calculated as provided below) of such Instrument unless otherwise specified in the relevant Final Terms.
|
(ii)
|
Subject to the provisions of sub-paragraph (iii) below, the Amortised Face Amount of any such Instrument shall be the scheduled Final Redemption Amount of such Instrument on the Maturity Date discounted at a rate per annum (expressed as a percentage) equal to the Amortisation Yield (which, if none is specified in the relevant Final Terms, shall be such rate as would produce an Amortised Face Amount equal to the issue price of the Instruments if they were discounted back to their issue price on the Issue Date) compounded annually.
|
(iii)
|
If the Early Redemption Amount payable in respect of any such Instrument upon its redemption pursuant to Condition 5.2 or, if applicable, Condition 5.5 or 5.6 or upon it becoming due and payable as provided in Condition 9, is not paid when due, the Early Redemption Amount due and payable in respect of such Instrument shall be the Amortised Face Amount of such Instrument as defined in sub‑paragraph (ii) above, except that such sub-paragraph shall have effect as though the reference in that sub-paragraph to the date on which the Instrument becomes due and payable was replaced by a reference to the Relevant Date as defined in Condition 7. The calculation of the Amortised Face Amount in accordance with this sub-paragraph shall continue to be made (both before and after judgment) until the Relevant Date, unless the Relevant Date falls on or after the Maturity Date, in which case the amount due and payable shall be the scheduled Final Redemption Amount of such Instrument on the Maturity Date together with any interest that may accrue in accordance with Condition 3.2.
|
5.4.2
|
Other Instruments
|
5.5
|
Redemption at the Option of the Issuer and Exercise of Issuer’s Options
|
5.5.1
|
If (i) Residual Holding Call Option is specified in the relevant Final Terms, and (ii) if at any time the Residual Holding Percentage or more of the aggregate nominal amount of Instruments originally issued shall have been redeemed or purchased and cancelled, the Issuer shall have the option to redeem such outstanding Instruments in whole, but not in part, at their Residual Holding Redemption Amount.
|
A39071248
|
102
|
5.5.2
|
If Call Option is specified in the relevant Final Terms, the Issuer may, unless an Exercise Notice has been given pursuant to Condition 5.6 or 5.7, on giving not less than 15 nor more than 30 days’ irrevocable notice to the Instrumentholders (or such other notice period as may be specified in the relevant Final Terms), redeem, or exercise any Issuer’s option in relation to, all or, if so provided, some of such Instruments on any Optional Redemption Date(s) or Option Exercise Date, as the case may be. Any such redemption of Instruments shall be at their Optional Redemption Amount together with interest accrued to but excluding the date fixed for redemption. Any such redemption or exercise must relate to Instruments of a nominal amount at least equal to the minimum nominal amount (if any) permitted to be redeemed specified in the relevant Final Terms and no greater than the maximum nominal amount (if any) permitted to be redeemed specified in the relevant Final Terms.
|
5.5.3
|
If Make-whole Redemption Option is specified in the relevant Final Terms as applicable, the Issuer may, unless an Exercise Notice has been given pursuant to Condition 5.6 or 5.7, on giving not less than 15 nor more than 30 days’ irrevocable notice to the Instrumentholders (or such other notice period as may be specified in the relevant Final Terms), redeem, or exercise any Issuer’s option in relation to, all or, if so provided, some of such Instruments on any Make-whole Redemption Date(s). Any such redemption of Instruments shall be at an amount equal to the higher of the following, in each case together with interest accrued to but excluding the date fixed for redemption:
|
(i)
|
the nominal amount of the Instrument; and
|
(ii)
|
the nominal amount of the Instrument multiplied by the price (as reported in writing to the Issuer and the Trustee by a financial adviser (the “Financial
|
A39071248
|
103
|
5.6
|
Redemption at the Option of Instrumentholders following a Restructuring Event
|
5.6.1
|
*[Redemption of Instruments issued by National Grid at the option of Instrumentholders
|
(i)
|
(if at the time that the National Grid Restructuring Event occurs there are Rated Securities) a Rating Downgrade in respect of the National Grid Restructuring Event occurs; or
|
(ii)
|
(if at the time that the National Grid Restructuring Event occurs there are no Rated Securities) a Negative Rating Event in respect of the National Grid Restructuring Event occurs,
|
A39071248
|
104
|
5.6.2
|
For the purposes of this Condition
|
A39071248
|
105
|
A39071248
|
106
|
A39071248
|
107
|
5.6.3
|
The Trustee shall not be responsible for ascertaining or monitoring whether or not the National Grid Restructuring Event, a Negative Rating Event or a Rating Downgrade in relation to National Grid has occurred and, unless and until it has actual knowledge to the contrary, shall be entitled to assume that no such event has occurred.
|
5.6.4
|
To exercise the option of redemption of an Instrument under Condition 5.6.1 the Instrumentholder must deliver each Instrument to be redeemed accompanied by a duly signed and completed notice of exercise in the form (for the time being current) obtainable from the specified office of any Paying Agent (a “Put Notice”) and, in which the Instrumentholder may specify an account to which payment is to be made under this Condition 5.6 to the specified office of any Paying Agent on any business day falling within the period (the “Put Period”) of 45 days after a Put Event Notice is given. The Instrument should be delivered together with all Coupons (and Talons) appertaining thereto maturing after the date (the “Put Date”) falling seven days after the expiry of the Put Period, failing which (unless Condition 6.6.1 applies) the Paying Agent will require payment of an amount equal to the face value of any such missing Coupon and/or Talon. Any amount so paid will be reimbursed in the manner provided in Condition 6 against presentation and surrender of the relevant missing Coupon and/or Talon, subject to Condition 8. The Paying Agent to which such Instrument and Put Notice are delivered will issue to the Instrumentholder concerned a non-transferable receipt in respect of the Instrument so delivered. Payment in respect of any Instrument so delivered will be made, if the Instrumentholder duly specified a bank account in the Put Notice to which payment is to be made, on the Put Date by transfer to that bank account and, in every other case, on or after the Put Date in the manner provided in Condition 6 against presentation and surrender (or, in the case of part payment, endorsement) of such receipt at the specified office of any Paying Agent. A Put Notice, once given, shall be irrevocable. For the purposes of the Conditions and the Trust Deed, receipts issued pursuant to this Condition 5.6
|
A39071248
|
108
|
5.6.1
|
*[Redemption of Instruments issued by NGET at the option of Instrumentholders
|
(i)
|
(if at the time that an NGET Restructuring Event occurs there are Rated Securities) a Rating Downgrade in respect of the relevant NGET Restructuring Event occurs; or
|
(ii)
|
(if at the time that an NGET Restructuring Event occurs there are no Rated Securities) a Negative Rating Event in respect of the relevant NGET Restructuring Event occurs,
|
5.6.2
|
For the purposes of this Condition
|
A39071248
|
109
|
(a)
|
the Secretary of State for Trade and Industry or any official succeeding to his functions gives NGET written notice of revocation of the Electricity Transmission Licence in accordance with the terms as to revocation set out in Schedule 2 of the Electricity Transmission Licence, such revocation to become effective not later than the Maturity Date of the Instruments or NGET agrees in writing with the Secretary of State for Trade and Industry or any official succeeding to his functions to any revocation or surrender of the Electricity Transmission Licence or any legislation (whether primary or subordinate) is enacted terminating or revoking the Electricity Transmission Licence;
|
(b)
|
any modification is made to the terms and conditions of the Electricity Transmission Licence other than such a modification which the Trustee, in its opinion, considers to be not materially prejudicial to the interests of the Instrumentholders and has so confirmed in writing to NGET; or
|
(c)
|
any legislation (whether primary or subordinate) is enacted removing, reducing or qualifying the duties or powers of the Secretary of State for Trade and Industry or any official succeeding to his functions and/or the Gas and Electricity Markets Authority under Section 3A of the Electricity Act as compared with those in effect on the issue date of the first Tranche of the Instruments other than such legislation which the Trustee, in its opinion, considers to be not materially prejudicial to the interests of the Instrumentholders and has so confirmed in writing to NGET;
|
A39071248
|
110
|
(a)
|
if at the time at which the NGET Restructuring Event occurs there are Rated Securities, the period of 90 days starting from and including the day on which an NGET Restructuring Event occurs or such longer period in which the Rated Securities are under consideration (announced publicly within such 90 day period) for rating review by a Rating Agency; or
|
(b)
|
if at the time at which an NGET Restructuring Event occurs there are no Rated Securities, the period starting from and including the day on which an NGET Restructuring Event occurs and ending on the day 90 days following the date on which a Negative Certification shall have been given to NGET in respect of that NGET Restructuring Event;
|
5.6.3
|
The Trustee shall not be responsible for ascertaining whether or not an NGET Restructuring Event, a Negative Rating Event or a Rating Downgrade in relation to NGET has occurred and, unless and until it has actual knowledge to the contrary, shall be entitled to assume that no such event has occurred.
|
A39071248
|
111
|
5.6.4
|
To exercise the option of redemption of an Instrument under Condition 5.6.1 the Instrumentholder must deliver each Instrument to be redeemed accompanied by a duly signed and completed notice of exercise in the form (for the time being current) obtainable from the specified office of any Paying Agent (a “Put Notice”) and, in which the Instrumentholder may specify an account to which payment is to be made under this Condition 5.6 to the specified office of any Paying Agent on any business day falling within the period (the “Put Period”) of 45 days after a Put Event Notice is given. The Instrument should be delivered together with all Coupons (and Talons) appertaining thereto maturing after the date (the “Put Date”) falling seven days after the expiry of the Put Period, failing which (unless Condition 6.6.1 applies) the Paying Agent will require payment of an amount equal to the face value of any such missing Coupon and/or Talon.
|
5.7
|
Redemption at the Option of Instrumentholders
|
5.8
|
Cancellation
|
A39071248
|
112
|
6
|
Payments and Talons
|
6.1
|
Payments
|
6.2
|
Payments in respect of Australian Domestic Instruments
|
(i)
|
if the Australian Domestic Instrument is held by Austraclear and entered in the Austraclear System, by crediting on the relevant Interest Payment Date, the Maturity Date or other date on which payment is due the amount then due to the account or accounts to which payments should be made in accordance with the Austraclear Regulations or as otherwise agreed with Austraclear; and
|
(ii)
|
if the Australian Domestic Instrument is not held by Austraclear and entered in the Austraclear System, by crediting on the Interest Payment Date, the Maturity Date or other date on which payment is due, the amount then due to an account in Australia previously notified by the Instrumentholder(s) of the Australian Domestic Instrument to the relevant Issuer and the Australian Registrar.
|
A39071248
|
113
|
6.3
|
Payments in the United States
|
6.4
|
Payments subject to Fiscal Laws etc.
|
6.5
|
Appointment of Agents
|
A39071248
|
114
|
6.6
|
Unmatured Coupons and unexchanged Talons
|
6.6.1
|
Upon the due date for redemption of any Instrument, unmatured Coupons relating to such Instrument (whether or not attached) shall become void and no payment shall be made in respect of them.
|
6.6.2
|
Upon the due date for redemption of any Instrument, any unexchanged Talon relating to such Instrument (whether or not attached) shall become void and no Coupon shall be delivered in respect of such Talon.
|
6.6.3
|
Where any Instrument which provides that the relevant Coupons are to become void upon the due date for redemption of those Instruments is presented for redemption without all unmatured Coupons, and where any Instrument is presented for redemption without any unexchanged Talon relating to it, redemption shall be made only against the provision of such indemnity as the Issuer may require.
|
6.6.4
|
If the due date for redemption of any Instrument is not a due date for payment of interest, interest accrued from the preceding due date for payment of interest or the Interest Commencement Date, as the case may be, shall only be payable against presentation (and surrender if appropriate) of the relevant Instrument. Interest accrued on an Instrument that only bears interest after its Maturity Date shall be payable on redemption of that Instrument against presentation of that Instrument.
|
6.7
|
Non-business Days
|
6.7.1
|
(in the case of a payment in a currency other than Euro) where payment is to be made by transfer to an account maintained with a bank in the relevant currency, on which foreign exchange transactions may be carried on in the relevant currency in the principal financial centre of the country of such currency (which in the case of Australian dollars is Sydney); or
|
6.7.2
|
(in the case of a payment in Euro) which is a TARGET Business Day.
|
6.8
|
Talons
|
7
|
Taxation
|
A39071248
|
115
|
(a)
|
by or on behalf of, a person who is liable to such taxes or duties in respect of such Instrument or Coupon by reason of his having some connection with the United Kingdom other than the mere holding of such Instrument or Coupon; or
|
(b)
|
by or on behalf of a person who would not be liable or subject to such deduction or withholding by making a declaration of non-residence or other claim for exemption to a tax authority; or
|
(c)
|
more than 30 days after the Relevant Date except to the extent that the holder would have been entitled to such additional amounts on presenting the same for payment on such 30th day.
|
8
|
Prescription
|
A39071248
|
116
|
9
|
Events of Default
|
(a)
|
Non-Payment: there is default for more than 30 days in the payment of any principal or interest due in respect of the Instruments; or
|
(b)
|
Breach of Other Obligations: there is default in the performance or observance by the Issuer of any other obligation or provision under the Trust Deed or the Instruments (other than any obligation for the payment of any principal or interest in respect of the Instruments) which default is incapable of remedy or, if in the opinion of the Trustee capable of remedy, is not remedied within 90 days after notice of such default shall have been given to the Issuer by the Trustee; or
|
(c)
|
Cross-Acceleration: if (i) any other present or future Relevant Indebtedness of the Issuer [(or a Principal Subsidiary)]* becomes due and payable prior to its stated maturity by reason of any actual event of default or (ii) any amount in respect of such Relevant Indebtedness is not paid when due or, as the case may be, within any applicable grace period, provided that the aggregate amount of the Relevant Indebtedness in respect of which one or more of the events mentioned above in this paragraph (c) have occurred equals or exceeds £100,000,000.
|
(d)
|
Winding-up: a resolution is passed, or a final order of a court in the United Kingdom is made and, where possible, not discharged or stayed within a period of 90 days, that the Issuer be wound up or dissolved; or
|
(e)
|
Enforcement Proceedings: attachment is made of the whole or substantially the whole of the assets or undertakings of the Issuer and such attachment is not released or cancelled within 90 days or an encumbrancer takes possession or an administrative or other receiver or similar officer is appointed of the whole or substantially the whole of the assets or undertaking of the Issuer or an administration or similar order is made in relation to the
|
A39071248
|
117
|
(f)
|
Insolvency: the Issuer ceases to carry on all or substantially all of its business or is unable to pay its debts within the meaning of Section 123(1)(e) or Section 123(2) of the Insolvency Act 1986; or
|
(g)
|
Bankruptcy: the Issuer is adjudged bankrupt or insolvent by a court of competent jurisdiction in its country of incorporation,
|
10
|
Enforcement
|
(a)
|
it has been so directed by an Extraordinary Resolution or in writing by the holders of at least one-quarter of the principal amount of the Instruments outstanding; and
|
(b)
|
it has been indemnified and/or secured and/or prefunded to its satisfaction.
|
11
|
Meetings of Instrumentholders, Modifications and Substitution
|
11.1
|
Meetings of Instrumentholders
|
A39071248
|
118
|
11.2
|
Modification of the Trust Deed and the Australian Deed Poll
|
11.3
|
Substitution
|
11.4
|
Entitlement of the Trustee
|
A39071248
|
119
|
12
|
Replacement of Instruments, Coupons and Talons
|
13
|
Further Issues
|
14
|
Notices
|
15
|
Indemnification of Trustee
|
A39071248
|
120
|
16
|
Contracts (Rights of Third Parties) Act 1999
|
17
|
Governing Law and Jurisdiction
|
17.1
|
The Instruments (other than Australian Domestic Instruments) and any non-contractual obligations arising out of or connected with them are governed by, and shall be construed in accordance with, English law.
|
17.2
|
The courts of England have exclusive jurisdiction to settle any dispute (a “Dispute”), arising from or connected with the Instruments (other than Australian Domestic Instruments).
|
17.3
|
The Issuer agrees that the courts of England are the most appropriate and convenient courts to settle any Dispute and, accordingly, that it will not argue to the contrary.
|
17.4
|
Nothing in this Condition 17 prevents the Trustee or any Instrumentholder from taking proceedings relating to a Dispute (“Proceedings”) in any other courts with jurisdiction. To the extent allowed by law, the Trustee or Instrumentholders may take concurrent Proceedings in any number of jurisdictions.
|
17.5
|
The Australian Domestic Instruments, the Australian Deed Poll and (unless otherwise specified in the applicable Final Terms) the Australian Agency and Registry Agreement will be governed by, and construed in accordance with, the laws in force in New South Wales, Australia, save that the provisions of Condition 9 (Events of Default) shall be interpreted so as to have the same meaning they would have if governed by English law.
|
17.6
|
In the case of Australian Domestic Instruments, each Issuer has irrevocably agreed for the benefit of Instrumentholders that the courts of New South Wales, Australia are to have jurisdiction to settle any disputes which may arise out of or in connection with the Australian Domestic Instruments, the Australian Deed Poll and the Australian Agency and Registry Agreement and that accordingly any suit, action or proceedings arising out of or in connection with the Australian Domestic Instruments, the Australian Deed Poll or the Australian Agency and Registry Agreement (together referred to as “Australian Proceedings”) may be brought in such courts.
|
A39071248
|
121
|
A39071248
|
122
|
[Cp. No.]
|
[Denomination]
|
[ISIN]
|
[Series]
|
[Certif. No.]
|
|
|
|
|
|
A39071248
|
123
|
A39071248
|
124
|
[Talon No.]
|
[ISIN]
|
[Series]
|
[Certif. No.]
|
|
|
|
|
A39071248
|
125
|
A39071248
|
126
|
1
|
In this Schedule:
|
1.1
|
references to a meeting are to a meeting of Instrumentholders of a single Series of Instruments issued by the relevant Issuer and include, unless the context otherwise requires, any adjournment;
|
1.2
|
references to “Instruments” and “Instrumentholders” are only to the Instruments of the Series in respect of which a meeting has been, or is to be, called, and to the holders of these Instruments, respectively;
|
1.3
|
“agent” means a holder of a voting certificate or a proxy for, or representative of, an Instrumentholder;
|
1.4
|
“Alternative Clearing System” means any clearing system (including without limitation The Depositary Trust Company (“DTC”)) other than Euroclear or Clearstream, Luxembourg;
|
1.5
|
“block voting instruction” means an instruction issued in accordance with paragraphs 9 to 15;
|
1.6
|
“Electronic Consent” has the meaning set out in paragraph 31;
|
1.7
|
“Extraordinary Resolution” means a resolution passed (a) at a meeting duly convened and held in accordance with this Trust Deed by a majority of at least 75 per cent. of the votes cast, (b) by a Written Resolution or (c) by an Electronic Consent;
|
1.8
|
“voting certificate” means a certificate issued in accordance with paragraphs 6 to 8;
|
1.9
|
“Written Resolution” means a resolution in writing signed by the holders of not less than 95 per cent. in nominal amount of the Bonds outstanding;
|
1.10
|
references to persons representing a proportion of the Instruments are to Instrumentholders or agents holding or representing in the aggregate at least that proportion in nominal amount of the Instruments for the time being outstanding; and
|
1.11
|
where Instruments are held in Euroclear or Clearstream, Luxembourg or an Alternative Clearing System, references herein to the deposit or release or surrender of Instruments shall be construed in accordance with the usual practices (including in relation to the blocking of the relevant account) of Euroclear or Clearstream, Luxembourg or such Alternative Clearing System.
|
2
|
A meeting shall, subject to the Conditions and without prejudice to any powers conferred on other persons by this Trust Deed, have power by Extraordinary Resolution:
|
2.1
|
to sanction any proposal by the relevant Issuer or the Trustee for any modification, abrogation, variation or compromise of, or arrangement in respect of, the rights of the Instrumentholders
|
A39071248
|
127
|
2.2
|
to sanction the exchange or substitution for the Instruments of, or the conversion of the Instruments into, shares, bonds or other obligations or securities of the relevant Issuer or any other entity;
|
2.3
|
to assent to any modification of this Trust Deed, the Instruments, the Talons or the Coupons proposed by the relevant Issuer or the Trustee;
|
2.4
|
to authorise anyone to concur in and do anything necessary to carry out and give effect to an Extraordinary Resolution;
|
2.5
|
to give any authority, direction or sanction required to be given by Extraordinary Resolution;
|
2.6
|
to appoint any persons (whether Instrumentholders or not) as a committee or committees to represent the Instrumentholders’ interests and to confer on them any powers or discretions which the Instrumentholders could themselves exercise by Extraordinary Resolution;
|
2.7
|
to approve a proposed new Trustee and to remove a Trustee;
|
2.8
|
to approve the substitution of any entity for the relevant Issuer (or any previous substitute) as principal debtor under this Trust Deed; and
|
2.9
|
to discharge or exonerate the Trustee from any liability in respect of any act or omission for which it may become responsible under this Trust Deed, the Instruments, the Talons or the Coupons,
|
3
|
The relevant Issuer or the Trustee may at any time convene a meeting. If it receives a written request by Instrumentholders holding at least 10 per cent. in nominal amount of the Instruments of any Series for the time being outstanding and is indemnified to its satisfaction against all costs and expenses, the Trustee shall convene a meeting of the Instrumentholders of that Series. Every meeting shall be held at a time and place approved by the Trustee.
|
4
|
At least 21 days’ notice (exclusive of the day on which the notice is given or deemed to be given and of the day of the meeting) shall be given to the Instrumentholders. A copy of the notice shall be given by the party convening the meeting to the other parties. The notice shall specify the day, time and place of meeting and, unless the Trustee otherwise agrees, the nature of the resolutions to be proposed and shall explain how Instrumentholders may appoint proxies or representatives, obtain voting certificates and use block voting instructions and the details of the time limits applicable.
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5
|
A meeting that has been validly convened in accordance with paragraph 3 above, may be cancelled by the person who convened such meeting by giving at least 5 days’ notice (exclusive of the day on which the notice is given or deemed to be given and of the day of the meeting)
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6
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If a holder of an Instrument wishes to obtain a voting certificate in respect of it for a meeting, he must deposit such Instrument for that purpose at least 48 hours before the time fixed for the meeting with a Paying Agent or to the order of a Paying Agent with a bank or other depositary nominated by the Paying Agent for the purpose. The Paying Agent shall then issue a voting certificate in respect of it.
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7
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A voting certificate shall:
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7.1
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be a document in the English language;
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7.2
|
be dated;
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7.3
|
specify the meeting concerned and the serial numbers of the Instruments deposited;
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7.4
|
entitle, and state that it entitles, its bearer to attend and vote at that meeting in respect of those Instruments; and
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7.5
|
specify details of evidence of the identity of the bearer of such voting certificate.
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8
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Once a Paying Agent has issued a voting certificate for a meeting in respect of an Instrument, it shall not release the Instrument until either:
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8.1
|
the meeting has been concluded; or
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8.2
|
the voting certificate has been surrendered to the Paying Agent.
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9
|
If a holder of an Instrument wishes the votes attributable to it to be included in a block voting instruction for a meeting, then, at least 48 hours before the time fixed for the meeting, (i) he must deposit the Instrument for that purpose with a Paying Agent or to the order of a Paying Agent with a bank or other depositary nominated by the Paying Agent for the purpose and (ii) he or a duly authorised person on his behalf must direct the Paying Agent how those votes are to be cast. The Paying Agent shall issue a block voting instruction in respect of the votes attributable to all Instruments so deposited.
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10
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A block voting instruction shall:
|
10.1
|
be a document in the English language;
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10.2
|
be dated;
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10.3
|
specify the meeting concerned;
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10.4
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list the total number and serial numbers of the Instruments deposited, distinguishing with regard to each resolution between those voting for and those voting against it;
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10.5
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certify that such list is in accordance with Instruments deposited and directions received as provided in paragraphs 9, 12 and 15; and
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10.6
|
appoint one or more named person (a “proxy”) to vote at that meeting in respect of those Instruments and in accordance with that list.
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11
|
Once a Paying Agent has issued a block voting instruction for a meeting in respect of the votes attributable to any Instruments:
|
11.1
|
it shall not release the Instruments, except as provided in paragraph 12, until the meeting has been concluded; and
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11.2
|
the directions to which it gives effect may not be revoked or altered during the 48 hours before the time fixed for the meeting.
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12
|
If the receipt for an Instrument deposited with or to the order of a Paying Agent in accordance with paragraph 9 is surrendered to the Paying Agent at least 48 hours before the time fixed for the meeting, the Paying Agent shall release the Instrument and exclude the votes attributable to it from the block voting instruction.
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13
|
Each block voting instruction shall be deposited at least 24 hours before the time fixed for the meeting at such place as the Trustee shall designate or approve, and in default the block voting instruction shall not be valid unless the chairman of the meeting decides otherwise before the meeting proceeds to business. If the Trustee requires, a certified copy of each block voting instruction shall be produced by the proxy at the meeting but the Trustee need not investigate or be concerned with the validity of the proxy’s appointment.
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14
|
A vote cast in accordance with a block voting instruction shall be valid even if it or any of the Instrumentholders’ instructions pursuant to which it was executed has previously been revoked or amended, unless written intimation of such revocation or amendment is received from the relevant Paying Agent by the relevant Issuer or the Trustee at its registered office or by the chairman of the meeting in each case at least 24 hours before the time fixed for the meeting.
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15
|
No Instrument may be deposited with or to the order of a Paying Agent at the same time for the purposes of both paragraph 6 and paragraph 9 for the same meeting.
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16
|
The chairman of a meeting shall be such person as the Trustee may nominate in writing, but if no such nomination is made or if the person nominated is not present within 15 minutes after the time fixed for the meeting the Instrumentholders or agents present shall choose one of their number to be chairman, failing which the relevant Issuer may appoint a chairman.
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17
|
The chairman need not be an Instrumentholder or agent. The chairman of an adjourned meeting need not be the same person as the chairman of the original meeting.
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18
|
The following may attend and speak at a meeting:
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18.1
|
Instrumentholders and agents;
|
18.2
|
the chairman;
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18.3
|
the relevant Issuer and the Trustee (through their respective representatives) and their respective financial and legal advisers; and
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18.4
|
the Dealers and their advisers.
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19
|
No business (except choosing a chairman) shall be transacted at a meeting unless a quorum is present at the commencement of business. If a quorum is not present within 15 minutes from the time initially fixed for the meeting, it shall, if convened on the requisition of Instrumentholders or if the relevant Issuer and the Trustee agree, be dissolved. In any other case it shall be adjourned until such date, not less than 14 nor more than 42 days later, and time and place as the chairman may decide. If a quorum is not present within 15 minutes from the time fixed for a meeting so adjourned, the meeting shall be dissolved.
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20
|
Two or more Instrumentholders or agents present in person shall be a quorum:
|
20.1
|
in the cases marked “No minimum proportion” in the table below, whatever the proportion of the Instruments which they represent; and
|
20.2
|
in any other case, only if they represent the proportion of the Instruments shown by the table below.
|
Column 1
|
Column 2
|
Column 3
|
Purpose of meeting
|
Any meeting except one referred to in column 3
|
Meeting previously adjourned through want of a quorum
|
|
Required proportion
|
Required proportion
|
To pass a special quorum resolution
|
Two thirds
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One third
|
To pass any other Extraordinary Resolution
|
A clear majority
|
No minimum proportion
|
Any other purpose
|
10 per cent.
|
No minimum proportion
|
21
|
The chairman, may with the consent of (and shall if directed by) a meeting, adjourn the meeting from time to time and from place to place. Only business which could have been transacted at the original meeting may be transacted at a meeting adjourned in accordance with this paragraph or paragraph 18.
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22
|
At least 10 days’ notice (exclusive of the day on which the notice is given or deemed to be given and of the day of the adjourned meeting) of a meeting adjourned through want of a quorum shall be given in the same manner as for an original meeting and that notice shall state the quorum required at the adjourned meeting. However, no notice need otherwise be given of an adjourned meeting.
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23
|
Each question submitted to a meeting shall be decided by a show of hands unless a poll is (before, or on the declaration of the result of, the show of hands) demanded by the chairman, the relevant Issuer, the Trustee or one or more persons holding one or more Instruments or voting certificates or representing not less than 2 per cent. of the Instruments.
|
24
|
Unless a poll is demanded a declaration by the chairman that a resolution has or has not been passed shall be conclusive evidence of the fact without proof of the number or proportion of the votes cast in favour of or against it.
|
25
|
If a poll is demanded, it shall be taken in such manner and (subject as provided below) either at once or after such adjournment as the chairman directs. The result of the poll shall be deemed to be the resolution of the meeting at which it was demanded as at the date it was taken. A demand for a poll shall not prevent the meeting continuing for the transaction of business other than the question on which it has been demanded.
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26
|
A poll demanded on the election of a chairman or on a question of adjournment shall be taken at once.
|
27
|
On a show of hands every person who is present in person and who produces an Instrument or a voting certificate or is a proxy or representative has one vote. On a poll every such person has one vote in respect of each integral currency unit of the Specified Currency of such Series of Instruments so produced or represented by the voting certificate so produced or for which he is a proxy or representative. Without prejudice to the obligations of proxies, a person entitled to more than one vote need not use them all or cast them all in the same way.
|
28
|
In case of equality of votes the chairman shall both on a show of hands and on a poll have a casting vote in addition to any other votes which he may have.
|
29
|
An Extraordinary Resolution shall be binding on all the Instrumentholders, whether or not present at the meeting, and on all the Couponholders and each of them shall be bound to give effect to it accordingly. The passing of such a resolution shall be conclusive evidence that the circumstances justify its being passed. The relevant Issuer shall give notice of the passing of an Extraordinary Resolution to Instrumentholders within 14 days but failure to do so shall not invalidate the resolution.
|
30
|
Minutes shall be made of all resolutions and proceedings at every meeting and, if purporting to be signed by the chairman of that meeting or of the next succeeding meeting, shall be conclusive evidence of the matters in them. Until the contrary is proved every meeting for which minutes have been so made and signed shall be deemed to have been duly convened and held and all resolutions passed or proceedings transacted at it to have been duly passed and transacted.
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31
|
Subject to the following sentence, a Written Resolution may be contained in one document or in several documents in like form, each signed by or on behalf of one or more of the Instrumentholders.
|
32
|
Electronic Consent: where the terms of the resolution proposed by the Issuer or the Trustee (as the case may be) have been notified to the Instrumentholders through the relevant Clearing System(s) as provided in sub-paragraphs (i) and/or (ii) below, each of the Issuer and the Trustee shall be entitled to rely upon approval of such resolution given by way of electronic consents communicated through the electronic communications systems of the relevant Clearing System(s) to the Principal Paying Agent or another specified agent in accordance with their operating rules and procedures by or on behalf of the holders of not less than 95 per cent. in nominal amount of the Instruments outstanding (the “Required Proportion”) (“Electronic Consent”) by close of business on the Relevant Date. The Principal Paying Agent shall confirm the result of voting on any Electronic Consent in writing to the Issuer and the Trustee (in a form satisfactory to the Trustee), specifying (as of the Relevant Date): (i) the outstanding principal amount of the Instruments and (ii) the outstanding principal amount of the Instruments in respect of which consent to the resolution has been given in accordance with this provision. The Issuer and the Trustee may act without further enquiry on any such confirmation from the Principal Paying Agent and shall have no liability or responsibility to anyone as a result of such reliance or action. The Trustee shall not be bound to act on any Electronic Consent in the absence of such a confirmation from the Principal Paying agent in a form satisfactory to it. Any resolution passed in such manner shall be binding on all Instrumentholders and Couponholders, even if the relevant consent or instruction proves to be defective. The Issuer shall not be liable or responsible to anyone for such reliance:
|
(i)
|
When a proposal for a resolution to be passed as an Electronic Consent has been made, at least 14 days’ notice (exclusive of the day on which the notice is given or deemed to be given and of the day on which affirmative consents will be counted) shall be given to the Instrumentholders through the relevant Clearing System(s). The notice shall specify, in sufficient detail to enable Instrumentholders to give their consents in relation to the proposed resolution, the method by which their consents may be given (including, where applicable, blocking of their accounts in the relevant clearing system(s)) and the time and date (the “Relevant Date”) by which they must be received in order for such consents to be validly given, in each case subject to and in accordance with the operating rules and procedures of the relevant Clearing System(s).
|
(ii)
|
If, on the Relevant Date on which the consents in respect of an Electronic Consent are first counted, such consents do not represent the Required Proportion, the resolution shall be deemed to be defeated. Such determination shall be notified in writing to the other party or parties to the Trust Deed by the Principal Paying Agent. Alternatively, the party proposing such resolution (the “Proposer”) may give a further notice to Instrumentholders in accordance with (i) above that the resolution will be proposed again. Such notice must inform Instrumentholders that insufficient consents were received in relation to the original resolution and the information specified in sub-
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33
|
Written Resolution: where Electronic Consent is not being sought, for the purpose of determining whether a Written Resolution has been validly passed, the Issuer and the Trustee shall be entitled to rely on consent or instructions given in writing directly to the Issuer and/or the Trustee, as the case may be, (a) by accountholders in the clearing system(s) with entitlements to such Global Instruments and/or, (b) where the accountholders hold any such entitlement on behalf of another person, on written consent from or written instruction by the person identified by that accountholder as the person for whom such entitlement is held. For the purpose of establishing the entitlement to give any such consent or instruction, the Issuer and the Trustee shall be entitled to rely on any certificate or other document issued by, in the case of (a) above, Euroclear, Clearstream, Luxembourg or any other relevant alternative clearing system and, in the case of (b) above, the relevant Clearing Systems and the accountholder identified by the relevant Clearing Systems for the purposes of (b) above.
|
34
|
Subject to all other provisions in this Trust Deed the Trustee may without the consent of the Instrumentholders prescribe such further regulations regarding the holding of meetings and attendance and voting at them as it in its sole discretion determines including (without limitation) such requirements as the Trustee thinks reasonable to satisfy itself that the persons who purport to make any requisition in accordance with this Trust Deed are entitled to do so and as to the form of voting certificates or block voting instructions so as to satisfy itself that persons who purport to attend or vote at a meeting are entitled to do so.
|
35
|
The holder of a Global Instrument shall (unless such Global Instrument represents only one Instrument) be treated as two persons for the purposes of any quorum requirements of a meeting of Instrumentholders.
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36
|
The above provisions of this Schedule shall have effect subject to the following provisions:
|
36.1
|
Meetings of Instrumentholders of separate Series will normally be held separately. However, the Trustee may from time to time determine that meetings of Instrumentholders of separate Series shall be held together.
|
36.2
|
A resolution that in the opinion of the Trustee affects one Series alone shall be deemed to have been duly passed if passed at a separate meeting of the Instrumentholders of the Series concerned.
|
36.3
|
A resolution that in the opinion of the Trustee affects the Instrumentholders of more than one Series but does not give rise to a conflict of interest between the Instrumentholders of the different Series concerned shall be deemed to have been duly passed if passed at a single meeting of the Instrumentholders of the relevant Series provided that for the purposes of determining the votes an Instrumentholder is entitled to cast pursuant to paragraph 26, each Instrumentholder shall have one vote in respect of each whole Euro 1.00 nominal amount of Instruments held, converted, if such Instruments are not denominated in Euro, in accordance with Clause 8.13 (Currency Conversion).
|
36.4
|
A resolution that in the opinion of the Trustee affects the Instrumentholders of more than one Series and gives or may give rise to a conflict of interest between the Instrumentholders of the different Series concerned shall be deemed to have been duly passed only if it shall be duly passed at separate meetings of the Instrumentholders of the relevant Series.
|
36.5
|
To all such meetings as previously set out all the preceding provisions of this Schedule shall mutatis mutandis apply as though references therein to Instruments and to Instrumentholders were references to the Instruments and Instrumentholders of the Series concerned.
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|
|
EXECUTED BY AFFIXING
THE COMMON SEAL of NATIONAL GRID plc
in the presence of:
|
|
|
|
|
|
|
|
|
EXECUTED BY AFFIXING
THE COMMON SEAL of NATIONAL GRID ELECTRICITY TRANSMISSION plc
in the presence of:
|
|
|
|
|
|
|
|
|
EXECUTED AND DELIVERED AS A DEED BY THE LAW DEBENTURE TRUST CORPORATION p.l.c.
by:
|
|
|
|
|
|
Director
|
|
|
|
|
|
Director/Secretary
|
|
|
|
|
|
SIGNATURE PAGE TO THE TRUST DEED
|
1.
|
I have reviewed this annual report on Form 20-F of National Grid plc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
1.
|
I have reviewed this annual report on Form 20-F of National Grid plc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the company and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
Date: 25 June 2020
|
/s/ John Pettigrew
John Pettigrew
Title: Chief Executive
National Grid plc
|
|
|
|
|
Date: 25 June 2020
|
/s/ Andrew Agg
Andrew Agg
Title: Chief Financial Officer
National Grid plc
|