National Grid 2008 Annual Report Download - page 113

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 56850
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.5.1, Doc: 4, Page: 17
Description: EXH 2(B).5.1
0/2496.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/496/2*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 56850
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.5.1, Doc: 4, Page: 17 Description: EXH 2(B).5.1
0/2496.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/496/2*
may be influenced by a number of factors includin
g
chan
g
es in law and accountin
g
standards and the proportion of National
Grid’s business operations which are located in the U.S.
Future funding requirements of National Grid’s pension schemes could adversely affect its results of operations.
National Grid participates in a number of pension schemes which to
g
ether cover substantially all of its employees. In both the
U.K. and the U.S., the principal schemes are defined benefit schemes where the scheme assets are held independently of
National Grid’s finances. Estimates of the amount and timin
g
of future fundin
g
for these schemes are based on various actuarial
assumptions and other factors includin
g
, amon
g
other thin
g
s, the actual and projected market performance of the scheme
assets, future long-term bond yields, avera
g
e life expectancies and relevant le
g
al requirements. The impact of these
assumptions and other factors may require National Grid to make additional contributions to these pension schemes which, to
the extent they are not recoverable under its price controls or state rate plans, could adversely affect National Grid’s results of
operations.
New or revised accounting standards, rules and interpretations by the U.K., U.S. or international accounting standard settin
g
boards and other relevant bodies could have an adverse effect on National Grid’s reported financial results
The accounting treatment under International Financial Reporting Standards (“IFRS”), as adopted by the European Union, of
replacement expenditure, regulatory assets, pension and post-retirement benefits, derivative financial instruments and
commodity contracts si
g
nificantly affect the way National Grid reports its financial position and results of operations. As a body
of practice develops for IFRS, the application and interpretation of accounting principles to National Grid’s circumstances, and
to those areas above in particular, could result in chan
g
es in its financial results and financial position. In addition, new
standards, rules or interpretations may be issued that could also have significant effects.
Factors that may affect NGET’s ability to fulfil its obligations under Instruments issued under the Programme
Risks relating to NGET and its business
Changes in law or regulation could have an adverse effect on NGET’s results of operations
NGET is subject to re
g
ulation by
g
overnmental and re
g
ulatory authorities, in particular by Of
g
em. Consequently, chan
g
es in law
or re
g
ulation could adversely affect the company. Re
g
ulatory decisions concernin
g
, for example, whether licences or approvals
to operate are
g
ranted or renewed, whether market developments have been satisfactorily implemented, whether there has
been any breach of the terms of a licence or approval, the level of permitted revenues for NGET’s business and proposed
business development activities, could have an adverse impact on NGET’s results of operations, cash flows, the financial
condition of its businesses and the ability to develop those businesses in the future.
Breaches of or changes in environmental or health and safety laws or regulations could expose NGET to claims for financia
l
compensation and adverse regulatory consequences as well as damaging NGET’s reputation
Aspects of NGET’s activities are potentially dan
g
erous, such as the operation and maintenance of electricity lines. Electricity
utilities also typically use and generate in their operations hazardous and
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