National Grid 2008 Annual Report Download - page 359

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 63193
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.7.1, Doc: 8, Page: 16
Description: EXH 2(B).7.1
0/1770.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/770/1*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 63193
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.7.1, Doc: 8, Page: 16 Description: EXH 2(B).7.1
0/1770.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/770/1*
National Grid Gas is subject to certain covenants and restrictions in relation to its listed debt securities and its bank lendin
g
facilities. National Grid Gas is also subject to restrictions on financin
g
that have been imposed by re
g
ulators. These restrictions
may hinder National Grid Gas in servicin
g
the financial requirements of its businesses. The debt issued by National Grid Gas is
rated by credit ratin
g
a
g
encies and chan
g
es to these ratin
g
s may affect both the borrowin
g
capacity of the National Grid Gas
Group as a whole and the cost of these borrowin
g
s. The effective rate of tax paid by the National Grid Gas Group may be
influenced by a number of factors including changes in law and accounting standards.
Future funding requirements of National Grid’s pension schemes could adversely affect National Grid Gas’s results o
f
operations
National Grid Gas participates in a of pension scheme which covers the majority of its employees. This scheme is a defined
benefit scheme where the scheme assets are held independently of National Grid Gas’s finances. Estimates of the amount and
timin
g
of future fundin
g
for this scheme are based on various actuarial assumptions and other factors includin
g
, amon
g
other
things, 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
Gas to make additional contributions to this pension scheme which, to the extent they are not recoverable under its price
controls, could adversely affect results of operations of National Grid Gas.
New or revised accounting standards, rules and interpretations by the UK, or international accounting standar
d
setting boards and other relevant bodies could have an adverse effect on National Grid Gas’s reported financia
l
results
The accounting treatment under International Financial Reporting Standards (“IFRS”), as adopted by the European of
replacement expenditure, pension and post-retirement benefits, derivative financial instruments and commodity contracts
si
g
nificantly affect the way National Grid Gas 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 Gas’s circumstances, and to
those areas in particular, could result in chan
g
es in the financial results and financial position that it reports. In addition new
standards, rules or interpretations may be issued that could also have significant effects.
Risk relating to National Grid Gas Finance (No 1) plc and its business
National Grid Gas Finance (No 1)’s only business is to act as a finance subsidiary of National Grid Gas and it has no assets
other than the amounts representing the proceeds of its issued and paid-up share capital, such fees (if any) payable to it in
connection with the issue of Instruments or entry into other obligations from time to time and any on-loan made by it of the
proceeds of the issue of any Instruments.
Factors which are material for the purpose of assessing the market risks associated with Instruments issued under
the Programme
Instruments may not be a suitable investment for all investors
Each potential investor in any Instruments must determine the suitability of that investment in li
g
ht of its own circumstances. In
particular, each potential investor should:
16
(i) have sufficient knowled
g
e and experience to make a meanin
g
ful evaluation of the relevant Instruments, the merits and
risks of investin
g
in the relevant Instruments and the information contained or incorporated by reference in this Prospectus
or any applicable supplement;
(ii) have access to, and knowled
g
e of, appropriate analytical tools to evaluate, in the context of its particular financial
situation, an investment in the relevant Instruments and the impact such investment will have on its overall investment
p
ortfolio;
(iii) have sufficient financial resources and liquidity to bear all of the risks of an investment in the relevant Instruments,
includin
g
where
p
rinci
p
al or interest is
p
a
y
able in one or more currencies, or