National Grid 2008 Annual Report Download - page 594

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 36752
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-15.1, Doc: 16, Page: 72
Description: EXHIBIT 15.1
0/4268.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/268/4*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 36752
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-15.1, Doc: 16, Page: 72 Description: EXHIBIT 15.1
0/4268.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/268/4*
Table of Contents
80
Financial
p
osition and financial mana
g
ement continued
National Grid plc
Contractual obligations at 31 March 2008
The table of contractual obligations shown below analyses
our long-term contractual obligations according to payment
period. Purchase obligations reflect commitments under
power contracts and future capital expenditure contracted for
but not provided. The other long-term liabilities reflected in
the balance sheet at 31 March 2008 comprise commodity
contracts carried at fair value and other creditors that
represent contractual obligations falling due after more than
one year.
Interest on borrowings is calculated based on borrowings at
31 March 2008 and does not reflect future debt issues.
Floating rate interest has been estimated using future
interest rate curves at 31 March 2008.
Off balance sheet arrangements
There were no significant off balance sheet arrangements
other than the contractual obligations and commitments and
contingencies described above.
Details of material litigation as at 31 March 2008
We were not party to litigation that we considered to be
material as at 31 March 2008.
As noted on page 23, Ofgem decided that we were guilty of
breaches of competition law with respect to our metering
services business in the UK and have imposed a fine of
£41.6 million, which has been suspended pending our
appeal to the Competition Appeal Tribunal. We believe that
we have never been anti-competitive and that we will be
successful in appealing this decision. We have therefore not
provided for this fine in our financial statements.
Also as described on page 23, the US Department of Justice
is investigating competition issues in the New York City
electricity capacity market prior to our acquisition of
KeySpan. The civil investigation demands received are
requests for information in the course of an investigation and
do not constitute the commencement of legal proceedings
and no specific allegations have been made against
Ke
y
S
p
an.
Less than 1-3 3-5 More than
1 year years years 5 years Total
£m £m £m £m £m
Financial liabilities
Borrowings (3,379) (2,725) (4,732) (9,894) (20,730)
Interest payments on
borrowin
g
s
(
822
)
(
1,391
)
(
2,136
)
(
5,810
)
(
10,159
)
Finance lease liabilities (266) (72) (128) (19) (485)
Other non-interest
bearin
g
liabilities
(
2,190
)
(
347
)
–
–
(
2,537
)
Derivatives payments (647) (951) (1,498) (4,040) (7,136)
Derivatives recei
p
ts 990 1,205 1,779 3,550 7,524
Commodit
y
contracts
(
490
)
(
445
)
(
247
)
(
32
)
(
1,214
)
Other contractual
obli
g
ations
Ca
p
ital commitments
(
956
)
(
135
)
(
6
)
–
(
1,097
)
O
p
eratin
g
leases
(
83
)
(
163
)
(
135
)
(
356
)
(
737
)
Ener
gy
commitments
(
1,790
)
(
1,375
)
(
425
)
(
1,163
)
(
4,753
)
Total at 31 March 2008
(
9,633
)
(
6,399
)
(
7,528
)
(
17,764
)
(
41,324
)
Related party transactions
We provide services to and receive services from related
parties, principally joint ventures. In the year ended 31
March 2008, we charged £3 million and received charges of
£33 million from related parties (other than Directors)
compared with £4 million and £26 million in 2006/07 and
£4 million and £32 million in 2005/06 respectively.
Further information relating to related party transactions is
contained within note 30 to the consolidated financial
statements. Details on amounts paid to Directors are
included within the Directors’ remuneration report on pages
100 to 110.
Retirement arrangements
We operate pension arrangements on behalf of our
employees in both the UK and the US and also provide post-
retirement healthcare and life insurance benefits to qualifyin
g
retirees in the US.
In the UK, the defined benefit section of the National Grid UK
Pension Scheme and the National Grid Electricity Group of
the Electricity Supply Pension Scheme (National Grid
Electricity Supply Pension Scheme) are closed to new
entrants. Membership of the defined contribution section of
the National Grid UK Pension Scheme is offered to all new
employees in the UK.
In the US, we operate a number of pension plans, which
provide both defined benefits and defined contribution
benefits.
We also provide post-retirement benefits other than pensions
to the majority of employees in the US. Benefits include
health care and life insurance coverage to eligible retired
employees. Eligibility is based on certain age and length of
service requirements and in most cases retirees must
contribute to the cost of their coverage.
Net pension and other post-retirement obligations
The following table summarises the pension and other post-
retirement obligations recorded in the consolidated financial
statements:
UK US Total
Net plan asset/(liability) £m £m £m
As at 1 April 2007 (451) (794) (1,245)
Ac
q
uisition of Ke
y
S
p
an
–
(
440
)
(
440
)
Exchan
g
e movements
–
66
Pension service cost (81) (68) (149)
Ex
p
ected return less interest 75
(
12
)
63
Curtailments and settlements 3
(
81
)
(
78
)
Actuarial
g
ains and losses
–
on
p
lan assets
(
631
)
(
280
)
(
911
)
– on plan liabilities 1,252 91 1,343
Contributions
–
ordinar
y
contributions 93 83 176
– additional contributions 155 180 335
As at 31 March 2008 415
(
1,315
)
(
900
)
Plan assets 13,981 3,292 17,273
Plan liabilities
(
13,566
)
(
4,607
)
(
18,173
)
Net plan asset/(liability) 415 (1,315) (900)