National Grid 2008 Annual Report Download - page 653

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 16636
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: 126
Description: EXHIBIT 15.1
0/6322.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/322/6*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 16636
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: 126 Description: EXHIBIT 15.1
0/6322.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/322/6*
Table of Contents
134
Notes to the consolidated financial statements continued
National Grid plc
6. Finance income and costs
2008 2007 2006
£m £m £m
Interest income and similar income
Ex
p
ected return on
p
ension and other
p
ost-retirement benefit
p
lan assets 1,064 926 901
Interest income on financial instruments
Interest income from bank de
p
osits and other financial assets 209 214 130
Interest receivable on finance leases 2 3 4
Gains transferred from e
q
uit
y
on dis
p
osal of available-for-sale investments
–
1 1
1,275 1,144 1,036
Interest ex
p
ense and other financial costs
Before exce
p
tional items and remeasurements
(
2,035
)
(
1,691
)
(
1,638
)
Exce
p
tional items and remeasurements
(
16
)
(
217
)
(
57
)
(
2,051
)
(
1,908
)
(
1,695
)
Net finance costs (776) (764) (659)
Interest expense and other finance costs comprise of the followin
g:
Interest on pension and other post-retirement benefit plan obligations (1,001) (869) (889)
Interest ex
p
ense on financial liabilities held at amortised cost:
Interest on bank loans and overdrafts
(
71
)
(
48
)
(
33
)
Interest on other borrowin
g
s
(
984
)
(
768
)
(
708
)
Interest on finance leases (11) (1) (1)
Exce
p
tional debt redem
p
tion costs
–
(
45
)
(
39
)
Exce
p
tional B share issue costs
–
–
(
10
)
Interest on derivatives
(
46
)
(
54
)
(
49
)
Unwinding of discounts on provisions (41) (21) (18)
Less: interest ca
p
italised
(
i
)
119 70 60
Interest ex
p
ense
(
2,035
)
(
1,736
)
(
1,687
)
Net
g
ains/
(
losses
)
on derivative financial instruments included in remeasurements:
Ineffectiveness on derivatives desi
g
nated as fair value hed
g
es
(
ii
)
1 18
(
10
)
Ineffectiveness on derivatives designated as cash flow hedges 13 – 17
Ineffectiveness on derivatives desi
g
nated as net investment hed
g
es 14 25
(
25
)
On undesi
g
nated forward rate risk relatin
g
to derivatives desi
g
nated as net investment hed
g
es
(
53
)
(
82
)
36
On derivatives not desi
g
nated as hed
g
es or ineli
g
ible for hed
g
e accountin
g
(
iii
)
18
(
114
)
(
12
)
Financial element of remeasurements on commodit
y
contracts
(
9
)
(
19
)
(
14
)
Net losses on derivative financial instruments included in remeasurements
(
iv
)
(
16
)
(
172
)
(
8
)
Interest expense and other finance costs (2,051) (1,908) (1,695)
(i) Interest on funding attributable to assets in the course of construction was capitalised during the year at a rate of 6.3% (2007: 5.6%; 2006: 5.5%).
(ii) Includes a net gain on instruments designated as fair value hedges of £87m (2007: £100m loss; 2006: £11m loss) less a net loss of £86m (2007: £118m gain; 2006: £1m gain) arising
from fair value adjustments to the carrying value of debt.
(iii) Includes a loss of £3m (2007: £126m; 2006: £nil) relating to pre-tax losses on investment-related derivative financial instruments which offset on a post-tax basis.
(iv) Includes a net foreign exchange loss on financing activities of £885m (2007: £122m gain; 2006: £273m loss). These amounts are offset by foreign exchange gains and losses on
derivative financial instruments measured at fair value.