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Connecting to life
Annual Report and Accounts 2014/15
Connecting to life
Annual Report and Accounts 2014/15

Table of contents

  • Page 1
    Connecting to life Annual Report and Accounts 2014/15

  • Page 2
    ... About National Grid 01 Strategic Report pages 02-41 Chairman's statement Chief Executive's review Operating environment What we do Our business model Our vision and strategy Delivering our strategy - key performance indicators Financial review Our people Principal operations Internal control and...

  • Page 3
    ... +2% 2013/14: 42.03p 24,274 Employees £3.5bn Capital investment 0.13IFR 7.3 Best overall group safety performance to date Our principal operations UK Electricity Transmission We own and maintain the high voltage electricity transmission network in England and Wales, balancing supply with demand...

  • Page 4
    ... of little relevance to a long-term business such as National Grid. Alongside our major announcements at the half year and full year we will continue to provide updates covering market and Company developments. We also continue to provide commentary on both our IFRS reported results and underlying...

  • Page 5
    ... updated UK Corporate Governance Code enhances the quality of information investors can expect to receive about the long-term health and strategy of listed companies, and encourages companies to be more transparent about risk management and internal control. Finally, I am confident that our people...

  • Page 6
    ..., there were two fatalities during the year - a member of the public in the UK who fell when climbing on one of our pipelines, and a contractor at our Rhode Island gas distribution business. Despite these incidents, we achieved our best-ever Group safety performance during 2014/15. We can never be...

  • Page 7
    ...end-to-end processes so we can continue to improve our overall performance and efficiency; and Regulatory filings: prepare and file applications for new rate plans in New York, Long Island and Massachusetts. Responsible Business of the Year As Sir Peter has described in his statement, National Grid...

  • Page 8
    ... to connect new plant and reinforce the network. Variable output from solar PV and wind makes balancing demand and supply more challenging. More interconnection between the UK and adjacent European markets will deliver net benefits to the UK. US Lower national wholesale gas prices have increased the...

  • Page 9
    ... resources to the grid and give customers more control over their energy use. These could require significant network investment in order to integrate new and variable resources and provide customers with more information on their usage. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 07

  • Page 10
    ...at a voltage they can use. We do not own or operate electricity distribution networks in the UK. In the US, our distribution networks serve around 3.5 million customers in upstate New York, Massachusetts and Rhode Island. 5 Supply The supply of electricity involves buying electricity and selling it...

  • Page 11
    ... reliability in England and Wales 3 Transmission 30 TWh Approximate amount of electricity we forecast, plan for and procure annually across three states in the US 4 Distribution 3.5 million US electricity customers ELECTRICITY NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 5 Supply 09

  • Page 12
    Strategic Report 4 Supply 3.6 million US gas customers 7,660 km of high pressure pipeline in the UK D 3 Distribution 26,882 2 Transmission T New gas heating customers in the US 10.9 million Customers serviced in the UK GAS 10 1 Production and importation 14.9% Approximate percentage of UK ...

  • Page 13
    ...through the system, particularly at times of high demand. The gas transmission system has to be kept constantly in balance, which is achieved by buying, selling and using stored gas. This means that, under normal circumstances, demand can be met. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 11

  • Page 14
    ... and cash flows. Our strategy is to be a recognised leader in the development and operation of safe, reliable and sustainable energy infrastructure, to meet the needs of our customers and communities and to generate value for our investors. We own and operate gas and electricity transmission and...

  • Page 15
    ... customers, the communities in which we operate, shareholders, governments and regulators. Cash flow Our ability to convert revenue to cash is an important factor in the ongoing reinvestment in our business. Securing low-cost funding, carefully managing our cash flows and efficient development...

  • Page 16
    ... talented teams that are in step with our strategic objectives is vital to our success. Our presence within the communities we serve, the people we work with and our opportunities to grow both individually and as a business are all important to making National Grid a great place to work. Stimulate...

  • Page 17
    ... about the development of our networks. Our employees volunteer for community-based projects and we support educational initiatives in schools. • Greenhouse gas emissions See pages 18-19 • Regulated asset growth • Adjusted EPS See pages 16-17 NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15...

  • Page 18
    ...to shareholders of dividend and growth in National Grid's assets, net of the growth in overall debt. Value added £bn 2.1 1.7 57.2 Not measured 10/11 44.7 Not measured 11/12 Not measured 12/13 13/14 14/15 Value added per share (pence) Employee lost time injury frequency rate Number of employee...

  • Page 19
    ... new price controls, including the assumed 3% long run average RPI inflation. US returns of 8.4% were slightly down on last year, reflecting the additional costs incurred on gas leak repair and compliance and the increased level of rate base growth since 2013. See page 21 The Group RoE target set...

  • Page 20
    ... in the UK using RIIO related metrics agreed with Ofgem. In the US, we use J.D. Power and Associates customer satisfaction surveys. UK Electricity Transmission UK Gas Transmission UK Gas Distribution US Gas distribution - Residential US Gas distribution - Commercial US Electricity - Residential US...

  • Page 21
    ... our Employee Resource Groups continue to support our business goals and inclusion and diversity initiatives. See Our people: pages 24-25 No specific target set. We aim to develop and operate a business that has an inclusive and diverse culture. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 19

  • Page 22
    ... the impact of foreign exchange, net regulated income increased by £81 million, reflecting increased revenue allowances under the Niagara Mohawk three year rate plan and other regulated revenue increases, partially offset by the impact of the end of LIPA management services agreement (MSA) in...

  • Page 23
    ...capital investment programme. This performance represents 360bps outperformance over allowed returns. Our UK RoE does not include the impact of legal settlement benefits of £56 million. If these were included UK RoE would increase by 60bps to 14.3%. 21 NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014...

  • Page 24
    ... the consolidated cash flow statement page 93 Commentary on borrowings page 125 2010 2011 2012 2013 2014 1. Calculated on a calendar year basis. Cash generated from operations Cash generated from operations was £5,350 million (2013/14: £4,419 million). Changes in working capital improved by...

  • Page 25
    ... are pass-through costs (including commodity and energy efficiency costs) and are fully recoverable from our customers. Timing differences between costs of this type being incurred and their recovery through revenue are also included in timing. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 23

  • Page 26
    ...', and we work with veterans through the US Troops to Energy Jobs programme. This is designed to help veterans make the transition from military service to the energy/utility industry. 1.8m Number of engineers, technicians and crafts people needed in the UK over the period 2012-2022. We...

  • Page 27
    ...and are employees of the Company. Financial year ended 31 March 2015 Male Female Total Male Female % % Health and wellbeing Among our programmes for 2014/15 we have worked to address the stigma and discrimination associated with mental health. We signed the UK Government-led 'Time to Change' pledge...

  • Page 28
    ..., including FutureVille, a vibrant futuristic cityscape controlled by the visitor's smartphone. The Science Museum is using 'Engineer Your Future' to pledge support to the UK Government's Your Life campaign, which aims to boost the number of young people in the UK studying physics and mathematics...

  • Page 29
    ... between supply and demand for the next three years. Helping the market to make the right decisions to maintain security of supply has been an important theme in our role as SO during 2014/15. Following a number of generation plant outages over the winter, the two new balancing services developed to...

  • Page 30
    ... available to fund capital investment in National Grid Electricity Transmission plc. We also deployed new tools and systems to our field workforce, winning the Mobile Innovation category at the SAP UK Quality Awards. Priorities for the year ahead Safety: Make sure our suppliers and employees manage...

  • Page 31
    ... and secure funding for continued works over the remainder of the RIIO-T1 period and beyond. Our new Gas National Control Centre visitor walkway at Warwick helps explain the role of our network and how it serves the UK's gas requirements. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 29

  • Page 32
    ... calls during 2014/15 across the emergency number, enquiry lines, appliance repair helpline and meter enquiry service. We own and operate four gas distribution networks comprising approximately 131,000 kilometres (82,000 miles) of pipeline. We transport gas from the national transmission system...

  • Page 33
    .... Our use of innovative technologies, like Core&Vac keyhole technology, helps us to keep disruption to a minimum, allowing the City to go about its daily business while we improve the network for the future. nationalgrid.com/LondonGasMainsReplacement NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15...

  • Page 34
    ... Reliability Project will bring more reliable power to the nearly 32,000 homes and businesses in Portsmouth, Middletown and Newport. The project includes two state-of-the-art substations, reconfiguration of two transmission lines, local distribution work, and retirement of five substations on the...

  • Page 35
    ..., customers and stakeholders to transform the energy industry through initiatives such as Grid Mod in Massachusetts, Reforming the Energy Vision (REV) in New York, and Gas and Electric Infrastructure Safety and Reliability (ISR) plans in Rhode Island. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014...

  • Page 36
    ... while minimising the cost impact on our customers. In a joint programme with Earth Networks, we purchased 55 Weatherbug stations to donate to our communities in Massachusetts, New York and Rhode Island. These stations provide customers with more localised weather information and we use them to...

  • Page 37
    ... and the University of Rhode Island. FERC We are part of a joint venture to form New York Transco. This aims to construct, own, and operate incremental electric transmission assets in New York State to improve reliability and reduce congestion. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 It is...

  • Page 38
    ... services to energy suppliers in the regulated market in Great Britain. It maintains an asset base of around 14.1 million domestic, industrial and commercial meters. The domestic traditional gas metering business continues to operate in its role as the National Metering Manager, pending the start...

  • Page 39
    Strategic Report Putting our surplus land to good use Connecting to life: St William Homes In November, we announced the creation of St William Homes LLP, a joint venture with the Berkeley Group. St William will transform acres of former industrial land owned by National Grid in London and the UK...

  • Page 40
    ... at any given time when pursuing our strategic objectives. The Board regularly reviews our internal controls and risk management processes. This year specific consideration was given to the guidance in the new UK Corporate Governance Code 2014 (the New Code) which applies to the Company in the next...

  • Page 41
    ...post-employment benefit true-ups, as described on pages 169 and 172. • We maintain and monitor a reputation 'watch list' at both Company and regional levels to support awareness and proactive management of issues that could cause us reputational harm. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014...

  • Page 42
    ... programme last year and actions to improve our data quality and integrity processes based on the results are being managed by the business functions. • We use industry best practices as part of our cyber security policies, processes and technologies. • We continually invest in cyber strategies...

  • Page 43
    ... our opinion on internal control over financial reporting, see page 173. The Strategic Report was approved by the Board of Directors on 20 May 2015 and signed on its behalf by: Alison Kay Group General Counsel & Company Secretary 20 May 2015 NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 41

  • Page 44
    ...Remuneration Report Dear Shareholders, Our Board is responsible for shaping the culture, values and ethics of National Grid, both within the boardroom and across the organisation, by setting the tone from the top and establishing high standards of behaviour. The changes introduced in 2014 to the UK...

  • Page 45
    ... R Remuneration Committee S Safety, Environment and Health Committee (ch) Chairman of committee ^ Including National Grid Group plc Tenure as at 31 March 2015 Charts and membership are as at 20 May 2015 John Pettigrew (46) Executive Director, UK 1 year's tenure Dean Seavers (54) Executive Director...

  • Page 46
    ...service contracts and letters of appointment, see page 67 of the Directors' Remuneration Report. Role of our Board Our Board is collectively responsible for the effective oversight of the Company and its businesses. It also determines the strategic direction, business plan, objectives and governance...

  • Page 47
    ... and development As our internal and external business environment changes, it is important to make sure that Directors' skills and knowledge are refreshed and updated regularly. Our Chairman is responsible for the ongoing development of all Directors. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014...

  • Page 48
    .../Executive Directors/Group General Counsel & Company Secretary Use a diversity of thinking styles. Responsibility: Chairman/Board members Board focus Continue to manage the strategy agenda. Responsibility: Chairman/Chief Executive/Group General Counsel & Company Secretary Progress against last year...

  • Page 49
    .... Management are encouraged to meet with the executive owner at the start of the drafting process to discuss the framework for the paper and owners are required to review and sign off on the final paper prior to submission to the Board or committee. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15...

  • Page 50
    ... the Board changes that have taken place during the year and the associated remuneration arrangements. The Board receives regular feedback on investor perceptions and opinions about the Company. Specialist advisors and the Director of Investor Relations provide updates on market sentiment. Each year...

  • Page 51
    ... Committee Finance Committee Management committees - examples of Executive Committee Global Ethics and Compliance Committee Disclosure Committee Global Retirement Plan Committee Lines of responsibility and reporting Lines of communication NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 49

  • Page 52
    ... the updated framework. See page 41 for the Company's statement on the effectiveness of internal control over financial reporting. Accounting for rate regulated activities. The Committee endorsed management's response to the discussion paper issued by the International Accounting Standards Board in...

  • Page 53
    ...year to 31 March 2015. Biographical details and experience of Committee members are set out on pages 178 and 179. Name Attendance Summarised below are the issues which attracted the most focus, and time, of the Committee in relation to the financial statements during the year. US financial controls...

  • Page 54
    ... to senior financial positions within the Company in line with our internal code; • monitoring the changes in legislation related to auditor objectivity and independence to help ensure we remain compliant; • providing a business conduct helpline that employees can use to report any concerns...

  • Page 55
    ... considers PwC's response to accounting, financial control and audit issues as they arise, and meets with them at least annually without management present, providing the external auditors with the opportunity to raise any matters in confidence. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 53

  • Page 56
    ... with the New Code, reporting to the Audit Committee on risk management and internal control has been reviewed by the Board and refinements will be adopted for the financial year 2015/16. Details of our internal control systems, including those relating to the financial reporting process, can be...

  • Page 57
    .../16 to further improve performance. An update on the evaluation including the draft Committee action plan was reported to the Board in May 2015. Progress against the action plan will be monitored through the year by the Committee and the Board. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 55

  • Page 58
    ... a safety management system across both our UK and US businesses. We have spent time looking at the risks relating to our US LNG assets and the measures being introduced to address these (see 'The Committee in action' below). Following a fatality involving a contractor at our Rhode Island gas...

  • Page 59
    ...succession planning will be reviewed to make sure that Committee input continues to be provided, as appropriate, to support senior appointments. An update on the evaluation including the draft Committee action plan was reported to the Board in May 2015. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014...

  • Page 60
    ... senior management. Objective met - ongoing. We will continue to make key diversity data, both about the Board and our wider employee population, available in the Annual Report and Accounts. Objective met - ongoing. Progress against the objectives and the policy will continue to be reviewed annually...

  • Page 61
    ... the removal of the requirement to publish an IMS, the Committee will review the investor newsletters prior to publication to the extent they contain updated technical guidance on the Company's performance or other price-sensitive information. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 59

  • Page 62
    ... ease of reference. The new policy followed an extensive review by the Remuneration Committee to assess how the remuneration framework needed to change to reflect developments in National Grid's business - the introduction of a new eight year regulatory framework in the UK (RIIO), and the continued...

  • Page 63
    ...68 have also been updated to take account of Board departures and joiners and June 2015 salary levels. A copy of the remuneration policy is available on the Company website at investors.nationalgrid.com/reports/2013-14 (pages 60 to 66). There may be circumstances from time to time when the Committee...

  • Page 64
    ...to year. Participation in tax approved all-employee share plans is subject to limits set by the relevant tax authorities from time to time. Performance metrics, weighting and time period applicable Not applicable. Operation Benefits provided include company car or a cash alternative (UK only); use...

  • Page 65
    ... Retirement Plan. These plans were non-contributory, cash balance and final average pay plans. Tom's benefits included compensation to buy out entitlements from his former employer that were lost on recruitment to National Grid. In line with market practice, pensionable pay for UK-based Executive...

  • Page 66
    Corporate Governance Directors' Remuneration Report continued Annual Performance Plan Operation Purpose and link to strategy: to incentivise and reward the achievement of annual financial and strategic business targets and the delivery of annual individual objectives. Maximum levels The maximum ...

  • Page 67
    ... Chairman is covered by the Company's private medical and personal accident insurance plans and receives a fully expensed car or cash alternative to a car, with the use of a driver, when required. There is no provision for termination payments. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 65

  • Page 68
    ...for example, flexible benefits and share plans. When considering annual salary increases, the Committee reviews the proposals for salary increases for the employee population generally, as it does for any other changes to remuneration policy being considered. This will include a report on the status...

  • Page 69
    ... as a non-executive director of another company and retain any fees received for the appointment. Experience as a board member of another company is considered to be beneficial personal development, that in turn is of value to the Company. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 67

  • Page 70
    .... In 2013/14, we consulted larger shareholders on the proposed changes to remuneration policy. Shareholders were supportive of the direction of change proposed, particularly increasing holding periods for awards and retention thresholds. Several responses suggested a number of small changes and...

  • Page 71
    ... portion will be disclosed in the 2015/16 Remuneration Report under payments to past Directors. The pension for 2014/15 shown above represents pension earned by Nick over the full year to 31 March 2015, as required by BIS disclosure regulations. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 69

  • Page 72
    ...the Executive Directors for 2014/15, together with their overall performance against these objectives: Andrew Bonfield Steve Holliday Tom King John Pettigrew Nick Winser Safety Business growth Capability development Stakeholder relations Employee engagement Financial strategy Operational excellence...

  • Page 73
    ...20% 20% n/a 248,470 407,138 47,668 (ADSs) 161,720 n/a June 2017 June 2017 June 2017 June 2017 n/a 1. The face value of the awards is calculated using the share price at the date of grant (29 July 2014) (£8.8115 per share and $74.7032 per ADS). NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 71

  • Page 74
    ...(audited information) The Executive Directors are required to build up and hold a shareholding from vested share plan awards. Deferred share plan awards are not taken into account for these purposes until the end of the deferral period. Shares are valued for these purposes at the 31 March 2015 price...

  • Page 75
    ... Marks and Spencer Group plc Board. 2. Fees for Nick Winser relate to the period from 1 April to 28 July 2014 when he stepped down from the National Grid Board at the 2014 AGM. Relative importance of spend on pay This chart shows the relative importance of spend on pay compared with other costs and...

  • Page 76
    Corporate Governance Directors' Remuneration Report continued Performance graph and table This chart shows National Grid plc's six year annual total shareholder return (TSR) performance against the FTSE 100 Index since 31 March 2009. The FTSE 100 Index has been chosen because it is the widely ...

  • Page 77
    ...% of the ISC voted. In addition, shareholders holding 40 million shares abstained. The Directors' Remuneration Report has been approved by the Board and signed on its behalf by: Jonathan Dawson Chairman of the Remuneration Committee 20 May 2015 NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 75

  • Page 78
    ... Note 21 - Other non-current liabilities 126 Note 22 - Pensions and other post-retirement benefits 130 Note 23 - Provisions 132 Note 24 - Share capital 133 Note 25 - Other equity reserves 134 Note 26 - Net debt Notes to the consolidated financial statements - supplementary information 136 Note 27...

  • Page 79
    ... of our business model (set out in the Strategic Report on pages 12 to 13), and showing how the disclosures reflect this strategy. Audit opinions We have two audit opinions on our financial statements, reflecting our dual listing on the London Stock Exchange and the New York Stock Exchange. Due to...

  • Page 80
    ... the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy. By order of the Board Alison Kay Group General Counsel & Company Secretary...

  • Page 81
    ... Grid in both the UK and US are network investment and the associated financing, and maximising returns allowable under regulatory frameworks. These activities provide the context for our audit together with, in National Grid US, the ongoing work to improve business processes and financial controls...

  • Page 82
    ... US Regulated business. How our audit addressed the area of focus: To address the risk, a significant portion of both US and group senior audit team members' time was spent developing our audit response to the issues within the US financial control environment, which we discussed with management and...

  • Page 83
    ... rates without material issues. Where the Group entered into new significant contracts in the year, we tested the contracts and assumptions used to assess whether the accounting treatment adopted is in accordance with International Accounting Standard 39. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS...

  • Page 84
    ...small number of customers who settle within agreed terms. In the US Regulated business, different services and locations are regulated by different authorities and are subject to numerous price controls. Unlike the UK, revenue is also earned through the supply of gas and electricity to end customers...

  • Page 85
    ...provision C.1.1 of the UK Corporate Governance Code (the 'Code'), that they consider the Annual Report taken as a whole to be fair, balanced and understandable and provides the information necessary for members to assess the Group's performance, business model and strategy is materially inconsistent...

  • Page 86
    .... Corporate Governance statement Under the Listing Rules we are required to review the part of the Corporate Governance statement relating to the Company's compliance with 10 provisions of the Code. We have nothing to report having performed our review. Responsibilities for the financial statements...

  • Page 87
    ... statement of changes in equity, present fairly, in all material respects, the financial position of National Grid plc and its subsidiaries at 31 March 2015 and 31 March 2014, and the results of their operations and their cash flows for each of the three years in the period ended 31 March 2015...

  • Page 88
    Financial Statements Consolidated income statement for the years ended 31 March Notes 2015 £m 2015 £m 2014 £m 2014 £m 2013 £m 2013 £m Revenue Operating costs Operating profit Before exceptional items, remeasurements and stranded cost recoveries Exceptional items, remeasurements and ...

  • Page 89
    ... parts of our business to deliver under the new RIIO price controls; and a £79m provision for the demolition of UK gas holders that are no longer required. If 2013/14 results had been translated at 2014/15 exchange rates, revenue, adjusted operating profit and operating profit reported in sterling...

  • Page 90
    ... We had a net loss after tax of £472m (2013/14: net gain of £313m) on our pension and other post-retirement benefit schemes which is due to changes in key assumptions made in the valuation calculation of pension liabilities and differences between the expected and actual pension asset returns. 88

  • Page 91
    ... dividend of 28.16p, bringing the total dividend for the year to 42.87p, a 2.0% increase on 2013/14. The Directors intend to continue the dividend policy of increasing the annual dividend by at least the rate of RPI inflation for the foreseeable future. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014...

  • Page 92
    ...331 14,870 (4,682) 11,962 12 11,974 The consolidated financial statements set out on pages 86 to 158 were approved by the Board of Directors on 20 May 2015 and were signed on its behalf by: Sir Peter Gershon Chairman Andrew Bonfield Finance Director National Grid plc Registered number: 4031152 90

  • Page 93
    ... impact of the £299m deferred tax credit on actuarial losses (a £172m tax charge in 2013/14) being offset by the impact of the reduction in the UK statutory tax rate, foreign exchange movements of £203m and the reduction in prior year charges. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 91

  • Page 94
    ... Dividends paid to shareholders Net cash flow (used in)/from financing activities Net (decrease)/increase in cash and cash equivalents Exchange movements Net cash and cash equivalents at start of year Net cash and cash equivalents at end of year1 1. Net of bank overdrafts of £3m (2014: £15m; 2013...

  • Page 95
    ...assets or other businesses (Investing activities); and the cash raised from debt or share issues and other loan borrowings or repayments (Financing activities). Changes in working capital improved by £360m over the prior year, principally in the US (£441m) due to the collection of high winter 2014...

  • Page 96
    ... the financial statements of the Company and its subsidiaries, together with a share of the results, assets and liabilities of jointly controlled entities (joint ventures) and associates using the equity method of accounting, where the investment is carried at cost plus post-acquisition changes in...

  • Page 97
    ... within the next financial year are as follows: • review of residual lives, carrying values and impairment charges for other intangible assets and property, plant and equipment - notes 10 and 11; • estimation of liabilities for pensions and other post-retirement benefits - notes 22 and...

  • Page 98
    ...growth (such as UK Electricity Transmission) to cash generative developed assets with minimal investment requirements (such as National Grid Metering, included within Other activities). We generate 95% of our revenue from our regulated operating segments in the UK and US. We work with our regulators...

  • Page 99
    ... New York. Other activities primarily relate to non-regulated businesses and other commercial operations not included within the above segments, including: the Great Britain-France electricity interconnector; UK based gas metering activities; UK property management; a UK LNG import terminal; US LNG...

  • Page 100
    ... costs Share of post-tax results of joint ventures and associates Profit before tax 3,863 36 (1,069) 46 2,876 (c) Capital expenditure, depreciation and amortisation Capital expenditure 2015 £m 2014 £m 2013 £m Depreciation and amortisation 2015 £m 2014 £m 2013 £m Operating segments: UK...

  • Page 101
    ... to last year's under-recoveries of £21m. Partially offsetting the revenue gains, regulated controllable costs were £8m higher, mainly as a result of additional system operator costs relating to EU work and some organisation change costs. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 99

  • Page 102
    ...increase in underlying revenues associated with increased regulated asset value. This was partly offset by lower allowed cost of debt (2.72% real compared with 2.92% real in 2013/14). Reconciliation of regulated financial performance to operating profit 2015 £m 2014 £m % change Reported operating...

  • Page 103
    ... the UK are either directly or indirectly employed in the transmission and distribution of gas or the transmission of electricity. At 31 March 2015, there were 2,131 (2014: 2,044; 2013: 2,151) employees in other operations, excluding shared services. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15...

  • Page 104
    ... primary statements continued 3. Operating costs continued (c) Key management compensation 2015 £m 2014 £m 2013 £m Short-term employee benefits Post-employment benefits Share-based payment 10 9 4 23 9 1 5 15 8 3 5 16 Key management compensation relates to the Board of Directors, including...

  • Page 105
    ... financial indices and prices over which we have no control. Stranded cost recoveries represent the recovery, through charges to electricity customers in upstate New York and New England, of historical generation-related costs, related to generation assets that are no longer owned by National Grid...

  • Page 106
    ... the UK. 3. For the year ended 31 March 2014, a net gain of £254m was recognised. This included a pension curtailment and settlement (£214m) for employees who transferred to a new employer following the cessation of the Management Services Agreement (MSA) with the Long Island Power Authority (LIPA...

  • Page 107
    .... In addition, the current year debt redemption costs have been treated as exceptional (see note 4). 2015 £m 2014 £m 2013 £m Finance income Interest income on financial instruments: Bank deposits and other financial assets Gains on disposal of available-for-sale investments 28 8 36 22...

  • Page 108
    ...tax rates and tax laws used to compute the amounts are those that have been enacted or substantively enacted by the reporting date. The calculation of the Group's total tax charge involves a degree of estimation and judgement, and management periodically evaluates positions taken in tax returns with...

  • Page 109
    ... deferred tax 321 Total tax charge 617 284 557 Adjustments in respect of prior years include the following amounts that relate to exceptional items, remeasurements and stranded cost recoveries: £1m credit (2014: £nil; 2013: £1m credit). NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 107

  • Page 110
    ... financial statements - analysis of items in the primary statements continued 6. Tax continued Tax (credited)/charged to other comprehensive income and equity 2015 £m 2014 £m 2013 £m Current tax Share-based payment Available-for-sale investments Deferred tax Available-for-sale investments Cash...

  • Page 111
    ... current and prior reporting periods: Pensions and other postretirement benefits £m Accelerated tax depreciation £m Sharebased payment £m Financial instruments £m Other net temporary differences £m Total £m Deferred tax (assets)/liabilities Deferred tax assets at 31 March 2013 Deferred...

  • Page 112
    ... Group's 2014 Total Tax Contribution Survey ranks National Grid in 4th place in respect of UK capital expenditure on fixed assets. For instance, National Grid's economic contribution also supports a significant number of UK jobs in our supply chain. The most significant amounts making up the 2014...

  • Page 113
    ... ordinary shares - employee share plans Weighted average number of ordinary shares - diluted 1. Comparative amounts have been restated to reflect the impact of additional shares issued as scrip dividends. 3,766 17 3,783 3,766 19 3,785 3,761 18 3,779 NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014...

  • Page 114
    ... generated in the year to meet future growth plans and pay out the remainder in accordance with our dividend policy. Interim dividends are recognised when they become payable to the Company's shareholders. Final dividends are recognised when they are approved by shareholders. 2015 Cash dividend paid...

  • Page 115
    ... as at 31 March 2015 include balances relating to the following cash-generating units: New York £2,964m (2014: £2,640m); Massachusetts £1,108m (2014: £987m); Rhode Island £412m (2014: £367m); and Federal £661m (2014: £600m). Goodwill is reviewed annually for impairment and the recoverability...

  • Page 116
    ...contractual or other legal rights are also included in the statement of financial position at their fair value. Acquisition-related intangible assets principally comprise customer relationships. Other intangible assets are amortised on a straight-line basis over their estimated useful economic lives...

  • Page 117
    ... and charging the cost of the asset to the income statement equally over this period. Our strategy in action 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...

  • Page 118
    ... financial statements - analysis of items in the primary statements continued 11. Property, plant and equipment continued Land and buildings £m Plant and machinery £m Assets in the course of construction £m Motor vehicles and office equipment £m Total £m Cost at 1 April 2013 Exchange...

  • Page 119
    ... short-term money funds 2 Managed investments in equity and bonds 3 Bank deposits Cash surrender value of life insurance policies Other investments Restricted balances: Collateral 4 Other 618 785 - 158 2 1,199 127 2,889 1. Comparatives have been represented on a basis consistent with current year...

  • Page 120
    ...net assets of the arrangement. An associate is an entity which is neither a subsidiary nor a joint venture, but over which the Company has significant influence. 2015 £m 2014 £m Share of net assets at 1 April Exchange adjustments Additions Share of post-tax results for the year Dividends received...

  • Page 121
    ...designated as cash flow hedges. On recognition of the underlying transaction in the financial statements, the associated hedge gains and losses, deferred in equity, are transferred and included with the recognition of the underlying transaction. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 119

  • Page 122
    ... currency contracts are used in the management of the foreign exchange exposure arising from the investment in non-sterling denominated subsidiaries. Where these contracts qualify for hedge accounting they are designated as net investment hedges. 2015 £m 2014 £m Cross-currency interest rate swaps...

  • Page 123
    ... Fuel stocks Raw materials and consumables Work in progress Current intangible assets - emission allowances 112 152 13 63 340 74 128 13 53 268 There is a provision for obsolescence of £28m against inventories as at 31 March 2015 (2014: £29m). NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15...

  • Page 124
    ... is established for irrecoverable amounts when there is objective evidence that amounts due under the original payment terms will not be collected. 2015 £m 2014 £m Trade receivables Prepayments and accrued income Commodity contract assets Current tax assets Other receivables 1,568 1,081 35 60 92...

  • Page 125
    ... manage risks associated with interest rates and foreign exchange. Our strategy in action Our price controls and rate plans require 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...

  • Page 126
    .... Included in current bank loans is £540m (2014: £843m) in respect of cash received under collateral agreements. For further details of our borrowing facilities, refer to note 31. For further details of our bonds in issue, please refer to the debt investor section of our website. Assets held under...

  • Page 127
    ... companies Grain LNG 1. Includes hybrid bonds at first callable date (euro: 2020; sterling: 2025). Actual maturity of these bonds is euro: 2076; sterling: 2073. Further information on our bonds can be found in the debt investor section of our website. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014...

  • Page 128
    ... Grid UK Pension Scheme, the National Grid Electricity Group of the Electricity Supply Pension Scheme and The National Grid YouPlan. In the US, we have a number of plans and also provide healthcare and life insurance benefits to eligible retired US employees. The fair value of associated plan assets...

  • Page 129
    ...management of foreign exchange exposure. Amounts recognised in the statement of financial position UK pensions 2015 £m 2014 £m 2013 £m 2015 £m US pensions 2014 £m 2013 £m US other post-retirement benefits 2015 £m 2014 £m 2013 £m Present value of funded obligations Fair value of plan assets...

  • Page 130
    ... pensions 2015 £m 2014 £m 2013 £m 2015 £m US pensions 2014 £m 2013 £m US other post-retirement benefits 2015 £m 2014 £m 2013 £m Included within operating costs Administration costs Included within payroll costs Defined contribution scheme costs Defined benefit scheme costs: Current service...

  • Page 131
    ... continued UK pensions 2015 £m 2014 £m 2013 £m 2015 £m US pensions 2014 £m 2013 £m US other post-retirement benefits 2015 £m 2014 £m 2013 £m Changes in the present value of defined benefit obligations (including unfunded obligations) Opening defined benefit obligations Current service cost...

  • Page 132
    ... 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. Our strategy in action We are committed...

  • Page 133
    ... and remediation costs relating to a number of sites owned and managed by subsidiary undertakings, together with certain US sites that National Grid no longer owns. The environmental provision is as follows: 2015 Discounted £m Undiscounted £m Real discount rate Discounted £m 2014 Undiscounted...

  • Page 134
    ...Company made payments totalling £7m (2014: £3m) to National Grid Employee Share Trusts, outside of its share repurchase programme, to enable the trustees to make purchases of National Grid plc shares in order to satisfy the requirements of employee share option and reward plans. The maximum number...

  • Page 135
    ... the difference between the carrying value of subsidiary undertaking investments and their respective capital structures following the Lattice demerger from BG Group plc and the 1999 Lattice refinancing. The cash flow hedge reserve on interest rate swap contracts will be continuously transferred to...

  • Page 136
    ... in net debt 2015 £m 2014 £m 2013 £m (Decrease)/increase in cash and cash equivalents (Decrease)/increase in financial investments Increase/(decrease) in borrowings and related derivatives Net interest paid on the components of net debt1 Change in debt resulting from cash flows Changes in fair...

  • Page 137
    ... expense of £131m (2014: £nil; 2013: £nil) is included in net interest charge on the components of net debt and an exceptional cash outflow of £152m (2014: £nil; 2013: £nil) is included in net interest paid on the components of net debt. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 135

  • Page 138
    ... contractually required to pay in the future as long as the other party meets its obligations. These commitments primarily relate to operating lease rentals, energy purchase agreements and contracts for the repurchase of network assets which, in many cases, extend over a long period of time. We also...

  • Page 139
    ... of scheme assets at latest valuation Actuarial value of benefits due to members Market value as percentage of benefits Funding deficit Funding deficit (net of tax) 1. National Grid UK Pension Scheme 2. National Grid Electricity Group of the Electricity Supply Pension Scheme. 31 March 2013 Towers...

  • Page 140
    ... on long-term financial assumptions, the contribution rate required to meet future benefit accrual was 36% of pensionable earnings (currently 33% by employers and 3% by employees). In addition, National Grid makes payments to the scheme to cover administration costs and the Pension Protection Fund...

  • Page 141
    ... employment of interest rate and inflation hedging instruments. The target asset allocation of the plans as at 31 March 2015 is as follows: UK pensions % US pensions % US other post-retirement benefits % Equities Other 21 79 100 42 58 100 65 35 100 NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014...

  • Page 142
    ... yields on high-quality corporate bonds prevailing in the UK and US debt markets at the reporting date. 2. A promotional scale has also been used where appropriate. The UK assumption stated is that relating to service prior to 1 April 2014. The UK assumption for the rate of increase in salaries...

  • Page 143
    ... managed on a daily basis. Sales to retail customers are usually settled in cash, cheques, electronic bank payments or by using major credit cards. We are committed to measuring, monitoring, minimising and recording counterparty credit risk in our wholesale business. The utilisation of credit limits...

  • Page 144
    ... American Energy Standards Board) agreements. National Grid has similar arrangements in relation to bank account balances and bank overdrafts; and trade payables and trade receivables which are subject to general terms and conditions. However, these balances are immaterial. Related amounts available...

  • Page 145
    ... 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. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 143

  • Page 146
    ... risk associated with our UK inflation linked revenues. The table in note 19 sets out the carrying amount, by contractual maturity, of borrowings that are exposed to interest rate risk before taking into account interest rate swaps. During 2015 and 2014, net debt was managed using derivative...

  • Page 147
    ... guidance with regard to specific hedging limits. Energy purchase contracts for the forward purchase of electricity or gas that are used to satisfy physical delivery requirements to customers or for energy that the Company uses itself meet the normal purchase, sale or usage exemption of IAS 39...

  • Page 148
    ... capital risk management strategy and balance sheet efficiency. As noted on page 22, we monitor our balance sheet efficiency using several metrics including our retained cash flow/net debt and interest cover. Interest cover for the year ended 31 March 2015 was 5.1 (2014: 4.1). Our long-term target...

  • Page 149
    ...nor do we currently expect they will prevent the planned payment of dividends in future in line with our dividend policy. Some of our regulatory and bank loan agreements additionally impose lower limits for the long-term credit ratings that certain companies within the Group must hold. All the above...

  • Page 150
    ... 2015 Income statement £m 2014 Income statement £m 10% increase in commodity prices1 10% decrease in commodity prices1 Volume forecast uplift 2 Volume forecast reduction 2 Forward curve extrapolation +10% market area price change -10% market area price change +20 basis point change in Limited...

  • Page 151
    ... to the above the Group has an RPI-linked bank loan agreement totalling £1,500m with the European Investment Bank (EIB), which is currently undrawn. Further information on our bonds can be found on the debt investor section of our website. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 149

  • Page 152
    ... (US) Partner 1 Limited National Grid USA1 Niagara Mohawk Holdings, Inc.1 1. Incorporated in the US. Distribution of gas Distribution of gas Distribution of gas Distribution of electricity Electricity interconnector operator Generation of electricity LNG importation and storage Metering services...

  • Page 153
    ... 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 £771m (2014: £781m) in the opposite direction if the dollar exchange rate changed by 10%. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 151

  • Page 154
    ... and on the basis of the hedge designations in place at 31 March 2015 and 2014 respectively; • the statement of financial position sensitivity to interest rates relates only to derivative financial instruments and available-for-sale investments, as debt and other deposits are carried at amortised...

  • Page 155
    ... National Grid consolidated £m National Grid plc £m Other subsidiaries £m Consolidation adjustments £m Revenue Operating costs: Depreciation and amortisation Payroll costs Purchases of electricity Purchases of gas Rates and property tax Balancing Service Incentive Scheme Payments to other UK...

  • Page 156
    ...National Grid consolidated1 £m National Grid plc £m Other Consolidation subsidiaries1 adjustments £m £m Revenue Operating costs: Depreciation and amortisation Payroll costs Purchases of electricity Purchases of gas Rates and property tax Balancing Service Incentive Scheme Payments to other UK...

  • Page 157
    ...National Grid consolidated1 £m National Grid plc £m Other Consolidation subsidiaries1 adjustments £m £m Revenue Operating costs: Depreciation and amortisation Payroll costs Purchases of electricity Purchases of gas Rates and property tax Balancing Service Incentive Scheme Payments to other UK...

  • Page 158
    ... information continued 34. Additional disclosures in respect of guaranteed securities continued Statements of financial position as at 31 March 2015 - IFRS Parent guarantor Issuer of notes Niagara Mohawk Power Corporation £m British Transco Finance Inc. £m Subsidiary guarantor National Grid Gas...

  • Page 159
    ... tax liabilities Pensions and other post-retirement benefit obligations Provisions Total non-current liabilities Total liabilities Net assets Equity Share capital Share premium account Retained earnings Other equity reserves Shareholders' equity Non-controlling interests Total equity - - - - 305...

  • Page 160
    ...£m National Grid plc £m Other subsidiaries £m Consolidation adjustments £m Year ended 31 March 2015 Net cash flow from operating activities Net cash flow from/(used in) investing activities Net cash flow (used in)/from financing activities Net (decrease)/increase in cash and cash equivalents...

  • Page 161
    ... tax assets and liabilities are not discounted. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 I. Dividends Interim dividends are recognised when they are paid to the Company's shareholders. Final dividends are recognised when they are approved by shareholders. J. Directors' remuneration Full...

  • Page 162
    ...The notes on pages 161 to 163 form part of the individual financial statements of the Company, which were approved by the Board of Directors on 20 May 2015 and were signed on its behalf by: Sir Peter Gershon Chairman Andrew Bonfield Finance Director National Grid plc Registered number: 4031152 160

  • Page 163
    ... equity-settled employee share schemes. During the year ended 31 March 2014, the Company acquired a further 98,851 ordinary shares of £1 each in National Grid (US) Holdings Limited for a total consideration of £606m. The names of the principal subsidiary undertakings, joint ventures and associates...

  • Page 164
    ... 1. The notional contract amounts of derivatives indicate the gross nominal value of transactions outstanding at the balance sheet date. 5. Investments The following table sets out the Company's current asset investments: 2015 £m 2014 £m Investments in short-term money funds Short-term deposits...

  • Page 165
    ... shareholders' funds 2015 £m 2014 £m Profit for the financial year Dividends1 Loss for the financial year Purchase of treasury shares Issue of treasury shares Purchase of own shares Scrip dividend related share issue2 Movement on cash flow hedge reserve (net of tax) Movement on available-for-sale...

  • Page 166
    ...the reporting period Exchange controls Exchange rates Material interests in shares Share capital Share price Shareholder analysis Taxation Other disclosures All-employee share plans Change of control provisions Code of Ethics Conflicts of interest Corporate governance practices: differences from New...

  • Page 167
    ... our UK and US businesses from utilising any material operating assets in the course of their operations. *Access to electricity and gas transmission and distribution assets on property owned by others is controlled through various agreements. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15...

  • Page 168
    ... our customers and wider stakeholder community; and • invest in developing the network in a way that ensures long-term security of supply. Our UK Electricity Transmission (UK ET), UK Gas Transmission (UK GT) and UK Gas Distribution (UK GD) businesses operate under eight separate price controls in...

  • Page 169
    ...across the RIIO period) and the depreciation calculation for UK GD (changed from 45 years straight line to 45 years sum of digits for assets added post 2002). We are also allowed to collect additional revenues related to non-controllable costs and incentives. The incentive mechanisms can increase or...

  • Page 170
    ... Debt Equity Return Controllable costs Non-controllable costs Depreciation Taxes Lagged recoveries Allowed revenue Our rate plans Each operating company has a set of rates for service. We have three electric distribution operations (upstate New York, Massachusetts, and Rhode Island) and six gas...

  • Page 171
    ... the year. We completed the final stabilisation upgrade to our new financial systems in July 2014. The new systems will facilitate future regulatory filings and capture the benefit of the increased investments in asset replacement, network reliability and customer growth. Planning has started to...

  • Page 172
    ...improvement in the performance of our New York gas businesses, including recommendations around strengthening of the National Grid US jurisdictional operating model, enhancing the service level agreements between the operating companies and supporting functions and corporate governance. We generally...

  • Page 173
    ...term cash needs will be met through capital contributions in the form of equity. New York Transco On 14 November 2014, the four New York investor-owned utilities (IOUs), including Niagara Mohawk Power Corporation, formed NY Transco LLC, a New York company whose sole business will be to plan, develop...

  • Page 174
    Additional Information The business in detail continued Summary of US price controls and rate plans Commodity-related bad debt true-up§ P P P P P P n/a n/a n/a n/a Achieved return on equity (31 Dec 2014) Capital tracker‡ Rate plan New York Public Service Commission Niagara Mohawk1 (upstate...

  • Page 175
    ... use by our customers. If more onerous requirements are imposed or our ability to recover these costs under regulatory frameworks changes, this could have a material adverse impact on our business, reputation, results of operations and financial position. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS...

  • Page 176
    ... revenue, and other decisions relating to the impact of general economic conditions on us, our markets and customers, implications of climate change and of Business performance Current and future business performance may not meet our expectations or those of our regulators and shareholders. Earnings...

  • Page 177
    ... us to make additional contributions to these pension schemes which, to the extent they are not recoverable under our price controls or state rate plans, could materially adversely affect the results of our operations and financial condition. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 175

  • Page 178
    ... paying dividends, lending cash and levying charges. The inability to meet such requirements or the occurrence of any such restrictions may have a material adverse impact on our business and financial condition. The remediation plans in place or being implemented to address control weaknesses...

  • Page 179
    ... exercise all the powers of the Company. They may delegate authorities to committees and day-to-day management and decision-making to individual Executive Directors. The committee structure is set out on page 49. General The Company is incorporated under the name National Grid plc and is registered...

  • Page 180
    ... Business in the Community and of The Careers and Enterprise Company. Experience: • Utilities - energy • Chief Executive • Customer • Engineer • Oil and gas • Government/regulatory • US • Partnering/JV/contract • International management • City Andrew Bonfield, Finance Director...

  • Page 181
    ... business between 2007 and 2010; Chief Operating Officer for UK Gas Distribution between 2010 and 2012; and UK Chief Operating Officer from 2012 to 2014. Experience: • Utilities - energy • Government/regulatory • US • Partnering/JV/contract management Dean Seavers, Executive Director...

  • Page 182
    ... last day of each month during the period. See weighted average exchange rate on page 87. Material interests in shares As at 31 March 2015, National Grid had been notified of the following holdings in voting rights of 3% or more in the issued share capital of the Company: Number of ordinary shares...

  • Page 183
    ... is in line with investor guidelines. The Directors currently have no intention of issuing new shares, or of granting rights to subscribe for or convert any security into shares, except in relation to, or in connection with, the operation and management of the Company's scrip dividend scheme and the...

  • Page 184
    Additional Information Shareholder information continued Price history The following table shows the highest and lowest intraday market prices for our ordinary shares and ADSs for the periods indicated: Ordinary share (pence) High Low ADS ($) High Low 2014/15 2013/14 2012/13 2011/12 2010/111 2014...

  • Page 185
    ... shareholders You can find CGT information relating to National Grid shares for UK resident shareholders on our website under: Investors, Shareholder centre, More information and help. Share prices on specific dates are also available on our website. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014...

  • Page 186
    ...purchase ADSs on a monthly basis at a 15% discounted price. Under the plan employees may contribute up to 20% of base pay each year up to a maximum annual contribution of $18,888 to purchase ADSs in National Grid. Code of Ethics In accordance with US legal requirements, the Board has adopted a Code...

  • Page 187
    ...-site through the use of QR codes. The US business has been working on research and development initiatives to improve the way we deliver gas operations, and on modernising the US electricity grid in Massachusetts and Reforming the Energy Vision (REV) in New York State. More information in relation...

  • Page 188
    ... financial statements on page 111. Year ended 31 March 2015 £m 2014 £m 2013 £m Adjusted operating profit Adjusted net finance costs Share of post-tax results of joint ventures and associates Adjusted profit before tax Adjusted tax Adjusted profit after tax Attributable to non-controlling...

  • Page 189
    ... in 2013/14 of 2.6p (5%) and 5.4p (12%) in 2012/13. In accordance with IAS 33, all EPS and adjusted EPS amounts for comparative periods have been restated for shares issued via scrip dividends and the bonus element of the 2010 rights issue. NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 187

  • Page 190
    ... reflecting increases in allowed revenues under the new RIIO regulatory framework. Timing differences added another £39 million, with £29 million over-recoveries in 2013/14, compared with a £10 million under-recovery in the prior year. Partially offsetting these, regulated controllable costs were...

  • Page 191
    ... Net pension and other post-retirement obligations A summary of the total UK and US assets and liabilities and the overall net IAS 19 (revised) accounting deficit is shown below: UK £m US £m Total £m Net plan liability As at 1 April 2013 Exchange movements Current service cost Net interest cost...

  • Page 192
    ... of National Grid for the five financial years ended 31 March 2015. It should be read in conjunction with the consolidated financial statements and related notes, together with the Strategic Report. The information presented below for the years ended 31 March 2011, 2012, 2013, 2014 and 2015 has...

  • Page 193
    ...the selected financial data. For the year ended 31 March 2014, the adoption of IAS 19 (revised) 'Employee benefits' resulted in a significant change in pensions and employee benefits accounting. The numbers included in the selected financial data above for the years 31 March 2011, 2012 and 2013 were...

  • Page 194
    ... BritNed Development Limited. C called up share capital Shares (common stock) that have been issued and have been fully paid for. carrying value The amount at which an asset or a liability is recorded in the Group's statement of financial position and the Company's balance sheet. circuit See route...

  • Page 195
    ... known as a capital lease. financial year For National Grid this is an accounting year ending on 31 March. Also known as a fiscal year. FRS A UK Financial Reporting Standard as issued by the UK Financial Reporting Council (FRC). These apply to the Company's individual financial statements on pages...

  • Page 196
    ..., capital expenditure and financing costs, including a return on equity invested. PSA The 15 year power supply agreement with LIPA which came into effect on 28 May 2013, under which the Company supplies electricity to communities and businesses across Long Island. R rate base The base investment on...

  • Page 197
    ... (the New Code) Updated guidance, issued by the Financial Reporting Council in September 2014, on how companies should be governed, applicable to UK listed companies, including National Grid, in respect of reporting periods beginning on or after 1 October 2014. UK GAAP Generally accepted accounting...

  • Page 198
    ... dividend scheme • No stamp duty or commission to pay Electronic communications To receive an email notifying you as soon as new shareholder information is available to view online, including your electronic tax voucher, sign up for electronic communications. Simply go to the National Grid share...

  • Page 199
    ..., email [email protected] or write to Stocktrade, 6th floor, Atria One, 144 Morrison Street, Edinburgh EH3 8BR. Cautionary statement This document comprises the Annual Report and Accounts for the year ending 31 March 2015 for National Grid and its subsidiaries. It contains the Directors' Report...

  • Page 200
    ... alongside other connection options when developing new transmission circuits. The new T-pylon design was the winner of an international competition held in 2011 by the Department of Energy and Climate Change, together with the Royal Institute of British Architects and National Grid. nationalgridt...