National Grid 2015 Annual Report Download - page 4

In focus:
The Board is proposing
a recommended
full-year dividend of
42.87p
(2013/14: 42.03p)
Strategic Report
It’s been a challenging year for the energy sector. Energy policies in the UK and
US have continued to evolve against a backdrop of political uncertainty, seeking
an acceptable balance between affordability to consumers, security of supply
and sustainability considerations.
Chairman’s statement
In the UK, we saw debate around the cost of living
lead to a sharper focus on the costs of energy and
the competitiveness of energy markets. This focus
has included an Energy and Climate Change Select
Committee inquiry into energy network costs, as well
as an investigation by the Competition and Markets
Authority into the supply and acquisition of energy
inGreat Britain.
In the UK, Electricity Market Reform (EMR) was
implemented successfully, and we saw developments
in significant interconnector projects (see page 27).
Inthe US, there were mid-term US congressional
and gubernatorial elections and debate continued on
essential infrastructure, resilience andsustainability.
Transparency
In January we announced our decision to stop
publishing formal Interim Management Statements
(IMSs), following the changes in legislation that
removed this requirement. Mandatory requirements
to publish information canfrequently provide an
unnecessary focus on matters 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 economic
(regulatory) performance, including reconciliations
between the key metrics for both results. To help
explain this more fully, we have increased the
commentary on our regulatory performance on
page23, and have included further analysis of our
regulatory performance by segment on page 100.
We support the development of an accounting
standard for rate-regulated activities, which would
reduce the need for additional explanations of our
results, and submitted a response to the IASB’s
project in January this year.
Dividend
The Board has recommended an increase in the final
dividend to 28.16 pence per ordinary share ($2.1866
per American Depositary Share). If approved, this
willbring the full-year dividend to 42.87 pence per
ordinary share ($3.3584 per American Depositary
Share), an increase of 2.0% over the 42.03 pence per
ordinary share in respect of the financial year ending
31 March 2014.
In August 2014 we began a share buyback
programme designed to operate alongside our scrip
dividend option, which we offered for the interim
dividend and will offer again for the full-year dividend.
The buyback programme, which operates under
authorities granted at our 2014 AGM, is designed to
balance shareholders’ appetite for the scrip dividend
option with our desire to operate an efficient balance
sheet with appropriate leverage.
Effective governance
In July 2014, John Pettigrew, who joined the Board
inApril 2014, became Executive Director, UK and
Nick Winser and Maria Richter both stepped down
from the Board.
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