TIDM82HZ
RNS Number : 0970R
National Grid Gas PLC
25 June 2020
25 June 2020
National Grid plc ('National Grid' or 'the Company')
Publication of Annual Report and Accounts and
Notice of 2020 Annual General Meeting
National Grid has today published the following documents:
- Annual Report and Accounts 2019/20
- Annual Report on Form 20-F 2019/20
- Notice of 2020 Annual General Meeting ('AGM')
In compliance with LR 9.6.1R, the Annual Report and Accounts
2019/20 and Notice of 2020 AGM have been submitted to the Financial
Conduct Authority via the National Storage Mechanism and will
shortly be available to the public for inspection at
https://www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism
In addition, the Annual Report on Form 20-F 2019/20 has today
been filed with the US Securities and Exchange Commission and will
shortly be available at
www.sec.gov/edgar/searchedgar/companysearch.html Shareholders
resident in the United States can receive a hard copy of the
Company's audited financial statements free of charge on request by
contacting The Bank of New York Mellon toll free on
+1-800-555-2470
The documents listed above are available electronically on
National Grid's website at
http://investors.nationalgrid.com/news-and-reports/reports
Notice of 2020 Annual General Meeting
National Grid's 2020 AGM will be held at 1.45pm (UK time) on
Monday 27 July 2020 at National Grid's Office, 35 Homer Road,
Solihull B91 3QJ.
In light of the COVID-19 pandemic and the current UK government
restrictions which prohibit, among other things, public gatherings,
this year's AGM will be held in a different format to that of
previous years, while still allowing shareholders to exercise their
voting rights. The health and safety of our shareholders and
colleagues is always our main priority and we are committed to
supporting the UK government's efforts in relation to this
pandemic. The AGM will take place as a closed meeting. This means
the AGM will be held with only the minimum number of persons in
attendance as is legally required to form a quorate meeting. Two
Directors, each of whom is either a shareholder, or a proxy or
corporate representative appointed by a shareholder, will attend
the meeting. Please do not travel to the AGM as anyone who seeks to
attend in person will be refused entry.
We strongly urge all shareholders to register their votes in
advance by appointing the Chairman of the AGM as their proxy and
giving voting instructions. We do not recommend the appointment of
any other person as your proxy as they will not be able to attend
the AGM and your vote will not be counted.
The Board recognises the ongoing importance of communication
with shareholders at this time and is pleased to confirm that the
Company will be holding a live webcast for shareholders following
the conclusion of the formal business of the meeting. The webcast
will take place on Monday 27 July 2020, commencing at 2.00pm (UK
time). Viewing the live webcast will not constitute formal
attendance at the AGM.
For more details on how to vote at this years AGM and how to
register for the live webcast please refer to the Notice of 2020
AGM which can be found at
https://investors.nationalgrid.com/shareholder-information/agm/2020
.
As this is a rapidly changing situation, the Company will
announce any further changes to the arrangements for holding the
AGM and update the Company's website accordingly.
Compliance with DTR 6.3.5R
The information included in the final results announcement
released on 18 June 2020 , together with the information in the
Appendices to this announcement which is extracted from the Annual
Report and Accounts 2019/20 , constitute the materials required by
the FCA's Disclosure Guidance and Transparency Rule 6.3.5R. T his
announcement is not a substitute for reading the Annual Report and
Accounts 2019/20 in its entirety.
Megan Barnes
Head of Company Secretariat
OAM: Annual financial and audit reports
National Grid LEI: 8R95QZMKZLJX5Q2XR704
APPIX
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report
and Accounts, including the Group financial statements and the
Parent Company financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare the Group financial statements in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union and Article 4 of the IAS
Regulation and have elected to prepare the Parent Company financial
statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and
applicable law), including FRS 101 'Reduced Disclosure Framework'.
Under company law, the Directors must not approve the accounts
unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and Parent Company and of the
profit or loss of the Group and Parent Company for that period.
In preparing the Group financial statements, International
Accounting Standard 1 requires that Directors:
-- properly select and apply accounting policies;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- provide additional disclosures when compliance with the
specific requirements in IFRSs are insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance; and
-- make an assessment of the Group's ability to continue as a going concern.
In preparing the Parent Company financial statements, the
Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
Parent Company's transactions and disclose with reasonable accuracy
at any time the financial position of the Group and Parent Company
on a consolidated and individual basis, and to enable them to
ensure that the Group financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the Parent Company and its subsidiaries and hence for
taking reasonable steps for the prevention and detection of fraud
and other irregularities.
The Directors are responsible for the maintenance and integrity
of the Company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Having made the requisite enquiries, so far as the Directors in
office at the date of the approval of this Report are aware, there
is no relevant audit information of which the auditors are unaware
and each Director has taken all reasonable steps to make themselves
aware of any relevant audit information and to establish that the
auditors are aware of that information.
Each of the Directors, whose names and functions are listed on
pages 66 - 67, confirms that:
-- to the best of their knowledge, the Group financial
statements and the Parent Company financial statements, which have
been prepared in accordance with IFRSs as issued by the IASB and
IFRS as adopted by the European Union and UK GAAP FRS 101
respectively, give a true and fair view of the assets, liabilities,
financial position and profit of the Company on a consolidated and
individual basis;
-- to the best of their knowledge, the Strategic Report
contained in the Annual Report and Accounts includes a fair review
of the development and performance of the business and the position
of the Company on a consolidated and individual basis, together
with a description of the principal risks and uncertainties that it
faces; and
-- they consider that the Annual Report and Accounts, taken as a
whole, are fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company's
position and performance, business model and strategy.
This Responsibilities Statement was approved by the Board and
signed on its behalf.
Directors' Report
The Directors' Report, prepared in accordance with the
requirements of the Companies Act 2006 and the UK Listing
Authority's Listing Rules, and Disclosure Rules and Transparency
Rules, comprising pages 1 - 107 and 216 - 252, was approved by the
Board and signed on its behalf.
Strategic Report
The Strategic Report, comprising pages 1 - 62, was approved by
the Board and signed on its behalf.
By order of the Board
Alison Kay
Group General Counsel & Company Secretary
17 June 2020
Company number: 4031152
Risk Management
The following is extracted in full and unedited from the Annual
Report and Accounts 2019/20, pages 227-230.
Risk factors
Management of our risks is an important part of our internal
control environment, as we describe on pages 22 - 25. In addition
to the principal risks listed, we face a number of inherent risks
that could have a material adverse effect on our business,
financial condition, results of operations and reputation, as well
as the value and liquidity of our securities.
Any investment decision regarding our securities and any
forward-looking statements made by us should be considered in the
light of these risk factors and the cautionary statement set out on
page 258. An overview of the key inherent risks we face is provided
below.
Potentially harmful activities
Aspects of the work we do could potentially harm employees,
contractors, members of the public or the environment.
Potentially hazardous activities that arise in connection with
our business include: the generation, transmission and distribution
of electricity; and the storage, transmission and distribution of
gas. Electricity and gas utilities also typically use and generate
hazardous and potentially hazardous products and by-products. In
addition, there may be other aspects of our operations that are not
currently regarded or proved to have adverse effects but could
become so, such as the effects of electric and magnetic fields.
A significant safety or environmental incident, or the failure
of our safety processes or of our occupational health plans, as
well as the breach of our regulatory or contractual obligations or
our climate change targets, could materially adversely affect our
results of operations and our reputation.
Safety is a fundamental priority for us and we commit
significant resources and expenditure to ensuring process safety;
to monitoring personal safety, occupational health and
environmental performance; and to meeting our obligations under
negotiated settlements.
We are subject to laws and regulations in the UK and US
governing health and safety matters to protect the public and our
employees and contractors, who could potentially be harmed by these
activities, as well as laws and regulations relating to pollution,
the protection of the environment, and the use and disposal of
hazardous substances and waste materials.
These expose us to costs and liabilities relating to our
operations and properties, including those inherited from
predecessor bodies, whether currently or formerly owned by us, and
sites used for the disposal of our waste.
The cost of future environmental remediation obligations is
often inherently difficult to estimate and uncertainties can
include the extent of contamination, the appropriate corrective
actions and our share of the liability. We are increasingly subject
to regulation in relation to climate change and are affected by
requirements to reduce our own carbon emissions as well as to
enable reduction in energy 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.
Pandemics
We face risks related to health epidemics and other
outbreaks.
As seen in the context of COVID-19, pandemics and their
associated counter measures may affect countries, communities,
supply chains and markets, including the UK and our service
territory in the US. The spread of such pandemics could have
adverse effects on our workforce, which could affect our ability to
maintain our networks and provide service. In addition, disruption
of supply chains could adversely affect our systems or
networks.
Pandemics such as COVID-19 can also result in extraordinary
economic circumstances in our markets which could negatively affect
our customers' ability to pay our invoices in the US or the charges
payable to the system operators for transmission services in the
UK. The suspension of debt collection and customer termination
activities across our service area in response to such pandemics is
likely to result in near-term lower customer collections, and could
result in increasing levels of bad debt and associated
provisions.
The extent to which pandemics such as COVID-19 may affect our
liquidity, business, financial condition, results of operations and
reputation will depend on future developments, which are highly
uncertain and cannot be predicted, and will depend on the severity
of the relevant pandemic, the scope, duration, cost to National
Grid and overall economic impact of actions taken to contain it or
treat its effects.
Infrastructure and IT systems
We may suffer a major network failure or interruption, or may
not be able to carry out critical operations due to the failure of
infrastructure, data or technology or a lack of supply.
Operational performance could be materially adversely affected
by: a failure to maintain the health of our assets or networks;
inadequate forecasting of demand; inadequate record keeping or
control of data or failure of information systems and supporting
technology. This, in turn, could cause us to fail to meet agreed
standards of service, incentive and reliability targets, or be in
breach of a licence, approval, regulatory requirement or
contractual obligation. Even incidents that do not amount to a
breach could result in adverse regulatory and financial
consequences, as well as harming our reputation.
Where demand for electricity or gas exceeds supply, including
where we do not adequately forecast and respond to disruptions in
energy supplies, and our balancing mechanisms are not able to
mitigate this fully, a lack of supply to consumers may damage our
reputation.
In addition to these risks, we may be affected by other
potential events that are largely outside our control, such as the
impact of the COVID-19 pandemic (including on our operations and as
a result of large-scale working from home by our employees),
weather (including as a result of climate change and major storms),
unlawful or unintentional acts of third parties, insufficient or
unreliable supply, or force majeure.
Weather conditions can affect financial performance, and severe
weather that causes outages or damages infrastructure, together
with our actual or perceived response, could materially adversely
affect operational and potentially business performance and our
reputation.
Malicious attack, sabotage or other intentional acts, including
breaches of our cyber security, may also damage our assets (which
include critical national infrastructure) or otherwise
significantly affect corporate activities and, as a consequence,
have a material adverse impact on our reputation, business, results
of operations and financial condition.
Unauthorised access to, or deliberate breaches of, our IT
systems may also lead to manipulation of our proprietary business
data or customer information. Unauthorised access to private
customer information may make us liable for a violation of data
privacy regulations. Even where we establish business continuity
controls and security against threats to our systems, these may not
be sufficient.
Law, regulation and political and economic uncertainty
Changes in law or regulation, or decisions by governmental
bodies or regulators and increased political and economic
uncertainty, could materially adversely affect us.
Most of our businesses are utilities or networks subject to
regulation by governments and other authorities. Changes in law or
regulation or regulatory policy and precedent (including any
changes arising as a result of emergency legislation to address the
COVID-19 pandemic and the UK's exit from the European Union),
including decisions of governmental bodies or regulators, in the
countries or states in which we operate could materially adversely
affect us. We may fail to deliver any one of our customer, investor
and wider stakeholder propositions due to increased political and
economic uncertainty.
If we fail to engage in the energy policy debate, we may be
unable to influence future energy policy and deliver our
strategy.
Decisions or rulings concerning the following (as examples)
could have a material adverse impact on our results of operations,
cash flows, the financial condition of our businesses and the
ability to develop those businesses in the future:
-- the RIIO-2 price controls; whether licences, approvals or
agreements to operate or supply are granted, amended or renewed;
whether consents for construction projects are granted in a timely
manner; or whether there has been any breach of the terms of a
licence, approval or regulatory requirement; and
-- timely recovery of incurred expenditure or obligations; the
ability to pass through commodity costs; a decoupling of energy
usage and revenue, and other decisions relating to the impact of
general economic conditions on us, our markets and customers;
implications of climate change and of advancing energy
technologies; whether aspects of our activities are contestable;
and the level of permitted revenues and dividend distributions for
our businesses and in relation to proposed business development
activities.
For further information, see pages 219 - 226, which explain our
regulatory environment in detail.
Business performance
Current and future business performance may not meet our
expectations or those of our regulators and shareholders.
Earnings maintenance and growth from our regulated gas and
electricity businesses will be affected by our ability to meet or
exceed efficiency targets and service quality standards set by, or
agreed with, our regulators.
If we do not meet these targets and standards, or if we are not
able to deliver the US rate plans strategy successfully, we may not
achieve the expected benefits, our business may be materially
adversely affected and our performance, results of operations and
reputation may be materially harmed and we may be in breach of
regulatory or contractual obligations.
Growth and business development activity
Failure to respond to external market developments and execute
our growth strategy may negatively affect our performance.
Conversely, new businesses or activities that we undertake alone or
with partners may not deliver target outcomes and may expose us to
additional operational and financial risk.
Failure to grow our core business sufficiently and have viable
options for new future business over the longer term, or failure to
respond to the threats and opportunities presented by emerging
technology or innovation (including for the purposes of adapting
our networks to meet the challenges of increasing distributed
energy resources), could negatively affect the Group's credibility
and reputation and jeopardise the achievement of intended financial
returns.
Our business development activities and the delivery of our
growth ambition include acquisitions, disposals, joint ventures,
partnering and organic investment opportunities, such as
development activities relating to changes to the energy mix and
the integration of distributed energy resources and other advanced
technologies. These are subject to a wide range of both external
uncertainties (including the availability of potential investment
targets and attractive financing and the impact of competition for
onshore transmission in both the UK and US) and internal
uncertainties (including actual performance of our existing
operating companies and our business planning model assumptions and
ability to integrate acquired businesses effectively). As a result,
we may suffer unanticipated costs and liabilities and other
unanticipated effects.
We may also be liable for the past acts, omissions or
liabilities of companies or businesses we have acquired, which may
be unforeseen or greater than anticipated. In the case of joint
ventures, we may have limited control over operations and our joint
venture partners may have interests that diverge from our own.
The occurrence of any of these events could have a material
adverse impact on our results of operations or financial condition,
and could also impact our ability to enter into other
transactions.
Exchange rates, interest rates and commodity price indices
Changes in foreign currency rates, interest rates or commodity
prices could materially impact earnings or our financial
condition.
We have significant operations in the US and are therefore
subject to the exchange rate risks normally associated with non-UK
operations including the need to translate US assets, liabilities,
income and expenses into sterling (our reporting currency).
In addition, our results of operations and net debt position may
be affected because a significant proportion of our borrowings,
derivative financial instruments and commodity contracts are
affected by changes in interest rates, commodity price indices and
exchange rates, in particular the dollar-to-sterling exchange
rate.
Furthermore, our cash flow may be materially affected as a
result of settling hedging arrangements entered into to manage our
exchange rate, interest rate and commodity price exposure, or by
cash collateral movements relating to derivative market values,
which also depend on the sterling exchange rate into the euro and
other currencies.
Post-retirement benefits
We may be required to make significant contributions to fund
pension and other post-retirement benefits.
We participate in a number of pension schemes that together
cover substantially all our employees. In both the UK and US, the
principal schemes are DB schemes where the scheme assets are held
independently of our own financial resources.
In the US, we also have other post-retirement benefit schemes.
Estimates of the amount and timing of future funding for the UK and
US schemes are based on actuarial assumptions and other factors,
including: the actual and projected market performance of the
scheme assets; future long-term bond yields; average life
expectancies; and relevant legal requirements
Actual performance of scheme assets may be affected by
volatility in debt and equity markets (including as a result of the
COVID-19 pandemic).
Changes in these assumptions or other factors may require 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.
Financing and liquidity
An inability to access capital markets at commercially
acceptable interest rates could affect how we maintain and grow our
businesses.
Our businesses are financed through cash generated from our
ongoing operations, bank lending facilities and the capital
markets, particularly the long-term debt capital markets.
Some of the debt we issue is rated by credit rating agencies,
and changes to these ratings may affect both our borrowing capacity
and borrowing costs. In addition, restrictions imposed by
regulators may also limit how we service the financial requirements
of our current businesses or the financing of newly acquired or
developing businesses.
Financial markets can be subject to periods of volatility and
shortages of liquidity - for example, as a result of unexpected
political or economic events or the COVID-19 pandemic. If we were
unable to access the capital markets or other sources of finance at
commercially acceptable rates for a prolonged period, our cost of
financing may increase, the discretionary and uncommitted elements
of our proposed capital investment programme may need to be
reconsidered, and the manner in which we implement our strategy may
need to be reassessed.
Such events could have a material adverse impact on our
business, results of operations and prospects.
Some of our regulatory agreements impose lower limits for the
long-term unsecured debt credit ratings that certain companies
within the Group must hold or the amount of equity within their
capital structures, including a limit requiring National Grid plc
to hold an investment-grade long-term senior unsecured debt credit
rating.
In addition, some of our regulatory arrangements impose
restrictions on the way we can operate. These include regulatory
requirements for us to maintain adequate financial resources within
certain parts of our operating businesses and may restrict the
ability of National Grid plc and some of our subsidiaries to engage
in certain transactions, including 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.
Our debt agreements and banking facilities contain covenants,
including those relating to the periodic and timely provision of
financial information by the issuing entity, and financial
covenants, such as restrictions on the level of subsidiary
indebtedness.
Failure to comply with these covenants, or to obtain waivers of
those requirements, could in some cases trigger a right, at the
lender's discretion, to require repayment of some of our debt and
may restrict our ability to draw upon our facilities or access the
capital markets.
Customers and counterparties
Customers and counterparties may not perform their
obligations.
Our operations are exposed to the risk that customers,
suppliers, banks and other financial institutions, and others with
whom we do business, will not satisfy their obligations, which
could materially adversely affect our financial position.
This risk is significant where our subsidiaries have
concentrations of receivables from gas and electricity utilities
and their affiliates, as well as industrial customers and other
purchasers, and may also arise where customers are unable to pay us
as a result of increasing commodity prices or adverse economic
conditions (including as a result of the COVID-19 pandemic).
To the extent that counterparties are contracted with for
physical commodities (gas and electricity) and they experience
events that impact their own ability to deliver, we may suffer
supply interruption as described in Infrastructure and IT systems
on page 228.
There is also a risk to us where we invest excess cash or enter
into derivatives and other financial contracts with banks or other
financial institutions. Banks who provide us with credit facilities
may also fail to perform under those contracts.
Employees and others
We may fail to attract, develop and retain employees with the
competencies (including leadership and business capabilities),
values and behaviours required to deliver our strategy and vision
and ensure they are engaged to act in our best interests.
Our ability to implement our strategy depends on the
capabilities and performance of our employees and leadership at all
levels of the business. Our ability to implement our strategy and
vision may be negatively affected by the loss of key personnel
(including personnel on sick leave or otherwise unable to work on
an extended basis because of the COVID-19 pandemic) or an inability
to attract, integrate, engage and retain appropriately qualified
personnel, or if significant disputes arise with our employees.
As a result, there may be a material adverse effect on our
business, financial condition, results of operations and
prospects.
There is a risk that an employee or someone acting on our behalf
may breach our internal controls or internal governance framework
or may contravene applicable laws and regulations. This could have
an impact on the results of our operations, our reputation and our
relationship with our regulators and other stakeholders
--------------------------------------------------------------------------------------------------
National Grid's Financial Timetable for 2020/21 financial year
is currently scheduled as follows:
1 July 2020 ADRs go ex-dividend for 2019/20
final dividend
----------------------------- ------------------------------------------
2 July 2020 Ordinary shares go ex-dividend for
2019/20 final dividend
----------------------------- ------------------------------------------
3 July 2020 Record date for 2019/20 final dividend
----------------------------- ------------------------------------------
9 July 2020 Scrip reference price announced
----------------------------- ------------------------------------------
22 July 2020 (5pm London Scrip election date
time)
----------------------------- ------------------------------------------
27 July 2020 2020 AGM
----------------------------- ------------------------------------------
19 August 2020 2019/20 final dividend paid to qualifying
shareholders
----------------------------- ------------------------------------------
12 November 2020 2020/21 half year results
----------------------------- ------------------------------------------
25 November 2020 ADRs go ex-dividend
----------------------------- ------------------------------------------
26 November 2020 Ordinary shares go ex-dividend
----------------------------- ------------------------------------------
27 November 2020 Record date for 2020/21 interim
dividend
----------------------------- ------------------------------------------
3 December 2020 Scrip reference price announced
----------------------------- ------------------------------------------
14 December 2020 (5pm London Scrip Election Date for 2020/21
time) interim dividend
----------------------------- ------------------------------------------
13 January 2021 2020/21 interim dividend paid to
qualifying shareholders
----------------------------- ------------------------------------------
May 2021 2020/21 preliminary results
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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