annual report 
and accounts
200607 dear shareholder
we are pleased to report a good financial performance 
for the year ended 31 march 2007 adjusted operating 
profit
†
was £2454 million and adjusted earnings per 
share
†
was 477p up 5 operating profit was 
£2513 million and basic earnings per share was 481p 
up 16 these results reflect the company’s sound 
platform of operational performance and we are confident
they provide a solid basis for our future investment 
as part of our aim to be worldclass in all we do we have
undertaken a fresh strategic review at the core of this 
review was the need to ensure we are maximising value 
for shareholders and continuing our focus on providing a 
safe efficient and reliable service while acting responsibly 
as a result of the review we are now focusing on our 
core skills of operating in the gas and electricity sector 
in the us and uk we are committed to ensuring a 
disciplined approach to running our business reducing 
inefficiencies and developing more effective ways of 
working to support this the company has been 
reorganised under lines of business to allow further 
integration and knowledge transfer between our us 
and uk businesses 
we continue to invest in the development of our 
workforce with the aim of employing and retaining 
the highest calibre people both now and in the future 
we are proud of the commitment and professionalism 
demonstrated by our talented and diverse employees 
the company’s goal of worldclass performance remains 
unchanged we believe this will be achieved through our 
investment programmes and our determination to continue
to create value in our existing businesses we are both 
confident of the company’s ability to continue to provide 
good financial performance and value for our shareholders
sir john parker steve holliday
chairman chief executive
what’s inside
01 business overview
01 highlights
02 chairman’s statement
04 chief executive’s review
06 what we do
08 how we do business
10 what we have achieved
10 transmission
12 gas distribution
14 electricity distribution
16 nonregulated businesses
18 board of directors
20 operating and financial review
20 about national grid
24 current and future developments
26 objectives and strategy
30 key performance indicators
32 performance during the year
44 transmission
50 gas distribution
56 electricity distribution
60 nonregulated businesses and other
63 discontinued operations
64 financial position and financial 
management
71 accounting policies
76 independent verifier’s report on 
corporate responsibility
77 corporate governance
86 directors’ reports
86 directors’ report
88 directors’ remuneration report
99 financial statements
99 contents to financial statements
100 statement of directors’ 
responsibilities
101 independent auditors’ report
102 accounting policies
108 consolidated income statement 
109 consolidated balance sheet 
110 consolidated statement of recognised 
income and expense
111 consolidated cash flow statement 
112 notes to the accounts
173 company accounting policies
175 company balance sheet
176 notes to the company accounts
180 glossary of terms
181 definitions
182 summary consolidated financial 
information 
183 shareholder information
important notice
this document contains certain statements that are neither reported 
financial results nor other historical information these statements are 
forwardlooking statements within the meaning of section 27a of the 
securities act of 1933 as amended and section 21e of the securities 
exchange act of 1934 as amended for a description of factors that 
could affect future results reference should be made to the full 
‘cautionary statement’ on the inside back cover  annual report and accounts 200607 01
operating and
financial review
corporate
governance
business 
overview
directors’
reports
financial
statements
shareholder
information
highlights
for more information see wwwnationalgridcom
revenue
£8695m
200506 £8868m down 2
lost time injuries
142
200506 117 up 21
cash generated from operations
£3090m
200506 £2973m up 4
capital expenditure
£2345m
200506 £1907m up 23
adjusted operating profit
†
£2454m
200506 £2457m
percentage of females in workforce
237
200506 234
operating profit 
£2513m
200506 £2374m up 6 
return on equity
124
three year average
adjusted earnings per share
†
477p
200506 455p up 5
reduction in greenhouse gas emissions
35
200506 26
earnings per share
481p
200506 416p up 16
ordinary dividends
287p
200506 261p up 10


Summary:
 annual report and accounts 200607 01
operating and
financial review
corporate
governance
business 
overview
directors’
reports
financial
statements
shareholder
information
highlights
for more information see wwwnationalgridcom
revenue
£8695m
200506 £8868m down 2
lost time injuries
142
200506 117 up 21
cash generated from operations
£3090m
200506 £2973m up 4
capital expenditure
£2345m
200506 £1907m up 23
adjusted operating profit
†
£2454m
200506 £2457m
percentage of females in workforce
237
200506 234
operating profit 
£2513m
200506 £2374m up 6 
return on equity
124
three year average
adjusted earnings per share
†
477p
200506 455p up 5
reduction in greenhouse gas emissions
35
200506 26
earnings per share
481p
200506 416p up 16
ordinary dividends
287p
200506 261p up 10