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Financial Statements
33. Consolidated cash flow statement
a) Cash flow from operating activities - discontinued operations
| 2007 £m |
2006 £m |
2005 £m |
|
|---|---|---|---|
| Operating profit | 62 | 111 | 465 |
| Adjustments for: | |||
| Exceptional items | 55 | 20 | 87 |
| Depreciation and amortisation | 72 | 77 | 213 |
| Share-based payment charge | - | 3 | 4 |
| Changes in working capital, provisions and pensions | (8) | (47) | (50) |
| Cash flow relating to exceptional items | - | (26) | (81) |
| Cash flow relating to discontinued operations | 181 | 138 | 638 |
b) Reconciliation of net cash flow to movement in net debt
| 2007 £m |
2006 £m |
2005 £m |
|
|---|---|---|---|
| Movement in cash and cash equivalents | 175 | 1,181 | 8 |
| Increase/(decrease) in financial investments | 1,725 | (25) | 59 |
| Increase/(decrease) in borrowings and derivatives | (3,045) | 2,304 | (1,052) |
| Cash paid to shareholders under B share scheme | 26 | 1,957 | - |
| Net interest paid (i) | 597 | 704 | n/a |
| Change in net debt resulting from cash flows | (522) | 6,121 | (985) |
| Exchange adjustments (i) | - | - | 112 |
| Changes in fair value of financial assets and liabilities and exchange movements (i) | 331 | (299) | n/a |
| Issue of B shares | - | (2,009) | - |
| Net interest charge (i) | (655) | (660) | n/a |
| Acquisition of subsidiary undertaking | (48) | - | - |
| Amounts reclassified to businesses held for sale | (42) | - | - |
| Other non-cash movements | (2) | (17) | (28) |
| Movement in net debt (net of related derivative financial instruments) in the year | (938) | 3,136 | (901) |
| Net debt at start of year | (10,850) | (13,638) | (12,737) |
| Impact of adoption of IAS 32 and IAS 39 (i) | - | (348) | - |
| Net debt (net of related derivative financial instruments) at end of year | (11,788) | (10,850) | (13,638) |
(i) The adoption of IAS 39 resulted in changes to the carrying value of borrowings and financial investments as at 1 April 2005.
c) Analysis of changes in net debt
| At 1 April 2004 £m |
Cash flow £m |
Exchange adjustments £m |
Other non-cash movements £m |
At 31 March 2005 £m |
|
|---|---|---|---|---|---|
| Cash and cash equivalents | 273 | – | (1) | – | 272 |
| Bank overdrafts | (26) | 8 | – | – | (18) |
| 247 | 8 | (1) | – | 254 | |
| Financial investments | 343 | 59 | (4) | – | 398 |
| Borrowings | (13,327) | (1,052) | 117 | (28) | (14,290) |
| (12,737) | (985) | 112 | (28) | (13,638) |
| At 1 April 2005 £m |
Impact of adoption of IAS 32 and IAS 39 (i) £m |
Cash flow £m |
Fair value gains and losses £m |
Issue of B shares £m |
Interest charges £m |
Other non-cash movements £m |
At 31 March 2006 £m |
|
|---|---|---|---|---|---|---|---|---|
| Cash and cash equivalents | 272 | – | 1,166 | 14 | – | – | – | 1,452 |
| Bank overdrafts | (18) | – | 15 | – | – | – | – | (3) |
| 254 | – | 1,181 | 14 | – | – | – | 1,449 | |
| Financial investments (ii) | 398 | 3 | (155) | 3 | – | 135 | – | 384 |
| Borrowings (ii) | (14,290) | (894) | 5,037 | (207) | (2,009) | (746) | (17) | (13,126) |
| Derivatives (ii) | – | 543 | 58 | (109) | – | (49) | – | 443 |
| (13,638) | (348) | 6,121 | (299) | (2,009) | (660) | (17) | (10,850) |
| At 1 April 2006 £m |
Cash flow £m |
Fair value gains and losses £m |
Interest charges £m |
Other non-cash movements £m |
At 31 March 2007 £m |
|
|---|---|---|---|---|---|---|
| Cash and cash equivalents | 1,452 | 178 | (14) | - | (23) | 1,593 |
| Bank overdrafts | (3) | (3) | - | - | - | (6) |
| 1,449 | 175 | (14) | - | (23) | 1,587 | |
| Financial investments (ii) | 384 | 1,509 | (9) | 215 | (1) | 2,098 |
| Borrowings (ii) | (13,126) | (2,233) | 511 | (833) | (30) | (15,711) |
| Derivatives (ii) | 443 | 27 | (157) | (37) | (38) | 238 |
| (10,850) | (522) | 331 | (655) | (92) | (11,788) |
(i) There are no comparatives for net debt-related derivative assets and liabilities at 31 March 2005 as National Grid adopted IAS 39 with effect from 1 April 2005 consistent with the requirements of IFRS 1. The adoption of IAS 39 also resulted in changes to the carrying value of borrowings and financial investments as at 1 April 2005.
(ii) Includes interest.