Note 24 – Reserves
| Group | Company | |||||||
|---|---|---|---|---|---|---|---|---|
| |
Share premium account £m |
Other reserves £m |
Profit and loss account £m |
Share premium account £m |
Other reserve £m |
Profit and loss account £m |
||
| At 1 April 2002 (restated) | 1,243 | (5,139) | 5,231 | 1,243 | 3 | 498 | ||
| Exchange adjustments | – | – | (322) | – | – | – | ||
| Tax on exchange adjustments | – | – | 12 | – | – | – | ||
| Ordinary shares issued during the year | 2 | – | – | 4 | – | – | ||
| Repurchase and cancellation of ordinary shares | – | 2 | (97) | – | 2 | (97) | ||
| Transfer on issue of certain shares under share option schemes |
2 | – | (2) | – | – | – | ||
| Unrealised gain on transfer of assets to a joint venture (net of tax) |
– | 6 | – | – | – | – | ||
| Movement in shares held by employee share trusts | – | – | 14 | – | – | – | ||
| Employee option scheme issues | – | – | 40 | – | 24 | – | ||
| Retained (loss)/profit for the year (restated) | – | – | (179) | – | – | 734 | ||
| At 31 March 2003 (restated) | 1,247 | (5,131) | 4,697 | 1,247 | 29 | 1,135 | ||
| Exchange adjustments | – | – | (417) | – | – | – | ||
| Tax on exchange adjustments | – | – | (12) | – | – | – | ||
| Ordinary shares issued during the year | 33 | – | – | 33 | – | – | ||
| Movement in shares held by employee share trusts | – | – | 5 | – | – | – | ||
| Employee option scheme issues | – | – | 25 | – | 23 | – | ||
| Retained profit for the year (restated) | – | – | 465 | – | – | 186 | ||
| At 31 March 2004 (restated) | 1,280 | (5,131) | 4,763 | 1,280 | 52 | 1,321 | ||
| Exchange adjustments | – | – | (73) | – | – | – | ||
| Ordinary shares issued during the year | 9 | – | – | 9 | – | – | ||
| Movement in shares held by employee share trusts | – | – | 5 | – | – | – | ||
| Employee option scheme issues | – | – | 16 | – | 16 | – | ||
| Deferred tax on employee option schemes | – | – | 4 | – | – | – | ||
| Retained profit for the year | – | – | 177 | – | – | 1,921 | ||
| Unrealised gain on sale of investment to a Group undertaking |
– | – | – | – | – | 4,293 | ||
| At 31 March 2005 | 1,289 | (5,131) | 4,892 | 1,289 | 68 | 7,535 |
The Company has not presented its own profit and loss account as permitted by section 230 of the Companies Act 1985. The Company’s profit after taxation was £2,652m (2004: £795m; 2003: £1,264m). Of the Company’s profit and loss account reserve of £7,535m at 31 March 2005, £4,567m relating to gains on intra-group transactions was not distributable to shareholders.
Other reserves are non-distributable reserves. They primarily represent the difference between the carrying value of Group undertakings, investments and their respective capital structures following the Lattice Demerger from BG Group plc and the 1999 Lattice Refinancing of £(5,745)m. The reserve also included the merger differences described below of £221m and £359m together with unrealised gains of £32m on transfer of fixed assets to a former joint venture which subsequently became a Group undertaking.
During the year ended 31 March 2002, the application of merger accounting principles to a group reconstruction which involved the creation of a new holding company gave rise to a difference of £359m. It was accounted for as a merger difference and included within other reserves. In accordance with merger accounting principles, the shares issued in connection with the scheme of arrangement to acquire the former holding company of the Group (National Grid Holdings One plc), as adjusted to reflect the issue of options, were treated as if issued throughout the year ended 31 March 2002 and comparative period.
During the year ended 31 March 2003, the application of merger accounting principles to the Merger gave rise to a difference of £221m. It was accounted for as a merger difference and included within other reserves. The difference represented the excess of nominal share capital in issue by Lattice at the date of the Merger over the National Grid Transco plc share capital issued to Lattice shareholders. In accordance with merger accounting principles, the shares issued in connection with the Merger were treated as if issued throughout the year ended 31 March 2003 and comparative periods.
Own shares are included in the profit and loss account reserve at 31 March 2005 and related to 7 million 10p ordinary shares in National Grid Transco plc, held by employee share trusts for the purpose of satisfying certain obligations under various share option schemes operated by the Group. The carrying value of £29m (market value £33m) at 31 March 2005 represented the exercise amounts receivable in respect of those which were issued at market value by the Company and the cost in respect of those shares purchased in the open market.
Funding is provided to the trusts by Group undertakings. The trusts have waived their rights to dividends on these shares.
Own shares at 31 March 2004 related to 9 million 10p ordinary shares in National Grid Transco plc (book value £34m, market value £43m).
Own shares at 31 March 2003 related to 10 million 10p ordinary shares in National Grid Transco plc (book value £39m, market value £37m).