SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

Commission file number: 001-14958

NATIONAL GRID PLC

(Exact name of Registrant as specified in its charter)

England and Wales

(Jurisdiction of incorporation or organization)

1-3 Strand, London WC2N 5EH, England

(Address of principal executive offices)

Alison Kay

011 44 20 7004 3000

Facsimile No. 011 44 20 7004 3004

Group General Counsel and Company Secretary

National Grid plc

1-3 Strand London WC2N 5EH, England

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Securities registered or to be registered pursuant to Section 12(g) of the Securities Exchange Act of 1934: None.

Securities for which there is a reporting obligation pursuant to Section15(d) of the Securities Exchange Act of 1934: None.

The number of outstanding shares of each of the issuer’s classes of capital or common stock as of 31 March 20152016 was

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes þ  No ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  Yes ¨  No þ

Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:  Yes þ  No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files):  Yes ¨  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ¨    International Financial  Reporting Standards as issued by the International Accounting Standards Board þ     Other ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.  Item 17 ¨    Item 18 ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨  No þ

This constitutes the annual report on Form 20-F of National Grid plc (the “Company”) in accordance with the requirements of the US Securities and Exchange Commission (the “SEC”) for the year ended 31 March 20152016 and is dated 57 June 2015.2016. Details of events occurring subsequent to the approval of the annual report on 2018 May 20152016 are summarised in section “Further Information” which forms a part of this Form 20-F .20-F. The content of the Group’s website (www.nationalgrid.com/uk) should not be considered to form part of this annual report on Form 20-F.

Form 20-F Cross Reference Table

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national grid
Connecting to life
Annual Report and Accounts 2014/15

Contents

National Grid Annual Report and Accounts 2015/16

Strategic Report
The Strategic Report pages 02–41includes an overview of our strategy and business model, the principal risks we face and information about our performance. In addition to the financial review included within this section, we provide additional analysis and commentary, including the performance of our operating segments, within the unaudited commentary sections of the Financial Statements. This additional analysis forms part of our Strategic Report.				At a glance		02
				Chairman’s statement		0204
				Chief Executive’s review		04
		Operating environment		06
				Our operating environment		08
				What we do		0810
				Our business model		1214
				Our vision and strategy		14
		Delivering our strategy – key performance indicators		16
				Our KPIs		18
				Financial review		2022
		Our people		24
		Principal operations		27
	Internal control and risk management		3826
			Viability statement		30
			Principal operations		31
			Our people		44
Corporate Governance
			Corporate Governance pages 42–75
			The Corporate Governance Report, introduced by theour Chairman, contains details about the activities of the Board and its committees during the year, includingyear. We include reports from the Audit, Nominations, Remuneration, Finance, and Safety, Environment and Health Committees, as well asCommittees. We also include details of our shareholder engagement activities.
			Corporate Governance contents		4246
					Directors’ Report and other disclosures		5967
					Directors’ Remuneration Report		6068
Financial Statements
			Our Financial Statements pages 76–163
			Includinginclude: the independent auditors’ reports,reports; consolidated financial statements prepared in accordance with IFRS as adopted by the EU; related commentary and notes to the consolidated financial statements, as well asstatements; and the CompanyCompany’s financial statements prepared in accordance with UK GAAP.FRS 101.
			Financial Statements contents		7682
					Introduction to the financial statementsFinancial Statements		83
				77
		Statement of Directors’ responsibilities		7884
				Independent auditors’ report		85
			79
	Report of Independent Registered Public Accounting Firm		8593
Additional Information
Additional Information pages 164–inside back cover
		AdditionalThis section includes additional disclosures and information, definitions and a glossary of terms, summary consolidated financial information, and other useful information for shareholders, including contact details for more information or help.
		Additional Information contents		164174
				Definitions and glossary of terms		203
				Want more information or help?		207
				Cautionary statement		208
			We use a number of technical terms and abbreviations within this document. For brevity, we do not define terms or provide explanations every time they are used; please refer to the glossary for this information.
	Definitions and glossary of terms		192
	Want more information or help?		196
		Online
		For a full search facility, please goas well as an important notice in relation to the pdf offorward-looking statements with our Annual Report and Accounts 2014/15 in the investor relations section of our website (www.nationalgrid.com) and use a word search.
				cautionary statement.

About National Grid
Our job is to connect people to the energy they use, safely. We are at the heart of one of the greatest challenges facing our society – delivering clean energy to support our world long into the future.
Financial highlights
Adjusted operating profit1 Adjusted earnings per share1 Operating profit Earnings per share
£3,863m 58.1p £3,780m 53.6p
+5% +9% +1% -18%
2013/14: £3,664m 2013/14: 53.5p2 2013/14: £3,735m 2013/14: 65.7p2
Group return on equity Regulated assets Cash generated from operations Ordinary dividends
11.8% £37.0bn £5,350m 42.87p
+4% +7% +21% +2%
2013/14: 11.4% 2013/14: £34.7bn 2013/14: £4,419m 2013/14: 42.03p
24,274 £3.5bn 0.13IFR 7.3 75%
Employees Capital investment Best overall group safety performance to date Greenhouse gas emissions (million tonnes
carbon dioxide equivalent) Best employee engagement score to date
Our principal operations
UK Electricity Transmission UK Gas Transmission UK Gas Distribution US Regulated Adjusted operating
We own and operate an electricity transmission network and electricity and gas distribution networks serving consumers across the northeastern US.
profit %
We own and maintain the high voltage electricity transmission network in England and Wales, balancing supply with demand on a minute-by-minute basis.
All gas in the UK passes through National Grid’s national transmission system on its way to consumers.
We own and operate four of the eight regional gas distribution networks in Great Britain.
5 32 30 11 22
UK Electricity Transmission
UK Gas Transmission
UK Gas Distribution
US Regulated
Other activities
See page 28 See page 29 See page 30 See pages 33–35
1. Excludes the impact of exceptional items, remeasurements and stranded cost recoveries. See page 186 for more information about these adjusted profit measures.
Important notice
This document contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking 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, please refer to the full cautionary statement on the inside back cover and to the risk factors section on pages 173 to 176.
2. Comparative earnings per share (EPS) data has been restated for the impact of the scrip dividend issues.
Our financial results are reported in sterling. The average exchange rate, as detailed on page 87, was $1.58 to £1 in 2014/15 compared with the average rate of $1.62 to £1 in 2013/14. Except as otherwise noted, the figures in this Report are stated in sterling or US dollars.
All references to dollars or $ are to the US currency.
Acting responsibly
We have won Business in the Community’s highest award, Responsible Business of the Year 2014. This accolade acknowledges all of our efforts in getting involved with the things that really matter to us and to society, and doing the right things in the right way.
RESPONSIBLE BUSINESS OF THE YEAR 2014
BUSINESS IN THE COMMUNITY
NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15
01

		In focus:		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
		The Board is proposing    a recommended full-year  dividend of 42.87p  (2013/14: 42.03p)
				(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.

    02

In focus

Employee engagement score 76% (2014/15: 75%)

Our KPIs pages 18–21

Principal operations pages 31–43

On 12 May 2016, Ofgem announced a mid-term review. As expected, the scope of this review is narrow with no changes to key financial parameters. We welcome Ofgem’s continued commitment to the clarity and certainty offered by the eight-year RIIO framework. Ofgem will run a consultation process this summer, with any changes to be implemented in April next year.

In addition, the Company has been working with DECC and Ofgem to consider how to evolve the current SO model, to make it more independent, while remaining cost effective. In doing so, it is vital that there is no disruption to the pivotal role we play as SO in balancing the network.

Our US business

America’s gas and electricity networks, most of which were originally constructed during the nation’s ambitious post-World War II building boom, have served us well over the last half-century.

08		In focus: National Grid Annual Report and Accounts 2015/16		In the UK, there has been a lot of public focus on how secure and reliable our energy supply is, particularly on tighter margins between electricity supply and demand in the winter. Despite tighter margins than previous years, we were able to operate the system without calling upon our additional reserve. This was because of stronger than expected plant availability, mild weather,
Strategic Report	Employee  engagement score                 75%  (2013/14: 71%)
			healthy wind output and consistent interconnector imports from France and the Netherlands. We also tendered the two new balancing services for additional reserves of supply. Although these additional reserves were not used, this was a sensible precaution in case of colder weather or a series of unexpected plant shutdowns.
			In the US, we saw an extremely harsh and prolonged period of plunging temperatures and record levels of snowfall in parts of New England, particularly in February and March. Again, our network resilience held up well. We have invested millions of dollars in both our electricity and gas infrastructure to improve resilience and help reduce the impact of service interruptions.
			In December 2014 we received an award for excellence in energy efficiency from Platts Global Energy. Platts commended us for ongoing initiatives to upgrade equipment, reduce emissions, and improve safety and network efficiency. And in March 2015, the Edison Electric Institute presented us with its Emergency Recovery Award for our power restoration efforts following the severe ice storm in northern New York in December 2013.
			Safety Safety remains a hugely important priority for us. Regrettably, there were two fatalities during the year – a member of the public in the UK who fell when climbing on one of our pipelines, and a contractor at our Rhode Island gas distribution business. Despite these incidents, we achieved our best-ever Group safety performance during 2014/15. We can never be complacent about our performance and must continually strive to improve.
			Our operations We have continued to provide good value and reliability for customers while keeping our element of bills as low as possible.
			We are totally committed to providing the best value we can for our customers, investors and other stakeholders, so we’re working hard to make sure we are being as efficient as possible in everything we do. To help achieve this, we have continued to develop a way of working we call ‘Performance Excellence’, which you can read about on page 27. We also reorganised our UK business to increase clarity around what we do and who is accountable.
			In the US, we finally completed the stabilisation work on our new financial systems (see page 34). This fixed a number of long-standing problems, such as inefficient payroll processing, which had previously required expensive manual interventions. Long term,

    04

   Strategic Report

 

the robust data we can produce with the new systems is an essential foundation to the future performance improvements and regulatory filings that we need for profitable growth in the US.

It is increasingly recognised in the US that investment levels in some areas will need to rise compared with the earlier part of this decade, and we have seen increased activity this year, making it our highest ever year of US investment.  In December 2014 the NYPSC approved $200 million gas infrastructure investment in Long Island to speed up the replacement of ageing pipe and extend the use of natural gas to more customers. The NYPSC also published the results of the regulatory audit of our New York gas companies. These audits are a regular feature of the New York regulatory process. The audit was broadly supportive of our performance and structure and, as is usual, made some helpful recommendations for further improvement. We have responded with an implementation plan to provide these benefits on behalf of New York customers. As you can read on pages 18 and 19, our customer satisfaction scores were mixed. We exceeded our UK electricity and gas transmission targets. However, we did not meet our US targets and I recognise this is an area in which we must improve. Responsible Business of the Year As Sir Peter has described in his statement, National Grid was named Responsible Business of the Year 2014, which is BITC’s top award. I am extremely proud of this achievement, which is terrific recognition of how we are running a responsible and sustainable business, bringing long-term benefits to society. Although BITC is a UK body, the award was given to the entire Company and recognises the excellent work we’re doing across our entire service area in the UK and US. For example, in the UK we are completing a test line for the T-pylon at our training academy. It is smaller than the existing lattice towers and provides communities with added choice. Our property business entered into a new arrangement with the Berkeley Group to develop a number of our sites in London and the surrounding area. The first phase of investments could lead to the development of over 7,000 new homes, including affordable housing, alongside schools and public spaces. Our EmployAbility programme provides supported internship opportunities for students with additional learning needs. Now into its second year, we have extended the programme and will continue to do this across more of our UK sites. We are helping schools, parents and children see engineering as a modern, dynamic, desirable sector with a great future. Our careers education programmes in the UK include Careers Lab, an initiative we developed that has now been taken up by BITC. It links working professionals with schools

to bring the world of work to life for secondary school children. Our US initiatives include partnering with seven local community colleges to deliver energy utility technology training programmes that are designed to equip people for jobs in the energy industry. We are doing a great deal of work in this area, as you can read on page 24. All this is business as usual for us – the BITC recognition is not the result of any special new initiative we have done to win the award. But it would not have been possible without the efforts of our employees. I was delighted to see that the results of our 2015 employee opinion survey – a good measure of how satisfied employees are with their employer – included an engagement score of 75% – our highest since we started conducting Group-wide employee opinion surveys. I would like to thank all our people for making a positive impact, through their work for National Grid, their volunteering and fundraising achievements, and by getting involved in activities that really matter to us and to society. Priorities for 2015/16 Safety: continue to build on our strong performance so we can achieve a consistent world-class safety performance; Customers and stakeholders: improve the service we provide for our customers and continue to build trust among our stakeholders; Performance Excellence: focus on being efficient in our end-to-end processes so we can continue to improve our overall performance and efficiency; and Regulatory filings: prepare and file applications for new rate plans in New York, Long Island and Massachusetts. Steve Holliday

Reducing greenhouse gas emissions forms part of the Company’s KPIs (see page 21).

Strategic Report

What we do – Electricity

The electricity industry connects generation sources to homes and businesses through transmission and distribution networks. Companies that pay to use transmission networks buy electricity from generators and sell it to consumers.

 

				What we do Electricity The electricity industry connects generation sources to homes and businesses through transmission and distribution networks. Companies that pay to use transmission networks buy electricity from generators and sell it to consumers.
In focus
Our business model pages 14–15
Real-time balancing Through our Electricity Network Control Centre we balance the UK’s energy needs in real time. Read more about this on pages 34–35.
				Generation Generation is the production of electricity from fossil fuel and nuclear power stations, as well as renewable sources such as wind and solar. In the US, we own and operate 50 fossil fuel-powered stations on Long Island and 7.9 MW of solar generation in Massachusetts. We do not own or operate any electricity generation in the UK. We sell the electricity generated by our plants on Long Island to LIPA under a long-term power supply agreement. The contract allows us to recover our efficient operating costs and provides a return on equity on our investment in the generation assets. For solar generation, we recover our costs and a reasonable return from customers in Massachusetts through a solar cost-adjustment factor. This is added to the electricity rate, net of revenues earned from the solar assets.		Transmission Transmission systems generally include overhead lines, underground cables and substations. They connect generation and interconnectors to the distribution system. We own and operate the transmission network in England and Wales. We operate but do not own the Scottish networks. We are also working in a joint venture with Scottish Power Transmission to construct an interconnector to reinforce the GB transmission system between Scotland and England and Wales. In the US, we jointly own and operate transmission facilities spanning upstate New York, Massachusetts, New Hampshire, Rhode Island and Vermont. Distribution Distribution systems carry lower voltages than transmission systems over networks of overhead lines, underground cables and substations. They take over the role of transporting electricity from the transmission network, and deliver it to consumers at a voltage they can use. We do not own or operate electricity distribution networks in the UK. In the US, our distribution networks serve around 3.5 million customers in upstate New York, Massachusetts and Rhode Island. Supply The supply of electricity involves buying electricity and selling it on to customers. It also involves customer services, billing and the collection of customer accounts. We do not sell electricity to consumers in the UK. All our customers in the US can select a competitive supplier for the supply component of electricity utility services. Where customers choose National Grid, they pay us for distribution and electricity costs. Where they choose to buy electricity from third parties, they pay us for distribution only and pay the third-party supplier for the electricity. Our base charges for electricity supply are calculated to recover the purchased power costs.
				Interconnectors
System operator As system operator (SO) for England and Wales, we coordinate and direct electricity flows onto and over the transmission system, balancing generation supply and user demand. Where necessary, we pay sources of supply and demand to increase or decrease their generation or usage.   We have the same role for the two high voltage electricity transmission networks in Scotland and we are SO for the offshore electricity transmission regime.   Our charges for SO services in the UK are subject to a price control approved by Ofgem. System users pay us for connection, for using the system and balancing services.   As electricity transmission SO, our price control includes incentives to minimise the costs and associated risks of balancing the system through buying and selling energy, as well as procuring balancing services from industry participants.   In the US, similar services are provided by independent system operators.				will deliver significant benefits to consumers. These include opportunities for interconnection with Iceland, Denmark and a further link with France.
				We also jointly own and operate a 224 kilometre interconnector between New England in the US and Canada.
				We sell capacity on our UK interconnectors through auctions and on our US interconnector through wholesale markets and bilateral contracts.
				Transmission systems generally include overhead lines, underground cables and substations. They connect generation and interconnectors to the distribution system.
				We own and operate the transmission network in England and Wales. We operate but do not own the Scottish networks. We are also working in a joint venture with Scottish Power Transmission to construct an interconnector to reinforce the GB transmission system between Scotland and England and Wales.
		Generation is the production of electricity from fossil fuel and nuclear power stations, as well as renewable sources such as wind and solar. In the US, we own and operate 50 fossil fuel-powered stations on Long Island and 4.6 MW of solar generation in Massachusetts. We do not own or operate any electricity generation in the UK. We sell the electricity generated by our plants on Long Island to LIPA under a long-term power supply agreement. The contract allows us to recover our efficient operating costs and provides a return on equity on our investment in the generation assets. For solar generation, we recover our costs and a reasonable return from customers in Massachusetts through a solar cost adjustment factor. This is added to the electricity rate, net of revenues earned from the solar assets. Transmission grids are often interconnected so that energy can flow from one country or region to another. This helps provide a safe, secure, reliable and affordable energy supply for citizens and society across the region. Interconnectors also allow power suppliers to sell their energy to customers in other countries.   Great Britain is linked via interconnectors with France, Ireland, Northern Ireland and Thethe Netherlands. National Grid ownsWe own part of the interconnectors with France and Thethe Netherlands. We are also now entering the construction phase for two new interconnectors, between the UK and Belgium and the UK and Norway. We are continuing to work on developing additional interconnector projects, which we believe will deliver significant benefits to consumers. These include opportunities for interconnection with Iceland, Denmark and a further link with France.				In the US, weWe also jointly own and operate transmission facilities spanning upstatea 224 kilometre interconnector between New York, Massachusetts, New Hampshire, Rhode IslandEngland in the US and Vermont. Distribution systems carry lower voltages than transmission systems over networks of overhead lines, underground cables and substations. They take over the role of transporting electricity from the transmission network, and deliver it to consumers at a voltage they can use.Canada.   We do not own or operate electricity distribution networks in the UK. In thesell capacity on our UK interconnectors through auctions and on our US our distribution networks serve around 3.5 million customers in upstate New York, Massachusettsinterconnector through wholesale markets and Rhode Island. The supply of electricity involves buying electricity and selling it on to customers. It also involves customer services, billing and the collection of customer accounts. We do not sell electricity to consumers in the UK. All our customers in the US can select a competitive supplier for the supply component of electricity utility services. Where customers choose National Grid, they pay us for distribution and electricity costs. Where they choose to buy electricity from third parties, they pay us for distribution only and pay the third-party supplier for the electricity. Our base charges for electricity supply are calculated to recover the purchased power costs.bilateral contracts.