Annual Report 2016
CORPORATE GOVERNANCE
Business plans, annual budgets
and investment proposals for each
business, and for the Group, have
been formally prepared, reviewed
and approved by the Board. These
include profit and loss and cash
flow forecasts. Actual financial
results and cash flows, including
a comparison with budgets and
forecasts, are regularly reported
to the Board with variances being
identified and used to initiate
any action deemed appropriate.
Forecasts of the Group’s compliance
with its borrowing covenants are
also prepared on a regular basis, and
forecasts of the Group’s level of its
undrawn and available borrowing
facilities for liquidity purposes are
also prepared and reported to the
Board.
Internal control
The Board attaches considerable
importance to its system of
internal control and for reviewing
its effectiveness, including its
responsibility for taking reasonable
steps for the safeguarding of
the assets of the Company and
the Group and for preventing
and detecting fraud and other
irregularities. Such a system
is designed to manage rather
than eliminate the risk, and
can nonetheless provide only
reasonable and not absolute
assurance against misstatement or
loss. There is an established internal
control framework within the Group
that is continually reviewed and
updated taking into account the
nature of the Group’s operations.
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Internal Audit
Specific topics covered by Internal
Audit during the year included but
were not limited to:
• Review of the evidence and
assumptions that support the
planning Assurance Statement
to Market Operator Services
Limited and Ofwat in respect of
the opening of non-household
competition in the water industry
• Review of business risks and
controls
• Review of Cyber Risks
• Review of South Staffordshire
Water PLC’s customer tariffs for
the 2016/17 year
• Review of change of Accounting
Standards to FRS 102
A formal Business Risk Assurance
Paper and Internal Audit Plan for
South Staffordshire Water PLC,
which seeks to examine and
evaluate the effectiveness of the
control environment and test
specific areas that are considered
a pr