National Grid 2015 Annual Report Download - page 85

Going concern
Under the Listing Rules we are required to review the Directors’
statement, set out on page 54, in relation to going concern.
Wehave nothing to report having performed our review.
As noted in the Directors’ statement, the Directors have concluded
that it is appropriate to prepare the financial statements using the
going concern basis of accounting. The going concern basis
presumes that the Group and Company have adequate resources
to remain in operation, and that the Directors intend them to do so,
for at least one year from the date the financial statements were
signed. As part of our audit we have concluded that the Directors’
use of the going concern basis is appropriate.
However, because not all future events or conditions can be
predicted, these statements are not a guarantee as to the Group’s
and Company’s ability to continue as a going concern.
Other required reporting
Consistency of other information
Companies Act 2006 opinion
In our opinion, the information given in the Strategic Report and
theDirectors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial statements.
ISAs (UK & Ireland) reporting
Under ISAs (UK & Ireland) we are required to report to you if,
inouropinion:
• Information in the Annual Report is:
– materially inconsistent with the information in the audited
financial statements; or
– apparently materially incorrect based on, or materially
inconsistent with, our knowledge of the Group and Company
acquired inthecourse of performing our audit; or
– otherwise misleading.
We have no exceptions to report arising from this responsibility.
• The statement given by the Directors on page 78, in accordance
with provision C.1.1 of the UK Corporate Governance Code
(the‘Code’), that they consider the Annual Report taken as
awhole to be fair, balanced and understandable and provides
the information necessary for members to assess the Group’s
performance, business model and strategy is materially
inconsistent with our knowledge of the Group acquired in the
course of performing our audit.
We have no exceptions to report arising from this responsibility.
• The section of the Annual Report on pages 51 and 52, as
required by provision C.3.8 of the Code, describing the work
ofthe AuditCommittee does not appropriately address
matterscommunicated by us to the Audit Committee.
We have no exceptions to report arising from this responsibility.
For US utility revenues billed to end consumers, we selected
samples of rate classes to test that customer rates were properly
updated in the billing systems, and that rate types were assigned
tocustomers consistent with the type of customer and (where
appropriate) the volume of usage. We also selected samples of
customer bills and tested that such bills were paid by customers
and were consistent with the regulator-approved rate plans.
Forthose bills selected that were outstanding at the end of the
year, we confirmed the balance with customers, and tested
amounts to subsequent cash receipts where no customer
confirmation was received.
In respect of unbilled revenue we tested management’s
assumptions in relation to consumption by reference to historical
data as well as specific current year factors, including weather
patterns. In so doing, we did not note any material issues.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the geographic
structure of the Group, the accounting processes and controls,
andthe industry in which the Group operates.
We identified that UK Electricity Transmission, UK Gas
Transmission, UK Gas Distribution and the US Regulated business
required an audit of their complete financial information due to
theirsize. As the Group has separate finance functions for head
office, the UK and US operations which each maintain their own
accounting records and controls and report to Group through an
integrated consolidation system, we used component auditors
within PwC UK and PwC US who are familiar with the local laws
and regulations to perform this audit work.
Where the work was performed by component auditors, we
determined the level of involvement we needed to have in the audit
work at those locations to be able to conclude whether sufficient
appropriate audit evidence had been obtained as a basis for our
opinion on the Group financial statements as a whole. In performing
this assessment, and in particular given the US issues in our areas
of focus, the Group team visited the US on a number ofoccasions
for meetings with our US team and the US Regulated business.
This was supported by regular conference calls throughout the
year. We also held regular calls and meetings with our UK
component teams.
The Group consolidation, financial statement disclosures and
taxand treasury related activities are audited by the Group team
using specialists where appropriate. Taken together, the territories
and functions where we performed our audit work accounted for
96% of Group revenues and 88% of Group profit before tax.
TheGroup team retains overall responsibility for the audit of the
financial statements.
Financial Statements
NATIONAL GRID ANNUAL REPORT AND ACCOUNTS 2014/15 83