RAND WATER ANNUAL REPORT 2023

HOW RAND WATER IS GOVERNED

KING IV PRINCIPLE

APPLY AND EXPLAIN

15. The governing body should ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision making and of the organisation’s external reports.

The Group Audit and Risk Committee has been established by the Board to oversee: • The effectiveness of Rand Water’s assurance functions and services, with particular focus on combined assurance arrangements, including external assurance service providers, the internal audit function and the finance function. • The implementation of an appropriate enterprise-wide risk management strategy which is supported by an effective Enterprise-wide Risk Management Framework. • The quality and effectiveness of Rand Water’s risk management systems processes and procedures including the strategies and policies for the management of risks across the organisation. • The quality and integrity of Rand Water’s integrated reporting, the consolidated Rand Water Group (the Group financial statement), sustainability reporting, and public announcements in respect of the financial results. • The independence of the external auditors for the Rand Water Group and the audit scope and assessment of the effectiveness of the external audit function. • The effectiveness of the Group’s internal controls and internal audit function. • Compliance with legal and regulatory requirements to the extent that it might have an impact on the financial statements. Further, the establishment of the Combined Assurance framework within the structures of the organisation, ensures that the Board adheres to good governance principles which stipulate that a more holistic view of assurance is beneficial to the organisation and provides more than compliance alone. Accordingly, the following benefits of having such assurance structures have been identified by the Board and its management: • Coordinated efforts that focus on key risk exposures. • Minimal disruptions throughout business operations. • Sufficient tracking of remedial action on identified improvement opportunities/ weaknesses. • Improved reporting to the Board and all Committees. The use of combined assurance to support the Group Audit and Risk Committee and the Board in decision-making processes.

Refer to “How Rand Water is Governed” section of the IAR (page 34).

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