To: the Board of Management of Alliander N.V.
The Board of Management of Alliander N.V. (‘the Organisation’) engaged us to provide assurance on the sustainability information in the Annual Report 2015. We believe these procedures fulfil the rational objective as disclosed by Alliander N.V. in the section ‘About this report’ (page 3-6).
Our engagement consisted of a combination of limited assurance (leading to a ‘conclusion’) and reasonable assurance (leading to an ‘opinion’) on the following information:
- We reviewed the sustainability information presented in the following chapters, leading to limited assurance:
- About this report (page 3-6)
- About Alliander (page 7-26)
- Our results in 2015:
- Customers (page 28-38)
- Employees (page 39-45)
- Shareholders and investors (page 46, 66-72)
- The impact cases on pages 32, 44 and 71
- We audited the sustainability information presented in the column ‘Results 2015’ on page 21-22 in the chapter ‘Objectives & results’ and the materiality assessment presented on page 203-207 in the chapter ‘Materiality test’, leading to reasonable assurance.
Based on our review procedures and the evidence we have obtained, nothing has come to our attention that causes us to believe that the sustainability information in the Annual Report 2015 does not, in all material respects, provide a reliable and appropriate presentation of Alliander N.V.’s policy with regard to sustainable development and the related activities, events and performance of Alliander N.V. during the reporting year, in accordance with the Alliander N.V. reporting criteria.
Based on our audit procedures and the evidence we have obtained, in our opinion the Results 2015 as presented in chapter ‘Objectives & results’ of the Annual Report 2015, and the materiality assessment presented on page 203-207 in chapter ‘Materiality test’ are, in all material respects, presented reliably and adequately, in accordance with the Alliander N.V. reporting criteria.
Our conclusion and opinion are to be read in the context of the remainder of this report.
The scope of our assurance
We reviewed the sustainability information included in the Annual Report 2015 of Alliander N.V., Arnhem. This sustainability information consists of:
- the policy of Alliander N.V. concerning the sustainable development for the year ended 31 December 2015; and
- the activities, events and performance of Alliander N.V. concerning the sustainable development for the year ended 31 December 2015; and
- the scoping of the sustainability information, disclosed by management in the paragraph ‘Integrated reporting’ on page 5 of the Annual Report 2015.
A review focuses on obtaining limited assurance. The procedures performed to obtain limited assurance focus on assessing the plausibility of information and are substantially less in scope than for a reasonable assurance engagement. The procedures we performed in this respect consisted primarily of inquiries with Alliander N.V. staff members and performing analytical procedures on the information disclosed in the Annual Report 2015. The level of assurance obtained through review procedures is therefore less than the assurance obtained from audit procedures.
In addition to our review procedures, we have audited the Results 2015 presented on page 21-22 in chapter ‘Objectives & results’ and the materiality assessment presented on page 203-207 in chapter ‘Materiality test’ (leading to an ‘opinion’).
The basis for our opinion and conclusion
Professional and ethical standards applied
We conducted our assurance engagement in accordance with Dutch law, including Standard 3810N ‘Assurance engagements relating to sustainability reports’ (hereafter ‘Standard 3810N’). Our responsibilities under this standard are further described in the “Our responsibilities” section of this report.
We are independent of Alliander N.V. in accordance with the “Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten” (ViO) and other relevant independence requirements in the Netherlands. Furthermore we have complied with the “Verordening gedrags- en beroepsregels accountants” (VGBA) and other relevant regulations.
Limitations in our scope
The Report contains prospective information, such as ambitions, strategy, targets, expectations and projections. Inherent to this information is that actual future results may be different from the prospective information and therefore it may be uncertain. We do not provide any assurance on the assumptions and feasibility of this prospective information.
The auditor is not expected to, and cannot, reduce audit risk to zero and cannot therefore obtain absolute assurance that the sustainability information is free from material misstatement due to fraud or error. This is because there are inherent limitations of an assurance engagement, which result in most of the audit evidence on which the auditor bases the auditor’s opinion being persuasive rather than conclusive.
Alliander N.V. developed its reporting criteria on the basis of the G4 Guidelines of the Global Reporting Initiative (GRI), which are disclosed in chapter ‘About this report’, together with detailed information on the reporting scope, processes and methods. We believe that the assurance evidence we have obtained is sufficient and appropriate to provide a basis for our opinion and conclusion.
Understanding reporting and measurement methodologies
The information in the scope of this assurance engagement needs to be read and understood together with the reporting criteria, for which Alliander N.V. is solely responsible for selecting and applying. The absence of a significant body of established practice on which to draw, to evaluate and measure non-financial information allows for different, but acceptable, measurement techniques and can affect comparability between entities and over time.
Our assurance approach
We set thresholds for materiality at the planning stage and reassessed them during the engagement. These helped us to determine the nature, timing and extent of our procedures and to evaluate the effect of identified misstatements on the information presented, both individually and in aggregate. Based on our professional judgement, we determined specific materiality levels for each element of the sustainability information. When determining our materiality thresholds, we considered the relevance of information for both the stakeholders and the organisation based on the materiality assessment of Alliander N.V.
Area of focus in our review
The most significant area of focus we identified in this assurance engagement in relation to the sustainability information is identified below, including a disclosure of how we have tailored our procedures to address this area.
We discussed this area with the Board of Management. This area of particular focus is addressed taking the complete assurance engagement on sustainability into account, including formulating our opinion and conclusion thereon. We do not provide a separate opinion on this area of particular focus.
Area of focus
How the scope of our work addressed the area of focus
One of topics Alliander N.V. reports about on pages 32, 44 and 71 relates to the impact on its stakeholders. Through this disclosure, Alliander N.V. provides insight in how its procedures with respect to sustainability impact its stakeholders. In 2015, the Organisation made its first efforts towards reporting on impact by disclosing three cases about the following: smart meters (page 32), its Step2Work program (page 44) and the heat transport network in Nijmegen (page 71).
Alliander N.V. requested us to provide limited assurance on these cases.
The impact measurement is an area of focus in our engagement since the three cases contain various assumptions. Some of these assumptions are based on complex calculations, a variety of underlying sources, expertise from external experts (like the impact measurement methodologies and desktop research relating to assumptions) and prospective information or otherwise.
As part of our assurance procedures we have reviewed the cases presented on page 32, 44 and 71. Through interviews with relevant Alliander N.V. staff members and external experts we gained insight in the process followed to determine the assumptions and calculations for the impact measurements.
Where Alliander N.V. used the expertise of external experts (i.e., Ecofys and TruePrice) to perform impact measurements, we gathered information about the expertise and objectivity of these experts.
We took note of the calculations and performed recalculations for the most important components of these calculations.
Where underlying assumptions play an important role in the calculations, we performed reconciliations with underlying source documentations, such as sub administrations, external reports and research results.
For those areas where management applied estimates or future oriented information in assumptions or calculations, we gathered information about underlying data. Based on our procedures, we gained insight in the methods used by management and the estimates applied, as well as how management disclosed this in the Annual Report.
We are required to plan and perform our audit and review in order to be able to provide reasonable and limited assurance that no material misstatements exist in the Annual Report 2015.
Our main review procedures included the following:
- performing an external environment analysis and obtaining an understanding of the relevant social issues, relevant laws and regulations and the characteristics of the organisation;
- evaluating the acceptability of the reporting policies and consistent application of this, such as assessment of the outcomes of the stakeholder dialogue and the process for determining the material subjects, the reasonableness of estimates made by management, as well as evaluating the overall presentation of the Annual Report;
- evaluating the design and implementation and testing the operating effectiveness of the systems and processes for data gathering and processing of information as presented in the Annual Report 2015;
- interviewing relevant staff responsible for providing the information for the Annual Report 2015, carrying out internal control procedures on the data and the consolidation of the data in the Annual Report 2015;
- reviewing relevant internal and external documentation, on a sample basis, to determine the reliability of the information in the Annual Report 2015;
- analytical review of the data and trends;
- evaluating internal and external documentation to assess whether information in the Annual Report 2015 is substantiated adequately;
- assessing the consistency of the sustainability information and the information in the Annual Report 2015 not in scope for this Assurance Report;
- assessing whether the sustainability information has been prepared ‘in accordance’ with the Sustainability Reporting Guidelines version G4 of GRI.
In addition to the procedures mentioned above, for the information in audit scope we performed the following audit procedures:
- assessing the systems and processes for data gathering, including testing the design, existence and the effectiveness of the relevant internal controls during the reporting year;
- conducting analytical procedures and substantive testing procedures on the relevant data;
- assessing the processing of other information, such as the aggregation process of data to the information as presented in the sustainability information; and
- corroborating internal and external documentation to determine whether the sustainability information is substantiated adequately.
We believe that the assurance evidence we have obtained is sufficient and appropriate to provide a basis for our opinion and conclusion.
The Board of Management’s responsibilities
The Board of Management of Alliander N.V. is responsible for the preparation of the responsibility reporting sections in accordance with the Alliander N.V. reporting criteria, including the identification of the stakeholders and the determination of material subjects. Furthermore, the Board of Management is responsible for such internal control as necessary to enable the preparation of the Annual Report 2015, which is free from material misstatement, whether due to fraud or error.
Based on our assurance engagement in accordance with Standard 3810N, our responsibility is to:
- express a conclusion about the sustainability information
- express an opinion on the ‘Results 2015’ within the chapter ‘Objectives & results’ and the materiality assessment on page 203-207 in the chapter ‘Materiality test’.
This requires that we comply with ethical requirements and that we plan and perform our work to obtain a combination of limited and reasonable assurance about whether the Annual Report 2015 is free from material misstatement.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of Annual Report 2015, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant for the preparation of the Annual Report in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the organisation’s internal control. An assurance engagement aimed on providing limited and reasonable assurance also includes evaluating the appropriateness of the reporting framework used and the reasonableness of estimates made by management as well as evaluating the overall presentation of the Annual Report 2015.
Amsterdam, 23 February 2016
PricewaterhouseCoopers Accountants N.V.
Original Dutch version signed by:
drs. R. Dekkers RA