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Recoverability of non-current assets is a

key audit matter due to the:

•    complex naturę of the egulatory framework for determining revenue and expenditure applicable to each of the Group's regulated cash generating units (CGUs);

•    comp!exity in auditing the forward-looking assumptions applied to the Group’s discounted cash flow models for each CG U given the significant management assumptions involved. The key assumptions in the cash flow models included terminal values, expected Capital and operating expenditure, expected returns from futurę regulatory determinations, contract margins and re-contract ng nsk, inflation, growth rates and discount rates; and

•    challenges associated with auditing the Group's long term forecast cash flow models {up to 20 years), having regard to emerging regulatory changes, technology and market changes and accounting standard reguirements.

Our procedures included:

•    involving our regulatory advisory specialists, and using our industry knowledge, to consider the impact of relevant regulatory developments and legał proceedmgs on management's discounted cash flow models for regulated CGUs;

•    testing the key Controls over the cash flow models, including review and approval of key assumptions and business unit budgets which form the basis of the cash flow forecasts;

•    assessing the appropriateness of the methodology applied by the Group to perform the annual impairment test against the requirements of the accounting standards;

•    challenging management's key assumptions, in particular those relating to discount rates, revenue growth and forecasted expenditure by analysing historical data and taking mto consideration expected futurę events, and corroborating the key market re ated assumptions to external data, through the fol łowi ng procedures:

- comparing regulated cash flow assumptions to regulatory determinations relevant to the forecast cash flow period. We analysed attributes including allowable expenditures and rates of return, inflationary impacts, and trends influencing long-term projections of these;