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Hafren Dyfrdwy Cyfyngedig Annual Performance Report 2021 2 Hafren Dyfrdwy Cyfyngedig Annual Performance Report 2021 Contents Hafren Dyfrdwy Cyfyngedig Annual Performance Report 2021 2 Hafren Dyfrdwy Cyfyngedig Annual Performance Report 2021 Contents Welcome to the Annual Performance Report 2021 4 About us 6 Setting aspirations and performing for all those we serve 8 This section provides an introduction to our Purpose and Values and gives insight into how we believe our Purpose has helped us to deliver our achievements this year. Our approach to Board leadership, transparency and governance 12 This section sets out how we apply Ofwat’s • Purpose, Values and culture 14 Board leadership, transparency and governance principles to ensure effective • Standalone regulated company 16 corporate governance is delivered through strong Board leadership. • Board leadership and transparency 16 • Board structure and effectiveness 18 Our approach to regulatory reporting 22 This section sets out our Assurance Framework • Our Assurance Framework 23 and compliance processes in relation to the Annual Performance Report (‘APR’). • Robust assurance 23 Our frameworks and internal controls support the Board to make a number of • Ownership and accountability 24 signed statements within the APR. • Effective governance 25 • Transparency and public accountability 26 Our Board Statements 27 This section contains our Board’s Risk and • Risk and Compliance Statement 28 Compliance Statement and Accuracy and Completeness of Data and Information • Statement from non-financial assurer - Jacobs 30 Statement, along with Jacobs’ Assurance Report. It also includes details of any • Accuracy and Completeness of Data 31 departures from compliance and our action and Information Statement plan to correct non-compliance. Regulatory Statements 35 This section contains the statements required by the terms of our licence conditions and the 36 • Disclosures required by RAG3 statutory requirements set out in the Water • Ring Fencing Certificate (Conditions K and P) 39 Industry Act 1991. Hafren Dyfrdwy Cyfyngedig Annual Performance Report 2021 3 Annual Performance Summary 41 This section contains a review of our annual performance against our performance commitments within our final determination. Regulatory Accounts for the Year Ended 31 March 2021 62 This section contains our regulatory • Independent Auditor’s Report 63 accounting statements and accompanying notes, as well as the Independent • Ofwat data tables: Section 1 – 67 Auditor’s report. Regulatory financial reporting • Notes to the regulatory accounts 80 • Ofwat data tables: Section 2 – 84 Price control and other segmental reporting Additional Regulatory Information 99 This section contains all of the data tables relating performance and • Ofwat data tables: Section 3 - 100 Performance summary additional regulatory information and the accompanying commentary. • Ofwat data tables: Section 4 – 9 - 107 Additional regulatory information Appendix A – APR assurance approach and outputs 149 This appendix covers how we approach APR assurance and the outcome of assurance, with our APR assurance approach during COVID-19 and APR specific governance approach also covered. Appendix B – Greenhouse gas (‘GHG’) 161 This appendix includes our voluntary emissions reporting for 2020/21 submission for operational and embedded emissions. 4 Hafren Dyfrdwy Cyfyngedig Annual Performance Report 2021 Welcome to the Hafren Dyfrdwy Annual Performance Report 2021 Gofalu am un o hanfodion bywyd Taking care of one of life’s essentials This Annual Performance Report (‘APR’) covers the year from April 2020 to 31 March 2021 and is our first APR to be published for the period 2020-2025 (know as ‘AMP7’). Croeso! We are delighted to present this year’s Annual Performance Report for Hafren Dyfrdwy. We hope you enjoy reading about our performance and activities during the year and our plans for the future. John Coghlan James Jesic Chair Managing Director Hafren Dyfrdwy Cyfyngedig Hafren Dyfrdwy Cyfyngedig Hafren Dyfrdwy Cyfyngedig Annual Performance Report 2021 5 The APR provides our customers and other stakeholders with clear and transparent information on all aspects of our performance in 2020/21, including the progress we have made to deliver our customer outcomes. Providing accurate, clear and understandable information which can be trusted by our stakeholders is important to us and ensures our customers and stakeholders can clearly see how we have performed. The aim of this APR is to provide customers and stakeholders with: A clear and assured account of our financial performance for each price control, An understanding of the A clear, accurate and assured based on Ofwat’s regulatory actions we have taken to put account of our performance accounts framework, to things right in areas where we across our 31 performance enable customers and have not performed as well as commitments in the year. stakeholders to consistently we wanted. assess our relative and absolute performance. Additional Regulatory Publications In addition to the APR, the following documents will be made available on our website in our regulatory library at hdcymru.co.uk: • A methodology statement which explains the systems and processes used to populate the data tables in the Regulatory accounts. • The Hafren Dyfrdwy Cyfyngedig Annual Report and Accounts (‘ARA’) for the year ended 31 March 2021. Where disclosures in the ARA fulfil the requirements of the APR, we have included a cross reference to the relevant section for further information. 6 Hafren Dyfrdwy Cyfyngedig Annual Performance Report 2021 About us Chester As one of the 11 regulated water and sewerage companies in England Wrexham and Wales, Hafren Dyfrdwy provides Mid and North-East Wales with Llangollen world-class water services at the Water and Waste Oswestry Water most affordable price in Wales. Llanfyllin When Hafren Dyfrdwy was HD ST launched in 2018, we knew our Welshpool enduring focus would be on Wales and on delivering for Welsh customers, both now and for Newtown generations to come. This thinking Llanidloes was behind our chosen name – Knighton Hafren Dyfrdwy means ‘Severn Dee’, representing the two major rivers in our region. Monmouthshire We are regulated by Ofwat, the economic regulator of the water sector in England and Wales, and every five years we work with our customers to develop a new business plan which is then assessed by and agreed with Ofwat. Shaping our business plan for AMP7 involved extensive customer engagement, listening and discussing the issues that are important to our customers over an 18 month period. As a result, our business plan takes a long-term view, delivering for our customers today and putting firm building blocks in place to continue to improve services and protect them for future Hafren Dyfrdwy Cyfyngedig is a subsidiary of generations. This approach centres around our core Severn Trent Water Limited, the primary regulated principle of being a socially purposeful company. water and waste water business of Severn Trent Plc. The full ownership structure of Hafren Dyfrdwy We are pleased to present our performance for the within the Severn Trent Group can be found on the first year of AMP7 in this APR, which is produced Severn Trent Plc website. in line with Ofwat’s guidance. It provides clear and transparent information on progress against the The Annual Report and Accounts of Severn Trent Plc delivery of our customer outcomes, service levels, and Severn Trent Water Limited are available on their costs and financial and environmental performance. respective websites. Hafren Dyfrdwy Cyfyngedig Annual Performance Report 2021 7 2020/21 Quick facts and performance highlights Quick facts Delivering water Waste water Customer, that is good to taken safely community and drink and is away environment always there 61 million 6.6% 100% < £1 per day Litres of drinking Year-on-year Compliance at our Lowest average water supplied reduction in leakage treatment works bills in England and each day Wales 18 million 35% Zero 4th place Litres of waste Year-on-year Serious pollutions in Developer Services water treated reduction in water over 10 years Measure of each day quality complaints Experience (‘D-MeX’) c.108,000 0.1 28% 208 Number of Compliance Risk Reduction in Hectares of land households and Index score* blockages with improved businesses served biodiversity 132 Read more about our performance in the Average number Annual Performance Summary of employees chapter from page 41. *A measure designed to show the risk from treated water compliance failures. 8 Hafren Dyfrdwy Cyfyngedig Annual Performance Report 2021 Gosod dyheadau a pherfformio i bawb yr ydym yn eu gwasanaethu Setting aspirations and performing for all those we serve We recognise how important our natural environment Our Purpose, ‘gofalu am un o hanfodion bywyd’ / is to the wellbeing of our employees and customers and ‘taking care of one of life’s essentials’, unites everyone are fully committed to playing our part in the vision to at Hafren Dyfrdwy. A large number of our employees create a better future for Wales in full consideration of were involved in its development, making it a Purpose the Well-being of Future Generations (Wales) Act 2015. made by our people, for our people. It included feedback We are committed to environmental leadership and from a range of stakeholders too, including from embrace the new approach to sustainable management customer engagement undertaken when developing of natural resources in Wales. our business plan, to ensure that our Purpose aligns with our company strategy, which considers short and We serve a comparatively
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