Endeavour Energy Annual Performance Report - Parliament of New ...

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02 Our Performance StRAtegic Objectives STRATEGIC OBJECTIVE 5 – MANAGE BUSINESS RISK 2010–11 Objective 2010–11 Target 2010–11 Result • Strengthen our controls against the risk of bushfires. • By October 2010. • Action plan developed to address areas in which the findings of the Victorian Bushfire Royal Commission could help strengthen our existing controls. Risk management In 2010–11, Endeavour Energy continued to implement the risk management framework that enables us to identify and manage risks that could affect our customers, the community, the environment, our people, assets and financial resources. Throughout 2010–11, we reviewed the major risks to achieving our strategic objectives and developed and implemented action plans to help mitigate those risks. Our management of business risk is based on three key behaviours: • We are aware of our activities, operations and objectives. • We consider what can go wrong and the consequences. • We take action to prevent what can go wrong. Our current risk management strategy spans the three-year period from 2010 to 2013. Our risk management process is now based on Australian Standard AS/NZS ISO31,000:2009 – Risk Management. The implementation of the risk management framework, as part of our corporate plan, is reported in our risk management plan. Risks to our corporate plan are continually identified and assessed across eight categories, as shown in this table: Business risk category Safety Network Financial Compliance Reputation Environment Retail Business strategy Risk description Fatality/serious injury of employee or member of public Significant customer service supply failure Significant unbudgeted loss of value Material breach of legislation or licence Sustained public criticism Significant environmental incident Significant loss of value Strategic objectives not delivered and business opportunities lost Note: Retail was removed from the risk management plan following the sale of our retail business in March 2011. Both the risk management strategy and risk management plan are reviewed by the Audit and Business Risk Board Committee throughout the year. ‘Risk owners’ provide regular reports to management and to the Audit and Business Risk Board Committee on the results of ongoing monitoring and review of risks, and on action plans to manage and mitigate them. This has contributed to the maturing of a culture of risk management in the organisation. Incident management and business continuity Endeavour Energy is committed to maintaining continuity of supply and business systems during network and other events. An important function of our incident management plan therefore is to enable us to mobilise resources, communicate with stakeholders and quickly recover key business processes. Our incident management plan provides a framework to guide the organisation through major disruptive events. Last year we embarked on a significant program to update and enhance the plan to ensure we are prepared for any type of incident. Our business continuity and disaster recovery plans for all critical processes and systems are regularly reviewed and tested. THE YEAR AHEAD 2011–12 Objective 2011–12 Target 2011–12 Reason • Strengthen causal controls to mitigate network bushfire risk. • Manage risk in transitioning the retail business to Origin Energy. • Implement new competency standards and roll out required training by June 2012. • Implement agreed plan by June 2012. • Bushfires are a major threat to our network and the communities we serve. • To ensure a smooth transition and minimal disruption to customers. 16
STRATEGIC OBJECTIVE 6 – DELIVER PERFORMANCE THROUGH PEOPLE 2010–11 Objective 2010–11 Target 2010–11 Result • Negotiate a new Enterprise Agreement. • Integrate refreshed values and new leadership competencies into the way we recruit, develop and promote our leaders. • By December 2010. • By June 2011. • We negotiated a new Enterprise Agreement under the Fair Work Australia framework, providing wage increases for employees and productivity gains for customers. • To align performance to our desired culture, we introduced our refreshed values to employees through the ethics and the reward and recognition programs. We also introduced a new performance management process for contract staff, aligned with our values and leadership competencies. Enterprise agreement In 2010–11, for the first time, we negotiated a new Enterprise Agreement (EA) under the Fair Work Australia framework. This resulted from legislation passed by the NSW and Commonwealth Parliaments transferring industrial agreements of NSW State Owned Corporations to the Federal Industrial Relations system. Under this framework, employees have the right to be represented by a union or their own bargaining agent. With the Enterprise Agreement 2010 having been certified in March 2011, we are now moving to the implementation phase of the reforms contained within the agreement. The key reforms include the iSAFE/ GPS vehicle location system, effective management of allowances and freezing of the pre-93 sick leave balances. These reforms will ensure we continue to boost efficiency through more cooperative work arrangements and improvements to the competitiveness, flexibility and productivity of our organisation. Developing people and culture This year, we implemented the first stage in our three-year roadmap to develop our people and culture. This work included initiatives aimed at developing leaders through the introduction of new development programs for senior and middle managers. To align performance to our desired culture we introduced our refreshed values to employees through ethics training and reward and recognition programs. We also introduced a new performance management process for contract employees, aligned with the values and new leadership competencies. In line with our strategic objective of delivering performance through people, in 2011–12 we will continue to focus on building an engaged and capable workforce that embraces our values. To align performance to our desired culture we have introduced our refreshed values to employees through our ethics and reward and recognition programs A key component of these efforts will involve aligning the selection of leaders and development programs with Endeavour Energy’s desired culture. This is necessary, in turn, to help leaders align the performance of managers and employees with our strategic and operational business requirements and build the desired culture throughout the organisation. The process includes new leadership development programs for senior leaders, middle managers, operations managers in 2010–11, and leading hands during 2011–12. By June 2012, 130 managers will have completed an Endeavour Energy tailored leadership development program. THE YEAR AHEAD 2011–12 Objective 2011–12 Target 2011–12 Reason • Align leadership development programs to the company’s purpose and desired culture. • Aligned programs in place by December 2011. • To help leaders align manager and employee performance with strategic and operational business requirements and build our desired culture. Endeavour Energy Annual Performance Report 2010–11 17
Page 1 and 2: ANNUAL PERFORMANCE REPORT 2010-11 I
Page 3 and 4: Contents LETTER TO SHAREHOLDING MIN
Page 5 and 6: YeAR at a Glance Items 2009-10 2010
Page 7 and 8: To that end, we pursued our second
Page 9 and 10: Endeavour Energy’s six strategic
Page 11 and 12: Performance indicator: lost time in
Page 13 and 14: Performance indicator: Capital expe
Page 15 and 16: Efficiency reviews to reduce costs
Page 17: Each year we investigate bushfire r
Page 21 and 22: Network Strategy Network business o
Page 23 and 24: Major works in progress 2010-11 con
Page 25 and 26: Major works in progress 2010-11 con
Page 27 and 28: The NSW Code of Practice - Demand M
Page 29 and 30: Network-related calls increased fro
Page 31 and 32: New apprentices vital to our workfo
Page 33 and 34: Equal employment opportunity As par
Page 35 and 36: Multicultural policies and services
Page 37 and 38: 06 8 % reduction in greenhouse emis
Page 39 and 40: Environmental management system Our
Page 41 and 42: ENDEAvoUR ENERGY’S GoveRNANCE AND
Page 43 and 44: EXECUTIve LEADERshIP TEAM Vince Gra
Page 45 and 46: 08 $ 245 m operating profit after t
Page 47 and 48: Debt Balance sheet debt increased b
Page 49 and 50: Directors’ Report For the yEAR en
Page 51 and 52: Statement of Comprehensive Income F
Page 53 and 54: Statement of Changes in Equity For
Page 55 and 56: Statement of Cash Flows For the yEA
Page 57 and 58: 2 Statement of Significant Accounti
Page 65 and 66: 4 Expenses 2011 $’000 2010 $’00
Page 67 and 68: 5 Gain/(loss) on sale of Retail bus
Page 69 and 70:
7 Deferred Tax (Assets)/Liabilities
Page 71 and 72:
8 Cash Flow Information continued (
Page 73 and 74:
9 Trade and Other Receivables conti
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12 property Plant and Equipment con
Page 77 and 78:
13 Intangible Assets Software $’0
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14 Employee Benefits - Superannuati
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16 Other Current Liabilities 2011 $
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21 Financial Instruments continued
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Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
23 Expenditure Commitments continue
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27 prudential Requirements An unsec
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Appendices Contents Five-year stati
Page 97 and 98:
Australian Financial Services Licen
Page 99 and 100:
Executive Remuneration General prin
Page 101 and 102:
Table A: Number of applications by
Page 103 and 104:
Implementation of Price Determinati
Page 105 and 106:
GLossARY The Australian Consumer La
Page 107:
Ausgrid LOCATIONS and contacts Kand
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