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

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09 Financial statements Notes to the Financial Statements For the year ended 30 June 2011 21 Financial Instruments continued The following table summarises the impact of changes in commodity prices on the Corporation’s post-tax profit and equity. For the 2010 financial year, a 6% movement in electricity prices was applied to the forward electricity curve. All variables other than the electricity price were held constant in the summary below. For the 2011 financial year, variability in electricity prices does not impact Endeavour Energy’s cash flows, and a nil impact has therefore been disclosed. Price risk – impact of changes in electricity prices 2011 2010 Profit or loss $’000 Equity $’000 Profit or loss $’000 Equity $’000 6% increase in electricity price – – 8,097 28,634 6% decrease in electricity price – – (8,893) (28,634) (ii) Commodity price risk Price risk is the risk that Endeavour Energy’s cash flows will be adversely affected by movements in commodity prices that increase the Australian dollar value of commodity payables. Endeavour Energy is exposed to price risk through the purchase of goods for the capital asset program. Regular reports are submitted to the Endeavour Energy Board, detailing hedging positions undertaken for commodity price risk, including volume and mark to market valuations of hedging undertaken. The following table summarises the impact of changes in commodity prices on the Corporation’s post-tax profit and equity. A 5% movement in commodity prices has been applied to the forward commodity curve as at balance date. All variables other than the commodity price are held constant in the summary below. Price risk – impact of changes in commodity prices 2011 2010 Profit or loss $’000 Equity $’000 Profit or loss $’000 Equity $’000 5% increase in commodity price 940 – – – 5% decrease in commodity price (940) – – – Sensitivity to reasonably possible price movements in the above table reflects Endeavour Energy’s use of commodity derivatives within a portfolio to manage risk. As the designation is “fair value through profit and loss” the movement in equity is nil. (d) Interest rate risk Interest rate risk is the risk of a reduction in earnings and/or the net present value of the Corporation as a consequence of adverse movements in interest rates. Interest rate risk is managed by the Treasury function within Endeavour Energy. The Corporation’s exposure to market risk for changes in interest rates relates primarily to interest bearing liabilities as Endeavour Energy borrows funds at both fixed and floating interest rates. The Corporation’s policy is to manage its interest cost using a mix of fixed and variable rate debt, and by the use of interest rate derivatives. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring optimal strategies are applied by either positioning the Statement of Financial Position or protecting interest expense through different interest rate cycles. 82
21 Financial Instruments continued At the reporting date the interest rate profile of the Corporation’s interest-bearing financial instruments was: 5 years $’000 Total $’000 2011 Floating rate Financial assets Cash and cash equivalents 3,288 – – 3,288 Financial liabilities Borrowings 256,260 50,000 50,000 356,260 Fixed rate Financial liabilities Borrowings 143,235 791,278 1,326,711 2,261,224 Treasury derivatives – interest rate swaps – – – – 2010 Floating rate Financial assets Cash and cash equivalents 30,355 – – 30,355 Financial liabilities Borrowings 195,000 – – 195,000 Treasury derivatives – interest rate swaps 60,000 – – 60,000 Fixed rate Financial liabilities Borrowings 266,353 618,406 1,334,539 2,219,298 Treasury derivatives – interest rate swaps (60,000) – – (60,000) Interest on financial instruments classified as fixed rate is fixed until maturity of the instrument. Other financial instruments of the Corporation not included in the above tables are non-interest bearing and therefore not subject to interest rate risk. Endeavour Energy Annual Performance Report 2010–11 83
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ANNUAL PERFORMANCE REPORT 2010-11 I
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Contents LETTER TO SHAREHOLDING MIN
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YeAR at a Glance Items 2009-10 2010
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To that end, we pursued our second
Page 9 and 10:
Endeavour Energy’s six strategic
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Performance indicator: lost time in
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Performance indicator: Capital expe
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Efficiency reviews to reduce costs
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Each year we investigate bushfire r
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STRATEGIC OBJECTIVE 6 - DELIVER PER
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Network Strategy Network business o
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Major works in progress 2010-11 con
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Major works in progress 2010-11 con
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The NSW Code of Practice - Demand M
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Network-related calls increased fro
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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
Page 75 and 76: 12 property Plant and Equipment con
Page 77 and 78: 13 Intangible Assets Software $’0
Page 79 and 80: 14 Employee Benefits - Superannuati
Page 81 and 82: 16 Other Current Liabilities 2011 $
Page 83: 21 Financial Instruments continued
Page 87 and 88: 21 Financial Instruments continued
Page 89 and 90: 21 Financial Instruments continued
Page 91 and 92: 23 Expenditure Commitments continue
Page 93 and 94: 27 prudential Requirements An unsec
Page 95 and 96: 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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