Full Version - Essential Energy

Risk management
Country Energy appreciates that appropriate risk
assessment and accountability hinges on a strong
and effective corporate governance framework.
Risk management is a key focus area for the Board
and its non-executive audit and risk committee.
To this end, we have an organisation-wide risk
management framework, backed by specialised
software which assists in managing risk at the strategic
and operations levels. Risk management is integrated
into the company from a divisional level and supported
by divisional risk coordinators.
During the year, our executive conducted an annual
review of strategic risks to ensure the business has
appropriate risk mitigation strategies in place. This year
saw the identification and inclusion of water related
risks, following the merger with Australian Inland.
The review led to the development of a key
performance indicator (KPI) to assist in reducing our
exposure to key risks. The KPI will be reported to the
Board from July 2005. The concept revolves around
individual risk plans developed in conjunction with
10 key business risks. The objective of each plan is
to reduce risk exposure over time, by implementing
agreed mitigation strategies.
Internal audit
The internal audit plan for the reporting period was
developed in association with the annual executive risk
review and areas of known business risk. This included
an ongoing emphasis on energy trading, security and
safety along with post-implementation reviews of
major change involving information and management
systems.
Country Energy also participated in the New South
Wales Audit Office’s fraud control, self assessment
process and following on from this, we are now
formulating an umbrella fraud policy and management
strategy. The significance of this initiative was
highlighted during an internal audit report involving the
purchasing and payments’ cycle. A strategy for fraud
minimisation will form a key risk focus during
2005-2006.
Insurance against risk
Country Energy participates in an industry scheme
for public and product’s liability and director’s and
officer’s insurance. Co-members of the scheme are
Energy Australia and Integral Energy. Aon Risk Services
Australia Ltd act as broker for these industry policies.
On an individual basis, we have separate insurance
policies covering industrial special risk, motor vehicle
comprehensive, motor vehicle CTP, fidelity guarantee,
marine hull, contract works, marine transit and personal
accident/travel. Marsh Pty Ltd act as brokers for these
policies.
We also are part of the statutory schemes for Workers
Compensation in New South Wales, Victoria and
Queensland.
During the latter part of the reporting period we worked
with our brokers to integrate Australian Inland policies.
The overall “softening” of the insurance market
permitted an opportunity to negotiate some favourable
insurance premiums.
Delegations to management
A comprehensive set of delegations has been issued
to the managing director, including the power to
sub-delegate, to allow management to conduct the
business of the corporation. Notwithstanding these
delegations, specific rules have been put in place in
critical areas such as energy trading, retail sales and
environmental determinations to ensure the Board
is directly involved in decisions above predetermined
thresholds.
Directors’ attendance at meetings
Board meetings
Committee
meetings
Eligible Attended Eligible Attended
Barbara Ward 11 11 4 4
Craig Murray 11 11 5 5
The Hon Michael
Lee
11 11 5 5
Greg McLean 11 10 5 4
Tim Sullivan OAM 11 11 5 5
Rowena Sylvester 11 11 4 4
John Wearne AM 11 10 4 4
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COUNTRY ENERGY ANNUAL REPORT 2004–2005