INTRODUCTION The Management’s Discussion and Analysis (MD&A) highlights the primary factors that affected SaskEnergy’s consolidated financial condition and performance for the 12 months ending March 31, 2017. Using financial and operating results as its basis, the MD&A describes the Corporation’s past performance and future prospects, enabling readers to view SaskEnergy from the perspective of management. The MD&A is presented as at May 25, 2017, and should be read in conjunction with the Corporation’s audited consolidated financial statements, which have been prepared in accordance with International Financial Reporting Standards (IFRS). On November 30, 2015, the Government of Saskatchewan announced a change in the year end for Crown Investments Corporation (CIC) and its subsidiaries from December 31 to March 31, commencing with the 15-month period ending March 31, 2016. Consequently, while the financial statements compare a 12-month period to a 15-month period, for the purposes of the MD&A, the results of the current fiscal year will be compared against the unaudited results of the 12-month period ending March 31, 2016. The MD&A contains certain forward-looking statements that are subject to inherent uncertainties and risks. Many of these risks are described in the Risk Management and Disclosure section of the MD&A. All forward-looking statements reflect the Corporation’s best estimates and assumptions based on information available at the time the statements were made. However, actual results and events may vary significantly from those included in, contemplated by, or implied by such statements. The Corporation’s financial results are subject to variation, especially given the volatility of natural gas prices. In order to compare financial performance from period to period, the Corporation uses the following measures: income before unrealized market value adjustments, realized margin on commodity sales, and realized margin on gas marketing sales. Each measure removes the impact of fair value adjustments on financial and derivative instruments and the revaluation of natural gas in storage to the lower of cost and net realizable value. Unrealized market value adjustments vary considerably with the market prices of natural gas, drive significant changes in the Corporation’s consolidated net income and may obscure other business factors that are also important to understanding the Corporation’s financial results. The measures referred to above are non-IFRS measures, in that there is no standardized definition, and may not be comparable to similar measures presented by other entities. STRATEGIC SCORECARD MEASURES SaskEnergy’s four strategic mandates — Service Excellence, Achieving Growth, Our Team and Creating Value — as set out in the Business Plan, support the vision, mission and values of the Corporation. They also align with the Crown Sector Strategic Priorities as identified by CIC. These mandates and strategic priorities provide guidance to SaskEnergy in its business planning process as well as its performance management and reporting. These strategic priorities and mandates also assist employees in making a link between their everyday efforts and their contribution to the Strategic Plan and the overall direction of the Corporation. The Crown Sector Strategic Priorities and the Saskatchewan Plan for Growth convey shareholder strategic direction for the Province’s Crown Corporations. MANAGEMENT’S DISCUSSION & ANALYSIS
The government’s strategic plan identified three critical issues and five strategic priorities based on the principle of Steady Growth.
Critical Issues
• Continued focus on improving operational efficiency through transformational change • Increased collaboration amongst the Crown corporations • Increased scrutiny of Crown corporation capital budget requirements
Strategic Priorities
• Customer Focus • Financial Sustainability • Infrastructure Investment • Private Sector Engagement • Labour Force
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2016-17 ANNUAL REPORT SASKENERGY
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