MANAGEMENT’S DISCUSSION & ANALYSIS
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 ended December 31, 2015 plus the three months ended March 31, 2016. On November 30, 2015, the Government of Saskatchewan announced a change in the year end for CIC and its subsidiaries from December 31 to March 31, commencing with the 2015-16 fiscal year. Accordingly, for the 2015-16 fiscal year, the Corporation reported a 15-month fiscal period ended March 31, 2016, which is compared to a 12-month period ended December 31, 2014. 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 26, 2016, 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). The following discussion contains certain forward-looking statements that are subject to inherent uncertainties and risks, which 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 fluctuations, 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. These 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 they may not be comparable to similar measures presented by other entities. STRATEGIC SCORECARD MEASURES SaskEnergy’s four strategic mandates as set out in the Business Plan — Service Excellence, Achieving Growth, Our Team and Creating Value — support the vision, mission and values of the Corporation. They also align with the Crown Sector Strategic Priorities as identified by Crown Investments Corporation of Saskatchewan (CIC). These mandates and strategic priorities play a vital role in SaskEnergy’s business planning process, performance management and reporting. They also help employees determine how their everyday efforts contribute to the Strategic Plan and overall direction of the Corporation and Province. The Crown Sector Strategic Priorities for 2015 – 2017 and the Saskatchewan Plan for Growth convey the shareholders strategic direction for the Province’s Crown corporations.
The government’s strategic plan identified three critical issues and five strategic priorities based on the principle of Steady Growth.
• Continued focus on improving operational efficiency • Increased collaboration amongst the Crown corporations • Increased scrutiny of Crown corporation’s capital budget requirements
• Customer Focus • Financial Stability
• Private Sector Engagement • Infrastructure Investment • Skilled Labour Shortage
2015-16 ANNUAL REPORT SASKENERGY
Made with FlippingBook Ebook Creator