energy AnnuAl RepoRt 2010 today, energy tomorrow · We are pleased to submit the TransGrid Annual...

energy today, energy tomorrow

AnnuAl RepoRt 2010

Leading electricity transmission service provider

letteR to shAReholdeRs31 October 2010

Dear Ministers,

We are pleased to submit the TransGrid Annual Report 2010 to Parliament. The Annual Report includes the income statement for the year ending 30 June 2010 and the balance sheet as at that date certified by the Auditor-General of New South Wales (NSW).

The Annual Report was prepared in accordance with the requirements of Section 24A of the State Owned Corporations Act 1989 and the Annual Reports (Statutory Bodies) Act 1984 and reporting regulations issued by NSW Treasury.

Mr Bruce Foy Mr Peter McIntyre Chairman Managing Director

About this RepoRtThis annual report was prepared by TransGrid’s Corporate Communications Manager and designed by an external graphic design firm. The total external costs in producing this report were $53,783.

Our annual reports are available on www.transgrid.com.au.

A printed version of the annual report can be requested by phone on 02 9620 0875.

We welcome your feedback on this report:

>> By email at [email protected]>> By post, PO Box 87, Horsley Park NSW 2175,>> By phone, 02 9620 0875

coveR imAgeDavid Adams and Michael Knox, Trainee Engineering Officers, at Sydney West Substation.

mailto:[email protected]

http://www.transgrid.com.au

TransGridannualreporT2010>contents 1

2 transGridataGlance

6 ournetwork

8 howwefitinthemarket

9 ourdirection

10 reviewbychairmanandmanaGinGdirector

12 ourboard

14 ourexecutiveleaders

16 ourresults

34 ourmarket

38 ourPeoPle

46 oPerationalexcellence

54 ourcommunity

60 healthandsafety

66 ourenvironmentalcommitment

70 ourcaPitalworksProGram

76 corPorateGovernance

88 financials

124index

126Glossary

forabetterfuture

enerGytoday,enerGytomorrow...

aboveByron Mills, Projects Coordinator, Wagga Wagga.

2 section>TransGridannualreporT2010

beingthebestwecanbe


TransGridannualreporT2010>section 3

transGridataglanceWeownandmanageoneofthelargesthighvoltagetransmissionnetworksinaustralia.

beingthebestwecanbe


leftJohn McCall, Projects Manager/Northern, Peter McIntyre, Managing Director, and Lionel Smyth, General Manager/Network, at the Tomago Substation site.

4 transGridataGlance>TransGridannualreporT2010

whoarewe? Weownandmanageoneofthelargesthighvoltageelectricitytransmissionnetworksinaustralia,connectinggenerators,distributorsandmajorendusersinnsWandtheaCT.

ournetworkincludesover12,600kilometresoftransmissionlineandlinkstoQueenslandandVictoria,facilitatinginterstateenergytrading.

ourpeoplearecrucialtoourperformance.TheyplayakeyroleinensuringwemeetourobjectivesandprovideareliablepowersupplytonsWandtheaCT.

transGridataglance

BrINGS eLeCTrICITy To More ThaN

3millionhouSehoLDS aND BuSINeSSeS aCroSS NSW, The aCT aND oTher STaTeS

More ThaN

1,000eMPLoyeeS

TraNSMISSIoN LINeS oPeraTING aT

132kv,220kv330kvand500kv

DeLIverING a fIve-year CaPITaL WorkS ProGraM vaLueD aT

2.6billion

36,483TraNSMISSIoN LINe STruCTureS

91SuBSTaTIoNS aND SWITChING STaTIoNS

TransGridannualreporT2010>transGridataGlance 5

358DISTrIBuTor aND DIreCT CuSToMer CoNNeCTIoN PoINTS

63GeNeraTor CoNNeCTIoN PoINTS

6INTerCoNNeCTIoNS To TraNSMISSIoN NeTWorkS IN vICTorIa aND QueeNSLaND

13CuSToMerS DIreCTLy CoNNeCTeD To our NeTWork

TraNSPorTeD arouND

75,100GIGaWaTT hourS( GWh) of eNerGy DurING The year

“Wehavealong,proudhistoryinthenationalelectricityMarket(neM).Forover60years,wehavebeendeliveringaworld-classelectricitytransmissionservice.ourhistoryputsusingreatsteadforthefuturesothatwecanmeetourupcomingchallenges.”

chairman,brucefoy

abovehannah Dunn, Media and Government Manager at Macarthur Substation.

6 ournetwork>TransGridannualreporT2010

ournetwork

OPERATING SYSTEM VOLTAGES 500kV Transmission Lines

330kV Transmission Lines




330kV Underground Cable

Customer Exchange Point

Interstate Exchange Point

500kV Substations

330kV Substations

220kV Substations

132kV Substations

INSET

Tomago

Eraring

Vales Point

Munmorah

Tuggerah

Sydney East

RegentvilleSydney West

Sydney South

NewcastleWaratah

West

Liverpool

Kemps Creek

Vineyard

Sydney North

Dapto

Ingleburn

Wallerawang

Yass Avon

Bayswater

Liddell

Beaconsfield West

Haymarket

INSET

TumutBurrinjuck

YassMarulan

Yanco

Griffith

Buronga

Broken Hill

FinleyDeniliquin

Darlington Point

AlburyHume

Cooma

Munyang

Snowy Adit

Queanbeyan

Canberra

Murrumburrah

Cowra

Kangaroo Valley

Panorama

Molong

Orange

Beryl

Parkes

Forbes

Wellington Bayswater Liddell

Dapto

Muswellbrook

Tamworth 330

Armidale

DumaresqLismore

Tamworth 132

Gunnedah

Narrabri

Moree

Inverell Glen Innes

Tenterfield

Koolkhan

CoffsHarbour

Nambucca

Kempsey

Port Macquarie

Taree

Balranald

Coleambally

Murray

Upper Tumut

Lower Tumut

ANMJindera

Guthega

Mt Piper132

Wallerawang

Mt Piper330

Avon

Wagga132

Wagga330

Redcliffs

Dederang

Wodonga

Bulli CreekMudgeeraba

Uranquinty

Gadara

Raleigh

Capital Wind Farm

during2009/10weinvested$428.7millioninournetwork.ThisincludedcompletionoftheWestern500kVproject,whichiscrucialtomaintainingreliableelectricitytransmissionservicetothesydney/newcastle/Wollongongregion.

nswelectricitytransmissionnetwork

TransGridannualreporT2010>ournetwork 7

OPERATING SYSTEM VOLTAGES









500kV Substations

330kV Substations

220kV Substations

132kV Substations

OPERATING SYSTEM VOLTAGES 500kV Transmission Lines








500kV Substations

330kV Substations

220kV Substations

132kV Substations

INSET

Tomago

Eraring

Vales PointMunmorah

Tuggerah

Sydney East

RegentvilleSydney West

Sydney South

WaratahWest

LiverpoolKemps Creek

Vineyard

Sydney North

Dapto

Ingleburn

Wallerawang

Yass Avon

Bayswater

Liddell

Beaconsfield West

Haymarket

Newcastle

aboveDon Mckay, Network Control Manager at the State System operations Control Centre.

8 howwefitinthemarket>TransGridannualreporT2010

howwefitinthemarket

WehaveanimportantpositioninthenationalelectricityMarketandworkcloselywithourstakeholderssowecanprovidethebestpossibleelectricitytransmissionservice.

australianenerGymarketcommission(aemc)a statutory commission responsible for developing NeM and market development rules.

australianenerGymarketoPerator(aemo)operates the NeM and manages power system security.

australianenerGyreGulator(aer)administers the National electricity rules (Ner) and makes regulated revenue determinations for monopoly energy companies like TransGrid.

GeneratorsMake electricity at power plants. Most power plants use coal, gas, water or wind –Eraring Energy, Macquarie Generation, Delta Electricity, Snowy Hydro, Origin Energy, and Renewable Power Ventures.

transmissionelectricity goes through TransGrid’s high voltage transmission lines that stretch across all of NSW.

distributionelectricity travels through distribution lines, where smaller pole-top transformers reduce the voltage for use in homes – Energy Australia, Integral Energy, Country Energy, ActewAGL.

endusersThe electricity travels through wires inside the walls to the switches for use in homes and businesses.

TransGridannualreporT2010>ourdirection 9

ourdirection

WeusetheBalancedscorecardtocommunicateourstrategies.Wemeasurefourmajordriversforthebusiness–financial,customersandstakeholders,internalprocesses,learningandgrowth.

eachyearwestepbackandreflectonourdirectiontomakesureitmeanssomethingtoourbusinessandourpeople.Beforewemapourstrategies,weundertakescenarioplanningtoidentifywhatcouldhappeninthefutureenvironmentsothatwecanmakegooddecisionsnow.Thisforwardplanningisakeybuildingblocktoourstrategies.

ourobjectives>> Tobeasuccessful business,and,tothisend:– tooperateatleastasefficiently

asanycomparablebusinesses.

– maximisethenetworthoftheState’s investmentinit.

– exhibitasenseofsocial responsibilitybyhavingregardtotheinterestsofthecommunityinwhichitoperates.

>> protecttheenvironmentbyconductingitsoperationsincompliancewiththeprinciplesofecologicallysustainabledevelopmentcontainedinsection6(2)oftheProtection of the Environment Administration Act, 1991

>> exhibitasenseofresponsibilitytowardsregional developmentanddecentralisationinthewayinwhichitoperates

>> operateefficient, safe and reliable facilitiesforthetransmissionofelectricityandotherformsofenergy

>> promote effective accesstothosetransmissionfacilities.

whatwevalueourvisionToberecognisedasaworld-classelectricitytransmissioncompany.

ourmissionToprovidesafe,reliableandefficienttransmissionservicesandtobecommerciallysuccessful.

ourvaluesourvaluesdriveourdecisionsandtheyaffecthowweconductourbusiness.Withoutcommitmenttoourvalues,wecannotachieveourvisionandmission.

Honesty and integrity–tobetruthfulandconsistentinourdealings.

Trust and respect–torecogniseandhaveconfidenceintheabilityofourcolleagues,valuetheircontributionsandopinionsandacceptthedifferences,aswellasthesimilaritiesofpeople.

Open communication–toshareinformationinanopenandtransparentmanner.

Professionalism–toundertakeourtasksdiligently,andtoaddressthedifficultaswellastheordinaryissuesthatweface.

Fairness and equity–toundertakeourdutieswithoutfearorfavour,andmakedecisionswithimpartialityandsensitivity.

Consideration–totreatpeoplewithunderstandingandconsidertheirviewpointswhenmakingdecisions.

Wearealeadingelectricitytransmissionserviceprovider.Wearecommittedtoourpeople,theirsafety,ourcommunityandcommercialsuccess.

eachyearwestepbackandreflectonourdirectiontomakesureitmeanssomethingtoourbusinessandourpeople.

TransGrid Corporate Plan 2010/2011

10 chairman’sandmanaGinGdirector’sreview>TransGridannualreporT2010

reviewbychairmanandmanagingdirector

Tobethebestwecanbe,weneedleaderswhomotivateandempower.Thisisthefocusofourleadershipstrategywhichisallaboutgivingourleaderstheskillstheyneedtodrivechange.

The2009/10yearhasbeenaverysuccessfulyear.Wehavedeliveredourbest-everresultinayearinwhichwehavealsohadthechallengeofdeliveringourbiggestevercapitalworksprogram.

2009/10wasthefirstyearofthe2009to2014revenuecapdecisionbytheaer,whicheffectivelyincludesmorethan95percentofouttotalforecastrevenueoverthattime.Thisdecisionalsoincludesincentivesforimprovingefficiency.

Wereceivedrevenueof$695millionandachievedarecordoperatingprofitof$225.3.althoughthisrepresentsamodestincreasefromlastyear,itreflectsastrategyofsteadysustainableefficiencyimprovementsyearonyear.allmeasuresofefficientandeffectiveservicedeliverytoourcustomerswerepositiveandefficiencyimprovementsdeliveredpositivecommercialoutcomes.Weareconcentratingonimprovingourresultseachandeveryyear.Thismeanshavingallpartsofourbusinessasproductiveaspossible.

ourtopgoaloverthelastyearhasbeentobringourcapitalworksprogramtothepeopleofnsW.Weachievedaremarkableincreaseinourabilitytodeliveralarge-scalebuildingprogrambyworkingsmarterandgettingthebestoutofourresources.Theprogramhassteadilygrownwiththeneedtoreplaceassetsbuiltinthe1960sand1970scoupledwiththeneedtomeettheincreasingdemandforelectricity.

Weinvested$428.7millioninourcapitalprogramduringtheyear.ThisincludedcompletionoftheWestern500kVproject,whichiscrucialtomaintainingreliabletransmissionservicestothesydney/newcastle/Wollongongregion,representingaroundonethirdoftheneM.WealsofinishednewsubstationsatWagganorthandQueanbeyanandstartedworkonanewsubstationatTomago.WecompletedtheWollartoWellington330kVline,whichrepresentedanorganisationaleffortofmanyemployeesovermorethansevenyears.

Weachievedapositiveoutcomeundertheaerplanavailabilityandreliabilityincentiveschemes.Thisreflectsgoodmanagementofplannedoutagesandreliableplantperformance.asat30June2010,weareontrackforanevenbetterresultundertheseincentiveschemesforthe2010calendaryear.

Weunderstandtheimportanceofengagingwithourstakeholdersinatargetedway.Buildingoftransmissionlinesconstitutesanincreasingproportionofourfutureinvestmentprogram,andtheseprogramsimpactonlocalcommunitiesinbothpositiveandnegativeways.itisthereforevitalforeachoneofourbuildingprogramstohaveauniqueandpersonalconsultationprocess.

Tobethebestwecanbe,weneedleaderswhomotivateandempower.Thisisthefocusofourleadershipstrategywhichisallaboutgivingourleaderstheskillstheyneedtodrivechange.overthenextyearwewillstartrollingoutthenewleadershipprogramacrossthebusiness.

Wearepleasedtopresentour2010annualreporttoyou.

The2009/10yearhasbeenaverysuccessfulyear.Wehavedeliveredourbest-everresults.

Thisreportisnotjustaboutlookingback.itisalsoaboutlookingattheroadaheadandwherewewanttogo.

TransGridannualreporT2010>chairman’sandmanaGinGdirector’sreview 11

althoughwerecordedasafetylostTimeinjuryFrequencyrate(lTiFr)of2duringtheyear,itwasanimprovementfrom3.5in2008/09.oursafetymottoof‘stopandconsider’isveryimportanttousandweworkedcloselywithouremployeestoreduceworkplaceinjuries.Thebigchallengeforuswillbetobetterintegratesafetyintoeverydaybusinessdecisionsandensurethatcontractorsafetyisliftedtomatchthatofourpermanentworkforce.

overthelastyear,wekickedoffourwellbeingprogramtohelppromoteahealthyandhappylifeforouremployees.ouremployeesspendmoreoftheirwakinghoursatwork,whichiswhywewanttomakeitaprimeplaceforpromotinghealthyhabits.

insupportofastrongfutureandmajorinvestmentprogram,ourworkforcehasgrownoverthelastyear.Wewelcomedsevennewapprenticesand24newgraduatesduringtheyear.Wenowhave48apprenticesand56newgraduatesintotal.ourapprenticeandgraduateprogramsbuildtheskillsweneedforthefuture.Wewelcomeallnewemployeestoourorganisation.

althoughwehavehadasuccessfulyear,wearefacingmorechallengesthaneverbefore.Wehaveacapitalworksprogramof$2.6billion–thelargestinourhistory.Weneedtosetourselvesupsothatwecandeliveronthiscommitmentefficiently,andinamannersensitivetoaffectedcommunities.

ourwinsarereflectiveoftheeffortsofourpeopleandweintendtosupporttheseeffortsintothefuture.Weinvolveemployeesindecisionsandletthemknowtheimpacttheyhaveonourfuture.Theyhaveachievedinanenvironmentthatcontinuestochange.onbehalfoftheboardandexecutiveteam,wethankthemfortheirhardworkandcommitment.

WethankKevinMurray,formerManagingdirector,whoretiredfromTransGridon26april2010.ThroughKevin’sleadership,wecontinuedtoimproveontheefficiencyofourbusiness,deliverour2004to2009capitalworksprogramandmaintainhighlevelsofsafetyandreliability.

ourleadershipteamhasfocusedonimprovementandhavebeensuccessfulinexecutingourorganisation’svision.Wethankthemfortheircommitment.

lookingaheadtothenextfiveyears,weareconfidentwehaveeverythinginplacetodeliveronourobjectives.Thisincludeshavingtherightpeopleandtherightexpertise.

Weinviteyoutotaketimetoreadourreporttobetterunderstandourstrategy,theprogresswearemaking,howwearegoingaboutitandwhattheroadaheadlookslike.

Byworkingsmarterandmeetingourchallengesheadon,wehaveachievedgreatcommercialresults.However,wearefacingmoreexternalpressuresthaneverbeforeandweneedtotakearenewedlookatefficiency.Welookforwardtobuildingonoursuccessesin2010/11.

aboveChairman, Bruce foy, and Managing Director, Peter McIntyre.

12 ourboard>TransGridannualreporT2010

ourboard

mrbrucefoy

(bcomm,ll.b,faicd)

Director and ChairmanMrBruceFoywasappointedasTransGrid’sChairmanon30June2009andhasbeenaTransGriddirectorsince15december2005.

Brucehasheldvariouspositionswithinthebankingindustry,mostrecentlyasManagingdirectorCountryHeadoftheinGBankn.V,apositionhehelduntil2005.Currently,BruceisadirectoroftheFinancialplanningassociationofaustralialtd;adirector/TrusteeoftheFirststatesuperannuationTrusteeCorporationandadirectorofThedoctorsHealthFundltdandsouthernuraniumltd.

BrucewasadmittedasabarristerofthesupremeCourtofnsWin1989.HeholdsaBacheloroflawsandaBachelorofCommerce,fromtheuniversityofQueensland.BruceisalsoaFellowoftheaustralianinstituteofCompanydirectors.

HebringstotheTransGridBoardextensiveexperienceincorporateandfinancialmanagement.

mrPetermcintyre

(bsc,be(hons),mba(technologymanagement),fieaust,faicd)

Executive Director and Managing DirectorMrpeterMcintyrewasappointedtotheTransGridBoardon27april2010.

asManagingdirectorofTransGrid,petermanagesthedevelopment,operationandmaintenanceofthensWelectricitytransmissionnetwork.

peterhasover25yearsexperienceintheelectricitytransmissionindustry,withparticularexpertiseinpolicydevelopment,assetmanagementandregulatorystrategy.

priortohisappointmentasManagingdirector,peterheldthreeexecutivepositionswithinTransGrid:GeneralManager/systemoperations,GeneralManager/networkperformanceanddevelopmentandGeneralManager/networkdevelopmentandregulatoryaffairs.

peterisalsodeputyChairmanoftheaustralianpowerinstitute,adirectoroftheenergynetworkassociation,aFellowoftheinstitutionofengineersaustraliaandaFellowtheaustralianinstituteofCompanydirectors.

msmatinaPaPathanasiou

(bcomm,ll.b,maicd)

DirectorMsMatinapapathanasiouwasappointedtotheTransGridBoardon13december2004.

Matinahasover20yearsfundsmanagementandinvestmentbankingexperience.shehasspecialisedintheinfrastructuresectorwithsignificantexperienceintheenergysector.MatinaisemployedbyQiCasapartneroftheGlobalinfrastructureinvestmentteam,whichshejointlyestablishedin2006,andwhichnowmanagesover$2.6billionofinvestmentsinglobalunlistedinfrastructureinutilitiesandtransportassets.

priortojoiningQiC,MatinawasemployedbytheaMpCapitalinvestors,BankersTrustandMacquarieBankintheirbusinessfocussingoninfrastructure.shestartedhercareerwitharthurandersenasataxadviser.

MatinaholdsaBachelorofCommerce(majoringinaccounting,Financeandsystems)andaBacheloroflawsfromtheuniversityofnsW.in1985,shewasadmittedasasolicitorofthesupremeCourtofnsW.

MatinaiscurrentlyadirectorofBrisbaneairportandWestlink(M7Tollroad).sheisontheBoardandinvestmentCommitteeoftheinfrastructureindiaHoldingsFundandisontheinvestmentCommitteeofTheQiCGlobalinfrastructurebusiness.

TransGridannualreporT2010>ourboard 13

mrnevillebetts

DirectorMrnevilleBettswasappointedtotheTransGridBoardon30June1998.

nevilleiscurrentlytheassistantsecretaryoftheelectricalTradesunionofaustraliansWbranch.nevillehasbeenaunionofficialsince1984.HeisalsoamemberofthedivisionalCouncilpowerindustryCommittee,TreasureroftheaCTutilitiesandlightManufacturerindustryTrainingadvisoryBoard(iTaB)andamemberofthenationalTrainingadvisoryGroup(nTaG)fortheelectricalTransmissionanddistributionindustry.HeisVicepresidentofunionsaCTandamemberoftheaCTlaborCouncilexecutive,andformermemberoftheaCTGovernmentindustrialrelationsadvisoryCommittee.nevilleisalsoamemberoftheaustralianinstituteofCompanydirectors.

neville’sin-depthunderstandingoftheelectricityindustry,anditsassociatedindustrialrelations,trainingandunionactivities,isaninvaluableresourceoftheBoard.

thehon.JohnPriceam,

(JP,imareng,ieng,ofieaust.,maicd)

DirectorTheHon.JohnpriceaMwasappointedtotheTransGridBoardon5February2008.

priortohisappointment,Johnbeganhiscareeratthestatedockyardleavingin1982asassistantGeneralManagerandengineeringManagertotakeupaconsultingrole.in1984,hewaselectedtothensWlegislativeassembly,firstlyastheMemberforWaratah,andin1999,astheMemberforMaitland,retiringin2007asdeputyspeaker.

John’spreviousdirectorshipsincludenewcastleFMptyltdand2HdBroadcastersptyltd.HeservedasChairmanofboththesecompaniesfrom1997to1999.JohnisaformerChairofHunteruni-ClinicsptyltdandisacurrentmemberoftheCounciloftheuniversityofnewcastle.

Johnbringstotheboardawealthofknowledgefromhislengthycareerinpolitics,alongwithastrongcommercialandadministrativebackground.

mrmichaelnuGent

(fcPa,faicd)

DirectorMrMichaelnugentwasappointedtotheTransGridBoardon1august2008.

MichaelisalsocurrentlyadirectorofliveCorpwhichprovidesservicestotheliveanimalexportsector.

Michaelwasformerlyanon-executivedirectoroferaringenergy,railaccessCorporationandsnowyMountainsengineeringCorporation.MichaelwaspreviouslytheChiefexecutiveandanexecutivedirectorofGoodmanFielderlimited(1990-1994),theManagingdirectorofeldersagribusinessandanexecutivedirectorofitsparentcompanyFostersBrewingGrouplimited(1983-1990).

Michaelalsoheldanumberofgeneralmanagement,marketingandfinancialpositionsinthefood,transportandvehicleindustriesrespectivelywithHenryJonesiXllimited,Brambles,ansettandtheBritishleylandMotorCorporation(1965to1982).earlyinhiscareer,MichaelworkedforpeatMarwick,nowKpMG,(1961to1965)andsubsequentlycompletedhisprofessionalaccountingtrainingin1968andiscurrentlyanFCpa.

MichaelbringstotheTransGridBoardabroadrangeofskillsandexperienceinmanagement,strategy,governance,marketingandfinance.Healsohasexperienceininfrastructureandtheexecutionoflargecapitalprojectsacrossabroadrangeofindustries.

msclaremannion(acis,b.ed)

Board SecretaryMsClareMannionwasappointedasBoardsecretaryinseptember2008.

ClarehasnineyearsexperienceatTransGrid.ClareholdsaBachelorofeducationandhasrecentlycompletedaGraduatediplomainappliedCorporateGovernancefromCharteredsecretariesaustralia.

14 ourexecutiveleaders>TransGridannualreporT2010

ourexecutiveleaders

mrchrisfitZGerald

General Manager/ Capital Program DeliveryChrisisresponsiblefor:

>> executingourmajorcapitalworksprogram

>> supportingtheongoingperformanceofourhighvoltagetransmissionassets

>> providingdesignsandadviceforminorprojects,replacementprojectsandotherassetmanagementactivities

>> applyingexpertisetonon-regulatedprojects.

mrmichaelGatt

General Manager/CorporateMichaelisresponsiblefor:

>> representingTransGridasacorporateentity

>> stakeholderandcommunityliaison>> internalandexternalcommunicationstrategies

>> propertyportfoliomanagement>> mediaandgovernmentinteractions>> corporatestrategyanddevelopment>> corporatesocialresponsibility>> legalservices.

mrtonymeehan

Chief Financial OfficerTonyisresponsiblefor:

>> ourcommercialandcorporatefinancialinterests

>> financialstrategiesandpolicies>> debtportfolio,bankingandinsurancearrangements

>> corporateaccountingandmanagementaccounting

>> taxation>> businesssystems>> procurement.

Managing DireCTOrPeter McIntryre

general Manager neTwOrk

Lionel Smyth

general Manager neTwOrk DevelOPMenT

anD regulaTOry aFFairSvacant

exeCuTive Manager SySTeM OPeraTiOnS

Neil Smith

general Manager CaPiTal PrOgraM

DeliveryChris fitzGerald

general Manager COrPOraTeMichael Gatt

CHieF FinanCial OFFiCer

Tony Meehan

general Manager buSineSS ServiCeS

Paul Phillips

TransGridannualreporT2010>ourexecutiveleaders 15

mrPaulPhilliPs

General Manager/Business Servicespaulisresponsiblefor:

>> environmentalcomplianceandservices>> healthandsafety>> humanresources>> informationtechnologyservicesandbusinesscommunicationservices

>> regionalprocurement,fleetmanagement,logistics

>> qualityandbusinessimprovementservices>> executiveservices.

mrneilsmith

Executive Manager/ System Operationsneilisresponsiblefor:

>> thereliableoperationofthensWelectricitytransmissionnetwork

>> operatingpolicy,strategiesandinstructionsfornetworkoperation

>> monitoringandcontrolfacilities>> operatingthesystemfromthecontrolcentres

>> liaisonwithaeMoanddistributors.

mrlionelsmyth

General Manager/Networklionelisresponsiblefor:

>> assetmanagementpoliciesandstrategies>> managingandmaintainingourhighvoltagetransmissionsystemassets

>> propertyandeasementmaintenance>> fieldmanagementandcommissioningofcapitalprojects.

“Changeisnowstandardbusinesspracticeforus.ourleadershipteamhasbeeninstrumentalindrivingefficienciesacrossourbusinesstoensurewearethebestwecanbe.Weareatapointwherewecanlookaheadandbeconfidentaboutthefuture.”

chairman,brucefoy


havingoutcomesinmind



havingoutcomesinmind


ourresults> Benchmarked

world-wideasatopelectricitytransmissionserviceperformer

> achievednetworkreliabilityexceeding99.999%

> increasedoperatingprofitby$46.3million

> Welcomed74newemployeestotheorganisation

left

Steve Paddison, Communications Technician Specialist, Newcastle regional Centre.

18 ourresults>TransGridannualreporT2010

whatwedidwell

INTroDuCeD a

wellbeingProGraM To heLP eMPLoyeeS Make heaLThy LIfeSTyLe ChoICeS

WeLCoMeD

74neweMPLoyeeS To The orGaNISaTIoN

CoMPLeTeD The

western500kvProJeCT, our LarGeST-ever CoMPLeTeD ProJeCT

aChIeveD NeTWork reLIaBILITy exCeeDING

99.999%

LauNCheD a NeW exTerNaL

website

IMProveD our

safetyresults

IMPLeMeNTING our BIGGeST-ever INveSTMeNT ProGraM, a

$2.6billionCaPITaL WorkS ProGraM over The 2009 To 2014 PerIoD

aCTIveLy WorkeD WITh LoCaL

communitiesThrouGh our SPoNSorShIP ProGraM

BeNChMarkeD WorLD-WIDe aS a ToP eLeCTrICITy TraNSMISSIoN

serviceperformer

“Throughtheexpertiseofourpeopleandsmartinvestmentinournetworkwecontinuedtodeliverstrongresultsallround.oursolidperformanceputsusinagoodpositionforthefuture”.

Petermcintyre,manaGinGdirector

exCeeDeD aNNuaL oPeraTING ProfIT TarGeT By

$46.3million

TransGridannualreporT2010>ourresults 19

wherewecanimProve

restructureour CoMPaNy To SuPPorT furTher SuSTaINaBLe IMProveMeNTS IN effICIeNCy

harNeSS The

fullpotentialof our PeoPLe IN MeeTING our BuSINeSS oBJeCTIveS

CoNTINue To

reduceavoIDaBLe WorkPLaCe INJurIeS

aCTIveLy

contributeTo The DeveLoPMeNT of NeM PoLICIeS aND ruLeS

exPeDITe aND ProMoTe NeW

connectionsTo The NeTWork

Make BuSINeSS DeCISIoNS WITh aN effeCTIve

commercialmindset

CoNTINue To TeST ourSeLveS aGaINST

externalbenchmarks

BeTTer uTILISe

innovationaND NeW TeChNoLoGIeS

Seek The vIeWS of our STaff,

addresstheissuesaND aCT oN TheM

revIeW our

environmentalSTraTeGy To BeTTer refLeCT key ChaNGeS IN The exTerNaL eNvIroNMeNT

“Whilstourachievementsover2009/10showstrengthsinmanyareas,weareawareofthechallengesahead.Weneedtothinkandactcommerciallysothatwecanworkinnewanddifferentwaystodriveefficiencies.Weknowwhereweneedtoimproveandwilltakeourpeopleonthejourneytobetteringourresultseachyear.”

brucefoy,chairman


$695.0 $42.2m(6.5%)increase

financessnaPshot

$362.4$41.9m(13.7%)increaseexceededannualtarGetby$51.4m



earninGsbeforeinterestandtax($m)

revenue($m)

Profitbeforetax($m)

dividend($m)


69.5 71.5

105.9

120.2

135.1

20102009200820072006

118.1

141.6

190.6

217.4225.3

20102009200820072006

216.3240.8

290.5

320.5

362.4

20102009200820072006

478.5

506.7

573.0

652.8

695.0

20102009200820072006

Byintroducingefficiencyimprovementsacrossallfacetsofthebusiness,wehavedeliveredstrongcommercialresults.


0.3%decreaseexceededannualtarGetby0.3%

0.5%decreaseexceededannualtarGetby0.5%

0.4timesdecrease

1.6%decrease

7.5returnonequity**(%)

6.5returnonassets*(%)

2.6interestcover(times)

48.4GearinGratio(%)


47.3 46.1 46.750.0 48.4

20102009200820072006

2.22.4

2.9 3.0

2.6

20102009200820072006

5.45.8

7.7 8.07.5

20102009200820072006

5.8

6.3

7.16.8

6.5

20102009200820072006

* return on assets measures the efficiency with which TransGrid uses its assets to produce profits. It is calculated taking into consideration net borrowing costs.

** return on equity measures TransGrid’s efficiency in earning profits on behalf of its shareholders. It is calculated taking into account post-tax profit.

Weareconcentratingonimprovingourresultseachandeveryyear.Thismeanshavingallpartsofourbusinessasproductiveaspossible.


PeoPlesnaPshot

aNNuaL TurNover raTe

4.96%

averaGe aGe

42.4years

averaGe yearS ServICe

17.3years

workforceProfile

staffnumbersstaffbycateGory2008to2010

cateGorydescriPtion 2010 2009 2008

administrativeofficer 151 150 151

apprentice 48 63 57

engineeringofficer 291 269 254

lineWorker 32 33 38

operator 22 22 24

professionalofficer 252 227 212

powerWorker 40 44 49

seniorContractofficer 91 90 91

networkTeamleader 18 17 19

Tradesperson 72 76 73

Total 1,017 991 968

* Staff Numbers do not include four Managing Director’s scholarship holders.


staffnumbersstaffbyGender30June2010

staffnumberscomParisonofstaffbycateGoryasat30June2010

totalstaff

no.P/tstaff

equiv.f/tofP/t

equiv.f/tstaff

administrativeofficer 151 20 12.46 143.46

apprentice 48 0 0 48

engineeringofficer 291 2 1.72 290.72

lineWorker 32 0 0 32

operator 22 0 0 22

powerWorker 40 0 0 40

professionalofficer 252 5 3.36 250.36

seniorContractofficer 91 0 0 91

networkTeamleader 18 0 0 18

Tradesperson 72 0 0 72

Total 1,017 27 17.54 1,007.54

* Staff numbers do not include four Managing Director’s scholarship holders

descriPtion30June

200930June

2010

Female 146 155

Male 845 862

Total 991 1,017

seniorcontractstaffbyGender30June2010

descriPtion30June

200930June

2010

Female 8 9

Male 82 82

Total 90 91

above

Leonie McCallum, human resources Project Co-ordinator at Metropolitan regional Centre.


safetysnaPshot

annualltifrdecreasedby1.52

emPloyeesafetylosttimeinJuryfrequencyrate(ltifr)

10.9contractorsafetylosttimeinJuryfrequencyrate(ltifr)

$191.2m(30.8%)decrease$428.7

caPitalinvestment($m)

reGulatorytest numberofProJectsthatcomPletedthereGulatory

test2009/10

numberofProJectsPlannedtoGothrouGhreGulatory

testdurinG2010/11

newsmallnetworkassets 2 2

newlargenetworkassets 2 2

ourbuildinGProGram

lostTimeinjuryFrequencyrate

TotalnumberoflostTimeaccidentsfortheYearx1,000,000

averagenumberoffull-timeequivalentemployeesx2,000hours

=


3.5

1.6

3.7 3.7

2.0

20102009200820072006

619.9

218.2

158.6

355.0

428.7

20102009200820072006

caPitalworkscomPleted2009/10

2009/10

Transmissionlines 3

substations 7

Transformeradditionandreplacementprojects 8

Total 18

ourtopgoaloverthelastyearhasbeentobringourcapitalprogramtothepeopleofnsW.Weachievedaremarkableincreaseinourabilitytodeliveralarge-scalebuildingprogram.


availabilitydecreasedby0.2%98.2%

availability*

assetbaseincreasedby$768.2m$5,939.1

assetbase($m)

systemminuteslostincreasedby0.86systemminutes1.28

reliability(systemminuteslost)**

networksnaPshot


98.4

99.499.5

98.5

98.2

20102009200820072006

5,170.9

3,929.03,749.94,220.6

5,939.1

20102009200820072006

0.42

1.19

0.68

0.37

1.28

20102009200820072006

* our availability has been impacted by outages, which were necessary for us to implement our capital works program.

Cumulative Circuit availability as a percentage based on TransGrid owned transmission lines rated at 132kv and above for planned, forced and emergency outages.

** our reliability for 2009/10 is lower than in previous years due to the failure of a current transformer at Bayswater switchyard in July 2009.

MaINTeNaNCe exPeNDITure (2009/10)

$65.4million


13

1010 10

13

20102009200820072006

13customers

communityinformationsessions

stakeholderssnaPshot

numberofcommunityinformationsessionsheld 2009/10

dumaresqtolismore330kVtransmissionlineproject 8

Tomagotostroud132kVtransmissionlineproject 3

Westernsydneysupplyproject 2

Manildratoparkes132kVtransmissionlineproject 2

Total 15

environmentsnaPshot

environmentalincidentnotificationstatistics

2009/10 2008/09

low 17 16

Medium 5 7

High 2 3

Total 24 26

tyPeofissue numberofissues

oilspill 7

Fire 6

Contractorissues 6

erosionandsedimentissue 3

Contamination 2


media

sPonsorshiPs

2009/10

numberofmediainquiriesreceivedandactioned

175

numberofmediareleasesissued 36

2009/10

numberofsponsorshipssupported 16

Totalexpenditureonsponsorships $336,571

“ourproventechnicalcapabilitiescoupledwithourgoodinsightwilldriveustofurthersuccess.Westriveforexcellenceandexceedourtargetseachandeveryyear.akeyfocusoverthenextyearwillbetostrengthenourreportingacrossallareasofourbusiness.”


during2009/10,wereported24environmentalincidentsinourincidentnotificationsystem(ins).Twooftheseincidentswereofasignificancelevelthatrequirednotificationtoaregulator.Wepromptlyaddressedallissues.during2009/10therewerenoprosecutionsbroughtagainstusunderanyenvironmentalstatutes.


lookingahead



ourmarketeffectivestakeholderengagementisessentialtothewaywedobusinessintheneM.Wearecommittedtobuildingtrustingrelationshipswithourstakeholders.

left

Peter Glenn, Projects Support engineer at Macarthur Substation.

34 ourmarket>TransGridannualreporT2010

ourmarket

facinGnewchallenGesinthenemWecontinuetoseeanevolvingnationalenergyMarket(neM).Manydifferentgroupsdrivethischange,includingneMparticipants,interestgroups,participantbodiesandgovernments.

ClimatechangeandtheformationoftheaustralianenergyMarketoperator(aeMo),whichhasaleadingnationalplanningrole,allimpactourroleintheneM.astheneMchanges,sodoesourroleandthenationalelectricityrulesweliveby.Thisiswhywewillworkhardtoensureourpositionsontransmissionissuesareeffectivelyrepresentedandthebestlong-termoutcomefortransmissioncustomersisachieved.

WewillcontinuetobeacrosswhatishappeningintheneMandparticipateinthedevelopmentofnewrulesandpolicyreviewsinitiatedbytheMinisterialCouncilonenergytoensurethemostefficientandeffectiveroleforourbusiness.

enGaGinGnemstakeholderseffectivestakeholderengagementisessentialtothewaywedobusinessintheneM.Webuildtrustingrelationshipswithourstakeholderstoprovidethemwiththebestpossibleelectricityservice.

Weuseamulti-stakeholderengagementprocess,whichrecognisesthedifferentrolesthatthegovernment,marketandcommunityplayinthedeliveryofourworks.

duringtheyear,ourstakeholderengagementstrategyincluded:

>> implementingdemandmanagementinitiativeswithothercompanies

>> providinginputintoneMpoliciesandassociatedregulatoryprocess

>> co-ordinationmeetingswithmarketparticipantsincludingthegenerators,distributorsandaeMo

>> liaisingdirectlywithaffectedlandowners,governmentdepartmentsandcouncilsonourcapitalprojects

>> developingnewnetworkconnectionswithgenerationandloadproponents.

electricitydemandontheriseThechallengeswearefacingintheneMarecoupledwiththeneedtomeettheincreasingdemandforpower.

Wepublishourannualplanningreport(apr)eachJune.TheaprplaysavitalroleinthemarketasitprovidesadvanceinformationtomarketparticipantsandinterestedpartiesonnsWenergydemandprojections,thenatureofemergingconstraintsinthensWelectricitynetwork,andproposednetworkdevelopmentsoverthenextfiveyears.The2010aprforecaststhatpeakelectricitydemandinnsWwillincreaseby2.3percentannuallyonaverageforthenexttenyears.

Therearevariousreasonsforthisincreaseindemand.someoftheseinclude:

>> ournetworkservessomeofaustralia’sfastestgrowingcommunities.populationinnsWisforecasttogrowbysixpercentby2013/14

>> peopleareusingmoreelectricitythanpreviouslywith81percentofhouseholdsnowhavingairconditioners

>> theincreaseduseofcomputers,laptopsandplasmatelevisionshasincreasedexpectationsforareliablepowersupply.

astheneMchanges,sodoesourroleandthenationalelectricityrulesweliveby.Wewillworkhardtoensureourpositionsontransmissionissuesareeffectivelyrepresentedandthebestlong-termoutcomeforourcustomersisachieved.

TransGridannualreporT2010>ourmarket 35

Summer Peak Demand (2001/02 to 2018/19)

Winter Peak Demand (2001/02 to 2018/19)

10000

11000

12000

13000

14000

15000

16000

17000

18000

19000

50% POE Projection (MW)


Actual20

18/1

9

2017

/18

2016

/17

2015

/16

2014

/15

2013

/14

2012

/13

2011

/12

2010

/11

2009

/10

2008

/09

2007

/08

2006

/07

2005

/06

2004

/05

2003

/04

2002

/03

2001

/02


10000

11000

12000

13000

14000

15000

16000

17000

18000

19000



Actual20

18/1

9

2017

/18

2016

/17

2015

/16

2014

/15

2013

/14

2012

/13

2011

/12

2010

/11

2009

/10

2008

/09

2007

/08

2006

/07

2005

/06

2004

/05

2003

/04

2002

/03

2001

/02


10000

11000

12000

13000

14000

15000

16000

17000

18000

19000

2018

/19

2017

/18

2016

/17

2015

/16

2014

/15

2013

/14

2012

/13

2011

/12

2010

/11

2009

/10

2008

/09

2007

/08

2006

/07

2005

/06

2004

/05

2003

/04

2002

/03

2001

/02

aboveL-r – Ian Davidson, Manager/Central region, Lionel Smyth, General Manager/Network, and Tim Barnes, Projects Manager/Central at orange regional Centre.

36 ourmarket>TransGridannualreporT2010

demandmanaGementinitiativesoverthelastyear,wehavestrengthenedourtieswithdistributorsintheareaofdemandManagement(dM).

WehavesignedaMemorandaofunderstanding(Mou)withallnsWandaCTdistributorstopromoteinitiativesinthedMareaincluding,demandsideresponse,embeddedgenerationandenergyefficiencyinitiativeswhichhavethepotentialtolowerpeakdemand.TheMouisbackedupwithastrongeducationcampaign.

WearealsoworkingindependentlywithtertiaryinstitutionsoninnovationdMresearchprojects.Theseagreementscoverawiderangeofprojects,including:

>> energyanddemandauditsofdifferentcustomers

>> reviewofresidentialloadcontrol

>> energysurveystargetedatcustomereducation

>> airconditioningcycling–controlofresidentialandsmallMediumenterprise(sMe)installations

>> baseloadprofile–signaltocustomerstoreducedemandbelowtheirbaselineonpeakdays

>> changeoflightswithenergyefficientlampsonbusinesssites

>> jointresearchprojectondMwithrMiTMelbourne,andenergyaustralia

>> co-fundingofaproject(lowriseHighenergy)bytheWarrenCentreforexcellenceoftheuniversityofsydney.

overthenextfiveyears,wewillrolloutthefollowingdMprojectswithdistributors:

>> anetworksupportprojectaspartofthedevelopmentofelectricitysupplytotheFarnorthCoastofnsW

>> anetworksupportprojectaspartofthedevelopmentoftheelectricitysupplytothesydneyCentralBusinessdistrict(CBd)andinnermetropolitanarea

>> aprojectwiththestate’sdistributorsaspartoftheimplementationofinnovativedemandsideresponsesolutionstorequestsforproposalsfornon-networkalternatives

>> provisionofreactivepowersupportfrompowerstationsforthemainsystemnetwork

>> implementationofasystemprotectionschemetoimprovethepowertransfercapabilitybetweensnowyandYass/Canberra.

ourpreparationsforthe2009to2014revenuedeterminationrepresentedanorganisationaleffortofmanyofouremployees.Goingthroughthisprocessgaveustheopportunitytoseehowwecanimproveourbusiness.

uPcloselearninGfromtherevenuereseteveryfiveyearstheaerdeterminesourrevenue.

ourpreparationsforthe2009to2014revenuedeterminationrepresentedanorganisationaleffortofmanyofouremployees.Goingthroughthisprocessgaveustheopportunitytoseehowwecanimproveourbusiness.

asaresult,aninternalreviewhasbeenundertakentodeterminewhatwecouldhavedonebetterbasedonfeedbackfromtheaer.WesetuparevenueresetimprovementCommitteewhosecharterwastoidentifytheimprovementsneededtoputusingoodsteadforthenextrevenuedetermination.

Welearnedmanylessonsfromthisexercise,including,theneedformoretransparentandobjectivedata,andscopetotakeamoreholisticviewtothewaywemanageourcapitalworks.Thereisalsoscopetobemoreresponsivetotheperformanceincentivesbuiltintorevenuecapdecisions.

Wehavestartedputtingtheabovelearningsintopractice.inparticular,wehave:

>> strengthenedgovernanceinhowweplanourcapitalprojects

>> changedourprocessestoenablebetterregulatoryreportingprocesses

>> improvedourinternalreporting>> reviewedourself-insuranceadministrationandcapitalburdenrates

>> launchednewsoftware,whichallowsustobetterestimatethefuturecostsofourbuildingprogram.

overthenextyear,wewillcontinuetoembedtheselessonsacrossourbusiness.inparticular,wewill:

>> developamodeltoassistinapplyingthecapitalexpenditureincentiveschemeinamorecommerciallyeffectivemanner

>> improveourunderstandingoftheinteractionbetweenkeycapitalprojectsandtransmissionserviceoutcomes

>> developaprocessformanagingchangestoourcapitalworksprogramcausedbychangesinrequirementssincethemostrecentrevenuecapdecision

>> reviewourcostallocationprocessesandredevelopouroperatingexpendituremodel

>> implementchangestoourfinancialandprojectsystemstoimproveprocessefficiency.

Thisexercisewillbecomestandardbusinesspracticeforusoverthenextyear.

TransGridannualreporT2010>ourmarket 37

nationalmarketreviewsWeregularlytakepartinneMreviews.

ThemainneMregulatoryreviewsandconsultationsimpactingusduringtheyearincludedthefollowing:

>> TheaerregulatoryinvestmentTestforTransmission(riT-T).TheriT-T,whichreplacestheexistingregulatorytestfortransmissionassets,startedon1august2010.itprovidesasingleframeworkforregulatorytestsonalltransmissioninvestmentsandremovestheformerdistinctionbetweenreliability-drivenprojectsandthosemotivatedbythedeliveryofmarketbenefits.

>> duringMay2010,theaeMCreceivedadirectionfromtheMinisterialCouncilonenergytostartareviewofTransmissionFrameworks.Thereviewfocusesontheprovisionofelectricitytransmissionservicesinthelightofclimatechangepolicies;transmissioninvestment,networkcharging,managementofnetworkcongestionandaccessandconnection.Thisreviewisscheduledtobecompletedbynovember2011.

>> WeweresuccessfulinourMeritsreviewappealtotheaustralianCompetitionTribunalwithregardstoourfinalrevenuedecisionofapril2009.

>> inconjunctionwithGridaustralia,welodgedarulechangeproposalonconfidentialityprovisionsapplyingtonewconnectionapplications.ThenewrequirementsbenefitTransGridthroughmoreefficientprocessingofnetworkapplications.

otherkeyreviewscurrentlyunderwayincludetheaeMC’songoingreviewofTotalFactorproductivityandaeMo’srulechangeproposalsarisingfromitsnetworkControlandancillaryservicesreview.

overthenextyear,wewillcontinuetobeakeyplayerinprovidinginputintoneMregulation.

aerPerformanceincentiveschemeon1July2009,webecamethefirsttransmissionnetworkserviceproviderintheneMtoparticipateinanewcomponentoftheaer’sperformanceincentivescheme.Thenewcomponentmeasurestheimpactoftransmissionoutagesonthemarketpriceandgivesanincentivefortransmissionproviders,likeourselves,toreducethisimpact.

Wehavebeenproactiveinourresponsetothisschemeandhaveputinplacesomeadjustmentstokeypractices.Thefirstresult,reportedon31december2009,wasanachievementof39percentoftheavailableincentive.Thisisanexcellentresultagainstachallengingtarget.

“wholeofindustry”nememerGencyaPProachWeworkcloselywithneMparticipantstohelpusbettermanagethenetwork.

Weholdannualtrainingsessionswithoursystemoperators,operatorsfromotherelectricitycompanies,ourmajorcustomers,aeMoandothermarketparticipantsinnsWandaCT.

Thegoalofthetrainingistosetupouroperatorstodealwithacriticalsystemincidentsothatpowercanbebackonassoonaspossible.Fortunately,suchincidentsareveryrare,however,whentheydooccurweneedtorespondintherightway.

incidentscoveredintrainingrangefromminorincidentsallthewaytotheultimatecriticalincident–the“blackstart”,wherethewholenetworkhasshutdown.Wehavedevelopedacomputersimulationmodelforthispurpose.

overthenextyear,wewillbroadenthescopeofthetraininganddofurthergoodworkwithotherneMparticipantsinthisessentialarea.

lookinGatimaGeandrePutationourimageandreputationreflectshowgoodabusinessweare.Thisiswhywearetakingacloselookatit.

during2008/09,wedidanimageandreputationaudittoseewhatourstakeholdersthinkofus.Theauditshowsthatourstakeholdersexpectmoreofusthantheydidtenyearsago.Tothisend,wehavewovenimageandreputationconsiderationsintoourbusinessstrategies.

apriorityforushasbeentobettertalktostakeholdersinthebuildingofnewlines.Wehavestakeholdermanagementplansforeachofourmajorcapitalprojects.Thesearetargetedatmeetingcommunityexpectationsforwiderconsultationandbettercommunicationthroughouttheentirelifecycleofaproject.

Theimageandreputationaudithasgivenusasolidbasistocarefullylookathowwedealwithourstakeholders.overthenextyear,wewillcontinuetoworkcloselywithourstakeholderstoensuretheirneedsaremet.

ourwins–2009/10>> Implemented strategies to put us in good stead for the next revenue reset determination.

>> Signed an Mou with all NSW and aCT distributors to promote DM initiatives.

>> achieved a positive outcome in the aer performance incentive scheme.

>> Contributed to important national market reviews.>> Looked at our image and reputation.

theroadahead–2010/11>> undertake a customer connection survey to identify opportunities for improvement.

>> Implement new processes and models for the connection of renewable and low carbon generation sources to our network.

>> actively collaborate with our stakeholders to make sure our role in the NeM is valued by the market.

>> Widen our demand management projects around NSW.>> Take steps to strengthen and promote our image and reputation.


puttingourpeoplefirst



ourpeopleWeareasuccessfulbusinessbecausewehavetherightpeople.Theyhaveachievedinanenvironmentthatcontinuestochange.Wethankthemfortheirhardworkandcommitment.

left

Wayne Chambers, Manager/ellipse and Business reporting, Louise Birkmann, Senior analyst, and Scienta Lau, Insurance officer, at Sydney head office.

40 ourPeoPle>TransGridannualreporT2010

theriGhtworkforceWefaceanumberofchallengesoverthecomingyearsinbuildingtherightworkforceforthefuture.

Wehavealargenumberofemployeesagedover50andwepredictahighnumberofretirementsoverthenextfivetotenyears.Theretirementoftheseemployeeswillaffectourknowledgeandskillsaswellasleadershipcapability.

Wearepleasedthatouroverallseparationrateforreasonsotherthanretirementislow,aroundtwotothreepercent.However,weknowthatweneedtochallengeouremployeeswithrewardingworkanddevelopthemwithacareerpathinmindsothatwecanretainthem.

strategiessuchasleadershipdevelopmentandincreaseddevelopment-levelintakeshavehelpedtoaddressourageingworkforceissueandwewillcontinuewiththemoverthe2010/11period.

Theresourcingofalargecapitalworksprogramandtheneedtomanageagrowingnumberofentry-levelemployeespresentschallengesforhowweplanourworkforce.Wearecurrentlyreviewingourworkforceplanningstrategy,whichwillincludethetrialofanonlineforecastingandplanningtool.overthenextyear,thefocuswillbetotakeamoreholisticviewtoworkforceplanning.

Wearealsolookingatintroducinganalumniprogramforretiredemployees,youngeremployeeswhohaveresignedandwhomwewouldliketoenticebackaswellasotherkeygroups.Thisprogramwillbeprogressivelyintroducedoverthe2010/11period.

leadershiPthatdrivesourvisionTheleadersoftodayandtomorrownolongerjustdirectbutfacilitate,motivateandcoach.inthisperformance-drivenworld,ourleadersneedtohaveinitiativeandfosteraculturethatrecognisesandrewardssuccess.

Wehelpstaffdeveloptheirleadershipskillsbyofferingarangeofprogramsspanningfromfrontlinemanagementstudiestomoretargetedleadershipdevelopmentprogramsforhigh-potentialcandidates.

over30employeeshavetakenpartintargetedleadershipdevelopmentprogramsduringtheyear.TheseprogramsareoverseenbyourleadershipCouncil,whichincludesexecutivemembersandotherseniormanagers.inearly2010,wewidenedthescopeofourleadershipprogramssothatwehaveabroadermixofhighpotentialcandidatesforfutureprograms.overthenextyear,wewillreviewourleadershipcompetenciestobetteralignwithourvisionandstrategies.nominationsforthesenewprogramswillstartinthefirsthalfof2010/11.

akeycomponentofourleadershipstrategyisthediplomainManagementprogram.duringseptember2009,13participantsstartedthischallengingjourney.Theprogramgivescandidatestheskillstheyneedtomanagepeopleandresources.participantsenjoyarangeofbenefits,someofwhichincludegaininganationallyrecognisedqualificationandbeinginabetterpositiontogointomanagementrolesinthefuture.

leanneKeene,informationCommunicationsTechnologysystemsManager,says,“The best thing about the program is that it covers both management theory and practice. The course includes a

series of 8 face-to-face days which are complemented by assessment tasks. The course has provided me with an insight into the skills required in managing a team which is composed of different personality types who in turn approach their role in different ways. This understanding of people as well as the practical skills gained from the course modules has empowered me to shape the work environment so that all members of my team can make an effective contribution and we can achieve our goals.”

securinGfuturetechnicalexcellencethrouGhaPPrenticesWehavecontinuedourstrongfocusonapprenticeships.

ourapprenticeshipprogramprovidesgroundingforourapprenticestodevelopabroadrangeoftechnicalskillssotheycanbecomeleadersintheirfield.ourapprenticesarepartofaprogramtoaddresstheskillshortagesintheelectricityindustry.

Wehaveatotalof48apprentices,allatdifferentstagesintheircompetency-basedtraining,whichnormallytakesfouryears.Yearafteryear,thepopularityofourapprenticeshipprogramcontinuestogrowandattractarecordnumberofapplicationsfromhighcalibrecandidates.The2009/10yearwasnoexception.

Theapprenticeshipprogramgivesapprenticesbothonandoffthejobtrainingtohelpthembecomequalifiedsystemselectricians.Theygettoworkonmanydifferentprojectsinthetransmissionlinesandsubstationsgroups.andworkwiththebesttrainerswhoareworldexpertsintheirfield.

MostofourapprenticesaresuccessfulinobtainingpermanentpositionswithinTransGrid.

ourpeople “Wedevelopandmotivateourpeoplewithaneyeforthefuture.Weneedaworkforcethathasinitiativeandwilladapttochangetodeliverthebestpossibleservicetoourcustomers.Wearecommittedtodevelopingourfutureleaders,andprovidingthemwithchallengingcareerpaths.Wevalueourpeopleandempowerthemtobethebesttheycanbe.”


TransGridannualreporT2010>ourPeoPle 41

manaGinGdirector’sscholarshiPProGramThroughtheManagingdirector’sscholarshipprogram,wegiveouremployeestheopportunitytobethebesttheycanbe.

ourManagingdirectorawardsthescholarshipannuallytoaTransGridapprenticewhohasexcelledathisorherstudiesandshownleadershipatwork.Thescholarshipisagreatwayforourapprenticestoreachnewheightsintheircareers.

duringtheyear,theManagingdirectorawardedourfifthManagingdirector’sscholarshiptoMelaniedunnill,previouslyaCommunicationsapprenticeatYass.MelanieisnowstudyingaBachelorofengineering(electrical)attheuniversityofsydneyandwilldoworkexperiencewithus.

ThescholarshiphasallowedMelanietoreapthebenefitsofherhardworkandcommitment.

WithMelanie’sjourneyonthescholarshipprogramjustbeginning,Jeremyroberts’hasjustfinished.Jeremywasawardedthefirstscholarshipin2005andinlate2009completedhisBachelorofengineeringattheuniversityofWollongong.

ofhisexperience,Jeremysays,“I have started on TransGrid’s graduate development program with my first placement in the design group at Newcastle. I am enjoying the technical design work this rotation has exposed me to and I look forward to continuing my learning on the program. It is very satisfying to see a project through from start to finish.”

ourgraduateprogramisallaboutbuildingskillsanddevelopingfutureleaders.Wecurrentlyemploy60graduates,whichincludesanintakeof24for2009/10.

in2010,wekickedoffourYoungprofessionalsprogram,whichinvolvesastructuredthree-yeardevelopmentplanthatsupportsgraduatesinattainingtheirCpengorCpa.TheYoungprofessionalsprogramdevelopsourgraduatesinarangeofareassuchasleadership,safetyandstakeholdermanagement.itgivesthemtheskillstheyneedtofulfiltheircareeraspirationsandensuretheyarecontinuallychallenged.

ourgraduatesrotatethroughdifferentareasoftheorganisationsotheygettoknowthebusinessinsideout.Theprogramalso

includesworkplaceseminarsforyoungprofessionals.overthelastyear,wehaveheld13seminars.

ourtailoredprogramensuresthateachgraduatereceivesmentoringandfeedbackneededtomeettheircareergoals.

Connieliangjoinedusasanelectricalengineeringgraduate.onhertimewithus,Conniesays,“When I first started with TransGrid, I was faced with a steep learning curve. My supervisor and work colleagues are really helpful and supportive, guiding me to put into practice the skills I acquired at university. The graduate development program also holds monthly seminars which gives graduates an insight into other specialised work areas. I believe these are the things that make TransGrid and its development program first rate”.

uPcloseGraduatesonaProGramforsuccess

abovetoPL-r – Samantha Christie, Darren Wu, khorshid Jahan, and Shahpar ahmed, electrical engineering graduates at the Metropolitan regional Centre.

aboveMelanie Dunnill and former Managing Director, kevin Murray, at the Scholarship awards Ceremony.

aboveConnie Liang, electrical engineering Graduate.


newaPProachtoPerformancemanaGementagoodperformancemanagementsystemdrivesahighperformingculture.Thisiswhy,overthelastyear,wehavestartedimplementinganonlineperformancemanagementtool.

Thenewsystemwilldelivermanybenefitstoourbusinessincludingmoretargetedperformanceassessments,onlinehelptools,streamlinedreportingandeasieraccesstoperformancemanagement.

during2009/10,weranapilotofthenewsystemwithYassemployeestopromotebetterparticipationinperformancereview.Thepilotwassupportedwithtrainingonmanagingemployeeperformance.

Thefeedbackfromthepilotgrouphasbeenverypositive.participantsfoundthenewsystemverysimpletouseastheycanquicklylogonandseehowtheirreviewisprogressing.inaddition,Managerscaneasilyschedulereviewsfortheirstaffandtheratingscriteriaiswideenoughtocoveroffalllevelsofperformance.

overthenextyear,wewillrollouttheprogramacrossthebusinessandcommunicateitsbenefitstoouremployees.

emPloyeeenGaGementTheextenttowhichouremployeesfeelengagedoftendictateshowlongtheywillstaywithus.

Wehavemanylong-termemployeesaswellasmanynewemployees.Theseemployeesplayakeyroleinhelpingusdeliveronourobjectives.

overthenextyear,wewilldeliveranemployeesurvey.Thesurveywillbeanimportantwayforouremployeestotelluswhatwearedoingwellandwhereweneedtoimprove.

Wewillactontheresultsandfocusonthoseareasthatthemajorityofemployeesbelieveneedimprovement.Wewillalsoidentifyourstrengthsandcontinuetobuildonthem.initiativesfromthesurveywillbeactionedin2011andbeyond.

oPencommunicationWeliveourvalueofopencommunicationbysharinginformationwithourpeople.

ourinternalcommunicationsmakesurethatouremployeescanbetteridentifywithwherewearegoingasabusiness.

uPclosehowtodeveloPaworldexPert

during2009,wekickedoffaresearchprojectwithMacquarieuniversitytitled“How do people become experts?”Theresearchisaboutunderstandingthedifferentwaysthatexpertshandleinformation.

Wehavereapedlargebenefitsfromthisresearch,particularlyinthetrainingofsystemoperators.ithelpsustoscreenpeopleatanearlierstagetoestablishtheirunderlyingsuitabilityforthejobanddeveloptargetedtrainingtohelpnewstaffrecognisethesecues.Thiswillhelpthemtobecomeexpertsmuchsoonerthanmightotherwisehavebeenthecase.

Wefollowedthreelinesofinvestigationindoingthisresearch:

>> observingoperatorsbyusingeye-trackingtechnologyandwatchingthespecificareasthatoperatorsfocuson.

>> Carryingoutspatialrecognitionexercisestodeterminewhetherthereisunderlyinginnateskillsthatexpertspossess.

>> onlinescenariotesting,whichflashesupanabnormalscreenforashorttime,requiringtheparticipanttoexplainwhatwashappeningandwhatneedstobedone.

neilsmith,executiveManager/systemoperations,says:“This training is an industry first and we are setting the benchmark for best practice in emergency response. We are the leaders in this area. Over the next year, we will broaden the research to include other NEM participants. The World Expert training will be part of a recruitment campaign targeted at bringing new staff into the control room at an earlier stage, allowing them to work alongside the experienced operators.”


Wecommunicatewithouremployeesinmanydifferentways.progressupdatesandinitiativesarecommunicatedviabriefingsessions,emailbroadcastsandamonthlyelectronicnewsletter.Thesecommunicationchannelsareavaluablewayofengagingouremployeesandgettingtheirfeedbackonwhatisimportanttothem.

overthenextyearwewillintroduceanewintranet,whichwilladdanewdynamictothewaywecommunicatewithouremployees.Wewillalsolookatnewwaystobetteraligninternalcommunicationswithoverallorganisationalstrategy.

CorporateCommunicationsManager,natalienacinovicsays:“We want our people to identify with our business strategy and feel like they are making a difference. We will continue to be more proactive in our internal communications by telling simple and consistent messages to nurture a workplace that works towards the same goals.”

emPloyeebenefitsthatworkWewantouremployeestoenjoytheirtimeatTransGrid.Thisiswhyweofferthemmanybenefits.

Wehelpemployeesgetagoodwork-lifebalancebyofferinganine-dayfortnight,35-hourweek,flexibleworkarrangements,maternity/paternityleaveandvacationcaresubsidies.

ouremployeescanbepartofourregionalsportsandsocialclubs,whichgivesthemthechancetomeetfellowemployeessociallyandhavefun.Theclubsoffermanyticketstodiscountedsportingevents,theatreshowsandconcerts.

Weprovidecompetitivesalariesforemployeeswithagenerous13percentemployer’ssuperannuationcontribution.employeescanalsoenterintosalarysacrificearrangementsforthepurchaseofmotorvehiclesandforthepaymentoftheirelectricitybills.

TheTransGridemployeesWelfareFundcontinuestobepopular.Throughasmallweeklycontribution,employeescanreceivesupportforthemselvesandtheirfamiliesintimesofhardshipandcanaccessarangeofwelfareandrecreationalfacilities.

GoodworkPlacerelationsWecontinuedtohaveaharmoniousworkplacerelationsenvironmentduring2009/10withmostissuesdealtwithataworkplacelevel.

WealsomovedintotheFederalworkplaceindustrialrelationsjurisdiction,followingthensWGovernment’sreferralofitsstateindustrialrelationspowerstotheCommonwealth.Thishasnotaffectedusgreatly,withonlyminorchangestopoliciesandproceduresrequiredtocomplywiththenewlegislation.

Weliveourvalueofopencommunicationbysharinginformationwithourpeople.ourinternalcommunicationsmakesurethatouremployeescanbetteridentifywithwherewearegoingasabusiness.

aboveleftGavin Thomas, Capital expenditure analyst, and angela Chau, Graduate accountant at Sydney’s head office.

aboveDavid adams and Michael knox, Trainee engineering officers, at Sydney West Substation.


movinGforwardwithdiversityourdiverseworkforcehasbeensteadilygrowingoverrecentyears,withthenumberoffemaleshavingrisenfrom146to155overthelastyear.

ourworkforcediversitystrategyisaboutimprovingcareeropportunitiesforpeoplewhoareunder-representedinourworkforce.

during2008/09,wedevelopedaneeoManagementplan2010to2013,whichincludesspecificprogramsforeeoGroups.

equalemPloymentoPPortunity(eeo)disclosures

Trends in the representation of EEO Groups1

eeoGrouP PercentaGe(%)oftotalstaff

benchmark3ortarGet

2010 2009 2008

Women 50% 15 15 14

aboriginalpeopleandTorresstraitislanders

2.6% 0.8 0.8 0.9

peoplewhosefirstlanguagewasnotenglish

19% 20 20 19

peoplewithadisability 12% 6 6 5

peoplewithadisabilityrequiringwork-relatedadjustment

7% 0.5 0.5 0.5

Trends in the distribution of EEO Groups2

eeoGrouP PercentaGe(%)oftotalstaff

benchmark3ortarGet

2010 2009 2008

Women 100 94 92 93

aboriginalpeopleandTorresstraitislanders

100 n/a n/a n/a

peoplewhosefirstlanguagewasnotenglish

100 106 104 104

peoplewithadisability 100 102 105 103

peoplewithadisabilityrequiringwork-relatedadjustment

100 n/a n/a n/a

notes

1 excludescasualstaff.2 adistributionindexof100indicatesthatthecentreofthedistribution

oftheeeogroupacrosssalarylevelsisequivalenttothatoftheotherstaff.3 TheaboveeeoBenchmarksaredeterminedbythensWGovernment,

departmentofpremierandCabinet,equalemploymentopportunity.

aboveleft

rachana amin, Professional engineer, and Ingrid Thompson, Graduate accountant.

aboveriGhtShahpar ahmed, electrical engineering Graduate.


multiculturalPoliciesandservicesProGram(mPsP)WearecommittedtothemulticulturalismprinciplesoutlinedinthePrinciples of Multiculturalism Act 2000(nsW).

oureeoManagementplan2010to2013considersculturalandreligiousdiversityacrossbroadareas.TheseareintegratedwithinourMpsp.

Thekeyresultsoftheplaninclude:>> Planning:integratingmulticulturalpolicygoalsintoouroverallbusinessplanning.

>> Consultation and feedback:policydevelopmentandservicedeliverydrivenbyconsultationandfeedback,complaintsandparticipationonadvisoryboardsandsignificantcommittees.

>> leadership:ourManagingdirectorandseniorleadersactivelypromotingtheplanandimplementingmulticulturalismwithinthewidercommunity.

>> Human resources:improvingourskillsbyemployingandtrainingpeoplewithlinguisticandculturalexpertise.

>> access and equity:puttinginplaceprogramsthatreducethebarriersforpeoplefromcultural,linguisticandreligiouslydiversebackgrounds.

>> Communication:usingarangeofcommunicationchannelstoeducatepeoplefromculturallyandlinguisticallydiversebackgroundsaboutourservices.

>> Social and economic development: puttingprogramsandservicesinplacetodeveloptheskillsofaculturallydiversepopulationforthesocialandeconomicbenefitofthensW.

aboriGinalandtorresstraitislanderemPloymentactionPlanWesupportaboriginalandTorresstraitislanderpeopleindevelopingtheirfullpotential.ouraboriginalandTorresstraitislanderactionplanaimstoimproveindigenousemployment.

ThegoaloftheplanistoincreasethenumberofaboriginalandTorresstraitislanderpeopleapplyingforTransGridjobs,retaininganddevelopingtheirskillsandprovidingthemwithcareerpaths.

femalesbyclassification2009/10 malesbyclassification2009/10

Senior Contract O�cer

Professional O�cer

Engineering O�cer

Apprentice

Administration O�cer

Tradesperson

Team Leader/Network

Senior Contract Ocer

Professional Ocer

Power Worker

Operator

Misc

Line Worker

Engineering Ocer

Apprentice

Administration Ocer

administrationofficer 89

apprentice 3

engineeringofficer 7

professionalofficer 47

seniorcontractofficer 9

Total 155

administrationofficer 62

apprentice 45

engineeringofficer 283

lineworker 32

Miscellaneous 5

operator 22

powerworker 40

professionalofficer 205

seniorcontractofficer 82

Teamleader/network 18

Tradesperson 72

Total 862


disabilityactionPlanourdisabilityactionplanisconsistentwiththensWGovernment’sdisabilitypolicyFramework,theNSW Disability Services Act 1993andtheNSW Anti-Discrimination Act 1977.

Theplanaimstoremovebarrierstoservicesforpeoplewithadisability,givinginformationinarangeofformats,makingourbuildingsandfacilitiesphysicallyaccessible,helpingpeoplewithadisabilityparticipateinpublicconsultationsandincreasingtheiremployment.

women@transGridactionPlanTheWomen@TransGridprogramstartedin2008/09toattractwomentoengineering,technicalandmanagementrolesandhelppromoteagreaterwork-lifebalance.

Committeemembershelpwithactivitiessuchasworkingparties,researchandpromotionalactivities.Theyalsotalkwithfellowfemaleemployeesaboutcurrentissues.

duringtheyear,theWomen@TransGridactionplanwaslaunched.Theeventwaswellsupportedbywomenfromseveralofourlocationsaswellasmembersoftheexecutiveandmanagersandteamleaders.

Matinapapathanasiou,adirectorontheTransGridBoard,gavethekeynotepresentation,discussinghereducation,

careerachievementsandtheexperiencesshehashadinvariousorganisationsandroles.Matinaprovidedgoodinsightintowhatshehasfoundhelpfulalongthewayandthepresentationwasbothinterestingandinspiring.

sincethelaunchoftheactionplan,theWomen@TransGridprogramhasputinplacearangeofinitiatives.someoftheseincludethepromotionoftheactionplanandprofilesofsuccessfulwomenviaourvariousinternalcommunicationchannels.

Theprogramhasalsopromotedarangeofexternalseminarsandtalksonareassuchasleadershipanddevelopment.over25womenhaveattendedtheseevents,withmanyofthembringingnewideasbacktotheworkplace.in2010/11,wewilllaunchasurveyregardingdevelopmentbarriersforwomen.

WewouldliketothankeveryonefortheircontinuedsupportoftheWomen@TransGridinitiatives.

eeoachievements2009/10>> developedtheeeoManagementplan2010to2013.

>> re-issuedourpoliciesonanti-discrimination,harassment,bullyingandequalemploymentopportunityandappropriateuseofTransGrid’semail,internetandcomputerresources.Thesepoliciescanbeaccessedfromourintranet.

>> deliveredawarenesssessionstoseniorleaders,apprentices,traineeengineeringofficersandgraduatesontheCodeofConductandanti-discrimination,harassment,bullyingandeeopolicies.

>> encouragedindigenousandfemaleapplicationsforthe2010apprenticeintake.

>> sponsoredtheindigenousaustralianengineeringsummerschool2010.

>> launchedtheWomen@TransGridactionplan.

>> appointedaprovidertodeveloptailoredworkplacebehaviourtrainingforallemployees.

>> providedinductionprogramstoallnewemployeestointroducethemtoourpolicies.

>> sponsoredthedon’tdisMyabilitycampaign.

>> providedaquietroomforstafffromreligiouslydiversebackgroundstouse.

>> promotedoureeoachievementsandinitiativesthroughourvariousinternalcommunicationchannels.

>> ConsultedwithstaffindevelopinganageingworkforceplanandstrategiesfortheWomen@TransGridactionplan.

ontheeveningof21september2009,astormseverelydamagedour220kVlinewhichsuppliespowertoBrokenHill.Fiveofourtowersweredamagedbythestrongwinds.

Formorethanaweek27TransGridemployees,sevenCountryenergyemployeesandsixcontractedplantoperatorsworkedtirelessly,finalisingrepairworkonthetransmissionlines.Thisincredibleeffortresultedinaround2.5kilometresoftransmissionlinebeingre-builtby29septemberinharshweatherconditions.

Thelogisticsinvolvedinresourcingtherecoveryeffortwerequitechallengingwithstaff,plantandmaterialbeingsourcedfromanumberofourregionsacrossnsW.ThepressuretoreturnthetowertoservicewasmademoreurgentbythefactthatthesoleemergencysupplytoBrokenHillwasbeingprovidedbyCountryenergy.Thisvulnerability,combinedwiththehighcostoffuel,madeitevenmoreimportanttomakesuretherestorationwasexpedited.

Thechallengeswefacedwereexacerbatedbywindscausingthewirestobecomeentangledinthetowersteelworkandsurroundingtrees.safetywasalwaysourhighestpriority.our“stopandConsider”mindsetwascalledtoaction.duetoconductorsbeingentangledintreesandthefallentowers,wehadtomovethemverycarefullyontheirnewstructures.

Thechallengewasnotonlytoensurethatweworkedsafely,buttoseeifwecouldbuildthelinebetter.Wealsohadtobeconfidentthenewstructuresweredesignedandbuiltinsuchawaythattheywouldsustainanyfutureextremeweatherconditions.Weachievedthisbycomingupwithaninnovativesolutionsowecouldrebuildthelinewithminimumimpactoncustomers.

Thebiggestfactorinachievingthefastreturntoservicewastheeffortwespentinplanningtherightsolution.oursitesupervisorhadextensiveexperience

uPcloseextremeweathersouthofbrokenhill


eeoPlannedachievements2010/11>> ContinuetosupporttheWomen@TransGridprogramandimplementitsinitiatives.

>> encourageindigenousandfemaleapplicationsforthe2010apprenticeandgraduaterecruitmentdrives.

>> delivertailoredworkplacebehaviourtrainingforallemployeeswithafocusoneeo,andpreventingharassment,discriminationandbullying.

>> improvethequalityofoureeostatisticaldata.

>> promoteoureeoprogramstoemployeesandprospectiveemployeestodevelopandattractpeoplefromeeogroups.

>> implementandcommunicateourrevisedgrievancemanagementprocess.

>> Continuetosupportthedon’tdisMyabilitycampaign.

>> increaseinteractionwithuniversities,schools,industryandprofessionalcommunitygroupstoimprovetherepresentationofeeogroupsandgainnewinsightintofutureprograms.

>> Giveourseniormanagersbetterinformationonhowweareperformingagainstoureeotargets.

ourwins–2009/10>> reviewed our workforce planning strategy.>> renewed our leadership strategy for high-potential employees.

>> Piloted an online performance review system.>> Strengthened our internal communication strategies. >> Made good progress in implementing eeo strategies.

theroadahead–2010/11>> roll out the online performance review system across the business.

>> align recruitment strategies to the skills the business needs to be successful.

>> Launch a new employee orientation program.>> Introduce programs to improve the retention and re-employment of high potential employees.

>> undertake an employee engagement survey and identify improvement initiatives.

>> roll-out a leadership program for high-potential employees.

inleadinglargeteams.inaddition,weappointedastaffmemberwhohadthesoledutyofensuringthatallplantandmaterialwasavailableintheshortesttimepossible.Weaddresseddesignissueswiththeon-sitepresenceofaseniorlinedesigner.

GeneralManager/network,Mrlionelsmythsays,“This event reaffirms the fact that NSW can rely on our expertise and determination to get the job done. So many people were involved in this enormous feat. We had so many challenges, including the extreme weather and the complex line design, let alone the demand of getting the line up in record time. We met all of these challenges by working closely together towards a shared outcome for the people of NSW. The job was managed flawlessly with a well thought out plan which was communicated and executed in a very safe way”.

leftrestoration of the Broken hill transmission line.

aboveChris Bennett, Professional engineer, and Maggie Chan, Business Services Manager.


alwayslearninganddoing



alwayslearninganddoing

enerGytoday,enerGytomorrow...operationalexcellenceWehavearenewedfocusonenhancingourcommercialmindset.Wearewatchingourbusinessprocessestoseehowwecanworksmarteranddothingsmoreefficiently.

left

L-r – Lewis ryan, Professional engineer, and Joseph Diver, Graduate electrical engineer at Metropolitan regional Centre.

50 oPerationalexcellence>TransGridannualreporT2010

betteroPerationalefficiencyinthepreviousregulatoryperiod,weworkedhardtomanageourcosts.Wedidthisbyputtinginplacegoodbusinessstrategy,beingproactivewithbenchmarkingandimprovingthewaywedothings.

Wehavearenewedfocusonenhancingourcommercialmindset.Wehavestarteddevelopingaframeworkthatcarefullylooksatallrevenueandcostdriversimpactingourprofits.Wearealsowatchingourbusinessprocessestoseehowwecanworksmarteranddothingsmoreefficiently.

althoughourunregulatedbuildingprogramisasmallpartofourregulatedbuildingprogram,weseeitasanimportantpathwaytogrowingourprofits.overthenextyear,wewilldevelopabusinessmodelfornegotiatedandunregulatedwork.Thiswillhelpdeliverthebestcommercialoutcomesforunregulatedwork.

alowcostserviceProvidereveryfiveyearstheaerdecidesourrevenueforregulatedservicessowecanmaintainournetwork.

electricitytransmissioncostsgenerallyformaround10percentofmostnsWhousehold’selectricitybills.The2010/11transmissionpricesforloadcustomersanddistributorshaveincreasedoverallbymorethantheexpectedConsumerpriceindexmovements.

ourpricehasmainlyrisenbecauseofthesharpfallintheneMrevenuestreamsthatareusedtooffsettransmissionprices.

WeunderstandthatourcostsareultimatelymetbythepeopleofnsW,anddespitethisincrease,wecontinuetobeoneofthelowest-costtransmissionserviceprovidersworldwide.

GoodmaintenancedrivesworldclassreliabilityThehighreliabilityofournetworkisacombinationoftherightplanningandtherightmaintenancestrategies.

ournetworkManagementplansetsoutthemaintenanceneedsforourequipmentandhelpsustocontinuallyimproveournetwork.Wecarefullyplanournetworkmaintenanceandconsiderthedifferentlifespansofvarioustypesofequipmentandtheirservicingneeds.

Weusearisk-basedapproachindevelopingourassetmanagementstrategies.Thesestrategiesarecheckedbyspecialistworkinggroupsandconsidermanyfactorssuchascost,expectedreliabilityandassetcapability.

overthelastyear,wehaverevisedourtransmissionlinemaintenancerequirementsfordetailedaerialinspections.Toachieveadetailedevaluationoftheconditionofalllinecomponentsandfittings,analternativemethodusingdigitalimagerytechniqueswhilstthehelicoptersafelyoperatesatitspreferredflyingheightandspeed,wassuccessfullytrialledduringtheyear.

atthesametimelightdetectionandranging(lidar)technologiesarebeingemployedtocaptureanaccuratevegetationprofileandidentifytreesthatrequiremaintenance.Thesetechniquesarenowplannedtobeextendedtotheentirenetworkforthecomingyeartoprovideuswiththefirstfulldigitalimagesofalltransmissionlineassetsandeasements.

operationalexcellence

ThelatestinternationalTransmissionoperationsandMaintenancestudy(iToMs)hasdemonstratedthatweareoneofthebestperformingtransmissioncompaniesintheaustraliaandnewZealandregion.

aboveriGhtL-r – amie White and kieran Caffery, electrical apprentices, russell ubrihien, Grid officer, and Col Campbell, electrical fitter, at Wagga Wagga’s apprentice workshop.

TransGridannualreporT2010>oPerationalexcellence 51

during2009/10,wespent$65.4milliononmaintenanceandexceededourmaintenancetargetof95percentforeachofthelast15years.Thisresult,coupledwiththeexpertiseofourpeople,isakeyfactorinourongoinghighlevelofreliability.

atoPPerformerininternationalbenchmarkWehavehadahighlevelofnetworkreliabilityovermanyyears.

during2009,atotalof27companiestookpartintheinternationalTransmissionoperationsandMaintenancestudy(iToMs),whichcomparesperformancewithinthetransmissionindustryworldwide.

inthelatestresults,wehavebeenidentifiedasaleadingperformerworldwideonbothserviceandcostmeasures.Wearenotonlywellaheadoftheworldwideaveragebutalsowellaheadoftheasia-pacificaverage,demonstratingthatweareoneofthebestperformingtransmissioncompaniesintheaustraliaandnewZealandregion.

Wecontinuetoreapthebenefitsoftakingpartinthisglobalbenchmarkingstudy.itnotonlyreaffirmsourbestpractice,assetmanagementtechniquesbutalsohelpsusstayabreastofleadingtrendssothatwecanfurtherstrengthenouroverallmaintenanceperformance.

takinGstePstomanaGechanGeTheonethingthateveryorganisationiscertainofisthatchangeisaconstantintoday’sworld.Well-implementedchangemeanssuccess.

Changeforacompanylikeourshasmanydifferentfacetstoit.duringtheyear,wedevelopedaformalchangemanagementsystemsothatwecanbetterpositionourselvestodriveimprovementsacrossthebusiness.

Thefocusfornextyearwillbetocommunicateandeducateourpeopleonhowtouseit.Weknowthatchangeassociatedwithcontinuousimprovementisvitalinusbeingsuccessful.

overthenextyear,wewillusethechangesystemtoimplementsomeimportantcontinuousimprovementprojects.someoftheseincludeknowledgemanagement;incorporatingrevenueresetlearningsinthebusiness;strategicprocurementandperformancemonitoring.

PushinGthetechnoloGyenveloPeWehavedrivenourinformationtechnologiestonewheightsoverthelastyear.Goodinformationtechnologysupportsgoodbusinessprocesses.

during2009/10,weimplementedthefollowinginformationtechnologyimprovements:

>> executedamulti-sourcingstrategy,whichtransitionedsomeapplicationsupportandfullcorporatedatanetworkservicestoexistingandnewemployees,allofwhichwascompletedwithoutdisruptiontothebusiness.

>> replacedourenterpriseservers,whichhostourmajorapplications,toimproveperformanceandreliability.

>> launchedanewexternalwebsitedesignedwithuserneedsinmind.

>> introducedvideoconferencingatourmajorsitestoenablebetterstaffcollaborationandpromotebusinessefficienciesthroughreductionintraveltime.

>> performedastrategiccheckofourenterpriseresourceplanningsolutions.

>> Completedservervirtualisationtosaveoperatingandadministrationcosts.Thisprojectincludedthedeliveryofcriticalbusinessprojectssuchasoffice2007andanemployeeself-serviceupgrade.

overthenextyear,wewilldriveourinformationtechnologiesfurther.Wewillimplementourenterpriseresourceplanningstrategy;upgradeouroutageplanningmanagementsystemandgrowtheunregulatedtelecommunicationsbusinesstoincreaseprofits.

“Thechallengeforusoverthenextfewyearswillbetorefineandenhanceourassetmanagementstrategytocaterfortheexpected24percentincreaseinourassets.Wewilldothisbylookingatinnovativewaystogetthebestoutofourassetbase.”

lionelsmyth,GeneralmanaGer/network

52 oPerationalexcellence>TransGridannualreporT2010

anewvirtualcontrolroomThestatesystemoperationsControlCentreinWesternsydneyhasreceivedafacelift,makingitthemostmoderncontrolroominaustralia.

Therefurbishmenthasbroughtmanybenefitstothebusiness.someoftheseincludebetteroperatorsituationalawarenessandasuperioroverviewofthetransmissionnetwork.systemoperatorshaveaccesstothebesttools,networkinformationonhandsoonerandoperatortraininginrealtime.

Thesmart,fit-for-purposecontrolroomhasreducedourcostsbyallowingcompleteflexibilityofoperationfromanygeographiclocation.

Weareproudtosaythatthetransitionfromthetemporarycontrolroomransmoothly,withnopowersupplyinterruptionstoourcustomers.

moreeffectivesecuritycontrolduringtheyear,westartedupgradingtoanewaccesscardmanagementsystemsothatwecanbettercontrolandmonitoraccesstooursites.

Thenewsystemincorporatesthelatesttechnologyandwillincludeasecuritypanelupgradeateachsite.

Themainbenefitofthenewsystemisthatitwillgiveusasinglesystemtoreacttoalarms.Theupgradewilldriveefficienciesbycuttingdowntheadministrativeworkloadofmanagingsiteaccess.

Theprojectisnearlyfinishedwiththeinstallationofhighsecurityfences,detectionsystems,closedcircuittelevisionandaccesscontrolsystems.

deliverinGanefficientsuPPlychainWedeliveranefficientsupplychain,whichpromotescompetitionandgetsthebestvalueformoney.Thishelpsustodeliverourcapitalworksprograminthebestwaypossible.

Weseekcompetitivequotesandadvertisetenderspubliclyonourexternalwebsiteandinthepress.ourprocurementframeworkencouragesbusinessestocompeteintheopenmarketbysubmittingeitherexpressionsofinterestortenders.

duringtheyear,werevisedourprocurementgovernanceframework.Theserevisionshaveimprovedthecosteffectivenessofprocuredgoodsaswellasthetimeframesinwhichtheyaredelivered.Weheldawarenesssessionsformanagerstomakesuretheyunderstandthenewframeworkandtheirresponsibilities.

“ThestatesystemoperationsControlCentrerefurbishmenthasbroughtmanybenefitstothebusinessincludingasuperioroverviewofthetransmissionnetwork,networkinformationonhandsoonerandoperatortraininginrealtime”.

neilsmith,executivemanaGer/systemoPerations

duringoctober2009,wegavethepublicabrandnewexternalwebsitewww.transgrid.com.au.

Thenewwebsitewasbuiltfromthegroundupandincludesmanynewfeaturessuchasanewlookandfeel,betterfunctionality,improvedsearchfacilities,moredynamicgraphicsandtheintroductionofemployeevideoprofiles.Thenewlookwebsitepresentsourinformationinawaythatmakesitmucheasiertofindwhatyouarelookingfor.

ourwebsiteusersarequitediverse,rangingfromjobseekerstothebroadercommunityandmarketparticipants.Weranin-depthfocusgroupswithmanyofourstakeholderstotapintotheirexpectationsasusers.Thefeedbackfromthefocusgroupshashelpedshapethe

waywepresentinformationonthewebsite.Thechallengewastomakesurethatthewebsitewasaone-stopshopforourstakeholders.Weneededtoincreasetheinteractivity.Wedidthisbyhavingafacilityforthepublictosubscribetoupdatesonprojects,mediaandcareers.sincegoinglive,wehavehadover200membersofthepublicsubscribetowebsiteupdates.

Weareconfidentthatthenewwebsitewilldeliverresults,enhanceourbrandandmeetthedifferent,yetuniqueneedsofourstakeholders.

overthenextyear,wewilllookatourwebsiteanddrivefurtherimprovementsinthewaywecommunicateinformationtoourusers.

uPcloseamodernwebsite


TransGridannualreporT2010>oPerationalexcellence 53

newintranetisonitswayWewillgolivewithanewintranet,theWire,in2011.TheWirewillhavealookthatreflectsourpositioningasamodernandperformance-drivenorganisation–andmoreimportantfunctionality.

preparationskickedoffinJanuary2010with50ofouremployeestakingpartinfocusgroupsessions.Thefocusgroupswereagreatwayforustofindoutwhatouremployeeswantofanintranet.TheirinputhasgonealongwayindefiningwhattheWirewillbeabout.

TheWirewillbebuiltwiththelatestintechnologyandwilldeliverall-roundbenefitstoouremployees.someoftheseincludereal-timenewsupdates;teamandprojectsitestopromotecollaborativeworkpractices;aknowledgebaseforemployeestocontributetoasharedpoolofinformationandastronggovernanceframework.

TheWirewillbetheprimaryinternalcommunicationsplatformforemployeesandwillplayakeyroleinengagingemployeefeedbackonourstrategiesandinitiatives.

“ihavebeenwithTransGridforafewmonthsandthenewexternalwebsitehasreallyhelpedmefindouteverythingineedtolearnaboutthecompany.TheemployeevideoprofilesarefantasticandgavemeagreatunderstandingofwhaticanexpectwhileworkingatTransGrid.Withonlyafewclicks,icansubscribetoupdatesonourcapitalworksprogramwhichhelpsmeinmyroleasCommunityliaisonofficer.”

kristyhead,communityliaisonofficer

ourwins–2009/10>> Implemented a new external website.>> Scoped the development of a new intranet. >> Identified as a leading performer in the IToMS benchmark.>> Delivered information technology improvements to the business.

>> Developed a new business model to address the regulatory and financial aspects of the business for medium and long-term forecasting of organisational performance.

>> Commenced the rollout of a new access card management system.

theroadahead–2010/11>> Develop an approach on knowledge management for both internal and external knowledge.

>> Strategically review our procurement function.>> Improve performance reporting through the development of organisational key performance indicators and a business reporting platform.

>> Launch a new employee intranet.>> apply our change management system across the business.

aboveL-r – Brett hasenkam and robert Smith, Communication Technicians, orange regional Centre.


beingintouch



beingintouch


ourcommunityWeappreciateourcommunitiesandvaluetheircontributions.Weengagewiththemandbuildvaluablepartnerships.

leftL-r – Matthew Lee, and Joseph Diver, Graduate electrical engineers with Tim Barnes, Project Manager/Central, kristy head, Community Liaison officer, albert Maldonado, Network Projects engineer at Metropolitan regional Centre.

56 ourcommunity>TransGridannualreporT2010

GivinGbacktoourcommunitiesWeappreciateourcommunitiesandvaluetheircontributions.Weengagewiththemandbuildvaluablepartnerships.

Wehaveaproudtrackrecordofinteractingwiththecommunityduringourcapitalworksprocess.WiththeresponsibilitytomaintainasafeandsecureelectricitysupplythroughoutnsW,wearecommittedtolisteningtothecommunity.

oursponsorshipframeworksupportsstrategicpartnershipswithorganisationsintheareasofindustry,education,communityandenvironment.

duringtheyear,werenewedourpartnershipwithGreeningaustralia,ourlargestsponsorship.TheGreenGridpartnershipcontributestotheenvironmentalwellbeingofnsW.

WehavealsocontributedtouniversitiestohelpdeveloppowerindustryexpertiseandsupportedsomekeyeventsthathaveastrongpresencewithinnsW.Thisgoesalongwaytohelpingusstrengthenourtieswiththecommunity.

oursponsorshipshavebeenasuccessbecauseouremployeeschampionthemyearinandyearout.Wethankthemfortheircommitmenttotheseworthwhilecauses.

ourcommunity “ourworkwiththecommunityhasincreased.Weunderstandthatourbuildingprogrammaysometimesimpactoncommunities,sowetrytobalancethetechnicalneedsofanupgradetothenetworkwiththeneedsofcommunities.Weworkwithourcommunitieseverystepoftheway.”

michaelGatt,GeneralmanaGer/corPorate

Wevaluethefutureofthepowerindustryandhavecontinuedtobeagoverningmemberoftheaustralianpowerinstitute(api).

Theapi’sgoalistoboostthequalityofpowerengineeringgraduates,whoseekasuccessfulcareerinourindustry.Throughthismembership,wesupportthedevelopmentofpowerengineeringprogramstoattractthebestengineeringgraduates.

eachyearwetakepartintheapiengineeringsummerschoolprogram.Theprogramincludestwoweekspackedfullofpresentationsbyindustryexperts,fieldtripsandnetworkingevents.Thesummerschoolgivesouryoungengineersthechancetointeractwithotherdelegateswhichhasproveninvaluableincreatinggoodnetworks.

sophiedowling,plantengineer,attendedthesummerschoolthisyearandsaysofherexperience:“One of the most rewarding features of the program were the discussions with the technical presenters from the industry. This gave me the opportunity to ask lots of questions. The informal discussions are where the best learning took place. Another feature of the program is the syndicate work. This required me to work in a small group to research a topic under the guidance of an industry expert and present the results to all delegates at the end of the program. API allowed me to broaden my knowledge and look at what I do at TransGrid from different perspectives.”

uPcloseinvestinGinfuturePowerenGineerinGcaPability

aboveriGhtL-r – Lionel Smyth, General Manager/Network, John McCall, Projects Manager/Northern, Peter McIntyre, Managing Director, and Warwick Schroder, Civil Projects engineer at Tomago Substation.

aboveSophie Dowling, Plant engineer.

TransGridannualreporT2010>ourcommunity 57

nameoforGanisation amount*Granted

natureandPurPoseofsPonsorshiP

australiannationalFielddays(anFd)

1,035 TookpartintheanFdasanexhibitorprovidingcareersinformation,capitalprojectinformationandenvironmentalinformation.

stateWater 5,500 sponsoredthecentenarycelebrationsmarking100yearssincethebuildingofBurrinjuckdam.

electricenergysocietyofaustralia(eesa)

16,500 Goldsponsoroftheeesastateconference.ComplimentaryregistrationswereprovidedtotheYoungprofessionalsprogramnetworktoallowgraduateemployeestoattend.

departmentofageing,disabilityandHomeCare

5,500 sponsoredthedon’tdisMyabilityCampaign.Twoambassadorsspoketoouremployees.

engineeringaidaustralia 3,000 sponsoredtheindigenousaustralianengineeringsummerschoolheldattheuniversityofnsW.

TheWarrenCentre 22,000 sponsoredtheenergyefficiencyprojectlowenergyHighriseprojectstage2(leHr2).

TheWarrenCentreforadvancedengineeringisanindependent,industry-linkedinstitutecommittedtofosteringexcellenceandinnovationinadvancedengineeringthroughoutaustralia.

ThissponsorshipwasfundedfromtheinnovationdMallowanceasapprovedbytheaer.

engineersaustralia–sydneydivision

2,500 sponsoredtheengineersaustralia–sydneydivision–excellenceawardsevent.Theeventrecognisesthecommitmentengineersmaketothewellbeingofthecommunityandtheinnovativeworkbeingperformedeverydaybypeopleintheengineeringprofession.

Taralgapublicschool/upperlachlanBushpoets

600 VisitedTaralgapublicschooltotalktothechildrenaboutelectricityandsafetyaroundourassets.

universityofnsW(unsW)–schoolofelectricalengineering

25,000 Theaustralianpowerinstitute(api)wasapproachedbytheschoolofelectricalengineering,universityofnsW,tosupportaschoollecturingposition.TheapiandTransGridareproviding$25,000eachtowardsthesalaryofaselectedlecturerwiththeremainderpaidbytheunsW.

TaFensW–Westernsydneyinstitute

1,100 sponsoredthestudentexcellenceawards2010attheWesternsydneyinstituteofTaFensW.

Greeningaustralia 220,000 renewedpartnershipwithGreeningaustraliaforafurtherthreeyears.Thetotalcostis$660,000($220,000peryear).

earthwatchinstituteaustralia 27,720 renewedpartnershipwiththeearthwatchinstituteaustralia.ThiscostincludedourmembershipwiththeearthwatchCorporatesustainabilityGroupandfourplacesforemployeestotakepartintheenvironmentalFellowshipawardprogram.

MovemberFoundation 2,000 donationoftwoTransGridteamstoparticipateinMovember.$1000perteamwasgranted.

CanberrainstituteofTechnology 300 donationtoFyshwickTradeskillsCentreprizenight2010.

nsWFireBrigades–Trainingdivision(CentralCoast)

1,200 one-offdonationtothensWFireBrigadestrainingdivision(CentralCoast)charitygolfdaywithallfundsraisedsupportingtheBurnsequipmentFund.

CancerCouncilofaustralia 2,616 Wematchedemployees’donationsforaustralia’sBiggestMorningTea.

* all amounts are GST inclusive.

58 ourcommunity>TransGridannualreporT2010

communityconsultationonourProJectseachoneofourprojectsrequiresauniqueapproachtocommunityconsultationthatconsidersthedifferenttypesofcommunitiesweworkin.itisimportantforourconsultationactivitiestostartearly,andbeclearandconsistentthroughoutthelifeoftheproject.

Wedeliverourcommunityconsultationsinlinewithwell-plannedcommunicationstrategies.Theaimistomakesurethedevelopmentofaprojectinvolvesallstakeholdersandconsiderstheirintereststhroughoutallstagesoftheproject.effectivecommunicationandconsultationwiththecommunityiscriticaltosuccessfullyachievingtheprojectobjectives.

overthelastyear,wehaveheldatotalof15communityinformationsessionsforfourofourprojects.

BestpracticecommunityrelationshasbeenattheforefrontoftheWesternsydneysupplyproject.This$569millionprojectinvolvesanupgradeoftheexistingabovegroundtransmissionlinebetweenthesydneyWestsubstationateasternCreekandGreystanes;buildingoftwonewsubstationsatGreystanes(Holroydsubstation)andpottsHill(rookwoodroadsubstation);andthebuildingofnewundergroundelectricitycablesbetweenthetwonewsubstations.

Wehaveactivelyengagedourcommunityandkeystakeholdersintheearlystagesofthisproject.Wehave:

>> soughtexpressionsofinterestfromthemarkettoseeifthereareanypossiblenon-networksolutions

>> establishedacommunityinformationlineandprojectemailaddressforpublicenquiries

>> heldinformationsessionstoadviselandownersundertheexistingabovegroundtransmissionlineabouttheupgradeandtoansweranyquestionstheymayhave

>> deliveredquarterlycommunityupdatestoaround2,600ownersandoccupiersoflandalongtheprojectcorridor

>> postedregularinformationincludingcommunityupdates,factsheetsandenvironmentalassessmentsonourexternalwebsite

>> providedafacilityforthecommunitytosubscribetoregularprojectupdatesviaourexternalwebsite.

australiannationalfielddaysduringoctober2009,weparticipatedintheaustraliannationalFielddays,athree-dayagriculturalshow,heldinBorenore,nearorange.

Theshowattractedthousandsofcommunitymembersfromaroundthestateandwasagoodopportunityforustotalkwithlandownersonimportantprojects,safetyaroundpowerlines,environmentalinitiativesandpotentialemployees.

ourexhibitprovidedgeneralinformationaboutTransGridandourlocalprojectsintheCentralWest.Communitymembersinquiredaboutarangeofprojectsincludingtheorangenorthredevelopmentproject,ManildratoparkestransmissionlineandtheWestern500kVproject.

Thethemefortheeventwas“changingagricultureinachangingenvironment”.Toreinforcethistheme,wepromotedourGreenGridpartnershipandgavearangeofeasementinformationtothecommunity.

ourstaffdidacommendablejobontheday.Theyprovidedfirst-handknowledgeinrespondingtoanyissuesandquestionsraisedbythecommunity.

teachinGourschoolsaboutelectricityTofurtherbuildgoodcommunitylinks,wehavebeenworkingwithlocalschoolsinareasaroundourcapitalprojects.

duringnovember2009,wevisitedTaralgapublicschoolandpresentedtoitsstudents.Thepresentationgavestudentsinterestingfactsaboutelectricityandimportantsafetymessagesforbothhomeandschool.WealsotookthestudentstovisitournewBannabysubstation.

ourgoodworkwiththeTaralgacommunitystartedtwoyearsagowiththebuildingofBannabysubstation.WewereactiveintheupperlachlanshireCouncilduringtheconstructionofthe500/330kVBannabysubstation,whichwaspartofouroverallWestern500kVproject.ThebuildingofBannabysubstationinvolvedsubstantialroadworks,whichwereundertakenbytheupperlachlanshireCouncil.Wethankboththecommunityandthecouncilfortheirassistancewhiletheroadworkswereunderwayandduringtheoverallbuildingofthesubstation.

chamPioninGemPloyees’toPfourcharitiesduringoctober2009,welaunchedacharityfundraisingprogramwhichsupportsfourkeycharitieseachyearonanorganisationwidebasis.

WeengagedouremployeesinthisinitiativerightfromthestartbyaskingthemtoprovidefeedbackonwhatcharitiestheywouldliketoseeTransGridsupport.Manyvoteswerereceivedanditwasrewardingtoseetheinterestfromemployees.

ourschoolssponsorshipprogramissomethingweareveryproudof.itisasmallwayinwhichwecanhelpourlocalcommunities.overthenextyear,wewillformaliseourschoolssponsorshipcampaignbyvisitingfurtherschoolsandlaunchingaTransGridkidswebsitepage.Welookforwardtoworkingwithmoreschoolsoverthenextyear.

TransGridannualreporT2010>ourcommunity 59

during2010/11wearesupportingthefollowingcharities:

>> australia’sBiggestMorningTea>> JeansforGenesday>> Movember>> pinkribbonday.

during2010,wehaveorganisedeventssuchasmorningteastoshowoursupportoftheabovecharities.Thecommitmentfromouremployeesintheseinitiativeshasbeensecondtononeandwelookforwardtoholdingsimilareventsinthefuture.

ouremployeeshaveenjoyedparticipatinginthesecharityevents.itisagreatwayforallemployeestogettogetherandsupportaworthwhilecause.

PromotionWemakeawidevarietyofinformationavailabletoourcustomers,stakeholders,employeesandsuppliers.

Weproducedthefollowingpublicationsduringthereportingperiod:

>> annualreport>> nsWannualplanningreport>> Corporateplan>> statementofCorporateintent>> Varietyofbrochures,advertisements,factsheets,communityupdatesandprojectnewslettersinformingstakeholdersaboutourcapitalprojects

>> reviewofenvironmentalFactorsforourvariouscapitalprojects.

electronicservicedeliveryWeusemanydifferentcommunicationtoolstoengagethepublic,customers,stakeholders,employeesandsuppliersaboutwhatwedo.

Weprovideouremployeeswithfacilitiestosecurelyaccesselectroniccorporateapplications,suchastheintranetandtheiremailaccountthroughtheinternet.Thenewintranet,scheduledtogolivein2011,willfurtherstrengthenthistwo-waycommunication.

Wehavegonelivewithanewexternalwebsite,whichbettermeetstheincreasingneedsforinformationbythepublic.Thepubliccannowsubscribetoregularupdatesonourcapitalprojects,mediareleasesandregulatorydocuments.Thenewwebsitealsofacilitatessimpleaccesstooure-tenderingande-recruitmentsites.

ourwins–2009/10>> Contributed $336,571 to sponsorships over the last year.>> Continued our good work with the aPI.>> renewed our GreenGrid sponsorship for a further three years.

>> formalised our charity fundraising program.

theroadahead–2010/11>> Launch an employee-giving program.>> formalise our schools sponsorship program.>> Create stronger links between our sponsorships and our capital projects.

>> rollout a social media policy to take our work with the community to the next level.

aboveMichael Gatt, General Manager/Corporate (far right), talking with community members at the australian National field Day agricultural exhibition in orange.


thinkingstopandconsider



thinkingstopandconsider


healthandsafetysafetyisournumberonepriority.ourhealthandsafetyapproachiswovenintobusinessdecisions,processesandeverydayactivities.

leftanthony o’Mara, electrical apprentice, yass regional Centre.

62 healthandsafety>TransGridannualreporT2010

PuttinGhealthandsafetyfirstsafetyisournumberonepriority.Thatiswhyourhealthandsafetyapproachiswovenintobusinessdecisions,processesandeverydayactivities.

ourstrategiesareaimedatcontinuallyimprovingourhealthandsafetyperformanceandmaintainingamajorfocusonriskmanagement.

ourgoaliszeroinjuries.Webelieveallaccidentsarepreventableonandoffthejob.

Thelosttimeinjuryfrequencyrate(numberoflosttimeinjuriespermillionman-hoursworked)for2009/10wastwo,whichwasasignificantimprovementfrom3.5in2008/09.

Thehealthandsafetystrategiesforthenext12monthsaredesignedtoraiseawarenessandhaveapositiveimpactinreducingourinjurylevels.

oursafetyPerformance

2009/10 2008/09 2007/08 2006/07 2005/06

lostTimeinjuryFrequencyrate 2.0 3.5 3.7 1.6 3.7

TotallostTimeincidents 4 7 7 3 7

Totaldayslost 79 54 83 6 228

averagelostTimerate 19.75 7.71 11.86 2 32.57

healthandsafety

“Keepingouremployees,contractorsandthepublicsafeisessentialtothewaywedobusiness.safetyisournumberonepriority.WeliveourstopandConsidermottodayinanddayout.ourgoaliszeroinjuries.

ourhealthandsafetystrategiesforthenext12monthsaretargetedatreducinginjuriesacrosstheentireorganisation.”

kenmccall,healthandsafetymanaGer

TransGridannualreporT2010>healthandsafety 63

causeofaccidentsfrom30June2009to30June2010(%)

Sports

Miscellaneous

Innapropriate Technique

Surface/Ground Conditions

House Keeping

Inappropriate use of PPE

Hazard not Identi�ed

Procedure not Followed

Lack of Concentration

lackofConcentration17%

procedurenotfollowed10%

Hazardnotidentified20%

inappropriateuseofppe3%

Housekeeping3%

sports3%

Miscellaneous7%

inappropriatetechnique21%

surface/groundconditions16%

althoughwerecordedasafetylTiof2duringtheyear,itwasanimprovementfrom3.5in2008/09.Weworkedcloselywithouremployeestoreduceworkplaceinjuries.Thebigchallengeforuswillbetobetterintegratesafetyintoeverydaybusinessdecisionsandensurethatcontractorsafetyisliftedtomatchthatofourpermanentworkforce.

abovevijendra Prasad at Macarthur Substation.

leftamie White, electrical apprentice, Wagga Wagga regional Centre.

64 healthandsafety>TransGridannualreporT2010

Healthandsafetyauditinghasrisenduringthelastyear.Theprocessesforaccreditingcontractors’healthandsafetysystemsandmonitoringperformancearealsobeingreviewedtoprovidemoretransparentinformationintenderselectionforprojects,networkmaintenanceactivitiesandmanagingcontractors’safetyperformance.

duringJune2010,weheldtwoworkshopswithourexecutiveleadershipteamtoidentifystrategiesfor2010/11.Thekeyimprovementareasforthecomingyearincludehealthandsafetybehaviours,electricalsafety,contractorsafety,wellbeingandhealth,travellingsafelyandfatigue.

oneoftheareasidentifiedintheseworkshopswastoimprovethehealthandsafetybehavioursofourpeople.Thesafetycultureofourpeoplecanhaveadirecteffectonoursafetyperformance.Toassist

uswithbetterunderstandingoursafetyculture,theexecutiveoccupationalHealthandsafetyCommitteeendorsedaprogramtoconduct13shortsafetyfocusgroupsessionsacrossthecompanyduringJuneandJuly2010.Thesefocusgroupstakeasnapshotofourunderlyingsafetyculture.Basedontheoutcomes,targetedinitiativesandactionscanbedevelopedwhichshouldimproveoursafetyperformance.

oranGetakeshomethesafetydayshieldWehavealongandproudsafetydayhistory.

our52ndannualsafetyday,heldon10september2009,waslargerthaneverwith21teamsfromacrossourbusinesscompetinginfirstaid,emergencyresponse,firefightingandriskassessment.

Thedaywasagreatsuccesswitharecordnumberof200participants.itfinishedwithapresentationdinnerwheretheeffortsofparticipantswererecognisedbyourChairman,MrBruceFoy.

safetydayisallaboutputtinginpracticeourlivingmottoofstopandConsider,whichinvolvesputtingsafetyfirstsothatwerealiseourgoalofzeroinjuries.

Wecongratulatetheorangeteamwhotookhomethesafetydayshield,provingthemselvesthebestall-rounders.

overthenextyear,wewillbroadenthescopeofoursafetydaytoincorporatekeyaspectsofourWellbeingprogram.

“icongratulateMarkandGrantfortheirsignificantcontributiontoonthejobsafetythroughtheirpositiveattitude.Theircommitmenttoputtingsafetyfirsthasbeensecondtononeandreaffirmsourlong-standing,positivesafetyculture.”

brucefoy,chairman

Wevalueanenvironmentthathelpsouremployeesbalanceworkandfamilyresponsibilitieswhilestayinghealthy.Thisgoesalongwaytocreatingacontentedandloyalworkforce.

duringMarch2010,wekickedoffourWellbeingprogram.Themaingoaloftheprogramistopromoteahealthy,happyandproductivelifebymakingpersonalchoicesthatcontributetoahealthyandbalancedlifestyle.ouremployeesspendmostoftheirwakinghoursatwork,whichiswhywewanttomakeitaprimevenueforpromotinghealthyhabits.

ThefirstinitiativeofourWellbeingprogramoccurredinapril2010withonsitefluvaccinationsofferedtoallemployees.Thevaccinationswereverypopularacrossallofoursiteswithnearly40percentofemployeestakingupthevaccination.

ourWellbeingprogrambringswithitarangeofprinciplestosupportemployees’social,emotional,physicalandfinancialwellbeing.someoftheseincludehealthassessments,returntoworkprograms,ergonomics,employeeassistanceprogram,financialinformation,eldercareandchildcareresourcesandhealthawarenesssessions.

HealthandsafetyManager,KenMcCallstates:“Our Wellbeing program caters for the rapidly changing work/life balance needs of our employees. Increasingly, we are seeing the link between employee wellbeing and their ability to perform their role. Healthy, engaged and valued workers will reap great personal benefits while TransGrid will see proportionally, a real productivity gain.”

uPclosekeePinGouremPloyeeshealthy

TransGridannualreporT2010>healthandsafety 65

chairman’ssafetyawardwinnerTheannualChairman’ssafetyawardrecognisesanindividualorteamwhohavemadeasignificantcontributiontosafetyanddevelopedorappliedsafetysolutionsinaninnovativeway.

Thisyear’sawardwaspresentedtoMarkZahraandGrantleves,fromthesubstationsgroup,fortheinnovativeworkmethodstheyappliedinoverhaulingHaymarketGasinsulatedTransformers.MarkandGrant’ssafetyinitiativeisallaboutlookingoutsideofthesquareforsolutions.MarkandGrantappliedthisprincipletotheHaymarkettransformermaintenancework.

TheHaymarketgasinsulatedtransformerswereduefortheirfour-yearoverhaul.MarkandGranttookituponthemselvestoinvestigatealternateworkmethodstothoserecommendedbythemanufacturer.

TheoutcomeatHaymarketwasasignificantlysaferjobwitharobustrepeatableworksystemandtoolsthataresuitableforuseonthethreetransformersandreactorseveryfouryears.

futurehealthandsafetystrateGiessomeoftheimprovementareasthatwewillfocusonoverthenextyearinclude:

>> promotingawarenessofthedangersofelectricity,forbothnewemployeesandexistingemployees,toreducethepotentialforelectricalrelatedincidents

>> improvingtheprocessforaccreditingcontractors,tenderingrequirements,inspectingandauditingcontractorsworkandreportingofcontractorperformance

>> continuingtodevelopandimplementtheWellbeingprogram

>> developinginitiativestoreducetraveltimewhilepromotinggreaterunderstandingandawarenessoftherisks

>> promotingawarenessoffatigue-relatedrisks.

ourwins–2009/10>> reduced our LTIfr from 3.5 to 2.>> Launched our Wellbeing program, including on-site flu vaccinations.

>> held safety improvement workshops with our senior leaders.

theroadahead–2010/11>> Better equip our contractors to meet our health and safety expectations in line with increased construction activity.

>> further embed our Wellbeing program across the organisation.

>> Broaden the scope of our safety day to include wellbeing.>> help our employees and the public better appreciate the dangers of electricity.

aboveMark Snowdon, Projects foreman/Team Leader, Lionel Smyth, General Manager/Network, Isabel Shanahan, Grid engineering officer, and Michael Gatt, General Manager/Corporate, at Wallerawang Substation.


beinggreen



beinggreen


ourenvironmentalcommitmentWevaluethefutureofourassetsandwillcontinuetoprotectthembytakingawholeofbusinessapproachtotheenvironment.

leftColin Mayer, Senior Project Manager, at Macarthur Substation.

68 ourenvironmentalcommitment>TransGridannualreporT2010

ourenvironmentalcommitment

“Wearecommittedtoprotectingourenvironment.ourenvironmentalstrategiesareaimedatpreventingenvironmentalincidentsandshiftingourenvironmentalculturetoonethatintegratesenvironmentalmanagementintoeverydaybusinessactivities.”

stuartJohnston,corPorateenvironmentmanaGer

WehavecontinuedtoimproveourenvironmentalManagementsystem(eMs).duringoctober2009,oureMswasrecertifiedagainsttheiso14001standard.

duringtheyear,wemadethefollowingchangestooureMs:

>> Wedevelopedtheenvironmentalrulesprocedurewhichestablishesenvironmentalassessmentresponsibilitiesforthedifferentstagesofacapitalproject.Theprocedureaddressesanumberoffindingsfromauditsandincidentinvestigations.proceduresforthepreparationofConstructionenvironmentalManagementplans(CeMp)andenvironmentalimpactassessment(eia)havealsobeenprepared.

>> WeimplementedtheGreenhouseGasreportingdataCollectionproceduretohelpusmeettheNational Greenhouse and Energy Reporting Actrequirements.

>> Weupdatedourwastemanagementprocedure.

liveGreenourliveGreenprogramisallaboutincreasingemployees’awarenessofenvironmentalimpactsandencouragingthemtoembraceenvironmentallyfriendlyoptions.Theprogramhasbeenanexcellentopportunityforeveryonetoworkasateamtoachievepositivechange.

duringtheyear,wehavepromotedlivegreentipstoouremployeesthroughvariousinternalcommunicationchannels.Wepromotetipsacrossfourthemes:recycling,energyuseandsavings,waterandhometips.

Thechallengeforusoverthenextyearwillbetoestablishclearstrategiesformeasuringthesuccessoftheprogram.

resPondinGtoclimatechanGeThecommunityexpectsenergycompaniestoaddressclimatechange.

Theknowledgeofclimatechangehassignificantlyimprovedoverrecentyears.Thelastfewyearshavebeenaperiodoflearningforusandwehavefocusedonlookingathowclimatechangecouldimpactourloadforecastsandperformanceunderarangeofscenarios.Wearealsomonitoringcommunity,

politicalandregulatorydevelopmentsinthisareaandactivelyrespondingtoreportspublishedbyindustrybodies.

overthelastyear,wehavetakenthefollowingstepsinrespondingtoclimatechange:

>> completionofaGreenhouseandenergyreportingguidetohelpstaffusetheCommonwealthsoftwarepackageforreportinggreenhousegasemissions

>> submissionofthenationalGreenhouseandenergyreporting(nGer)reporttotheCommonwealthGovernment

>> developmentofaTransportenvironmentalstrategy,whichsetstargetsfortheenvironmentalperformanceofourfleetandhowweselectthem

>> preparationofaClimateChangeandCarbonManagementstrategy

>> continuedtomaintainanawarenessofcommunity,politicalandregulatorydevelopmentsrelatingtoclimatechange.

Wevaluethefutureofourassetsandwillcontinuetoprotectthembytakingawholeofbusinessapproachanddevelopingassetstrategieslinkedtotheimpactsofclimatechangeoverthenextyear.

Thestandoutwinnerofthe2009Chairman’senvironmentalawardwastheMacarthursubstationprojectteam.TheprojectteamwasledbyVijendraprasad,peterGlennandHeatherWaglandandisrecognisedfortheinnovativeenvironmentalapproachestaken.

externalstakeholders,includingtheMountannanBotanicGardenandCampbelltownCityCouncilallhadsignificantexpectationsfromtheproject.Theirsatisfactionwiththeoutcomeisameasureofthesuccessoftheproject.

alandscapingplanutilisingnativevegetation,ascreeningmound,lowreflectionconductorsandenhancementof

keyareasoftheendangeredCumberlandplainwoodlandcommunitymeantthatstakeholder’shighexpectationsofminimalenvironmentalimpactweresatisfied.

TheMacarthursubstationprojecthasdemonstratedthatbyengagingwiththecommunity,wecanworkwithcontractorstodeliverasubstationthatmeetstheobjectivesofsustainabledevelopment.

Macarthursubstationhasdefinitelysetanewenvironmentalbenchmarkforfuturesubstations.

allnominationsreceivedcontinuetodemonstratetheongoingcommitmentthatourstaffhavetoimprovingourenvironmentalperformance.

uPclosechairman’senvironmentalawardwinner

aboveMacarthur Substation.

TransGridannualreporT2010>ourenvironmentalcommitment 69

GreenGridoverviewGreenGridisaremarkable12-yearpartnershipbetweenTransGridandGreeningaustralia.

GreenGridisresponsibleforrestorationworksonanareaofapproximately2,000footballfields.Theprojecthasengaged350landholdersintheMurrumbidgeeandlachlancatchmentsofnsW.planting,directseedingandfencinghasbeencarriedoutonover1,000hectaresofclearedfarmlandwithsupportfrom1,800volunteersrepresentinglandcare,schools,TransGridandGreeningaustralia.

ThehighlightsofGreenGridduring2009/10included:

>> GreenGridanditsassociatedprogramBoorowariverrecovery(partofthenationalriverrecoveryprogram)werebothselectedasnationalfinalistsintwocategoriesforthenationalBanksiaawardsfor2009.

>> TheBoorowariverrecoveryprogramwasafinalistinthe2010unitednationsassociationofaustralia(unaa)Worldenvironmentdayawards.

>> TheBoorowariverrecoveryprogramwasafinalistinthe2010nationallandcareawards.

>> 31newsiteswereaddedtotheGreenGridprogramtakingittoover350sites.

>> 25newlandholdersand260newvolunteersjoinedtheprogram.

>> 15successfulcommunityeventswereundertakenacrossnsW.

>> environmentalrestorationandrehabilitationworkswereimplementedonapproximately60hectaresofclearedfarmland.

TheprioritiesoftheGreenGridpartnershipoverthenextfewyearsinclude:

>> managingclimatechangebyimplementingcarbonand/orecologicalmitigationopportunities

>> extendingtheGreenGridpartnershipfurtherintoourcentralandnorthernregions

>> addressingbiodiversity,waterqualityandsustainabilityissuesthroughtargetedon-groundaction.

ThefuturedirectionsofGreenGridwillbuilduponpastachievementswithabroaderfocustooffsetourcarbonfootprint.

wastereductionandPurchasinGPolicyWehaveanongoingcommitmenttoincorporatingthensWGovernment’sWastereductionandpurchasingpolicy(Wrapp)intowhatwedowiththeenvironment.

since1999,wehavesupportedtheWrappframeworkbymaximisingresourceefficiencyandreducingwastegenerationthroughavoidance,reduction,reuseandrecycling.

ourWrappplanincludesthefollowingwastereductioninitiativesfortheofficeenvironment:

>> reductioninpaperuse>> increasedrecycling>> educationinitiativesthroughourliveGreenprogramtoinformstaffaboutenvironmentalissuesincludingresourceconsumption.

inouroperationalenvironment,ourWrappplanincludeswastereductionandrecyclinginitiativesformaintenanceandconstructionactivities,includingvegetationmaterialsandconstruction,demolitionandexcavatedmaterials.

in2009,weissuedourWrappreporttothedepartmentofenvironment,ClimateChangeandWater(deCCW).

earthwatchThroughourpartnershipwiththeearthwatchinstitutewearegivingouremployeesthechancetobetterunderstandlocalenvironmentalissuesandbroadentheirpersonaldevelopment.

Theearthwatchinstituteisanindependent,non-profitorganisationthatsupportsscientificresearchbyplacingvolunteersinthefieldtoworkwithscientists.

during2009/10,thefollowingemployeesparticipatedinearthwatchfieldresearchprojects:

>> GordonKeen–FreshwaterTurtlesoftheKimberlyThisstudyishelpingtodefinethepopulationstructure,densityandfeedingbehaviouroftwofreshwaterturtlespecies.

>> sophiedowling–projectMantraThisprojectstudiestheworld’slargestraytohelpprotectthespeciesagainstrisingthreatstoitslong-termhealth.

>> darrenspoor–ClimateChangeintherainforestThisprojectmeasuresthedistributionofanimals,birdsandreptilesinthedaintreerainforestinQueenslandtoassesstheimpactsofclimatechange.

onhisexperiencewithearthwatch,darrensays,“Despite the late nights and early mornings, it was all good fun and a real honour to be a part of this research program. There was always interesting work to be done. I feel very fortunate to have travelled to areas that would be completely inaccessible as a tourist. I thank TransGrid’s leaders for this fantastic opportunity”.

duringJuly2009,weextendedourpartnershipwithearthwatchtoincludethescientistforadayprogram.Thisprogramisagreatwayforouremployeestogetoutintothefieldandassistinmuchneededconservationresearch.during2009/10,wehadtenemployeesparticipateinthisprogram.

ourwins–2009/10>> achieved recertification of our eMS against the ISo 14001 standard.

>> Completed a Greenhouse Gas emissions Inventory Study (carbon footprint).

>> Completed our WraPP reporting requirements. >> Developed a Transport environmental Strategy. >> Completed our NGer reporting requirements under the National Greenhouse Energy Reporting Act 2007.

>> renewed our GreenGrid partnership for a further three years.

theroadahead–2010/11>> Develop a sustainability road map. >> Scope a plan for being carbon neutral by 2015.>> Look into how the performance of our assets can be impacted by climate change.

>> Provide training to project managers and the wider business on key environmental risks in project delivery.

>> Develop a code of conduct for environmental management in TransGrid.


buildingforasustainablefuture



ourcapitalworksprogramWearecommittedtodeliveringourcapitalworksprogramonasustainablebasis.Thegoalisnotjusttodelivertheprojectsbuttodelivertheminthemostefficientmanner.


left

Peter McIntyre, Managing Director, Mark Connolly, Project engineer/yass and Lionel Smyth, General Manager/Network at orange substation.

72 ourcaPitalworksProGram>TransGridannualreporT2010

deliverinGasustainablecaPitalProGramWearecommittedtodeliveringourcapitalprogramonasustainablebasis.

Todeliveronourcapitalprogram,weneedtohavetherightskillsandexpertise.Wehavedevelopedspecificresourcetargetswhichhavebeenmetwithastrongintakeoftraineesandgraduatesoverthelastfouryears.Thetraininganddevelopmentopportunitiesprovidedtoourtraineesandgraduateshasputtheminagoodpositiontomoveintomoreexperiencedroles.

inadditiontodevelopingtheskillsandexpertiseofourpeople,wehavedevelopedprojectdeliverymodelstohelpusdeliverourcapitalworksprogrammoreefficiently.ourdesignandconstructmodelforsubstationprojectsbenefitsuswithmoreprojectsbeingdeliveredontimeandtobudget.Currently,sixcontractorshavebeenpre-qualifiedtobidfortheseprojects.Weexpectthatallmajornewsubstationprojectsinthe2009to2014periodwillbedeliveredusingthismodel.

anearlycontractorengagement(relationship)model,beingusedforthetelecommunicationupgradeworks,hasproventobeagrowingsuccess.sixprojects,withatotalvalueofover$50million,havebeenorarebeingdeliveredbythismodel.Thelessonslearnedfromtheearlierworkshaveledtobetterdeliverytimesandlowercostsinlaterworks.

duringtheyear,weimplementedaprojectmanagementtool,artemis,tohelpdelivertheupcomingcapitalprogram.Wehavewidenedtheuseofartemisthroughouttheorganisationtoprovideaviewofthewholecapitalworksprogramsothatlonger-termforecastsareavailable.asthetoolhasdeveloped,variouspartsofthebusinesshaveseenthebenefitsinforecastingtheirworkloadsandidentifyingwherekeybusinessinformationwillbecomeavailablefromprojects.

wollartowellinGton330kvtransmissionline

Powering supply to half a million homes in Central West NSWduringearly2010,wecompletedanew117kilometre,330kVtransmissionlinebetweenWollarandWellington.Thenewlinerepresentsa$90millioninvestmenttoensurehighstandardsofreliabilitytotheCentralWestnsWcommunity.

WestartedbuildingthelineinFebruary2008.ThelinelinksWellingtonsubstationtoour500kVnetwork,viaanew500/330kVsubstationatWollar.

environmentalconsiderationswerekey.Thestudyareaforthelinewaschosenonthebasisthatitmetenvironmental,socialandeconomiccriteria.aftermuchcommunityconsultation,wechoseapreferredcorridorandstartedanenvironmentalimpactassessment(eia).

TheprojectgaveusthechancetobuildonourongoingpartnershipwithGreeningaustraliaandthecommunity–viatheMolongGrassWoodlandCommunityrestorationproject.TheMolongprojectinvolvedcommunitygroups,Greeningaustraliaandouremployeesenhancing25hectaresofBox-GumGrassyWoodlandandrevegetating50hectaresofadjacentclearedfarminglandinMolongtoestablishwildlifecorridorsinthelocallandscape.

WestartedbuildingthenewWollar500/330kVsubstationinoctober2008bybuildingacreekcrossingnearthesubstationsitetomaintainexistingwaterflows.

WehadtwotransformersdeliveredtoWollarsubstationinseptember2009.eachtransformerweighedaround125tonnesandwasover85metresinlength.WeenergisedWollarsubstationinJanuary2010andtheWollartoWellingtontransmissionlineinMarch2010.

Thesuccessfulcompletionoftheprojectisatestamenttotheeffortofmanyemployeesandcontractorsoveraperiodofmorethansevenyears,frominitialplanningthroughtofinalconstruction.

tomaGotostroud132kvtransmissionline

Strengthening supply to one of the fastest growing areas in NSWTomeetthegrowingenergyneedsinthestroud,TarroandBulahdelahcommunities,wearebuildinganew$50milliontransmissionlinefromTomagotostroud.

Weexpectpeakelectricitydemandinthelower-midnorthCoastareaofnsWtorisebyasmuchas35percentoverthenexttenyears.

ThenewprojectinvolvesthebuildingofsixkilometresofnewtransmissionlinebetweenTomagoandTarro,andthereplacementof64kilometresofanexistingwoodpolepowerlinebetweenTarroandstroudroadwithaconcretepoleline.

Weareintheenvironmentalplanningstages,withareviewofenvironmentalFactors(reF)havingstartedinFebruary2010,duetobefinishedbydecember2010.Wehavecompletedalargemajorityofthefieldstudiesandnosignificantimpactshavebeenfoundatthisstage.

ourcapitalworksprogram

Wecurrentlyhavemorethan60majorcapitalprojectsunderwaycoveringmostofourprojectsinthe2009to2014regulatoryperiod.Wehavebeensuccessfulindeliveringourcapitalworksprogrambecauseoftheskillsofouremployeesandcontractors.Weareconfidentthatthisskillandknowledgebasewillprovidealong-termbenefittous.

TransGridannualreporT2010>ourcaPitalworksProGram 73

caPitalworksProGram–snaPshot

substationscomPleted transmissionlinescomPleted transformeradditionandrePlacementProJects

Macarthursubstation

WaggaWagganorthsubstation

Queanbeyansubstation

Wollarsubstation

Bannabysubstation(aspartofWestern500kVdevelopment)

Bayswater500kVswitchyard(aspartofWestern500kVdevelopment)

Mtpiper500kVswitchyard(aspartofWestern500kVdevelopment)

WollartoWellingtontransmissionline

YassWaggaWaggatransmissionlinerebuild

somelineconversionsontheCoffsHarbourtoKempseytransmissionline

CoffsHarbour

Cowra

Finley

Koolkhan

sydneysouth

WaggaWagga

shuntreactorsatWellingtonandsydneysouthsubstations

Wehaveworkedwiththecommunityrightfromthestart.Therearearound121propertyownerspotentiallyaffectedalongtheline.ourpeoplemetthelandownersintheearlystagestointroducethemtotheproject.Throughoutourdealingswiththelocalcouncilandlandownersfromsurroundingareas,ourresponsefromindividualshasbeenlargelyapositiveone.Werecognisethevalueinseekingfeedbackfromthecommunityduringeverystageofthecapitalprojectdeliveryprocesstomakesureitsviewsarecarefullytakenintoconsideration.

Weexpecttheprojecttomakerealcontributionstothelocalcommunitybycreating40newfull-timejobsinthearea.

Westartbuildingthenewlineinoctober2011.Completionisexpectedinnovember2012.

waGGawaGGanorth132kvsubstation

Delivering supply to 14,000 customers in Wagga Wagga duringseptember2009,wecompletedbuildinganew$22millionWaggaWagganorth132kVsubstation.

WestartedbuildingthesubstationinMay2008,aftermorethanfiveyearsofdetailedplanningwithCountryenergy.

risingelectricitydemandinWaggaWaggaanditssurroundingareasmeantthatourexistingWaggaWaggasubstationwasreachingcapacity.ThenewWaggaWagganorthsubstationwillsupplytenofCountryenergy’sruralzonesubstations,providingpowertoaround14,000homesandbusinessesintheWaggaWaggaarea.

TheBomenBusinessparksite,locatedadjacenttotheexistingindustrialareainByrnesroad,gaveusthechancetobuildcloselytotheexistingtransmissionnetworkinfrastructure,optimisingthepowerflowingintotheWaggaWaggaregion.

ThenewsubstationhasproventobeanimportantpartofourcapitalworksprogramandwillgoalongwaytosupportingfuturedevelopmentinnsW’slargestinlandcity.

queanbeyan132kvsubstationredeveloPment

More power to 50,000 homes and businessesduringMay2010,wecompletedamajorredevelopmentofQueanbeyan’s132kVsubstation.

The$28.5millioninvestmentwillimprovepowersupplytoover50,000homesandbusinessesintheQueanbeyan,Canberra,easternaCTandBraidwoodcommunities.

ThefirstQueanbeyansubstation,builtin1957,hasprovidedreliablepowertotheQueanbeyanandsurroundingcommunitiesforover50years.However,therebuildofQueanbeyan’s132kVsubstationwasimportantincateringfortherapidlygrowingregion.

Westartedworksindecember2008bydemolishingtheoriginalsubstationandreplacingitwithanup-to-date,modernsubstationonanadjacentsite.

aboveCompleted Wollar to Wellington 330kv Transmission Line.

74 ourcaPitalworksProGram>TransGridannualreporT2010

Wefacedmanychallengesinseeingthisprojecttofruition.Weneededtoplancarefullyandregularlyreviewouractionplanstomakesureissueswereaddressedpromptly.WeworkedcloselywithCountryenergyinaproactivewaytoovercomethetechnicalchallengesoftheproject.

Theprojectwasoneofanumberofsystemupgradeswedidintheareatomaintainasecureelectricitysupplyintheregionforyearstocome.

Testingandpre-commissioningofthesubstationwascarriedoutduringmid-2010.Thesubstationisexpectedtobefullyenergisedandinoperationbytheendof2010.

oranGenorthredeveloPment

Better power supply to Orangeinmid-2009,westartedamajorupgradetotheorangenortharea.orangesubstationprovideselectricitytomorethan40,000peopleandplaysakeyroleindeliveringsafepowertotheorangearea.

Theorangenorthredevelopmentprojectwillhappenoveraperiodoffouryearsandinvolvesbuildinganewswitchingstationonleedsparade,rearrangingthetransmissionlinestoconnecttheswitchingstationtotheexistingnetworkandupgradingtheexistingorangesubstationonWilliamstreet.

Theorangenorthsubstationisnowover50yearsoldandthesubstationsiteistoosmalltocaterforallthenecessaryupgrades.anewswitchingstationwillbebuiltaspartofalargerprojectfortheregion’spowersupply.

stakeholderconsultationhasbeenveryimportanttousduringthisproject.WeinvitedthecommunitytohavetheirsayontheprojectwiththepublicreleaseofthereF.Wealsopublishedcommunityupdates,feedbackformsandeasementguidesonourpublicwebsite.

Theswitchingstationandtransmissionlineworksareduetobefinishedbylate2011andthesubstationupgradebymid-2013.

uPcloseenerGisinGthewestern500kvTomeetrisingelectricitydemandinthesydney,newcastleandWollongongareas,wehaverecentlyfinishedtheWestern500kVproject,atavalueof$320million.itisourlargestever-completedproject.

Theprojectincludesnolessthansixmajorcomponents,including:

>> BuildingofBayswater,Mtpiper,BannabyandWollar500/330kVsubstations.

>> upgradingof330kVequipmentatWallerawang330kVswitchingstation.

>> replacementofthecircuitbreakersandprotectionschemechangesatBayswaterandliddellsubstations.

Theprojectkickedoffindecember2005andtookalmostfiveyearstocomplete.

Wewereactivewiththecommunityrightfromthestart,withdevelopmentapprovalsandenvironmentalapprovalsinvolvingtheupperlachlanshirecouncilintheGoulburn/Crookwellareaofthestate,thelithgowCitycouncil,theMid-WesterncouncilandMuswellbrookcouncilintheHunterValley.significantcommunityconsultationwascarriedoutatBannaby.

Theprojectincludedthesupplyofsevenbanksofthreesinglephasetransformers,atotalof21units.eachbankof500/330/33kVtransformershasacapacityof1500MVa.during2008/09,18oftheseunitswereshippedfromJapantotheportofnewcastleandthenbyheavyhaulageroadtransporterstoBayswater,MtpiperandBannaby.Thelastthreeunits,forWollar,weredeliveredinthesecondhalfof2009.

siteworksstartedatBayswaterinaugust2007andfinishedon8January2009.Thereplacementofthecircuitbreakers,

protectionschemechangesatBayswaterandliddellandtheupratingoftheWallerawang330kVswitchingstationwerecompletedinMarch2009.

Mtpipersubstationfollowedwithcompletionon27March2009.inconjunctionwiththecompletionofMtpiper,thefirst500kVlinebetweenBayswaterandMtpiperwasputinservice.ThismarkedtheachievementofthefirstofanumberofsignificantmilestonesfortheWestern500kVproject,asthelinecarriedloadat500kVforthefirsttime.

ThesecondsignificantmilestonefortheprojectwasachievedinearlyJune2009whenMacquarieGenerationcompletedthereplacementofno.3generatortransformerswith500kVunits.MacquarieGeneration’sunitstartedgenerationintothe500kVsystemon3June2009.

ThesecondtransformeratMtpiperwascommissionedandputintoserviceinJune2009.Theestablishmentofthe

aboveCompleted Bannaby 500/330kv Substation.

TransGridannualreporT2010>ourcaPitalworksProGram 75

beaconsfieldwestsubstationuPGrade

$144m investment to secure inner Sydney power supplyduringapril2010,westartedanupgradeonourBeaconsfieldWestsubstation.

Thesubstationwasfirstcommissionedin1979asthefirst330kVsubstationintheinnersydneyareaandisavitalpartofournetwork.BeaconsfieldWestisoneofourtwobigsubstationsintheinnersydneyCBdandinnermetropolitanareaanditsupgradeisimportanttomaintainreliabilitytoourinnersydneycommunities.Theseworkswillincreasethecapacityofthesubstationby50percent,whichwillsupplyaroundhalfamillionaveragehomes.

Theprojectinvolvesupgradinghighvoltageequipmentinthesubstation,constructingnewbuildingsandinstallingathirdstate-of-the-arttransformeratthesite.

innovationhasbeenakeyconsiderationonthisproject.Forinstance,weputinplacesignificantfireprotectionmeasurestoprotectthebuildings,appliedaninnovativedesigntotheoilcontainmentsystemandusedleadingconstructionmethodologies.

on17March2009,weformallyawardeduGlinfrastructureacontracttodesignandconstructthesubstation.Theceremonywasagreatwayforustorecognisetheskillsandcapabilitiesofourcontractorsinhelpingtodeliveronourmulti-billiondollarcapitalworksprogram.

Weareexpectingtocompletethesubstationinnovember2012.

westernsydneysuPPly

A key milestone in our journeyWehaveembarkedonourlargestprojectever–theWesternsydneysupply.TheWesternsydneysupplyisa$569millioninvestmenttosecuresydney’spowersupplyforthefuture.

sydney’spopulationisexpectedtoincreaseby1.1millioninthenext25years.Thismeansweneedtopoweranadditional640,000homesandover6.8millionsquaremetresofcommercialspace.Thatisanaveragepopulationincreaseof40,000peopleeveryyearforthenext25years.

TocaterforthisgrowthwewillbeupgradingtheexistingtransmissionlinebetweeneasternCreekandHolroyd,buildingtwonewsubstationsatHolroydandpottsHillandjoiningthesesubstationswithnew18kilometreundergroundcables.ThecablewillfollowthesydneyWaterpipelinebetweenGuildfordandregentsparkandtheliverpooltoparramattaBusT-Way.

Wevalueindustryinputandattheendof2009,weaskedindustrytoproposealternativestobuildingthenewinfrastructuresuchasdemandmanagementsolutions.althoughtheseproposalshavethepotentialtodelaytheneedtobuildtheinfrastructure,noviablealternativeswerepresented.

environmentalconsultantswereengagedtodofieldstudiesandprepareareFforeachpartoftheproject.Thesestudieswillhelpusdetermineandmanageanypotentialenvironmentalimpactsthisprojectmayhave.

WewillstartbuildingthetransmissionlineandHolroydandrookwoodroadsubstationsinmid-2011.Buildingoftheundergroundcablewillstartfrommidtolate2011.

ourwins–2009/10>> Delivered more than $428.7 million worth of capital projects across NSW.

>> Successfully finished the Western 500kv project, one of our largest and most important projects.

>> Boosted our graduate, apprentice and engineering trainee numbers to build our internal project delivery capability.

theroadahead–2010/11>> Implement a capital program prioritisation framework to deliver our capital works more efficiently.

>> Implement a risk methodology for our major capital works.>> Consolidate and refine our approach to community and stakeholder engagement for our transmission line projects.

secondlinebetweenBayswaterandMtpiperat500kVandtheestablishmentoftheMtpipertoWallerawang330kVlinewerecompletedinaugust2009.

WollarsubstationwasplacedinserviceduringJanuary2010andBannabysubstationwasinserviceduringMarch2010.

Whatremainstobedonein2010/11isthecompletionoftheassociatedlinerearrangementsatBannabyandMtpipersubstations.Thisworkwillhappeninaugust2010.

Weworkedwiththelocalpeopleeverystepofthewayandthankthemfortheircontributionstotheproject.TheprojectwasnosimplefeatandinvolvedhundredsofTransGrid,unitedGroup,contractorandsubcontractorstaff,allofwhoaretobecommendedfortheirachievementstodate.

“FortheWesternsydneysupplyproject,wehavebeenengagingthecommunityrightfromthebeginninginmanydifferentways.someofthesehaveincludedgivingthecommunitytheopportunitytosubscribetoourprojectsviaourwebsite;establishingacommunityinformationlineandprojectemailaddressforpublicenquiries;,holdingtargetedinformationsessionsforlandowners;recordingallcommunityconsultationswithnewconsultationmanagementsoftwareanddeliveringquarterlycommunityupdatestoaround2,600landowners.”

michaelGatt,GeneralmanaGer/corPorate


beingresponsibleandaccountable



beingresponsibleandaccountable


corporategovernanceourBoardandmanagementsupportanenvironmentthatencouragesaccountabilityamongstallemployeestodeliveraserviceinthebestinterestsofshareholders,thecommunityandourstakeholders.

leftalbert elsouri, engineering officer/Technician, at Metropolitan region.

78 corPorateGovernance>TransGridannualreporT2010

ourcharterWewereestablishedasastate-ownedcorporationon14december1998,intermsoftheEnergy Services Corporations Act 1995.

section6Coftheactgivesus,asanenergytransmissionoperator,twoprincipalfunctions,whichare:

1. toestablish,maintainandoperatefacilitiesforthetransmissionofelectricityandotherformsofenergy.

2. toprovideservicesforthetransmissionofelectricityandotherformsofenergyinaccordancewiththerelevantregulatoryregime.

Thesectionalsoempowersustoutiliseanddevelopourelectricitytransmissionfacilitiestocarryouttelecommunicationsservices.

TheprincipallegislationweoperateunderistheEnergy Services Corporations Act 1995,theElectricity Supply Act 1995andtheState Owned Corporations Act 1998.

ourshareholdersourBoardandexecutivebelievethatgoodgovernanceisthekeytoahigh-performingandsustainableorganisation.

ourBoardisaccountabletothevotingshareholdersforourperformance.Therearetwovotingshareholdersatanyonetime,eachholdingthesamenumberofsharesandthesamerights.TheshareholdersholdtheirsharesonbehalfofthensWGovernment.

asat30June2010,ourshareholderswere:

>> TheHon.MichaeldalyMp,MinisterforFinance.

>> TheHon.ericroozendaalMlC,Treasurer.

ourministerFrom1July2009till13september2009,weformedpartoftheportfoliooftheHon.ianMacdonaldMp.

From14september2009till20May2010,weformedpartoftheportfoliooftheHon.Johnrobertson,MlC.

From21May2010to30June2010,weformedpartoftheportfoliooftheHon.paullynchMp,Ministerforaboriginalaffairs,MinisterforindustrialrelationsMinisterforCommerce,MinisterforenergyandMinisterforpublicsectorreform.

boardofdirectorsourprincipalobjectivesandfunctionsandthestructureandcompositionofourBoardarelaidoutintheEnergy Services Corporations Act 1995 No. 95;theState Owned Corporations Act 1989 No. 134andourconstitution.

ourBoardoperatesinaccordancewiththeprinciplessetoutintheBoardCharter.ThischarterdetailstheBoard’sstructureandresponsibilitiesandisreviewedonanannualbasis.TheBoardalsohasaCodeofConducttowhichalldirectorsmustadhereandwhichisreviewedonanannualbasis.

corporategovernance

TheBoardisresponsibleforprovidingeffectiveguidanceanddirection,independenceindecisionmaking,aneffectivesystemofcorporategovernanceandexecutivedevelopmentandsuccessionplanning.

aboveriGhtomar hassanein and Jahangir Safari, electrical engineering Graduates.

TransGridannualreporT2010>corPorateGovernance 79

boardstructureTheEnergy Services Corporations Act 1995 providesthatourBoardconsistof:

a. TheManagingdirector.

b. onedirectorappointedbythevotingshareholdersontherecommendationofaselectioncommitteecomprising:i. twopersonsnominatedbythe

portfoliominister;ii. twopersonsnominatedbythelabor

CouncilofnsW,eachbeingapersonselectedbythecommitteefromapanelofthreepersonsnominatedbythelaborCouncil;and

c. atleasttwo,andnotmorethanfiveotherdirectors,appointedbythevotingshareholdersattheirdiscretion.

Theperiodofappointmentofnon-executivedirectorsisatthediscretionofthevotingshareholders.

boardresPonsibilitiesTheresponsibilitiesofourBoardareoutlinedintheBoardCharter.Themainresponsibilitiesinclude:

>> providingstrategicguidanceanddirectiontothecorporation,includingcontributingtothedevelopmentofandapprovingthecorporatestrategy.

>> reviewingandapprovingbusinessplans,theannualbudgetandfinancialplans,includingcapitalexpenditureinitiatives.

>> overseeingandmonitoring:– organisationalperformanceand

achievementofstrategicgoalsandobjectives

– compliancewiththeCorporation’sCodeofethicsandConduct

– progressonmajorcapitalexpenditureandothersignificantcorporateprojects

>> Monitoringfinancialperformance>> ensuringthataneffectivesystemofcorporategovernanceexists

>> ensuringeffectivemanagementprocessesincludingexecutivedevelopmentandsuccessionplanning.

chairmanandmanaGinGdirectorTheBoardCharteroutlinestheroleoftheChairmanandManagingdirector.

TheChairmanistoprovideleadershipandpromotethecohesivenessandeffectivenessoftheBoard.

KeyrolestobeperformedbytheChairmaninclude:

>> assistingtheBoardtodevelopgoodrelationshipswiththeshareholdingministersandportfoliominister,withtheManagingdirectorandwithotherkeystakeholdersandinterestedparties.

>> assistingindividualdirectors,andtheBoardasawhole,tounderstandtheirrole,responsibilitiesandaccountabilities.

>> HelpingdirectorsunderstandtheirrisksandliabilitiesasindividualmembersandasaBoard.

>> ensuringacomprehensiveagendaispresentedateachBoardmeeting.

section20l(2)oftheState Owned Corporations Act 1989andarticle16.7(a)ofourconstitutionprovidethattheManagingdirectorisresponsibleforourday-to-daymanagementofoperationsinaccordancewiththegeneralpoliciesandspecificdirectionsoftheBoard.

boardinductionandtraininGupontheirappointmenttotheBoard,ourdirectorsundergoaninductionprogramtohelpthemunderstandtheBoard’sexpectationsandrequirements.BriefingswiththeChairman,theManagingdirectorandtheBoardsecretaryarearranged.

anumberofkeydocumentsarealsoprovidedduringthistime,including:

>> letterofappointment>> adeedofindemnity>> alistoffellowdirectorsandthechairandcontactdetails

>> acopyofthebusiness’sconstitution>> acopyoftheBoard’sCodeofConduct>> copiesofthechartersfortheBoardandBoardCommittees

>> acopyofthemostrecentstatementofCorporateintent(sCi)andannualreport

>> theBoardandCommitteemeetingschedule

>> organisationcharts>> acopyofthepreviousmonth’smeetingpapersandminutes.

newlyappointeddirectorsalsoreceiveongoingeducationviaquarterlyinformationsessions.Weheldthreeinformationsessionsduring2009/10.duringtheyear,informationsessionswereheldonbushfirepreparedness,transmissionpricing,debtmanagementanddirectorduties.

termsofofficeandremunerationinaccordancewithschedule8,Clause5oftheState Owned Corporations Act 1989,adirectormaybeappointedtoholdofficeforaperiodnotexceedingfiveyears.

Theremunerationofeachnon-executivedirectorispaidoutofourfunds,andisdeterminedbytheshareholders.Thetotalincomereceived,orduereceivable,byallourdirectorsislistedinthenotestotheFinancialstatements.

TheManagingdirectorisnotentitledtoanyadditionalremunerationforbeinganexecutivedirector.


commitmentTwelveBoardmeetingsandoneadditionalBoardandexecutivecorporateplanningsessionwereheldduringtheyear.

ofthetwelveBoardmeetings:

>> onemeetingwasheldinaugustatMacarthurduringtheMacarthursubstationopening

>> asecondmeetingwasheldinseptemberatWaggaWaggaduringoursafetyday

>> athirdmeetingwasheldindecemberatournewcastleregiontomeetwithemployeesandpresenttheChairman’ssafetyandenvironmentalawards

>> allotherBoardmeetingswereheldatoursydneyoffice.

conflictofinterestTheBoardCodeofConductsaysthatadirectormustdiscloseintereststotheBoard(whichincludespositionsandpecuniaryinterests)incorporations,partnershipsorotherbusinessesthatmayberelevanttotheactivitiesoftheBoardoranassociatedcommittee.Wemaintainaregisterofsuchinterests.

Thefollowingconflictsofinterestweredeclared:

>> attheBoardmeetingheldonTuesday30July2009,MrJohnpricedeclaredaconflictofinterestwiththeagendaitem‘TamworthtoGunnedah66kVtransmissionlinedismantling’.

>> attheBoardmeetingheldonTuesday24november2009,MrJohnpricedeclaredaconflictofinterestwiththeagendaitemonthe‘Gleninnestoinverelltransmissionlineproject’.

>> attheBoardmeetingheldonTuesday20april2010,MrJohnpricedeclaredaconflictofinterestwiththeagendaitemonthe‘KempseytoportMacquarietransmissionlineproject’.

>> attheBoardmeetingheldonTuesday18May2010,MrJohnpricedeclaredaconflictofinterestwiththeagendaitemonthe‘armidaletoCoffsHarbourtransmissionlineupratingproject’.

>> attheBoardmeetingheldonTuesday22June2010,MrJohnpricedeclaredaconflictofinterestwiththeagendaitemonthe‘KempseytoportMacquarietransmissionlinesafetyincident’.

Therehavebeennootherconflictsofinterestdeclaredduringtheyear.

indePendentProfessionaladvicedirectorsandBoardcommitteeshavetheright,inconnectionwiththeirdutiesandresponsibilities,toseekindependentprofessionaladviceatourexpense.

disclosureobliGationsWehaveaframeworktomakesurewemeetourdisclosurereportingobligationstoshareholdingministers.

ourBoardaimstoensurethatourshareholdingministersareinformedofallmajordevelopmentsaffectingourstateofaffairs.Thisisprimarilyfacilitatedthrougharangeofdisclosureandreportingtoolsincludingmeetings,progressreports,ourannualreport,regulatorydocumentsandourwebsite.

aboveL-r – Peter McIntyre, Managing Director, and robert Trimble, Substations engineering officer, at orange Substation.

aboveriGhtCindy Lee farras, administrative officer, Catherine Mulligan, recruitment officer, and kathryn edwards, human resources officer, Metropolitan regional Centre.


meetinGsoftheboardThenumberofmeetingsattendedbyourBoardmembersduringtheyearisshownbelow:

name

transGridboard boardauditandriskcommittee

boardremunerationandstructurecommittee

meetinGsattended

meetinGsentitledto

attend

meetinGsattended

meetinGsentitledto

attend

meetinGsattended

meetinGsentitledto

attend

MrBeFoy 12 12 5 5 4 4

MrKnMurray* 10 10 4 4 3 3

MsMpapathanasiou 11 12 4 5 X X

MrnBetts 9 12 X X X X

TheHon.Jprice** 12 12 2 2 4 4

MrMnugent*** 11 12 3 3 4 4

MrpMcintyre# 3 3 1 1## 1 1##

* retired 26 april 2010x Not a member of this committee# Was appointed Managing Director from 27 april 2010## Standing invitee to this Committee Meeting** Chair of Board audit and risk Committee to September 2009*** Chair of Board audit and risk Committee from october 2009 to present

strateGicPlanninGourBoardandexecutiveholdannualstrategicplanningconferencestosetourcorporategoalsforthefollowingyear.TheoutcomesofthisplanningarereflectedinthesCiandtheCorporateplan.

ThesCiandCorporateplansetoutourstrategicdirectionwhichbecomesthebasisforindividualbusinessunitplans.ourCorporateplandefinesthekeyobjectives,strategicinitiativesandperformancetargetstomeasureachievement.italsoincludesadetailedoverviewofourcapitalworksprogramforthefollowingyear.

BoththesCiandCorporateplanarepresentedtoourshareholdingministers.

boardcommitteesTohelptheBoardfulfilitscorporategovernanceresponsibilities,itutilisestheexecutiveBoardCommittee,theBoardauditandriskCommitteeandtheBoardremunerationandstructureCommittee.

achartergovernsthesecommitteesandtheBoarddelegatesspecificpowersandprocedures.eachcharterisreviewedannuallyandincludesthecommittee’sprimaryfunction,structureandresponsibilities.

TheBoardauditandriskCommitteeandtheBoardremunerationandstructureCommitteemeetatleastonaquarterlybasisoratsuchtimesasconsideredappropriate.

TheexecutiveBoardCommitteemeetasandwhenrequired.

non-executivedirectorschairtheBoardcommittees.seniorexecutivesandmanagementmaybeinvitedtoattendcommitteemeetings.

areportdetailingtheitemsconsideredbythecommitteeistabledatthefollowingBoardmeeting.

Executive Board Committee TheprimaryroleoftheexecutiveBoardCommitteeistoconsidermattersbetweenBoardmeetingswhichwouldotherwiserequireBoardapproval.ThematterisdelegatedtotheexecutiveBoardCommitteeatthepriorBoardmeetingandareportisprovidedtotheBoardatthemeetingfollowingtheexerciseofthedelegation.

Generally,theexecutiveBoardCommitteeismadeupoftheChairmanandtheManagingdirector.However,otherdirectorsmaybeinvitedtositonthiscommitteeasandwhenrequired.


Board Audit & Risk CommitteeTheBoardauditandriskCommitteeincludesthefollowingdirectors:

>> MrMnugent(chairofthecommitteefromoctober2009topresent).

>> TheHon.Jprice(chairofthecommitteetoseptember2009).

>> MrBFoy.>> MsMpapathanasiou.

TheprimaryroleoftheBoardauditandriskCommitteeistohelptheBoardfulfilitsoversightresponsibilitiesbyreviewingtheoverallauditprocessoftheorganisation,thesystemofinternalcontrolwhichmanagementandtheboardofdirectorshaveestablishedandthefinancialinformationwhichwillbeprovidedtoshareholdingministersandothers.

Board Remuneration and Structure CommitteeTheBoardremunerationandstructureCommitteeincludesthefollowingdirectors:

>> MrBFoy(chairofthecommittee).>> TheHon.Jprice(nolongeramemberofthiscommittee).

>> Mrnnugent.

TheprimaryroleoftheBoardremunerationandstructureCommitteeistohelptheBoarddeterminetheremunerationandemploymentconditionsofourexecutiveandseniormanagementandreviewourorganisationalstructure.

remunerationofdirectorsMrBruceFoy $115,420

MsMatinapapathanasiou $64,860

TheHon.Johnprice $63,100

MrnevilleBetts $60,600

MrMichaelnugent $69,500

executiveleadershiPteam

Remuneration objectiveourexecutiveremunerationframeworkisdeterminedbytheBoardremunerationandstructureCommittee.

Thegoalistoprovidecompetitivereward,basedonmarketbestpracticefordemonstratedperformanceandresults.Theframeworkisconsistentwithourstrategicobjectivesandthecreationofshareholdervalue.

allourexecutiveofficershaveawrittenperformanceagreementalignedtoourcorporategoals.TheBoardcommitteecommissionsareportfromanexternalremunerationconsultanteachyeartoprovidemarketremunerationtrendsandtorecommendappropriateremunerationlevels.remunerationforexecutiveofficersisbasedontheirdocumentedperformanceoutcomesagainstsettargets.

Performance statementsMr k Murray, Managing Director (1 July 2009 to 26 april 2010),wasassessedbytheBoardashavingachievedallkeyperformancecriteriasetintheCorporateplanandthestatementofCorporateintent.Thisincluded:

>> meetingthecapital,operating,reliabilityandefficiencytargetssetbytheaerforthe2004to2009period

>> submissionandfinalisationofourrevenuedeterminationforthe2009to2014period.

Mr P Mcintyre, general Manager/network Development and regulatory affairs,wasassessedbytheManagingdirectorashavingachievedallperformancecriteria,including:

>> achievementofthetransmissionplanninganddevelopmentrequirementsforourcapitalworksprogram

>> theproductionofthe2009apr>> theimplementationofthelargestnetworksupportarrangementintheneM

>> improvedcustomerandstakeholderrelationships

>> theeffectivemanagementofourinputintothedevelopmentoftheregulatoryregimefortransmissionintheneM

>> themanagementofour2009to2014revenueresetprocesswiththeaer.

Note: Mr McIntyre was appointed Managing Director on 27 April 2010.

Mr C Fitzgerald, general Manager/Capital Program Delivery,wasassessedbytheManagingdirectorashavingachievedallperformancecriteria,including:

>> successfulcommencementofthechallengingmajorcapitalworksprogramforthe2009to2014regulatoryperiod

>> deliveredmorethan$300millioninexpenditureonthedeliveryofover60projectsduring2009/10

>> completionoftheWestern500kVprojectontimeandtobudget,withtheWollarandBannabysubstationsbeingenergisedat500kV

>> completionoftheWollartoWellington330kVtransmissionline,theQueanbeyansubstationreconstructionandtheWaggaWaggasubstationtransformerreplacementprojects

>> commencementofconstructionontheBeaconsfieldsubstationrefurbishment

>> progresstowardstenderofthecomponentpartsoftheWesternsydneysupply.

TheincreasedcapabilityoftheCapitalprogramdeliverybusinessunittodeliverthelargeprogramofworkshascontinuedtobekeytotheseachievements.Theincreasingcontributionofthosemembersoftheteambroughtinduringthegraduateandtraineeintakesofthepastfiveyearshasbeenahighlightofthiseffort.

Mr M gatt, general Manager/Corporate,wasassessedbytheManagingdirectorashavingachievedallperformancecriteria,including:

>> addressingtheneedsofstakeholders>> managingmediaandgovernmentrelationsactivities

>> deliveringeffectivecorporatecommunicationsbothinternallyandexternally.

additionally,Michaelhasmanagedthepropertyportfolio,legalservicesandcorporateplanningfunctions.TheCorporatebusinessunit,throughMichael’sleadership,hasledanumberofkeychangeinitiativesoverthelastperiodincludingconsultationtrackingandimprovedpropertyprocesses.

Mr T Meehan, Chief Financial Officer,wasassessedbytheManagingdirectorashavingachievedallperformancecriteria,including:

>> effectivecontroloftheorganisation’sfinancialpositionandstatutoryreportingrequirements

>> developmentofnewfinancialplanningsystemsandmanagementaccountingreportingfortheexecutiveandBoard

>> implementationofnewdebtandinvestmentriskManagementpolicies

>> changestoworkingcapitalarrangementsandreviewoftheorganisation’sinsuranceprogram

>> achievedtheplacementandmanagementofcontractstodeliverTransGrid’scapitalandmaintenanceprograms.

“ourleadershipteamexecuteourvisionwithefficiency,goodcommercialmindsetandaneyeforthefuture.Theylookaheadtoseehowwecancontinuetodobetterandbetter.ithankthemfortheirstrongleadership”.

brucefoy,chairman


Mr P Phillips, general Manager/business Services,wasassessedbytheManagingdirectorashavingachievedallperformancecriteria,including:

>> workforcedevelopmentandresourceplanning

>> enhancementandongoingmanagementoftheleadershipdevelopmentprograms

>> establishmentofthestructuredthreeyeardevelopmentprogramforGraduates

>> implementationoftheenvironmentalrulesforprojects

>> theestablishmenttheJointVenturewithpowerlinkfortelecommunicationservices

>> maintainingcertificationsofTransGrid’ssafetyManagementsystemtoas4801,theenvironmentalManagementsystemtoiso14001andQualitysystemtoiso9001.

Mr n Smith, executive Manager/System Operations,wasassessedbytheManagingdirectorashavingachievedallperformancecriteriaincluding:

>> majorrefurbishmentofthestatesystemoperationsCentreatWallgrovetoachieveimprovedsituationalawarenessforoperationsstaff

>> instigatingdynamictransmissionlineratingstoallowforgreaternetworkoptimisation

>> improvedmonitoringofenvironmentalriskstothenetworkbydirectstreamingofrFsdata

>> furtherdevelopmentofthensWsystemrestartplaninconjunctionwithelectricitydistributioncompanies

>> optimisingofshiftrosteringtomatchworkloadandunifyingofoperatingproceduresacrossgeographicregions

>> implementingimprovedplanningtools>> deliveringahigherbonuspaymentthananticipatedfromtheaertransmissionconstraintincentivescheme.

Mr l Smyth, general Manager/network,wasassessedbytheManagingdirectorashavingachievedallperformancecriteriaincluding:

>> allkeynetworkreliability,availability,maintenanceandconstructiontargetswithinapprovedbudgetsandtimeframeswhilemaintaininghighlevelsafetyperformanceandenvironmentalcompliance

>> deliveredandcommissionedallplannedmajorprojectsandassetreplacementprograms

>> refinedassetmanagementstrategiesanddevelopedconceptsthatwillimproveprocessesformaintenanceandfuturecapitalworksandreduceoperationalcosts

>> maintainedasustainablehumanresourceplanthatincludessuccessionanddevelopmentplanstomeetfuturerequirements.

remunerationPaid

name titleremuneration

Paid($2009/10)

MrKevinMurray* Managingdirector $543,146

MrpeterMcintyre** GeneralManager/networkdevelopment&regulatoryaffairs $368,780

MrChrisFitzGerald GeneralManager/Capitalprogramdelivery $319,823

Mrlionelsmyth GeneralManager/network $309,319

Mrpaulphillips GeneralManager/Businessservices $300,609

MrTonyMeehan ChiefFinancialofficer $295,854

MrMichaelGatt GeneralManager/Corporate $274,665

Mrneilsmith executiveManager/systemoperations $238,136

* retired on 26 april 2010.** appointed Managing Director on 27 april 2010. above

Gordon Baseley, voice System Specialist and Gordon keen, Broadband optical fibre and Microwave Specialist, Newcastle regional Centre


leGislativechanGesduringthereportingperiod,theEnergy Legislation Amendment (Infrastructure Protection) Act 2009 No 31wasenactedandstartedon1July2010.Thepurposeoftheactistoprotectundergroundelectricityassets.However,itwasrepealedbysection30Cofthe Interpretation Act 1987 No 15 witheffectfrom2July2010.

TheElectricity Supply (Corrosion Protection) Regulation 2008andtheElectricity Supply (Safety and Network Management) Regulation 2008wereamendedbytheElectricity Supply Amendment (GGAS) Act 2009 No 100.However,theamendmentsdidnotaffectouroperations,financialpositionorfinancialperformancetoamaterialextent.

Judicialdecisionsduringthereportingperiod,therewerenodecisions,whichre-interpretedlegislationinanyway,whichaffectedouroperations,financialpositionorfinancialperformancetoamaterialextent.

consumerresPonseTransGridreceivesarelativelysmallnumberofcomplaintsinthefollowingareas:

>> sitemaintenance>> substationnoiselevels>> easementmaintenance.

Wealsoreceivepropertyinformationenquiriesfromsolicitors,conveyancersandthegeneralpublicregardingourrightsandintereststhatmayaffecttitletoland.Fortheyearending30June2010,werespondedto52,658suchenquiries.allenquiriesarenowprocessedusingonlineaccessfacilitiesprovidedbytheCentralregisterofrestrictionsadministeredbythelandandpropertyManagementauthority.

Thefollowingserviceshaveimproved/changedwithaviewtocontinuousimprovement:

>> appointmentoftwoCommunityliaisonofficerstobetterservicethebroadercommunity

>> improvedwebsiteinformationandtransparencytosatisfyarangeofenquiries

>> phoneandwebsiteenquiriesonourcapitalworksprogramcannowbeloggedthroughthewebsiteforimmediateaction

>> noisestudiesareconductedanddependentonresults,soundwallsareinstalledtominimiseimpactonaffectedareas

>> easementmaintenanceguideshavebeendistributedtoover6,000landowners.

creditcardusaGeourcreditcardusageisinaccordancewithourdocumentedprocedures.

Wecontinuetopromotethecorrectusageofourcorporatecreditcardsandwecontinuallyreviewusagecharacteristicsandauthorisations.

consultantfeesduringtheyear,$74,987wasspentonconsultingservicesrelatingtothepreparationofenvironmentalimpactassessmentsandtechnicaltreasuryadvice.

qualifications

name title qualifications

MrKevinMurray* Managingdirector Be(elec),dipBusstudies,FaiCd

MrpeterMcintyre** GeneralManager/networkdevelopment&regulatoryaffairs

Bsc,Be(Hons),MBa(TechnologyManagement),Fieaust,FaiCd

MrChrisFitzGerald GeneralManager/Capitalprogramdelivery Bsc,Be(Hons),Me,Graddip(Busadmin),Fieaust,Cpeng

Mrlionelsmyth GeneralManager/network Be(elec),GradMgtQual,GaiCd

Mrpaulphillips GeneralManager/Businessservices Be(Hons),Bsc,MMgt

MrTonyMeehan ChiefFinancialofficer B.Comm(accounting,Finance&systems)FCpa

MrMichaelGatt GeneralManager/Corporate adv.Certelectrotechnology,dip.elecengineering,B.Comm,(Business)

Mrneilsmith executiveManager/systemoperations Bsc(Hons),FieT,Fieaust,Cpeng

* retired on 26 april 2010.** appointed Managing Director on 27 april 2010.


riskmanaGementTheexecutiveauditandriskCommitteeisresponsibleforensuringourrisksareidentifiedandeffectivelymanaged.

implementationofriskmanagementstrategiesaretheresponsibilityofalllevelsofmanagementandaframeworkexiststoensurethatallrisksareproactivelyandexplicitlymanagedonanongoingbasis.

TheCorporateauditandriskgroupprovidesassistanceinthedevelopmentandmaintenanceofenterprise-wideriskmanagementplans,trainingstaffinriskmanagementandtheongoingverificationandreviewofriskmitigationactionsacrosstheorganisation.

ourBoardareoftheopinionthattheBoardauditandriskCommitteeisconstitutedandoperatesinaccordancewiththeindependenceandgovernancerequirementsofTreasuryCircularnsWTC09/08.

ThechairandmembersoftheauditandriskCommitteeare:

>> MrMichaelnugent,chairofthecommittee>> MrBruceFoy>> MsMatinapapathanasiou

Theabovechairandmembersareappointedforaperiodofthreeyears.

insuranceourinsurancestrategyistoobtainthemostcomprehensiveinsurancecoverageavailableatthemosteconomicalcost.eachyear,welookattherisksforwhichwearepreparedtoseekcover,theavailableinsurancecoverageorothermeanstomeettheremainingrisksandthecostsofcoveringtheserisks.

GuaranteeofserviceTransGridhasdefinedservicecommitmentswithourcustomersthroughourConnectionagreements.TransGrid’sservicelevelsaremonitoredbytheaerandthensWdepartmentofWaterandenergy(dWe).

freedomofinformationWereceivedfiveFreedomofinformation(Foi)applicationsundertheFreedom of Information Act 1989 in2009/10.

Thefollowingtableprovidesanoverviewofresponsestorequestsmadeundertheact.

total

foirequests 2009/10 2008/09

numbersofrequestsreceived 5 2

Broughtforward 0 0

Completed 5 2

Transferredout 0 0

unfinished(Carriedforward) 0 0

Grantedinfull 4 0

partiallygranted 1 2

refused 0 0

Feesreceived $590 $35

duringtheyear:

>> Theimpactoftherequirementsoftheactonouractivitieswasminimal.>> noissuesaroseinconnectionwithourcompliancewiththerequirementsoftheact.>> nodeterminationbyTransGridwasthesubjectofreviewbytheombudsman,theadministrativedecisionsTribunalorthesupremeCourt.

statementofaffairsinformationrequiredundersection14(2)oftheFreedomofinformationact1989,islocatedasfollows:

>> Theagency’sstructureandfunctions:TransGridataglance.>> Thewayinwhichitsfunctionsaffectthepublic:ourCommunityandourCapitalWorksprogram.

>> Howthepublicmaytakepartinagencypolicydevelopment:TheMarket,Community.

abovelefthieu Nguyen, Control Design engineer, Metropolitan regional Centre.

aboveL-r – karl Sturmer, electrical fitter, Isabel Shanahan, Grid engineering officer, and roslyn ryan, Corporate Business analyst, at Wallerawang Substation.


rePortinGexemPtionsThefollowingreportingexemptionshavebeengrantedbynsWTreasurytoenablefinancialreportingrequirementsthatapply,tobebroadlyconsistentwithCorporationsactreportingrequirements,giventhattheentityoperatesinthecompetitiveneM

statutoryrequirements act/reGulationreferences

comments

Budgets:

>> detailedbudgetfortheyearreportedon. s.7(1)(a)(iii)arsBa

>> outlinebudgetfornextyear. s.7(1)(a)(iii)arsBa

>> particularsofmaterialadjustmentstodetailedbudgetfortheyearreportedon.

cl6arsBr

reportofoperations s.7(1)(a)(iv)arsBa exemptionsubjecttotheconditionthatinformationrelatingtothe“summaryreviewofoperations”istobedisclosedinasummarisedform.

Managementandactivities schedule1arsBr exemptionsubjecttotheconditionthatrelevantinformationistobedisclosedinasummarisedform.

research&development schedule1arsBr

Humanresources schedule1arsBr

Consultants schedule1arsBr exemptionsubjecttotheconditionthatthetotalamountspentonconsultantsistobedisclosedalongwithasummaryofthemainpurposesoftheengagements.

landdisposal schedule1arsBr

paymentofaccounts schedule1arsBr

Timeforpaymentofaccounts schedule1arsBr

reportonriskManagementandinsuranceactivities

schedule1arsBr exemptionsubjecttotheconditionthatrelevantinformationistobedisclosedinasummarisedform.

investmentperformance cl12arsBr

liabilityManagementperformance cl13arsBr

abbreviations:

arSBa annual reports (Statutory Bodies) act 1984

arSBr annual reports (Statutory Bodies) regulation 2005

aboveriGhtGreg Lodge, Protection Metering Technician, Newcastle regional Centre.


PrivacyWearecommittedtotheprinciplesofsoundprivacymanagementinlinewiththePrivacy and Personal Protection Act 1998.

WehaveaprivacyManagementplan,whichfacilitatescompliancewiththeactandtellsouremployeeshowwemanageprivacy.Theplanisaccessibleviaourintranet.

overseastravelBelowisalisoftheoverseasvisitsundertakenbyouremployeesduringthereportingperiod.

overseasvisitsprovideouremployeeswiththechancetobenchmarkourperformancewithotherleadersintheindustryandlearnfromthem.overseasvisitsplayakeyroleinhelpingusdeterminethebestwaytobuildasafe,reliableandsecurenetwork.

name title countries PurPoseofvisit

s.dowling professionalofficer Japan Witnessfactorytestingof330kVpowertransformers.

M.Grierson engineeringofficer China Witnessfactorytestingof330kVpowertransformersforVineyardsubstation.

J.abbatantuono professionalofficer sweden Witnessfactorytestingof362kVseriesreactorforsydneysouthsubstation.

C.FitzGerald Generalmanager newZealand MeetingwithTranspowerandGissubstationsitevisit.

s.Jones Manager newZealand MeetingwithTranspowerandGissubstationsitevisit.

W.Goldsmith engineeringofficer sweden TwooverseastripsassociatedwiththesCada/eMsupgradeproject.

a.Hammond engineeringofficer sweden sCada/eMsupgradeproject.

C.Hitchen professionalofficer China inspectionsofVTaandVTdtowersfortheBannaby500kVand330kVlinerearrangement.

p.antuch engineeringofficer China inspectionsofVTaandVTdtowersfortheBannaby500kVand330kVlinerearrangement.

a.Kingsmill Manager newZealand participateintheiToMs2009resultsworkshop.

J.Howland Manager newZealand participateintheiToMs2009resultsworkshop.

a.Meehan Chieffinancialofficer unitedKingdom

undertakeworkassociatedwithplacementofTransGrid’sinsurancecoverage.

d.Guille engineeringofficer newZealand MaterialsinspectionatelectroparassociatedwithWilliamsdale330/132kVsubstation.

a.Klepac Manager HongKong inspectGissubstationsassociatedwithrookwoodandHolroyd330/132kVsubstations.

J.abbatantuono professionalofficer HongKong inspectGissubstationsassociatedwithrookwoodandHolroyd330/132kVsubstations.

a further three trips, where the majority of costs were funded by other organisations, were undertaken by Transgrid officers as follows:

s.dowling professionalofficer China inspectdismantlingofToshiba330kVTransformer.

G.Mackay engineeringofficer austria attendconferenceonpowertransformerdiagnosticmeasurements.

e.lamplough professionalofficer China WitnessrepeatfactoryacceptancetestingofToshiba330kVTransformer.

landdisPosalBelowisalistingofthelandwedisposedofduringtheyear.

month disPlayname lot dP saledate newowner comment

February2010 CarlingfordsystemControlCentre241-245pennantHillsroadCarlingfordnsW2118

1-2and5-6

805059 12February2010

TripleeightCorpptyltd

landandbuildingwassurplustooperationalneeds.

soldbytenderfor$2.6millionplusGsTsubjecttositecompatibilityforcommercialuse.

March2010 portKembla–sydney66kVtransmissionline

1 727968 March2010 deCC–npWs TransferredtodeCCWatnilvalueresidueofsubtransmissiontransfers.

March2010 landatearlwood–480m2formingpartoftheWolliCreekregionalpark,earlwood.

66 16629 March2010 deCC–npWs originallytransferredtodeCCWinMay2008buttransfernotlodgedbydeCCWuntilMarch2010.

July2009 parkvilleradiorepeatersiteWallingtonrd,parkville,2337

1 232278 23July2009 HuntershireCouncil

surplustooperationalneeds.soldbytender$5,000for0.1954perhectare.


2009/10financialscontents90 statementoffinancialPosition

91 statementofcomPrehensiveincome

92 statementofchanGesinequity

93 statementofcashflows

94 notestothefinancialstatements

121statementbymembersoftheboard

122indePendentauditor’srePort

abovekayle Mabagos, human resources advisor and kathy Mirzaian, executive assistant, Metropolitan regional Centre.

TransGridannualreporT2010>commercial report 89

commercial reportby the chief financial officer

Withtotalrevenuein2009/10of$695millionandexpensesincludingfinancecostsof$470millionwehaveachievedaprofitbeforetaxof$225millionandanoperatingprofitaftertaxof$162million.

Theprofitsgeneratedintheyearhaveresultedinusdeclaringdividendpaymentstoshareholdersof$135million.

ourregulatedrevenueincreasedby$72millionthisyearduetotheaustralianenergyregulatorrevenuedeterminationorthe2009/10to2013/14regulatoryperiodandtheaustralianCompetitionTribunalreviewofthisdetermination.

Wehaveexperiencedasignificantdecreaseinourcapitalexpenditureoverthelastyear,adecreaseof$191million.Thisyearmarksthebeginningofthecurrent2009/10to2013/14regulatoryperiod.Capitalexpenditurefortheyearwas$428millionwithtotalapprovedcapitalexpenditureforthecurrentregulatoryperiodof$2.6billion.Thisapprovedcapitalexpenditureforthecurrentregulatorycontrolperiodwillbeusedtoupgradeournetworktomeettheincreasingdemandforelectricity,replacementofageingassetsandimprovingoverallnetworksecurityandreliability.

Weincreasedourdebtlastyearby$205millioninordertofundourincreasedcapitalworksprogram,resultinginasubstantialincreaseinfinancingcharges.afterareviewofourdebtandinvestmentriskManagementpolicylastyear,thedebtportfoliohasundergonesignificantchangesduring2009/10tominimiseinterestexpenseandprofitvolatilitywhilemitigatingpotentialrefinancingrisks.

Therehasbeenasteadyincreaseinourdefinedbenefitsuperannuationliabilityoverrecentyears.Thisisaresultofincreasesinthepresentvalueofthedefinedbenefit

obligationsandreductionsinthefairvalueoftheschemeassets.during2009/10therewassomerecoveryinthevalueofthescheme’sassetsbutsuperannuationlossescontinuedtoeroderetainedearnings.Wehavehadtobemoreproactiveinmanagingthisliabilitywithmorefrequentengagementwithsuperfundprovidersonthefactorsaffectinginvestmentfundperformanceandthevalueofthedefinedbenefitobligations.

Theincreaseinrevenueduring2009/10hasresultedinarequirementtoreversetheimpairmentlosstoproperty,plantandequipmentrecordedin2008/09financialstatements.Thereversalofsomeofthisimpairmentlosshasresultedina$365millionincreaseinassetswhichalongwithcapitalexpenditureseesthetotalproperty,plantandequipmentnowbeingvaluedat$5.1billion.overthelasttwoyearsassetrevaluationshaveincreasedthevaluesofourproperty,plantandequipmentbyaround$900million.Theserevaluationshaveimpactedtwoofourfinancialperformanceindicators.asignificantfactorinthedecreaseinourreturnonassetsandreturnonequityrecordedin2008/09and2009/10istheincreaseinproperty,plantandequipmentfromassetrevaluations.

duringtheyear,wecarriedoutareviewtodeterminetheappropriatelevelofworkingcapitalthatweshouldholdinordertomeetourobligationsandcoverpossiblecontingencies.asaresultofthisreview,wehaverevampedourworkingcapitalmanagementprocessesresultinginTransGridoperatingwithaminimalcashbalancetherebydeliveringfundingcostsavings.

Wearecommittedtofinancialgovernancepoliciesandpracticesthatprovideappropriateaccountabilityandcontrolsystemstoencourageandenhancesustainablebusinessperformance.ourfinancialgovernancepoliciesandpractices

aredocumentedinasuiteofpoliciesandproceduresthatarethefoundationforourfinancialmanagementframework.Weregularlyreviewthesepoliciesandproceduresinlightofnewstandardsandimprovedbusinesspractices.

oursub-delegationsofauthorityproceduresetsoutthepowersheldbytheBoard,ManagingdirectorandTransGridemployeesinensuringthereisadequateprobityandcontrolsaroundexpenditure.

ourannualcapitalandoperatingbudgetpreparationcycleformspartoftheTransGridCorporateandBusinessplanningprocessesandensuresthattheshortandmediumtermresourcesrequiredtomeetbusinessobjectivesareidentified.Budgettargetsaresettopromotegoodfinancialperformanceandareusedalongsideotherkeyfinancialindicators,asstandardsforjudgingperformance.Budgets,bothcapitalandoperating,takeintoconsiderationdecisionsandallowanceslaiddownbyourregulator.

WealsohaveawellestablishedchartofaccountsandcostallocationmethodologythatensuresfinancialtransactionsarecorrectlyrecordedinTransGrid’sfinancialsystems.Thishelpstopromotetransparency,consistencyandcomparabilityinhowweprovideandreportfinancialinformation.

intermsofthefuture,thefocuswillbetoputgreateremphasisonourmediumtermfinancialforecastingtoassistincontrollingcostsandmonitoringandmeasuringourfinancialperformance.

Withastrongfocusoncontrollingexpenditureandincreasedregulatedincomewehaveachievedarecordoperatingprofitbeforetaxof$225million,exceedingourtargetof$179million.

90 statement of financial position > TransGridannualreporT2010

beginning of audited financial statements

statement of financial positionasaT30ThJune2010

note2010

$’0002009 $’000

current assets

Cashandcashequivalents 7 1,144 20,861

Tradeandotherreceivables 8 131,177 110,096

inventories 9 28,818 27,634

Currenttaxassets 2,120 –

derivatives 10 1,472 3,018

other 11 2,389 2,295

Total Current Assets 167,120 163,904

non-current assets

deferredtaxassets 6(b) 84,653 73,658

derivatives 10 57 1,521

property,plantandequipment 12 5,135,747 4,393,175

intangibles 13 545,761 534,635

other 14 5,793 4,008

Total Non-Current Assets 5,772,011 5,006,997

Total Assets 5,939,131 5,170,901

current liabilities

Borrowings 302,401 375,738

Tradeandotherpayables 16 134,066 130,894

provisions 17 202,093 189,616

Currenttaxliabilities – 17,877

derivatives 18 1,103 1,020

other 19 3,064 13,288

Total Current Liabilities 642,727 728,433

non-current liabilities

Borrowings 1,891,929 1,613,190

deferredtaxliabilities 6(b) 847,956 664,768

Tradeandotherpayables 16 – 2,973

provisions 17 215,057 173,721

derivatives 18 892 279

Total Non-Current Liabilities 2,955,834 2,454,931

Total Liabilities 3,598,561 3,183,364

Net Assets 2,340,570 1,987,537

equity

Capital 20 651,967 651,967

reserves 21 1,642,671 1,286,367

retainedearnings 22 45,932 49,203

Total Equity 2,340,570 1,987,537

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

TransGridannualreporT2010>statement of comprehensive income 91

statement of comprehensive incomeForTheyearended30ThJune2010

note2010

$’0002009 $’000

income 3 695,033 652,797

expensesexcludingFinanceCosts 4 (330,983) (330,304)

FinanceCosts 4 (138,753) (105,072)

Profit/(Loss) Before Income Tax Expense 225,297 217,421

incomeTaxBenefit/(expense) 6(a)(i) (63,224) (67,130)

Profit/(Loss) For The Year 162,073 150,291

Other Comprehensive Income

assetrevaluationsurplus:netincrease/(decrease)inrevaluations,includingimpairments 21 513,250 414,560

CashFlowhedgereserve:netmovementinequity 21 (3,706) 14,397

superannuationactuarialGains/(losses) 5(b) (44,034) (133,287)

incomeTaxrelatingtocomponentsofotherComprehensiveincome 6(a)(ii) (139,654) (88,701)

Other Comprehensive Income For The Year, Net of Tax 325,856 206,969

Total Comprehensive Income For The Year 487,929 357,260


92 statement of changes in equity > TransGridannualreporT2010

statement of changes in equityForTheyearended30ThJune2010

capital $’000

retained earnings

$’000

cash flow hedge

reserve $’000

asset revaluation

surplus $’000

total $’000

Balance at 1 July 2008 651,967 111,472 (7,810) 994,589 1,750,218

comprehensive income for the year:

profit/(loss)fortheyear – 150,291 – – 150,291

othercomprehensiveincomefortheyearbeforerelatedtaxeffects

– (133,287) 14,397 414,560 295,670

incometaxrelatingtocomponentsofothercomprehensiveincome

– 39,986 (4,319) (124,368) (88,701)

Total Comprehensive Income For The Year – 56,990 10,078 290,192 357,260

owner related equity transactions:

dividend – (120,233) – – (120,233)

Transfersfromassetrevaluationsurplus – 974 – (974) –

incometaxrelatingtoTransfersfromassetrevaluationsurplus

– – – 292 292

Total Owner Related Equity Transactions – (119,259) – (682) (119,941)

Balance at 30 June 2009 651,967 49,203 2,268 1,284,099 1,987,537

Balance at 1 July 2009 651,967 49,203 2,268 1,284,099 1,987,537

comprehensive income for the year:

profit/(loss)fortheyear – 162,073 – – 162,073

othercomprehensiveincomefortheyearbeforerelatedtaxeffects

– (44,034) (3,706) 513,250 465,510

incometaxrelatingtocomponentsofothercomprehensiveincome

– 13,209 1,112 (153,975) (139,654)

Total Comprehensive Income For The Year – 131,248 (2,594) 359,275 487,929

owner related equity transactions:

dividend – (135,058) – – (135,058)

Transfersfromassetrevaluationsurplus – 539 – (539) –

incometaxrelatingtoTransfersfromassetrevaluationsurplus

– – – 162 162

Total Owner Related Equity Transactions – (134,519) – (377) (134,896)

Balance at 30 June 2010 651,967 45,932 (326) 1,642,997 2,340,570


TransGridannualreporT2010>statement of cash flows 93

note2010

$’0002009 $’000

cash flows from operating activities

CashreceiptsfromCustomers 745,630 664,245

Cashpaidtosuppliersandemployees (255,000) (269,018)

FinanceCostspaid (148,042) (111,057)

interestreceived 275 2,028

incomeTaxpaid (50,520) (42,424)

Net Cash Inflows / (Outflows) from Operating Activities 30(d) 292,343 243,774

cash flows from investing activities

purchaseofproperty,plantandequipment,andintangibles (403,204) (607,327)

proceedsfromthesaleofproperty,plantandequipment 6,479 2,268

Net Cash Inflows / (Outflows) from Investing Activities (396,725) (605,059)

cash flows from financing activities

proceedsfromBorrowings 1,379,093 1,245,985

repaymentsofBorrowings (1,174,195) (788,500)

dividendspaid 17(a) (120,233) (105,910)

Net Cash Inflows / (Outflows) from Financing Activities 84,665 351,575

netincrease/(decrease)inCashandcashequivalents (19,717) (9,710)

CashandcashequivalentsatBeginningoftheFinancialyear 20,861 30,571

Cash and cash equivalents at the End of the Financial Year 30(a) 1,144 20,861


statement of cash flowsForTheyearended30ThJune2010

94 notes to the financial statements > TransGridannualreporT2010

1. reporting entityThefinancialstatementsofTransGridfortheyearended30June2010wereauthorisedforissueinaccordancewitharesolutionofthedirectorson21september2010.

TransGridisastatutorystateownedCorporationunderthestateownedCorporationsact1989andwascorporatisedundertheenergyservicesCorporationsamendment(TransGridCorporatisation)act1998.

2. summary of significant accounting policies

(a) BasisofPreparationThefinancialstatementsaregeneral-purposefinancialstatements,andhavebeenpreparedinaccordancewithaustralianaccountingstandardsincludingaccountinginterpretations,therequirementsofthepublicFinanceandauditact1983,thepublicFinanceandauditregulation2010,thestateownedCorporationsact1989,andrelevantTreasuryCirculars.

property,plantandequipmentandderivativefinancialinstrumentsaremeasuredatfairvalue.otherfinancialstatementitemsarepreparedinaccordancewiththehistoricalcostconvention,exceptasotherwisestatedinthefinancialstatements.

Wherenecessary,comparativeinformationhasbeenreclassifiedtoconformtothecurrentyear’spresentation.

allamountsareroundedtothenearestthousanddollars($’000)andareexpressedinaustraliancurrency.

(b) StatementofCompliance

(i) Financial Statement ComplianceThefinancialstatementscomplywiththeinternationalFinancialreportingstandards(iFrs)asissuedbytheinternationalaccountingstandardsBoard(iasB).

(ii) Financial Statement PresentationTransGridhasappliedtherevisedaasB101Presentation of Financial Statementswhichbecameeffectiveon1January2009.TherevisedstandardrequirestheseparatepresentationofastatementofComprehensiveincomeandastatementofChangesinequity.allnon-ownerchangesinequitymustnowbepresentedinthestatementofComprehensiveincome.asaconsequence,TransGridhadtochangethepresentationofitsfinancialstatements.Comparativeinformationhasbeenre-presentedsothatitisalsoinconformitywiththerevisedstandard.

(c) NewAustralianAccountingStandardsandInterpretationsnotyetadopted

australianaccountingstandardsandinterpretationsthathaverecentlybeenissuedoramended,butarenotyeteffective,havenotbeenadoptedbyTransGridinpreparingthefinancialstatementsinaccordancewithTreasuryCircularnsWTC10-08Mandates of Options and Major Policy Decisions under Australian Accounting Standards.

Thefollowingstandards,amendmentstostandardsandinterpretationshavebeenidentifiedasthosewhichmayimpactTransGridintheperiodofinitialapplication:

>> aasB9andaasB2009-11relatetofinancialinstruments.>> aasB2009-5relatestoamendmentstoaustralianaccountingstandardsarisingfromtheannualimprovementsproject.

>> aasB124andaasB2009-12relatetorelatedpartytransactions.>> aasB2009-14relatestoprepaymentsofaminimumfundingrequirement.

allofthesestandardsareapplicabletofuturereportingperiods.ThenewstandardsareconcernedwithdisclosuresandwillhavenodirectimpactonTransGrid’sfinancialresults.

(d) SignificantAccountingJudgements,EstimatesandAssumptionsmadebymanagement

inapplyingTransGrid’saccountingpolicies,managementevaluatesjudgements,estimatesandassumptionsbasedonexperienceandotherfactors,includingexpectationsoffutureeventsthatmayhaveanimpactonTransGrid.alljudgements,estimatesandassumptionsmadearebelievedtobereasonable,basedonthemostcurrentsetofcircumstancesknowntomanagement.actualresultsmaydifferfromthejudgements,estimatesandassumptions.significantjudgements,estimatesandassumptionsmadebymanagementinthepreparationofthesefinancialstatementsareoutlinedbelow:

(i) Significant accounting judgements

ImpairmentTransGridassessesimpairmentofallassetsattheendofthereportingperiodbyevaluatingconditionsspecifictoTransGrid’sbusinessasawhole,whichmayleadtoimpairment.ifanimpairmenttriggerexists,therecoverableamountofthevalueinuseforthebusinessisdetermined.Furtherdetailsonthevalueinusecalculationsandadjustmentforimpairmentaredisclosedinnote2(f)(ii).

Recovery of Deferred Tax Assetsdeferredtaxassetsarerecognisedfordeductibletemporarydifferencesasmanagementconsidersthatitisprobablethatfuturetaxableprofitswillbeavailabletoutilisethosetemporarydifferences.

Long Service Leave ProvisionTransGrid’sliabilityforemployeebenefitsrelatingtolongserviceleaveismeasuredusingthecurrentcostapproach,whichapproximatesthepresentvaluebasis.periodiccomparisonisundertakenofthetwomeasurementbases,inconjunctionwithanindependentactuarialreview.Management’sjudgement,basedonhistoricalexperience,isappliedindeterminingwhethertheresultingdifferencemateriallyimpactsontheliabilityvaluationrecognisedinthefinancialstatementsandrequiresanadjustmenttoaligntopresentvaluemeasurement.

Workers’ Compensation ProvisionTheliabilityforworkers’compensationisbasedonanannualindependentactuarialassessment,supplementedbymanagementconsiderations,toarriveatabestestimateoftheexpenditurerequiredtosettlepresentconsiderationsattheendofthereportingperiod.

(ii) Significant accounting estimates and assumptions

Allowance for impairment loss on trade and other receivablesWherereceivablesareoutstandingbeyondthenormaltradingterms,thelikelihoodofrecoveryofthesereceivablesisassessedbymanagement.Thisassessmentisbasedonsupportablepastcollectionhistoryandhistoricalwrite-offsofbaddebts.

notes to the financial statementsForTheyearended30ThJune2010

TransGridannualreporT2010>notes to the financial statements 95

Estimation of useful lives of assetsTheestimationoftheusefullivesofassetsisbasedonhistoricalexperience,industrycomparisons,aswellasexpectedusage,physicalwearandtear,andtherateoftechnicalandcommercialobsolescence.Furtherinformationontheestimationofusefullivesisdisclosedinnote2(f)(v).

(e) ChangesinAccountingPoliciesaccountingpoliciesareconsistentwiththoseappliedinthepreviousyear.

(f) Property,PlantandEquipment

Acquisition of AssetsThecostmethodofaccountingisusedfortheinitialrecordingofallacquisitionsofassetscontrolledbyTransGrid.Costistheamountofcashorcashequivalentspaidatthetimeofacquisitionorconstruction.CostincludesinterestonborrowingsrelatedtoQualifyingassetsasdetailedinnote2(f)(iv).

assetsacquiredatnocost,orfornominalconsideration,areinitiallyrecognisedattheirfairvalueatthedateofacquisition.

Revaluationsproperty,plantandequipmentarevaluedinaccordancewithnsWTreasurypolicyTpp07-1Valuation of Physical Non-Current Assets at Fair Value.Thevaluationofproperty,plantandequipmentisdeterminedinatwo-stepprocess.First,fairvalueisdeterminedinaccordancewithaasB116Property, Plant and Equipment.second,thefairvalueissubjecttoaseparateimpairmenttestinaccordancewithaasB136Impairment of Assets.

Fair ValueFairvalueofproperty,plantandequipmentisdeterminedbasedonthebestavailablemarketevidence,includingcurrentmarketsellingpricesforthesameorsimilarassets.Wherethereisnoavailablemarketevidence,theasset’sfairvalueismeasuredatitsmarketbuyingprice,thebestindicatorofwhichisdepreciatedreplacementcost.

TransGridrevaluesdepreciableproperty,plantandequipmentbyreferencetoitscurrentdepreciatedreplacementcost.Theaccumulateddepreciationfortherevaluedassetisrestatedproportionatelywiththechangeinthegrosscarryingamountoftheasset,sothatthecarryingamountoftheassetafterrevaluationequalsitsrevaluedamount,inlinewithnsWTreasurypolicy.

TransGridassessesattheendofthereportingperiodwhetherthereisanyindicationthatanasset’scarryingamountdiffersmateriallyfromfairvalue.ifanyindicationexists,theassetisrevalued.

TransGrid’svaluationpolicyprovidesforafullanddetailedvaluationoftheseassetstobeundertakenatfive-yearintervals,inaccordancewithnsWTreasurypolicy.intheinterveningyears,arevaluationbasedonpriceindexmovementsisundertaken.

Whereanasset’scarryingamountisincreasedasaresultofarevaluation,theincreaseisrecognisedinotherComprehensiveincomeandaccumulatedinequityundertheheadingofassetrevaluationsurplus.

Whereanasset’scarryingamountisdecreasedasaresultofarevaluation,thedecreaseisrecognisedinotherComprehensiveincometotheextentofanycreditbalanceexistingintheassetrevaluationsurplusinrespectofthatasset.ThedecreaserecognisedinotherComprehensiveincomereducestheamountaccumulatedinequityundertheheadingofassetrevaluationsurplus.

Impairment Assessmenteachyear,TransGrid’sspecialisedplantandinfrastructureassets,landandbuildings,andeasementsaretestedforimpairment.shouldtherebeanyindicationthatthecash-generatingunitmaybeimpaired,TransGridmakesanestimateoftherecoverableamount.TransGridasawholerepresentsacashgeneratingunit.

Therecoverableamountisbasedonthevalueinuseforthebusinessasawhole.inassessingvalueinuse,theestimatedfuturecashflowsforthebusinessarediscountedtotheirpresentvalueusingadiscountratethatreflectstherisksspecifictothebusinessandrelevantmarketassessments.

ifthecarryingamountsoftheassets,asrepresentedbythecurrentdepreciatedreplacementcost,exceedtherecoverableamountofthebusiness,theassetscomprisingthebusinessasawholeareconsideredtobeimpaired.Theassetsarewrittendownproportionatelytoensuretheircarryingamountsreflecttherecoverableamountandacorrespondingimpairmentlossisrecognisedasarevaluationdecrease.

attheendofeachyear,anassessmentismadeastowhetherthereisanyindicationthatanimpairmentlossrecognisedinpriorperiodsforanassetmaynolongerexistormayhavedecreased.ifanysuchindicationexists,TransGridestimatestherecoverableamountofthatasset.animpairmentlossisreversediftherehasbeenachangeintheestimatesusedtodeterminetherecoverableamountsincethelastimpairmentlosswasrecognised.areversalofanimpairmentlossisallocatedproportionatelytotheassetstoensuretheircarryingamountsreflecttherecoverableamount.acorrespondingamountisrecognisedasarevaluationincrease.

Retirements or Disposalsuponretirementordisposal,anyrevaluationsurplusrelatingtotheparticularassetistransferredtoretainedearnings.

(iii) Categoriesproperty,plantandequipmentcomprisethefollowingtypesofassets:

Prescribed Assets prescribedassetscompriseproperty,plantandequipmentusedbyTransGridtoprovideelectricitytransmissionservicesthatareregulatedbytheaustralianenergyregulator(aer).prescribedassetsasdisclosedinnotes12(a)and(b)are:

>> networkasset>> otherassets

Thenetworkassetisacomplexinfrastructureassetthatworkstogetherasanintegratedwholetoprovideregulatedelectricitytransmissionservices.itincludesthefollowingmajorparts:

>> land>> Buildings>> systemplantandequipment>> Communicationequipment

Thefiveyeardetailedvaluationsofthenetworkassetwereundertakenasat30June2009usingacombinationofindependentvaluersandinternalexpertise.



Negotiated Assetsnegotiatedassetsincludethoseassetsrelatingtoconnectionservicesbetween:

>> TransGridandnewgenerators;and>> TransGridtoneworexpandedloads.

Thisexcludesassetsrelatingtoservicesthataresubjecttograndfatheringprovisionswhichpreservethehistorical‘prescribed’status.

Non-regulated Assetsnon-regulatedassetscompriseproperty,plantandequipmentusedbyTransGridtoprovideservicesotherthanprescribedandnegotiatedelectricitytransmissionservices.non-regulatedassetsasdisclosedinnotes12(a)and(b)are:

>> systemplantandequipment>> Communicationequipment>> otherassets

(iv) Capitalisation Capitalexpenditureisdefinedasexpenditureinrelationto:

>> acquisitionofanewunitofplant;>> installationofanewunitofplant;>> workperformedonaunitofplant,wheretheneedfortheworkexistedatthetimetheunitwasacquiredandtheworkwascarriedoutpriortoitbeingputintooperation;

>> replacementofaunitofplant,orofasubstantialpartofaunitofplant;

>> anadditionoralterationtoaunitofplant,whichresultsinanincreaseineconomicbenefits.

interestonborrowingsiscapitalisedagainstQualifyingassetsinaccordancewithaasB123Borrowing Costs.Qualifyingassetsareassetswhichtakemorethan12monthstobereadyfortheirintendeduse.

expenditureisnotcapitalisedbelowaminimumthresholdof$1,000.

(v) Depreciationproperty,plantandequipment,excludingland,aredepreciatedovertheirestimatedusefullives.Thestraight-linedepreciationmethodisused.assetsaredepreciatedfromthemonthofacquisitionorinrespectofconstructedassets,fromthetimetheassetreachespracticalcompletionandisreadyforuse.

assetlivesarereviewedannuallyinaccordancewithaasB116Property,PlantandEquipment,andwhererequired,adjustmentshavebeenmadetotheremainingusefullivesofseparatelyidentifiablepartsofassetshavingregardtofactorssuchasassetusageandtherateoftechnicalandcommercialobsolescence.

Withintheprescribed,non-regulatedandnegotiatedassetbasethefollowingsub-categorieshavebeenestablished.Theusefullivespresentlyassignedtotheseassetsare:

Prescribed & Non-regulated Assets

networkasset Buildings 40years

systemplantandequipment

20–50years

Communicationequipment

10–35years

otherassets 2–10years

Negotiated Assets

systemplantandequipment

20–30years

(g) IntangibleassetsintangibleassetsaremeasuredatcostandcompriseeasementsandComputersoftwareasdisclosedinnotes13(a)and(b).TransGridhasnointernallygeneratedintangibleassets.

Capitalexpenditureonintangibleassetsisdefinedasexpenditureinrelationto:

>> acquisitionofcomputersoftwareoreasements;>> installationofcomputersoftware;>> anadditionoralterationtocomputersoftware,whichresultsinanincreaseineconomicbenefits.

easementsareacomponentofTransGrid’sinfrastructureassetsthatprovideelectricitytransmissionservicesthatareregulatedbytheaer.easementsareassessedforimpairmentonanannualbasisandarenotamortisedastheyaregrantedforanunlimitedtime,andthushaveanindefiniteusefullife.

Computersoftwareisamortisedoveraperiodof5yearsusingthestraight-lineamortisationmethod.amortisationexpenseisincludedinthe“expensesexcludingFinanceCosts”lineitemofthestatementofComprehensiveincome.Theusefullifeforsoftwareisreviewedannually,andadjustmentswhereapplicable,aremadeonaprospectivebasis.

expenditureisnotcapitalisedbelowaminimumthresholdof$1,000.

(h) InventoriesinventoriesofstoresandMaterialsarevaluedatthelowerofcostandnetrealisablevalue.CostisdeterminedbyTransGridtobetheweightedaveragecostofitemsinstore,separatelydeterminedforeachlocation.TransGrid’sinventoriesrelatemostlytospecialistequipment.asthereisnoactivemarketinrespectofthemajorityofTransGrid’sinventories,TransGridrecognisestheweightedaveragecostofitemsasaproxyforlowerofcostandnetrealisablevalue.

(i) CashandcashequivalentsCashandcashequivalentsinthestatementofFinancialpositionandforpurposesofthestatementofCashFlowscomprisecashonhand,cashatbankanddepositswithfinancialinstitutions.

(j) Borrowingsallborrowingsaremeasuredatamortisedcostusingtheeffectiveinterestmethod.

interestonborrowingsisrecognisedasexpenseintheperiodinwhichitisincurredunlessitrelatestoqualifyingassets.Qualifyingassetsareassets,whichtakemorethan12monthstogetreadyfortheirintendeduse.Wherefundsareborrowedgenerally,interestontheborrowingsiscapitalisedtoqualifyingassetsinaccordancewithaasB123Borrowing Costs.

Theamountofinterestattributedtoqualifyingassetsduringtheyearwas$21.7m(2009–$19.4m)ataweightedaveragerateof7.6%(2009–7.2%).Thetotalinterestexpenseforthefinancialyearisreportedat$129.7m(2009–$107.8m)

loansareclassifiedascurrentwhentheyhaveamaturityoflessthanoneyearfromtheendofthereportingperiod.

(k) Dividendsprovisionismadefortheamountofdividendpayableinrelationtothecurrentfinancialyear,inaccordancewiththedividendrecognitionpolicysetoutinTreasuryCircularnsWTC05-11Accounting for Dividends.accordingly,adividendinrelationtothefinancialyearistakentobedeterminedbeforetheendofthereportingperiod,consistentwiththerequirementsofaasB137Provisions, Contingent Liabilities and Contingent Assets.


ThedividendiscalculatedinaccordancewithTpp02-3Financial Distribution Policy for Government Businesses.Thedividendpayableof$135.1m(2009:$120.2m)iscalculatedbasedonprofitfortheyear.ThedividendsaredeterminedbyTransGrid’sBoardafterdiscussionwithnsWTreasury.

(l) EmployeeBenefitsacalculationinaccordancewithaasB119Employee BenefitsismadeeachyearinrespectofTransGrid’sliabilityattheendofthereportingperiodforemployeebenefitsrelatingtolongserviceleaveandannualleave,andanannualcontributionismadetoadjusttheprovisiontoanamountwhichisconsideredadequatetomeetthatliability.

(i) Annual LeaveTheprovisionforemployeebenefitsrelatingtoannualleaverepresentstheamountwhichTransGridhasapresentobligationtopayresultingfromemployees’servicesprovideduptotheendofthereportingperiod.

Theprovisionhasbeencalculatedatnominalamountsbasedontheremunerationratesthatareexpectedtobepaidwhentheleaveistaken.

(ii) Long Service LeaveTheliabilityforemployeebenefitsrelatingtolongserviceleavehasbeencalculatedonthebasisofcurrentsalaryratestobepaidbyTransGridresultingfromemployees’servicesprovideduptotheendofthereportingperiodandincludesrelatedon-costs,inaccordancewiththeguidelinesofTreasuryCircularnsWTC09/04Accounting for Long Service Leave and Annual Leave.Theliabilityforlongserviceleaveisrecognisedandmeasuredasthepresentvalueofexpectedfuturepaymentstobemadeinrespectofservicesprovidedbyemployeesuptothereportingdate.expectedfuturepaymentsarediscountedusingmarketyieldsatthereportingdateonCommonwealthGovernmentbondswithtermstomaturitythatmatch,ascloselyaspossible,theestimatedfuturecashoutflows.

(m)SuperannuationTransGridcontributestotheenergyindustriessuperannuationschemepoolB(eiss)whichisadefinedbenefitsuperannuationschemeforwhichliabilitiesaccrue.

TransGridceasedcontributingtothefollowingdefinedbenefitschemesduringthe2008/09financialyear:

>> stateauthoritiessuperannuationscheme(sass);>> stateauthoritiesnon-Contributorysuperannuationscheme(sanCs);and

>> statesuperannuationscheme(sss).

TransGridalsocontributestoanumberofaccumulationsuperannuationschemesforwhichnolong-termliabilityaccrues.

Withthedefinedbenefitschemes,acomponentofthefinalbenefitisderivedfromamultipleofmembersalaryandyearsofmembership.allthedefinedbenefitschemesareclosedtonewmembers.

eachsuperannuationschemeadvisethelevelofliabilityinrespectofTransGrid’ssuperannuationcommitmentstoitsemployeeswhoaremembersofthevariousdivisionsoftheschemes.ThecalculationofthesuperannuationpositionisbaseduponactuarialreviewsindependentofTransGrid’songoingactivitiesandinvolvement.VariousactuarialassumptionsunderpinthedeterminationofTransGrid’sdefinedbenefitobligations.Theseassumptionsandtherelatedcarryingamountsforeissaredisclosedinnote5.

TransGridrecognisesthenettotalofthefollowingasanassetoraliabilityinitsstatementofFinancialposition:

>> presentvalueofthedefinedbenefitobligationattheendofthereportingperiod;and

>> Fairvalueofplanassetsinthedefinedbenefitschemesattheendofthereportingperiod.

Thetotalofthenetsuperannuationexpense(orrevenue)fortheyear,includingamountsrecognisedintheaccounts,isthedifferencebetweentheopeningandclosingbalancesofthenetdefinedsuperannuationliability(orprepaidsuperannuationcontributions)plusthecontributionspaidbyTransGridtotheeiss.

inaccordancewithnsWTreasuryCircularnsWTC09/01Accounting for Superannuation,actuarialgainsandlossesarerecognisedinotherComprehensiveincomewhilenon-actuarialgainsandlossesarerecognisedinprofitorloss.

TransGridhasreviewedtheclassificationofitssuperannuationliability.accordingly,thesuperannuationliabilityhasbeenreclassifiedfromaCurrentliabilitytoanon-currentliabilityinordertomoreappropriatelyreflectthetimingoftheobligation.Thecomparativeamountof$161.8mwasalsoreclassified.

(n) InsuranceTransGridmaintainsamixofexternalinsurancepoliciesandinternalprovisioninginaccordancewithaasB137Provisions, Contingent Liabilities and Contingent Assets.Thetreatmentofrisksandassociatedliabilitiesaredeterminedinconjunctionwithindependentinsuranceadvisersandlossadjusters.

TransGridisaself-insurerforWorkers’Compensation.Theliabilityforclaimsmade,ortobemade,againsttheinsuranceprovisionisdeterminedbyreferencetotheWorkers’Compensationact1987andtheWorkCoverauthority’sguidelinestoself-insurers.

(o) TradeandOtherReceivablesreceivablesfromtradeandotherdebtorsarerecognisedatamountsduelessanallowanceforanyuncollectibleamounts.Collectibilityofthesereceivablesisreviewedonanongoingbasis.debtsthatareknowntobeuncollectiblearewrittenoffwhenidentified.anallowanceforimpairmentlossontradeandotherreceivablesisraisedwhenthereisobjectiveevidencethatTransGridwillnotbeabletocollectthedebt.

Prescribed Customer Receivablesasat30June2010,TransGrid’stotalrevenuereceivedforprescribedtransmissionservices,includingintra-regionalsettlementresiduesandinter-regionalsettlementresidueauctionproceeds,waslessthantherevenueentitlementforthefinancialyear.inaccordancewiththenationalelectricityrules(ner),theunder-recoveredamountandassociatedinterestisentitledtoberecoveredwhensettingfuturetransmissionserviceprices.Therevenueunder-recoveryhasbeenrecognisedinprescribedCustomerreceivables.

(p) Payablesaccountspayable,includingaccrualsnotyetbilled,arerecognisedwhenTransGridhasanobligationtopayasaresultofthecompletionofaworkorservice.

(q) RevenuerevenueisrecognisedtotheextentthatitisprobablethattheeconomicbenefitswillflowtoTransGridandtherevenuecanbereliablymeasured.Thefollowingspecificrecognitioncriteriamustalsobemetbeforerevenueisrecognised:



(i) Sale of goodsrevenueisrecognisedwhenthesignificantrisksandrewardsofownershipofthegoodshavepassedtothebuyerandcanbemeasuredreliably.risksandrewardsareconsideredpassedtothebuyeratthetimeofdeliveryofthegoodstothecustomer.

(ii) Rendering of servicesrevenuefromelectricitytransmissionservicesissubjecttotheapplicationofanaerdeterminedMaximumallowablerevenue(Mar)forthefinancialyear.TransGridisinthefirstyearofthecurrentfiveyearregulatorydeterminationwhichoperatesfromJuly2009toJune2014.ThetransmissionservicepricesaresetatthebeginningofthefinancialyearinaccordancewiththeMar.

revenuefromtherenderingofotherservicesisrecognisedwhentheserviceisprovidedorbyreferencetothestageofcompletion.Wherethecontractoutcomecannotbemeasuredreliably,revenueisrecognisedonlytotheextentoftheexpensesrecognisedthatarerecoverable.

(iii) Interestinterestrevenueisrecognisedasitisearned,usingtheeffectiveinterestmethod.

(iv) Contributions for Capital WorksCashandnon-cashcapitalcontributionshavebeenrecognisedinaccordancewithaccountinginterpretation18Transfers of Assets from Customers.

Contributionsofnon-currentassetsarerecognisedasrevenueandanassetwhenTransGridgainscontroloftheasset.Theamountrecognisedisthefairvalueofthecontributedassetatthedateonwhichcontrolisgained.

Cashcapitalcontributionsarerecognisedasrevenuewhenthenetworkisextendedormodified,consistentwiththetermsofthecontribution.

(r) IncomeTaxTransGridissubjecttothenationalTaxequivalentregime(nTer)administeredbytheaustralianTaxationoffice.ThenTerisbasedonapplicationoffederalincometaxlawsunderwhichTransGridpaysincometaxequivalentstonsWTreasury.

deferredincometaxisprovidedonalltemporarydifferencesattheendofthereportingperiodbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.

deferredincometaxliabilitiesarerecognisedforalltaxabletemporarydifferencesexceptwherethedeferredincometaxliabilityarisesfromtheinitialrecognitionofanassetorliability,andatthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss.

deferredincometaxassetsarerecognisedforalldeductibletemporarydifferences,carry-forwardofunusedtaxassetsandunusedtaxlosses,totheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,andthecarry-forwardofunusedtaxassetsandunusedtaxlossescanbeutilised,exceptwherethedeferredincometaxassetarisesfromtheinitialrecognitionofanassetorliability,andatthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss.

Thecarryingamountofdeferredincometaxassetsisreviewedattheendofeachreportingperiodandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailabletoallowallorpartofthedeferredincometaxassettobeutilised.

deferredincometaxassetsandliabilitiesaremeasuredatthetaxratethatisexpectedtoapplytotheyearwhentheassetisrealisedortheliabilityissettled,basedontaxrate(andtaxlaws)thathavebeenenactedorsubstantivelyenactedattheendofeachreportingperiod.

incometaxesrelatingtoitemsrecogniseddirectlyinequity(suchasassetrevaluationsurplus,cashflowhedgesandsuperannuationactuarialgainsandlosses)arerecognisedinequityandnotinprofitorloss.

(s) FinancialRiskManagement

OverviewTransGridhasexposuretothefollowingrisksfromitsuseoffinancialinstruments:

>> Creditrisk>> liquidityandfundingrisk>> interestraterisk>> Foreignexchangerisk>> Commodityrisk>> operationalrisk

Credit RiskCreditriskistheriskthatarisesifafinanciallossissufferedduetotheinabilityofthecounterpartybeingabletomeetitsfinancialobligationstoTransGrid.

Theriskismanagedbyonlyundertakingtransactionswithgovernmentownedfinancialinstitutionsandcommercialbankswithaminimumcreditratingthreshold.Monetarylimitsapplytocontaintheexposurewithinreasonablelevels.

Trade and other receivablesTransGrid’sexposuretocreditriskisinfluencedmainlybytheindividualcharacteristicsofeachcustomer.ThedemographicsofTransGrid’scustomerbase,includingthedefaultriskoftheindustryandcountryinwhichcustomersoperate,haslessofaninfluenceoncreditrisk.

TransGridconsidersaconcentrationofcreditrisktoexistwhenanindividualcustomer’soutstandingtradereceivablebalanceexceeds10%ofthetotaltradereceivablesbalance.approximately88%(2009–88%)ofTransGrid’stradereceivablesbalanceisattributabletothreedistributioncustomerswhohaveindividualtradereceivablebalancesinexcessof10%ofthetotalbalance.allofTransGrid’sdistributioncustomershavebeentransactingwiththeorganisationsinceitsinception,withnocreditlossesoccurringinthatperiodoftime.

Liquidity and Funding RiskThemainobjectiveofliquidityriskmanagementistoensurethatTransGridhassufficientfundsavailabletomeetitsfinancialobligationsandinatimelymanner.

TransGridmaintainsdetailedcashflowforecastsanduseapprovedinstrumentswithliquiditylimitstomaintainadequatecashflow.Borrowinglimitsaremonitoredtoensurefundingcommitmentformajorcapitalworksareinplace.Thedebtportfolioismanagedinsuchawaythatnomorethan20%oftheportfoliowillmatureinany12monthperiod.


Interest Rate Riskinterestrateriskistheriskofamaterialchangeinearningsasaconsequenceofadversemovementsininterestrates.

Theobjectiveinmanaginginterestrateriskistominimiseinterestexpensevolatilitywhilstensuringthatanappropriatelevelofflexibilityexiststoaccommodatepotentialchangesinfundingrequirementsandmovementinmarketinterestrates.Toachievethis,TransGrid’soveralldebtportfoliocomprisesamixofnominalfixedrateandlongdatedCpilinkeddebtwithsomeshorttermnominaldebt.

Foreign Exchange RiskForeignexchangeriskistheriskthatTransGridsuffersfinanciallossduetoachangeinforeignexchangerates.

TransGrid’spolicyistohedgeallforeigncurrencyexposuresinexcessofaud0.5millionequivalent.

Commodity RiskTransGridmaybeexposedtocommoditypricerisktypicallyinrelationtoadverseandunexpectedincreasesincostsforinfrastructurerelatedcapitalexpenditure.TransGrid’spreferredpositioninrelationtocommodityriskistonegotiatefixedpricecontractswithitssuppliers.inaddition,appropriatepoliciesareinplacetomonitormovementsincommoditypriceswithhedgingstrategiestomitigaterisk.

Operational RiskoperationalriskistheriskthatTransGridsuffersfinanciallossduetomismanagement,error,fraudorunauthoriseduseoftechniquesand/orfinancialproducts.

ThepolicyobjectiveistominimisetheriskthatTransGridsuffersanyfinanciallossarisingfromoperationalrisk.

appropriatesegregationofdutiesandmaintenanceofcontrolsystemsareinplacetomitigateoperationalrisk.

(t) CapitalManagementTransGridhasbeensubjecttothensWGovernment’sFinancialdistributionpolicysinceitsinceptionandisfullycommittedtoprovidinganadequatereturntoitsshareholder.Thisobjectivemustbemanagedwithintheregulatoryframeworkprovidedbythener,giventhatthevastmajorityofTransGrid’srevenueissubjecttoregulation.

TransGrid’sreturnoncapitalisbasedonaWeightedaverageCostofCapitalsetbytheaer,aspartoftherevenuecapdeterminationprocessatfive-yearintervals.TheregulatoryrateofreturnissetataleveldeemedsufficienttoensurethecontinuingviabilityofTransGrid’sbusinessandtoencouragenecessaryinvestmentinnewandreplacementassets.TheWeightedaverageCostofCapitalapplicabletoTransGridforthecurrentfive-yearregulatoryperiodending30June2014is10.05%.

TherewerenochangesinTransGrid’sapproachtocapitalmanagementduringtheyear.

TransGridisnotsubjecttoexternallyimposedcapitalrequirements.

(u) GoodsandServicesTaxrevenues,expensesandassetsarerecognisednetoftheamountofGoodsandservicesTax(GsT),withthefollowingexceptions:

>> WheretheamountofGsTincurredisnotrecoverablefromtheaustralianTaxationoffice.inthesecircumstances,theGsTisrecognisedaspartofthecostofacquisitionoftheassetoraspartofanitemoftheexpense.

>> receivablesandpayablesarestatedwiththeamountofGsTincluded.

ThenetamountofGsTrecoverablefrom,orpayableto,theaustralianTaxationofficeisincludedasacurrentassetorcurrentliabilityinthestatementofFinancialposition.

CashflowsareincludedinthestatementofCashFlowsonagrossbasis.TheGsTcomponentofcashflowsarisingfrominvestingandfinancingactivitieswhicharerecoverablefrom,orpayableto,theaustralianTaxationofficeareclassifiedasoperatingcashflows.

(v) DerivativeFinancialInstrumentsTransGridusesderivativefinancialinstrumentssuchasforwardforeigncurrencycontractstohedgeitsrisksassociatedwithforeigncurrencyfluctuations.

Forthepurposesofhedgeaccounting,TransGridclassifiesitshedgesascashflowhedges.Thehedgesareundertakentoaddressexposuretovariabilityincashflowsthatiseitherattributabletoaparticularriskassociatedwitharecognisedassetorliabilityoraforecastedtransaction.

inrelationtocashflowhedgestohedgefirmcommitmentswhichmeetthespecificconditionsforhedgeaccounting,theportionofthegainorlossonthehedginginstrumentthatisdeterminedtobeaneffectivehedgeisrecogniseddirectlyinotherComprehensiveincomeandtheineffectiveportionisrecognisedinprofitorloss.

Whenthehedgedfirmcommitmentresultsintherecognitionofanassetorliability,then,atthetimetheassetorliabilityisrecognised,theassociatedgainsorlossesthathadpreviouslybeenrecognisedinotherComprehensiveincomeareincludedintheinitialmeasurementoftheacquisitioncostorothercarryingamountoftheassetorliability.

aasB7Financial Instruments: Disclosuresrequiresclassificationoffairvaluemeasurementsusingafairvaluehierarchythatreflectsthesignificanceoftheinputsusedinmakingthemeasurements.Thefairvaluehierarchyismadeupofthefollowinglevels:

>> level1–quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities;

>> level2–inputs,otherthanquotedpricesincludedwithinlevel1,thatareobservablefortheassetorliability,eitherdirectly(i.e.asprices)orindirectly(i.e.derivedfromprices);and

>> level3–inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs).

Thelevelinthefairvaluehierarchyinwhichthefairvaluemeasurementiscategorisedinitsentiretyshallbedeterminedonthebasisofthelowestlevelinputthatissignificanttothefairvaluemeasurementinitsentirety.

ForTransGrid,theabovedisclosuresonlyapplytoderivativetransactions.

(w)JointVenturesTransGridhasenteredintoanunincorporatedJointVentureagreementinordertoaccommodatethefutureprovisionoftelecommunicationsservices.

inaccordancewithaasB131Interests in Joint Ventures,thejointventureisdeemedtobeajointlycontrolledoperationaseachventurerusesitsownassetsinpursuitofthejointoperations.uponcommencementofactivities,TransGrid’sinterestinthejointventurewillbebroughttoaccountbyrecognisinginitsfinancialstatementstheassetsitcontrols,theliabilitiesandexpensesitincurs,anditsshareofincomethatitearnsfromthesaleofgoodsorservicesbythejointventure.



3. income

2010 $’000

2009 $’000

Revenue

Transmissionofelectricity 675,044 602,789

non-prescribedWork 14,543 22,716

CapitalContributions 53 18,546

interest 1,615 2,028

sundry 3,778 5,721

Total Revenue 695,033 651,800

Net Gain on Cash Flow Hedges – 997

Total Income 695,033 652,797

4. expenses

2010 $’000

2009 $’000

Expenses excluding Losses & Finance Costs

Transmissionofelectricity 320,596 309,730

otherservices 9,368 14,109

Total Expenses excluding Losses & Finance Costs 329,964 323,839

netlossondisposalofproperty,plantandequipment 477 2,150

netlossonCashFlowhedges 542 –

impairmentadjustmentonintangibles – 4,315

Total Expenses excluding Finance Costs 330,983 330,304

FinanceCosts 138,753 105,072

Total Expenses 469,736 435,376

Total Expenses above include:

2010 $’000

2009 $’000

depreciationofproperty,plantandequipment(refertonote12(b)) 174,925 148,272

amortisationofintangibles(refertonote13(b)) 6,374 4,612

impairmentlossonTradeandotherreceivables (35) 45

inventoryexpense 3,063 2,736

inventoryWrite-downs 418 402

EmployeeBenefitsExpense:

netsuperannuationexpense,excludingactuariallosses(refernote5(a)) 11,004 5,348

otheremployeeBenefitsexpense 79,926 85,278

Total Employee Benefits Expense 90,930 90,626

Maintenanceexpensesareasubsetoftheabovetotalexpenses:

MaintenanceExpense:

Transmissionofelectricity

employee-relatedmaintenanceexpense 27,219 24,149

othermaintenanceexpense 37,958 40,248

Transmissionofelectricity–Maintenanceexpense 65,177 64,397

otherservices–Maintenanceexpense 251 251

Total Maintenance Expense 65,428 64,648


5. superannuation defined benefit plansThefollowingtablessummarisethecomponentsofmovementinemployer’ssuperannuationreserverecognisedinprofitorlossandotherComprehensiveincome,andthefundedstatusandamountsrecognisedinthestatementofFinancialpositionforthedefinedbenefitsuperannuationplans.

TheassetsandliabilitiesofTransGrid’seissdefinedBenefitplansareprovidedbythescheme’sactuary,Mercer(australia)ptyltd.

(a) Movements in Superannuation Reserves recognised in profit or loss

2010 $’000

2009 $’000

EISS

Currentservicecost (10,060) (8,375)

interestcostonbenefitobligation (25,424) (26,299)

expectedreturnonplanassets 24,475 29,320

EISS net income/(expense) (11,009) (5,354)

SSS, SASS and SANCS net income/(expense) 5 6

Total net income/(expense) (11,004) (5,348)

(b) Movements in Superannuation Reserves recognised in Other Comprehensive Income

2010 $’000

2009 $’000

eissactuarialgains/(losses) (44,029) (133,170)

sss,sassandsanCsactuarialgains/(losses) (5) (117)

Total Actuarial gains/(losses) (44,034) (133,287)

(c) EISS Superannuation Surplus/(Liability)

2010 $’000

2009 $’000

FairValueofplanassetsatendofyear 346,559 307,166

presentValueofdefinedBenefitobligationatendofyear (547,814) (468,958)

Net Asset/(Liability) Recognised in Statement of Financial Position at End of Year (201,255) (161,792)

(d) Reconciliation of the present value of the EISS defined benefit obligations

2010 $’000

2009 $’000

Present value of defined benefit obligations at beginning of the year (468,958) (412,716)

Currentservicecost (10,060) (8,375)

interestcost (25,424) (26,299)

Contributionsbyschemeparticipants (3,893) (4,238)

actuarialgains/(losses) (49,876) (34,330)

Benefitspaid 10,397 17,000

Present value of defined benefit obligations at the end of the year (547,814) (468,958)



(e) Reconciliation of the EISS fair value of plan assets

2010 $’000

2009 $’000

Fair value of plan assets at beginning of the year 307,166 385,164

expectedreturnonplanassets 24,475 29,320

actuarialgains/(losses) 5,847 (98,840)

employerContributions 15,575 4,284

Contributionsbyplanparticipants 3,893 4,238

Benefitspaid (10,397) (17,000)

Fair value of plan assets at the end of the year 346,559 307,166

(f) Percentage invested in each asset class at the end of the reporting period:

2010 2009

australianequities 36.4% 34.3%

overseasequities 32.3% 33.1%

australianfixedinterestsecurities 14.6% 9.0%

australianinflation-linkedbonds 3.8% –

overseasfixedinterestsecurities – 6.9%

property 2.5% 6.1%

Cash 5.7% 6.1%

other 4.7% 4.5%

(g) Fair value of EISS scheme assetsallschemeassetsareinvestedbytheTrusteesatarm’slengththroughindependentmanagers.

(h) Expected rate of return on assetsTheexpectedreturnonassetsassumptionisdeterminedbyweightingtheexpectedlong-termreturnforeachassetclassbythetargetallocationofassetstoeachclass.Thereturnsusedforeachclassarenetofinvestmenttaxandinvestmentfees.

(i) Actual return on EISS plan assets

2010 $’000

2009 $’000

actualreturnonplanassets 34,442 (67,367)

(j) Valuation MethodTheprojectedunitCredit(puC)valuationmethodwasusedtodeterminethepresentvalueofthedefinedbenefitobligationsandtherelatedcurrentservicecosts.Thismethodseeseachperiodofserviceasgivingrisetoanadditionalunitofbenefitentitlementandmeasureseachunitseparatelytobuildupthefinalobligation.

(k) Economic Assumptions

30 June 2010

salaryincreaserate(excludingpromotionalincrease) 4.0%p.a.

rateofCpiincrease 2.5%p.a.

expectedrateofreturnonassets 8.10%p.a.

discountrate 5.17%p.a.


(l) Demographic AssumptionsThedemographicassumptionsat30June2010arethoseusedinthe2009triennialactuarialvaluation.

(m) Historical Information

2010 $’000

2009 $’000

2008 $’000

2007 $’000

2006 $’000

presentvalueofdefinedbenefitobligation (547,814) (468,958) (412,716) (409,747) (405,668)

Fairvalueofschemeassets 346,559 307,166 385,164 430,848 387,067

surplus/(deficit)inscheme (201,255) (161,792) (27,552) 21,101 (18,601)

experienceadjustments–schemeliabilities (49,876) (34,330) 32,850 5,103 15,036

experienceadjustments–schemeassets 5,847 (98,840) (72,279) 24,780 32,968

(n) Expected Contributions

2010 $’000

expectedemployercontributionstobepaidinthenextreportingperiod 22,250

(o) Funding Arrangements for Employer Contributions

(i)NetSurplus/(Liability)Thefollowingisasummaryofthefinancialpositionoftheschemeattheendofthereportingperiodcalculatedinaccordancewithaas25Financial Reporting by Superannuation Plans.

2010 $’000

2009 $’000

netMarketValueofschemeassets 346,559 307,166

accruedBenefits (417,574) (368,099)

Net Surplus/(Liability) (71,015) (60,933)

(ii)FundingMethod

ThemethodusedtodeterminetheemployercontributionrecommendationswastheAggregate Funding method.Themethodadoptedaffectsthetimingofthecosttotheemployer.

undertheAggregate Funding method,theemployercontributionrateisdeterminedsothatsufficientassetswillbeavailabletomeetbenefitpaymentstoexistingmembers,takingintoaccountthecurrentvalueofassetsandfuturecontributions.

(iii)EconomicAssumptionsTheeconomicassumptionsadoptedforthe2009actuarialreviewoftheschemewere:

Weighted Average Assumptions

expectedrateofreturnonschemeassets 7.0%p.a.

expectedsalaryincreaserate 4.0%p.a.

expectedrateofCpiincrease 2.5%p.a.

(iv)NatureofAsset/Liability

asaliabilityisrecognisedinthestatementofFinancialpositionasat30June2010,TransGridisresponsibleforthedifferencebetweentheorganisation’sshareofschemeassetsandthedefinedbenefitobligation.

(p) OtherThesuperannuationexpenserecognisedinprofitorlossisincludedinthelineitem“expensesexcludingFinanceCosts”.superannuationactuariallossesinrespectofeiss,sss,sassandsanCsof$44m(2009:$133.3m)areseparatelyidentifiedinotherComprehensiveincome.



6. income tax

(a) Income Tax Expense Majorcomponentsofincometaxexpensefortheyearsended30June2010and2009are:

(i)Profitorloss

2010 $’000

2009 $’000

Current Income Tax

Currentincometaxcharge 30,512 37,487

adjustmentsinrespectofcurrentincometaxofpreviousyears 10 (750)

Deferred Income Tax

relatingtooriginationandreversaloftemporarydifferences 32,702 30,393

Income tax expense 63,224 67,130

(ii)OtherComprehensiveIncome

2010 $’000

2009 $’000

Deferred Income Tax

nettax(gain)/lossonrevaluationofproperty,plantandequipment 153,975 124,368

nettax(gain)/lossonsuperannuationreserve–actuariallosses (13,209) (39,986)

nettax(gain)/lossoncashflowhedges (1,112) 4,319

Income tax on items taken directly to equity during the year 139,654 88,701

(iii)StatementofChangesinEquity

2010 $’000

2009 $’000

Deferred Income Tax

nettax(gain)/lossontransfersfromassetrevaluationsurplus (162) (292)

Income tax on items taken directly to equity during the year (162) (292)

(iv)Reconciliationofincometaxexpenseonpre-taxaccountingprofittoincometaxexpensereportedinprofitorlossTheprimafacieincometaxexpenseonpre-taxaccountingprofitfromoperationsreconcilestotheincometaxexpenseinprofitorlossasfollows:

2010 $’000

2010 $’000

2009 $’000

2009 $’000

profit/(loss)BeforeincomeTaxexpense 225,297 217,421

incometaxexpense/(benefit)calculatedatstatutoryincometaxrateof30% 67,589 65,226

Capitalallowances (2,219) (131)

expenditurenotallowedforincometaxpurposes 55 16

reversaloftemporarydifferencesrecognisedinpreviousyears (2,211) 2,769

adjustmentsinrespectofcurrentincometaxofpreviousyears 10 (750)

Income tax expense reported in profit or loss 63,224 67,130


(b) Deferred Income TaxdeferredincomeTaxat30Junerelatestothefollowing:

Recognised in Statement of Financial Position

Recognised in Profit or Loss

2010 $’000

2009 $’000

2010 $’000

2009 $’000

DeferredTaxAssets

provisions 21,274 21,839 565 (685)

superannuationliability 60,377 48,538 1,370 (321)

property,plantandequipmentandintangibles 1,578 2,018 440 (1,106)

other 1,424 1,263 48 (68)

Gross Deferred Tax Assets 84,653 73,658

DeferredTaxLiabilities

property,plantandequipmentandintangibles (845,148) (661,617) 29,719 32,248

superannuationsurplus – – – 5

other (2,808) (3,151) 560 320

Gross Deferred Tax Liabilities (847,956) (664,768)

Deferred Tax Charge 32,702 30,393

7. cash and cash equivalents

2010 $’000

2009 $’000

Cashonhand 13 13

deposits 1,131 20,848

Total 1,144 20,861

8. trade and other receivables

2010 $’000

2009 $’000

Current

Debtors

Tradedebtors 86,171 67,481

debtorsotherThanTrade 5,365 7,742

91,536 75,223

allowanceforimpairmentlossonTradeandotherreceivables – (50)

Total Debtors 91,536 75,173

Other

prescribedCustomerreceivables 39,541 34,822

other 100 101

Total Other 39,641 34,923

Total 131,177 110,096



9. inventories

2010 $’000

2009 $’000

Transmissionplantspares 28,647 27,451

other 171 183

Total 28,818 27,634

10. derivatives (assets)

2010 $’000

2009 $’000

Current

ForwardForeignCurrencyContracts 1,472 3,018

Non-Current

ForwardForeignCurrencyContracts 57 1,521

Total 1,529 4,539

11. other current assets

2010 $’000

2009 $’000

prepayments 1,912 1,774

insurancerecoveryasset 477 521

Total 2,389 2,295


12. property, plant and equipment

(a) Valuation and accumulated depreciation for each class of property, plant and equipment

2010 $’000

2009 $’000

PrescribedAssets

networkasset 9,746,991 8,042,105

accumulateddepreciation (5,090,029) (4,317,538)

Workinprogress 348,045 537,737

5,005,007 4,262,304

otherassets 104,267 91,953

accumulateddepreciation (59,052) (50,906)


62,058 58,860

Total Prescribed Assets 5,067,065 4,321,164

Non-regulatedAssets

systemplantandequipment 14,111 13,729

accumulateddepreciation (4,979) (4,366)

Workinprogress – 1,868

9,132 11,231

Communicationequipment 489 198

accumulateddepreciation (124) (67)

Workinprogress – 19

365 150

otherassets 1,269 1,260

accumulateddepreciation (220) (245)

Workinprogress 30 –

1,079 1,015

Total Non-regulated Assets 10,576 12,396

NegotiatedAssets

systemplantandequipment 61,479 29,215

accumulateddepreciation (3,373) (911)

Workinprogress – 31,311

Total Negotiated Assets 58,106 59,615

Total Property, Plant and Equipment 5,135,747 4,393,175



(b) Reconciliations of the carrying amounts of each class of Property, Plant and Equipment at the beginning and end of the financial year

property,plantandequipmentistreatedinaccordancewiththevariousexplanationssetoutinnote2.property,plantandequipmentarevaluedinaccordancewithnsWTreasurypolicyTpp07-1Valuation of Physical Non-Current Assets at Fair Value.

attheendofthereportingperiodnonon-currentassetsheldforsalewererecognisedinTransGrid’saccounts(2009–nil).

2010

Carrying Amount at Beginning

of year $’000

Movements $’000

Disposals $’000

Depreciation $’000

Revaluation Increments/

(Decrements) excluding

Impairments $’000

(Impairments)/Impairment

Reversals $’000

Carrying Amount

at End of year

$’000

PrescribedAssets:

networkasset 4,262,304 394,061 (3,921) (160,687) 148,229 365,021 5,005,007

otherassets 58,860 16,697 (2,583) (10,916) – – 62,058

Total Prescribed Assets 4,321,164 410,758 (6,504) (171,603) 148,229 365,021 5,067,065

Non-regulatedAssets:

systemplantandequipment 11,231 (1,486) – (613) – – 9,132

Communicationequipment 150 273 – (58) – – 365

otherassets 1,015 702 (449) (189) – – 1,079

Total Non-regulated Assets 12,396 (511) (449) (860) – – 10,576

NegotiatedAssets:

systemplantandequipment 59,615 953 – (2,462) – – 58,106

Total Negotiated Assets 59,615 953 – (2,462) – – 58,106

Total 4,393,175 411,200 (6,953) (174,925) 148,229 365,021 5,135,747

2009

Carrying Amount at Beginning

of year $’000

Movements $’000

Disposals $’000

Depreciation $’000

Revaluation Increments/

(Decrements) excluding

Impairments $’000

(Impairments)/Impairment

Reversals $’000

Carrying Amount

at End of year

$’000

PrescribedAssets:

networkasset 3,441,875 545,122 (1,427) (137,826) 1,333,560 (919,000) 4,262,304

otherassets 49,988 20,411 (2,576) (8,963) – – 58,860

Total Prescribed Assets 3,491,863 565,533 (4,003) (146,789) 1,333,560 (919,000) 4,321,164

Non-regulatedAssets:

systemplantandequipment 9,972 1,869 – (610) – – 11,231

Communicationequipment 140 19 – (9) – – 150

otherassets 982 651 (409) (209) – – 1,015

Total Non-regulated Assets 11,094 2,539 (409) (828) – – 12,396

NegotiatedAssets:

systemplantandequipment 28,959 31,311 – (655) – – 59,615

Total Negotiated Assets 28,959 31,311 – (655) – – 59,615

Total 3,531,916 599,383 (4,412) (148,272) 1,333,560 (919,000) 4,393,175


(c) Property, Plant and Equipment Impairment Impact

TransGrid’svaluationpolicyprovidesforafullanddetailedvaluationofassetstobeundertakenatfiveyearintervalsinconjunctionwithnsWTreasurypolicyTpp07-01Valuation of Physical Non-Current Assets at Fair Value.inaccordancewiththiscycle,anextensiverevaluationwasundertakenin2009whichdeterminedthecarryingamountstoberecordedinTransGrid’saccounts,priortoanypotentialimpairmentimpact.Therevaluationoutcomewastestedagainstaseparatevaluationprocesstodeterminetherecoverableamountofthecashgeneratingunit.TherecoverableamountwasdeterminedwiththeassistanceofindependentvaluersusingtheValueinusemethodologyandcomparedtothecarryingamount.asthecarryingamountwasdeterminedtobehigherthantherecoverableamountanimpairmentlosswasbroughttoaccountin2009.

on25november2009,theaustralianCompetitionTribunalgrantedTransGridanincreaseinitsprescribedrevenueforthe2009/10to2013/14regulatoryperiod.Thisincreasedrevenuesignificantlychangedthebasisonwhichanimpairmentlosswasrecognisedin2009.inaccordancewithaasB136 Impairment of Assets,thischangeinrevenuerequirestheimpairmenttobereviewedandasaresultanimpairmentreversalisrequired.anassetimpairmentreversalof$365mhasbeenbroughttoaccountasanincreasetotheassetrevaluationsurplusin2010withrespecttothefollowingclassesofassets.

2010 $’000

Asset Class

Transmissionlines–impairmentreversal 219,086

substationequipment–impairmentreversal 145,935

Total Impairment Impact 365,021

ThediscountrateusedintheestimateofTransGrid’svalueinusewas7.70%(2009–7.75%).

(d) Cost Model

As at 30 June 2010Cost

$’000

Accumulated Depreciation

$’000Net Book Value

$’000

PrescribedAssets:

networkasset 3,843,789 (955,226) 2,888,563

As at 30 June 2009Cost

$’000

Accumulated Depreciation

$’000Net Book Value

$’000

PrescribedAssets:

networkasset 3,252,298 (829,639) 2,422,659



13. intangibles

(a) Valuation and Accumulated Amortisation of Intangibles

2010 $’000

2009 $’000

easements 510,534 497,748


514,014 504,320

Computersoftware 51,911 45,494

accumulatedamortisation (39,960) (33,794)


31,747 30,315

Total Intangibles 545,761 534,635

(b) Reconciliations of the carrying amounts of intangibles at the beginning and end of the financial year

2010

Carrying Amount at

Beginning of Year

$’000Additions

$’000Disposals

$’000Amortisation

$’000Impairments

$’000Adjustments

$’000

Carrying Amount at

End of Year $’000

IntangibleAssets

easements 504,320 9,694 – – – – 514,014

Computersoftware 30,315 7,810 (4) (6,374) – – 31,747

Total 534,635 17,504 (4) (6,374) – – 545,761

2009

Carrying Amount at

Beginning of Year

$’000Additions

$’000Disposals

$’000Amortisation

$’000Impairments

$’000Adjustments*

$’000

Carrying Amount at

End of Year $’000

IntangibleAssets

easements 493,975 10,351 (6) – – – 504,320

Computersoftware 21,877 13,050 – (4,612) – – 30,315

airspacerights 7,215 – – – (4,315) (2,900) –

Total 523,067 23,401 (6) (4,612) (4,315) (2,900) 534,635

*The2009adjustmentsrelatetoairspacerightswhichhavebeenreclassifiedfromintangiblestoproperty,plantandequipmentarisingfromachangeinthenatureofthedevelopmentproposal.

14. other non-current assets

2010 $’000

2009 $’000

insurancerecoveryasset 5,793 4,008

Total 5,793 4,008


15. expenditure commitments

(a) Capital expenditure commitments Commitmentsarisingfromcontractsforexpenditureinrespectofproperty,plantandequipmentandintangibles,totheextentnotprovidedforintheaccounts:

2010 $’000

2009 $’000

payableWithinoneyear 233,306 255,694

payableonetoFiveyears 74,657 18,222

payablelaterthanFiveyears – 2,022

Total (including GST) 307,963 275,938

TotalexpenditureCommitmentsaboveincludeinputtaxcreditsof$28m(2009–$25.1m)thatareexpectedtoberecoverablefromtheaustralianTaxationoffice.

(b) Operating expenditure commitments Majorcommitmentsarisingfromcontractsforexpenditureassociatedwithnetworksupport,totheextentnotprovidedforintheaccounts:

2010 $’000

2009 $’000

payableWithinoneyear 220 20,900

payableonetoFiveyears – –

payablelaterthanFiveyears – –

Total (including GST) 220 20,900

TotalexpenditureCommitmentsaboveincludeinputtaxcreditsof$20K(2009–$1,900K)thatareexpectedtoberecoverablefromtheaustralianTaxationoffice.

16. trade and other payables

2010 $’000

2009 $’000

Current

Creditors 62,693 75,503

accruedFinanceCosts 66,148 54,358

other 5,225 1,033

134,066 130,894

Non-Current

Creditors – 2,973

Total 134,066 133,867



17. provisions

2010 $’000

2009 $’000

Current

dividend 135,058 120,233

employees’accruedBenefits 65,922 68,036

insurance 1,113 1,347

202,093 189,616

Non-Current

employees’accruedBenefits 4,319 4,027

insurance 9,483 7,902

superannuationliability 201,255 161,792

215,057 173,721

Total 417,150 363,337

(a) Dividends

2010 $’000

2009 $’000

openingBalance 120,233 105,910

dividendpayments (120,233) (105,910)

dividendfortheyear 135,058 120,233

Closing Balance 135,058 120,233

(b) Employees’ Accrued Benefits Thefollowingtabledetailsthemovementsintheemployees’accruedBenefitsprovisionduringtheyear:

2010 $’000

2009 $’000


Contributions 9,319 18,302

payments (11,141) (11,360)


Thefollowingtableshowsabreakdownoftheemployees’accruedBenefitsprovisionattheendofthereportingperiod:

2010 $’000

2009 $’000

annualleave 16,596 16,998

longserviceleave 53,645 55,065

Total 70,241 72,063

ThefollowingtableshowsabreakdownoftheCurrentportionoftheemployees’accruedBenefitsprovisionattheendofthereportingperiod,splitintotheperiodoftimethebenefitsareexpectedtobesettled:

2010 $’000

2009 $’000

Withinoneyear 13,390 15,581

laterthanoneyear 52,532 52,455

Total 65,922 68,036


(c) InsuranceinaccordancewithCondition6(a)(iii)ofthelicensegrantedundersection211oftheWorker’sCompensationact,1987,theprovisionfortotaloutstandingworkers’compensationclaimsliabilityincludingincurredbutnotreportedclaimsandadministrationis$10.6m(2009–$9.2m).duringthefinancialyear,$2.4m(2009–$1.3m)wascontributedtotheprovisionforWorkers’Compensation.

Theprovisionincludes$6.3mforaworkers’compensationclaimthathasbeenactivatedunderTransGrid’sreinsurancepolicy.reinsurancerecoverieshavecommencedandfuturerecoveriesforthisclaimareconsideredtobevirtuallycertain.TransGridhasrecognisedaninsurancerecoveryassetof$6.3mbasedonindependentactuarialadvice(refertonotes11and14).

Thefollowingtabledetailsthemovementsintheinsuranceprovisionduringtheyear:

Class Opening Balance $’000

Contributions $’000

Payments $’000

Closing Balance $’000

Workers’Compensation 9,249 2,377 (1,031) 10,595

Total 9,249 2,377 (1,031) 10,595

18. derivatives (liabilities)

2010 $’000

2009 $’000

Current

ForwardForeignCurrencyContracts 1,103 1,020

Non-Current

ForwardForeignCurrencyContracts 892 279

Total 1,995 1,299

19. other current liabilities

2010 $’000

2009 $’000

electricityCreditors – 10,391

other 3,064 2,897

Total 3,064 13,288

20. capital TransGridcommencedoperationson1February1995onseparationfrompacificpowerundertheelectricityTransmissionauthorityact,1994atwhichtimeaseriesofassetsandliabilitiesweretransferred.

TransGridwascorporatisedasastatutorystateownedCorporationon14december1998,withsharecapitaloftwo$1.00shares.TheseshareswereissuedtotheTreasurerandtheMinisterforFinance,asVotingshareholdersonbehalfofthensWGovernment,asat30June2010.The$2.00isreportedaspartofCapital.

2010 $’000

2009 $’000

Capital


Movements – –




21. reserves

Reserves

Asset Revaluation

Surplus $’000

Cash Flow Hedge

Reserve $’000

Total $’000

At 1 July 2008 994,589 (7,810) 986,779

revaluationofproperty,plant&equipment,excludingimpairments(note12(b)) 1,333,560 1,333,560

impairments(note12(b)) (919,000) (919,000)

Transferstoretainedearnings–revaluationsurplusforassetsdisposed(note22) (974) (974)

Taxeffectofproperty,plant&equipmentrevaluation,andimpairments(note6(a)(ii)) (124,368) (124,368)

TaxeffectofTransferstoretainedearnings(note6(a)(iii)) 292 292

revaluationofCashFlowhedges 24,282 24,282

realisedGains/(losses)onCashFlowhedgesremovedfromequityandincludedinassets (9,885) (9,885)

TaxeffectofCashFlowhedgeequityMovements(note6(a)(ii)) (4,319) (4,319)

At 30 June 2009 1,284,099 2,268 1,286,367

revaluationofproperty,plant&equipment,excludingimpairments(note12(b)) 148,229 148,229

impairments(note12(b)) 365,021 365,021

Transferstoretainedearnings–revaluationsurplusforassetsdisposed(note22) (539) (539)

Taxeffectofproperty,plant&equipmentrevaluation,andimpairments(note6(a)(ii)) (153,975) (153,975)

TaxeffectofTransferstoretainedearnings(note6(a)(iii)) 162 162

revaluationofCashFlowhedges (3,405) (3,405)

realisedGains/(losses)onCashFlowhedgesremovedfromequityandincludedinassets (301) (301)

TaxeffectofCashFlowhedgeequityMovements(note6(a)(ii)) 1,112 1,112

At 30 June 2010 1,642,997 (326) 1,642,671

AssetRevaluationSurplusThisreserveisusedtorecordincreasesinthefairvalueofproperty,plantandequipment,anddecreasestotheextentthatsuchdecreasesrelatetoanincreaseonthesameassetpreviouslyrecognisedinequity.assetsarerevaluedinaccordancewithnsWTreasurypolicyTpp07-1Valuation of Physical Non-Current Assets at Fair Value.

CashFlowHedgeReserveThisreserverecordstheportionofthegainorlossonahedginginstrumentinacashflowhedgethatisdeterminedtobeeffective.

22. retained earnings

2010 $’000

2009 $’000


netprofit/(loss)Beforedividend 162,073 150,291

superannuationactuarialGains/(losses) (44,034) (133,287)

incomeTaxBenefit/(expense)onsuperannuationactuarialGains/(losses) 13,209 39,986

dividend (135,058) (120,233)

Transfersfromassetrevaluationsurplus 539 974


23. dividend and contributions to shareholderadividendof$135.1m(2009–$120.2m)hasbeenrecognisedfordistributiontotheshareholder.Thedividendwillbepaidduringthecourseofthe2010/11financialyearandisrepresentedbythedividendprovision.


24. secured liabilitiesattheendofthereportingperiod,therewasnoloanliabilityofTransGridsecuredbyachargeoverTransGrid’sassets.

25. audit feesamountsreceived,ordueandreceivable,bytheauditorsfor:

2010 $’000

2009 $’000

auditingthefinancialstatements 172 168

26. compensation of Key management personnel

2010 $’000

2009 $’000

short-termemployeebenefits 2,356 2,387

post-employmentbenefits 791 845

otherlong-termbenefits 338 238

Total 3,485 3,470

Fees Paid to DirectorsFees,includingsuperannuationbenefitspaidtodirectors,otherthansalariespaidtofull-timedirectors,were$0.4m(2009–$0.5m).

27. contingent liabilities and contingent assets

(a) Contingent Liabilities

2010 $’000

2009 $’000

Contractliability 1,548 247

ClaimsforcompensationassociatedwithdelayedcontractualmilestonesarebeingpursuedagainstTransGridbyacontractor.TheamountdisclosedrepresentsTransGridmanagement’sbestestimateattheendofthereportingperiod.atthisstage,itisnotpossibleformanagementtoformanopiniononthelikelyoutcomeoftheclaims.

aclaimforcompensationisbeingpursuedagainstTransGridassociatedwithrolesandresponsibilitiesunderthenationalelectricityrules.TheamountdisclosedrepresentsTransGridmanagement’sbestestimateattheendofthereportingperiod.atthisstage,itisnotpossibleformanagementtoformanopiniononthelikelyoutcomeoftheclaim.

ClaimsforcompensationassociatedwithdelayedcontractualmilestonesanddiscrepanciesinthevalueofworksarebeingpursuedagainstTransGridbyacontractor.atthisstage,itisnotpossibleformanagementtoformanopinionaboutthelikelyoutcomeorreliablyestimatethevalueofclaims.

Thereareasmallnumberofnon-contractualclaimsthathavebeenmadeagainstTransGridwhichhavebeeneitherdenied,areconsideredtobeoflowriskoratastagewhereareliablefinancialestimatecannotbemade.

(b) Contingent AssetsTransGridhasinitiatedlegalproceedingstorecoverdamagesof$15.7millionassociatedwithitscontractor.atthisstage,itisnotpossibleformanagementtoformanopiniononthelikelyoutcomeoftheproceedings.

28. fair compensation trust accountinaccordancewiththelandacquisition(JustTermsCompensation)act,TransGridmaintainsaTrustaccount.Theaccountbalanceattheendofthereportingperiodwas$38K(2009–$1,886K).



29. leases TransGridhasnofinanceleasecommitments.Thefollowingleasecommitmentsdisclosedareinthenatureofnon-cancellableoperatingleases.

LesseeTransGridhasoneoperatingleasecommitmentunderacommercialleasewhichcommencedon9May2007.Theleasetermis6yearswithanoptiontoextendforanother4years.leasepaymentsareincreasedannuallyby4%.Theleaseexpenditurerecognisedinprofitorlossforthefinancialyear,GsT-exclusive,was$1.9m(2009–$1.9m).

MinimumrentalspayableGsT-inclusive,asat30Juneareasfollows:

2010 $’000

2009 $’000

Withinoneyear 2,143 2,044

laterthanoneyearbutnotlaterthan5years 4,217 6,244

laterthan5years – –

Total (including GST) 6,360 8,288

30. notes to statement of cash flows

(a) Reconciliation of Cash CashasattheendofthefinancialyearasshowninthestatementofCashFlowsisreconciledtotherelateditemsinthestatementofFinancialpositionasfollows:

2010 $’000

2009 $’000

CashandCashequivalents 1,144 20,861

(b) Dividends and Taxesnodividendswerereceived.dividendsandtaxequivalentspaidduringtheyearamountedto$170.8m(2009–$148.3m).

(c) Acquisitions and Disposals of Entitiesnoentitieswereacquiredordisposedofduringtheyear.


(d) Reconciliation of Profit after Income Tax Equivalent Expense to Net Cash Provided by Operating Activities

2010 $’000

2009 $’000

Profit/(Loss) after Income Tax Equivalent Expense 162,073 150,291

Add/(Less): Items Classified as Financing/Investing Activities

loss/(Gain)ondisposalofproperty,plantandequipment 478 2,150

Add/(Less) Non-Cash Items

depreciationandamortisation 181,299 152,884

amortisationof(premium)/discountonloans 504 (149)

impairmentadjustment – 4,315

Capitalisedinterest (21,723) (19,370)

CapitalContributions (53) (18,546)

Net Cash Provided by Operating Activities Before Change in Assets and Liabilities 322,578 271,575

Net Changes in Assets and Liabilities During the Financial Year

(increase)/decreaseinTradedebtors&otherreceivables (21,081) (39,206)

(increase)/decreaseininventories (1,184) (1,935)

(increase)/decreaseinotherCurrentassets (94) (1,066)

(increase)/decreaseinothernon-Currentassets (1,785) (405)

increase/(decrease)inTradeCreditors&otherpayables (3,525) 8,462

increase/(decrease)inprovisions (475) 7,241

increase/(decrease)inincomeTax&deferredTaxes 12,704 24,706

increase/(decrease)inotherCurrentliabilities (14,795) (25,598)

Net Cash Provided by Operating Activities 292,343 243,774

(e) Financing ArrangementsTransGridhasarangeoffacilitiesinplacetomeetliquidityrequirements.

31. financial instruments disclosure

(a) Credit Risk

ExposuretocreditriskThecarryingamountofTransGrid’sfinancialassetsrepresentsthemaximumcreditexposure.TransGrid’smaximumexposuretocreditriskattheendofthereportingperiodwas:

Carrying Amount Note2010

$’0002009 $’000

Tradeandotherreceivables 131,177 110,146

Cashandcashequivalents 7 1,144 20,861

Forwardexchangecontractsusedforhedging(assets) 10 1,529 4,539

133,850 135,546



ImpairmentlossesTheagingofTransGrid’stradeandotherreceivablesattheendofthereportingperiodwas:

Gross Receivables 2010

$’000

Impairment Losses 2010

$’000

Gross Receivables 2009

$’000

Impairment Losses 2009 $’000

notpastdue 129,096 – 107,135 –

pastdue1-30days 1,416 – 596 –

pastdue31-60days 44 – 38 –

Morethan60days 621 – 2,377 50

131,177 – 110,146 50

TheabovetabledefinestheGrossreceivablesexpectedtobereceivedbyTransGrid.

asat30June2010,allreceivabletransactionswereassessedtodeterminetheirfairvalueandthatcollectabilitywashighlyprobable.Therewasnoimpairmentfor2010($49,500in2009).

Themovementintheallowanceforimpairmentlossontradeandotherreceivablesaccountduringtheyearwasasfollows:

2010 $’000

2009 $’000

Balanceat1July 50 –

reversalofpreviousallowance (50) –

impairmentlossrecognised – 50

Balance at 30 June – 50

Basedonhistoricdefaultrates,TransGridbelievesthatnoimpairmentallowanceisnecessaryinrespectoftradereceivableseithernotpastdueorpastdue.Thetradereceivablesbalance,whichincludestheamountsowedbyTransGrid’sthreemostsignificantcustomers,relatestocustomersthathaveagoodcredithistorywithTransGrid.

(b) Liquidity and Funding Risk Thefollowingarethecontractualmaturitiesoffinancialliabilities,includingestimatedinterestpayments:

30 June 2010

Carrying Amount

$’000

Contractual Cash flows

$’000

Less than 1 year $’000

1 year to 5 years

$’000

More than 5 years

$’000

Non-derivativefinancialliabilities

Borrowings 2,194,330 3,208,646 412,261 1,043,211 1,753,174

Tradeandotherpayables 134,066 134,066 134,066 – –

otherfinancialliabilities – – – – –

Derivativefinancialliabilities

Forwardexchangecontractsusedforhedging:Grossoutflow 1,995 32,621 9,151 23,470 –

Total 2,330,391 3,375,333 555,478 1,066,681 1,753,174

30 June 2009

Carrying Amount

$’000

Contractual Cash flows

$’000

Less than 1 year $’000

1 year to 5 years

$’000

More than 5 years

$’000

Non-derivativefinancialliabilities

Borrowings 1,988,928 2,616,580 485,892 1,064,758 1,065,930

Tradeandotherpayables 133,867 133,867 130,894 2,973 –

otherfinancialliabilities 10,391 10,391 10,391 – –

Derivativefinancialliabilities

Forwardexchangecontractsusedforhedging:Grossoutflow 1,299 9,695 7,479 2,216 –

Total 2,134,485 2,770,533 634,656 1,069,947 1,065,930


(c) Foreign Exchange Risk

CashFlowHedgesThecashflowsarisingfromcashflowhedgesarenotexpectedtoaffectprofitorloss.

CashFlowHedgeEquityMovements

2010

Carrying Amount at beginning of period (1/7/09)

$’000

Amount recognised in equity during

the period $’000

Amount removed from equity

and included in profit or loss

$’000

Amount removed from equity and

included in assets $’000

Carrying Amount at end of period

(30/6/10) $’000

equity 3,240 (3,405) – (301) (466)

2009

Carrying Amount at

beginning of period (1/7/08)

$’000

Amount recognised

in equity during the period

$’000


and included in profit or loss

$’000


and included in assets

$’000

Carrying Amount at

end of period (30/6/09)

$’000

equity (11,156) 24,282 – (9,886) 3,240

Sensitivity analysisTransGridemployscashflowhedgestoremovecurrencyriskassociatedwithpurchaseofoverseasequipment.

a10percentstrengtheningandweakeningoftheaustraliandollaragainstthefollowingcurrencieswouldhaveincreased/(decreased)equitybytheamountsshownbelow.Thisanalysisassumesthatallothervariables,inparticularinterestrates,remainconstant.Theanalysisisperformedonthesamebasisfor2009.

asthesearealleffectivecashflowhedges,therearenoprofitorlossimpacts.

Impact on Equity in AUD

$’000 +10%

$’000 -10%

30June2010

usd (313) 383

ChF (163) 199

eur (2,916) 3,563

Jpy (1,019) 1,245

seK (50) 61

30June2009

usd (288) 352

Cad (6) 7

eur (513) 627

Jpy (3,943) 4,819


(d) Interest Rate Risk interestrateriskistheriskofamaterialchangeinearningsandultimatelydividendpaymentsasaconsequenceofadversemovementsininterestrates.ThepolicyobjectiveistoensurethatTransGridisnotexposedtointerestratemovementswhichcouldadverselyimpactonitsabilitytomeetitsfinancialobligationsastheyfalldue.

Cash flow sensitivity analysis for variable rate instrumentsachangeof100basispointsininterestratesattheendofthereportingperiodwouldhaveincreased/(decreased)profitorlossbytheamountsshownbelow.Thisanalysisassumesthatallothervariables,inparticularforeigncurrencyrates,remainconstant.Theanalysisisperformedonthesamebasisfor2009.

Impact on Profit or Loss

$’000 -100bp

$’000 +100bp

30June2010

prescribedCustomerreceivables (395) 395

electricityCreditors – –

WestpacBankaccounts (11) 11

nsWTreasuryCorporationComeandGoFacility 303 (303)

Cash flow sensitivity (net) (103) 103

30June2009

prescribedCustomerreceivables (348) 348

electricityCreditors 104 (104)

WestpacBankaccounts (88) 88

Cash flow sensitivity (net) (332) 332

(e) Net Fair Value of Financial Assets and Liabilities Thenetfairvalueoffinancialassetsandliabilities,withtheexceptionofborrowings,isreflectedbytheircarryingamountsinthestatementofFinancialposition,inaccordancewithaasB132andaasB7.

ThenetfairvalueofborrowingsisbasedonmarketvaluederivedbyBarringtonTreasuryservicesusingmarketinterestratescurrentattheendofthereportingperiod.

Thecarryingamountsandnetfairvaluesoffinancialassetsandliabilitiesattheendofthereportingperiodare:

2010 2009

Carrying Amount

$’000Fair Value

$’000

Carrying Amount

$’000Fair Value

$’000

FinancialAssets

Cashandcashequivalents 1,144 1,144 20,861 20,861

Tradeandotherreceivables 131,177 131,177 110,096 110,096

derivatives 1,529 1,529 4,539 4,539

Total Financial Assets 133,850 133,850 135,496 135,496

FinancialLiabilities

Tradeandotherpayables 134,066 134,066 133,867 133,867

Borrowings 2,194,330 2,277,759 1,988,928 2,000,231

otherfinancialliabilities – – 10,391 10,391

derivatives 1,995 1,995 1,299 1,299

Total Financial Liabilities 2,330,391 2,413,820 2,134,485 2,145,788

inaccordancewiththerequirementsofaasB7Financial Instruments: Disclosures,allofTransGrid’sderivativefinancialinstrumentsfallwithinthelevel2categoryofthefairvaluehierarchy.Therewerenotransfersbetweencategoriesduringtheyear.

end of audited financial statements


TransGridannualreporT2010>statement by members of the board 121

statement by members of the board

122 independent auditors report > TransGridannualreporT2010

independent auditor’s report

TransGridannualreporT2010>independent auditors report 123

independent auditor’s report continued

124 index > TransGridannualreporT2010

index

aaboriginalandTorresstraitislander 45employmentactionplan

apprentices 40

assetBase 29

bBoardofdirectors 12,79

cCapitalinvestment($Million) 26

CapitalWorksprojects 72

ChairmanandManagingdirector’sreview 10

Chairmanenvironmentalaward 68

Chairmansafetyaward 65

Charter 78

ClimateChangestrategy 68

Commercialreport 89

CommunityConsultation 58

Communityinformationsessions 30

ConsultantFees 84

Consumerresponse 84

Contents 1

CorporateGovernance 78

Costofannualreport insidefrontcover

CreditCardusage 84

CustomerConnections 30

ddemandGraphs 35

demandManagementinitiatives 36

disabilityactionplan 46

eeeoachievements(2009/2010) 46

eeodisclosures 44

eeoplannedachievements(2010/2011) 47

electronicservicedelivery 59

employeeBenefits 43

environmentalincidentnotification 30

executiveleadershipTeam 12,82

fFinancialreport 90

Freedomofinformation 85

gGlossary 126

Graduateprogram 41

Guaranteeofservice 85

iindependentauditor’sreport 122

index 123

industrialrelationspoliciesandpractices 43

informationTechnology 51

insurance 85

intranet 53

internetContactdetails Backpage

JJudicialdecisions 84

llanddisposal 70

leadershipdevelopmentprograms 40

legislativeChange 84

lettertoshareholders insideFrontCover

lost-TimeinjuryFrequencyrate–Contractors 26

lost-TimeinjuryFrequencyrate–employees 26,62

TransGridannualreporT2010>index 125

index continued

mMaintenanceexpenditure 29

Managingdirectorsscholarship 41

Mediastatistics 31

MeetingsoftheBoard 81

Minister 78

Multi-Culturalpoliciesandservicesprogram(Mpsp) 45

nnationalMarketreviews 37

networkavailability(%) 28

networkreliability(systemMinuteslost) 28

notestotheFinancialstatements 94

ooccupationalhealthandsafetyperformance 62

operationalexcellence 49

ourCommunity 54

ourdirection 9

ournetwork 6

overseasVisits 87

pperformanceManagement 42

performancesummary:executive 82

pricing 50

privacy 87

promotion 59

qQualifications:executive 84

rremuneration:Boardofdirectors 82

remuneration:executive 83

reportingexemptions 86

returnonassets(%) 22

returnonequity(%) 22

revenue($Million) 20

riskManagement 85

sschoolssponsorshipprogram 58

shareholders 78

sponsorships 57

staffnumbers:Comparisonofstaffnumbers 25

staffnumbers:staffbyCategory 24

staffnumbers:numbersofexecutiveofficers 25

staffnumbers:numbersbyGender 25

statementbyMembersoftheBoard 121

statementofaffairs 84

statementofCashFlows 93

statementofChangesinequity 92

statementofComprehensiveincome 91

tTransGridataGlance 4

TransGridContactdetails BackCover

wWastereductionandpurchasingpoliCy(Wrapp) 69

Womenprograms 51

Workforcediversitystrategy 49

Workforceprofile 24

126 glossary > TransGridannualreporT2010

Term Explanation/Comments

aer(“theregulator”) Theaustralianenergyregulator

aeMC TheaustralianenergyMarketCommission

aeMo TheaustralianenergyMarketoperator

annualplanningreport(apr200X) adocumentthatsetsoutissuesandprovidesinformationtothemarketthatisrelevanttotransmissionplanninginnewsouthWales.Thisdocumentistheapr2010.

annualplanningreview TheannualplanningprocesscoveringelectricitytransmissionnetworksinnewsouthWales.

“assets” TransGrid’s‘polesandwires’,allthesubstationsandelectricitytransmissionlinesthatformournetwork.

CBd CentralBusinessdistrict

Constraint aninabilityofanelectricitytransmissionordistributionsystemtosupplyarequiredamountofelectricitytoarequiredstandard.

Customers TransGrid’scustomersarethosedirectlyconnectedtoournetwork.Theyareeitherdistributionnetworkserviceproviders,directlyconnectedgenerators,largeindustrialcustomers,customersconnectedthroughinter-regionalconnectionsorpotentialnewcustomers.

dM demandmanagement.asetofinitiativesthatisputinplaceatthepointofend-usetoreducethetotaland/orpeakconsumptionofelectricity.

dnsp(distributor) distributionnetworkserviceprovider.abodythatowns,controlsoroperatesadistributionsystemintheneM.

easement aneasementoverapropertygivesTransGridtherighttoconstructandmaintainourassets,whileownershipofthepropertyremainswiththeoriginallandowner.

eia environmentalimpactassessment

GWh aunitofenergyconsumptionequalto1,000MWh.

interconnection Thepointsonanelectricitytransmissionnetworkthatcrossjurisdictional/stateboundaries.

iparT independentpricingandregulatoryTribunalofnsW

kV operatingvoltageofelectricitytransmissionequipment.onekilovoltisequaltoonethousandvolts.

lidar lightdetectionandranging

load Theamountofelectricalpowerthatisdrawnfromthenetwork.

localGeneration agenerationorcogenerationfacilitythatislocatedontheloadsideofatransmissionconstraint.

glossary

TransGridannualreporT2010>glossary 127

lTiFr losttimeinjuryfrequencyrate

MWh aunitofenergyconsumption.oneMegawatthouristheamountofenergyconsumedinonehouratarateofoneMegawatt.

nationalelectricitylaw CommonlawsacrossthestateswhichcomprisetheneM,whichmakethenerenforceable.

nationalelectricityrules(neror“therules”)

TherulesthatgoverntheoperationoftheneM.

neM ThenationalelectricityMarket

networkaugmentation anexpansionoftheexistingelectricitytransmissionnetwork.

non-networksolutions alternativestonetworkaugmentationwhichaddressapotentialshortageinelectricitysupplyinaregion.

outage anoutageiswhenpartofthenetworklosespower.Thiscanbeeitherplanned(i.e.whenworkneedstobedoneontheline)orunplanned.

reF reviewofenvironmentalFactors

regulatoryTest atestpromulgatedbytheaerthatisrequiredbythenertobeappliedwhendeterminingtherelativeeconomicmeritsofoptionsforthereliefoftransmissionconstraints.

rFp requestforproposal

riT-T regulatoryinvestmentTest–Transmission

sVC staticVarCompensator.adevicethatprovidesforcontrolofreactivepower.

switchbay asitecontaininghighvoltageswitchgear,usedtoconnectordisconnectasectionofthenetwork.

theMinister ThenewsouthWalesMinisterforenergy.

Tnsp Transmissionnetworkserviceprovider.abodythatowns,controlsandoperatesanelectricitytransmissionsystemintheneM.

Transmissionline ahigh-voltagepowerlinerunningat500kV,330kVor132kV.

glossary continued

128 environmental production notes > TransGridannualreporT2010

environmental production notes

printingTheprinteroftheannualreportholdsanFsCChainofCustody(CoC)Certificationensuringthehigheststandardsofsustainablepracticehavebeenusedthroughouttheprintingprocess.

environmentallyfriendlysoy-basedinksandlow-alcoholproductionmethodshavebeenused.

cover and editorial pagesThecoverandeditorialsectionpagesareprintedonMonzarecycled,whichcontains55%recycledfibre(25%postconsumerand30%preconsumer)andFsCcertifiedpulp,ensuringallvirginpulpisderivedfromwell-managedforests,andismanufacturedbyaniso14001certifiedmill.

ThepaperisFsCMixedsourceCertified.

financial pagesThefinancialpagesareprintedonTudorrp,whichisFsCrecycledCertifiedandaustralianMade.itcontains100%recycledfibreandnochlorinebleachingoccursintherecyclingprocess.Themilllisiso14001certified.salesofTudiorrpsupportlandcareaustralia.

TransGrid’scommitmenttotheenvironmentisreflectedinthesustainableprintingpracticesandpaperusedintheproductionofthisannualreport.

TransGrid ConTaCT deTailsSydney201 Elizabeth Street PO Box A1000 Sydney South NSW 1235

Telephone +61 2 9284 3000 Facsimile +61 2 9284 3456

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Metropolitan Telephone +61 2 9620 0777

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TamworthTelephone +61 2 6765 1666

WaggaTelephone +61 2 6922 0222

YassTelephone +61 2 6226 9666

TransGrid ABN: 19 622 755 774

This report is available on CD and on TransGrid’s website.

www.transgrid.com.au

aCknowledGemenTs Published by TransGrid Corporate Communications Group

Designed and produced by Equation Corporate Design Pty Ltd

Photographs by:>> Gavin Jowitt>> Karl Hofman>> Neil Billington


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