Annual Report PDF - Black Sun Plc

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Directors’ Report: Business ReviewKey Performance Indicators (KPIs) continuedCustomer FocusThe Group’s priority is to understand its customers’ needs and expectations, and deliveron its commitments throughout the life of its products and services.Link to 2010Executive Committeetop ten objectives p123. Focus on our commitments to our customers throughschedule performanceLink to executive directors’2010 annual incentive p107Other objectivesLink to principal risksp58Defence spending, government customers, global market, contractaward timingSCHEDULE ADHEREnCECUSTOMER SATISFACTIOnPerformanceThe Group targets an aggregated improvementin schedule adherence metrics relating tomilestones across its major contracts.Schedule adherence metrics can only be fullyinterpreted and understood on a contract-bycontractbasis and, therefore, aggregated datais not presented.The Group targets an aggregated year-on-yearimprovement in customer satisfaction acrossits major contracts.Customer satisfaction metrics can only be fullyinterpreted and understood on a contract-bycontractbasis and, therefore, aggregated datais not presented.Definition3 Target achieved➤ Part of the executive directors’2010 annual incentiveSchedule adherence measures the timing ofachievement of key milestones. It shows howwell the Group is performing against key contractcommitments to its customers.3 Target achieved➤ Part of the executive directors’2010 annual incentiveCustomer satisfaction surveys are used to collectcustomer opinions on key customer-fundedprojects. This provides an opportunity forcustomers to share information on perceivedperformance levels, and identify areas ofstrength and weakness.CommentThe data for the schedule adherence metricincluded 91 (2009 88) contracts reported inContract Reviews prepared under LifecycleManagement (LCM). Performance was strong,achieving the year’s target.The data for the customer satisfaction metricincluded 90 (2009 85) contracts reported inContract Reviews prepared under LCM. Theyear’s target was achieved. Plans to improveperformance on those contracts reporting adeterioration in customer satisfaction arebeing implemented.p32For more information on LCM, which provides a structured approach to managing contractualcommitments and investments throughout project and product lifecycles18 www.baesystems.com
Programme ExecutionThe Group’s performance is dependent on thesuccessful execution of projects. It is important thatthe Group wins and contracts for high quality newprogrammes, and delivers on its projects within tighttolerances of quality, time and cost performance.Link to 2010Executive Committeetop ten objectives p12Link to executivedirectors’ 2010 annualincentive p107Link to principal risksp58PROGRAMME MARGIn vARIATIOnThe Group targets an aggregated year-on-yearimprovement in programme margin across itsmajor contracts.Programme margin variation metrics can only befully interpreted and understood on a contractby-contractbasis and, therefore, aggregated datais not presented.3 Target achieved2. Further enhanceprogramme executionthrough cost performanceOther objectivesLarge contracts, fixed-pricecontracts, componentavailability, subcontractorperformance and key suppliers➤ Part of the executive directors’2010 annual incentiveProgramme margin variation measures outturnprojections of and movements in margin ofkey customer-funded projects. It provides anindicator of the Group's ability to effectivelymanage major programmes.Responsible Behaviour 1High standards of business conduct are essential to the Group’s mission to deliversustainable growth.Link to 2010Executive Committeetop ten objectives p12Link to executive directors’2010 annual incentive p107Link to principal risksp58RESPOnSIBLE BUSInESS COnDUCTAwAREnESS TRAInInG 2The Group’s target is to train all employees duringthe period May 2010 to May 2011.During the period to 31 December 2010, more than50% of employees were trained.Objective ongoingThe global Code of Conduct was launched inJanuary 2009. It defines the principles andstandards of responsible business conductthe Group expects of employees wherever theywork globally. Following the completion of theroll-out of the global Code of Conduct in early2010, managers throughout the Group wereasked to lead face-to-face training on responsiblebusiness conduct to raise further the ethicalawareness of its employees. Accordingly, thisyear, the global Code of Conduct KPI has beenreplaced by the Responsible Business ConductAwareness Training 2 KPI.4. Progress towards recognised leadership positionin Responsible BehaviourBusiness conduct, safetyLaws and regulationsSAFETy1,0008006004002000557 5540607789085620938910Lost Work Day Case Rate (per 100,000 employees)The Group targeted a 20% improvement in theLost work Day Case Rate compared with 2009.3 Target achieved➤ Part of the executive directors’2010 annual incentiveThe number of incidents resulting in days lost toinjuries per 100,000 employees is monitored,and actions taken to minimise the risk to theGroup’s employees and its operations, and drivecontinual performance improvement.Financial statements Governance Segmental performanceGroup performanceStrategyOverviewThe data for the programme margin variationmetric included 105 (2009 105) contractsreported in Contract Reviews prepared underLCM, representing over 70% of the Group’s orderbook. The target was achieved despite theimpact of the termination of the Trinidad andTobago ship contract.Training was completed by employees in theElectronics, Intelligence & Support and Land &Armaments businesses. All other businesses areon track to complete training by the end ofMay 2011.An update on performance to 31 May 2011 will beprovided in next year's Annual Report.In 2010, the overall Group improvementwas 31%.p45For more information on the Group’s corporate responsibility performancep66–72For more information on the safetyperformance of the operating groups1 In the Annual Report 2009, a KPI was presented relating to a 20% targeted improvement in the Group’s OperationalAssurance Statement (OAS) scores below the minimum standard. In 2010, the Executive Committee’s objective relatingto OAS was to agree action plans in respect of all scores below minimum standards. Whilst this objective has been achieved,it is not presented as a Responsible Behaviour KPI this year. Further information on OAS is provided on page 87.2 The Responsible Business Conduct Awareness Training objective is not a 2010 Executive Committee objective, but theExecutive Committee has committed to complete this for all employees by 31 May 2011.BAE Systems Annual Report 2010 19
Page 1 and 2: Annual Report 2010Total Performance
Page 3 and 4: BAE Systems at a glanceBAE Systems
Page 5 and 6: Contents1. Overview2010 performance
Page 7 and 8: p16p36p18p45For more information on
Page 9 and 10: …across multiplehome markets…BA
Page 11 and 12: made in embedding these principles
Page 13 and 14: esponding effectively to customers
Page 15 and 16: total PerformanceTotal Performance
Page 17 and 18: THE EXECUTIVE COMMITTEEThe Executiv
Page 19 and 20: The home markets in which the Group
Page 21: UNDERLYING EBITA 1,3 (£M)2,5002,00
Page 25 and 26: SAUDI ARABIAp26No.1in-country defen
Page 27 and 28: OutlookAfter exceptional growth in
Page 29 and 30: OutlookIn the air domain, the SDSR
Page 31 and 32: OutlookRegional tensions combined w
Page 33 and 34: OutlookThe Australian government ha
Page 35 and 36: OutlookThe Indian government has em
Page 37 and 38: Subcontractors and other suppliersS
Page 39 and 40: Research and Development (R&D)The G
Page 41 and 42: Income statement - continuing opera
Page 43 and 44: Cash flowReconciliation of cash inf
Page 45 and 46: Balance sheetsummaRy balance sheet2
Page 47 and 48: The Group’s interest rate managem
Page 49 and 50: Directors’ Report: Business Revie
Page 51 and 52: EMPLOYEE ENQUIRIESTO ETHICS HELPLIN
Page 53 and 54: assessed by our Business Developmen
Page 55 and 56: Diversity and inclusionGoalWe are w
Page 57 and 58: CommunityGoalOur goal is to support
Page 59 and 60: the Business Development Adviser Po
Page 61 and 62: As with any system of internal cont
Page 63 and 64: GovErnmEnT cuSTomErSThe Group’s l
Page 65 and 66: lawS anD rEGulaTionSThe Group is su
Page 67 and 68: conSorTia anD JoinT vEnTurESThe Gro
Page 69 and 70: Land & Armaments Programmes & Suppo
Page 71 and 72: The business continues to invest in
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BAE Systems is on schedule to deliv
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not matched against the UK governme
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All 200 Tactica land vehicles have
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Directors’ ReportGovernance5. Gov
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7. Michael Hartnall9. Roberto Quart
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Board, regardless of gender. Compan
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Board Performance - 2010 oBjectives
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oles and resPonsiBilitiesThe role o
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from the Nominations Committee if t
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Risk management and internal contro
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Audit Committee reportMembersMichae
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Policy on non-audit services Provid
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Risk managementThe Committee review
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Non-executive succession planningAs
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GovernanceThe members of the Commit
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Non-Executive Directors’ FeesComm
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2010 remuneration reviewThe 2010 re
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Whilst the Plan is primarily aimed
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stRuCtuRe of individual exeCutive d
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Performance in 2010The structure of
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PeRfoRmanCe Condition - PsP tsRThe
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estrict - scheme benefits to the va
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Non-executive directors’ appointm
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table b: shaRe oPtions and long-teR
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table b: shaRe oPtions and long-teR
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table d: Post-RetiRement benefitsAc
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Rights and obligations of the Speci
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Statement of directors’ responsib
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Independent auditor’s report to t
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Consolidated statement of comprehen
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Consolidated cash flow statementfor
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1. Accounting policies continuedpri
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1. Accounting policies continuedAn
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1. Accounting policies continuedRev
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3. Segmental analysisThe Group repo
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3. Segmental analysis continuedAnal
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4. Operating costs continuedFees pa
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7. Employees and directorsThe weekl
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8. Tax continuedTax recognised in o
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8. Tax continuedFuture changes in t
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11. Intangible assetsGoodwill£mPro
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11. Intangible assets continuedThe
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13. Investment property£mCostAt 1
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14. Equity accounted investments co
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16. Trade and other receivables con
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19. Loans and overdrafts continuedT
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21. Retirement benefit obligations
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24. Share capital and other reserve
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25. Share-based paymentsDetails of
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25. Share-based payments continuedC
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27. Net (debt)/cash (as defined by
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29. Acquisition of subsidiaries con
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30. Financial risk management conti
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30. Financial risk management conti
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Company balance sheetas at 31 Decem
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1. Accounting policies continuedIn
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7. CreditorsDue within one yearAmou
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12. ReservesSharepremiumaccount£mO
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Movement in net (debt)/cash (as def
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ShareGiftThe Orr Mackintosh Foundat
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