Annual Report PDF - Black Sun Plc

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Directors’ Report: Business ReviewKey home markets in detail continuedUnited KingdomMarket contextThe 2010 National SecurityStrategy (NSS), and StrategicDefence and Security Review(SDSR) have defined the areasfor future UK spend in securityand defence.Our positionThe Group has a key role in supporting the UKarmed forces, and the nation’s security andintelligence capabilities. Together, the NSS andSDSR have confirmed that the Group’s strategy forthe UK market is focused on the appropriate areas.In defence, the business has a secure backlog ofcontracted business across air, maritime and landplatforms, including significant Readiness &Sustainment contracts. In Cyber & Intelligence,the business continues to play a formative rolesupporting customers in the growing intelligence,civil government and commercial markets.Type 45 programmeThe Type 45 build programme is more than halfcomplete, with delivery of the third of class,Diamond, sea trials for fourth of class, Dragon, andthe launch of the final ship, Duncan, during 2010.24 www.baesystems.com
OutlookIn the air domain, the SDSR committed the UK to moderniseand upgrade the capabilities of Typhoon, and to procure F-35for operation from the Queen Elizabeth class aircraft carriers.In addition, the UK and France are expected to develop ideasfor closer co-operation on Unmanned Aircraft Systems. Thesefactors will contribute to the future sustainment of the Group’scombat air capability.In the maritime domain, the Group’s surface warship design,build and support capability is sustained by a 15-year Termsof Business Agreement (ToBA). The SDSR’s commitment tothe construction of two Queen Elizabeth class aircraft carriersunderpins that capability in the near and medium term, as doesthe Type 26 Global Combat Ship programme in the longer term.The future of the Group’s submarine business is secured by thegovernment’s commitment to the procurement of seven Astuteclass submarines, and the retention and planned renewal of asubmarine-launched continuous nuclear deterrent.The NSS outlined and prioritised the “different and more complexrange of threats from a myriad of sources” that the UK faces, andidentified an additional £650m of investment to be made in thenext four years in the strengthening of national cyber securityas part of that response. BAE Systems is well placed to accessgrowth in the emerging security market through its investmentsin Detica and elsewhere.Opportunities in actionDuring 2010, the Group launched the DeticaTreidan TM cyber threat detection service and isworking with a number of clients including majorprivate sector organisations to detect and stopsophisticated intrusions into their IT systems.Building on the Group’s capabilities in data captureand large scale data analytics, the Detica Treidan TMservice hunts out patterns of unusual behaviour inorder to detect unauthorised intruders who havegained access to protected systems using cyberattacks, and to stop these incursions before theattacker has had the opportunity to identify andcompromise sensitive systems and information.Findings from these highly sensitive operationsconfirm many of the messages in the SDSR aboutthe threat to the UK’s security and economicprosperity. The Group continues to invest in a widerange of new technologies and approaches in thisarea for which it forecasts growing demand as bothpublic and private sector organisations becomeincreasingly aware of the nature and scale of thethreat to their operations.OpportunitiesAcross all domains, the Group has been working with theMinistry of Defence to reduce costs and deliver militarycapability more effectively. Broad service offerings, includingReadiness & Sustainment solutions, will be a key contributor todelivering additional savings and efficiencies. The Group is wellpositioned to expand these service offerings in support of theUK customer.The Group’s investment in Cyber & Intelligence positions itfor growth in this expanding market segment. The Group iscommitted to delivering world class technologies and servicesto assist the government and commercial sectors to detectand defend against cyber attacks, prevent fraud and moneylaundering, and ensure secure delivery of services.Financial statements Governance Segmental performanceGroup performanceStrategyOverviewBAE Systems Annual Report 2010 25
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 and 22: UNDERLYING EBITA 1,3 (£M)2,5002,00
Page 23 and 24: Programme ExecutionThe Group’s pe
Page 25 and 26: SAUDI ARABIAp26No.1in-country defen
Page 27: OutlookAfter exceptional growth in
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
Page 73 and 74: BAE Systems is on schedule to deliv
Page 75 and 76: not matched against the UK governme
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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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