Annual Report PDF - Black Sun Plc

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Directors’ Report: Business ReviewKey home markets in detail continuedAustraliaMarket contextAustralia’s 2009 defence budgetwas $24bn (£15bn) and, as its largestdefence contractor, BAE Systems iswell placed to provide the AustralianDefence Force (ADF) and securitycommunity with a full range of productsand services.Our positionBAE Systems is the largest defence companyin Australia. It supplies total capability acrossmission systems, air defence, land combatsystems, maintenance, logistics support, andintelligence, surveillance and reconnaissance.In January 2011, the Group acquired stratsec.net,an information security company, adding to theGroup’s capabilities and footprint in the growingmarket segment of Cyber & Intelligence.Readiness & SustainmentBAE Systems and Australian Army personnelinspect an upgraded M113AS4 ArmouredPersonnel Carrier at Bandiana, Victoria.28 www.baesystems.com
OutlookThe Australian government has detailed an expansiveacquisition programme for platforms and systems over thenext decade, and has committed to average real growth in thedefence budget of 3% annually to 2017-18, with further growthbeyond in order to meet the defence and security objectivesoutlined in its 2009 Defence White Paper. An importantcontributor to this growth will be savings and efficiencies inAustralia’s military sustainment expenditure emerging from theten-year Strategic Reform Programme, which will be re-investedin the acquisition programme. This is expected to generate newopportunities for service offerings in Readiness & Sustainment.Opportunities in actionIn January 2010, BAE Systems began modifyingthe first of the Royal Australian Navy’s ANZAC Classfrigates to be upgraded under the Anti-Ship MissileDefence project. The upgrade will significantlyimprove the anti-ship self defence capabilities ofthe ANZAC Class by integrating leading-edge CEAPhased Array Radar, Vampir New GenerationInfrared Search & Track, Sharpeye NavigationRadar Systems and an upgraded CombatManagement System which will include animproved Operations Room layout. The platformintegration of these systems requires significantstructural modifications, and BAE Systems hasdeveloped innovative design solutions to minimisethe impact on the ship’s weight and stability.In October 2010, the first ship departed from theBAE Systems production facility, and entered itstest and trials phase, with delivery back to thecustomer anticipated in mid-2011.This upgrade contract is a key example ofBAE Systems’ strong position in the Servicessegment of the Australian maritime market,a key focus for future growth.OpportunitiesBAE Systems expects strong opportunities for Readiness& Sustainment to the ADF in both the air and maritime domains.Cyber & Intelligence also represents an important focus for theAustralian government.BAE Systems is well placed to offer a range of solutions that aresourced both from indigenous capability within Australia andcapability sourced from elsewhere in the Group. For example,the business has recently experienced success in the Cyber& Intelligence market segment through the transfer of Detica’sUK capability into BAE Systems Australia.Financial statements Governance Segmental performanceGroup performanceStrategyOverviewBAE Systems Annual Report 2010 29
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 and 28: OutlookAfter exceptional growth in
Page 29 and 30: OutlookIn the air domain, the SDSR
Page 31: OutlookRegional tensions combined w
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
Page 77 and 78: All 200 Tactica land vehicles have
Page 79 and 80: Directors’ ReportGovernance5. Gov
Page 81 and 82: 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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