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Notes to the Consolidated Financial Statements
30 June 2013
52 BRADKEN LIMITED ANNUAL REPORT 2013
Notes to the consolidated financial statements
30 June 2013
(continued)
4 Segment information (continued)
(c) Other segment information
(i) Segment revenue
2013
2012
$'000
$'000
Total segment revenue
1,522,586
1,648,148
Intersegment eliminations
(209,447)
(196,892)
Interest revenue
254
369
Other revenue
-
1,218
Rental income
400
516
Royalty income
506
415
Sale of scrap
925
868
Commission income
145
62
Other
2,073
1,377
Total revenue from continuing operations (note 5 )
1,317,442
1,456,081
Segment revenues are allocated based on the country in which the customer is located.
Australia
605,717
733,420
US
326,148
401,910
Other countries
381,274
315,926
Revenue from external customers
1,313,139
1,451,256
(ii) Gross margin
2013
2012
$'000
$'000
Gross margin
429,585
431,798
Fixed manufacturing overheads and other cost of sale adjustments
(152,000)
(134,558)
Other reveune
14,570
2,017
Other income
4,303
4,825
Selling and technical expenses
(60,726)
(57,803)
Administration expenses
(110,089)
(76,681)
Finance costs
(31,501)
(33,785)
Share of net profit of associates accounted for using the equity method
9,847
2,826
Profit before income tax
103,989
138,639
The Managing Director assesses the performance of each operating segment based on a measure of gross margin. Gross
margin is considered the most relevant measure of individual segment results as manufacturing plants all make product for the
various segments and transfer product at cost. This measurement basis excludes the allocation of manufacturing variances and
overheads from individual manufacturing plants as any allocation would be arbitrarily based.
A reconciliation of standard gross margin to operating profit before income tax is provided as follows:
Sales between segments under the same tax jurisdiction are made at variable cost and are eliminated on consolidation. Sales
between segments under different tax jurisdictions are carried out at arms length and are eliminated on consolidation.
The revenue from external parties reported to the Managing Director is measured in a manner consistent with that in the income
statement. Segment revenue reconciles to total revenue from continuing operations as follows:
The Group's divisions are managed on a global basis and operate in five main geographical areas, Australia, the home country of
the parent entity, the UK, the US, Canada, China and Other countries. The majority of revenue classified as "Other" relates to
Canada, and various European, African, Asian, and South American countries.
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Bradken Limited