Page 9 - Bradken Annual Report 2013_Page flip

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A number of very significant achievements occurred
for Bradken during the last 12 months. The
construction of the new A$87 million greenfield
foundry in Xuzhou, China culminated in an official
opening on the 18th April 2013. The new Xuzhou
foundry reinforces our commitment to develop
world-class centres of excellence for manufacturing
with facilities capable of producing high quality
castings using state-of-the-art equipment and with
globally competitive productivity.
The footprint of the main building is impressive
by any standard, being the size of eight football
fields under roof. Design of the foundry layout
and process flow was a consolidated effort
with Bradken’s specialist staff from all over the
world participating throughout the construction,
installation and commissioning phases.
March 2013 saw the opening of Bradken’s new
Global Corporate Centre in Newcastle, New
South Wales, Australia. The building was designed
and purpose-built to promote a collaborative work
environment and encourage innovative thinking.
Immediately after completion, the building was
sold to a consortium and leased back to Bradken
on a rolling 15 year leasing arrangement.
The Company did not meet its Total Shareholder
Return (TSR) hurdle for the 2012/13 financial year,
which resulted in no vesting of long-term incentive
(LTI) rights for key personnel for the period. The LTI
Plan was reviewed for continuing effectiveness by
the Directors and it was agreed to proceed with a
rights offer to key personnel again this year.
In 2012, Norcast commenced proceedings
against Bradken in the Federal Court of Australia.
The findings of the Court published in March 2013
have been the subject of a significant amount
of interest and speculation in legal circles. The
Company was very surprised and disappointed
with the findings of the Court and have lodged a
Notice of Appeal seeking orders to reverse the
damages and other findings made against the
Bradken parties to the proceedings.
The Non-Executive Directors who are not
individual parties to the proceedings have
obtained independent legal advice concerning the
proceedings and are of the view that the Chairman
and Managing Director were acting in good faith in
relation to their conduct.
A one-off pre-tax payment of $24.6 million has
been lodged with the Court, which subject to the
success of the appeal will be written back to profit.
I stress that the Board of Directors and Executive
Management Team have been very careful not to
impact the day-to-day operations of the Company
with this distraction and we look forward to a
successful appeal and being able to move forward
as the matter reaches a conclusion.
Strategically, we remain committed to our present
business model, which has served the Company
very well and we will continue to avail ourselves
of opportunities for organic and acquisition growth
globally, remaining mindful of our commitment
to ensure that we produce the best possible
outcomes for our shareholders.
At the 2012 Annual General Meeting held in
Brisbane in October, we farewelled our colleague
Vince O’Rourke, who had been a Non-Executive
Director of Bradken since it became a public
company in 2004. Vince was an enthusiastic
advocate for the career development of many of
our young graduates and as the Chairman of our
Human Resources Committee, was a driver of
new safety initiatives. Our newest Non-Executive
Director, Eileen Doyle replaced Vince as the new
Chairman of the Human Resources Committee
and is making her own mark on this important and
responsible position in the Group.
The Board of Directors would like to thank Brian
Hodges and all of our employees for the work and
effort they have expended to achieve a financial
result commensurate with the challenges we have
experienced over the last 12 months in a volatile
market. We also appreciate the continuing support
of our shareholders.
Nick Greiner