53 l BRADKEN LIMITED ANNUAL REPORT 2014
Notes to the consolidated financial statements
30 June 2014
(continued)
5 Segment information (continued)
(c) Other segment information
(i) Segment revenue
2014
2013
$'000
$'000
Total segment revenue
1,290,646
1,522,586
Intersegment eliminations
(155,406)
(209,447)
Total external segment revenue
1,135,240
1,313,139
Rental income
405
400
Royalty income
251
506
Sale of scrap
380
925
Commission income
19
145
Insurance recovery
1,795
-
Other
1,271
2,073
Total revenue from continuing operations (note 6 )
1,139,361
1,317,188
Segment revenues are allocated based on the country in which the customer is located.
Australia
548,971
605,717
US
250,824
326,148
Other countries
335,445
381,274
Revenue from external customers
1,135,240
1,313,139
(ii) Gross margin
2014
2013
$'000
$'000
Gross margin
378,107
429,585
Fixed manufacturing overheads and other cost of sale adjustments
(150,435)
(152,000)
Other revenue
4,121
4,049
Other income
14,621
14,824
Selling and technical expenses
(57,136)
(60,726)
Administration expenses
(89,331)
(107,531)
Finance costs
(30,662)
(31,501)
Restructuring and asset impairment costs
(41,161)
(2,558)
Share of net profit/(loss) of associates accounted for using the equity method
(85)
9,847
Profit before income tax
28,039
103,989
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 within "Other countries"
relates to Canada, and various European, African, Asian, and South American countries.
Page 53
Bradken Limited
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
(CONTINUED)
1...,80,81,82,83,84,85,86,87,88,89 91,92,93,94,95,96,97,98,99,100,...136