Bradken Limited Annual Report 2015 - page 88

53 l BRADKEN LIMITED ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
30 June 2015
(continued)
7 Significant items (continued)
(a) Pala legal case
(b) Runcorn fire
(c) Manufacturing reorganisation
(d) Impairment of property, plant & equipment
(e) Impairment of goodwill and intangible assets
(f) Due dilligence, acquisition and legal costs
As announced in the 2014 financial year, and reaffirmed on 5 December 2014, the Group has continued to review its operational
footprint. During the period the Group incurred $50.5m of redundancy and other restructuring costs and had a remaining
provision balance of $20.2m as at 30 June 2015.
Of the $55.8m fixed asset impairment expense recognised during the period, $23.1m related to the facilities subject to closure
already announced.
During the period there was structural deterioration in the market conditions in which the Scunthorpe (United Kingdom),
Edmonton (Canada) and Launceston (Australia) facilities operate. As a result, the Group has assessed the recoverable amount
of the facility’s property, plant and equipment and recognised impairment expense of $11.1m relating to Scunthorpe, $13.1m
relating to Edmonton and $4.4m relating to Launceston.
During the year Bradken incurred $1.2m of due diligence costs associated with acqusitions that did not proceed and further legal
costs of $0.7m. During the prior year Bradken incurred $5.3m of due dilligence costs associated with acquisitions that did not
proceed and further legal costs of $1.2m.
During the prior period Bradken reached a commercial in confidence settlement with Norcast S.ar.L regarding the 2011
acquisition of Norcast. An amount of $30.4m (before tax) had been expensed during the financial year ending 30 June 2013
pursuant to the legal case relating to the Federal Court of Australia judgment sum, interest and associated costs. As a
consequence of the Federal Court of Australia setting aside its initial judgement and the settlement reached with Norcast S.ar.L,
a gain of $13.3m (before tax) was recorded in the prior period.
In October 2014, a fire destroyed part of the core shop at the Runcorn facility. This resulted in the $256k impairment of plant and
equipment. The company is continuing to work with its insurer to assess the final damage. For the period ended 30 June 2015,
the company was entitled to net insurance proceeds, after deductibles, of $2.2m.
During the period, a total impairment of $167.2m was recorded on goodwill and intangibles broken down as a $141.4m
impairment expense against goodwill, $16.7m impairment expense against Licences and Other and a $9.1m impairment
expense against customer lists. Refer to note 16 for a breakdown of these balances by CGU and a description of the
circumstances that lead to the impairment charge.
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