TITULARIDAD DEL DERECHO A LA SALUD EN MATERIA DE TRASPLANTES

TITULARIDAD DEL DERECHO A LA SALUD Y TRASPLANTE DE ORGANOS

6. Tecnologías en salud necesarias durante el trasplante

4.5. TITULARIDAD DEL DERECHO A LA SALUD EN MATERIA DE TRASPLANTES

We have audited the financial statements of BAE Systems plc for the year ended 31 December 2013 which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Group and parent company balance sheets, the Consolidated Cash Flow Statement, the Consolidated Statement of Changes in Equity and related notes. In our opinion:

– the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as at

31 December 2013 and of the Group’s profit for the year then ended;

– the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union;

– the parent company financial statements have been properly prepared in accordance with UK accounting standards; and – the financial statements have been prepared in accordance with

the requirements of the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. 2 Our assessment of risks of material misstatement

In arriving at our audit opinion above on the financial statements the risks of material misstatement that had the greatest effect on our audit were as follows:

Risk The procedures to address these audit risks included, amongst others, those listed below

Recognition of revenues and profits on long-term contracts

Refer to page 75 (Audit Committee report) and page 130 (accounting policy and financial disclosures) A significant proportion of the Group’s revenues and profits are

derived from long-term contracts.

These contracts include complex technical and commercial risks and often specify performance milestones to be achieved throughout the contract period, which can last many years, resulting in estimates and assumptions being made to: – forecast the margin on each contract after making appropriate

allowances for technical and commercial risks related to performance milestones yet to be achieved; and

– assess the proportion of revenue to recognise, in particular with regards to the value of claims for contract variations.

The risk of misstatement is that the accounting for the Group’s significant contracts does not accurately reflect the status of the relevant contract.

The directors have detailed procedures and processes, called Lifecycle Management (LCM), in place to manage the commercial, technical and financial aspects of the Group’s long-term contracts. The LCM process includes the regular preparation of a Contract Status Report (CSR) which includes key accounting information for the relevant contract.

We considered the design and tested the effective operation of key LCM controls. For significant contracts, determined on the basis of technical and commercial complexity and profitability of the contract, we also:

– obtained an understanding of the status of the contract through discussions with contract project teams and directors at a Group and operating business unit level, attendance at project teams’ contract review meetings, and examining externally available evidence, such as customer correspondence; and

– challenged the key estimates and assumptions applied in determining financial status of these contracts by: – corroborating the consistency of changes in the updated

contract financial information summarised in the year-end CSRs to other financial information received;

– considering how key uncertainties are reflected in the contracts’ status taking into account externally available information;

– assessing whether allowances for risks and uncertainties are consistent with past experience considering the maturity of the contracts and the extent of technical or commercial risk identified; and

– using our cumulative knowledge of contract issues to assess the appropriateness of the contract positions reflected in the financial statements at the year end.

We performed the above procedures, amongst others, in respect of the Group’s significant contracts which included, but are not limited to:

– Saudi Typhoon aircraft;

– Radford Army Ammunition Plant; and – Queen Elizabeth Class aircraft carriers.

We also considered the adequacy of the Group’s segmental and operating cost disclosures in respect of changes in the status of contracts which had a material impact on the Group’s financial performance for the year.

FIN AN C IA L S TA TE ME N TS FINANCIAL STATEMENTS

BAE SyStEmS AnnuAl RepoRt 2013 189

Notes to the Company accounts continued

11. Reserves

Share premium account £m Statutory reserve £m Other reserves £m Profit and loss account £m At 31 December 2012 1,249 202 90 2,330

Profit for the year – – – 758

Dividends paid – – – (638)

Share-based payments – – – 41

Purchase of own shares – – 1 (212)

Movements in hedging reserve – – (3) –

At 31 December 2013 1,249 202 88 2,279

Statutory reserve

Under Section 4 of the British Aerospace Act 1980, this reserve may only be applied in paying up unissued shares of the Company to be allotted to members of the Company as fully paid bonus shares.

Other reserves

Other reserves for the Company comprise: capital reserve £24m (2012 £24m); hedging reserve £4m debit (2012 £1m); capital redemption reserve £1m (2012 £nil) and non-distributable reserve arising from property disposals to other Group undertakings £67m (2012 £67m). The non-distributable reserve arising from property disposals to other Group undertakings relates to the revaluation surplus realised by the Company on properties which were sold to other Group companies as part of operational reorganisations in prior years. Amounts within this reserve are transferred to the profit and loss account as distributable when the related properties are disposed of outside the Group, or written down following impairment.

Profit and loss account

The Company’s profit for the financial year was £758m (2012 £797m). The non-distributable portion of the profit and loss account is £196m (2012 £196m).

Own shares held

Own shares held, including treasury shares and shares held by BAE Systems ESOP Trust, are recognised as a deduction from retained earnings.

BAE Systems ESOP Trust

The Group has an Employee Share Option Plan (ESOP) discretionary trust to administer the share plans and to acquire Company shares, using funds loaned by the Group, to meet commitments to Group employees. A dividend waiver was in operation for shares within the ESOP Trust, other than those owned beneficially by the participants, for the dividends paid in June and December 2013.

At 31 December 2013, the ESOP held 1,451,631 (2012 2,633,198) ordinary shares of 2.5p each with a market value of £6m

(2012 £9m). The shares held by the ESOP are recorded at cost and deducted from retained earnings until such time as the shares vest unconditionally to employees.

Dividend waivers were in operation for the dividends paid in June and December 2013 over shares in the Group All-Employee Free Shares Plan Trust other than those shares owned beneficially by participants. A dividend waiver was also in operation for the dividends paid in June and December 2013 over shares within the Company’s Share Incentive Plan Trust other than those shares owned beneficially by the participants.

12. Other information

Employees

The total number of employees of the Company at 31 December 2013 was 831 (2012 801). Total staff costs, excluding charges for share-based payments, were £102m (2012 £129m).

Directors’ emoluments

Under Schedule 5 of the Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008 (Schedule 5), total directors' emoluments, excluding Company pension contributions, were £6,289,295 (2012 £6,542,000); these amounts are calculated on a different basis to emoluments in the Annual remuneration report which are calculated under Schedule 8 of the Large and

Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (Schedule 8 (2013)). These emoluments were paid for their services on behalf of the BAE Systems Group. No emoluments related specifically to their work for the Company. Under Schedule 5, the aggregate gains made by directors from the exercise of share options in 2013 as at the date of exercise was £1,909,962 (2012 £370,881) and the net aggregate value of assets received by directors in 2013 from Long-Term Incentive Plans as calculated at the date of vesting was £129,722 (2012 £869,116); these amounts are calculated on a different basis from the valuation of share plan benefits under Schedule 8 (2013) in the Annual remuneration report.

Company audit fee

Fees payable to the Company’s auditor for the audit of the Company’s annual accounts totalled £1,621,000 (2012 £1,570,000). Related party transactions

Details of related party transactions are detailed in note 30 to the Group accounts.

The Company also has a related party relationship with its directors and key management personnel, and pension schemes.

Independent auditor’s report to the members of BAE Systems plc

Opinions and conclusions arising from our audit

1 Our opinion on the financial statements is unmodified We have audited the financial statements of BAE Systems plc for the year ended 31 December 2013 which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Group and parent company balance sheets, the Consolidated Cash Flow Statement, the Consolidated Statement of Changes in Equity and related notes. In our opinion: