REG - BAE SYSTEMS PLC - Doc re. Annual Financial Report <Origin Href="QuoteRef">BAES.L</Origin> - Part 3

BAE SystemsAnnouncement

18/03/2015 12:51

- Part 3: For the preceding part double click  ID:nRSR7932Hb 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          techniques, to monitor and mitigate this risk.                                                        
 10. PEOPLEThe Group's strategy is dependent on its ability to recruit and retain people with appropriate talent and skills. All employees are required to act in accordance with the Group's policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
 Description- Delivery of the Group's strategy and business plan is dependent on its ability to compete to recruit and retain people with appropriate talent and skills, including those with innovative technological capabilities.- With constraints on defence spending in its UK and US markets, the Group's business plan is targeting an increasing level of business in international export markets. It is important that the Group recruits and retains management with the necessary international skills and experience in the relevant jurisdictions.- It is important that all employees act in accordance with the requirements of the Group's policies, including the Code of Conduct, at all times.                                                                           Impact- The loss of key employees or inability to attract the appropriate people on a timely basis, in particular to deliver the Group's strategy in international markets, could adversely impact its ability to meet the business plan and, accordingly, have a negative impact on the Group's future results and financial condition.                                                                                                                                                                    Mitigation- The Group recognises that its employees are key to delivering its strategy and business   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          plan, and focuses on developing the existing workforce and hiring talented people to meet current and 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          future requirements.- The Group has well-established graduate recruitment and apprenticeship          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          programmes and, in order to maximise the contribution that its workforce can make to the performance  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          of the business, has an effective through-career capability development programme.- In order to seek  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          to maximise its talent pool, the Group is committed to creating a diverse and inclusive environment   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          for its employees.- BAE Systems continues to embed its ethics programme globally, driving the right   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          behaviours by supporting employees in making ethical decisions and embedding responsible business     
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          practices.                                                                                            
 
 
 Changes in principal risks                                                                                                                                                                                                                                                         
 As a result of its assessment of the Group's principal risks referred to on page 48, the Board has determined that the following risks, identified as principal risks in the 2013 Annual Report, while still risks for the Group, are no longer considered to be principal risks:  
 1.                                                                                                                                                                                                                                                                                 THE GROUP IS DEPENDENT UPON COMPONENT AVAILABILITY, SUBCONTRACTOR PERFORMANCE AND KEY SUPPLIERSIn the improving global economic environment, the Group has not identified any specific, material risks in relation to its strategically important subcontractors 
                                                                                                                                                                                                                                                                                    or suppliers.                                                                                                                                                                                                                                                   
 2.                                                                                                                                                                                                                                                                                 THE ANTICIPATED BENEFITS OF ACQUISITIONS MAY NOT BE ACHIEVEDThe Group has not engaged in acquisitions other than bolt-on acquisitions in the last three years.                                                                                                  
 3.                                                                                                                                                                                                                                                                                 THE GROUP IS INVOLVED IN CONSORTIA, JOINT VENTURES AND EQUITY HOLDINGS WHERE IT DOES NOT HAVE CONTROLWhilst the Group has such joint ventures, the principal ones being Eurofighter, MBDA and Air Astana (as referred to on page 125), its relationships with   
                                                                                                                                                                                                                                                                                    the joint venture partners are such that the risk of disagreement leading to failure to meet the strategic objectives of those joint ventures is not currently regarded as a principal risk to the Group.                                                       
                                                                                                                                                                                                                                                                                    
 Additional risks and uncertainties currently unknown to the Group, or which the Group currently deems immaterial, may also have an adverse effect on the business or financial condition of the Group.                                                                             
 
 
Page references used above refer to the Annual Report 2014 that can be viewed
on the Company's website. 
 
SEGMENTAL PERFORMANCE 
 
ELECTRONIC SYSTEMS 
 
Electronic Systems comprises the US and UK-based electronics activities,
including electronic warfare systems and electro-optical sensors, military and
commercial digital engine and flight controls, next-generation military
communications systems and data links, persistent surveillance capabilities,
and hybrid electric drive systems. 
 
Electronic Systems has advanced technology, high-integrity electronics
capabilities with a large portfolio of annually-funded contracts and
significant Group-funded research and development investment. 
 
Electronic Combat combines the Electronic Protection, Electronic Warfare and
Electronic Attack product lines, and provides a depth of capability in
integrated electromagnetic systems for airborne applications. 
 
Survivability & Targeting includes threat warning and infrared countermeasures
systems for aircraft, handheld targeting and thermal devices, precision
guidance systems, electro-optic sensor products and enhanced situational
awareness systems. 
 
Communic