Basler
Annual Report 2011

Plain-text annual report

BLUESCOPE STEEL LIMITED ANNUAL REPORT 2010/2011 CONTENTS Chairman’s Message Annual Results ASX Media Release Investor Presentation Directors’ Report Concise Financial Report Auditor’s Report Shareholder Information CHAIRMAN’S MESSAGE FROM GRAHAM KRAEHE Dear Fellow Shareholder, At our recent full year results, I announced the Board’s approval of a major restructure of the Company’s Australian operations to reposition it for improved profit and growth. The restructure includes shutting down the No 6 Blast Furnace at Port Kembla and closing the Western Port Hot Strip Mill to better align Australian steelmaking production with Australian domestic demand. The restructure will deliver a material improvement in future earnings and cash flow. It reduces export losses, earnings volatility through the economic cycle and long-term capital investment requirements at Port Kembla. The EBIT improvement in the Australian steel manufacturing business is expected to deliver around $225 million1 per annum. This decision was taken against the background that the Australian steel industry has experienced an unprecedented combination of economic challenges: – a record high Australian dollar – low steel prices – record high raw material prices – low Australian steel demand The rate of structural change in the steel industry has been massive and rapid. Your Board came to the view that the economic conditions for export steelmaking from Australia are unlikely to improve in the foreseeable future and continued exposure to the export market was unsustainable. However, the blast furnace closure will be implemented in a way which enables it to be re-opened if conditions change. BlueScope remains committed to making steel in Australia and the Company can now prioritise resources and efforts to better service our domestic customers. OUR PEOPLE Regrettably, the restructure will see a total workforce reduction of approximately 1,000 employees. BlueScope prides itself on the calibre of its employees and it is heartening to see that more than 20 Australian and international companies promptly registered interest in employing highly skilled BlueScope employees in other industrial and resources projects following our announcement. The Company has established job centres at Western Port and Port Kembla to assist employees and is examining alternatives including job substitution, flexible work patterns and retraining. SAFETY Safety is the number one priority at BlueScope Steel. Tragically, an operator at our Butler Shanghai operation in China was killed in March. Our condolences go to his family, friends and work colleagues. We must learn from this terrible incident and stay focussed every day on safety. Overall, the Company’s Lost Time Injury Frequency Rate (LTIFR) lowered to 0.6. The Medically Treated Injury Frequency Rate was also reduced to a record 4.4. REMUNERATION The Board takes its responsibility to remunerate fairly and responsibly very seriously. I have noted recent ill-informed public comments on aspects of the Company’s executive remuneration. I encourage all shareholders to review the Company’s remuneration report (commencing on page 11 of the Directors’ Report) which provides a full explanation of the Company’s remuneration strategy and individual management remuneration. 1 management estimate on a pro forma FY2011 basis Page 1 FY2011 ACHIEVEMENTS A significant risk to BlueScope Steel was the Federal Government’s proposed carbon tax. Over the last four years, Management and Board have worked diligently on this issue. The Company worked to ensure the Government understood that the vast majority of the steel industry’s carbon emissions are derived from the chemical process in steel-making, that no viable alternative exists and that our global competitors all use this same process. In July, BlueScope concluded its carbon tax negotiations with the Federal Government, and secured a sectoral deal for steel with the $300 million Steel Transformation Plan (STP) for the first four years of the tax. After that time, there will be an independent review to monitor the carbon tax position of our international competitors. Our aim was to minimise the impact of the carbon tax on BlueScope’s business and we are confident this will be achieved through the STP. One of BlueScope’s core growth strategies has been to expand its participation in the global building and construction markets. During the year, the Company restructured its buildings business and appointed Pat Finan, formerly President BlueScope Buildings North America, as Executive General Manager, Global Building and Construction Markets and a member of the Executive Leadership Team. His main task is to promote the Company’s world class pre-engineered building (PEB) capability and assist country Presidents in growing the building and construction markets. Early trends are encouraging. BOARD RENEWAL The BlueScope Board has a great breadth of experience but the regeneration of the Board’s expertise is a necessary and ongoing process. In March, we were pleased to announce the appointment of Ms Penny Bingham-Hall as a non-executive director. She brings to the Board extensive experience in the building and construction and mining industries in Australia and Asia. ANNUAL REPORT FORMAT This year the Company has changed the format and timing of the Annual Report, to reduce costs and enable earlier distribution to shareholders. The Report also now includes a copy of the Investor Presentation lodged with ASX. This presentation contains additional detailed information on Company performance. This initiative means all shareholders will receive more current information. THE FUTURE Our decision to restructure the Australian business was carefully considered and is the best decision to return the Australian business to profit and growth. There are many opportunities to continue to grow our Asian businesses and build on recent excellent performance. Following the successful transformation of the Coated & Building Products Asia division in FY2010, the division contributed a record underlying EBIT of $108 million last financial year, in constant currency terms, with impressive contributions from our businesses in China and Malaysia in particular. We will also continue to focus on growing our presence in building and construction markets, particularly in PEBs where we are a world leader. Our metallic coating and painting technologies provide a strong competitive advantage and BlueScope is recognised for its world-class brands of ZINCALUME® and COLORBOND® steel products. Through a collaborative partnership with Nippon Steel, we are creating the next generation of coated products for our customers, initially in Australia and subsequently across our global footprint. Finally, I’d like to thank my fellow directors for their support and contribution, and the senior management and BlueScope Steel employees for their hard work during a challenging year in very tough trading conditions. GRAHAM KRAEHE, AO CHAIRMAN Page 2 ANNUAL RESULTS ASX MEDIA RELEASE ASX Media Release Release Time: Date: Immediate 22 August 2011 BlueScope Steel Limited ABN 16 000 011 058 Level 11, 120 Collins St Melbourne VIC 3000 AUSTRALIA Telephone +61 3 9666 4000 Facsimile +61 3 9666 4111 www.bluescopesteel.com BLUESCOPE ANNOUNCES MAJOR RESTRUCTURE TO AUSTRALIAN OPERATIONS AND REINFORCES COMMITMENT TO STEEL PRODUCTION IN AUSTRALIA BlueScope Steel Chairman, Mr Graham Kraehe, today announced the Board has approved a major restructure of Australian operations to reposition the Company for improved profit and growth. “We are experiencing significant economic challenges and structural change in the global steel industry. The restructure, which includes shutting down the No.6 Blast Furnace at Port Kembla and closing the Western Port Hot Strip Mill, will better align Australian steelmaking production with Australian domestic demand and see BlueScope exit the Australian export business. “The restructure announced today will produce a more viable and sustainable Australian steel business and allow us to focus clearly on domestic markets and international growth opportunities. It will also lower fixed costs at our major facilities at Port Kembla (NSW) and Western Port (Victoria). “We are committed to making steel in Australia and can now prioritise our resources and efforts towards even better service for our domestic customers,” Mr Kraehe said. BlueScope Managing Director and CEO, Mr Paul O’Malley said: “There is a compelling business case underpinning this decision. It will deliver a material improvement in future earnings and cashflow. It materially reduces export losses, reduces earnings volatility through the economic cycle and reduces long-term capital investment requirements at Port Kembla. “For the Coated and Industrial Products Australia (CIPA) reporting segment, if the restructure had been in place for the full year, the Earnings Before Interest and Tax (EBIT) improvement would have been around $225 million (management estimate on a pro forma FY2011 basis). “It’s the right decision for the long-term viability of our business. The Company has the support of its lenders to undertake the restructure. We will now enter a consultation process with our employees and affected stakeholders, including customers, unions, contractors, suppliers, governments and local communities,” said Mr O’Malley. Economic Conditions Drive Restructure Mr O’Malley said the Company is experiencing an unprecedented combination of economic challenges in the form of a record high Australian dollar, low steel prices and high raw material costs and these challenges are compounded by low domestic steel demand in the wake of the GFC. “This is evidenced by the $487 million underlying EBIT loss experienced in FY2011 on our export sales. The economic conditions for export steelmaking from Australia appear unlikely to become favourable in the foreseeable future and our continued exposure to this market is clearly unsustainable. Our decision is a direct response to the economic factors affecting our business and is not related to the Federal Government’s proposed carbon tax.” 1 of 4 When fully implemented, the restructure plan will result in: • Shut-down of No.6 Blast Furnace at Port Kembla, with production reduced to 2.6 mtpa. The shut down process will be completed in a manner that facilitates re-start of the furnace in the future should that be desirable. • Closure of No. 4 cokemaking battery, No. 3 BOS steelmaking furnace and No. 1 slab caster. The PKSW hot strip and cold rolling mills, metal coating and paint lines will continue to operate. • Closure of the Western Port Hot Strip Mill and mothballing of a metal coating line (MCL5). Commitment to Australia and to Growth “The restructure will better position us for profit and growth in Australia and allow us to grow our presence in building construction markets, in particular Pre-Engineered Buildings, where we are a world leader. We will also focus on growth opportunities, particularly in Asia. “The Company has a strong competitive advantage in coated steel with its world class ZINCALUME® and COLORBOND® steel products. In collaboration with Nippon Steel Corporation, we will develop the next generation of coated products for our customers. We expect these products to be launched initially in Australia and then rolled out across the Company’s global footprint,” said Mr O’Malley. Consultation Before Implementation Mr O’Malley said: “In managing the transition out of exports we will take a careful and considered approach. Regrettably, these changes will see a workforce reduction of around 1,000 people, with approximately 800 at Port Kembla and 200 at Western Port. There will be flow-on impacts for contractors and suppliers. “The actual size of the workforce reduction will be the subject of discussions with employees and unions and we will examine alternatives, including flexible work patterns, retraining, voluntary redundancies and job substitution. There will be programs and local job centres to assist employees to transition into the next phase of their careers either within or external to BlueScope, or to early retirement,” Mr O’Malley said. The FY2011 Result – Performance In Line with Previous Guidance The Company reported a Net Loss After Tax (NLAT) of A$1,054 million for FY2011 (underlying NLAT of A$118 million, in line with previous guidance). The reported NLAT includes the previously announced one-off impairment cost of A$922 million, mainly relating to write-downs of the carrying value of two businesses; Coated and Industrial Products Australia and BlueScope Distribution. The Board has decided there will be no final ordinary dividend. This follows the 2 cent per share interim dividend (fully franked) announced in February 2011. Reflecting on the FY2011 Company performance, Mr O’Malley said, “The underlying result is in line with expectations and results from the tough economic challenges and structural changes our business faces. Asia “Following the successful transformation of our Coated and Building Products Asia division in FY2010, the segment delivered another excellent result, contributing $108 million in underlying EBIT, a record result in constant currency. Highlights included another impressive contribution from our businesses in China and Malaysia. New Zealand “New Zealand and Pacific Products again provided a profitable contribution, with $82 million underlying EBIT in FY2011, and over recent years has been a consistent performer. This business continues to benefit strongly from the sale of iron sands from Taharoa. 2 of 4 North America “Our North American businesses have delivered an overall positive contribution of $52 million in underlying EBIT in FY2011. This result was largely driven by an excellent second half performance by the North Star joint venture, leading to a $72 million underlying EBIT result for Hot Rolled Products North America, which more than offset the $20 million underlying EBIT loss for Coated and Building Products North America. More broadly, the US building business continues to remain subdued, given the state of the US economy. Australia “The Australian businesses delivered a poor result in FY2011, with the Coated and Industrial Products Australia business, which includes sales to the loss-making export market, accounting for $258 million underlying EBIT loss and Australian Distribution and Solutions continuing to underperform with a $34 million underlying EBIT loss,” Mr O’Malley said. Significant Initiatives Mr O’Malley said: “BlueScope has undertaken several significant initiatives over the last 12 months that will help underpin the Company’s future, these include: 1) Carbon Tax – Steel Transformation Plan ”The announcement of the Government’s Steel Transformation Plan (STP) on 10 July 2011, effectively shields BlueScope from any material cost of the Carbon Tax for the first four years of the scheme. 2) BlueScope Australia & New Zealand (BANZ) Restructure “Following the announcement to restructure the Australian and New Zealand businesses on 10 March 2011 from three businesses into one consolidated business (BANZ), the design and implementation of the restructure is now well advanced and will deliver a more efficient and effective customer interface. 3) Further Fixed Cost Reductions “In FY2011, the Company has been able to achieve a further $38 million in fixed cost reductions, whilst successfully maintaining the cumulative savings of $696 million ($340 million in permanent savings and $356 million in temporary savings), based on FY2008 base levels. “Cost reductions remain an ongoing focus for the business and we expect further improvements, once the BANZ restructure and the implementation of today’s announcement are completed,” said Mr O’Malley. BlueScope’s Outlook Turning to the first half Outlook, Mr O’Malley said: “Three key drivers will continue to have a material influence on 1HFY2012 financial performance: ‐ ‐ ‐ A$/US$; Steel spread (function of HRC and raw material prices); and Demand. “Restructure costs will have a material impact on financial performance in this half. We expect continued good performance from Asia, New Zealand and our 50% interest in North Star. “Currently we expect: ‐ ‐ A significant reported Net Loss After Tax (NLAT) including restructuring costs (excluding NRV’s and/or impairments); and A small underlying NLAT (excluding restructure costs, NRV’s and/or impairments). “We will update the market at the AGM in November.” 3 of 4 For further information about BlueScope Steel Limited: www.bluescopesteel.com *** Contacts: Media Michael Reay Manager Corporate Affairs and Corporate Brand BlueScope Steel Limited Tel: +61 3 9666 4004 Mobile: +61 (0) 437 862 472 E-mail: Michael.Reay@bluescopesteel.com Investor John Knowles Vice President Investor Relations BlueScope Steel Limited Tel: +61 3 9666 4150 Mobile: +61 (0) 419 893 491 E-mail: John.Knowles@bluescopesteel.com Don Watters Manager Investor Relations and Special Projects BlueScope Steel Limited Tel: +61 3 9666 4206 Mobile: +61 (0) 409 806 691 E-mail: Don.Watters@bluescopesteel.com 4 of 4 INVESTOR PRESENTATION 1 e g a P r e c i f f O l i a c n a n F i f i e h C , s a i l E e i l r a h C 1 1 0 2 t s u g u A 2 2 L S B : e d o C X S A e t a d p U s s e n s u B d n a i s t l u s e R 1 1 0 2 Y F n o i t a t n e s e r P r e c i f f O e v i t u c e x E f i e h C d n a r o t c e r i i D g n g a n a M , y e l l a M O ’ l u a P N I I I I D E N A T N O C S N O N P O R O N O T A M R O F N I I N O D E C A L P E B T O N D L U O H S E C N A I L E R . I E C V D A L A C N A N F I I I T O N S E O D N O T A T N E S E R P S H T I . M E H T E T A D P U R O T C E R R O C O T N O T A G I L B O Y N A T P E C C A T O N S E O D I L E E T S E P O C S E U L B , I O S O D O T N O T A G I L B O L A G E L Y N A O T Y L N O T C E J B U S , I D N A N O T A T N E S E R P S H T I I R A L U C T R A P R O N O T A U T S L A C N A N F I I I I , I S E V T C E J B O T N E M T S E V N I I E H T N O T A R E D S N O C O T N I I E K A T I I E T A R P O R P P A G N K E E S R E T F A Y L N O E D A M E B D L U O H S S T C U D O R P R E H T O R O S E T R U C E S D E T M L I I I I L E E T S E P O C S E U L B L L E S R O Y U B O T N O S C E D Y N A I I . I I S E T R U C E S F O T C E P S E R N I I R O N O T A T V N I I , R E F F O Y N A F O T R A P M R O F T O N S E O D D N A T O N S I I N O T A T N E S E R P S H T I I N O T A D N E M M O C E R . R O T S E V N I I R A L U C T R A P Y N A F O S D E E N I I D E F T N E D I E B N A C H C H W I , I I S T N E M E T A T S G N K O O L - D R A W R O F N A T R E C S N A T N O C N O T A T N E S E R P S H T I I I , ” T C E P X E “ , ” D L U O H S “ , ” L L I W “ , ” Y A M “ I E V T A G E N E H T R O ” T S A C E R O F “ R O ” E M U S S A “ , ” I E U N T N O C “ , ” E T A M T S E I “ , ” I E T A P C T N A I “ , ” D N E T N I “ I I S A H C U S Y G O L O N M R E T G N K O O L - D R A W R O F F O E S U E H T Y B N W O N K E V L O V N I I S T N E M E T A T S G N K O O L - D R A W R O F E S E H T . I Y G O L O N M R E T E L B A R A P M O C R O F O E R E H T I L A U T C A R U O E S U A C Y A M H C H W S R O T C A F R E H T O D N A S E T N A T R E C N U I I , I S K S R N W O N K N U D N A I T N E R E F F D Y L L A R E T A M E B O T I , S T L U S E R Y R T S U D N I R O , I S T N E M E V E H C A D N A E C N A M R O F R E P , S T L U S E R , S T L U S E R Y R T S U D N I R O , I S T N E M E V E H C A R O S E C N A M R O F R E P , S T L U S E R E R U T U F Y N A M O R F . I S T N E M E T A T S G N K O O L - D R A W R O F H C U S Y B D E I L P M I R O D E S S E R P X E 2 e g a P I Y N A R O F Y T I L I B S N O P S E R O N T P E C C A , S T N E G A D N A S E E Y O L P M E , S R O T C E R D I , I N O T A M R O F N I I G N K O O L D R A W R O F Y N A G N D U L C N I I , I N O T A T N E S E R P S H T N I I I D E D V O R P N O T A M R O F N I I , I S R E C F F O E V T C E P S E R I I R E H T D N A S E T A I L I F F A S T I D N A L E E T S E P O C S E U L B , I W A L Y B D E T T M R E P T N E T X E T S E L L U F E H T O T S S O L Y N A R O F ) E C N E G I L G E N R O F G N D U L C N I I ( R E V E O S T A H W Y T I L I B A I L Y N A M A L C S D D N A I I I I I D E N A T N O C G N H T Y N A N O E C N A I L E R R O N O T A T N E S E R P S H T F O E S U Y N A M O R F G N S R A R E V E O S W O H I I I . I I S H T H T W N O T C E N N O C N I I I I I G N S R A E S W R E H T O R O T I M O R F D E T T M O R O N I I e c i t o n t n a t r o p m I e t a R y c n e u q e r F y r u n j I d e t a e r T y l l i a c d e M e t a R y c n e u q e r F y r u n j I i e m T t s o L m r a H o r e Z s n a m e r i t e g r a t r u o – y t e a S f 4 . 4 0 . 5 7 . 5 4 . 6 8 . 6 6 . 6 3 . 9 3 . 8 4 . 9 4 . 2 1 0 . 7 1 9 . 1 2 4 . 2 2 1 . 9 2 1 . 7 4 2 . 2 5 0 . 0 6 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0 Medically treated injuries per million man-hours worked r o f e c n a m r o f r e p d e t r o p e R s e i n a p m o c r e b m e m l e e t S d l r o W ) s r o t c a r t n o c & s e e y o p m e ( l 0 . 8 . 6 0 . 9 0 . 9 0 . 9 0 . 6 0 . 8 0 . 9 0 6 . 1 8 . 1 8 . 2 1 . 4 5 . 3 5 . 3 8 . 4 0 . 4 1 0 . 6 1 8 1 6 1 4 1 2 1 0 1 8 6 4 2 0 Lost time injuries per million man-hours worked 1 1 0 2 0 1 0 2 9 0 0 2 8 0 0 2 7 0 0 2 6 0 0 2 5 0 0 2 4 0 0 2 3 0 0 2 2 0 0 2 1 0 0 2 0 0 0 2 9 9 9 1 8 9 9 1 7 9 9 1 6 9 9 1 5 9 9 1 1 1 0 2 0 1 0 2 9 0 0 2 8 0 0 2 7 0 0 2 6 0 0 2 5 0 0 2 4 0 0 2 3 0 0 2 2 0 0 2 1 0 0 2 0 0 0 2 9 9 9 1 8 9 9 1 7 9 9 1 6 9 9 1 5 9 9 1 Y F 3 e g a P 4 0 0 2 m o r f s r o t c a r t n o C s e d u c n I l 4 0 0 2 y a M m o r f r e l t u B s e d u c n I l s n o i t i s u q c a i 8 / 7 0 0 2 s e d u c n I l Y F 6 9 9 1 m o r f s r o t c a r t n o C s e d u c n I l 4 0 0 2 y a M m o r f r e l t u B s e d u c n I l s n o i i t i s u q c a 8 / 7 0 0 2 s e d u c n I l 4 e g a P e v i r d y m o n o c e n a i l a r t s u A d n a y r t s u d n i l e e t s e h t n i s e g n a h c l a r u t c u r t s t n a c i f i n g S i l e e t s o t d e t t i m m o c i n a m e r e W . s s e n s u b i t r o p x e l e e t s n a i l a r t s u A e h t t i x e o t d e e n . t e k r a m c i t s e m o d e h t r o f n o i t c u d o r p d e t a o C e h t f o l a i t n e t o p i s g n n r a e e h t e v o r p m i o t n e k a t r e d n u n e e b s a h k r o w t n a c i f i n g S i s s e n s u b i n a c i r e m A h t r o N . s e a s l s d n a s n o r i y b d e t r o p p u s s t l u s e r d i l o s r e v i l e d o t s e u n i t n o c l d n a a e Z w e N s r a e y r o i r p n i d e v e h c a i s n o i t c u d e r t s o c e h t i d e n a t n a M i e t i r w t n e m r i a p m i t e n n i d e t l u s e r s t n e m s s e s s a l e u a v g n y r r a c i t e s s a n o i t i d d a n I (cid:190) d e t c e p x e t h w o r g r e h t r u f h t i w , e c n a m r o f r e p i n a s A g n o r t s r e h t o n A . ) s t e s s a n a i l a r t s u A y l l i a p c n i r p ( m 2 2 9 $ f o s n w o d f l a h d n o c e s g n o r t s a d a h , A S U , l l i m i - i n m s ’ l t e e S e p o c S e u B l r a t S h t r o N n i t s e r e t n i % 0 5 • • • • • m o r f t l u s e r l e b a t p e c c a n u n a n e v i r d e v a h s r o t c a f i c m o n o c e - o r c a m n i e g n a h c l a r u t c u r t S • t n e m e c n u o n n a ' s y a d o t o t i g n d a e l , s s e n s u b i n a i l a r t s u A r u o e c n a m r o f r e p i s s e n s u B – n o i t c u d o r t n I 5 e g a P e t a r t s n o m e d o t y l i r a m i r p n w o h s s i r e h t a r t u b , ) c t e s e c i r p l e e t s d e s i l a e r l , s d n e b e r o n o r i r o f t n u o c c a t o n s e o d g e ( d a e r p s C R H t r o p x e d e s i l a e r L S B f t o n o i t a n e s e r p e r c i f i c e p s . d e v o v n l i y c n e r r u c / s e c i r p e h t m o r f i g n s i r a d o i r e p o t d o i r e p m o r f s t n e m e v o m , 0 1 0 2 l i r p A m o r f s e c i r p e g a r e v a x e d n i y l r e t r a u Q . 0 1 0 2 h c r a M o t p u s e c i r p k r a m h c n e b l a u n n a y r t s u d n I . d e m u s s a e c i r p s e n i f e r o n o r i e F % 2 6 i : d e s u g n c i r p e r o n o r i e R • . r e t f a e r e h t s e c i r p y r t s u d n i y l r e t r a u q ; 0 1 0 2 h c r a M o t p u s e c i r p k r a m h c n e b l a u n n a y r t s u d n i : d e s u e c i r p l i a o c g n k o c d r a h e R • . e c i r p i a n h C R F C m o r f t s o c i t h g e r f e t a i r p o r p p a s t c u d e d e t a m i t s e B O F ; r e t r a u q e n o y b d e g g a l a t o n s i t r a h C . l e e t s f o e n n o t t u p t u o r e p l i a o c g n k o c d r a h t 1 7 . 0 d n a s e n i f e r o n o r i t 5 . 1 f o d n e b l t u p n i l i e p m s n o d e s a b n o i t a t n e s e r p e r ’ d a e r p s C R H r e k a m e e l t s e v i t i a c d n I ‘ • : e t o N l e e t s e l i t a o v l l y h g h i d n a s t s o c l a i r e t a m w a r i g n s i r – d a e r p s l e e t S 1 1 - n a J 0 1 - n a J 9 0 - n a J 8 0 - n a J 7 0 - n a J 6 0 - n a J 5 0 - n a J 4 0 - n a J 3 0 - n a J 2 0 - n a J 1 0 - n a J 0 0 - n a J ) t / $ A ( d a e r p S C R H r e k a m l e e t S e v i t a c i d n I l a o c i g n k o c d r a h t 1 7 . 0 d n a s e n i f e r o n o r i t 5 . 1 f o t s o c s s e l e c i r p C R H a s A i t s a E B B S s e c i r p 0 0 8 $ 0 0 7 $ 0 0 6 $ 0 0 5 $ 0 0 4 $ 0 0 3 $ 0 0 2 $ 0 0 1 $ 0 $ t / $ A s n o i t l a u c a c l l t e e S e p o c S e u B l , a i l a r t s u A f o k n a B e v r e s e R , I S T , s t t a P l , U R C , B B S : e c r u o S s i i a n h C l , y p p u s r e v o g n g n e i l l a h c n a m e r i i s c m a n y d t e k r a m l e e t s l l a b o g - d a e r p s l e e S t * n o i t a s i l i t U y t i c a p a C l e e t S e d u r C y h t n o M l ^ n o i t c u d o r P l e e t S e d u r C d l r o W y l h t n o M d e s i l a u n n A … d e u d b u s i s n a m e r n o i t a s i l i t u W O R r e v e w o h , . a . p t m 0 0 7 d n u o r a t a g n i t a r e p o % 5 8 7 8 0 8 5 7 ) a n h C i l c x E ( d l r o W i a n h C d l r o W % 5 1 1 % 0 1 1 % 5 0 1 % 0 0 1 % 5 9 % 0 9 % 5 8 % 0 8 % 5 7 % 0 7 % 5 6 % 0 6 % 5 5 % 0 5 1 0 5 , 1 3 0 8 8 9 6 ) % ( n o i t a s i l i t U ) s e n n o T M ( ) a n h C i l c x E ( d l r o W i a n h C d l r o W ) s M ’ ( s e n n o T 0 0 6 , 1 0 0 5 , 1 0 0 4 , 1 0 0 3 , 1 0 0 2 , 1 0 0 1 , 1 0 0 0 , 1 0 0 9 0 0 8 0 0 7 0 0 6 0 0 5 0 0 4 0 0 3 0 0 2 0 0 1 0 2 1 n a J 1 1 n a J 0 1 n a J 9 0 n a J 8 0 n a J 7 0 n a J 6 0 n a J 5 0 n a J 4 0 n a J 3 0 n a J 2 0 n a J 1 0 n a J 0 0 n a J 2 1 n a J 1 1 n a J 0 1 n a J 9 0 n a J 8 0 n a J 7 0 n a J 6 0 n a J 5 0 n a J 4 0 n a J 3 0 n a J 2 0 n a J 1 0 n a J 0 0 n a J 6 e g a P h t n o m e h t r o f e t a r n o i t c u d o r p y l i a d e h t n o d e s a B ^ 1 1 0 2 y u J l o t a t a D - A S W : e c r u o S - d e s i l a u n n a e t a d o t r a e Y * ; r e i l p p u s s d r a w o t s t f i h s r e w o p g n c i r p % 5 8 i t A ; y t i c a p a c l e e t s e d u r c l a b o g l f o % 6 9 x o r p p a g n i t n e s e r p e r , s e i r t n u o c g n i t r o p e r 6 6 A S W e h t n o d e s a b d e t l a u c a c l s i n o i t a s i l i t u y t i c a p a c l e e t s e d u r C – s e t o N * 7 e g a P l a o c i g n k o C e r O n o r I y l r e t r a u q o t l a u n n a m o r f d e v o m o s a l g n i t t e s e c i r p n e h w s r a e y e e r h t t s a l e h t r e v o s e c i r p l a o c d n a e r o n o r i n i p m u j m u t n a u q a h t i w … d e g g a l , 0 1 0 2 l i r p A m o r f s e c i r p e g a r e v a x e d n i y l r e t r a u Q . 0 1 0 2 h c r a M o t p u s e c i r p k r a m h c n e b l a u n n a y r t s u d n I . d e m u s s a e c i r p s e n i f e r o n o r i e F % 2 6 : i d e s u g n c i r p e r o n o r I • l e e t S e p o c S e u B l , I S T , s t t a P l , U R C : e c r u o S : e t o N a i l a r t s u A B O F . r e t f a e r e h t s e c i r p y r t s u d n i y l r e t r a u q ; 0 1 0 2 h c r a M o t p u s e c i r p k r a m h c n e b l a u n n a y r t s u d n i : d e s u e c i r p l i a o c g n k o c d r a H • . i e c i r p a n h C R F C m o r f t s o c t i h g e r f e t a i r p o r p p a s t c u d e d t e a m i t s e B O F ; r e t r a u q e n o y b D S U f o n o i t c a r t n o c e h t s e t a b r e c a x e $ A r e g n o r t s – e g n a h c x E n g e r o F i a i l a r t s u A n i n o i t i t e p m o c t r o p m i d e s a e r c n i o t s d a e l d n a d a e r p s 8 8 0 . , g v A 9 7 . 0 $ : t r a t S 0 1 . 1 $ : d n E 0 1 . 1 $ : h g H i 3 6 . 0 $ : w o L 9 6 0 . , g v A 9 7 . 0 $ : t r a t S 9 7 . 0 $ : d n E 3 8 . 0 $ : h g H i 9 4 . 0 $ : w o L 0 0 . 1 0 9 . 0 0 8 . 0 0 7 . 0 0 6 . 0 0 5 . 0 0 4 . 0 8 e g a P 2 1 - n a J 1 1 - n a J 0 1 - n a J 9 0 - n a J 8 0 - n a J 7 0 - n a J 6 0 - n a J 5 0 - n a J 4 0 - n a J 3 0 - n a J 2 0 - n a J 1 0 - n a J 0 0 - n a J 9 9 - n a J 8 9 - n a J 7 9 - n a J 6 9 - n a J 5 9 - n a J 4 9 - n a J 3 9 - n a J 2 9 - n a J 1 9 - n a J 0 9 - n a J ) g u A - 1 0 ( 0 1 . 1 e t a R e g n a h c x E n g i e r o F y l h t n o M 1 1 0 2 t s u g u A t s 1 – 0 9 9 1 l y u J t s 1 D U A D S U / 0 1 . 1 1 1 0 2 Y F 0 1 0 2 Y F 9 0 0 2 Y F s e h c t a p s e D l a n r e t x E p u o r G e p o c S e u B l l a t o T % 0 2 % 6 % 1 1 s t r o p x E % 3 3 ) t k 9 7 5 , 2 ( % 6 1 % 0 2 % 4 % 6 s t r o p x E % 7 2 ) t k 1 3 9 , 1 ( % 1 2 % 4 % 9 s t r o p x E % 5 2 ) t k 2 9 4 , 1 ( % 7 1 % 2 1 % 2 1 % 2 1 s e a s l n a i l a r t s u A t f o s f f o n w o r g s a h x m i t r o p x e r u o d n a … % 0 3 9 e g a P t k 0 9 7 , 7 % 3 e s a e r c n i % 9 t k 5 5 1 , 7 e s a e r c n i % 0 2 t k 6 8 9 , 5 l a n r e t x E l a t o T l s e a S y e K % 4 1 % 7 3 % 4 % 8 3 % 4 c i f i c a P / d n a a e Z w e N l i a s A ) y r t n u o c i n h t i w d o s l d n a d e c u d o r p ( s e a s l c i t s e m o D ) A N P B & C + A N P R H ( A N a i l a r t s u A i l i / a d n I / t s a E e d d M d e M e p o r u E – s t r o p x E / . d e d n u o r n e e b e v a h s e g a t n e c r e P : e t o N s a c i r e m A - s t r o p x E i a s A - s t r o p x E ) 0 1 0 2 Y F n o 1 1 0 2 Y F ( % 1 1 g n i l l a f s e m u o v l l s e a s l a n r e t x e n a i l a r t s u A h t i w . . . g n i l l e w d - n o N g n i l l e w D % 7 6 % 7 6 ) t k 4 4 3 ( % 9 2 ) t k 0 4 3 ( % 9 2 ) t k 8 0 3 ( % 6 2 ) t k 3 1 3 ( % 7 2 ) 3 ( g n i r e e n g n E i g n i r u t c a f u n a M ) t k 4 5 1 ( % 2 1 ) t k 3 3 1 ( % 1 1 ) t k 4 2 1 ( % 0 1 ) t k 3 2 1 ( % 1 1 i g n n m & i i r g A ) t k 4 6 1 ( % 4 1 ) t k 7 5 1 ( % 3 1 % 5 6 ) t k 1 9 3 ( % 8 2 ) t k 0 2 3 ( % 3 2 ) t k 7 8 1 ( % 4 1 ) t k 2 5 1 ( % 1 1 ) t k 8 9 1 ( % 4 1 t r o p s n a r t & o t u A ) t k 6 0 1 ( % 9 ) t k 2 0 1 ( % 9 ) t k 4 3 1 ( % 0 1 ) t k 9 4 3 ( % 8 2 ) t k 2 1 3 ( % 5 2 ) t k 1 6 1 ( % 3 1 ) t k 0 6 1 ( % 3 1 ) t k 6 5 1 ( % 3 1 ) t k 5 0 1 ( % 8 ) t k 6 3 2 ( % 9 2 ) t k 5 3 2 ( % 8 2 ) t k 9 0 1 ( % 3 1 ) t k 0 9 ( % 1 1 ) t k 2 9 ( % 1 1 ) t k 2 6 ( % 8 % 0 7 ) t k 1 4 3 ( % 3 2 ) t k 2 1 2 ( % 4 1 ) t k 2 9 1 ( % 3 1 ) t k 2 0 2 ( % 4 1 ) t k 9 3 2 ( % 5 1 ) t k 0 3 1 ( % 9 ) t k 4 4 1 ( % 9 % 6 6 n o i t c u r t s n o C ) t k 9 8 3 ( % 7 2 e c a n r u f t s a B l ( ) e n i l e R 5 . o N % 4 6 1 1 0 2 Y F H 2 1 1 0 2 Y F H 1 0 1 0 2 Y F H 2 0 1 0 2 Y F H 1 9 0 0 2 Y F H 2 9 0 0 2 Y F H 1 8 0 0 2 Y F H 2 ) 4 ( ) 1 ( S E M U L O V H C T A P S E D L A N R E T X E t k 8 9 1 , 1 % 3 t k 8 6 1 , 1 ) % 5 1 ( t k 1 8 3 , 1 % 1 1 t k 3 4 2 , 1 % 1 5 t k 4 2 8 ) % 4 4 ( t k 6 6 4 , 1 ) % 9 ( t k 4 1 6 , 1 ) t k 0 6 1 ( ) t k 1 6 1 ( ) t k 6 6 1 ( ) t k 4 6 1 ( ) t k 0 4 1 ( ) t k 2 9 1 ( ) t k 6 4 2 ( t k 8 3 0 , 1 % 3 t k 7 0 0 , 1 ) % 7 1 ( ) 4 ( t k 5 1 2 , 1 % 3 1 t k 9 7 0 , 1 % 8 5 t k 4 8 6 ) % 6 4 ( t k 4 7 2 , 1 ) % 7 ( t k 8 6 3 , 1 0 1 e g a P l s e a s e s u d n e o t n i d e t r e v n o c g n e b e r a s e a s i l c i t s e m o d r u o w o h n o t h g s n i i r e t a e r g n i d e t l u s e r s a h s r e m o t s u c r u o o t r e s o c l t e g o t k r o w e h T 1 1 0 2 Y F t k 5 4 0 2 , - - ) % 1 1 ( - - 0 1 0 2 Y F t k 4 9 2 , 2 - - % 7 1 - - 9 0 0 2 Y F t k 8 5 9 , 1 . d e d n u o r n e e b e v a h s e g a t n e c r e P . s t c u d o r p g n o l l c n i , s t c u d o r p d e c r u o s y t r a p l d r i h t e d u c x e s e h c t a p s e d d e s i l a m r o N e s u d e k n i i i l - g n n m e m o s d n a s n o i i t a c n u m m o c , s e p p i t , r e a w , l i a r , r e w o p , s d a o r s a h c u s e r u t c u r t s a r f n i s e d u c n l i g n i r e e n g n E i : s e t o N ) 1 ( ) 2 ( ) 3 ( ) 4 ( % 3 6 ) t k 6 3 4 ( % 7 2 ) t k 4 4 3 ( % 1 2 ) t k 3 4 2 ( % 5 1 ) t k 8 0 2 ( % 3 1 0 0 8 , 1 0 0 6 , 1 0 0 4 , 1 0 0 2 , 1 0 0 0 , 1 0 0 8 0 0 6 0 0 4 0 0 2 ‘000 tonnes s e h c t a p s e D 0 s s o r G d e s i l a m r o N s e h c t a p s e D ) 2 ( s s e L f o e r u s o c l d n a e c a n r u F l t s a B 6 . o N f o n w o d t u h s e h t l e v o v n i l l i w s t r o p x e t i x e o t i n o s c e d i i s h T (cid:190) s s e n s u b i c i t s e m o d n a i l a r t s u A r u o o t d e t t i m m o c y l l u f i i g n n a m e r t s l i h w l , a b m e K . t r o P n r e t s e W t a l l i M p i r t S t o H e h t d n a , n e v o e k o c e n o i g n d u c n l i , s t e s s a r e h t o n o d e s a b , t n e m e v o r p m i I T B E ) 1 ( l M 5 2 2 $ A y e t a m x o r p p a i r e v i l e d o t d e t c e p x e s i e r u t c u r t s e r e h T (cid:190) t r o P t a d e r u t c a f u n a m l e e t s g n i t r o p x e f o s s e n s u b i e h t t i x e o t i n o s c e d i r u o d e c n u o n n a e w y a d o T • y t i c a p a c n o i t c u d o r p l i g n k a m e e t s n a i l a r t s u A e c n a a b o t n o s c e D l i i d n a m e d n a i l a r t s u A h t i w l t n e a v u q e i n a y b ) 1 ( d e d n u f ( M 0 0 5 - 0 0 4 $ A f o r e d r o e h t n i e b l l i w s t s o c e r u t c u r t s e r e t a p c i t n A i (cid:190) . ) e s a e e r l l a t i p a c i g n k r o w . s t l u s e r 1 1 0 2 Y F o t j s t n e m t s u d a a m r o f - o r p o t t n e m n r e v o g d n a , s e i t i n u m m o c , s n o n u i , s r e i l p p u s , s r e m o t s u c l , s e e y o p m e r u o h t i w e g a g n e l l i w e W • e m o c t u o e v i t c e f f e n a e r u s n e . e r u t c u r t s e r i g n d d a - e u a v l i s h t t n e m e p m l i o t t r o p p u s r e d n e l i d e n a t b o o s a l s a h e p o c S e u B l • 1 1 e g a P t n e m s s e s s a l a n r e t n i s ’ t n e m e g a n a m n o d e s a B ) 1 ( : e t o N t c u d o r p l e e t s d e t a o c d n a t e k r a m c i t s e m o d r u o n o a i l a r t s u A n i y t i l i b a p a c s u c o f o t e u n i t n o C • s t n e m t s e v n i g n i t s x e i r u o m o r f l s e a s w o r g e w s a i e d s p u l a i r e t a m h t i W (cid:190) s t e k r a m n o i t c u r t s n o c g n d i l i u b n i e c n e s e r p l a b o g l r u o w o r g o t e u n i t n o C • s g n d i l i u B d e r e e n g n E - e r P i l e e t s l r a u c i t r a p n I (cid:190) r a t S h t r o N t a y t i n u t r o p p o n o s n a p x E (cid:190) i s s e n s u b i a c i r e m A h t r o N • t n e m p o e v e d l s n r u t e r g n o r t s g n i r e v i l e d w o N (cid:190) i s s e n s u b e h t d e r u t c u r t s e R (cid:190) i a s A n i t n e m t s e v n i r u o n o g n i r e v i l e D • s u c o f h t w o r G s r e v o c e r y m o n o c e S U n e h w e d s p u i i s g n n r a e l a i r e t a m - d e r u t c u r t s e r s g n d i l i u B (cid:190) 2 1 e g a P s e i t i n u t r o p p o h t w o r g e r u t p a c o t m a r g o r p t n e m y o p e d e r l d n a e s a e e r l h s a C • 3 1 e g a P s e n i l d a e H 1 1 0 2 Y F 4 1 e g a P t n e m r i a p m i - e r p % 7 . 6 1 & t e g r a t % 0 3 - 5 2 w o e B l s p c 0 % 5 . 9 1 % % 6 + % 9 + - % 8 5 - - % 0 4 1 - - % 4 0 2 - - % 4 0 2 - - - % 9 6 - % 0 6 2 - ) M 7 8 6 ( M 4 5 2 ) M 3 4 0 , 1 ( ) M 1 0 1 ( ) M 4 5 0 , 1 ( ) M 8 1 1 ( ) ¢ 4 . 7 5 ( ) ¢ 4 . 6 ( * ) % 6 . 1 ( / ) % 2 . 6 1 ( * ) % 2 . 2 ( / ) % 6 . 9 1 ( M 2 4 1 $ A ) M 8 1 2 $ A ( M 0 9 5 M 5 0 6 M 0 4 2 M 5 5 2 M 6 2 1 M 3 1 1 ¢ 9 . 6 ¢ 2 . 6 * % 0 . 4 / % 8 . 3 * % 0 . 2 / % 3 . 2 M 3 6 4 $ A M 6 3 1 $ A s p c 5 % 4 . 1 1 E C N A R A V I e n u J 0 3 D E D N E S H T N O M e v e w T l 0 1 0 2 Y F . s v 1 1 0 2 Y F s e n i l d a e h 1 1 0 2 M 3 5 1 , 9 0 1 0 2 M 4 2 6 , 8 s e n n o t M 8 . 7 s e n n o t M 2 . 7 l i a c n a n i f p u o r G d e t r o p e R − A D T B E I s e h c t a p s e d l a n r e t x E e u n e v e R i g n y l r e d n U − i g n y l r e d n U − d e t r o p e R − d e t r o p e R − g n i y l r e d n U − d e t r o p e R − g n i y l r e d n U − I T B E T A P N S P E l a t i p a C d e t s e v n I n o n r u t e R T B E I s e i t i v i t c a g n i t a r e p o m o r F − s t n e m t s e v n i / x e p a c r e t f A − w o l f h s a C g n i t a r e p O t e N y t i u q E n o n r u t e R ) d e k n a r f y l l i i u f ( d n e d v d y r a n d r o i l a n F i ) t b e d t e n ( g n i r a e G s n r u t e R g n y l r e d n U * i : e t o N T A L N g n y l r e d n u i d n a T A L N d e t r o p e r 1 1 0 2 Y F n e e w t e b n o i t a i l i c n o c e R 1 1 0 2 Y F M $ A T A L N ) 4 5 0 , 1 ( ) 1 ( ) 5 5 0 , 1 ( 0 1 2 2 9 5 ) 8 1 1 ( s e s s e n s u b i d e u n i t i n o c s d m o r f s e s s o l / i ) s n a g ( t e N s e s s e n s u b i g n u n i i t n o c m o r f i s g n n r a e d e t r o p e R d e t r o p e R s t s o c y c n a d n u d e r & g n i r u t c u r t s e R s t s o c t n e m p o e v e d l s s e n s u B i T A L N l a n o i t a r e p o g n y l r e d n U i t n e m r i a p m i t e s s A 5 1 e g a P ) a 3 4 . l e u r g n i t s i l r e d n u t n e m u c o d ( 1 1 0 2 e n u J 0 3 d e d n e s h t n o m e v e w l t r o f l i e s a e e R s g n n r a E X S A e h t f o b 2 l e b a T o t r e f e r e s a e P l : e t o N 6 1 e g a P e g a p t n e u q e s b u s a n o d a e r p s l r e k a m e e t s n a s A e v i t i c i t s e m o d t f o s ; n o i t c a r t n o c d a e r p s r e h t r u F s t n e m t s u d a V R N j ; s e c i r p d n a d n a m e d n o i t c a r t n o c i n g r a m & n o i t i t e p m o c t r o p m I s d n a s n o r i r e w o l ; H 2 n i d a e r p s d e c u d e R H 1 k a e w g n d n a t s h t i i w t o n e c n a m r o f r e p d o o G g n m i i t h c t a p s e d . n o i t a s n a r t l X F d n a d n a l i a h T n i s n o i t i d n o c t e k r a m n i t n e m e v o r p m i t s e d o M s d a e r p s d e v o r p m I t i f o r p t u b , H 2 n i s t s o c e t a r o p r o c r e w o l y l t h g i l S H 1 n i r e t a e r g j t n e m t s u d a k c o t s n i ) 1 6 1 ( 6 8 2 9 7 2 3 0 . 1 ) 9 1 ( 3 3 2 6 ) 4 ( 4 6 ) 5 3 ( ) 0 6 ( ) 7 9 ( 2 5 2 6 6 2 5 9 . 0 ) 5 1 ( 9 4 6 4 ) 6 1 ( 8 ) 6 1 ( ) 1 4 ( ) 8 5 2 ( 9 6 2 3 7 2 9 9 . 0 ) 4 3 ( 2 8 8 0 1 ) 0 2 ( 2 7 ) 1 5 ( ) 1 0 1 ( 8 0 1 5 6 3 4 1 4 8 8 . 0 2 3 7 6 1 1 ) 6 1 ( 1 6 ) 9 8 ( 5 5 2 * * s t c u d o r P l a i r t s u d n I & d e t a o C a i l a r t s u A d a e r p S C R H e v i t a c d n I i - ) e n n o t / $ S U ( d a e r p S C R H e v i t a c d n I i - ) e n n o t / $ A ( c i f i c a P d n a l e e t S d n a a e Z w e N l s t c u d o r P g n d i l i u B & d e a o C t i a s A s t c u d o r P g n d i l i u B & d e a o C t a c i r e m A h t r o N . d o r P l e e t S & n o i t u b i r t s D a i i l a r t s u A s n o i t u o S l X F $ S U / $ A - h t r o N s t c u d o r P d e l l o R t o H t n e m g e s - r e t n i & P U O R G L A T O T a c i r e m A e t a r o p r o C i a c d n i i g n n r e c n o c s e t o n t o o f e e s * : e t o N s t n e m m o C M $ A , I T B E g n y l r e d n U i ) H 1 s v ( 1 1 0 2 Y F H 2 1 1 0 2 Y F H 2 1 1 0 2 Y F H 1 1 1 0 2 Y F 0 1 0 2 Y F y r a m m u s T B E I t n e m g e S g n i l i a r t l : e b a r u o v a f n u M 0 8 4 $ s t s o c e r o n o r I (cid:121) 7 1 e g a P s t s o C l a i r e a M t m o r f p u d e v o m e c i r p s e n i f e g a r e v a x e d n i r e t r a u q n i t / 8 5 1 $ S U o t 0 1 0 2 Y F n i t / 5 9 $ S U e g a r e v a e c i r p l a o c t e k r a m l : e b a r u o v a f n u M 8 2 4 $ s t s o c l a o C (cid:121) n i t / 8 4 2 $ S U . s v 0 1 0 2 Y F n i t / 7 4 1 $ S U d e g a r e v a 1 1 0 2 Y F s e c i r p C R H & b a s l r e g n o r t s y b t e s f f o y l t r a P s e h c t a p s e d t r o p x e i n g r a m r e w o l n i e s a e r c n I (cid:121) (cid:121) 0 2 8 - 8 0 1 + 8 5 2 - 3 3 - 1 1 0 2 Y F r e h t O w a R s e c i r P 0 1 0 2 Y F ) e F % 2 6 ( i a n h C R F C ( 1 1 0 2 Y F 7 8 4 + n i t n e m e v o m d a e r p s t e n e l b a r u o v a f n u M 3 3 3 $ : y b n e v i r d 0 1 0 2 Y F . s v 1 1 0 2 Y F d a e r p S t e N m 3 3 3 $ n o i t c u d e R i I T B E g n y l r e d n U – a i l a r t s u A s t c u d o r P l a i r t s u d n I & d e t a o C & d e t a o C f o e c n a m r o f r e p n i e n i l c e d e h t f o % 0 9 r e v o s e v i r d : d a e r p S 0 1 0 2 Y F . s v 1 1 0 2 Y F a i l a r t s u A s t c u d o r P l a i r t s u d n I a e d a m e v a h s e a s l t r o p x e ’ l s e p o c S e u B 0 0 0 2 e c n s – s e s s o i l t r o p x E s r a e y o w t l y n o n i s t i f o r p o t n o i t u b i r t n o c g n o r t s ) t / $ A ( d a e r p S C R H r e k a m l e e t S e v i t a c i d n I 1 1 - n a J 0 1 - n a J 9 0 - n a J 8 0 - n a J 7 0 - n a J 6 0 - n a J 5 0 - n a J 4 0 - n a J 3 0 - n a J 2 0 - n a J 1 0 - n a J 0 0 - n a J l a o c i g n k o c d r a h t 1 7 . 0 d n a s e n i f e r o n o r i t 5 . 1 f o t s o c s s e l e c i r p C R H a s A i t s a E B B S 0 0 8 $ 0 0 7 $ 0 0 6 $ 0 0 5 $ 0 0 4 $ 0 0 3 $ 0 0 2 $ 0 0 1 $ 0 $ t / $ A s n o i t l a u c a c l l t e e S e p o c S e u B l , a i l a r t s u A f o k n a B e v r e s e R , I S T , s t t a P l , U R C , B B S : e c r u o S 8 1 e g a P . r e t f a e r e h t s e c i r p y r t s u d n i y l r e t r a u q ; 0 1 0 2 h c r a M o t p u s e c i r p k r a m h c n e b l a u n n a y r t s u d n i : d e s u e c i r p l i a o c g n k o c d r a h e R • e t a r t s n o m e d o t y l i r a m i r p n w o h s s i r e h t a r t u b , ) c t e s e c i r p l e e t s d e s i l a e r l , s d n e b e r o n o r i r o f t n u o c c a t o n s e o d g e ( d a e r p s C R H t r o p x e d e s i l a e r L S B f t o n o i t a n e s e r p e r c i f i c e p s . d e v o v n l i y c n e r r u c / s e c i r p e h t m o r f i g n s i r a d o i r e p o t d o i r e p m o r f s t n e m e v o m , 0 1 0 2 l i r p A m o r f s e c i r p e g a r e v a x e d n i y l r e t r a u Q . 0 1 0 2 h c r a M o t p u s e c i r p k r a m h c n e b l a u n n a y r t s u d n I . d e m u s s a e c i r p s e n i f e r o n o r i e F % 2 6 i : d e s u g n c i r p e r o n o r i e R • . e c i r p i a n h C R F C m o r f t s o c i t h g e r f e t a i r p o r p p a s t c u d e d t e a m i t s e B O F ; r e t r a u q e n o y b d e g g a l a t o n s i t r a h C . l e e t s f o e n n o t t u p t u o r e p l i a o c g n k o c d r a h t 1 7 . 0 d n a s e n i f e r o n o r i t 5 . 1 f o d n e b l t u p n i i l e p m s n o d e s a b n o i t a t n e s e r p e r ’ d a e r p s C R H r e k a m e e l t s e v i t i a c d n I ‘ • : e t o N 9 1 e g a P % 0 5 : a i l a r t s u A % 0 5 l i y e t a m x o r p p a i s a w x m h c t a p s e d s e a s l ’ s A P C I i , s s i r C l i a c n a n F i l l a b o G - e r P • s t e k r a m t r o p x e t n e m g e s g n i t r o p e r ) A P C I ( s t c u d o r P l a i r t s u d n I t & d e a o C e h t f o t r a p m r o f s t e s s A • n a i l a r t s u A r u o g n s u c o F i e h t t r o p p u s o t g n k a m e e t s l i t e k r a m c i t s e m o d l s e a W h t u o S w e N l , a b m e K t r o P t a ) 6 . o N d n a 5 . o N ( s e c a n r u f t s a b l 2 s e t a r e p o e p o c S e u B • l d n u o r g k c a B l a o t t n i t a p m 3 5 . r o t a p m 6 2 . i l t y e a m x o r p p a f o y t i c a p a c a s a h h c a E • 1 9 1 - 7 8 4 - i i n o s c e d s h t i i g n v i r d e r a s n r u t e r r o o p d n a t n e m n o r i v n e o r c a M 5 3 4 2 2 0 0 0 , 1 6 6 7 9 6 5 6 3 2 , 1 7 6 3 7 9 6 6 4 5 I T B E g n y i l r e d n u ) e g r a h c V R N - e r p ( t n e m g e s l a t o t ) m $ A ( A P C I l a c i r o t s H i 9 8 1 - 6 4 2 - 7 9 - g n i y l r e d n u t r o p x E V R N - e r p ( T B E I ) m $ A ( ) e g r a h c 2 0 2 6 7 9 6 6 7 A P C I e v i t a c d n i I l a c i r o t s h i 1 1 0 2 Y F 0 1 0 2 Y F 9 0 0 2 Y F 8 0 0 2 Y F 7 0 0 2 Y F 6 0 0 2 Y F 5 0 0 2 Y F 4 0 0 2 Y F 3 0 0 2 Y F 2 1 - n a J 1 1 - n a J 0 1 - n a J 9 0 - n a J 8 0 - n a J 7 0 - n a J 6 0 - n a J 5 0 - n a J 4 0 - n a J 3 0 - n a J 2 0 - n a J 0 0 8 $ 0 0 6 $ 0 0 4 $ 0 0 2 $ 0 $ 0 2 e g a P e g a p r e i l r a e n o t r a h c d a e r p S C R H l i r e k a m e e t S e v i t a c d n I g n i t r o p p u s ” s e t o N “ o t e v i t a c d n i I l e e t S w a R ) * ( d a e r p S r e f e r e s a e P l ) * ( : e t o N ) 1 ( M 5 2 2 $ d e t a m i t s e n a y b e r u t c u r t s e r i s h t r e d n u f f o r e t t e b s i e p o c S e u B l ) 1 1 0 2 Y F n o t c a p m i a m r o f - o r p ( ) e g r a h c V R N - e r P ( I $ A T B E g n y l r e d n U i ) 1 ( 2 8 1 - ) 1 ( 0 8 - 4 3 + 7 8 4 + - o r P d e s v e R i 1 1 0 2 Y F a m r o F i d e n a t e r s t s o c d e x F i d e c u d e r n o i t c u d o r P ( s t r o p x e e m o s n o i d e n a t e r s s o L s s o l t r o p x E k c a b d d A A P C I l a u t c A 1 1 0 2 Y F 1 9 1 - ’ s A P C I r o f I T B E ) s t s o c d e x i f n a h t e r o m i s e n s u b c i t s e m o d t n e m e v o r p m i M 5 2 2 $ + 1 2 e g a P t n e m s s e s s a l a n r e t n i s ’ t n e m e g a n a m n o d e s a B ) 1 ( : e t o N n o r i f o n o i t a s i l i t u l a n o i t r o p o r p t r e a e r g ( e c i r p r e w o l o t t n e m e v o r p m i t n a p l t r e n s i t a t d e a e r c y t i c a p a c t n e a t l e s u o t s e n i f s t s o c i n o s r e v n o c l e b a i r a V l i x m s a i r e a m w a r t f o n o i t p m u s s a i g n d u c n l i l , s a i r e t a m w a R • • : f o d e s i r p m o C : n i n o i t c u d e r f o d e s i r p m o C l s e b a m u s n o c & s e i r o t c a r f e R r u o b a l t c e r i D t r e h o & A & G S s d a e h r e v O i t e c n a n e n a m & s r i a p e R i s e c v r e s & s e i t i l i t U • • • • • • y l t i n a n m o d e r p m 0 3 $ f o t e a m i t s e n o i t u b i r t n o c c i t s e m o d l e b a r u o v a F d n e b l l t s a i r e a m w a r n i t n e m e v o r p m i m o r f n o i t u b i r t n o c s e a s l t r o p x e m 0 7 1 $ f o s s o L • • : f o d e s i r p m o C 1 1 0 2 r o f a m r o f o r p e r u t c u r t s e r ) 1 ( f o t c a p m I e r u t c u r t s e r A 1 1 0 2 e n u J 0 3 o t r a e y ; m $ A 6 4 6 , 3 ) 6 8 2 , 2 ( 0 6 3 , 1 ) 5 7 1 , 1 ( 5 8 1 ) 2 5 1 ( 4 3 ) 2 ( 2 3 5 9 3 3 1 0 , 2 ) 0 5 5 , 1 ( 0 1 4 , 1 + ) 0 4 1 ( 5 1 3 + 5 7 1 + 0 5 + 5 2 2 + 5 6 + 0 9 2 + - ) 1 7 2 , 2 ( 6 9 1 , 5 ) 6 9 6 , 3 ( 0 0 5 , 1 ) 0 9 4 , 1 ( 0 1 ) 2 0 2 ( ) 1 9 1 ( ) 7 6 ( ) 8 5 2 ( 3 1 0 , 2 6 6 6 , 2 d n a s e n n o t e m i r p l a n r e t x e d n a l a n r e n t i n o i t u b i r t n o c l e b a i r a V r e h t o & t s o c d e x F i t s o c l e b a i r a V e u n e v e R ) e g r a h c V R N e r p ( A D T B E I n o i t a s i t r o m a & n o i t a c e r p e D i ) e g r a h c V R N e r p ( T B E I t n e s e r p e r s e r u g i f h c t a p s e D : e t o N ) t k ( s e n n o t c i t s e m o D ) t k ( s e n n o t t r o p x E ) g n i y l r e d n u ( T B E I e g r a h c e u a v l l e b a s i l a e r t e N 2 2 e g a P t n e m s s e s s a l a n r e t n i s ’ t n e m e g a n a m n o d e s a B ) 1 ( : e t o N s t i n u s s e n s u b i r e h t o f o f l a h e b n o l d o s e g a n n o t d n a s e a s l e m i r p - n o n e d u c x e l t n e m e t a t s e m o c n i I A P C 1 1 0 2 n o e r u t c u r t s e r f o t c a p m i a m r o f o r P ) e s a b I t e s s a A P C 1 1 0 2 Y F g n i t c e l f e r ( 2 1 0 2 Y F r o f s e i t i v i t i s n e s T B E e v i t I i a c d n I ) t n e m e c n u o n n a e c a n r u F l t s a B e n o e h t g n i t c e l f e r ( 2 1 0 2 Y F o t d e r a p m o c ) 1 ( I m $ A T B E 2 1 0 2 Y F n o t c a p m i d e t a m i t s E e c a n r u F l t s a B 1 s e c a n r u F l t s a B 2 ) 4 ( ) 4 ( 2 2 4 4 1 9 3 7 9 2 9 7 0 1 1 t o n s e o d i s h T . s t c u d o r p t r o p x e r e h o t o t d n a ) 2 ( e c i r p C R H t r o p x e d e s i l a e r e g a r e v a s e p o c S e u B n ’ l i t e k r a m e b u t d n a e p p i c i t s e m o d o t n o w o l f d n a , b a s l t r o p x e n o t c e f f e l a n o i t r o p o r p s e m u s s a e c i r p C R H t r o p x e n i e g n a h c e h T ) 2 ( d e s i l a u n n a s n o i t a r e p o F B 1 r o F B 2 e v i t c e p s e r e m u s s a s e i t i v i t i s n e S - . 2 0 . 1 $ S U s i e t a r e g n a h c x e e s a b r a e y l l u F - ) 1 ( s t s o c e r o n o r i n i t n e m e v o m e n n o t / 0 1 $ S U – / + s t s o c l a o c n i t n e m e v o m e n n o t / 0 1 $ S U – / + ) 3 ( e t a r e g n a h c x e r a l l o d S U / r a l l o d n a i l a r t s u A n i t n e m e v o m ¢ 1 – / + 3 2 e g a P f o t c a p m i e h t d n a l s e b a y a p d n a . n a i t r e c s s e l s i m r e t t r o h s e h t n i t c e f f e n o w o l f e h t s a , s e c i r p t c u d o r p d e t a o c c i t s e m o d n a i l a r t s u A n o t c a p m i l a i t n e t o p e h t e d u c n l i l s e b a v e c e r i i t d e a n m o n e d r a l l o d S U f o t n e m e t a t s e r e h t s e d u c n l i e t a r e g n a h c x e r a l l o d S U / r a l l o d n a i l a r t s u A e h t n i t n e m e v o m e h T ) 3 ( i . g n c i r p c i t s e m o d n a i l a r t s u A n o t c a p m i t c e l f e r t o n s e o D . $ A o t s n o i t a r e p o e r o h s f f o f o i s g n n r a e e h t l g n i t a s n a r t s e c a n r u f t s a b l 2 f o % 0 5 f o e t a r a t a n o i t p m u s n o c l a i r e t a m w a r e m u s s a s e i t i v i t i s n e s e c a n r u f l t s a b 1 ) 4 ( t n e m e v o m e n n o t / 5 2 $ S U – / + n o i t p m u s s A i n a t r e c f o e r u s o c l e h t h g u o r h t d e v e h c a i e b l l i w s n o i t c u d e r t s o c d e x F i l s r e w o B 2 2 / 1 2 d n a ) 4 . o N g n s o c ( i l s e i r e t t a b 3 e t a r e p O s e i r e t t a b 4 e s a b t e s s a a p t m 6 . 2 e s a b t e s s a a p t m 3 5 . g n i t a r e p O i g n k a m e k o C s t e s s a k e e w / y a d 5 o t s t f i h s d e c u d e r h g u o r h t n o i t c u d o r p e c u d e R y t i c a p a C l l u F t n a P l r e t i n S l s a i r e t a m w a r f o n o i t a s i l a n o i t a r l a i t n e t o p ; 6 . o N n w o d t u h S g n i l d n a h ) 3 . o N e s o C l ( ) 1 . o N e s o C l ( l s e s s e v 2 e t a r e p O s r e t s a c 2 e t a r e p O s t f i h s d e c u d e R n o i t a r e p o t f i h s d e c u d e R n o i t a r e p o t f i h s d e c u d e R e g n a h c o N ) t r o p x e o n ( d a o l d e c u d e R e g n a h c o N d e s o C l d a o l d e c u d e R 1 L C M o t n o i t c u d o r p c i t s e m o d r e f s n a r t d n a 5 L C M l l a b h t o M ) l l i h g n i r p S ( 3 d n a s r e t s a c s u o u n i t n o c e e r h t t e a r e p O g n i t s a C b a S l y t i c a p a c y t i c a p a c l l u f l l u f t A t A e g n a h c o N l l i M p i r t S t o H l l i M n k S i l l i M e t l a P ) l a m r o n ( y t i c a p a c d e c u d e r t t a s e a r e p O l l i M p i r t S t o H ) s e n i l 3 ( y t i c a p a c l l u F ’ s L C M e g n a h c o N g n i l l o R d o C l l l i h g n i r p S s e n i l g n i t a o c l a t e m 3 t e a r e p O ’ s L C M y t i c a p a c l l u f t A g n i l l o R d o C l n r e t s e W t r o P 6 . o N d n a 5 . o N : o w T s e c a n r u F t s a B l g n i t a r e p o s e s s e V 3 l l l A S O B t f i h s l a m r o N t n e m t a e r T l e e S t a l b m e K t r o P I I N O S S U C S D R O F T F A R D L A T N E D F N O C I I ) l e e t S n o p p N h t i i l w V J n i ( d n o b r o o C d n a e m u a c n Z n o i t l i a r e n e g t x e n n i l s e a S l a n r e t x E n a i l a r t s u A l a c i r o t s H i t n e m t s e v n i d e u n i t n o c h t i w , d n a m e d c i t s e m o d l l a t e e m o t t n e c i f f i u s y t i c a p a c , a p t m 6 . 2 t A l s n o i t u o S & n o i t u b i r t s D n a i i l a r t s u A d n a A P C h t o b m o r f I 5 4 0 . 2 8 5 9 . 1 4 9 2 . 2 6 3 2 2 . 1 1 0 2 0 1 0 2 9 0 0 2 8 0 0 2 7 0 0 2 6 0 0 2 5 0 0 2 4 0 0 2 3 0 0 2 3 6 6 2 . 9 9 6 2 . 7 9 5 . 2 2 7 4 2 . 8 6 4 . 2 7 . 2 6 . 2 5 . 2 4 . 2 3 . 2 2 . 2 1 . 2 0 . 2 9 . 1 a p M t s r a e Y l a c s F i 5 2 e g a P t n e m g e s g n i t r o p e r l s n o i t u o S & n o i t u b i r t s D n a i i l a r t s u A y b l e e t S e n O m o r f d e c r u o s s t c u d o r p g n o l E D U L C X E s e a s l l a n r e t x E : e t o N e b t i l l i w w o h d n a ) a p t m 6 . 2 ( e c a n r u f t s a b l e n o o t n o i t i s n a r t o t t s o c d e t c e p x e e h t s i t a h W . 1 ? d e d n u f . 2 1 0 2 h c r a M d n a w o n n e e w e b t e c a p l e k a t l l i w y t i v i t c a n o i t i s n a r t e h t f o l k u b e h T • l n a p n o i t i s n a r t e h t h t i i w d e t a c o s s a s n o i t s e u Q e h t n i h t o b , l a t i p a c i g n k r o w f o e s a e e r l m o r f t e m e b l l i w s t s o c h s a c e r u t c u r t s e r i e t a p c i t n A • ) 1 ( m 0 0 5 - 0 0 4 $ A f o r e d r o d n a e f a s - e k a m e t a i r p o r p p a e k a t r e d n u l l i w d n a e t i s e h t t a e t a r e p o o t e u n i t n o c l l i w e p o c S e u B • l s t n e m e r i u q e r r e h t o 6 2 e g a P t n e m s s e s s a l a n r e t n i s ’ t n e m e g a n a m n o d e s a B ) 1 ( : e t o N t c a p m i y a m n o s c e d i i ” r e n o o s n a h t r e t a l “ a g n i t o n , t r a t s e r o t n e k a t s i i n o s c e d i a n e h W (cid:190) 7 2 e g a P e g n a r n i d n a s h t n o m 2 1 - 6 f o r e d r o e h t n i e b l d u o w t s o c d n a e m i t f o e t a m i t s e t s e b , y l t n e r r u C • m 0 0 1 - 0 4 $ A e t l e p m o c o t e m i t d n a t s o c e c n e u l f n i l o s a d u o w l e c a n r u F l t s a B 6 . o N g n i t r a t s t s o p i g n k a m e e l t s d n a n o r i r o f y t i c a p a c d e n n a p l e h T (cid:190) t n e m h s b r u f e r i f o l e v e l d e s a e r c n i r o f t n e m e r i u q e r l a i t n e t o p e h t o t e u d e m i t d n a t s o c h t o b e b l l i w t s o c d n a e m i t e h t r e v e w o h , 6 . o N F B t r a t s e r o t y t i l i b a e h t e v a h l l i w y n a p m o c e h T • : n o p u t n e d n e p e d e d o m ” e c n a n e t i n a m d n a e r a c “ i c s a b a n o F B e h t p e e k n e h T (cid:190) n o r i n e t l o m e h t i n a r d o t r e d n a m a a s l e h t p a T (cid:190) ? 6 . o N F B t r a t s e r l y e v i t c e f f e t s o c o t l e b a e b e p o c S e u B l l l i W . 2 o t s i n o i t n e t n I • l n a p n o i t i s n a r t e h t h t i i w d e t a c o s s a s n o i t s e u Q 8 2 e g a P i n o i t a c e r p e d p u o r g d e c u d e r f o % 5 7 . e i , l d o h l l i w l e v e l i s h t t c e p x e s r a e y w e f t x e n r e v O (cid:190) t n e m t s u d a j t n e m r i a p m i e h t r e t f a e s a b . n o i t i a c e r p e d p u o r g f l o % 5 7 y e t a m x o r p p a i s a w p u o r g e p o c S e u B e h t l r o f l a t i p a c ” s s e n s u b i n i y a t s “ l a u n n a d e t r o p e r l y s u o v e r i P (cid:190) ? e r u t c u r t s e r e h t r e t f a e r u t i d n e p x e l a t i p a c ” s s e n s u b i n i y a t s “ i g n o g n o ’ s p u o r G e h t s i t a h W . 3 l n a p n o i t i s n a r t e h t h t i i w d e t a c o s s a s n o i t s e u Q 9 2 e g a P s r e i l p p u s e v i t a n r e t l a o t n o i t i s n a r t h t o o m s a l e b a n e o t m e h t h t i i w g n k r o W − s r e m o t s u c s a e s r e v O (cid:190) s r e i l p p u s d e e f l e e t s e v i t a n r e t l a g n i t a g i t s e v n i n o d e c n a v d a l l e W − s e t a i l i f f a s a e s r e v O (cid:190) d e s a e r c n i ’ s e p o c S e u B l f o m e h t e r u s s a o t s r e m o t s u c g n i t c a t n o c f o s s e c o r p e h t n I − s t n e m e r i u q e r r i e h t t e e m o t t n e m t i m m o c s r e m o t s u c c i t s e m o D (cid:190) s r e m o t s u C • t c e p s e r h t i w s e i t i n u m m o c r u o d n a s r e i l p p u s , s r o t c a r t n o c , s e e y o p m e l r u o t a e r T (cid:190) y t i n u m m o c r u o d n a l e p o e p r u O • n o s u c o f ’ l s e p o c S e u B e s m o r p m o c i t o n l l i w e w s s e c o r p n o i t a t n e m e p m l i e h t g n i r u D (cid:190) y t e f a s y t e f a S • s r e m o t s u c r u o d n a y t i n u m m o c l , e p o e p r u o , y t e f a S 0 3 e g a P . d e v e h c a i n e e b s a h s h T i . e r u t c u r t s e r i g n d d a - e u a v l i s h t t n e m e p m l i o t t r o p p u s r e d n e l n a i t b o o t s a w s n o i t a i t o g e n e s e h t n i e v i t c e b o j ’ s e p o c S e u B l s r e d o h e l t o N t n e m e c a P e t a v i r l P S U i e t a c d n y S k n a B (cid:190) (cid:190) s p u o r g i g n d n e l l i a p c n i r p ’ s e p o c S e u B h l t i w d e d u c n o c l n e e b e v a h s n o s s u c s D i i • • g n i r u t c u r t s e r e h t r o f t r o p p u s r e d n e l s a h e p o c S e u B l y l l a i r e t a m t s l i h w e d s p u i f o t n u o m a l l a m s a p u i g n v g i l y n o e r a e w s w o h s y r o t s H i i e d s n w o d e h t i g n c u d e r s e g n a h c l a r u t c u r t s i c m o n o c e o r c a m d n a y r t s u d n I d n a ; s s e n s u b i t r o p x e g n k a m s s o i l n i g n i t l u s e R (cid:190) (cid:190) (cid:190) t s o c 8 0 Y F . s v ( 1 1 0 2 Y F f o d n e y b m 6 9 6 $ A . e i , s g n v a s i t s o c l a i t n a t s b u s d e r e v i l e D e d a r g p u t n a p l r e t n s i d n a e n i l e r 5 . o N F B i a s A n i d n u o r a n r u t l e b a t i f o r P (cid:190) (cid:190) (cid:190) : g e , ” e g n a h c “ r e v i l e d o t y t i l i b a n a d e t a r t s n o m e d e v a h e W • i s s e n s u b n a c i r e m A h t r o N e h t d e r u t c u r t s e r y l l a i r e t a M (cid:190) : e r u t c u r t s e r f o s t i f e n e b y e K • ) e s a b : i n e v g e v i t a r e p m i s i g n i r u t c u r t s e R • y r a m m u S 1 3 e g a P t n e m n o r i v n e t n e r r u c e h t n i s e a s l t r o p x e n o s e s s o l t n a c i f i n g s i f o l a v o m e R d n a m e d n a i l a r t s u A d n a y t i c a p a c l a b m e K t r o P t a s t n e m t s e v n i l a t i p a c m r e t - g n o l r e w o L l e c y c e h t h g u o r h t i s g n n r a e f o y t i l i t l a o v n i n o i t c u d e R (cid:190) (cid:190) (cid:190) n o i t c u d o r p i g n k a m e e l t s n a i l ’ a r t s u A s e p o c S e u B n e e w e b t l t n e m n g i l a d e v o r p m I (cid:190) 2 3 e g a P o t n o i t a m r o f n i l a i c n a n i f l a n o i t i d d A d e s i v e r e h t i f o g n d n a t s r e d n u t s i s s a n o i t a r u g i f n o c t e k r a m l e e t s A P C I n o r i f o n o i t a s i l i t u l a n o i t r o p o r p t r e a e r g ( e c i r p r e w o l o t t n e m e v o r p m i i l x m s a i r e a m w a r t f o n o i t p m u s s a i g n d u c n l i l , s a i r e t a m w a R t n a p l t r e n s i t a t d e a e r c y t i c a p a c t n e a t l e s u o t s e n i f s t s o c i n o s r e v n o c l e b a i r a V • • : f o d e s i r p m o C y l t i n a n m o d e r p m 0 3 $ f o t e a m i t s e n o i t u b i r t n o c c i t s e m o d l e b a r u o v a F d n e b l l t s a i r e a m w a r n i t n e m e v o r p m i m o r f n o i t u b i r t n o c s e a s l t r o p x e m 0 7 1 $ f o s s o L • • e d i l s t x e n o t r e f e r e s a e P l : f o d e s i r p m o C 1 1 0 2 r o f a m r o f o r p e r u t c u r t s e r ) 1 ( f o t c a p m I e r u t c u r t s e r A 1 1 0 2 e n u J 0 3 o t r a e y ; m $ A 6 4 6 , 3 ) 6 8 2 , 2 ( 0 6 3 , 1 ) 5 7 1 , 1 ( 5 8 1 ) 2 5 1 ( 4 3 ) 2 ( 2 3 5 9 3 3 1 0 , 2 ) 0 5 5 , 1 ( 0 1 4 , 1 + ) 0 4 1 ( 5 1 3 + 5 7 1 + 0 5 + 5 2 2 + 5 6 + 0 9 2 + - ) 1 7 2 , 2 ( 6 9 1 , 5 ) 6 9 6 , 3 ( 0 0 5 , 1 ) 0 9 4 , 1 ( 0 1 ) 2 0 2 ( ) 1 9 1 ( ) 7 6 ( ) 8 5 2 ( 3 1 0 , 2 6 6 6 , 2 d n a s e n n o t e m i r p l a n r e t x e d n a l a n r e n t i n o i t u b i r t n o c l e b a i r a V r e h t o & t s o c d e x F i t s o c l e b a i r a V e u n e v e R ) e g r a h c V R N e r p ( A D T B E I n o i t a s i t r o m a & n o i t a c e r p e D i ) e g r a h c V R N e r p ( T B E I t n e s e r p e r s e r u g i f h c t a p s e D : e t o N ) t k ( s e n n o t c i t s e m o D ) t k ( s e n n o t t r o p x E ) g n i y l r e d n u ( T B E I e g r a h c e u a v l l e b a s i l a e r t e N 3 3 e g a P t n e m s s e s s a l a n r e t n i s ’ t n e m e g a n a m n o d e s a B ) 1 ( : e t o N s t i n u s s e n s u b i r e h t o f o f l a h e b n o l d o s e g a n n o t d n a s e a s l e m i r p - n o n e d u c x e l t n e m e t a t s e m o c n i I A P C A 1 1 0 2 n o e r u t c u r t s e r f o t c a p m i a m r o f o r P d n a r i a d e s s e r p m o c , m a e t s , r e t a w , s e s a g i c n e g o y r c , s e s a g l a n r e t n i , s a g l a r u t a n , y t i c i r t c e e l s e d u c n l i s e i t i l i t U • f o t n e m e v o m ( g n i l d n a h l s a i r e t a m r e h t o d n a g a s l f o t n e m e g a n a m r o f i s e c v r e s d e t c a r t n o c s e d u c n l I i s e c v r e s l i a r e t i s d n a t n a p l I C P , ) s m a e r t s e t s a w l , s a i r e a m t t s a b l t o h ) % 0 8 ~ ( d e x i f l y h g h i d e r e d s n o c i – s e r a p s / l s a i r e t a m , s r o t c a r t n o c , r u o b a l e c n a n e t n a m i t c e r i d s e d u c n l I • • s e c i v r e s & s e i t i l i t U l e v e l n o i t c u d o r p h t i w d e n g i l a t o n r i a p e r & r a e w o t e u d d e x i f i d e r e d s n o c % 0 3 ~ t u b t s o c e b a i r a v l a y l l i a c p y T • d n a S O B 3 # , y r e t t a b e k o c a – s e i t i l i c a f f o e r u s o c l d n a 6 . o N F B f o n w o d t u h s s i s n o i t c u d e r f o r e v i r d y e K • i e c n a n e t n a m & s r i a p e R r e t s a c b a s l . 1 o n t n e m e g a n a m d n a t r o p p u s f o n o i t r o p a d n a d e s o c l e r a t a h t s a e r a t n a p l e h t m o r f r u o b a l t c e r i d s e d u c n l I a e r a t n a p l h c a e m o r f r u o b a l r u o b a l l & s a i r e t a m y r o t c a r f e r s e d u c n l I • • d n a S O B 3 # , y r e t t a b e k o c a – s e i t i l i c a f f o e r u s o c l d n a 6 . o N F B f o n w o d t u h s s i s n o i t c u d e r f o r e v i r d y e K • r e t s a c b a s l . 1 o n r u o b a l t c e r i D & s e i r o t c a r f e R l s e b a m u s n o c ) 1 ( ) M 5 1 3 $ ( e t a m i t s e n o i t c u d e r t s o c d e x i f f o s t n e n o p m o C , y t i r u c e s g e ( s t s o c d e t a c o l l a i e d w e t i s d n a ) s e i t i l i c a f & r u o b a l ( s t s o c t r o p p u s a e r a t n a p l e d u c n l i s d a e h r e v O • 4 3 e g a P t n e m s s e s s a s e s s e c o r p s s e n s u b i f o i n o i t a s d r a d n a t s d n a n o i t a c i f i l p m s i h g u o r h t d e g a s v n e i e r a s g n v a s i d e t a m i t s e l a n o i t i d d A . e r u t c u r t s e r Z N A e p o c S e u B g n i t s x e l i l a n r e t n i s ’ t n e m e g a n a m n o d e s a B ) 1 ( : e t o N ) c t e i g n s u o h e r a w , t r o p p u s t n e m n o r i v n e , t r o p p u s l i a c n h c e t , s e e f , s e x a t d n a l , s e a r t e h t f o i n o s n e t x e n a s a , s t s o c d n a s e o r l d e t a c i l p u d f o l a v o m e r h g u o r h t n e v i r d i y l t n a n m o d e r p : A & G S • r e h t o & A & G S , s d a e h r e v O 0 1 Y F 4 Q g n o r t s m o r f g a l ) d a e r p s d n a ( e c i r p c i t s e m o d m o r f d e t i f e n e b 1 1 Y F 1 Q – : i d n m n i r a e b , n o i t u b i r t n o c l e b a i r a v g n i r e d s n o c i n e h W • ) M 0 0 1 $ . c ( t n e m t s u d a j k c o t s i g n n e p o n a m o r f d e t i f e n e b 1 1 0 2 Y F – s t s o c i n o s r e v n o c l e b a i r a v i d e n a t e r f o l n o i t a a c s E – l ) n o i t a a c s e - e r p ( e t a r g n i t a r e p o ) F B 2 ( % 0 8 m o r f e t a r s g n v a s i d e s i l ) 1 ( a u n n a M 0 2 1 $ ~ – l ) n o i t a a c s e - e r p ( e r u t c u r t s e r l l u f m o r f e t a r s g n v a s i d e s i l a u n n a M 5 1 3 $ ~ – : e r u t c u r t s e r m o r f t i f e n e b o t e s a b t s o c d e x i f d e t a m i t s E • ) 1 ( 2 1 0 2 Y F n i A P C I r o f s r o t c a f t n a v e e R l t a n e k a t t n e m r i a p m i i n e v g r a e y l l u f t u o h g u o r h t l y p p a o t M 0 5 $ ) 1 ( f o n o i t c u d e r n o i t a c e r p e D i • 1 1 0 2 e n u J 0 3 5 3 e g a P t n e m s s e s s a l a n r e t n i s ’ t n e m e g a n a m n o d e s a B ) 1 ( : e t o N ) 1 ( M 0 0 5 - 0 0 4 $ f o r e d r o e h t n i e b l l i w h t o b t c e p x e t u b , e g a t s s i h t t a y l n o s e t a m i t s e ; l a t i p a c g n i k r o w f o e s a e l e r h g u o r h t t e m e b l l i w s t s o c h s a c e r u t c u r t s e r t a h t e t a p i c i t n a e W ) e z i s d e t a m i t s e y b ( s t s o c h s a C e s a e l e r l a t i p a c g n i k r o W e v e h c a i o t t s o c d n a e s a e e r l l a t i p a c i g n k r o W l l s t s o c d e t a e r e e y o p m e d n a s e c n a d n u d e R i i i ) s n o s v o r p e v a e l f o t n e m y a p g n d u c n i ( l i s t s o c e r u t c u r t s e r / s e g n a h c l a n o i t a r e p O s t s o c d o o g - e k a m d n a e r u s o c e t i l S y r o t n e v n i t r o p x e f o n o i t a d u q L i i • • • • t u b , s t s o c d e d d e b m e n o d n e p e d l l i w s e c n a a B l ) 1 ( y l t h g i l s C W s s e n s u b i c i t s e m o D . s r o t b e d r e w o L – c i t s e m o d f o e u a v l o t e u d t r o p x e n a h t r e h g h i s r o t b e d : o t e u d , 2 1 0 2 e n u J o t l e v e l 1 1 0 2 e n u J t a a r - o r p d e t c e p x e h t i w y r o t n e v n i r e w o L – m o r f p o r d M 0 0 5 - 0 0 4 $ e t a p c i t n a y l t n e r r u c i t e n e r e w s t n u o c c a l i a t i p a c g n k r o w n a M i 1 1 0 2 e n u J 0 3 t a A P C n I i n b 1 $ ~ • • 6 3 e g a P t n e m s s e s s a l a n r e t n i s ’ t n e m e g a n a m n o d e s a B ) 1 ( : e t o N s t c a r t n o c l y p p u s r e h o t d n a s e s a h c r u p l s a i r e t a m w a r f o l s e v e l r e w o l n e v g i s r o t i d e r c r e w o L – r e f f u b s a l d e h e r o n o r i l a n o i t i d d a e m o s f o n o i t p m u s s a r o f t u b , n o i t c u d e r e m u o v l y r o t n e v n i 7 3 e g a P s t l u s e R l i a c n a n F i 1 1 Y F 3 5 1 , 9 ) 6 ( ) 7 8 6 ( ) 6 ( ) 3 4 0 , 1 ( ) 1 0 1 ( ) 6 ( ) 4 5 0 , 1 ( ) 8 1 1 ( ) 6 ( ) 4 . 7 5 ( ) 4 . 6 ( ) 4 1 8 ( ) 5 9 9 ( ) 0 6 ( ) 9 9 9 ( ) 1 7 ( ) 4 . 4 5 ( ) 9 . 3 ( 7 2 1 ) 8 4 ( ) 1 4 ( ) 5 5 ( ) 7 4 ( ) 0 . 3 ( ) 5 . 2 ( . s t l u s e r 1 3 5 , 4 2 2 6 , 4 4 2 6 , 8 9 2 3 , 0 1 5 9 4 , 0 1 1 1 Y F H 2 1 1 Y F H 1 0 1 0 2 Y F 9 0 0 2 Y F ) 3 ( 8 0 0 2 Y F 7 0 0 2 Y F e c n a m r o f r e p i s g n n r a e l a c i r o t s H i s n o i l l i M $ A 0 9 5 0 4 2 5 5 2 6 2 1 3 1 1 9 . 6 2 . 6 0 8 3 5 1 1 7 1 ) 6 6 ( 6 5 ) 1 . 7 ( 1 . 6 0 2 4 , 1 3 6 0 , 1 3 7 2 , 1 6 9 5 6 1 8 1 . 0 8 6 . 9 0 1 3 1 9 , 8 3 2 4 , 1 9 9 0 , 1 7 5 0 , 1 6 8 6 3 4 6 3 . 5 9 3 . 9 8 ) 2 ( d e t r o p e R – A D T B E I d e t r o p e R – ) 2 ( T B E I ) 1 ( e u n e v e R i ) 4 ( g n y l r e d n U – i ) 4 ( g n y l r e d n U – d e t r o p e R – T A P N d e t r o p e R – ) s p c ( ) 5 ( S P E i ) 4 ( g n y l r e d n U – : s e t o N 8 3 e g a P M 6 1 $ l e p a c s e e t S & M 0 0 1 $ n o i t u b i r t s D i , I M 7 9 7 $ A P C M 3 1 9 $ – 1 1 H 2 . M 8 6 $ f o k c a b - e t i r i w a n h C y b t e s f f o y l t r a p M 7 7 $ n o i t u b i r t s D i - M 9 $ – 1 1 H 1 . r e f f o t n e m e l t i t n e e h t f o t n e m e e l s u n o b e h t r o f d e t a t s e r n e e b t o n e v a h r e f f o t n e m e l t i t n e 9 0 0 2 e n u J / y a M e h t o t r o i r p s d o i r e p r o f S P E : s n w o d e t i r w t n e m r i a p m i t e s s a s e d u c n I l . s n o i t a r e p o i g n o g n o m o r f e c n a m r o f r e p l i a c n a n i f i g n y l r e d n u t c e l f e r o t s t n e v e g n i r r u c e r - n o n r o l a u s u n u r o f d e t s u d a j s r e b m u n d e t r o p e R t n e s e r p e r s r e b m u n i g n y l r e d n U l i a c n a n i f s e s s e n s u b i l e e t s A S M I s h t n o m e v i f d n a s t l u s e r l i a c n a n i f i n o i t u b i r t s D e p o c S e u B l f o s h t n o m n e v e e l s e d u c n I l . ) 0 1 0 2 Y F ( M 6 2 6 $ A . s v ) 1 1 0 2 Y F ( M 7 9 6 $ A s a w h c h w i , e u n e v e r l e e t S e p o c S e u B l r a t S h t r o N e d u c n l i t o n s e o D . x a t e r o f e b t i f o r p t e n l e e t S e p o c S e u B l r a t S h t r o N f o e r a h s % 0 5 s e d u c n I l ) 1 ( ) 2 ( ) 3 ( ) 4 ( ) 5 ( ) 6 ( 9 3 e g a P f o t l u s e r a s a , m 8 6 $ A f o k c a b e t i r w e n i l g n i t a o C l a t e M a n h C y b i t e s f f o y l t r a P − s r a e y o w t t s a p e h t r e v o e c n a m r o f r e p i s g n n r a e d e v o r p m i ) l l i w d o o g l l a ( m 7 7 $ A n o i t i u b i r t s D e p o c S e u B − l i g n y r r a c e h t s w e v e r i e p o c S e u B l r a e y f l a h h c a e s t n u o c c a s t i g n s i i l a n i f f o t r a p l a m r o n a s A . s t e s s a t n e r r u c - n o n s t i f o e u a v l ) l l i w d o o g o t s e t a e r l m 8 6 $ h c h w i f o ( m 7 9 7 $ A a i l a r t s u A s t c u d o r P l a i r t s u d n I & d e t a o C − - n o n g n w o i l l o f e h t e d a m e p o c S e u B l , d n a m e d c i t s e m o d w o l d n a ) t s o c l a i r e t a m w a r s s e l ) n w o d e t i r w t n e m r i a p m i t e s s a m 3 1 9 $ A ( 1 1 0 2 Y F H 2 (cid:190) : 1 1 0 2 Y F g n i r u d s n w o d e t i r w t n e m r i a p m i t e s s a t n e r r u c ) t n e m g e s a c i r e m A h t r o N , s t c u d o r P g n d i l i u B & d e t a o C f o t r a p ( A S U , e p a c s e e t S − l ) n w o d e t i r w t n e m r i a p m i t e s s a m 9 $ A t e n ( 1 1 0 2 Y F H 1 (cid:190) . ) l l i w d o o g l l a ( m 6 1 $ A ) l l i w d o o g l l a ( m 0 0 1 $ A n o i t i u b i r t s D e p o c S e u B − l e c i r p g n i l l e s ( s d a e r p s w o l , : D S U D U A h g h i f o s e g n e l l a h c i c m o n o c e o r c a m g n o g n o i n e v G i • • t n e m r i a p m i t e n n i t l u s e r s t n e m s s e s s a e u a v l i g n y r r a c t e s s A m 2 2 9 $ A f o s n w o d e t i r w ) 2 ( 8 3 5 2 1 ) 9 0 1 ( ) 3 4 ( ) 3 3 ( : s t s o C r e h t O & n o i s r e v n o C s e v i t a i t i n i t n e m e v o r p m i t s o C y r a n o i t e r c s d / i f f o - e n O l n o i t a a c s E e m u o V l ) t h g e r f i i l y n a m ( r e h t O ) 0 5 4 ( ) 0 8 4 ( ) 5 5 ( ) 7 1 ( ) 8 6 ( ) 4 7 ( ) 1 ( ) 8 2 ( 9 2 2 i i s n o s v o r p e u a v e b a s l l i l a e r t e N j d a k c o t s g n n e p O i l s a t e m g n i t a o C : s l a i r e t a M w a R e r o n o r I l a o C p a r c S s y o l l A d e e f l e e t s l a n r e t x E ) m 4 2 3 $ ( n o i t c u d e R d a e r p S t e N 4 8 1 + ) 1 ( r e h t O 6 3 4 + m e t i j r o a m y b 1 1 0 2 Y F o t 0 1 0 2 Y F e c n a i r a v T B E g n y l r e d n U I i 7 1 3 ) 9 4 ( ) 8 1 ( ) 2 6 2 ( : s e t a R e g n a h c x E e t a t s - e R r o t b e D l n o i t a s n a r T s e u n e v e R s t s o C 3 6 ) 1 6 ( 6 1 9 3 6 9 1 3 : s e c i r P c i t s e m o D g e S r e t n I / r e h t O i a s A B P & C A N P B & C I A P & C S & D A c a P Z N 1 0 1 - 6 1 - 2 1 - 2 2 - 2 1 + 1 1 0 2 Y F r e h t O e g n a h c x E i n o s r e v n o C r a t S h t r o N s e t a R s t s o C 0 7 - 6 7 + ) 3 ( i x M ) 3 ( e m u o V l 4 4 9 - w a R l a i r e t a M s t s o C c i t s e m o D s e c i r P t r o p x E s e c i r P 0 1 0 2 Y F 5 5 2 + 0 4 e g a P i s n g r a m 0 1 0 2 Y F n o d e s a b i x m / e m u o V l ) 3 0 1 0 2 Y F f o t r a t s e h t t a y r o t n e v n i d e c i r p r e h g h f o i t u o - d e e b l e h t - . 1 1 0 2 Y F n i s e m u o v l l s e a s / n o i t c u d o r p r e h g h f o i t l u s e r a s a s t s o c t i n u r e w o l f o t c e f f e e h t s t c e l f e r s t s o c n o t c a p m i e m u o V l ) 2 d n a ; 1 1 0 2 Y F f o t r a t s e h t t a y r o t n e v n i d e c i r p r e w o l f o t u o - d e e b e h t l - : g n i r a p m o c t n e m e v o m t e n e h t s t c e l f e r t n e m t s u d a j k c o t s i g n n e p O ) 1 : e t o N 7 4 2 1 1 1 ) 6 4 ( ) 3 1 ( : s t s o C r e h t O & n o i s r e v n o C s e v i t a i t i n I t n e m e v o r p m i t s o C y r a n o i t e r c s d / i f f o - e n O e m u o V l l n o i t a a c s E r e h t O 0 6 - 4 - 3 2 + 3 ) 7 7 ( ) 4 1 ( ) 3 ( ) 8 2 ( ) 3 1 ( - 0 1 ) 7 0 1 ( 1 1 + i i s n o s v o r p e u a v e b a s l l i l a e r t e N : s l a i r e t a M w a R e r o n o r I l a o C p a r c S s y o l l A d e e f l e e t s l a n r e t x E ) m 3 0 1 $ ( n o i t c u d e R d a e r p S t e N 5 - j t n e m t s u d a k c o t s g n n e p O i l s a t e m g n i t a o C ) 6 5 ( ) 5 1 ( 1 0 3 7 3 ) 2 ( 5 5 + r e h t O : s e c i r P c i t s e m o D g e S r e t n I / r e h t O i a s A B P & C A N P B & C I A P & C S & D A c a P Z N 9 2 2 - 1 4 - 1 3 1 + 1 4 e g a P 1 1 0 2 H 2 r e h t O e g n a h c x E i n o s r e v n o C r a t S h t r o N s e t a R s t s o C 6 + ) 1 ( i x M ) 1 ( e m u o V l 7 - w a R l a i r e t a M s t s o C c i t s e m o D s e c i r P t r o p x E s e c i r P 1 1 0 2 H 1 : e t o N i . s n g r a m 1 1 0 2 Y F H 1 n o d e s a b t c a p m i i x m / e m u o V l ) 1 ( m e t i j r o a m y b 1 1 0 2 Y F H 1 o t 1 1 0 2 Y F H 2 I e c n a i r a v T B E g n y l r e d n U i . n o i t a a c s e l e r o f e b i , d e v e h c a s a w e s a b t s o c e h t n i n o i t c u d e r M 8 3 $ l a n o i t i d d a n a 1 1 0 2 Y F g n i r u D (cid:121) ) e s a b t s o c 8 0 0 2 Y F . s v ( 1 1 0 2 Y F f o d n e e h t y b d e v e h c a i e r e w s g n v a s i l e v i t a u m u c M 6 9 6 $ (cid:121) s u c o f i g n o g n o i n a n a m e r s n o i t c u d e r t s o C (cid:121) s g n v a s i t n e n a m r e p M 0 4 3 $ s g n v a s i y r a r o p m e t M 6 5 3 $ (cid:190) (cid:190) : s e t o N s n o i t c u d e r d a e h r e v o d n a t s o c d e x F i d e c u d e r e d u c n l i l s e p m a x E . e v o r p m i s n o i t i d n o c i s s e n s u b s a n r u t e r y a m h c h w i l ) s t s o c e b a i r a v d e t a e r e m u o v l l t c e r i d g n d u c n i l i t o n ( s e v i t a i t i n i ’ i g n n e t h g i t t l e b ‘ m r e t - t r o h s e r a s g n v a s y r a r o p m e T i 2 4 e g a P i . d n e p s g n i r e e n g n e d n a e c n a n e t n a m i l a i t n e s s e - n o n f o l a r r e f e d , d n e p s s e i l p p u s d n a i s e c v r e s f o t n e m e r u c o r p f o n o i t a i t o g e n e r , l e v a r t , s t n a t l u s n o c , s r o t c a r t n o c f o e s u l . n o i t a a c s e t s o c f o t c a p m i s e d u c x E l s e t i s g n i t a r e p o f o n o i t a d i l o s n o c , s e i t i v i t c a t h g e r f i i & n a h c l y p p u s i f o y c n e c i f f e , s e u q n h c e t g n i i l u d e h c s d e v o r p m i s a h c u s s e v i t a i t i n i n o i t c u d e r t s o c i . s e c v r e s t r o p p u s f o n o i t a d i l o s n o c d n a l a r u t c u r t s m r e t - g n o l i e r a s g n v a s t n e n a m r e P ) a c i r e m A h t r o N d n a n o i t u b i r t s D n a i i l a r t s u A ( • • • l e e t s r e k a e w l a r e n e g n I h s a c d e c u d e r s d a e r p s s n o i t a r e p o m o r f t e e h s l e c n a a b e e s ) e g a p t x e n ( m a e t s s e d u c n l I : C W n i e s a e r c n I l e e t s , e r u t c u r t s a r f n i i n a s e n o d n I , n o i t c e n j i n i y a t s d n a i n o s n a p x e s s e n s u b i y l t i n a n m o d e r P & s t s o c t s e r e n t i . s e e f t n e m t i m m o c 3 4 e g a P ) 2 ( s e s s o l x a t d r a w r o f d e i r r a c s a h p u o r g x a t n a i l a r t s u A d e a d t i l o s n o c d n a d a e r p s r e w o l s e e f s t c e l f e r H 2 r e w o L - 7 3 ) 8 1 2 ( ) 5 1 1 ( 7 ) 2 1 ( 6 6 3 - - ) 3 9 ( ) 5 6 ( - 3 3 ) 6 2 ( 2 ) 9 4 ( ) 6 1 ( 1 2 2 - ) 2 4 ( - 0 9 8 0 3 2 4 1 ) 6 6 1 ( 2 4 1 6 1 8 5 1 6 6 1 ) 2 8 1 ( ) 6 1 ( 6 9 5 3 6 4 ) 3 3 1 ( 4 3 5 0 5 2 4 8 7 9 7 5 , 1 9 6 8 4 6 , 1 ) 7 9 3 ( ) 7 1 2 ( ) 0 8 1 ( ) 5 7 3 ( ) 2 6 7 ( ) 9 7 9 , 1 ( 1 1 0 2 Y F 1 1 Y F H 2 1 1 Y F H 1 0 1 0 2 Y F 9 0 0 2 Y F 8 0 0 2 Y F 7 0 0 2 Y F - 4 ) 2 9 1 ( - 8 4 6 3 1 - 4 3 6 5 7 4 4 2 2 8 3 1 4 6 3 , 1 ) 1 2 ( 3 4 3 , 1 ) 3 9 4 ( ) 9 1 3 ( 1 7 2 2 0 8 o n e b l l i w e r e h T . b 2 . 1 $ f o s s e c x e n i , 1 1 0 2 e n u J 0 3 t a s a , s e s s o l x a t d r a w r o f d e i r r a c e v a h o t d e t a m i t s e s i p u o r g d e a d t i l o s n o c x a t n a i l a r t s u A l e e S t e p o c S e u B l e h T ) 2 ( . 7 0 0 2 t s u g u A n i l a s o p s d i , 6 0 0 2 t s u g u A n i l t e e S n o g r o m S n i i l g n d o h e r a h s % 9 . 9 1 d e s a h c r u P ) 1 ( . d e r e v o c e r e r a s e s s o l e s e h t l i t n u s t n e m y a p x a t e m o c n i n a i l a r t s u A ) 6 6 ( ) 2 0 1 ( ) 1 6 1 ( ) 3 4 1 ( ) 6 5 1 ( 5 4 5 4 1 - - ) 1 5 ( 9 7 ) 5 5 1 ( - - ) 4 ( ) 5 5 1 ( ) 9 0 1 ( 6 ) 5 0 2 ( ) 3 4 9 ( 6 3 8 , 1 ) 3 5 2 ( - 6 3 3 7 1 3 3 ) 8 0 2 ( 9 2 2 ) 7 5 3 ( - ) 3 ( 6 ) 9 2 2 ( ) 6 5 3 ( 1 2 2 ) 1 2 3 ( 2 ) 1 3 ( x a t e m o c n i f o d n u f e r / ) t n e m y a P ( i d e v e c e r t s e r e n t I s t s o c g n c n a n F i i f o ) t n e m y a p e r ( i / g n w a r d t e N i s g n w o r r o b n i ) e s a e r c e d ( / e s a e r c n i t e N l d e h h s a c s e u s s i y t i u q E s d n e d v D i i r e h t O w o l f h s a C s n o i t a r e p o m o r f h s a C s n o i l l i m $ A t n e m e v o m l a t i p a c g n k r o W i w o l f h s a c g n i t a r e p o t e N s w o l f h s a c g n i t s e v n i t e N p x e t n e m t s e v n i & l a t i p a C l i ) 1 ( g n d o h e r a h s n o g r o m S r e h t O - - - e r o f e b w o l f h s a c t e N x a t i & g n c n a n i f 0 1 0 2 c e D n a h t r e h g H i r e h g h o i t e u d l y e g r a l t s r i f r e v o s e c i r p . f l a h g n i l l e s e d i l s t x e n r e e R f n o s n w o d w a r d r e h t r u F s e s a h c r u p l t a i r e a m w a r f o i g n m T i y t i l i c a f t e o n n a o l 4 4 e g a P i w e v e r l a i r a u t c a l y e g r a L d n u f i n o s n e p / r e p u s f o s e c n a a b l n w o d e t i r w t n e m r i a p m i t e s s A 2 7 1 0 5 0 1 , 9 2 0 2 , 1 4 0 1 , 1 0 5 3 , 3 9 7 7 , 3 6 1 1 , 0 4 2 1 , 4 9 9 7 9 3 3 , 6 9 3 4 , % 5 9 1 . 6 8 7 8 9 2 6 9 , 1 8 9 1 , 1 5 7 1 , 4 8 0 4 , 8 3 7 9 9 9 9 9 2 9 1 0 9 , 2 7 0 5 , 5 % 2 . 4 1 1 5 2 9 9 1 , 1 9 2 8 , 1 6 4 4 , 1 3 7 2 , 4 8 9 9 , 8 0 2 1 , 1 4 9 9 8 2 1 , 1 2 4 2 , 3 6 5 7 , 5 s t e s s A d e x F i t e N s t e s s A l a t o T s t e s s A r e h t O y r o t n e v n I s e i t i l i b a i L s r o t i d e r C s e i t i l i b a L i g n i r a e B t s e r e t n I l s e b a v e c e R i s t e s s A h s a C s e i t i l i b a L i r e h t o & s n o s v o r i i P s e i t i l i b a i L l a t o T s t e s s A t e N % 4 . 1 1 ) y t i u q E + t b e D t e N ( / t b e D t e N (cid:131) e d i l s i s u o v e r p r e e R f t a s A 1 1 0 2 e n u J 0 3 0 1 0 2 c e D 1 3 0 1 0 2 e n u J 0 3 t e e h S e c n a a B l s n o i l l i M $ A i y l t n a n m o d e r p 0 1 0 2 r e b m e c e D e c n s i y r o t n e v n i n i e s a e r c n i M 7 6 $ … t e e h S e c n a a B l I A P C m 3 7 $ M 8 8 3 $ 0 5 7 8 1 7 3 7 1 S M R I P W S G F r e h t O 9 2 0 , 2 + 8 2 - 1 3 - 0 3 + 6 9 + 2 6 9 , 1 + M 1 2 4 $ 0 9 6 9 7 6 2 7 1 S M R I P W S G F r e h t O M 7 9 3 $ 9 3 6 8 1 6 5 7 1 S M R I P W S G F r e h t O 9 2 8 , 1 + M 8 3 3 $ 9 6 5 8 9 4 2 8 1 S M R I P W S G F r e h O t 5 1 8 , 2 + 7 8 5 , 1 + 2 0 7 , 1 + 0 6 6 , 1 + t n e m t s u d a j t n e m e v o m s t s o c 1 1 - n u J V R N X F e m u o V l d e e f / e t a R 0 1 - c e D 0 1 0 2 n u J 9 0 0 2 c e D 9 0 0 2 n u J 8 0 0 2 c e D 8 0 0 2 n u J e g n a h c x e n g e r o f i y b t r a p n i t e s f f o , I A P & C l t a s e m u o v d n a s e c i r p f o t n u o c c a n o s t i f e n e b 5 4 e g a P 8 0 0 2 - n u J s v % 1 1 + 8 0 0 2 - n u J s v 8 0 0 2 - n u J s v 8 0 0 2 - n u J s v 8 0 0 2 - n u J s v 8 0 0 2 - n u J s v % 4 1 + % 1 - % 9 - % 2 1 - % 5 2 + e g n a h c e m u o V l 8 0 0 2 e n u J m o r f i ) s e s s e n s u b L S B o t d e e f l e e t s d e c r u o s y l l a n r e t x e g n d u c n i ( i l l s a i r e t a M w a R – ” S M R “ : e t o N s s e r g o r P n i k r o W – ” I P W “ s d o o G d e h s n F – ” i i S G F “ 6 4 e g a P t b e D t e N 1 1 0 2 e n u J l n o i t a s n a r t X F X F - 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. 2 0 . 1 $ S U s i e t a r e g n a h c x e e s a b r a e y l l u F - ) 1 ( 8 4 e g a P f o t c a p m i e h t d n a l s e b a y a p d n a l s e b a v e c e r i i d e t a n m o n e d r a l l o d S U f o t n e m e t a t s e r e h t s e d u c n l i e t a r e g n a h c x e r a l l o d S U / r a l l o d n a i l a r t s u A e h t n i t n e m e v o m e h T ) 3 ( i . g n c i r p c i t s e m o d n a i l a r t s u A n o t c a p m i t c e l f e r t o n s e o D . $ A o t s n o i t a r e p o e r o h s f f o f o i s g n n r a e e h t l g n i t a s n a r t s e c a n r u f t s a b l 2 f o % 0 5 f o e t a r a t a n o i t p m u s n o c l a i r e t a m w a r e m u s s a s e i t i v i t i s n e s e c a n r u f l t s a b 1 ) 4 ( 9 4 e g a P k o o l t u O 0 5 e g a P . r e b m e v o N n i M G A e h t t a t e k r a m e h t e t a d p u l l i w e W • ) s t n e m r i a p m i r o / d n a s V R N ’ , s t s o c e r u t c u r t s e r i l g n d u c x e ( T A L N g n y l r e d n u i l l a m s A (cid:190) n i t s e r e t n i % 0 5 r u o d n a l d n a a e Z w e N , i a s A m o r f e c n a m r o f r e p d o o g d e u n i t n o c t c e p x e e W f l a h i s h t n i e c n a m r o f r e p l i a c n a n i f n o t c a p m i l a i r e t a m a e v a h o s a l l l i w s t s o c e r u t c u r t s e R ’ r o / d n a s V R N g n d u c x e ( l i s t s o c g n i r u t c u r t s e r i g n d u c n l i T A L N d e t r o p e r t n a c i f i n g s A (cid:190) i ) s t n e m r i a p m i : t c e p x e e w y l t n e r r u C r a t S h t r o N • • • l i a c n a n i f 2 1 H 1 r u o n o e c n e u l f n i l a i r e t a m a e v a h o t e u n i t n o c l l i w s r e v i r d y e k e e r h T • : e c n a m r o f r e p ) s e c i r p l a i r e t a m w a r d n a C R H f o n o i t c n u f ( d a e r p s l e e t S d n a m e D $ S U / $ A (cid:190) (cid:190) (cid:190) k o o l t u o 2 1 0 2 Y F f l a h t s r i F DIRECTORS’ REPORT BlueScope Steel Limited ABN 16 000 011 058 Directors’ Report for the year ended 30 June 2011 Contents Corporate Directory Directors’ Report Directors’ Biographies Remuneration Report Corporate Governance Statement BlueScope Steel Limited Directors’ Report Page 2 3 7 11 38 Page 1 of 40 BlueScope Steel Limited Directors’ Report CORPORATE DIRECTORY Directors G J Kraehe AO Chairman R J McNeilly Deputy Chairman P F O’Malley Managing Director and Chief Executive Officer Secretary Executive Leadership Team D J Grady AM H K McCann AM Y P Tan D B Grollo K A Dean P Bingham-Hall M G Barron P F O’Malley Managing Director and Chief Executive Officer M G Barron Chief Legal Officer and Company Secretary N H Cornish Chief Executive, Australian & New Zealand Steel Manufacturing Businesses I R Cummin Executive General Manager, People and Organisation Performance S Dayal Chief Executive, Asia S R Elias Chief Financial Officer P Finan Executive General Manager, Global Building and Construction Markets K Mitchelhill Chief Executive, Australian Distribution & Solutions R Moore President China P E O’Keefe Chief Executive, Australian Coated & Industrial Markets M R Vassella President, North America Notice of Annual General Meeting The Annual General Meeting of BlueScope Steel Limited will be held at Wesley Conference Centre, 220 Pitt Street, Sydney, New South Wales at 2.00 pm on Thursday 17 November 2011 Registered Office Share Registrar Auditor Stock Exchange Level 11, 120 Collins Street, Melbourne, Victoria 3000 Telephone: +61 3 9666 4000 Fax: +61 3 9666 4111 Email: bluescopesteel@linkmarketservices.com.au Postal Address: PO Box 18207, Collins Street East, Melbourne, Victoria 8003 Link Market Services Limited Level 12, 680 George Street, Sydney, NSW 2000 Postal address: Locked Bag A14, Sydney South, NSW 1235 Telephone (within Australia): 1300 855 998 Telephone (outside Australia): +61 2 8280 7760 Fax: +61 2 9287 0303 Email: bluescopesteel@linkmarketservices.com.au Ernst & Young 8 Exhibition Street, Melbourne, Victoria 3000 BlueScope Steel Limited shares are quoted on the Australian Securities Exchange (ASX code: BSL) Website Address www.bluescopesteel.com Page 2 of 40 BlueScope Steel Limited Directors’ Report DIRECTORS’ REPORT FOR THE YEAR ENDED 30 June 2011 The Directors of BlueScope Steel Limited (‘BlueScope Steel’) present their report on the consolidated entity (‘BlueScope Steel Group’ or ‘the Company’) consisting of BlueScope Steel Limited and its controlled entities for the year ended 30 June 2011. PRINCIPAL ACTIVITIES During the year the principal continuing activities of the BlueScope Steel Group, based principally in Australia, New Zealand, North America, China and elsewhere in Asia, were: (a) Manufacture and distribution of flat steel products; (b) Manufacture and distribution of metallic coated and painted steel products; (c) Manufacture and distribution of steel building products; and (d) Design and manufacture of pre-engineered steel buildings and building solutions. SIGNIFICANT CHANGES IN STATE OF AFFAIRS The Company is progressing a number of growth initiatives mainly aimed at expanding the manufacture and distribution of metallic coated and painted steel products. The status of these projects is: • • Indonesia: a second metallic coating facility (capacity: 165,000 tonnes per annum) with in-line painting at Cilegon, was commissioned in May 2011; and India: the metallic coating and painting facilities project in India, which forms part of a 50/50 joint venture with Tata Steel, remains on track for completion during 2011. MATTERS SUBSEQUENT TO THE YEAR ENDED 30 JUNE 2011 1. Major Restructure to Australian Operations The Company announced the Board has approved a major restructure of Australian operations to reposition the Company for improved profit and growth. The Company has been experiencing significant economic challenges and structural change in the global steel industry. The restructure, which includes shutting down the No.6 Blast Furnace at Port Kembla and closing the Western Port Hot Strip Mill, will better align Australian steelmaking production with Australian domestic demand and see BlueScope exit the Australian export business. The restructure will produce a more viable and sustainable Australian steel business and allow the Company to focus clearly on domestic markets and international growth opportunities. It will also lower fixed costs at major facilities at Port Kembla (NSW) and Western Port (Victoria). BlueScope is committed to making steel in Australia and can now prioritise its resources and efforts to better service domestic customers. There is a compelling business case underpinning this decision. It will deliver a material improvement in future earnings and cashflow. It materially reduces export losses, reduces earnings volatility through the economic cycle and reduces long-term capital investment requirements at Port Kembla. For the Coated and Industrial Products Australia (CIPA) reporting segment, if the restructure had been in place for the full year, the Earnings Before Interest and Tax (EBIT) improvement would have been around $225 million (management estimate on a pro forma FY2011 basis). It’s the right decision for the long-term viability of the business. The Company has the support of its lenders to undertake the restructure. It will now enter a consultation process with employees and affected stakeholders, including customers, unions, contractors, suppliers, governments and local communities. Economic Conditions Drive Restructure The Company is experiencing an unprecedented combination of economic challenges in the form of a record high Australian dollar, low steel prices and high raw material costs and these challenges are compounded by low domestic steel demand in the wake of the GFC. This is evidenced by the $487 million underlying EBIT loss experienced in FY2011 on export sales. The economic conditions for export steelmaking from Australia appear unlikely to become favourable in the foreseeable future and continued exposure to this market is clearly unsustainable. The decision is a direct response to the economic factors affecting the business and is not related to the Federal Government’s proposed carbon tax. When fully implemented, the restructure plan will result in: • Shut-down of No.6 Blast Furnace at Port Kembla, with production reduced to 2.6 mtpa. The shut down process will be completed in a manner that facilitates re-start of the furnace in the future should that be desirable. • Closure of No. 4 cokemaking battery, No. 3 BOS steelmaking furnace and No. 1 slab caster. The PKSW hot strip and cold rolling mills, metal coating and paint lines will continue to operate. • Closure of the Western Port Hot Strip Mill and mothballing of a metal coating line (MCL5). Page 3 of 40 BlueScope Steel Limited Directors’ Report Commitment to Australia and to Growth The restructure will better position the Company for profit and growth in Australia and allow it to grow its presence in building construction markets, in particular Pre-Engineered Buildings, where BlueScope is a world leader. It will also focus on growth opportunities, particularly in Asia. The Company has a strong competitive advantage in coated steel with its world class ZINCALUME® and COLORBOND® steel products. In collaboration with Nippon Steel Corporation, it will develop the next generation of coated products for our customers. These products are expected to be launched initially in Australia and then rolled out across the Company’s global footprint. Consultation Before Implementation In managing the transition out of exports BlueScope will take a careful and considered approach. Regrettably, these changes will see a workforce reduction of around 1,000 people, with approximately 800 at Port Kembla and 200 at Western Port. There will be flow-on impacts for contractors and suppliers. The actual size of the workforce reduction will be the subject of discussions with employees and unions to examine alternatives, including flexible work patterns, retraining, voluntary redundancies and job substitution. There will be programs and local job centres to assist employees to transition into the next phase of their careers either within or external to BlueScope, or to early retirement. 2. Australian Federal Government’s proposed carbon tax During July 2011 the Australian Federal Government announced the key features of its proposed Clean Energy Future Scheme (CEFS), which is intended to be introduced from 1 July 2012 with a starting price of $23 per tonne of carbon dioxide equivalent emissions. The government also announced a sector-specific assistance package for Australian steelmakers, the Steel Transformation Plan (STP) which will effectively shield the Company from a carbon tax for four years. The proposed STP: • Provides $300 million funding to minimise the impact of the carbon tax on Australian steelmakers for the first four years of the tax (BlueScope Steel will receive approximately 60% of this funding); • • Provides an independent review mechanism to monitor the carbon tax position of our international competitors; and Signals the government’s intention to limit the potential pass-through of carbon emission costs from coal miners onto steelmakers. 3. Potential impact of global share market performance on Retirement Benefit Obligations During August 2011 global share markets declined significantly. This decline would materially increase the Company’s liability; refer note 33 of the Financial Report for details of the Company’s Retirement Benefit Obligations as at 30 June 2011. DIVIDENDS BlueScope Steel paid a fully franked dividend for the year ended 30 June 2010 of 5 cents per share in October 2010 and a fully franked interim dividend of 2 cents per share in April 2011 to its shareholders. In view of the financial performance of the Company in the second half of the year ended 30 June 2011 the Directors determined not to pay a final dividend for the year ended 30 June 2011. REVIEW AND RESULTS OF OPERATIONS The BlueScope Steel Group comprises six reportable operating segments: Coated & Industrial Products Australia, Australia Distribution & Solutions, New Zealand & Pacific Steel Products, Coated & Building Products Asia, Hot Rolled Products North America and Coated & Building Products North America. Page 4 of 40 BlueScope Steel Limited Directors’ Report REPORTED UNDERLYING REVENUES 2011 $M REVENUES 2010 $M EARNINGS 2011 $M EARNINGS 2010 $M EARNINGS 2011 $M EARNINGS 2010 $M 5,193.0 4,744.5 (1,062.5) 84.3 (257.8) 107.6 Sales revenue/EBIT Coated & Industrial Products Australia Australian Distribution & Solutions 1,675.4 1,761.6 (217.9) New Zealand & Pacific Steel Products 672.1 618.1 82.5 Coated & Building Products Asia 1,486.8 1,348.6 Hot Rolled Products North America 0.0 0.0 Coated & Building Products North America 1,312.2 1,306.8 175.6 72.3 (35.6) Discontinued operations Segment revenue/EBIT 0.0 0.7 1.8 10,339.5 9,780.3 (983.8) Inter-segment eliminations (1,227.1) (1,182.3) 15.7 Segment external revenue/EBIT 9,112.4 8,598.0 (968.1) Other expenses) revenue/(net Total revenue/EBIT Net borrowing costs unallocated 25.8 (74.6) 40.7 9,153.1 8,623.8 (1,042.7) Profit/(loss) from ordinary activities before income tax Income tax (expense)/benefit Profit/(loss) from ordinary activities after income tax expense Net (profit)/loss attributable to outside equity interest (98.9) (1,141.6) 101.2 (1,040.4) 11.9 72.9 115.6 60.7 (21.3) 7.0 331.1 (19.8) 311.3 (71.2) 240.1 (103.2) 136.9 2.6 139.5 (34.2) 82.5 107.8 72.3 (20.0) - (49.4) 15.7 (33.7) (67.6) (101.3) (98.6) (199.9) 95.3 (104.6) 1.7 72.9 115.6 60.7 (16.4) - 342.1 (19.8) 322.3 (67.5) 254.8 (103.2) 151.6 (24.8) 126.8 (13.8) (13.5) (13.8) (13.5) Net (profit)/loss attributable to equity holders of BlueScope Steel (1,054.2) Earnings per share (cents) (57.4) 126.0 6.9 (118.4) (6.4) 113.3 6.2 Underlying earnings The reported earnings includes the following unusual and non-recurring items: Factors Reported Earnings EBIT NPAT EPS$ FY2011 FY2010 FY2011 FY2010 FY2011 FY2010 (1,042.7) 240.1 (1,054.2) 126.0 (0.57) 0.07 Net (gains)/losses from businesses discontinued (1.8) (7.0) (1.2) (6.0) (0.00) (0.00) Reported earnings (from continuing operations) (1,044.5) 233.1 (1,055.4) 120.0 (0.57) 0.07 Unusual or non-recurring events: Restructure and redundancy costs Profit on sale and leaseback of properties Asset impairment Business development costs New Zealand tax adjustment Underlying earnings Group Review 14.0 0.0 922.3 6.9 0.0 30.6 (12.6) 0.0 3.7 0.0 9.8 0.0 922.3 4.9 0.0 21.0 (8.8) 0.0 2.6 (21.5) 0.01 0.00 0.50 0.00 0.00 0.01 (0.01) 0.00 0.00 (0.01) (101.3) 254.8 (118.4) 113.3 (0.06) 0.06 The Company reported a Net Loss After Tax (NLAT) of $1,054.2 million for FY2011 (underlying NLAT of $118.4 million, in line with previous guidance). The reported NLAT includes the previously announced one-off impairment cost of $922.3 million, mainly relating to write-downs of the carrying value of two businesses; Coated and Industrial Products Australia and BlueScope Distribution. Page 5 of 40 BlueScope Steel Limited Directors’ Report The Board has decided there will be no final ordinary dividend. This follows the 2 cent per share interim dividend (fully franked) announced in February 2011. Asia Following the successful transformation of the Coated and Building Products Asia division in FY2010, the segment delivered another excellent result, contributing $107.8 million in underlying EBIT, a record result in constant currency. Highlights included another impressive contribution from our businesses in China and Malaysia. New Zealand New Zealand and Pacific Products again provided a profitable contribution, with $82.5 million underlying EBIT in FY2011, and over recent years has been a consistent performer. This business continues to benefit strongly from the sale of iron sands from Taharoa. North America The North American businesses have delivered an overall positive contribution of $52.3 million in underlying EBIT in FY2011. This result was largely driven by an excellent second half performance by the North Star joint venture, leading to a $72.3 million underlying EBIT result for Hot Rolled Products North America, which more than offset the $20.0 million underlying EBIT loss for Coated and Building Products North America. More broadly, the US building business continues to remain subdued, given the state of the US economy. Australia The Australian businesses delivered a poor result in FY2011, with the Coated and Industrial Products Australia business, which includes sales to the loss-making export market, accounting for $257.8 million underlying EBIT loss and Australian Distribution and Solutions continuing to underperform with a $34.2 million underlying EBIT loss. Significant Initiatives BlueScope has undertaken several significant initiatives over the last 12 months that will help underpin the Company’s future, these include: 1) Carbon Tax – Steel Transformation Plan The announcement of the Government’s Steel Transformation Plan (STP) on 10 July 2011, effectively shields BlueScope from any material cost of the Carbon Tax for the first four years of the scheme. 2) BlueScope Australia & New Zealand (BANZ) Restructure Following the announcement to restructure the Australian and New Zealand businesses on 10 March 2011 from three businesses into one consolidated business (BANZ), the design and implementation of the restructure is now well advanced and will deliver a more efficient and effective customer interface. 3) Further Fixed Cost Reductions In FY2011, the Company has been able to achieve a further $38 million in fixed cost reductions, whilst successfully maintaining the cumulative savings of $696 million ($340 million in permanent savings and $356 million in temporary savings), based on FY2008 base levels. Cost reductions remain an ongoing focus for the business and we expect further improvements, once the BANZ restructure and the implementation of today’s announcement are completed. LIKELY DEVELOPMENTS AND EXPECTED RESULTS Three key drivers will continue to have a material influence on 1HFY2012 financial performance: A$/US$; Steel spread (function of HRC and raw material prices); and Demand. Restructure costs will have a material impact on financial performance in this half. The Company expects continued good performance from Asia, New Zealand and our 50% interest in North Star. Current expectations are: A significant reported Net Loss After Tax (NLAT) including restructuring costs (excluding NRV’s and/or impairments); and A small underlying NLAT (excluding restructure costs, NRV’s and/or impairments). The Company will update the market at the AGM in November. BOARD COMPOSITION The following were Directors for the full year ended 30 June 2011: Graham John Kraehe AO (Chairman), Ronald John McNeilly (Deputy Chairman), Diane Jennifer Grady AM, Daniel Bruno Grollo, Harry Kevin (Kevin) McCann AM, Kenneth Alfred Dean, Page 6 of 40 - - - - - Paul Francis O’Malley (Managing Director and Chief Executive Officer) and Tan Yam Pin. Ms Penny Bingham-Hall was appointed as a Director on 29 March 2011. Particulars of the skills, experience, expertise and special responsibilities of the Directors are set out below. BlueScope Steel Limited Directors’ Report DIRECTORS’ BIOGRAPHIES Graham Kraehe AO, Chairman (Independent) Age 68, BEc Director since: May 2002 Extensive background in manufacturing and was Managing Director and Chief Executive Officer of Southcorp Limited from 1994 to February 2001. Chairman of Brambles Industries Limited since February 2008 and a Non-Executive Director since December 2000, Member of the Board of the Reserve Bank of Australia since February 2007, Djerriwarrh Investments Limited since July 2002, Member of the Board of Governors of CEDA and a Director of European Australian Business Council. Mr Kraehe was a Non-Executive Director of National Australia Bank Limited from August 1997 to September 2005 and Chairman from February 2004 to September 2005, and was a Non-Executive Director of News Corporation Limited from January 2001 until April 2004. He brings skills and experience in manufacturing management and in companies with substantial, geographically diverse, industrial operations. Mr Kraehe’s experience with a wide range of organisations is relevant for his role as Chairman of the Board. Ron McNeilly Deputy Chairman (Independent) Age 68, BCom, MBA, FCPA Director since: May 2002 Deputy Chairman of the Board with over 30 years experience in the steel industry. He joined BHP in 1962, and until December 2001 held various positions with the BHP Group (now BHP Billiton), including Executive Director and President BHP Minerals, Chief Operating Officer and Executive General Manager, and was Chief Executive Officer BHP Steel until 1997. The latter role developed his knowledge of many of the businesses comprising BlueScope Steel today. Chairman of Worley Parsons Limited and a Director since October 2002. Director of Alumina Ltd from December 2002 to March 2011, Vice President of the Australia Japan Business Cooperation Committee until November 2010. He also served as a Member of the Council on Australia Latin America Relations and as Chairman of Melbourne Business School. Diane Grady AM, Non-Executive Director (Independent) Age 63, BA (Hons), MA (Chinese Studies), MBA Director since: May 2002 Director of Macquarie Group Limited and Macquarie Bank Limited since May 2011 and Member of the Advisory Board of McKinsey & Co. Director of Woolworths Ltd from July 1996 until November 2010 and Goodman Group from September 2007 to October 2010. Has served on the boards of a number of other public and not-for-profit organisations including Lend Lease Corporation, Wattyl Limited, Greengrocer.com (Chair), Sydney Opera House Trust, Ascham School (current Chair), The Hunger Project Australia (current Chair) and as President of Chief Executive Women. Formerly a partner of McKinsey & Co. serving clients in a wide range of industries on strategic growth and change initiatives. Diane is an experienced director who brings valuable strategic and business expertise to the Board and to her role as Chair of the Remuneration and Organisation Committee. Kevin McCann AM, Non-Executive Director (Independent) Age 70, BA LLB (Hons), LLM, FAICD Director since: May 2002 Chairman of Origin Energy Limited since February 2000, Chairman of Macquarie Group Limited and Macquarie Bank Limited since March 2011 and a Director since August 2007 and December 1996 respectively. Member of the Corporate Governance Committee of the Australian Institute of Company Directors. Member of the Board and NSW President of the Australian Institute of Company Directors, Member of the Council of the National Library of Australia and the University of Sydney Senate, and a Director of the United States Studies Centre at the University of Sydney. Former Chairman of the Sydney Harbour Federation Trust, Chairman of ING Management Limited from September 2010 to June 2011 and Director of the Sydney Harbour Conservancy from January 2010 to September 2010. He also served as Chairman of Healthscope Ltd from May 1994 to October 2008 and as a Member of the Takeovers Panel and the Defence Procurement Advisory Board. He has served on the Boards of Pioneer International Limited, Ampol Limited and the State Rail Authority of New South Wales. Former Chairman of Partners of Allens Arthur Robinson, a national and international Australian law firm, and a partner of the firm from 1970 until June 2004. He brings extensive commercial experience as a director and former director of a number of major listed companies, experience in corporate governance and legal expertise to the Board. Page 7 of 40 BlueScope Steel Limited Directors’ Report Tan Yam Pin, Non-Executive Director (Independent) Age 70, BEc (Hons), MBA, CA Director since: May 2003 A chartered accountant by profession, formerly Managing Director of Fraser and Neave Group, one of South-East Asia’s leading public companies, and Chief Executive Officer of its subsidiary company, Asia Pacific Breweries Ltd. A member of the Public Service Commission of Singapore since 1990 and a Director of the Board of Keppel Land Limited (Singapore) since June 2003, Singapore Post Limited since February 2005, Great Eastern Holdings Limited since January 2005, Leighton Asia Limited since January 2009 and The Lee Kuan Yew Scholarship Fund since January 2010. Mr Tan previously served as Chairman of PowerSeraya Limited (Singapore) from January 2004 to June 2009, as a Director of Certis CISCO Security Pte. Ltd from July 2005 to January 2009, The East Asiatic Company Limited A/S (Denmark) from 2003 to 2006, International Enterprise Singapore from January 2004 to June 2008 and Singapore Food Industries Ltd from December 2005 to December 2009. Mr Tan resides in Singapore. He brings extensive knowledge of Asian markets, an area of strategic importance to BlueScope Steel. His financial and leadership skills complement the skills on the Board. Daniel Grollo, Non-Executive Director (Independent) Age 41 Director since: September 2006 Chief Executive Officer of Grocon Pty Ltd, Australia’s largest privately owned development and construction company. He was appointed a Director of CP1 Limited in June 2007 and is a Director of the Green Building Council of Australia. He has previously been a Director and National President of the Property Council of Australia. He brings extensive knowledge of the building and construction industry to the Board. Paul O’Malley, Managing Director and Chief Executive Officer Age 47, BCom, M. App Finance, ACA Director since: August 2007 Appointed Managing Director and Chief Executive Officer of BlueScope Steel on 1 November 2007. Joined BlueScope Steel as its Chief Financial Officer in December 2005. Formerly the CEO of TXU Energy, a subsidiary of TXU Corp based in Dallas, Texas, and held other senior management roles within TXU including Senior Vice President and Principal Financial Officer and, based in Melbourne, Chief Financial Officer of TXU Australia. Before joining TXU, he worked in investment banking and consulting. Ken Dean, Non-Executive Director (Independent) Age 58, BCom (Hons), FCPA, FAICD Director since: April 2009 Mr Dean has been a Director of Santos Limited since February 2005 and has held past directorships with Alcoa of Australia Limited, Woodside Petroleum Limited and Shell Australia Limited. Mr Dean spent more than 30 years in a variety of senior management roles with Shell in Australia and the United Kingdom. His last position with Shell, which he held for five years, was as Chief Executive Officer of Shell Finance Services based in London. Upon his return to Australia in 2005, he was Chief Financial Officer of Alumina Limited, a position from which he resigned in 2009 to focus on non-executive directorship roles. He brings extensive international financial and commercial experience to the Board. Penny Bingham-Hall, Non-Executive Director (Independent) Age 51, BA (Ind.Des) FAICD, SA(Fin) Penny Bingham-Hall was appointed a Director of BlueScope Steel in March 2011. She has spent more than 20 years in a variety of roles with Leighton Holdings prior to retiring from that company at the end of 2009. Senior positions held by her with Leighton include Executive General Manager Strategy, responsible for Leighton Group’s overall business strategy and Executive General Manager Corporate, responsible for business planning and corporate affairs. Ms Bingham-Hall is the inaugural Chairman of Advocacy Services Australia (the fiduciary company for the Tourism & Transport Forum and Infrastructure Partnerships Australia) and is a Director of Australia Post (since May 2011), The Global Foundation and SCEGGS Darlinghurst School. She is a former Director of the Australian Council for Infrastructure Development and former Member of the Vis Asia Council, Art Gallery of NSW. She brings extensive knowledge of the building and construction industry in both Australia and Asian markets. Page 8 of 40 BlueScope Steel Limited Directors’ Report COMPANY SECRETARIES Michael Barron Chief Legal Officer and Company Secretary, BEc, LLB, ACIS Responsible for the legal affairs of BlueScope Steel and for company secretarial matters. Joined the Company as Chief Legal Officer and Company Secretary in January 2002. Prior to that occupied position of Group General Counsel for Orica. Darren Mackenzie, BA, LLB (Hons) Corporate Counsel with BlueScope Steel. A lawyer with over 10 years experience in private practice and corporate roles. Clayton McCormack, BCom, LLB Corporate Counsel with BlueScope Steel. A lawyer with over 10 years experience in private practice and corporate roles. PARTICULARS OF DIRECTORS' INTERESTS IN SHARES AND OPTIONS OF BLUESCOPE STEEL LIMITED As at the date of this report the interests of the Directors in shares and options of BlueScope Steel are: Director Director - Current G J Kraehe R J McNeilly P F O’Malley D J Grady H K McCann Y P Tan D B Grollo K A Dean P Bingham-Hall Ordinary shares Share rights 286,276 1,321,502 227,613 128,382 152,720 157,116 128,156 41,624 - - - 2,677,731 - - - - - - MEETINGS OF DIRECTORS The attendance of the current Directors at Board and Board Committee meetings from 1 July 2010 to 30 June 2011 is as follows: Board meetings Audit and Risk Committee Remuneration and Organisation Committee Health, Safety and Environment Committee Nomination Committee Other Sub- Committees Annual General Meeting G J Kraehe R J McNeilly A B 11 103 11 104 P F O’Malley 11 11 D J Grady 11 11 H K McCann 11 11 Y P Tan D B Grollo K A Dean 11 11 11 11 11 11 P Bingham-Hall 4 4 A - 4 - - 4 - 4 4 - B 41 34 42 - 4 - 4 4 - A 6 6 - 6 - 6 - - - B 6 44 62 6 - 6 - - - A 4 4 4 4 4 4 4 4 2 B 4 34 4 4 4 4 4 4 2 A 4 4 - 4 4 4 4 4 2 B 4 34 42 4 4 4 4 4 2 A - 1 - - 2 - - 2 - B A B - 1 - - 2 - - 2 - 1 1 1 1 1 1 1 1 - 1 1 1 1 1 1 1 1 - All Directors have held office for the entire year ended 30 June 2011 with the exception of Ms Bingham-Hall who became a Director on 29 March 2011. A = number of meetings held during the period 1 July 2010 to 30 June 2011 during the time the Director was a member of the Board or the Committee, as the case may be. B = number of meetings attended by the Director from 1 July 2010 to 30 June 2011. 1 The Chairman of the Board is not a Committee member and attends as part of his duties as Chairman. 2 The Chief Executive Officer is not a Committee member and attends by invitation as required. 3 An unscheduled meeting was missed due to illness. 4 Mr McNeilly was granted a leave of absence from these meetings due to an illness in his family. Page 9 of 40 There were a number of unscheduled meetings held during the year. They are as follows: Board meetings: 3 Nomination Committee meetings: 1 The Non-Executive Directors have met once during the year ended 30 June 2011 (without the presence of management). Non- Executive Directors meetings are chaired by the Chairman of the Board. BlueScope Steel Limited Directors’ Report Page 10 of 40 BlueScope Steel Limited Directors’ Report REMUNERATION SUMMARY (UNAUDITED) BlueScope’s approach to remuneration strategy is to support the delivery of long-term shareholder returns and to ensure executive rewards reflect achievements during the year. As a company undergoing structural change, it is important that the remuneration practices enable the Company to retain and motivate its executive talent in a different business environment. Key remuneration decisions during the year In the past year the Board has, with management support, remained focussed on ensuring remuneration practices reflect the current operating environment of the businesses, are consistent with good governance practices and take account of the potential risks to the Company. Key remuneration decisions taken by the Board include: • • • Following a year in which there was an executive pay freeze, average increases in remuneration of less than 4% were paid to executives for the year ended 30 June 2011; Below target Short Term Incentive (STI) bonuses were assessed for the year ended 30 June 2011 for significant achievements in responding to the challenges facing the steel industry since the onset of the global financial crisis; Base fees for the Chairman and Directors were increased for the first time since 1 January 2006 by 5%; • Determining there would be no vesting of the 2006 or 2007 Long Term Incentive Plan (LTIP) Awards; and • Awarding a special share based retention plan to support the restructure of the business. Further details of these awards are contained in the Remuneration Report at page 16. The table below shows the remuneration actually earned by or in the case of STI assessed for each member of the Executive Leadership Team (ELT) during FY2011 with comparatives for FY2010. The amounts required under accounting disclosures are disclosed at page 24. Specific comments in relation to amounts included in the table are: • Moderate Base Pay increases were awarded to executives from 1 September 2010. These were the first increases in fixed pay since 1 September 2008 as executives had been subject to a pay freeze in FY 2009. • STI assessments for FY 2011 are moderate and other than executives in the Asian business, are less than 50% of the maximum available opportunity. No executive has achieved stretch performance on non financials. Commentaries on the basis of STI assessments are included in the Remuneration Report at page 20. • No LTI vesting for Key Management Personnel (KMP) under the LTI Plan during FY2011. The last vesting occurred in September 2008 (FY 2009) in respect of awards under the 2004 and 2005 LTI Plans. • As a result of the reduced STI payments and the failure of LTI to vest, the total actual remuneration received by KMP executives during the past three years has been significantly lower than the remuneration available under their employment contracts. For example, the MD & CEO has only received 20% of his total variable pay (both STI and LTI at target opportunity) in year ended 30 June 2010 and 18% in year ended 30 June 2011 and the other KMP executives have on average received 26% of total variable pay. BlueScope shareholding Policy We believe the shareholding policy clearly demonstrates the personal commitment of all Directors and executives to align their interests with those of all shareholders. • • • All Non-Executive Directors (NED) are required to acquire over time a shareholding equal to one year’s total annual fees; The Managing Director and Chief Executive Offer and the Executive Leadership Team are required to accumulate and hold a shareholding equal to 100% of their annual base pay from participation in the Long Term Incentive Plan, net of tax obligations; and All other executives, a group of approximately 200 senior people, are required to accumulate and hold a minimum of 50% of their annual base pay in Company shares. This policy results in this group having significant personal financial exposure to the value of BlueScope Steel shares. Stringent corporate governance standards The Remuneration and Organisation Committee (the Committee) is responsible for the Company’s remuneration practices and policies on behalf of the Board. The Committee is comprised entirely of independent NED and adheres to stringent corporate governance standards. The Remuneration Report at page 13 provides a complete review of the Committee’s responsibilities. Page 11 of 40 BlueScope Steel Limited Directors’ Report KMP REMUNERATION - ADDITIONAL INFORMATION Nam e Year Base Pay Super- annuation 1 Total Fixed Pay STI Assessed LTIP Vested 2 Shares Vested 3 $ $ $ $ $ $ Executive Director P F O'Malley KMP executives - current N H Cornish 4 M R Vassella P E O'Keefe I R Cummin M G Barron S R Elias S Dayal 2011 1,702,346 238,404 1,940,750 2010 1,680,000 235,200 1,915,200 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 770,560 752,500 762,600 725,792 573,298 551,250 569,752 556,400 569,752 556,400 683,708 645,000 680,973 630,000 107,878 105,350 106,764 101,611 80,262 77,175 79,765 77,896 79,765 77,896 95,719 90,300 95,336 88,200 878,438 857,850 869,364 827,403 653,560 628,425 649,517 634,296 649,517 634,296 779,427 735,300 776,309 718,200 720,865 806,400 254,845 302,505 269,361 310,800 182,325 198,450 196,341 221,336 196,341 221,336 237,554 256,581 300,623 378,000 KA Mitchelhill 2011 747,520 104,653 852,173 236,849 Total 2011 - sam e KMP executives 7,060,508 988,547 8,049,055 2,595,104 Total 2010 - sam e KMP executives 6,816,111 954,256 7,770,367 3,002,008 2010 718,769 100,628 819,397 306,600 P J Finan 5 R J Moore 5 Total 2011 - all KMP executives Total 2010 - all KMP executives 2011 2010 2011 2010 454,959 - 575,000 - 17,639 - 80,500 - 472,598 - 655,500 - 155,869 - 300,840 - 8,090,467 1,086,686 9,177,153 3,051,813 6,816,111 954,256 7,770,367 3,002,008 - - - - - - - - - - - - - - - - - - - - - - - - - - Total $ 2,697,915 2,721,600 1,133,283 1,160,355 1,198,725 1,138,203 835,885 826,875 845,858 855,632 845,858 855,632 1,016,981 991,881 1,076,932 1,096,200 1,089,022 1,125,997 36,300 - - - 60,000 - - - - - - - - - - - - - 96,300 10,740,459 - - - - - 10,772,375 628,467 - 956,340 - 96,300 12,325,266 - 10,772,375 1 For Aust ralian executives, superannuation ent it lement of 14% of Annual Base Pay. KM P may have elect ed t o have received some of t his amount as a cash allowance. Superannuat ion Guarant ee obligat ions will have been met t o remit amount to a complying superannuat ion f und. For non-Australian Executives, pension cont ribut ions were made under local requirement s. 2 Share Right s vest ed and exercised during the year ended 30 June 2011 are valued at market value on date of exercise. 3 Shares vested during the year ended 30 June 2011 are valued at market value on date of release. 4 M r Cornish is a member of the Def ined Benef it Division of the BlueScope St eel Superannuat ion Fund. Amount s disclosed are not ionally 14% of Base Pay. 5 Base Pay for 2011 has been annualised at t he rat e upon appoint ment . Page 12 of 40 REMUNERATION REPORT (AUDITED) The Directors of the Company present the Remuneration Report prepared in accordance with section 300A of the Corporations Act 2001 for the Company and the consolidated entity for the year ended 30 June 2011. The information provided in this Remuneration Report has been audited as required by section 308(3C) of the Corporations Act 2001. This Remuneration Report forms part of the Directors’ Report. BlueScope Steel Limited Directors’ Report Structure of this report 1. Remuneration and Organisation Committee 2. Non-Executive Directors’ Remuneration 3. Remuneration Policy and Structure 4. Relationship between Company Performance and Remuneration 5. Specific Remuneration Details 1 REMUNERATION AND ORGANISATION COMMITTEE The Board oversees the BlueScope Steel Human Resources Strategy, both directly and through the Remuneration and Organisation Committee of the Board (the Committee). The Committee consisted entirely of independent non-executive directors. The members of the Committee during the year were: Ms Diane Grady - Independent Director and Chairman of the Committee Mr Graham Kraehe - Chairman of the Board and Committee Member Mr Ron McNeilly - Deputy Chairman and Committee Member Mr Tan Yam Pin - Independent Director and Committee Member The purpose of the Committee is to assist the Board in overseeing that the Company: • Has a human resources strategy aligned to the overall business strategy, which supports ‘Our Bond’; • Has coherent remuneration policies that are observed and that enable it to attract and retain executives and directors who will create value for shareholders; • • Fairly and responsibly rewards executives having regard to the performance of the Company, the creation of value for shareholders, the performance of the executives and the external remuneration environment; and Plans and implements the development and succession of executive management. The Committee has responsibility for remuneration strategy, policies and practices applicable to Non-Executive Directors, the Managing Director and Chief Executive Officer, senior managers and employees generally. The Committee focuses on the following activities in its decision making on the Company’s remuneration arrangements: • • Approving the terms of employment of the Executive Leadership Team, including determining the levels of remuneration; Ensuring a robust approach to performance management through approval of the STI objectives and awards and reviewing performance of members of the Executive Leadership Team; • Considering all matters relating to the remuneration and performance of the Managing Director and Chief Executive • • Officer prior to Board approval; Approving awards of equity to employees; and Ensuring the Company’s remuneration policies and practices operate in accordance with good corporate governance standards, including approval of the Remuneration Report and communications to shareholders on remuneration matters. The Committee seeks input from the Managing Director and Chief Executive Officer and the Executive General Manager People and Organisation Performance, who attend Committee meetings except where matters relating to their own remuneration are considered. In addition, advice is obtained by the Committee from external specialist remuneration advisers in a number of areas including: • Remuneration benchmarking; • • Short-term incentives; Long-term incentives; and • Contract terms. The Company’s approach to remuneration recognises that BlueScope Steel operates in a cyclical and highly competitive global environment and that the delivery of long-term shareholder returns is directly impacted by the quality of its people. Page 13 of 40 BlueScope Steel Limited Directors’ Report 2 NON-EXECUTIVE DIRECTORS’ REMUNERATION The Committee, on behalf of the Board, seeks the advice of expert external remuneration consultants to ensure that fees and payments reflect the duties of Board Members and are in line with the market. The Chairman and the Deputy Chairman of the Board do not participate in any discussions relating to the determination of their own fees. Non-Executive Directors do not receive share rights or other performance-based rewards. Non-Executive Directors are expected to acquire over time a shareholding in the Company at least equivalent in value to their annual remuneration. Non- Executive Directors have previously been required to salary sacrifice a minimum of 10% of their fees each year to acquire BlueScope Steel shares. Changes to the taxation of employee share plans introduced by the Federal Government effective 1 July 2009, made the operation of this plan impractical and the Board resolved to cease operation of this plan with effect from 1 July 2009. The schedule of fees and payments of Non-Executive Directors’ are reviewed each January. A 5% increase was applied effective 1 January 2011 to all fees. This was the first increase in base fees since 1 January 2006. There were no increases to committee fees in 2009 and 2010. The schedule of fees effective 1 January 2011, and which currently applies, is as follows: Role Chairman1 Deputy Chairman1 Non-Executive Director Chairman of Audit and Risk Committee Member of Audit and Risk Committee Chairman of Remuneration and Organisation Committee Fees effective 1 Jan 2011 $472,500 $273,000 $157,500 $36,750 $18,900 $26,250 Member Committee of Remuneration and Organisation $13,650 Member of Health, Safety and Environment Committee Travel and Representation Allowance2 $13,650 $21,000 1 Additional fees are not payable to the Chairman and Deputy Chairman for membership of Committees. 2 Allowance paid to Tan Yam Pin who is based in Singapore. The maximum fee pool limit is currently $2,925,000 per annum (inclusive of superannuation) as approved by shareholders at the Annual General Meeting in 2008. Total fees paid to Directors for the year ended 30 June 2011 amounted to $1,851,347. Compulsory superannuation contributions per director capped at $15,775 per annum (commencing 1 July 2011) are paid on behalf of each Director. Compulsory superannuation contributions for the year ended 30 June 2011 were $15,199 per annum. Non-Executive Directors do not receive any other retirement benefits. 3 REMUNERATION POLICY AND STRUCTURE 3.1 Key Principles BlueScope Steel’s remuneration and reward practices aim to attract, motivate and retain employees of the highest calibre, as well as supporting ‘Our Bond’ by rewarding performance through remuneration. The Company’s salaried remuneration framework is designed to: • Link employee remuneration with the creation of a sustainable business and value for shareholders; • Recognise and reward individual performance and accountability for key job goals; • Provide distinguishable remuneration differences between levels; and • Maintain a competitive remuneration level relative to the markets in which the Company operates. The framework is built on an appropriate mix of base pay and variable pay comprising short-term incentives and long-term equity incentives. The remuneration structure encourages a balanced approach to managing risk by: • Requiring the Board to approve the performance targets and the measurement of performance for the STI; • • Imposing a cap of 150% of target on STI awards; Incorporating a significant component of remuneration for achievement of longer term targets through the long term incentive plan; and Page 14 of 40 BlueScope Steel Limited Directors’ Report • Requiring executives to accumulate a prescribed shareholding in the Company from participation in the Long Term Incentive Plan. The Remuneration and Organisation Committee reviews the Company’s remuneration strategy annually. External factors impacting on financial performance such as the strong Australian dollar, high raw material costs and excess global steel industry capacity and competitive pressures for talent arising from Australia’s ‘two-speed economy’ have given rise to the need for a fundamental review this coming year. The Board is currently considering a number of alternatives aimed at aligning remuneration strategies more effectively with the Company’s business needs after the restructuring. The following describes the Company’s remuneration strategy that was in place for the year ended 30 June 2011. 3.2 Fixed Remuneration Fixed remuneration is determined by reference to the scope and nature of each individual’s role, performance, experience, work requirements and remuneration level for comparable roles in companies of similar complexity, size and geographical spread. Market data is obtained from external sources to establish appropriate guidelines for comparable roles. Remuneration reviews are usually conducted on an annual basis. There are no guaranteed remuneration increases for executives and all increases are based on individual contribution and performance and having regard to developments in the market. The Committee reviews proposed remuneration increases and approves increases in remuneration for ELT members. The Committee obtains market data from external advisers. No increases were awarded for the year ended 30 June 2010 and average increases of less than 4% were paid to executives and senior managers for the year ended 30 June 2011. 3.2.1 Superannuation BlueScope Steel operates superannuation funds in Australia, New Zealand and North America for its employees. In these locations there is a combination of defined benefit and defined contribution type plans. The defined benefit schemes are closed to new members. Contributions are also made to other international retirement benefit plans for employees outside of Australia, New Zealand and North America. 3.2.2 Other Benefits Additionally, executives are eligible to participate in an annual health assessment program designed to safeguard the Company against loss or long-term absence for health-related reasons. Employees engaged on international assignments are also provided with relocation benefits including housing, relocation costs and other living adjustments under the Company’s international assignment policy. 3.3 Short Term Incentives (Variable Pay) All senior managers and many salaried employees participate in the Short Term Incentive Plan (‘STI’). The STI is: • • • • An annual ‘at risk’ cash bonus scheme, which is structured to deliver total remuneration in the upper quartile for the respective market group when stretch performance is attained; STI awards are not an entitlement but rather the reward for performance; The scheme is applied at the discretion of the Board, which has established policies to ensure that STI payments are aligned with the organisation and individual performance outcomes; Target STI levels are set having regard to appropriate levels in the market and range from 10% of base salary through to 80% at CEO level. These levels are reviewed annually. For outstanding results, participants may receive up to a further 50% of their target bonus amount; • Goals for each participant are drawn from the following categories: o o Financial Measures – performance measures include Net Profit After Tax, Cash Flow, Return on Invested Capital, and Earnings Before Interest and Tax; Zero Harm – safety and environment performance measures, including Lost Time Injury Frequency Rates, Medical Treatment Injury Frequency Rates and environmental measures; o Business Excellence – performance measures for the year ended 30 June 2011 included operational targets such as long-term structural reductions to the cost base of the Company, balance sheet and liquidity initiatives and improvements to the performance of business units; and o Strategy – implementation of specific longer-term strategic initiatives. STI plans are developed using a balanced approach to financial measures and key performance indicator (‘KPI’) metrics. At the senior executive level, approximately 60% of the target STI award is based on financial measures with approximately 40% based on KPI metrics. For other participants, approximately 50% of the STI award is based on financial measures and approximately 50% is based on KPI metrics. At Board discretion, the weighting between financial and KPI metrics can vary depending on business circumstances and the individual’s role. Performance conditions, including threshold, target and stretch hurdles, are set for each plan and these conditions are assessed using quantified and verifiable measures or an assessment of value contribution. If the threshold level is not reached, no payment is made in respect of that goal. The Board retains the discretion to adjust any STI payments in exceptional circumstances, including determining that no award is paid, as was decided for the year ended 30 June 2009 and to pay below target STI awards as was decided in 2010 and 2011. Page 15 of 40 BlueScope Steel Limited Directors’ Report The Committee oversees the objective setting process and approves the targets and performance measures for all members of the Executive Leadership Team. The Board approves the targets and performance measures of the Managing Director and Chief Executive Officer. 3.4 Equity-Based Opportunities The Company encourages employee share ownership. This is achieved in the following ways: • • for all employees, through the General Employee Share Plan; and for executives, through the Long Term Incentive Plan. 3.4.1 General Employee Share Plan The Company operates a General Employee Share Plan. The allocation of shares to employees under such schemes and the form of the offer are determined by the Board on a year-by-year basis taking account of Company performance. The plan has been very effective in enabling employees to become shareholders with more than 97% of eligible employees participating in the last plan offered in 2008. In view of the impact of current business conditions on the financial performance of the Company, no shares were offered under the plans for the years ended 30 June 2010 and 2011. 3.4.2 Long Term Incentive Plan Awards of share rights are made to senior managers under the Long Term Incentive Plan (‘LTIP’). The LTIP is designed to reward senior managers for long-term value creation. It is part of the Company’s overall recognition and retention strategy having regard to the long-term incentives awarded to senior managers in the markets in which the Company operates. No LTI vesting occurred for KMP under the LTI Plan during FY2011. The last vesting occurred in September 2008 (FY 2009) in respect of awards under the 2004 and 2005 LTI Plans. The decision to make an award of share rights is made annually by the Board. Awards are based on a percentage of the relevant executive’s Base Pay and individual performance including living ‘Our Bond’. The number of share rights awarded to participants is calculated using the share price, averaged over three months to 31 August. Details of awards under the LTIP are set out below. In summary, the main features of the LTIP are as follows: • • • • Awards are generally made as a right to acquire an ordinary share for no consideration on vesting; Vesting requires sustained performance over at least three years with a hurdle based on Total Shareholder Return (‘TSR’) relative to the TSR of the companies in the S&P/ASX 100 index at the award commencement date; The minimum ranking required for vesting is the 51st percentile against the peer group, at which point 52% of an award vests. Maximum vesting (100% of a participant’s share rights) occurs at the 75th percentile or above; In view of the cyclical nature of the markets in which the Company operates, there is up to four retests at six monthly intervals following the initial three-year performance period. This helps moderate the impact of short- term share price volatility that may arise due to a market view of future Hot Rolled Coil prices, which is not reflective of actual Company performance. At each retest period, shares only vest if they have reached the hurdles for the total period from the date of the initial grant; • Unvested share rights lapse on resignation or termination for cause or at the expiry of the relevant performance period, whichever comes first; and • ‘Change of Control’ conditions may result in early vesting provided the relevant performance hurdles are satisfied at that time. 3.4.3 Retention Share Plan The Board approves the use of retention plans in exceptional circumstances and on a targeted basis for specific purposes. These types of arrangements are not used in lieu of performance-related remuneration. During the year ended 30 June 2011 the Board approved an award of shares in a share based retention plan. Invitations to participate in this plan for executives were determined on the basis of rewarding, recognising and retaining key individuals, whose contributions are crucial to delivery of BlueScope Steel’s strategy for the next three years including restructuring the Australian business, changes to operating assets to drive improved earnings associated with a significant reduction in steel production, improving the performance of the North American business and expanding the Asian businesses. Offers of retention shares to ELT members are expected to be made in late August 2011 (with details to be included in the Remuneration Report for the year ending 30 June 2012). The shares will be issued pursuant to awards that are expected to be accepted during September 2011. Shares awarded under the Retention Share Plan will be subject to the following conditions: • It will be a condition of acceptance of an award, that a recipient must agree to a variation of their employment contract which removes the ability of the company to make termination payments of more than 12 months fixed pay without shareholder consent other than as required by law; Page 16 of 40 BlueScope Steel Limited Directors’ Report • • • • Shares awarded will be forfeited in the event of cessation of employment for any reason in the restricted period other than where employment ceases due to death or disability; Shares cannot be sold, mortgaged, transferred, or otherwise encumbered at any time in the restriction period; The restriction period generally applies for a period of three years. The Board has discretion to allow vesting prior to the end of the restriction period; and In the event of a change in control during this time the shares will vest. The Board is satisfied that similar plans operated in the past have been successful in achieving their reward and retention objectives. Page 17 of 40 t r o p e R ’ s r o t c e r i D d e t i m L i l e e t S e p o c S e u B l 1 0 1 0 2 r e b m e t p e S 1 9 0 0 2 r e b m e t p e S 1 8 0 0 2 r e b m e t p e S 7 0 0 2 r e b m e p e S t 6 0 0 2 r e b m e p e S t 5 0 0 2 r e b m e p e S t S D R A W A N A L P E V T N E C N I I M R E T G N O L F O E L B A T Y R A M M U S 0 1 0 2 r e b m e v o N 0 3 9 0 0 2 r e b m e v o N 0 3 8 0 0 2 r e b m e v o N 8 2 7 0 0 2 r e b m e v o N 5 s e v i t u c e x e l l a ( & D M g n d u c x e i l 6 0 0 2 r e b m e v o N 8 1 5 0 0 2 r e b m e v o N 8 1 ) O E C e t a D t n a r G O E C & D M e h t o t t n a r g e h T ( O E C & D M e h t o t t n a r g e h T ( O E C & D M e h t o t t n a r g e h T ( O E C & D M e h t o t t n a r g e h T ( O E C & D M e h t o t t n a r g e h T ( r e d l o h e r a h s o t j t c e b u s s a w r e d l o h e r a h s o t j t c e b u s s a w r e d l o h e r a h s o t j t c e b u s s a w 7 0 0 2 r e b m e v o N 4 1 r e d l o h e r a h s o t j t c e b u s s a w r e d l o h e r a h s o t j t c e b u s s a w ) M G A 9 0 0 2 e h t t a l a v o r p p a ) M G A 8 0 0 2 e h t t a l a v o r p p a ) M G A 8 0 0 2 e h t t a l a v o r p p a ) O E C & D M ( ) M G A 6 0 0 2 e h t t a l a v o r p p a ) M G A 5 0 0 2 e h t t a l a v o r p p a 3 1 0 2 r e b m e t p e S 1 m o r F 2 1 0 2 r e b m e t p e S 1 m o r F 1 1 0 2 r e b m e t p e S 1 m o r F 0 1 0 2 9 0 0 2 t r e b m e p e S 1 m o r F 8 0 0 2 t r e b m e p e S 1 m o r F 5 1 0 2 r e b o t c O 1 3 4 1 0 2 r e b o t c O 1 3 3 1 0 2 r e b o t c O 1 3 2 1 0 2 r e b o t c O 1 3 1 1 0 2 r e b o t c O 1 3 0 1 0 2 r e b o t c O 1 3 t r e b m e p e S 1 m o r F 0 5 5 , 6 3 5 , 0 1 0 0 0 , 6 6 1 5 8 2 9 7 2 l i N 0 8 4 , 0 9 0 , 8 0 0 0 , 8 5 1 3 1 3 0 0 3 l i N 6 4 2 , 8 4 2 , 2 5 5 2 4 3 2 l i N 0 8 1 , 3 2 7 , 9 $ 2 1 8 , 6 1 5 , 0 1 $ 3 4 3 , 5 6 7 , 2 $ 0 2 . 1 $ 0 0 0 , 0 1 2 0 0 0 , 8 1 0 7 . 1 $ 0 1 2 , 5 8 4 0 0 0 , 3 1 4 6 . 1 $ 5 9 0 , 0 1 3 - , 5 4 8 4 3 9 1 , , 0 5 9 0 1 3 2 , , 0 0 1 8 3 9 1 , 7 1 2 2 5 1 l i N 6 0 2 3 2 1 l i N 8 2 2 0 l i N d e t n a r G s t h g R e r a h S i f o r e b m u N l a t o T 2 d e t n a r G s t h g R h s a C i f o r e b m u N l a t o T e t a D t n a r G t a i s t n a p c i t r a P f o r e b m u N i s t n a p c i t r a P t n e r r u C f o r e b m u N e t a D e s c r e x E i e t a D y r i p x E e c i r i P e s c r e x E , 3 6 2 8 6 4 1 1 $ , v o N 5 ( 7 3 6 $ . ) 7 0 0 2 v o N 4 1 ( 2 4 6 $ . ) 7 0 0 2 , 1 0 4 7 1 5 - , 0 8 7 2 1 0 2 1 $ , , 6 5 8 6 8 0 7 $ , e t a D t n a r G t a e t a m i t s E e u a V l r i a F 3 5 5 $ . , 6 7 1 8 6 0 1 , - 9 8 3 $ . 0 8 7 1 2 4 , - e t a D t n a r G i t a t h g R e r a h S r e p e u a V l r i a F e t a D t n a r G e c n s d e s p a L i i s t h g R e r a h S e t a D t n a r G e c n s d e s p a L i i s t h g R h s a C l e u d e h c S g n i t s e V y n A . e l i t n e c r e p h t 5 7 e h t t a g n i t s e v % 0 0 1 o t i s s a b r a e n i l a n o g n s a e r c n i i s t s e v % 2 5 t i n o p h c h w i t a , e l i t n e c r e p t s 1 5 e h t l i t n u g n i t s e v o n . s d o i r e p e c n a m r o f r e p t n e u q e s b u s t a t n e m s s e s s a r o f r e v o d e i r r a c e b l l i i w s t h g R e r a h S d e t s e v n u s i e r e h T e l i t n e c r e p h t 5 7 < - t s 1 5 l - e d r u H R S T % 0 0 1 % 0 0 1 % 0 0 1 % 0 0 1 % 0 0 1 % 0 0 1 e l i t n e c r e p h t 0 0 1 - h t 5 7 l - e d r u H R S T - - - - - - - - - - - - - - - 0 4 f o 8 1 e g a P . g n i t s e v n o t n e m y a p h s a c a s r e v i l i e d h c h w e d a m s i % 0 0 0 . % 0 0 0 . - - - d r a w a ' i s t h g R h s a C ' a , y t i u q e f o s d r a w a o t g n i t l a e r s n o i t c i r t s e r l a n o i t i d d a e r a e r e h t e r e h w , s e i r t n u o c e m o s r o F 2 . d e t s e t e b o t t e y e r a d n a d o i r e p e c n a m r o f r e p t s r i f e h t n h t i i w e r a s t n a r g e s e h T 1 % 0 0 0 . % 0 0 0 . % 0 0 0 . % 0 0 0 . - % 0 0 1 d o i r e P e c n a m r o f r e P t s 1 e m o c t u O g n i t s e V d o i r e P e c n a m r o f r e P d n 2 e m o c t u O g n i t s e V d o i r e P e c n a m r o f r e P d r 3 e m o c t u O g n i t s e V d o i r e P e c n a m r o f r e P h t 4 e m o c t u O g n i t s e V d o i r e P e c n a m r o f r e P h t 5 e m o c t u O g n i t s e V . s d o i r e p e c n a m r o f r e p t n e u q e s b u s t a t n e m s s e s s a r o f r e v o d e i r r a c e b l l i i w s t h g R e r a h S l l A e l i t n e c r e p t s 1 5 < l - e d r u H R S T BlueScope Steel Limited Directors’ Report 3.4.4 Share Ownership Guidelines Long-term equity incentives are tied to Company performance as experienced by shareholders. Employees who participate in the LTIP are prohibited from selling, assigning, charging or mortgaging their share rights. Share rights are personal to the employee. Employees are also prohibited from transferring any risk or benefit from the unvested share rights to any other party. So called ‘cap and collar’ transactions cannot be made in respect of BlueScope Steel share rights. Employees are required to provide an annual confirmation that they are in compliance with this policy. 4 RELATIONSHIP BETWEEN COMPANY PERFORMANCE AND REMUNERATION The short-term and long-term incentive components of the remuneration strategy reward achievement against Company and individual performance measures over short-term and long-term timeframes. The graph below shows the Total Shareholder Return (‘TSR’) performance of BlueScope Steel compared to the performance of the S&P/ASX 100 for the eight-year period to 30 June 2011. The TSR Index for BlueScope Steel as at 30 June 2011 was 74.9 compared to 212.4 for the S&P/ASX 100. BlueScope Steel Limited Total Shareholder Return Index Compared to S&P/ASX100 15/7/02 to 30/6/11 Source: RBS 600 500 400 300 200 100 0 Jun-2002 Jun-2003 Jun-2004 Jun-2005 Jun-2006 Jun-2007 Jun-2008 Jun-2009 Jun-2010 Jun-2011 BLUESCOPE STEEL - TOT RETURN IND S&P/ASX 100 - TSR Index (Rebased) The use of a relative TSR measure as the Company’s performance hurdle for the LTIP ensures that vesting of long-term incentives will only occur when the Company has delivered superior share price and dividend returns to shareholders over the performance period. For existing unvested LTIP grants to vest, the Company’s relative TSR performance over the remainder of the relevant performance periods will need to recover its relative performance and by reversing the decline in share price and dividend performance, perform at least at the 51st percentile of those companies in the ASX 100 comparator group. An analysis of other Company performance and performance-related remuneration data relating to the nominated senior corporate executives in Section 3 over the same period are set out below. Page 19 of 40 BlueScope Steel Limited Directors’ Report Measure Share Price Change in Share Price ($) Change in Share Price (%) Dividend per Share: Ordinary (cents) Special (cents) BlueScope Steel Performance Analysis 30 June 2004 30 June 2005 30 June 2006 30 June 2007 30 June 2008 30 June 2009 30 June 2010 30 June 2011 $6.74 $3.02 81.2 $8.23 $1.49 22.1 $7.95 $10.34 $11.34 $2.53 $2.10 -$0.28 $2.39 $1.00 -$8.81 -$0.43 -3.4 30.1 9.7 -77.7 -17.0 $1.21 -$0.89 -42.4 Earnings per Share (cents) 77.8 30 10 42 20 134 44 0 47 0 49 0 5 0 5 0 2 0 47.9 95.3 80.1 -7.1 6.9 -57.4 REPORTED NPAT $ million % movement EBIT $ million % movement EBITDA $ million % movement UNDERLYING NPAT $ million % movement EBIT $ million % movement EBITDA $ million % movement $584 $982 68.2 $1,388 69.7 $1,696 53.5 - $818 - $1,105 - $578 - $822 - $1,109 - $338 -65.6 $686 103.0 $596 -13.1 -$66 $126 -$1,054 -111.1 -290.9 -936.5 $556 $1,099 $1,063 $15 $240 -$1,043 -59.0 97.7 -3.3 -98.6 1,500.0 $850 $1,423 $1,420 -49.9 67.4 -0.2 $555 -50.8 $1,129 95.3 $1,559 89.7 -46.1 $1,856 $1,127 -39.3 67.3 $840 $643 15.9 $816 26.9 $1,057 $1,273 25.8 20.5 $1,374 $1,630 21.9 18.7 $380 -73.2 $56 -93.1 $171 -86.6 $536 -67.1 $590 55.3 $113 101.8 $255 49.1 $605 12.9 -534.2 -$687 -216.4 -$118 -204.4 -$101 -139.6 $254 -57.9 Change from 30/6/04 to 30/6/11 -$5.53 -82.0 N/A N/A N/A -$1,638 -280.5 -$1,860 -227.4 -$1,792 -162.2 -$696 -120.4 -$923 -112.3 -$854 -77.0 Note: From 1 July 2004 financial information is based on International financial reporting standards (IFRS). 1 Prior period earnings per share has been restated for the bonus element of the one for one share rights issue undertaken in May and June 2009 using a factor of 1.21. 4.1 Performance Related Remuneration Analysis In setting financial targets, the Board takes a number of factors into account, including market consensus on future earnings, forecast movements in steel prices, exchange rate and other external factors likely to impact financial performance. The Board aims to align executive remuneration to business outcomes and shareholder experience. BSL Performance Related Remuneration Analysis for Executive Leadership Team Year ended 30 June 2007 Year ended 30 June 2008 Year ended 30 June 2009 Year ended 30 June 2010 Year ended 30 June 2011 Measure Average % change in Short Term Incentive Payments1 % change in underlying NPAT 1Calculations are based on KMP executives w ho w ere employed for the current and prior financial years. -100% -93.1 294% 15.9 36% 26.9 100% 101.8 -13% -204.4 For 2011, all STI payments to ELT are below target and no amount is being paid for Group financial performance. Where bonuses are being paid for business unit financial performance, they are to be paid for results in Asia, New Zealand and Lysaght Australia and on a limited basis, for cash flow management. STIs for achievement of non financial objectives are being paid for reorganisation of the BlueScope Australian and New Zealand businesses, implementation of global Pre- Engineered Building marketing and engineering systems, improving the sourcing of raw materials, cost reduction, financial restructuring and improvements to the succession pipeline and talent capability. Page 20 of 40 5 SPECIFIC REMUNERATION DETAILS 5.1 Key Management Personnel – Directors’ Remuneration Details of the audited remuneration for the year ended 30 June 2011 for each Non-Executive Director of BlueScope Steel are set out in the following table. BlueScope Steel Limited Directors’ Report Page 21 of 40 d e t i m L i l e e t S e p o c S e u B l t r o p e R ’ s r o t c e r i D s r o t c e r i D e v i t u c e x E n o N – n o i t a r e n u m e R P M K $ l a t o T 2 8 0 , 6 8 4 3 2 8 , 6 7 4 9 9 1 , 1 8 2 1 6 4 , 4 7 2 8 3 5 , 7 0 2 1 6 4 , 2 0 2 6 7 3 , 0 0 2 1 6 4 , 5 9 1 2 2 7 , 5 1 2 1 6 4 , 0 1 2 6 7 3 , 0 0 2 1 6 4 , 5 9 1 8 6 7 , 7 1 2 1 1 9 , 9 0 2 7 8 2 , 2 4 - 1 $ s t i f e n e b l t n e m y o p m e - t s o P $ $ $ l a t o T - b u S y r a t e n o m - n o N s e e F r a e Y l s t i f e n e b e e y o p m e m r e t - t r o h S 9 9 1 , 5 1 1 6 4 , 4 1 9 9 1 , 5 1 1 6 4 , 4 1 9 9 1 , 5 1 1 6 4 , 4 1 9 9 1 , 5 1 1 6 4 , 4 1 9 9 1 , 5 1 1 6 4 , 4 1 9 9 1 , 5 1 1 6 4 , 4 1 9 9 1 , 5 1 1 6 4 , 4 1 9 4 4 , 3 - 3 8 8 , 0 7 4 2 6 3 , 2 6 4 0 0 0 , 6 6 2 0 0 0 , 0 6 2 9 3 3 , 2 9 1 0 0 0 , 8 8 1 7 7 1 , 5 8 1 0 0 0 , 1 8 1 3 2 5 , 0 0 2 0 0 0 , 6 9 1 7 7 1 , 5 8 1 0 0 0 , 1 8 1 9 6 5 , 2 0 2 0 5 4 , 5 9 1 8 3 8 , 8 3 - 8 9 4 , 0 1 2 6 3 , 2 1 - - - - - - - - - - - - - - 5 8 3 , 0 6 4 0 0 0 , 0 5 4 0 0 0 , 6 6 2 0 0 0 , 0 6 2 9 3 3 , 2 9 1 0 0 0 , 8 8 1 7 7 1 , 5 8 1 0 0 0 , 1 8 1 3 2 5 , 0 0 2 0 0 0 , 6 9 1 7 7 1 , 5 8 1 0 0 0 , 1 8 1 9 6 5 , 2 0 2 0 5 4 , 5 9 1 8 3 8 , 8 3 - 1 1 0 2 0 1 0 2 1 1 0 2 0 1 0 2 1 1 0 2 0 1 0 2 1 1 0 2 0 1 0 2 1 1 0 2 0 1 0 2 1 1 0 2 0 1 0 2 1 1 0 2 0 1 0 2 1 1 0 2 0 1 0 2 t n e r r u C - r o t c e r i D e h e a r K J G e m a N y l l i e N c M J R y d a r G J D n n a C c M K H o l l o r G B D n a e D A K n a T P Y 2 l l - a H m a h g n B P i 0 4 f o 2 2 e g a P 7 4 3 , 1 5 8 , 1 9 3 0 , 5 6 7 , 1 2 4 8 , 9 0 1 7 2 2 , 1 0 1 5 0 5 , 1 4 7 , 1 2 1 8 , 3 6 6 , 1 8 9 4 , 0 1 2 6 3 , 2 1 7 0 0 , 1 3 7 , 1 0 5 4 , 1 5 6 , 1 1 1 0 2 l a t o T 0 1 0 2 l a t o T . s t n e m e g n a r r a n o i t a u n n a r e p u s o t e t a e r l s t i f e n e b t n e m y o p m e - t s o P l . 1 1 0 2 h c r a M 9 2 n o r o t c e r i D e v i t u c e x E - n o N o t d e t n o p p A i 1 2 BlueScope Steel Limited Directors’ Report 5.2 Key Management Personnel – Executives (including Managing Director and Chief Executive Officer’s) remuneration The Key Management Personnel of BlueScope Steel Limited includes those members of the Executive Leadership Team who have the authority and responsibility for planning, directing and controlling the activities of the Company. These executives also represent the five most highly remunerated executives within the organisation. The following table shows the current composition of the Executive Leadership Team, who all held their positions during the year. Key Management Personnel - Executives Current KMP Position P F O’Malley N H Cornish1 I R Cummin M R Vassella S R Elias M G Barron P E O’Keefe K A Mitchelhill S Dayal R Moore P Finan Managing Director and Chief Executive Officer Chief Executive, Australian & New Zealand Steel Manufacturing Businesses Executive General Manager, People and Organisation Performance President, North America Chief Financial Officer Chief Legal Officer and Company Secretary Chief Executive, Australian Coated & Industrial Markets Chief Executive, Australian Distribution & Solutions Chief Executive, Asia President, China Executive General Manager, Global Building & Construction Markets 1 Noel Cornish retired from the Company on 31 July 2011. Dates Executive Leadership Team position held during year ended 30 June 2011 1 July 2010 – 30 June 2011 1 July 2010 – 30 June 2011 1 July 2010 – 30 June 2011 1 July 2010 – 30 June 2011 1 July 2010 – 30 June 2011 1 July 2010 – 30 June 2011 1 July 2010 – 30 June 2011 1 July 2010 – 30 June 2011 1 July 2010 – 30 June 2011 1 December 2010 – 30 June 2011 1 November 2010 – 30 June 2011 The audited information contained in the following tables represents the annual remuneration for the year ended 30 June 2011 for the Key Management Personnel - Executives. The aggregate remuneration of the Key Management Personnel - Executives of the Company is set out below: The remuneration of each member of the Key Management Personnel - Executives of the Company is set out in the following tables. Page 23 of 40 20112010$$Short-term employee benefits112,009,504 10,898,772 Post-employment benefits432,438 412,329 Other long-term benefits231,934 72,432 Termination benefits578,810 - Share-based payments2,32,452,180 2,253,122 Total15,704,866 13,636,655 1 This includes base salary, annual leave accruals, non-monetary benefits, superannuation received as cash allowance and bonus payments.2 This relates to awards of share rights that can only vest when performance hurdles are achieved.3 For some countries, where there are additional restrictions relating to awards of equity, a 'Cash Rights' award is made which delivers a cash payment on vesting. t r o p e R ’ s r o t c e r i D % f o % n o i t a r e n u m e r s i t a h t 9 d e t a l e r e c n a m r o f r e p $ l a t o T d e t i m L i l e e t S e p o c S e u B l 0 4 f o 4 2 e g a P 6 6 8 , 4 0 7 5 1 , 7 3 6 , 9 1 3 , 2 3 4 5 , 2 3 1 0 1 8 , 8 7 5 4 3 9 1, 3 2 8 3 4 , 2 3 4 4 0 5 , 9 0 0 , 2 1 6 7 0 , 2 2 6 4 2 8 , 5 8 5 3 1 8 1, 5 0 , 3 6 7 1 , 2 5 5 1 6 , 7 9 6 , 7 5 5 6 , 6 3 6 , 3 1 8 6 2 , 4 6 9 1, 4 5 8 , 8 8 2 0 2 3 4 , 2 7 9 2 3 , 2 1 4 2 7 7 , 8 9 8 , 0 1 7 8 9 , 9 5 5 9 0 9 , 5 6 5 8 0 0 , 2 0 0 , 3 3 4 2 , 5 4 - 1 1 1 , 6 1 8 , 6 . 4 5 4 2 . 4 4 2 . 4 3 9 . 0 4 9 . 8 2 . 4 5 2 5 . 0 2 4 . 3 3 5 . 4 3 3 . 0 4 4 . 3 3 . 4 5 3 7 . 2 3 3 . 4 3 . 8 5 3 6 . 4 3 . 9 7 2 9 . 8 2 2 . 6 2 - 7 . 6 3 - 8 2 3 , 8 8 7 , 3 4 0 8 7 9 9 , 4 5 7 , 8 8 0 0 4 , 4 9 6 , 3 3 4 3 5 2 8 , 6 2 8 , 6 3 1 1 8 1 , 8 6 3 1, 9 7 2 , 3 1 2 0 1 5 , 0 9 3 1, 8 3 6 5 6 2 , 0 0 0 2 1 , 4 8 5 1, 5 4 7 , 8 8 1 9 8 8 7 , 3 3 7 , 9 2 8 1, 1 5 3 , 4 5 1 8 2 1 , 6 1 1 6 0 5 , 6 9 5 1, 5 5 3 5 4 1 , 5 4 3 7 5 9 , 0 3 9 , 0 2 1 , 4 6 0 7 2 0 1, 1 1 4 , 8 5 1 , 1 4 7 5 4 0 1, 8 3 7 , 9 9 1 6 1 5 , 2 2 0 1, 1 6 2 5 4 1 , 1 4 8 , 6 6 9 8 3 8 , 0 2 1 , 6 3 0 5 4 2 1, 6 0 7 , 9 6 1 , 3 8 1 5 5 1 1, 5 3 7 , 9 3 1 0 0 0 0 0 0 0 0 5 4 0 1, 6 1 1, 0 1 2 5 1 1 , 7 6 0 , 6 1 9 2 4 , 6 7 2 1, 3 8 2 , 3 6 7 6 0 , 6 1 0 5 2 , 0 2 3 1, 4 9 6 1, 3 1 3 3 8 , 9 1 3 7 4 , 0 2 3 1, 2 1 4 , 4 7 3 3 8 , 9 1 0 0 3 9 9 5 9 6 , 6 6 4 , 6 2 0 0 6 2 8 5 9 8 , 6 0 7 7 2 , 0 0 0 0 $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 8 , 8 7 5 0 4 8 , 6 1 0 0 0 , 5 2 2 0 5 , 0 3 8 4 $ s t i f e n e b 3 $ s t i f e n e b l a t o t - b u S 2 r e h t O y r a t e n o m s u n o B $ $ $ $ 1 $ n o i s i v o r p s e e f d n a r a e Y e m a N $ r o t c e r i D e v i t u c e x E 9 7 0 1, 5 0 0 0 , 5 2 2 9 6 , 5 2 6 , 2 4 0 4 , 3 1 2 9 9 9 1, 4 4 7 6 , 0 3 8 5 5 , 9 5 6 , 2 6 2 5 , 4 0 2 0 8 9 0 4 9 0 0 4 , 6 0 8 8 0 3 , 2 3 - 0 0 0 , 0 8 6 1, 0 1 0 2 5 6 8 , 0 2 7 3 0 9 1, 1 - 6 4 3 , 2 0 7 1, 1 1 0 2 5 y e l l ' a M O F P 6 8 3 , 4 3 6 2 5 , 9 0 1 2 9 5 , 9 7 - 0 1 4 , 3 2 1 0 9 9 , 0 1 0 1, 4 5 0 1, 8 0 1, 0 0 9 6 8 1, 5 4 8 , 4 5 2 4 8 2 , 6 1 - 0 6 5 , 0 7 7 1 1 0 2 0 5 0 5 , 2 0 3 9 4 0 , 6 2 0 0 5 , 2 5 7 0 1 0 2 t n e r r u c - s e v i t u c e x e P M K i 1 1 h s n r o C H N 0 0 5 , 8 1 7 1 9 , 2 2 7 3 8 , 7 1 5 1, 4 9 6 , 8 7 1 2 0 , 5 2 4 0 0 8 , 0 1 3 0 7 4 , 2 2 - 2 9 7 , 5 2 7 0 1 0 2 9 4 8 , 7 2 0 0 0 , 5 2 7 3 6 , 4 3 3 1, 0 9 1 1, 8 5 0 1 1, 6 2 1 6 3 , 9 6 2 9 1 6 , 9 3 - 0 0 6 , 2 6 7 1 1 0 2 9 , 6 a l l e s s a V R M 9 4 1 , 0 2 0 0 0 , 5 2 1 8 1 , 0 3 0 1, 1 8 7 , 3 1 6 7 1 , 7 1 1 1 9 , 3 1 8 9 7 , 7 1 1 1 9 , 3 1 4 8 9 , 0 3 6 0 1 , 6 2 0 3 8 , 9 6 0 0 0 , 0 5 6 7 2 , 0 4 5 2 1 , 6 1 7 1 9 , 8 1 0 5 7 , 5 1 3 6 5 , 9 1 9 4 7 , 7 2 0 0 0 , 0 5 3 3 8 , 5 4 0 0 0 , 0 5 2 6 2 , 2 6 7 6 6 0 , 8 0 5 6 1, 9 7 1 7 3 , 5 2 8 7 5 4 , 9 0 8 6 1 8 1, 9 7 4 7 5 1, 7 9 1 9 2 , 5 5 1 9 1 , 6 4 0 0 0 5 4 , 8 9 1 1 4 2 , 4 - 0 5 2 1, 5 5 0 1 0 2 5 2 3 , 2 8 1 7 8 5 , 9 1 8 9 2 , 3 7 5 1 1 0 2 0 1 e f e e K O E P ' 9 5 6 , 3 5 0 8 9 1 4 3 , 6 9 1 9 3 6 , 4 2 5 7 , 9 6 5 1 1 0 2 i 5 n m m u C R I 5 6 7 , 9 2 0 2 6 , 7 3 1 7 7 , 0 7 1 5 5 , 2 6 0 0 0 0 0 1 8 5 , 6 5 2 2 4 4 , 7 0 0 0 , 5 4 6 0 1 0 2 6 3 3 1, 2 2 0 4 5 , 3 2 - 0 0 4 , 6 5 5 0 1 0 2 6 3 3 1, 2 2 0 4 5 , 3 2 - 0 0 4 , 6 5 5 0 1 0 2 1 4 3 , 6 9 1 9 9 5 , 3 1 2 5 7 , 9 6 5 1 1 0 2 n o r r a B G M 4 5 5 , 7 3 2 8 4 1 , 8 3 8 0 7 , 3 8 6 1 1 0 2 s a i l E R S 2 5 8 , 0 6 9 0 5 5 , 5 4 7 0 0 , 0 9 - 3 2 6 , 0 0 3 3 1 7 , 3 2 3 7 9 , 0 8 6 1 1 0 2 6 l a y a D S 6 9 4 , 5 3 1 1, 7 6 3 , 2 4 8 7 3 , 8 6 0 0 0 , 8 7 3 1 5 7 , 6 1 0 0 0 , 0 3 6 0 1 0 2 0 6 1 , 9 9 0 1, 3 5 6 , 4 5 2 5 4 , 0 5 9 4 8 , 6 3 2 6 8 6 , 9 0 2 5 , 7 4 7 1 1 0 2 8 , 5 l l i l h e h c t i M A K 7 4 0 , 8 1 6 5 6 , 0 2 5 2 5 , 7 8 1 1, 2 7 9 , 9 7 0 7 5 1, 7 0 0 6 , 6 0 3 4 1 6 , 0 1 9 6 7 , 8 1 7 0 1 0 2 0 0 0 9 3 6 , 7 1 0 8 8 8 1, 5 6 0 0 2 0 9 , 8 9 1 9 6 8 , 5 5 1 6 0 7 , 5 - 3 2 8 , 2 0 3 1 1 0 2 0 0 0 0 0 1 0 2 9 7 1 , 8 7 6 1 , 9 2 5 7 7 , 0 3 8 2 9 7 , 7 1 3 4 5 1, 6 1 0 4 8 , 0 0 3 7 1 3 , 6 1 3 8 2 , 4 3 3 1 1 0 2 0 0 0 0 0 0 0 0 0 1 0 2 8 , 7 , 6 n a n F J P i 7 , 6 e r o o M J R 1 1 0 2 l a t o T 0 1 0 2 l a t o T d n a s t h g i r s n o i t p O $ $ s t i n u d n a s t i f e n e b r e h t O m r e t - g n o l - t s o P s e r a h S n o i t a n m i r e T e e y o l p m e t n e m y o l p m e - n o N e v a e l l a u n n a n i t n e m e v o M y r a l a S s t n e m y a p d e s a b - e r a h S s t i f e n e b e e y o l p m e m r e t - t r o h S s e v i t u c e x E - I N O T A R E N U M E R P M K d e t i m L i l e e t S e p o c S e u B l t r o p e R ’ s r o t c e r i D e h t f o s r e b m e m h t i w , s t s o c t n e m y o l p m e e c u d e r o t e v i t a i t i n i y e k a n e e b s a h s e c n a a b e v a e l l l a u n n a n i n o i t c u d e r e h T . r a e y t n e r r u c e h t g n i r u d d e u r c c a e v a e l d e d e e c x e r a e y e h t g n i r u d n e k a t e v a e l s e t a c i d n i i i n o s v o r p e v a e l l a u n n a n i t n e m e v o m e v i t a g e N 1 . e l p m a x e n a g n i t t e s T L E . e c n a w o l l a h s a c a s a n o i t a u n n a r e p u s r i e h t f o n o i t r o p o r p a e v e c e r i o t l t c e e n a c n o s v D n o i i i i t u b i r t n o C d e n i f e D e h t f o s r e b m e m l , s e v e l n o i t u b i r t n o c m u m x a m n i i g n i t l u s e r n o i t a s l i g e l n o i t a u n n a r e p u s e h t n i s e g n a h c o t e u D 2 . s t i f e n e b t n e m y o l p m e - t s o p r e h t o o n e r a e r e h T . s t n e m e g n a r r a n o i t a u n n a r e p u s o t e t a e r l s t i f e n e b t n e m y o l p m e - t s o P 3 . r a e y e h t g n i r u d s t i f e n e b e v a e l i e c v r e s g n o l n i t n e m e v o m s w o h s s h T 4 i . d e v e c e r i y l l a u t c a s t n u o m a e h t n a h t r e h t a r s e u a v l g n i t n u o c c a n o d e s a b s i I T L . t e g r a t w o e b l t a s t u o y a p I i T S s e s n g o c e r l d e t a e r e c n a m r o f r e p s i t a h t n o i t a r e n u m e r f o % e h T 9 l . y n o r a e y t r a p r o f e r a 1 1 0 2 e n u J 0 3 d e d n e r a e y r o f d e s o c s l i d s t n u o m A 1. 1 0 2 e n u J 0 3 d e d n e r a e y g n i r u d T L E o t d e t n i o p p a P M K 7 . s e s n e p x e n o i t a c o e r l s e d u c n l i y r a t e n o m - n o N 8 . e g a r e v o c l a c i d e m d n a , n o i t a s i l a u q e x a t , n o i t a d o m m o c c a . g e y c i l o p t n e m n g s s a i l a n o i t a n r e t n i s ' y n a p m o C e h t r e d n u i d e d v o r p s t i f e n e b s e d u c n l i y r a t e n o m - n o N . k c e h c h t l a e h e v i t u c e x e s e d u c n l i y r a t e n o m - n o N 5 6 0 4 f o 5 2 e g a P i . d a p e r e w s t n e m e l t i t n e y r o t u t a t s n a h t r e h t o s t n e m y a p o N l 1. 1 0 2 y u J 1 3 n o y n a p m o C e h t m o r f d e r i t e r h s n r o C i l e o N 1 1 . t c a r t n o c t n e m y o l p m e s h i f o s m r e t e h t r e d n u , y a p e s a b s h t n o m 2 1 f o t n e m y a p n o i i t a n m r e t a o t d e l t i t n e e b l l i w e h e m i t h c h w i t a , 2 1 0 2 e n u J 0 3 g n i d n e r a e y e h t g n i r u d y n a p m o C e h t i g n v a e l e b l l i w e H . t n a d n u d e r e d a m n e e b s a h e l ' o r s e f e e K O ' r M , a i l a r t s u A n i s n o i t a r e p o s s e n s u b s i ' y n a p m o C e h t f o e r u t c u r t s e r e h t f o t l u s e r a s A 0 1 BlueScope Steel Limited Directors’ Report 5.3 Cash Bonuses For the year ended 30 June 2011, below-target STI payments will be made, resulting in outcomes for executives averaging less than 50% of the maximum STI that can be awarded. Eligibility to receive a bonus is subject to the terms and conditions of the plan, including a minimum of six months performance during the plan year and employment during the period is not terminated for resignation or performance-related reasons. Under the Company’s Short Term Incentive Plan each executive can earn between 0% and 150% (maximum) of the STI target award. The table below shows the STI opportunity, actual percentage outcome achieved and percentage forfeited for the year ended 30 June 2011. Target of annual base pay % Actual STI as a % of maximum STI for year ended 30 June 2011 % % of maximum STI forfeited for year ended 30 June 2011 % 80 60 60 60 60 60 60 60 60 60 60 35 37 39 35 38 38 38 48 35 38 58 65 63 61 65 62 62 62 52 65 62 42 Name Executive director P F O'Malley KMP executives - current N H Cornish M R Vassella P E O'Keefe I R Cummin M G Barron S R Elias S Dayal K A Mitchelhill P J Finan1 R J Moore2 1 Appointed to ELT on 1 November 2010. 2 Appointed to ELT on 1 December 2010. 5.4 Share Rights Holdings Share Rights granted, exercised and forfeited by the Key Management Personnel during the year ended 30 June 2011 were as follows: Page 26 of 40 BlueScope Steel Limited Directors’ Report VALUE OF SHARE RIGHTS HOLDINGS Rem uneration consisting of share rights 1 Value of share rights granted during the year at grant date 2 Value of share rights exercised during the year Value of share rights at lapse date, that lapsed during the year Total value of share rights granted, exercised and lapsed during the year % 38 24 20 15 24 24 24 25 24 30 25 $ 1,440,264 329,232 323,772 245,868 243,432 243,432 294,540 294,372 319,392 210,252 220,104 $ - - - - - - - - - - - $ - - - - - - - - - - - $ 1,440,264 329,232 323,772 245,868 243,432 243,432 294,540 294,372 319,392 210,252 220,104 Nam e Executive Director P F O'Malley KMP executives - current N H Cornish M R Vassella P E O'Keefe I R Cummin M G Barron S R Elias S Dayal K A Mitchelhill P J Finan3 R J Moore4 1 This figure is calculated on the value of share rights aw arded in the year ended 30 June 2011 as a percentage of the total value of all remuneration received in that same year. 2 External valuation advice from Pricew aterhouseCoopers Securities Limited has been used to determine the value of share rights aw arded in the year ended 30 June 2011. The valuation has been made using the Black-Scholes Option Pricing Model (BSM) that includes a Monte Carlo simulation analysis. 3 Apointed to ELT on 1 November 2010. 4 Apointed to ELT on 1 December 2010. The Share Rights awarded to executives under the September 2006 Award were tested after the third (31 August 2010) and fourth (28 February 2011) performance periods and no vesting occurred. The September 2007 Award were tested after the first (31 August 2010) and second (28 February 2011) performance periods and no vesting occurred. Both the September 2006 and 2007 Awards will be tested after the conclusion of the fifth and third performance period respectively on 31 August 2011. Details of the audited Share Rights holdings for year ended 30 June 2011 for the Key Management Personnel are set out in the following table. Refer to the Summary Table of Long Term Incentive Plan Awards (section 3.4.3) for details with respect to fair values, exercise price and key dates. Page 27 of 40 t r o p e R ’ s r o t c e r i D 0 4 f o 8 2 e g a P d e t i m L i l e e t S e p o c S e u B l e r a h S l a t o T n i d e t s e v s t h g R i d e t s e V t o n d n a t e y d e s i c r e x e n i d e s p a L d e s i c r e x E n i d e t n a r G d e d n e r a e y d e t s e v n U r a e y n i t a e c n a l a B r a e y r a e y n i r a e y t a e c n a l a B e n u J 0 3 e n u J 0 3 t a 0 3 d e d n e e n u J 0 3 0 3 d e d n e 0 3 d e d n e 0 3 d e d n e e n u J 0 3 1 1 0 2 1 1 0 2 1 1 0 2 e n u J 1 1 0 2 1 1 0 2 e n u J 1 1 1 0 2 e n u J 1 1 0 2 e n u J 0 1 0 2 1 1 0 2 1 1 0 2 e n u J 0 3 d e d n e r a e y l a i c n a n i f e h t r o f s g n i d l o h s t h g R i e r a h S r o t c e r i D e v i t u c e x E - - - - - - - - - - - - 1 3 7 , 7 7 6 , 2 0 7 1 8 6 6 , 8 6 5 4 8 5 , 9 2 4 , 4 5 4 9 8 2 , 6 9 4 9 8 9 1 9 4 , 9 1 9 2 2 5 , 0 1 7 0 7 4 , 0 8 9 9 2 5 , 0 1 2 , 5 7 1 0 2 4 , 3 8 1 - - - - - - - - - - - 1 3 7 , 7 7 6 , 2 0 7 1 , 8 6 6 8 6 5 , 4 8 5 9 2 4 , 4 5 4 9 8 2 , 6 9 4 9 8 9 , 1 9 4 9 1 9 , 2 2 5 0 1 7 , 0 7 4 0 8 9 , 9 2 5 0 1 2 , 5 7 1 0 2 4 , 3 8 1 - - - - - - - - - - - - - - - - - - - - - - 0 2 2 , 0 0 2 , 1 1 1 5 , 7 7 4 , 1 0 6 3 , 4 7 2 0 1 8 , 9 6 2 0 9 8 , 4 0 2 0 6 8 , 2 0 2 0 6 8 , 2 0 2 0 5 4 , 5 4 2 0 1 3 , 5 4 2 0 6 1 , 6 6 2 0 1 2 , 5 7 1 0 2 4 , 3 8 1 0 1 8 , 3 9 3 8 5 7 , 4 1 3 9 3 5 , 9 4 2 9 2 4 , 3 9 2 9 2 1 , 9 8 2 9 6 4 , 7 7 2 0 0 4 , 5 2 2 0 2 8 , 3 6 2 - - t n e r r u c - s e v i t u c e x e P M K i h s n r o C H N y e l l ' a M O F P a l l e s s a V R M e f e e K O E P ' i n m m u C R I n o r r a B G M i s a El R S l a y a D S l l i l h e h c t i M A K i 2 n a n F J P 3 e r o o M J R . d e u s s i e r a h s h c a e i r o f d a p n u i s n a m e r r o d a p i s a w t n u o m a o n d n a d e s c r e x e i s t h g i r f o r e b m u n e h t o t l a u q e s i d e u s s i s e r a h s f o r e b m u n e h T 1 . 0 1 0 2 r e b m e v o N 1 n o T L E o t d e t n o p p A 2 i . 0 1 0 2 r e b m e c e D 1 n o T L E o t d e t n o p p A 3 i d e t i m L i l e e t S e p o c S e u B l t r o p e R ’ s r o t c e r i D 0 1 0 2 e n u J 0 3 d e d n e r a e y l i a c n a n i f e h t l i r o f s g n d o h S T H G R E R A H S I e r a h S l a t o T n i d e t s e v s t h g R i d e t s e V t o n d n a t e y i d e s c r e x e n i d e s p a L i d e s c r e x E n i d e t n a r G d e d n e r a e y d e t s e v n U r a e y n i t a e c n a a B l r a e y r a e y n i r a e y t a e c n a l a B e n u J 0 3 e n u J 0 3 t a 0 3 d e d n e e n u J 0 3 0 3 d e d n e 0 3 d e d n e 0 3 d e d n e e n u J 0 3 0 1 0 2 0 1 0 2 0 1 0 2 e n u J 0 1 0 2 0 1 0 2 e n u J 1 0 1 0 2 e n u J 0 1 0 2 e n u J 9 0 0 2 0 1 0 2 r o t c e r i D e v i t u c e x E - - - - - - - - - - 1 1 5 , 7 7 4 , 1 0 1 8 , 3 9 3 8 5 7 , 4 1 3 9 3 5 , 9 4 2 9 2 4 , 3 9 2 9 2 1 , 9 8 2 9 6 4 , 7 7 2 0 0 4 , 5 2 2 0 2 8 , 3 6 2 - - - - - - - - - , 1 1 5 7 7 4 1 , , 0 1 8 3 9 3 , 8 5 7 4 1 3 , 9 3 5 9 4 2 , 9 2 4 3 9 2 , 9 2 1 9 8 2 , 9 6 4 7 7 2 , 0 0 4 5 2 2 , 0 2 8 3 6 2 - - - - - - - - - - - - - - - - - - 0 0 0 0 3 9 , 1 1 5 , 7 4 5 0 0 0 5 1 2 , 0 3 4 1 1 2 , 0 0 5 7 5 1 , 0 7 9 8 5 1 , 0 7 9 8 5 1 , 0 9 2 4 8 1 , 0 0 0 0 8 1 , 0 7 5 8 0 2 , 0 1 8 , 8 7 1 8 2 3 , 3 0 1 9 3 0 , 2 9 9 5 4 , 4 3 1 9 5 1 , 0 3 1 9 7 1 , 3 9 0 0 4 , 5 4 0 5 2 , 5 5 t n e r r u c - s e v i t u c e x e P M K i h s n r o C H N y e l l ' a M O F P a l l e s s a V R M i n m m u C R I n o r r a B G M i s a El R S l a y a D S l l i l h e h c t i M A K e f ' e e K O E P 0 4 f o 9 2 e g a P . d e u s s i e r a h s h c a e i r o f d a p n u i s n a m e r r o d a p i s a w t n u o m a o n d n a d e s c r e x e i s t h g i r f o r e b m u n e h t o t l a u q e s i d e u s s i s e r a h s f o r e b m u n e h T 1 t r o p e R ’ s r o t c e r i D d e t i m L i l e e t S e p o c S e u B l 0 4 f o 0 3 e g a P 3 5 6 , 7 8 3 7 2 0 , 4 0 4 0 6 3 , 3 8 4 , 1 0 0 0 , 1 8 5 , 1 4 6 2 , 0 4 4 , 1 3 5 6 , 7 8 3 6 8 6 , 9 2 3 5 0 4 , 3 9 0 0 5 , 5 6 3 2 3 2 , 9 2 3 8 2 4 , 1 0 3 3 5 8 , 1 9 5 9 5 , 3 6 2 7 7 , 3 2 3 4 6 2 , 7 4 2 4 2 4 , 8 6 8 6 8 , 5 4 2 7 6 0 , 8 9 2 7 0 9 , 4 4 2 4 6 0 , 9 6 9 4 2 , 0 7 2 2 3 4 , 3 4 2 - - - - - - - - - - - - - - - - - - - - - - - 1 1 0 2 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 1 1 0 2 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 1 1 0 2 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 1 1 0 2 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 0 0 1 , 0 7 3 5 0 , 1 3 2 8 5 3 , 6 4 2 0 0 0 , 0 3 9 0 2 2 , 0 0 2 , 1 0 0 1 , 0 7 6 5 7 , 1 5 4 5 9 , 6 5 0 0 0 , 5 1 2 0 6 3 , 4 7 2 0 2 3 , 7 4 8 0 0 , 6 5 0 3 4 , 1 1 2 0 1 8 , 9 6 2 0 0 5 , 1 1 7 1 8 , 8 3 2 2 7 , 1 4 0 0 5 , 7 5 1 0 9 8 , 4 0 2 0 0 9 , 3 5 7 4 4 , 8 3 2 1 1 , 2 4 0 7 9 , 8 5 1 0 6 8 , 2 0 2 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6 0 - v o N - 8 1 0 0 1 , 0 7 7 0 - v o N - 4 1 3 5 0 , 1 3 2 8 0 - v o N - 8 2 8 5 3 , 6 4 2 9 0 - v o N - 0 3 0 0 0 , 0 3 9 0 1 - v o N - 0 3 0 2 2 , 0 0 2 , 1 6 0 - v o N - 8 1 0 0 1 , 0 7 7 0 - v o N - 5 0 6 5 7 , 1 5 8 0 - v o N - 8 2 4 5 9 , 6 5 9 0 - v o N - 0 3 0 0 0 , 5 1 2 0 1 - v o N - 0 3 0 6 3 , 4 7 2 7 0 - v o N - 5 0 0 2 3 , 7 4 8 0 - v o N - 8 2 8 0 0 , 6 5 9 0 - v o N - 0 3 0 3 4 , 1 1 2 0 1 - v o N - 0 3 0 1 8 , 9 6 2 6 0 - v o N - 8 1 0 0 5 , 1 1 7 0 - v o N - 5 0 7 1 8 , 8 3 8 0 - v o N - 8 2 2 2 7 , 1 4 9 0 - v o N - 0 3 0 0 5 , 7 5 1 0 1 - v o N - 0 3 0 9 8 , 4 0 2 6 0 - v o N - 8 1 0 0 9 , 3 5 7 0 - v o N - 5 0 7 4 4 , 8 3 8 0 - v o N - 8 2 2 1 1 , 2 4 9 0 - v o N - 0 3 0 7 9 , 8 5 1 0 1 - v o N - 0 3 0 6 8 , 2 0 2 t n e r r u c - s e v i t u c e x e P M K i h s n r o C H N y e l l ' a M O F P a l l e s s a V R M 2 e f e e K O E P ' i n m m u C R I . e v i t u c e x E - P M K h c a e r o f 1 1 0 2 e n u J 0 3 d e d n e r a e y e h t g n i r u d d e t s e v d n a d e t n a r g s d r a w a d n a e h c n a r t t h g i r e r a h s c i f i c e p s h c a e f o s l i t a e d e h t t u o l s t e s w o e b e b a t e h T l t o n i s t h g R e r a h S f o e u l a V 1 1 1 0 2 e n u J 0 3 d e t s e v l a i c n a n F i h c i h w n i r a e y e r a h S n i d e t i e f r o f % n i d e t s e v % y a m s d r a w a t e y s t h g R i d e d n e r a e y d e d n e r a e y f o e t a D f o r e b m u N e r a h S s t h g R i x a M $ i n M $ t s e v t s e v o t 1 1 0 2 e n u J 0 3 1 1 0 2 e n u J 0 3 t n a r g d e d r a w a 1 1 0 2 r o t c e r i D e v i t u c e x E d e t i m L i l e e t S e p o c S e u B l t r o p e R ’ s r o t c e r i D 8 8 2 , 4 7 2 7 0 9 , 4 4 2 4 6 0 , 9 6 9 4 2 , 0 7 2 2 3 4 , 3 4 2 6 8 5 , 2 8 2 0 6 0 , 0 8 3 9 2 , 3 1 3 0 4 5 , 4 9 2 6 5 4 , 4 7 0 0 0 , 6 0 3 2 7 3 , 4 9 2 0 1 6 , 0 9 9 6 5 , 4 5 3 2 9 3 , 9 1 3 0 4 8 , 4 5 1 0 3 0 , 1 2 1 0 0 0 , 1 4 0 0 0 , 0 7 1 2 5 2 , 0 1 2 0 2 7 , 2 3 1 0 8 8 , 2 5 1 1 4 9 , 5 4 5 7 7 , 9 7 1 4 0 1 , 0 2 2 - - - - - - - - - - - - - - - - - - - - - - - - - 1 1 0 2 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 1 1 0 2 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 1 1 0 2 1 1 0 2 2 1 0 2 3 1 0 2 4 1 0 2 0 0 6 9 4 , 7 4 4 8 3 , 2 1 1 2 4 , 0 7 9 8 5 1 , 0 6 8 2 0 2 , 2 6 3 4 4 , 7 1 8 8 4 , 0 9 2 4 8 1 , 0 5 4 5 4 2 , 0 0 4 5 4 , 0 0 0 0 8 1 , 0 1 3 5 4 2 , 0 5 2 5 5 , 0 7 5 8 0 2 , 0 6 1 6 6 2 , 0 0 0 8 2 , 0 0 0 9 1 , 0 0 0 5 2 , 0 0 0 0 0 1 , 0 1 2 5 7 1 , 0 0 0 4 2 , 0 0 0 4 2 , 3 1 0 8 2 , 0 5 7 5 0 1 , 0 2 4 3 8 1 , - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6 0 - v o N - 8 1 0 0 6 , 9 4 7 0 - v o N - 5 0 7 4 4 , 8 3 8 0 - v o N - 8 2 2 1 1 , 2 4 9 0 - v o N - 0 3 0 7 9 , 8 5 1 0 1 - v o N - 0 3 0 6 8 , 2 0 2 7 0 - v o N - 5 0 2 6 3 , 4 4 8 0 - v o N - 8 2 7 1 8 , 8 4 9 0 - v o N - 0 3 0 9 2 , 4 8 1 0 1 - v o N - 0 3 0 5 4 , 5 4 2 8 0 - v o N - 8 2 0 0 4 , 5 4 9 0 - v o N - 0 3 0 0 0 , 0 8 1 0 1 - v o N - 0 3 0 1 3 , 5 4 2 8 0 - v o N - 8 2 0 5 2 , 5 5 9 0 - v o N - 0 3 0 7 5 , 8 0 2 0 1 - v o N - 0 3 0 6 1 , 6 6 2 6 0 - v o N - 8 1 0 0 0 , 8 2 7 0 - v o N - 4 1 0 0 0 , 9 1 8 0 - v o N - 8 2 0 0 0 , 5 2 9 0 - v o N - 0 3 0 0 0 , 0 0 1 0 1 - v o N - 0 3 0 1 2 , 5 7 1 6 0 - v o N - 8 1 0 0 0 , 4 2 7 0 - v o N - 4 1 0 0 0 , 4 2 8 0 - v o N - 8 2 3 1 0 , 8 2 9 0 - v o N - 0 3 0 5 7 , 5 0 1 0 1 - v o N - 0 3 0 2 4 , 3 8 1 2 n o r r a B G M i s a El R S l a y a D S l l i l h e h c t i M A K i 3 n a n F J P 3 e r o o M J R 0 4 f o 1 3 e g a P e n u J 0 3 t a P M K y b d e h l i s t h g R e r a h S l i f o e u a v e h t e n m r e t e d o t d e s u n e e b s a h d e t i m L i s e i t i r u c e S s r e p o o C e s u o h r e t a w e c i r i P m o r f e c v d a n o i t a u a v l l a n r e t x E 1 1 1 0 2 . T L E o t i t n e m t n o p p a o t r o i r p 6 0 0 2 d e t n a r g d r a w A 2 . T L E o t t i t n e m n o p p a o t r o i r p 9 0 0 2 & 8 0 0 2 , 7 0 0 2 , 6 0 0 2 d e t n a r g d r a w A 3 d e t i m L i l e e t S e p o c S e u B l t r o p e R ’ s r o t c e r i D 0 3 d e d n e r a e y e h t n i d e t s e v s e r a h s e s o h t f o e m o S . n a P l n o i t t n e e R e r a h S l i a c e p S e h t r e d n u s e r a h s d e d r a w a e r e w s e v i t u c e x e i r o n e s f o r e b m u n a 8 0 0 2 e n u J 0 3 d e d n e r a e y e h t n I . 1 1 0 2 e n u J n o i t a r e n u m e R s a d e d r a w A s e r a h S 5 . 5 y r a m m u S d r a w A e r a h S d e t s e v t o n s e r a h S f o e u l a V 1 1 1 0 2 e n u J 0 3 h c i h w n i r a e y l a i c n a n F i n i d e t i e f r o f % n i d e t s e v % f o r e b m u N y a m s d r a w a t e y s e r a h S d e d n e r a e y d e d n e r a e y f o e t a D s e r a h S x a M $ i n M $ t s e v t s e v o t 1 1 0 2 e n u J 0 3 1 1 0 2 e n u J 0 3 t n a r g d e d r a w a 1 1 0 2 r o t c e r i D e v i t u c e x E 0 4 f o 2 3 e g a P . 1 1 0 2 e n u J 0 3 t a P M K y b d e h l s e r a h S - 0 8 8 , 0 8 1 0 2 5 , 1 9 1 - - - - - - - - - - - 0 0 2 , 8 4 0 0 5 , 9 5 - - - - - - - - - - 2 1 0 2 3 1 0 2 - - - - - - - - - 2 1 0 2 2 1 0 2 - 0 0 0 , 7 1 0 0 0 , 8 1 - - - - - - - - 0 0 0 , 0 2 0 0 0 , 5 2 - - - - - - - - - - - - - - - - 0 0 1 - - 7 0 - g u A - 6 0 0 0 0 , 5 1 7 0 - g u A - 6 0 0 0 0 , 7 1 7 0 - g u A - 6 0 0 0 0 , 8 1 0 0 1 7 0 - g u A - 3 0 0 0 0 , 5 2 - - - - - - - - - - - - - - - - - - - - 9 0 - r a M - 0 1 0 0 0 , 0 2 9 0 - b e F - 7 2 0 0 0 , 5 2 t n e r r u c - s e v i t u c e x e P M K i h s n r o C H N y e l l ' a M O F P a l l e s s a V R M s a h e t a d t n a r g t a e c i r p e r a h S 1 i 3 n a n F J P 4 e r o o M J R e ' f e e K O E P i n m m u C R I n o r r a B G M i s a El R S 2 l a y a D S 2 l l i l h e h c t i M A K l i f o e u a v e h t e n m r e t e d o t d e s u n e e b . d e t i m L i l e e t S e p o c S e u B o t l i t n e m t n o p p a n o d e t n a r G 2 . 0 1 0 2 r e b m e v o N 1 n o m a e T L E o t d e t n o p p A 3 i . 0 1 0 2 r e b m e c e D 1 n o m a e T L E o t d e t n o p p A 4 i BlueScope Steel Limited Directors’ Report 5.6 Share Holdings in BlueScope Steel Limited The following table details the shares held by KMP – Non Executive Directors and Executives, as well as any related-party interests in BlueScope Steel Limited as at 30 June 2011. SHARE HOLDINGS1 IN BLUESCOPE STEEL LIMITED Ordinary shares held as at 30 June 2011 Ordinary shares held as at 30 June 2010 286,276 1,321,502 128,382 152,720 157,116 128,156 41,624 - 227,613 67,199 57,303 15,303 336,679 191,924 10,000 20,000 77,666 63,695 355,315 286,276 1,321,502 128,382 152,720 157,116 128,156 26,624 - 227,613 68,584 57,303 15,303 338,292 191,924 - 20,000 77,666 - - Name Non-Executive Directors - current G J Kraehe R J McNeilly D J Grady H K McCann Y P Tan D B Grollo K A Dean P Bingham-Hall 2 Executive Director P F O'Malley KMP executives - current N H Cornish M R Vassella P E O'Keefe I R Cummin M G Barron S R Elias S Dayal K A Mitchelhill P J Finan3 R J Moore4 1 lncluding related party interests. 2 Appointed to NED on 29 March 2011. 3 Appointed to ELT on 1 November 2010. 4 Appointed to ELT on 1 December 2010. Page 33 of 40 BlueScope Steel Limited Directors’ Report 5.7 Managing Director and Chief Executive Officer – Outline of Employment Contract Paul O’Malley was appointed to the position of Managing Director and Chief Executive Officer effective from 1 November 2007. Mr O’Malley’s current annual base pay is $1,750,000. He received a 4% increase from 1 September 2010. Prior to this his base salary had not changed since 1 September 2008. Remuneration is reviewed annually in accordance with the Board’s senior executive salary review policy. In addition, Mr O’Malley is eligible to participate in the Short Term Incentive Plan and, subject to shareholder approval, Long Term Incentive Plan awards. In a year where financial performance was adversely affected by the economic downturn, the Managing Director and Chief Executive Officer received no payment for financial outcomes. His strong leadership during the year ended 30 June 2011 in delivering a pragmatic solution to the carbon tax for the Company, establishing Global Pre-Engineered Buildings (PEB) business, maintaining the cost reductions achieved in year ended 30 June 2010, achieving a strong contribution from the Asian business and driving the initiatives to restructure the Australian business has resulted in an STI bonus of $720,865 which is 35% of his maximum total bonus available. Upon appointment Mr O’Malley was provided with 50,000 BlueScope Steel Limited shares (purchased on-market) to be held subject to certain restrictions. Some or all of these shares will be forfeited by Mr O’Malley if his employment with BlueScope Steel is terminated within the restriction period specified, other than as a result of fundamental change in his employment terms. The employment of Mr O’Malley may be terminated in the following circumstances: • by notice: on six months’ notice by either party. If BlueScope Steel terminates Mr O’Malley’s employment by notice, it may provide payment in lieu of notice and must make an additional payment of 12 months’ annual base pay. • with cause: immediate termination by BlueScope Steel if, among other things, Mr O’Malley wilfully breaches his Service Contract, is convicted of various offences for which he can be imprisoned or is disqualified from managing a corporation, or engages in conduct which is likely to adversely impact the reputation of BlueScope Steel. In this circumstance, Mr O’Malley will be entitled to his annual base pay up to the date of termination. • • illness or disablement: BlueScope Steel may terminate Mr O’Malley’s employment if he becomes incapacitated by physical or mental illness, accident or any other circumstances beyond his control for an accumulated period of six months in any 12-month period and, in this circumstance, will make payment of six months’ notice based on annual base pay. fundamental change: Mr O’Malley may resign if a fundamental change in his employment terms occurs and within three months of the fundamental change Mr O’Malley gives notice to BlueScope Steel. In this event, the Company will provide Mr O’Malley with six months’ notice, or a payment in lieu of that notice, and a termination payment of 12 months’ annual base pay. The rules governing the Company’s Long Term Incentive Plan and Short Term Incentive Plan will apply to his LTIP and STI awards on termination of his employment. These rules which provide that STI and LTIP awards will be forfeited if Mr O’Malley’s employment is terminated for cause. Provision has also been made for early vesting (subject to satisfying performance testing requirements) of LTIP awards on a change of control. Mr O’Malley is subject to a 12-month non-compete restriction after his employment ceases with BlueScope Steel. Mr O’Malley cannot solicit or entice away from BlueScope Steel any supplier, customer or employee or participate in a business that competes with BlueScope Steel during the 12-month period. 5.8 Other Key Management Personnel - Executives Remuneration and other terms of employment for the disclosed Key Management Personnel are formalised in employment contracts that can be terminated with notice. Each of these agreements provide for an annual review of annual base pay, provision of performance-related cash bonuses, other benefits, including annual health assessment, and participation, when eligible, in the Long Term Incentive Plan. The contracts provide for notice of six months for resignation by the executive or termination by the Company. In the event of termination by the Company other than for cause, a termination payment of 12 months’ pay applies. Agreements are also in place for Key Management Personnel detailing the approach the Company will take with respect to payment of their termination payments and with respect to exercising its discretion on the vesting of share rights in the event of a ‘Change of Control’ of the organisation. Page 34 of 40 BlueScope Steel Limited Directors’ Report ENVIRONMENTAL REGULATION BlueScope Steel’s Australian manufacturing operations are subject to significant environmental regulation. Throughout its Australian operations, the Company notified relevant authorities of 30 incidents resulting in statutory non-compliances with environmental licensing requirements during the financial year. During the period there were no serious environmental incidents. In September 2010 BlueScope Steel received a fine of $1,500 from an incident in May 2010 pertaining to localised dust emissions caused by vehicle movement in the recycling area of Port Kembla Steelworks. The NSW regulator has also indicated that BlueScope Steel will receive a fine of $1500 for an incident in May 2011 which resulted in process water being discharged into a drain and then to Port Kembla Harbour, with exceedances of concentration limits for ammonia. BlueScope Steel reports on an annual basis to the National Pollutant Inventory and, under the National Greenhouse and Energy Reporting scheme, on its greenhouse gas emissions and energy consumption and production. BlueScope Steel also assesses and reports publicly upon its energy efficiency opportunities at the Commonwealth level and prepares and monitors progress on water and energy savings plans required under state legislation. Each year BlueScope Steel publishes a Community Safety and Environment Report which is available on our website. The report provides further details of the Company’s environmental performance and initiatives. INDEMNIFICATION AND INSURANCE OF OFFICERS BlueScope Steel has entered into directors' and officers' insurance policies and paid an insurance premium in respect of the insurance policies, to the extent permitted by the Corporations Act 2001. The insurance policies cover former Directors of BlueScope Steel along with the current Directors of BlueScope Steel (listed on page 2). Executive officers and employees of BlueScope Steel and its related bodies corporate are also covered. In accordance with Rule 21 of its Constitution, BlueScope Steel to the maximum extent permitted by law: • must indemnify any current or former Director or Secretary; and • may indemnify current or former executive officers, of BlueScope Steel or any of its subsidiaries, against all liabilities (and certain legal costs) incurred in those capacities to a person, including a liability incurred as a result of appointment or nomination by BlueScope Steel or its subsidiaries as a trustee or as a director, officer or employee of another corporation. The current Directors of BlueScope Steel have each entered into an Access, Insurance and Indemnity Deed with BlueScope Steel. The Deed addresses the matters set out in Rule 21 of the Constitution and includes, among other things, provisions requiring BlueScope Steel to indemnify a Director to the extent to which they are not already indemnified as permitted under law, and to use its best endeavours to maintain an insurance policy covering a Director while they are in office and seven years after ceasing to be a Director. The Directors have not included details of the nature of the liabilities covered or the amount of the premium paid in respect of the directors' and officers' liability insurance contract, as (in accordance with normal commercial practice) such disclosure is prohibited under the terms of the contract. PROCEEDINGS ON BEHALF OF BLUESCOPE STEEL As at the date of this report, there are no leave applications or proceedings brought on behalf of BlueScope Steel under section 237 of the Corporations Act 2001. ROUNDING OF AMOUNTS BlueScope Steel is a company of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the Directors' Report. Amounts in the Directors' Report have been rounded off in accordance with that Class Order to the nearest hundred thousand dollars, or in certain cases, the nearest thousand or the nearest dollar. AUDITOR Ernst & Young was appointed as auditor for BlueScope Steel at the 2002 Annual General Meeting. AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES The Auditor’s Independence Declaration for the year ended 30 June 2011 has been received from Ernst & Young. This is set out at page 37 of the Directors’ Report. Ernst & Young provided the following non-audit services during the year ended 30 June 2011: Audit related assurance services • $742,111 acquisition related investigating accountant’s assurance. Other services • • $236,482 taxation compliance services; and $160,004 other advisory services. Page 35 of 40 The Directors are satisfied that the provision of these non-audit services is compatible with the general standard of independence for auditors in accordance with the Corporations Act 2001. The nature, value and scope of each type of non- audit service provided is considered by the Directors not to have compromised auditor independence. This report is made in accordance with a resolution of the Directors. BlueScope Steel Limited Directors’ Report G J KRAEHE AO Chairman P F O’MALLEY Managing Director and Chief Executive Officer Melbourne 20 August 2011 Page 36 of 40 Auditor’s Independence Declaration to the Directors of BlueScope Steel Limited In relation to our audit of the financial report of BlueScope Steel Limited for the financial year ended 30 June 2011, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the professional conduct. Corporations Act 2001 or any applicable code of Ernst & Young B R Meehan Partner 20 August 2011 Page 37 of 40 Liability limited by a scheme approved under Professional Standards Legislation BlueScope Steel Limited Directors’ Report CORPORATE GOVERNANCE STATEMENT Introduction As a global organisation with businesses operating in many countries, the BlueScope Steel Group must comply with a range of legal, regulatory and governance requirements. The Board places great importance on the proper governance of the Group. The Board operates in accordance with a set of corporate governance principles that take into account relevant best practice recommendations. These include the Corporate Governance Principles and Recommendations of the ASX Corporate Governance Council (2nd edition) (ASX Principles and Recommendations). The Company complies with each of the recommendations in the ASX Principles and Recommendations. A summary of BlueScope Steel's compliance with the recommendations follows, including details of specific disclosures required by a recommendation. Further information on the Company's corporate governance policies and practices can be found on the Company’s website. Principle 1 – Lay solid foundations for management and oversight The Board has adopted a Charter which sets out, among other things, its specific powers and responsibilities and the matters delegated to the Managing Director and Chief Executive Officer and those specifically reserved for the Board. A statement of the matters reserved for the Board and the areas of delegated authority to senior management is available on the Company's website. As part of the Board's oversight of senior management, all Company executives are subject to annual performance review and goal planning. This involves evaluation of the executives by their immediate superior. Each executive is assessed against a range of criteria, including achievement of financial, safety, business excellence and strategic goals, and adherence to the Company’s values as expressed in ‘Our Bond’. All senior executives participated in a performance evaluation on this basis during the year ended 30 June 2011. Principle 2 – Structure the Board to add value The Board is structured to bring to its deliberations a range of commercial, operational, financial, legal and international experience relevant to the Company's global operations. Pages 7 to 8 set out the qualifications, expertise and experience of each Director in office at the date of this Directors' Report, and their period of office. The Board considers all of its Non-Executive Directors to be independent. In making this assessment, the Board considers whether the Director is free of any business or other relationship that could, or could reasonably be perceived to, materially interfere with the exercise by the Director of an independent judgement in the interests of the Company as a whole. In determining whether a relationship between the Company and a Director is material and would compromise the Director's independence, the Board has regard to all the circumstances of the relationship including, where relevant: • • the proportion of the relevant class of expenses or revenues that the relationship represents to both the Company and the Director; and the value and strategic importance to the Company's business of the goods or services purchased or supplied by the Company. Further details regarding the circumstances considered by the Board in making assessments of independence are contained on the Company’s website under ‘Directors Independence Policy’ The Board seeks to achieve a Board composition with a balance of diverse attributes relevant to the Company’s operations and markets including skill sets, background, gender, geography, and industry experience. The Company is currently undergoing a process of Board renewal. The Nomination Committee has identified the keys skills and experience desirable on the Board as including financial / risk management, legal/governance, people management and operations management expertise; experience in the building and construction and steel or other heavy manufacturing industries; strategic and M&A/transactional experience; and experience with customers. The Board also strives for both gender and geographic diversity within these skill sets. Based on the assessment by the Nomination Committee of the particular skill profile for new appointees, a sub-committee is appointed to engage a search firm to assist in identifying appropriate candidates for consideration by the Board from a broad pool of possible candidates. Most recently, this process has resulted in the appointment of Ms Penny Bingham-Hall. The Board (and Board Committees and individual Directors) may obtain independent professional advice, at the Company's cost, in carrying out their responsibilities. Independent advice can be obtained without the involvement of the Company's management, where the Board or the Director considers it appropriate to do so. Procedures have been adopted by the Board setting out the practical steps by which independent advice may be obtained. All Non-Executive Directors are members of the Nomination Committee. Their attendance at meetings of the Committee are set out on page 9. The Board reviews its effectiveness and the performance of each Director regularly. Page 38 of 40 BlueScope Steel Limited Directors’ Report The Board completed an internal review of its effectiveness in August 2011 involving distribution of a questionnaire to Directors and senior management. Confidential responses were collated by the Company’s auditors and discussed by the Board. The review concluded that the Board is functioning well with an appropriate mix of skills and experience and that an effective working relationship exists among Board members and between Board and management. In addition, each Committee reviews its performance and effectiveness periodically through a confidential questionnaire completed by members of the Committee and relevant management attendees. The results of these reviews are discussed by the Committee. Each Board Committee has conducted a review on this basis in the last 12 months. A formal review of the performance of individual Directors takes place periodically, involving completion of an evaluation questionnaire by other Board members, the results of which are collated and discussed by the Chairman with the director concerned (or the Deputy Chairman in the case of the review of the Chairman) and with the Board as a whole. In addition, the performance of the Chairman and other Directors are reviewed regularly through other informal mechanisms such as meeting critiques, discussions between Directors and the Chairman, and as part of Board and Committee evaluations. The Nomination Committee has reviewed the performance of Directors seeking election in 2011 and endorses their candidature. Principle 3 – Promote ethical and responsible decision making BlueScope is committed to building a diverse workforce and considers that diversity (including gender diversity) will strengthen BlueScope’s capability to meet its objectives. A range of programs and initiatives are in place to promote diversity including the establishment of a global Diversity Council, diversity action plans focused on recruitment, development and retention, flexible working arrangements, paid parental leave, women’s networking groups, mentoring and leadership development programs and diversity awareness training. BlueScope’s Diversity Policy is available on the Company’s website. The Company has a set of values known as ‘Our Bond’ and a ‘Guide to Business Conduct’, which provides an ethical and legal framework for all employees. The Guide defines how the BlueScope Steel Group relates to its customers, employees, shareholders and the community. Information relating to the Guide and ‘Our Bond’ is available on the Company's website. In addition, the Board has established a Securities Trading Policy which governs dealing in the Company's shares and derivative securities. A copy of the policy has been lodged with ASX and is available on the Company's website. Principle 4 – Safeguard integrity in financial reporting The Board has established an Audit and Risk Committee which assists the Board in the effective discharge of its responsibilities for financial reporting, internal controls, risk management, internal and external audit, and insurance (with the exception of directors' and officers' liability insurance). The Committee's Charter is set out in full on the Company’s website. Separate discussions are held with the external and internal auditors without management present. The composition and structure of the Audit and Risk Committee complies with the requirements of the ASX Principles and Recommendations. The names of the members of the Audit and Risk Committee and their attendance at meetings of the Committee are set out on page 9 of this Directors' Report. The qualifications of the members are set out on pages 7 to 8. Principle 5 – Make timely and balanced disclosure The Company is subject to continuous disclosure obligations under the ASX Listing Rules and Australian corporations legislation. Subject to limited exceptions, the Company must immediately notify the market, through ASX, of any information that a reasonable person would expect to have a material effect on the price or value of its securities. As part of its continuous disclosure responsibilities, the Company has established market disclosure protocols to promote compliance with these requirements and to clarify accountability at a senior executive level for that compliance. A summary of the Company’s Continuous Disclosure Policy is included on the Company's website. Principle 6 – Respect the rights of shareholders Respecting the rights of shareholders is of fundamental importance to the Company and a key element of this is how we communicate with our shareholders. In this regard, the Company recognises that shareholders must receive high-quality relevant information in a timely manner in order to be able to properly and effectively exercise their rights as shareholders. The Company's communications policy is summarised on the Company's website. Principle 7 – Recognise and manage risk The Board has required management to design and implement a risk management and internal control system to manage the Company's material business risks and management has reported that those risks are being managed effectively. For the annual and half-year accounts released publicly, the Board has received assurance from the Managing Director and Chief Executive Officer and the Chief Financial Officer that, in their opinion: • • the financial records of the Group have been properly maintained; the financial statements and notes required by accounting standards for external reporting: (i) (ii) give a true and fair view of the financial position and performance of the Company and the consolidated BlueScope Steel Group; and comply with the accounting standards (and any further requirements in the Corporations Regulations) and applicable ASIC Class Orders; and Page 39 of 40 BlueScope Steel Limited Directors’ Report • the above representations are based on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks. Information relating to the Company's policies on risk oversight and management of material business risks is available on the Company's website. Principle 8 – Remunerate fairly and responsibly The Remuneration Report (on pages 11 to 34) sets out details of the Company's policy and practices for remunerating Directors, key management personnel and senior executives. The names of the members of the Remuneration and Organisation Committee and their attendance at meetings of the Committee are set out on page 9. Information relating to: • • the role, rights, responsibilities and membership requirements for the Remuneration and Organisation Committee; and the Company's Securities Trading Policy, which prohibits entering into transactions in associated products that limit the economic risk of participating in unvested entitlements under any equity-based remuneration schemes, is also available on the Company's website. Other than superannuation, there are no schemes for retirement benefits for Non-Executive Directors. All information referred to in this Corporate Governance Statement as being on the Company’s website is included under the ‘Responsibilities/Corporate Governance’ section of the website. Page 40 of 40 CONCISE FINANCIAL REPORT AUDITOR’S REPORT Independent auditor’s report to the members of BlueScope Steel Limited Report on the Concise Financial Report We have audited the accompanying concise financial report of BlueScope Steel Limited which comprises the consolidated statement of financial position as at 30 June 2011, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended and related notes, derived from the audited financial report of BlueScope Steel Limited for the year ended 30 June 2011. The concise financial report also includes the directors’ declaration. The concise financial report does not contain all the disclosures required by the Australian Accounting Standards. Directors’ Responsibility for the Concise Financial Report The Directors are responsible for the preparation of the concise financial report in accordance with Accounting Standard AASB 1039 Concise Financial Reports, and the Corporations Act 2001, and for such internal controls as the directors determine are necessary to enable the preparation of the concise financial report. Auditor’s Responsibility Our responsibility is to express an opinion on the concise financial report based on our audit procedures which were conducted in accordance with ASA 810 Engagements to Report on Summary Financial Statements Standards, of the financial report of BlueScope Steel Limited for the year ended 30 June 2011. We expressed an unmodified audit opinion on the financial report in our report dated 19 August 2011. The Australian Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report for the year is free from material misstatement. . We have conducted an independent audit, in accordance with Australian Auditing An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the concise financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the concise financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity’s preparation of the concise financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. Our procedures included testing that the information in the concise financial report is derived from, and is consistent with, the financial report for the year, and examination on a test basis, of audit evidence supporting the amounts and other disclosures which were not directly derived from the financial report for the year. These procedures have been undertaken to form an opinion whether, in all material respects, the concise financial report complies with AASB 1039 Concise Financial Reports. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. Auditor’s Opinion In our opinion, the concise financial report and the directors’ declaration of BlueScope Steel Limited for the year ended 30 June 2011 complies with Accounting Standard AASB 1039 Concise Financial Reports. Report on the Remuneration Report The following paragraphs are copied from our Report on the Remuneration Report for the year ended 30 June 2011. We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2011. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Corporations Act 2001. Our Auditor’s Opinion In our opinion, the Remuneration Report of BlueScope Steel Limited for the year ended 30 June 2011, complies with section 300A of the Corporations Act 2001. Ernst & Young B R Meehan Partner Melbourne 20 August 2011 -21- Liability limited by a scheme approved under Professional Standards Legislation SHAREHOLDER INFORMATION SHAREHOLDER INFORMATION DISTRIBUTION SCHEDULE (AS AT 12 AUGUST 2011) Ranges 1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 50,000 50,001 to 100,000 100,001 and Over Total No. of holders No. of shares % of Issued Capital 81,777 62,450 17,522 12,386 947 520 35,605,475 153,828,741 128,260,934 242,140,207 66,698,840 1,215,673,188 1.93 8.35 6.96 13.14 3.62 66.00 175,602 1,842,207,385 100.00 The number of shareholders holding less than a marketable parcel of 552 securities ($0.905 on 12/08/2011) is 56,049 and they hold 15,255,417 securities. TWENTY LARGEST REGISTERED (AS AT 12 AUGUST 2011) Rank Name of shareholder Total Units % Issued Capital 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED NATIONAL NOMINEES LIMITED J P MORGAN NOMINEES AUSTRALIA LIMITED CITICORP NOMINEES PTY LIMITED COGENT NOMINEES PTY LIMITED QUEENSLAND INVESTMENT CORPORATION JP MORGAN NOMINEES AUSTRALIA LIMITED AUSTRALIAN REWARD INVESTMENT ALLIANCE UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD RBC DEXIA INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED AMP LIFE LIMITED UBS NOMINEES PTY LTD CITICORP NOMINEES PTY LIMITED MR KIRBY CLARKE ADAMS CITICORP NOMINEES PTY LIMITED CREDIT SUISSE SECURITIES (EUROPE) LTD COMSEC NOMINEES PTY LIMITED M F CUSTODIANS LTD CITICORP NOMINEES PTY LIMITED RBC DEXIA INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED TOTAL Balance of Register Grand TOTAL 321,108,105 262,800,236 234,679,378 129,446,776 47,366,850 18,018,799 12,797,387 9,239,809 8,418,620 7,642,582 7,067,561 6,072,424 4,197,390 2,600,000 2,442,318 2,310,000 2,302,811 2,285,176 2,100,170 2,067,511 1,084,963,903 757,243,482 1,842,207,385 17.43% 14.27% 12.74% 7.03% 2.57% 0.98% 0.69% 0.50% 0.46% 0.41% 0.38% 0.33% 0.23% 0.14% 0.13% 0.13% 0.13% 0.12% 0.11% 0.11% 58.89% 41.11% 100.00% SUBSTANTIAL SHAREHOLDERS (AS AT 12 AUGUST 2011) As at 12 August 2011, BlueScope Steel has not been notified of any substantial shareholdings. VOTING RIGHTS FOR ORDINARY SHARES The Constitution provides for votes to be cast: (a) (b) On a show of hands, one vote for each shareholder; and On a poll, one vote for each fully paid share BLUESCOPE STEEL LIMITED ABN 16 000 011 058 LEVEL 11, 120 COLLINS STREET MELBOURNE, VICTORIA 3000 AUSTRALIA WWW.BLUESCOPESTEEL.COM 

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