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an post annual report 2011
RISI
NG TO
THE C
HALL
ENGE
S OF A
CHA
NGIN
G M
ARKE
T
an post an
nual report 2011
An PostGeneral Post OfficeO’Connell StreetDublin 1Ireland
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contents 2 mission, vision and values4 board of directors and corporate information6 chairman’s statement8 management10 chief executive’s review17 financial review19 universal service22 sustainability26 stamp issues and philatelic publications31 index to the financial statements
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To provide world class postal, distribution and financial services with unrivalled local community access and global connections.
Working together as a united team, our ambition is to outperform the new competition we face, delivering a better quality service, more efficiently, to more customers by continuously adapting, innovating and implementing change.
our mission
our vision
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board of directors and corporate information
1. john fitzgerald f.c.c.a.Chairman - 2, 3Appointed 1 Mar. 2008Mr.Fitzgeraldhasspentmostofhiscareerworkinginlocalgovernment,servinginseveralseniorpositions,includingthatofDublinCityManagerfrom1996until2006.Currently,heisChairmanoftheGrangegormanDevelopmentAgencyandofthetwoRegenerationAgenciessetupinLimerickfollowinghisreporttoGovernmentonproblemsofsocialexclusioninthatcity.HeisalsoChairmanoftheNationalTransportAuthority.
2. patrick comptonEmployee DirectorAppointed 1 Nov. 2008; fifth termMr.Comptonhasworkedinthepostalserviceforthepast39yearsandhiscurrentpositionisthatofPartnershipCo-ordinator,basedinRoscommon.HewasamemberoftheNationalExecutiveoftheCommunicationsWorkersUnionfor22yearsanditsPresidentin1986.HewasalsoadirectorofThePrizeBondCompanyLimitedformanyyears.HeisactiveincommunitydevelopmentinhislocalareaandheistheCountyRoscommonGAACoaching&GamesDevelopmentOfficer.
3. jerry condonEmployee Director - 2 Appointed 1 Nov. 2008; fourth termMr.Condoncommencedworkin1971withtheDepartmentofPostsandTelegraphsandhasworkedasaPostOfficeClerkforhisentirecareer.HehasbeenanactivememberoftheCommunicationsWorkers’UnionthroughouthiscareerandheservedontheNationalExecutiveofthatunionfor13years.
4. donal connell, c.eng., f.i.e.i., b.e.Director -2, 3 Appointed on 14 Aug. 2006Mr.ConnellwasappointedasChiefExecutiveon14August2006.HebeganhiscareerintheDepartmentofPostsandTelegraphsandhasheldseniormanagementpositionsinUnitrodeCorporation,3ComCorporationandMaxtorIrelandwherehewasGeneralManagerpriortojoiningAnPost.Heisanon-executiveDirectorofXilinxCorporation’sEuropeanBoardandheisChairmanofAnPostNationalLotteryCompany.
5. anne connolly, b.a., m.b.a.Director - 1, 2Appointed on 23 Nov. 2007Ms.ConnollyistheDirectoroftheAgeingWellNetwork,anindependentleadershipnetworkofheadsoforganisationsacrosstheprivate,publicandvoluntarysectors.ShehadpreviouslyfoundedandrunAnneConnollyConsultingLimited,astrategicManagementconsultancycompany.Priortoformingthiscompany,sheworkedasStrategyManagerwithKingspanplcand,beforethat,atseniormanagementlevelinthepublicandnot-for-profitsectors.ShehaspreviouslybeenontheboardsofICCBankplcandAPSOandshewasChairpersonoftheFederationofSimonCommunitiesinIreland.
6. paddy costelloEmployee DirectorAppointed on 1 Nov. 2008Mr.CostellojoinedthePostOfficeasaJuniorPostpersonin1964.HebecameaPostpersonin1966andhehasbeenemployedintheFinglasDeliveryServiceUnit(DSU),Dublin11forthelast44years.Throughouthisemployment,hehasrepresentedmembersoftheCommunicationsWorkers’UnionatDSUsinDublin.HehasheldvariousbranchofficerpositionsandheiscurrentlyservingastheTreasureroftheDublinPostalDeliveryBranch.
7. thomas devlinEmployee DirectorAppointed 26 Mar. 2010; second termMr.DevlinbeganhiscareerinthePostOfficein1976whenhejoinedtheDepartmentofPostsandTelegraphsasaJuniorPostmanworkingasamessengerintheMinister’sOffice.HeiscurrentlyemployedasaDeliveryServiceManagerinMalahideDeliveryServiceUnit,Co.Dublin.AnactivememberoftheCommunicationsWorkers’Union,heservedontheNationalExecutivefortwoyearsandwasChairmanoftheSDSDrivers’Branchfrom1996to2004.
8. paul henrya.c.a., m. accounting, b.a. (bus & econ).Director - 1Appointed 15 Sep. 2011Mr.Henry,aCharteredAccountant,hasworkedasaSeniorAuditManagerGroupInternalAuditwithDublinAirportAuthorityPLCsince2008.PriortothatheworkedwithPriceWaterhouseCoopers,DublinwithwhomhetrainedasaCharteredAccountant.
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board of directors and corporate information
Secretary jack dempsey
Registered Office general post officeo’connell streetdublin 1
Auditorkpmg, chartered accountants
Bankers bank of ireland
Solicitors matheson ormsby prentice
Registered Number98788
Key to Board Committees 1. audit and risk 2. personnel 3. remuneration
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9. peter ormond b.a. (bus. mgt.)DirectorAppointed 8 Mar. 2011Mr.OrmondistheMarketingManagerwithMidIrelandTourismsinceMarch2010priortowhichhewastheCommunityServicesProgrammeManagerforKilcormacDevelopmentAssociation.Hisotherworkexperiencesareinauctioneering,insalesandmarketing,andinlogistics.HeisamemberofOffalyCountyCouncilandwasitsChairmanin2005/2006.HeisalsoamemberoftheEducationFinanceBoard.
10. gerry o’tooleEmployee Director - 2Appointed 1 Nov. 2008Mr.O’ToolestartedworkintheDepartmentofPostsandTelegraphsin1980asaJuniorPostmanandthefollowingyearhewasappointedasaPostperson.In1989,hewaspromotedtothepositionofClericalOfficerandworkedintheFinancialServicesareauntil1998whenhemovedtotheITUnit.HecurrentlyisaTechnicalSupportSpecialistinGTSNetworkSupport.Hehasservedonanumberofbranchcommitteesfordifferentunionsovertheyears.
11. john quinlivan b.sc. (mgt. & law), m.sc. (spl. plg.), dip. in public admin.Director - 3Appointed 24 Jun. 2008; second termMr.Quinlivanhashadalengthycareerinlocalgovernment,servinginseniorpositionsinninecounties,including15yearsasLouthCountyManager.HeservedforfiveyearsasamemberoftheNationalRoadsAuthorityandhealsoservedasamemberoftheLocalGovernmentManagementServicesBoard,theLocalGovernmentComputerServicesBoardandAnComhairle.
12. alan sloane, postmasterDirectorAppointed 1 Jan. 2010; fourth termMr.Sloanehasworkedinthefamilygroceryandpostofficebusinesssince1976.HewasappointedpostmasterofLochGownaPostOffice,Co.Cavanin1979.HeisalsoManagingDirectorofJ.A.S.Limited,asecuritycounterandfurnituremanufacturingbusiness,whichheestablishedin1985.
13. catherine woods b.a.(econ).Director - 1, 3Appointed 4 Feb. 2008Ms.WoodshasspentmostofhercareerinLondonwithJPMorgan.Shehasextensiveexperienceofmergersandacquisitionsandstockbrokinginthefinancialsector.HermandatesincludedtherecapitalisationofLloyds’ofLondonInsurancemarketandthere-privatisationofScandinavianbanks.SinceherreturntoIreland,shehasservedontheElectronicCommunicationsAppealsPanelfrom2004to2007,opiningonappealsagainstComRegdecisions.SheisaDirectorofAlliedIrishBanksplcandisontheAdjudicationPanelforappealregardingtheNationalBroadbandScheme.
14. james wrynn bsc.bcomm., mba.Director - 1Appointed 15 Sep. 2011Mr.WrynnisaformerSeniorLecturerinStrategicManagementinDITandHeadoftheDepartmentofAdministrativeStudiesinDIT’sFacultyofBusiness.HeservedontheBoardofESBformorethantenyearsandduringhistermofofficeservedasDeputyChairpersonfrom1995–2000.HealsochairedESBBoardCommitteesonInternationalInvestmentandStrategicResponsetoDeregulation.
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Against a backdrop of national and international economic turmoil, full market liberalisation and ongoing uncertainty in the financial markets, An Post consolidated several key strands of its transformation and business development strategies during 2011.
the company delivered further improvements in the key areas of cost containment, service quality, staff engagement and the development of new revenue streams. our market positioning as an innovative, high quality, value-for-money service provider is no longer an aspiration, it is a reality.
chairman’sstatement
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ChangeandTransformationprogrammesarenowpartofoureverydaybusiness.Theseinitiativeshaveenabledustoattaintheveryhighestinternationalindustrystandards,improvingourcustomerfocusandensuringthedeliveryofcustomisedlogisticsandfulfilmentsolutionstothemailsandretailmarkets.TheapproachtakenbytheCompanyhaseffectedalastingchangeintheinternalcultureandenabledAnPostanditsstafftoadaptquicklyandeffectivelytochangingmarketcircumstances.
AnPostisnowamoremodern,innovativeandcosteffectiveenterprisethaneverbefore.ItisthemosttrustedindigenousIrishcompanyandconsistentlyrecordsthehighestlevelofcustomersatisfactionfrombothbusinessandprivatecustomers.
TheCompanyhasfundeditsprogrammeoftransformationandinvestmentinequipment,technologyandinfrastructurefromitsownresourcesandwithoutrecoursetostatesubsidyorborrowingsofanykind.Ourstrategywhichalsoincludesinvestmentinalignedbusinessesremainsappropriate.
However,asmailvolumescontinuetodeclinesignificantlyacrosstheworld,itbecomesincreasinglyimportantforustocontinuetoreduceourcostbase.IhavenodoubtthatthiswillbedifficultbuttheconsequencesofanydelaywillbeseriousfortheCompany.In2012,ComReg,TheCommissionforCommunicationsRegulation,servedlegalproceedingsonAnPostforallegedfailuretoimprovemailsqualityofservicetomeetcertaintargets.WebelievethatsuchactionsareunwarrantedandignorethesignificantimprovementinqualityofservicemadebytheCompany.
ThisisatimewhenallourkeystakeholdersneedtoworktogethertoensuretheCompany’sfutureviabilitywhileensuringthatAnPostrealisesitsfullpotential.AstrongandstablemailsandretailinfrastructuretrustedbyIrishandinternationalcustomersisanessentialsupporttotheprocessofeconomicrecovery.
IwanttothankBrianMcConnell,CiaraHurleyandJimHylandwhoretiredfromtheBoardduringtheyear.Theircontributionsduringtheirtermsofofficeareverymuchappreciated.
IalsowanttothankMinisterforCommunications,EnergyandNaturalResources,PatRabbitteT.D.,andhisofficialsfortheirassistanceandsupportduring2011.
IhaveeveryconfidenceintheBoard,managementandstaffofAnPostastheycontinuetodealwithmarketchallengeswhilstexploitingnewcommercialopportunitiesforthecorebusinessandsubsidiarycompanies.
John FitzgeraldChairman
AN POST IS NOW A MORE MODERN, INNOVATIVE AND COST EFFECTIVE ENTERPRISE THAN EVER BEFORE.
chairman’s statement
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management
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management
1. donal connell, c.eng., f.i.e.i., b.e.Chief ExecutiveMr.ConnellwasappointedasChiefExecutiveon14August2006.HebeganhiscareerintheDepartmentofPostsandTelegraphsandhasheldseniormanagementpositionsinUnitrodeCorporation,3ComCorporationandMaxtorIrelandwherehewasGeneralManagerpriortojoiningAnPost.Heisanon-executiveDirectorofXilinxCorporation’sEuropeanBoardandheisChairmanofAnPostNationalLotteryCompany.
2. john daly, a.c.m.a., m.sc.(mgmt.)Retail Operations DirectorMr.DalyjoinedAnPostinDecember1988havingworkedpreviouslyasaManagementAccountantinFÁS.DuringtheearlypartofhiscareerwithAnPost,heworkedintheFinanceDirectorateasaManagementAccountant.HethenheldvariousseniorfinanceandmanagementpositionswithintheRetaildivisionbeforebeingappointedtohiscurrentpositioninOctober2006.HeisChairmanofThePrizeBondCompanyLimited.
3. jack dempsey, b.comm., m.b.a., m.p.a.Company SecretaryMr.DempseyjoinedthePostOfficein1968asanExecutiveOfficerintheDepartmentofPostsandTelegraphs.Duringhiscareer,hehasgainedwideexperienceinallaspectsofpostaloperationsandcommercialactivities,bothnationalandinternational,occupyingavarietyofseniormanagementpositionsacrosstheCompany.HewasappointedasCompanySecretaryinMarch2011.
4. peter gallagher, b.sc., m.b.a., m.inst.dDirector of Strategy and Business ExcellenceMr.GallagherjoinedAnPostinApril2007asHeadofStrategyandBusinessExcellence.PriortojoiningAnPost,hehadbeenaPartnerinPAConsultingGroup’sGlobalBusinessTransformationPracticewhereheledmajortransformationalandbusinessoperationalimprovementprogrammesforprivate&publicsectorclients.PreviousrolesincludeDirectorofStrategywithKPMGConsultingandBusinessOperationsManager(UK&Ireland)forDellComputerCorporation.
5. pat knight, m.sc.(mgmt.), f.c.i.p.d.Human Resources DirectorMr.KnightjoinedAnPostinMarch2004asHumanResourcesDirector.Previously,hehadbeenGeneralManagerHumanResourcesatWaterfordCrystal,whichhejoinedin1986andwhereheheldseniorHRroles,bothinIrelandandtheUK.PreviousexperienceincludesworkasaPersonnelOfficerwithBordnaMónaplc.HeisaTrusteeoftheAnPostSuperannuationSchemesandadirectorofAirBusinessLimited.
6. brian mccormick, b.e.(mech.), m.b.a.Services DirectorMr.McCormickjoinedAnPostinMay2002asStrategyDirectorandwasappointedtohiscurrentpositionofServicesDirectorinOctober2003.PriorexperienceincludesCRHplcandMerrionCorporateFinancewherehewasaDirector.HeisaTrusteeoftheAnPostSuperannuationSchemesandChairmanofOneDirect(Ireland)LimitedandAirBusinessLimited.
7. liam o’sullivanMails Operations DirectorMr.O’SullivanjoinedAnPostin1985.Duringhiscareer,hehasgainedbroadexperienceacrossthefullrangeoftheCompany’sbusiness.HehasheldvariousseniormanagerialandprojectmanagementpositionsintheCompany.HewasappointedasMailProcessingDirectorinJuly2004andalsoservedaperiodasDirectorofCollection&DeliveryChangeProgrammesandOperations.HetookuphiscurrentpositioninApril2009.
8. peter quinn, b.comm., f.c.a., m.b.a.Chief Financial OfficerMr.QuinnjoinedAnPostinAugust2004.PriortothisheheldseniorfinancialandstrategicpositionsinPJCarrollandCompanyplcandMonaghanMushroomsLimited.HeisaCharteredAccountantandtrainedinpracticewithKPMG.HeisadirectorofAnPostNationalLotteryCompany.
9. liam sheehanSales and Marketing DirectorMr.SheehanjoinedAnPostin2000asGeneralManagerSales&MarketingandhewasappointedasSales&MarketingDirectorinOctober2006.HehasextensiveexperienceintheIrishfastmovingconsumergoodssectorandinbrandcreation,channelmanagementandsalesstrategy.HepreviouslyheldseniorSales&MarketingpositionsinProcter&GambleandinGuinnessandhewasCommercialDirectorwithErinFoods.HeisadirectorofThePrizeBondCompanyLimited.HeisalsoChairmanofTheGiftVoucherShopLimited.
10. barney whelan, b.sc., m.b.a., f.p.r.i.i.Director of Communications and Corporate AffairsMr.WhelanjoinedAnPostinJanuary2005.Havingspentmanyyearsintheaquacultureindustry,hewasresponsibleforpublicrelationsandbrandcommunicationsattheESB.HesubsequentlyheldthepositionofDirector,SalesandMarketingatTheFoodSafetyPromotionBoard.HewasappointedtohiscurrentpositioninOctober2006.
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2011 was marked by positive achievements for An Post, despite the great challenges posed to the Company, and its customers, by the difficult economic environment.
falling mail volumes, increasing electronic substitution and new competition are now well established and continue to have an impact on our mails, retail and subsidiary businesses.
chief executive’s review
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Theprocessofadaptingthebusinesstothecommercialrealitiesofthemarketplacecontinuedapacethroughongoingchangeimplementation,innovation,strategicinvestmentandcostreductionprogrammes.
2011sawthefullliberalisationoftheIrishmailsmarket,openingittofullcompetitionaslaiddownbytheCommunicationsRegulation(PostalServices)Act2011,withAnPostasthedesignatedUniversalServiceProviderforaperiodof12years.
TheCompanycontinuedtoinvestinthoseareaswhicharecriticaltothebusinessandalsoinareaswhichhavethepotentialtogeneratenewrevenuestreams.Wemaintainedourstrategicfocus,improvingcompetitiveness,servicequalityandstimulatinginnovationthroughouttheorganisation.WecontinuedtoadapttheCompany’sstructuresandbusinessmodeltodealwiththechangingbusinessenvironment.Wearedeterminedtosupportourcustomersindevelopingandgrowingtheirbusinesses.
Wecontinuedourfocusonimprovingdomesticqualityofserviceandoncemoreexceededourtargetsfordeliveryofinternationalmail.
Operating Profit
TheCompanyachievedagroupoperatingprofitof€2.2min2011(downfrom€5.8min2010),averysolidoutcomegiventhechallengesoutlinedabove.ThisperformanceresultedinlargemeasurefromtheimplementationofChangeprogrammes.Savingsof€15.4minpaycostswereachievedthroughmoreefficientworkingarrangements,automationandaFull-timeEquivalent(FTE)averagereductionof300,bringingthetotalstaffFTEreductionsince2008toalmost1,100withinthecorebusiness.AnadditionalstaffFTEreductionof1,500willbecompleteby2016.During2011,non-paycostsavingstotalled€10m,a3.7percentreductiononthepreviousyear’sresult.Asimilarlevelofcostreductionwillbeachievedin2012tobringthetotalcostreductionto€100msince2008.
Strongparcel,retailandsubsidiaryperformancesalsocontributedsignificantlytotheachievementofGroupTurnoverof€806.7m,anincreaseonthepreviousyear(€805.1m).Giventhatcoremailvolumesfellbyafurther7percentinthesameperiod,thiswasastrongperformance.
Itisanticipatedthatmailvolumeswillcontinuetodeclineinternationally;respondingtothistrendremainsthebiggestchallengefacingtheCompanyintheyearahead.
Mails
Weareproudtoleadthewayinpostalqualityandinnovation.WehaveinvestedinthelatestprocessingequipmentandsoftwareforourMailsCentres.Wehavefundedtheseprojectsfromourownresourcesandtheywillenableustocapitaliseonemergingopportunitieswithinthelettersandparcelsmarketaswellasensuringtheprovisionofatopqualityserviceforallcustomers.
AnPost’sCertificateofExcellenceintheManagementandProcessingofInternationalLetterMail,firstawardedforathree-yearperiodbytheInternationalPostalCorporation(IPC)inearly2009,wasextendedforafurther18months.ThisfollowedrigorousevaluationbytheIPCofourAirmailunitatDublinAirportandtheDublinMailsCentre,throughwhichthemajorityofincomingforeignlettermailisinitiallyprocessed.During2011,wecontinuedtoexceedourperformancetargetsandachieved95.4percentnextdaydeliveryforincominginternationalmailand88.6percentforoutgoingmailreachingitsdestinationcountrynextday.Wehavemaintainedthisqualitylevelforsevensuccessiveyears.TheretentionofthisCertificateconfirmsAnPost’spositionasaqualityleaderintheEuropeanmailsmarket.
chief executive’s review
WE ARE DETERMINED TO SUPPORT OUR CUSTOMERS IN DEVELOPING AND GROWING THEIR BUSINESSES.
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Domesticqualityimprovementandcustomerserviceisatthecentreofourbusinesstransformationanddevelopmentstrategy.Wemaintainedourfocusonsustainingprogresswithinthecontextofongoingoperationalchangeandinvestmentinthemailsandretailinfrastructures.Thebuildingblocksforthenextstageofthequalityimprovementprocess,whichwillenabletheintroductionofadded-valueletterandparcelsservices,arenowinplace.Investmentduring2011innewtechnology,stafftraining,processimprovementandtheconsolidationofourDeliveryServiceUnitswillcontinuetobearfruitthisyearandintheyearstocome.
WeachievedISO9001accreditationforourfourautomatedMailsCentresinDublin,Cork,AthloneandPortlaoise,togetherwithour120large-scaleDeliveryServicesUnitsandournationalCustomerServicesunit,basedattheGPO,Dublin.AsthedesignatedUniversalServiceObligation(USO)provider,wearefullycommittedtoprovidingmailscollectionanddeliveryservicesfivedaysaweektomorethantwomillionaddressesforauniformprice–i.e.thesamepostagerateappliestoaletterpostedfromDublin1toDublin2asappliestoonepostedfromCorktoLetterkenny.TheUSOisavitalpieceofnationalinfrastructure,centraltothebusinessandcommunitylifeofthecountryandakeyfacilitatorofeconomicactivityincludingnewbusinessinnovation.
TheCompany’scommitmenttotheprovisionofthisservicewithoutrecoursetograntorsubsidy,underpinsthisongoingprogrammeofstrategicinvestment,costcontainmentandinnovation.However,thefundingoftheUSOisnowabusiness-criticalissue.LastyearAnPostdeliveredto100,000moredeliverypointsthanin2007–theyearinwhichthepriceofthebasicstampwaslastincreased.Inthatsamefiveyeartimeperiod,mailvolumesfellbyalmost25percent,andsignificantfurtherdeclineisexpectedin2012.
ThistrendhasresultedinaseriousandunsustainableshortfallinUSOfunding,jeopardisingboththefutureoftheserviceandtheviabilityofAnPost’swideroperation.TheunderlyinglossintheUSOin2011hasincreasedonthe€50mlossin2010.Inspiteofsignificantcostreduction,mailvolumedeclinemeansthatwithoutthenecessarypriceadjustments,thesituationwillcontinuetodeteriorate.OurEuropeancounterpartshaverecentlymadeatleastonepricechange,leavingIrelandasthesecondlowestbasictariffacrosstheEU15groupofcountries.ThiswasconfirmedrecentlywhenTheBusiness,InnovationandSkillsCommitteeoftheUKHouseofCommonsreleasedareportdatedMarch1ston‘StampPrices’.Atparagraph6itnotesthat“TheUKcurrentlyhasthefourthlowestfirstclassstamppriceamongEU-15(pre-expansionEU)states.OnlySpain(37p),Ireland(42p)andLuxembourg(45p)arecheaper”.Sincethen,RoyalMailhasannouncedsignificantpricerisesof30percentand39percentrespectivelyforitsfirstandsecondclassserviceseffectivefrom30April2012.ItisinthiscontextthatwehavesubmittedanapplicationtoComRegforapriceadjustmentacrossourUSOproductsandservices.
InFebruaryof2012,ComRegservedlegalproceedingsonAnPostunderthetermsoftheEuropeanCommunities(PostalServices)Regulations2002,seekinganorderfromtheHighCourtthatAnPostcomplywiththe94percentnextdaydeliverytargetforsinglepiecemailandseekingtoimposeafinancialpenaltyonAnPostforallegednon-compliancewiththequalityofservicestandard.
Giventheeffortswearemakinginrelationtothequalityofourservice,wearesurprisedthatComReghaschosenthiscourseafterseveralyearsofsteadyandsustainedimprovementinmailsquality.Thisperformanceisevidencedinourowndata;
chief executive’s review
WE ACHIEVED ISO9001 ACCREDITATION FOR OUR FOUR AUTOMATED MAILS CENTRES, 120 LARGE-SCALE DELIVERY SERVICES UNITS AND OUR NATIONAL CUSTOMER SERVICES UNIT.
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corroboratedbytheongoingqualityofservicemonitorrunindependentlybyPWC,whichhavebeensharedwithComReg,aswellastheindependentinternationalpostalindustrymonitorsmentionedabove.Wewillcontestthisactionvigorously.
Atthebeginningof2011,weissuednewworkwear-styleuniformsto4,500mailscollection&deliverystaff.Theyarenowequippedwithstate-of-the-arthandheldscanningtechnologytoconfirmcollectionanddeliverydetailwhichisavailabletothecustomerinreal-time.AnPostisthefirstpostaloperatorintheworldtoequipallitsmailsstaffwiththistechnology.
TheCompanyhassignalleditsintentiontoparticipateinthetenderforthePostcodeManagementLicencewhichistobeputtothemarketbytheDepartmentofCommunications,EnergyandNaturalResourcesduring2012.
Onlineandcatalogueshoppingdirectlyincreasedthevolumeofpacketandsmallparcelmail.AnPostwillcontinuetoinvestinthismarketsegmentbyprovidinginnovativesupportsandnewproductstostimulategrowthwhileanticipatingtheneedsofonlinesellersandshoppersalike.
Workingcloselywithcustomersofallsectorsandsizes,weconcentratedresourcesonhelpingbusinesstodomorebusiness.Weengagedwithstart-upcompaniesrequiringassistancetodriveonlinetraffic,salesandservice.Wedealtwithlong-establishedbusinessesgrowingtheirproductportfolioaswellaslargeIrishandinternationalbrandswithhighvolume,time-sensitivemail.Ourfocusisonunderstandingtheirneedssoastodeliverservice,reliabilityandadded-valuebyputtingouruniqueinfrastructureandexpertisetoworkfortheminIrelandandthroughourUKsubsidiary,AirBusiness.
Workshopswithmarketingexperts,master-classesandonlinedirectmarketingcasestudiesweremadeavailablefree-of-chargetobusinesscustomersduring2011.WefocussedparticularlyontheSMEsector,encouragingthesebusinessestocombinemailcampaignsanddigitalmarketingtechniquestodrivesalesgrowthandcustomerloyalty.AnPostjoinedforceswithGoogle,BlackKnightSolutionsandtheCounty&CityEnterpriseBoardsinthe‘Getting Irish Business Online’initiativewhichhelpsSMEstodevelopanoptimalonlinepresencetosupportsalesandexpandtheirbusiness.
Retail Services
TheretailarmofAnPostperformedverystronglyin2011.Asotherfinancialinstitutionscontinuetorationalisetheirnetworks,wecontinuetoexpandourproductandserviceofferings.Thesizeandconfigurationofourretailnetwork,aswellasthefootfallofapproximately1.7mcustomersperweek,holdsmanyattractionsforotherfinancialorganisationscurrentlyreviewingtheiroperations.
TherewasastrongnetinflowtoStateSavingsintheearlierpartoftheyear,andwhiletheysoftenedsomewhataroundmid-year,thistrendwasreversedduringtheautumn.Theyearendedwithanetinflowof€1.4billion.Thisfundnowstandsatover€14billion(thisamountcovers12percentofNationalDebtandequatesto14percentofhouseholdsavings).ThesemoniesrepresentverygoodvaluetotheStatewhencomparedwithyieldsontheinternationalmarkets.
Thepotentialtobroadenourrevenuebaseisevidencedbythesteadygrowthofrecentlyintroducedservices.postfone,ourmobilephoneservice,continuestobuilditscustomerbaseinahighlycompetitivemarketplace.WeformedastrategicalliancewithDHLtoprovideanewinternationalpremiumovernightcourierservice,combiningourrespectiveinfrastructuralandgloballogisticsexpertise.Duringitsfirstyearof
chief executive’s review
THE SIZE AND CONFIGURATION OF OUR RETAIL NETWORK, AS WELL AS THE FOOTFALL OF APPROXIMATELY 1.7M CUSTOMERS PER WEEK, HOLDS MANY ATTRACTIONS FOR OTHER FINANCIAL ORGANISATIONS CURRENTLY REVIEWING THEIR OPERATIONS.
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operationat329PostOfficesnationwidethenewSterlingandDollarsForeignExchangefacilitycaptured23percentofthismarket.Ourover-the-counterBillPayfacilityhandled25milliontransactionsin2011andprovidedanexcellentplatformtolaunchitsonlineextension,mybills.ie.Thisfreeonlinebillpaymentandbudgetingfacilityattractedmorethan50,000registereduserswithinjust19weeksofitsAugustlaunch.Itisacomplementaryadditiontooursuiteoffinancialservicesproducts.
Securityremainedatoppriorityduring2011.Whiletherewasanincreaseinarmedraidsandattemptedrobberies,adherencetosecurityprotocolsresultedinthevastmajoritybeingunsuccessful.AnGárdaSiochanahadconsiderablesuccessintheirsubsequentinvestigations.Unfortunately,asmallnumberofAnPoststaff,agentsandtheirfamilieswerethetargetof‘TigerKidnap’raids.Again,adherencetosecurityprotocols,trainingproceduresandclosecooperationwiththeGardaiarekeytocombatingthistypeofcriminalactivity.
Subsidiaries
Wehavecontinuedtobroadenourrevenuebasethroughoursubsidiarybusinesses.Asplannedwewill,overthecomingyears,reduceourdependenceonmail-generatedrevenue.Turnoverinsubsidiarycompaniesreached€84m,anincreaseof24percentintheyear.
UK-basedsubsidiary,AirBusiness,whichspecialisesininternationalperiodicalanddirectmaildistributionisnowoneoftheUK’sfastinggrowingandmostsuccessfulinternationalmailingcompanies.LastyearitacquiredQuadrantSubscriptionServices(QSS),aleadingsubscriptionmanagementandpublishingservicesfirm.ThroughAirBusinessweprovidecustomisedadded-valueinternationalservicesforagrowingnumberoflargeIrish-basedcustomers.
ThelicenceunderwhichtheAnPostNationalLotteryCompanyoperateshasbeenextendedtoJune2013.TheMinisterforPublicExpenditureandReform,BrendanHowlinT.D.announcedthathisDepartmentwillholdatenderprocesswhichwillincludethepaymentofseveralhundredmillioneurobythesuccessfulbidder.Thelicencewillbegrantedforanextendedperiodof20years.AnPostintendstoactivelyparticipateinthisprocess.
Reputation and Brand
AnPostwasrecognisedasthemostreputableindigenousIrishcompanyinthe2011RepTraksurveyconductedbytheinternationalReputationInstitute.WeareveryproudofourtrustedpositionattheheartofIrishbusinessandIrishcommunities,particularlyatatimewhenthestandingofsomanyorganisationshasbeentarnished.EveryemployeeandagentofAnPostisfullyawareoftheirroleinmaintainingandbuildingonourstandinginIrishsociety.Thisprinciplecontinuestoinformallbusinesstransactions,brandactivitiesandstaffengagementinitiatives.
Significantprogresswasmadeintheareasofemissionsreductionandwastemanagementasnewrecordingsystemsandcostmanagementfacilitieswereputinplace.
TherewasongoinginvestmentintheAnPostbrandincludinganewsuiteofsuccessful,high-impactadvertisingandpromotionalcampaigns,whichranacrossallmediachannels,topromotetheincreasingrangeofbusinessandpersonalservicesavailable.WemaintainedourcommitmenttotheprovisionofsupportsforimprovingAdultLiteracyandNumeracyacrossthecountry,intandemwithNALA,theNationalAdultLiteracyAgency.
chief executive’s review
WE WILL REDUCE OUR DEPENDENCE ON MAIL GENERATED REVENUE. TURNOVER IN SUBSIDIARY COMPANIES REACHED €84M IN 2011, AN INCREASE OF 24 PER CENT IN THE YEAR.
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TherewasincreasedcommunityinvolvementbypeopleofallagesandabilitiesintheAnPostCycleSeriesfeaturingfivecyclingeventsacrosstheseason.WetookovertitlesponsorshipoftheAnPostRás,Ireland’sonlyinternationallevelcyclingracewhichattractsprofessionalteamsfromallovertheglobe.ThissponsorshipcomplementsourinvolvementwithTheSeanKellyRacingTeamwhichactsasadevelopmentteamforyoungIrishriders.Theseeventsbringsignificantbenefitstothelocaleconomies,includingthetourisminterestsinvolved.
Looking to the future
AnPostmaintainsauniquepositionattheheartofIrishsocietyandwearecommittedtoplayingourpartintheState’seconomicrecovery.Wewilldosobyensuringreliability,valueformoneyandtheprovisionofanexpandingrangeofservicesfor,andonbehalfof,theIrishState,Irishbusinessandlocalcommunities.
IwouldliketothanktheBoardfortheirassistance,supportandguidanceduring2011andinparticular,IwouldliketothankourChairman,JohnFitzgerald,forhiscontributionandsupport.Iwouldalsoliketothankmymanagementteam,ourstaffandcontractorsforthededicatedandcommittedmannerinwhichtheycarriedouttheirduties.Inconclusion,Iwishtoexpressourgratitudetoallourbusinesspartnersforthetrustplacedinus.Theirconfidencespursustocontinuetoimproveourperformanceandtoensurethatweareareliableandinnovativepartnerinallaspectsoflogistics,communicationsandfinancialtransactions.
OngoingchangeandadaptationisaninevitablepartoftheIrishandinternationalpostal,financialservicesandcommunicationsindustries.Throughouttheworldpostaladministrationsarereportingasignificantdeclineinthevolumeofmailbeingprocessed.Itisobviousthatthepaceofchangemustnowbeacceleratedtodealwithrevenueslostduetomailvolumedecline.Wewilladdressthiswithdeterminationduringthecomingyearandthereafter.WewillcontinuetoaligntheCompany,itsstructuresandresourceswiththechangingbusinessrealitythatweface.Wewillensurethedevelopmentofinnovativeproductsandservices.Inshort,wewillcontinuetoprovideahighquality,valueformoney,relevantandcustomer-focussedservice.Ihaveeveryconfidence,andastrongbelief,inourabilitytodeliverthisateverylevel.
Donal ConnellChiefExecutive
chief executive’s review
ONGOING CHANGE AND ADAPTATION IS AN INEVITABLE PART OF THE IRISH AND INTERNATIONAL POSTAL, FINANCIAL SERVICES AND COMMUNICATIONS INDUSTRIES.
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financial highlights
€806.7m €805.1m €2.2m €5.8m
• staff costs
• postmasters’ costs
• distribution
• facilities
• operational
• administration
• depreciation & goodwill amortisation
turnover
operating profit em
analysis of operating costs
operating profit
2011 20112010 2010
0.3% 0.7%
operating profit as % of turnover
2011 2010
turnover em
876.0 850.0804.2 805.1 806.7
2007 2008 2009 2010 2011
2007 2008 2009 2010 2011
2.2
29.131.2
5.7 5.8
876.0 850.0804.2 805.1 806.7
2007 2008 2009 2010 2011
2007 2008 2009 2010 2011
2.2
29.131.2
5.7 5.8
• mails
• post offices
• other services
• interest income
analysis of turnover
61.7
%
10.0%
9.0%3.2%
7.8%
4.9%
3.4%
66.3%
1.2% 11.2%
21.3%
61.7
%
10.0%
9.0%3.2%
7.8%
4.9%
3.4%
66.3%
1.2% 11.2%
21.3%
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17
Group turnover for the year was €806.7m. A Group operating profit of €2.2m was generated. Achieving these results in a challenging domestic economy is very credible.
financial review
Turnoverfor2011was€806.7m.Thisisslightlyaheadoftheprioryearandisaconsiderablesuccess.Mailincomecontributed€535.3m(3percentdownontheprioryear)andisthesinglelargestsourceofrevenuefortheGroup.
Mailrevenueissubjecttoanumberofinfluences.Volumesarereducingduetotheperformanceofthedomesticeconomy,e-substitutionandareductioninhousecompletions.
Therehashowever,beenanincreaseinvolumesdrivenbyinternetfulfilmentandDirectMailServices.2011alsosawone-offmailingstofacilitatethegeneralandpresidentialelectionprocess.
Revenueintheretailnetworkwasinlinewiththeprioryearat€171.6m.ThevalueofStateSavingsreached€14.1billionbytheendofDecember2011,anincreaseof€1.4billionontheprioryear.OthernewretailincomestreamsshowedencouraginggrowthincludingForeignExchangeforbothDollarsandSterling;andtheadditionofagencyservicesforAIB,NIBandotherfinanceandutilityproviders.
Turnoverinsubsidiarycompaniesreached€84m,anincreaseof24percentintheyear.AddingtotherevenuestreamsisverymuchinlinewithGroupStrategy.
TheoperatingprofitearnedfrombusinessventuressuchasPostPoint,TheGiftVoucherShop,OneDirectInsurance,allofwhichbenefitsignificantlyfromtheirassociationwiththeAnPostbrandandnetwork,formsanincreasinglyimportantcornerstoneofthefinancialplanfortheGroup.
2011 2010 em em
Turnover 806.7 805.1Groupoperatingprofit 2.2 5.8Profit/(loss)forthefinancialyear 0.3 (24.7)Netassets(excludingpensionliability) 319.0 323.9
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financial review
Operating Costs
Inlinewithpostaloperationsinotherjurisdictions,thereductioninoperatingcostsisanimportantstrategicobjective.
OperatingCostswithinthecoreAnPostCompanywerereducedby€25.4m.Thelastthreeyearshasseenareductionof€78mfromtheannualoperatingcostbase.2011representsafurtheryearofprogressinthisregard.Overallcostsof€804.5mwereupontheprioryearby€5.2m,astheGroupincreaseditssubsidiaryactivityandfacilitatedtwonationalelectionprocesses.
Typicallylabourrepresents70percentofthecostbaseinpostaladministrations.ThereductionofFullTimeEquivalents(FTE)isthereforeacentralelementofourcostreductionprogramme.TheaveragenumberofstaffFTEsreducedbyafurther300FTEsduring2011.
Pension Schemes
TheGrouppensionschemeaccountedforunderFRS17showsanaccountingdeficitof€483.6m.Theassetbaseis€1.76billion.
Incommonwiththemajorityofdefinedbenefitpensionschemes,theAnPostdeferredbenefitschemeisrequiredtomeettheMinimumFundingStandardsrequiredbythePensionsBoard.DiscussionsareadvancedwithstakeholderstoformulateanagreedplantoaddresstherequirementsoftheMinimumFundingStandards.
Fixed Assets
Capitalexpenditurein2011amountedto€36m.Therewerenosignificantassetdisposalsduringtheyear.Thereareplansforfurthercapitalspendingofthesamemagnitudein2012includingcompletinginvestmentinthenextgenerationofmailsortingequipment.
Therewasaninvestmentof€3.3minaUKbasedbusiness,QuadrantSubscriptionServices,whichspecialisesinservicingpublishinghouses.ThisadditionalactivitywillbemanagedintheGroup’ssuccessfulUKbasedAirBusinesssubsidiary.Itrepresentsfurtherexpansioninvalue-addedmailrelatedactivity.
Balance Sheet and Cash Resources
TheGroupbalancesheetshowsfixedassetsof€291m,cashbalancesof€150mandanetassetpositionbeforepensionliabilityof€319m.TheGroupoperatesatreasurystrategytoensuretheavailabilityoffundsfortradingwhileoptimisingthereturnoncashresourcesunderaBoardapprovedpolicy.
Economic Outlook
Thecoreactivityofprovidingthenationalpostalserviceislikelytocontinuetofaceachallengingeconomicclimate.Thiscombinedwithastructuraldeclineinpartsofthepostalindustryworldwide,makesforachallengingbusinessenvironment.
However,diversifyingrevenuestreams,continuedcostreductionsandimprovedefficienciesandqualityofservice,areequippingtheCompanytodealwiththisbusinessenvironment.TheGrouplooksforwardtomaintainingastrongpositionin2012andbeyond.
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The Communications Regulation (Postal Services) 2011 (the Act) was enacted in August 2011.
universalservice
Requirements of the USO (Universal Service Obligation)
UnderSection17oftheAct,AnPostisdesignatedasauniversalpostalserviceproviderforaperiodof12years.
UnderSection16oftheAct,UniversalPostalServicemeansthatoneveryworkingday,exceptincircumstancesorgeographicalconditionsdeemedexceptionalbyComReg,thereisatleast:
(i) oneclearance,and
(ii)onedeliverytothehomeorpremisesofeverypersonintheStateor,asComRegconsidersappropriate,undersuchconditionsasitmaydeterminefromtimetotime,toappropriateinstallations.
Universalserviceshallincludethefollowingminimumfacilities:
(a)theclearance,sorting,transportanddistributionofpostalpacketsupto2kgs;
(b)theclearance,sorting,transportanddistributionofpostalparcelstoaweightlimittobespecifiedbyorderofComReg(orintheabsenceofthis20kgs);
(c) thesorting,transportationanddistributionofparcelsfromotherMemberStatesupto20kgsinweight;
(d) servicesforregistereditems;
(e)servicesforinsureditemswithintheStateandtoandfromallcountrieswhich,assignatoriestotheConventionoftheUniversalPostalUnion,declaretheirwillingnesstoadmitsuchitemswhetherreciprocallyorinonedirectiononly;
(f) postalservices,freeofcharge,toblindandpartiallysightedpersons.
Access to Universal Services
AnPostprovidesaccesstoitsservicesthroughitsnetworkof57Companypostoffices,1,099postmaster-operatedpostofficesand175postalagents.Inaddition,some2,234retailpremisesarelicensedtosellpostagestamps,asactivelicensedagents.Tofacilitatephysicalaccesstotheservice,approximately5,000postboxesaredistributedwidelythroughouttheState.Thereare43designatedacceptancepointsforbulkmailservices.
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universal service
Tariffs
Thefollowingisasummaryofthecurrentpricesforstandardservicesweighingupto50gms†.
Quality of Service
international
Thequalityperformancestandardforthedeliveryofintra-Communitycross-bordermailwassetbytheEuropeanCommissionandwastransposedintoIrishlawunderSection32andSchedule3oftheAct.Thequalitystandardforpostalitemsofthefasteststandardcategoryisasfollows:
D+3: 85% of items; D+5: 97% of items,whereDreferstothedayofposting.
domestic
TheActrequiresComRegtosetaquality-of-servicestandardfortheuniversalserviceandthestandardsetfordomesticmailmustbecompatiblewiththoseforintra-Communitycross-borderservices.ComReghavesetaquality-of-servicetargetfordomesticsinglepieceprioritymailasfollows:
D+1: 94% D+3: 99.5%,whereDreferstothedayofposting.
*Thefeepayableforthebasicregisteredservicecoverscompensationuptoamaximumof€320.Furthercompensationuptoalimitof€1,500isavailablefor€4anduptoalimitof€2,000for€5basedondeclaredvalueattimeofposting.
**Availabilityofservicedependentonpostaladministrationindestinationcountry.Compensationupto€320inGB;€150inEurope;€100forparcelsand€35forlettersoutsideEurope.
† Witheffectfrom1May2012,AnPostischangingtariffswithintheUniversalServiceforitemsweighingover50gms.Theratesabovewhichapplytoitemsweighingupto50gmsremainunchanged.
AfulllistofUSOtariffsisavailableintheGuidetoPostalRates(seewww.anpost.ie).
ireland & ni letters large envelopes packets parcels (up to c5)
StandardPost<100g 55c 95c €2.20 €6.50 54cifCeadúnas ormeter
RegisteredPost* €5.25 €5.25 €5.25 €10.50
international letters large envelopes packets parcels destinations (up to c5)
StandardPost 82c €1.50 €2.70 GB€18.25 Europe€22.00 ROW€22.00
RegisteredPost** €5.17 €5.85 €7.05 GB€23.00 Europe€27.00 ROW€27.00
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universal service
quality monitoring
MonitoringofperformanceagainsttheinternationaltargetsiscarriedoutbyResearchInternationalonbehalfofInternationalPostCorporation(IPC).MonitoringofthedomesticqualityofserviceiscarriedoutbyIpsosMRBIonbehalfofComReg.Detailsofthemostrecentresultsareavailablefromourwebsitewww.anpost.ie,withdomesticperformancealsoavailableonComReg’swebsitewww.askcomreg.ie.
Customer Complaints
AnPostisrequiredtomaintainrecordsofcustomercomplaintstakingintoaccounttherelevantEuropeanstandardIS:EN14012:2003.Thetableprovides,inrelationtomail,abreakdownofwrittencomplaintsreceivedfromcustomersduring2011.Thetotalcontinuestorepresentaminutefractionoftheentiremailtraffichandledduringtheyear.
Includedinthetotalfigurearecomplaintsaboutregistereditems,whichnumber7,949.
In2011,511,827telephonecallsweremadetoAnPostCustomerServices.Mostofthesewereroutineorgeneralenquiriesratherthancomplaints.Duringthisyear,DeliveryServicesUnittelephonelineswerecentralisedintotheCustomerServicesCentreensuringamorestandardisedandco-ordinatedservicetoourcustomers.
TheAnPostComplaintandDisputeResolutionProceduresaresetoutin‘Getting it Sorted’,whichisavailableonourwebsite,inretailoutlets,andfromourCustomerServicesCentre.WealsohaveaCustomerCharter,containingspecificpledgestocustomersregardingourservices.
Further Information
AdditionalinformationinrelationtoservicesprovidedbyAnPostisavailablebyphoningAnPostCustomerServicesonCallSave1850575859,byemailatcustomer.services@anpost.ie,byvisitingwww.anpost.ie,orbycallingintoalocalpostoffice.
written complaints received from customers
Itemslostorsubstantiallydelayed 20,350
Itemsdamaged 887
Itemsarrivinglate 1,059
Mailcollectionordelivery:
Timeofdelivery 413
Failuretomakedailydeliverytohomeorpremises 270
Collectiontimes/Collectionfailures 1
Misdelivery 454
Accesstocustomerserviceinformation 4
Underpaidmail 25
Tariffsforsinglepiecemail/discountschemesandconditions 0
Changeofaddress(Redirections) 1,271
Behaviourandcompetenceofpostalpersonnel 23
Howcomplaintsaretreated 0
Other(notincludedinabove) 3,082
total 27,839
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We continue to focus on making Sustainability a reality within our business strategy. We continue to manage this approach as one of a small number of strategic projects within the Company. Considerable resources were invested in the professional development of our management and staff. Our staff engagement programmes are now very well established and have contributed to performance improvement.
during 2011 we worked with the international post corporation (ipc) to benchmark an post’s operations with other postal services across the world. this process has guided the improvements we have made in our approach to sustainability.
sustainabilityat an post
Workplace
TheCompanyprovidesawelldevelopedandintegratedapproachtoworkingconditionsforourstaffofover10,000FullTimeEquivalentemployees(FTE’s).
Wehavewellestablishedpolicies,practicesandproceduresintheareasofoccupationalhealthandsafety,staffwell-beingaswellastraininganddevelopmentincluding:
• AdocumentedandcommunicatedSafetyStatement
• TheOHSAS18001/2007managementsystemstandard
• Atrainingpolicyentitled“BuildingOrganisationalCapability”
• AStaffEducationandSupportScheme
• Best-in-classpolicyandpracticeinrelationtoDiversityandEqualityincludingco-operativeworkingwiththeDisabilityAuthority.
TheCentralPartnershipForumprovidesaregularopportunitytomeetwithstaffrepresentativesandtocommunicatewithstaffregardlessoftheirroleorlocation.
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YourVoiceMattersAnEmployeeSurveywasconductedtogainanunderstandingofthecurrentexperienceofstaffatAnPostaswellastheirawarenessoftheCompany’sstrategicdirection.TowersWatsonwasengagedbyAnPosttoconductthisprojectandtoanalyseandreportontheresults.TheresultshavebeencommunicatedwidelyandasetoffollowupactionsagreedwithspecificprojectsledbymembersoftheExecutive.
LivingtheValuesLivingtheValueswasacompany-wideprogrammeofstaffworkshopstoensurethatstaffatalllevelsareawareofandunderstandtheCompany’sMission,VisionandValues.Thisprogrammealsoprovidedanopportunitytodiscussourvaluesandtakeactiontoensurewebehaveinaccordancewiththem,astheyapplyintheworkplace.
Theprogrammeranfromsummer2009–autumn2011topromotecomprehensivediscussion,encouragingstafftounderstandfullytheimportanceofprovidingongoingserviceexcellencetoourcustomers.
Marketplace
AnPostisoperatingtoaveryhighstandardinrelationtomailscollectionanddelivery.ThisreflectstheCompany’sfocusonqualityofservice,withpoliciesandproceduresinplace,includingtheISO9001QualityManagementSystemwhichismanagedbyourQualityTeam.
OurQualityManagementSystemincludes:
• Targetsinplaceforcontinuousimprovement
• An‘end-to-end’viewofthecustomerexperienceenshrinedinourCustomerCharter
• Adefinedcomplaintsprocedure
• ContinuousmonitoringofserviceperformanceandcustomerqueuingtimethroughMysteryShoppingsurveys
• Customersupportssuchasprovisionforhard-of-hearingcustomers.
Environment
In2011AnPostmadesignificantprogressintheareasofEnergy,TransportandWasteManagement.
Environmentaldataiscollected,collatedandmanagedcentrallyinrespectoftheCompany’scarbonperformance.ThisdataisalsoinputtedtotheIPCEnvironmentalManagementandMonitoringSystem(EMMS).
Since2008theCompanyhasassessedthecarbonimpactofitsoperationsonanannualbasis.WebenchmarkourperformanceeachyearwithIPCandimplementanannualactionplanforcontinuousimprovement.During2011ourpublicbuildingstockover1,000squaremeterswasaudited,enablingustoexhibitaDisplayEnergyCertificate(DEC).TheDECprovidestheCompanywithanaccurateaccountofourenergyconsumptionandmaintenanceandmanagementpractices.WealsoimplementedaWasteManagementSystemwhichprioritiseswasteavoidance,reduction,re-useandrecycling.Wealsoworkwithoursuppliertransportcompaniestopromoteenvironmentallyfriendlypracticessuchastrainingstaffineco-drivingtoreducefuelconsumptionaswellasrouteoptimisation.
sustainability at an post
SINCE 2008 THE COMPANY HAS ASSESSED THE CARBON IMPACT OF ITS OPERATIONS ON AN ANNUAL BASIS.
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sustainability at an post
Overview of Energy Usage in 2011
ThemainuseofEnergyinAnPostisfortheheatingandlightingofourofficesandthefuelforthetransportfleet.In2011,AnPostconsumed134.55GWhofenergy,consistingof:
• 18.8GWhofelectricity
• 35.8GWhoffossilfuelsforheatandlight
• 79.95GWhoffossilfuelsfortransport
Therehasbeenasubstantialreductionof5.5GWhinAnPost’sEnergyusageinthelastyear.Weestimatethat3GWhofthisreductioncanbeattributedtothemildwinterincomparisonto2010.
Actions Undertaken in 2011
During2011AnPostundertookarangeofinitiativestoimproveourenergyperformance,including:
• Continuedinvestmentinimprovedlightingcontrolsinanumberofkeyoffices,whichresultedin800MWhofannualsavings.
• TheBuildingManagementSystem(BMS)intheCorkandAthloneMailsCentreswasupgradedinordertoimprovecontrolofourenergyconsumptionandthisresultedin124MWhofannualsavings.
• TheBMSintheGPOwasupgradedtoincludeadditionaltemperaturesensorsandanewcontrolpanelwhichresultedin51MWhannualsavings
• Improvedstaffcommunicationandawarenessresultedinsavingsof1,525MWhannually
• FuelconsumptiontestingwascompletedfortheHGVFleet
• 1,000driverscompletedanAssessment&Trainingcourse
Actions Planned for 2012
In2012theCompanywillfurtherimproveitsenergyperformancebyundertakingthefollowinginitiatives:
• AchievingcertificationtotheISO50001standardwhichwillsave1,750MWhannually
• Investinginalightingupgradeatafurthernineofficeswhichwillsave500MWhannually
• Reviewingtheenergyusageinourretailofficesanddevelopinganenergyimprovementprogrammefor2012/13whichwillsave50MWhannually
Wewillcontinuetodevelopenergyefficiencyinitiativeswherebuildingworksaretakingplaceincludingrainwaterharvesting,solarenergy,amotionandavailablelightdetectionlightingsystemandmonitoringofimprovementcontrolstrategiesforheating.WehavecommencedastructuredtrialofelectricvehiclesinDublin,CorkandGalwayandwewillpresentafurther1,000driversforAssessmentTraining.
Community
AnPosthasastrongtrackrecordofcommunityengagementthroughourMailsandRetailstaffinteractionwithcustomers.ThishasasignificantpositiveimpactonourBrandandtheperceptionofourroleinIrishsocietyamongbothourcustomersandemployees.Ourcommunityprogrammeincludes:
• AnAssociationwiththeNationalAdultLiteracyAgency(NALA)andourfacilitationoftheLogOn,Learninitiative.Theimpactofthisactivityhasbeenmeasuredeachyearsince2008withover13,500peoplebenefitingfromourLiteracyawarenesscampaignandover30,000olderpeopleandstudentsparticipatinginLogOn,Learn.
THERE HAS BEEN A SUBSTANTIAL REDUCTION OF 5.5GWH IN AN POST’S ENERGY WAGE. IN 2012 THE COMPANY WILL FURTHER IMPROVE ITS ENERGY PERFORMANCE.
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sustainability at an post
• SupportforIrishCyclingateverylevelfromeliteathletestograss-roots,mass-participationevents.AnPostistheleadingsponsorofIrishcyclingincludingyoungIrishridersracinginternationallywiththeAnPostSeanKellyTeam,theAnPostRás,Ireland’spremiereUCIcycleraceandtheAnPostCycleSeries,withover13,500leisurecyclistsparticipatingin2011.WealsosupporttheIrishParacyclingTeamintheirpreparationforthe2012LondonGamesandAnPostRásnamBan,Ireland’spremierewomen’sstagecyclingrace.
The Future
AnPostcontinuestomakesignificantprogressinoperatingasaresponsiblebusinessinachallengingenvironment.Wehavepoliciesinplaceacrossthemajorityofsustainabilitymeasures,allofwhichinfluencepracticewithintheCompany.
Disability Act
TheDisabilityAct,2005placesadutyonpublicorganisationstoensurethattheirpublicbuildingsandservicesare,asfarasispracticable,accessibletopeoplewithdisabilities.Inparticular,thoseareasofbuildingstowhichthepublichasaccessaretobemadeaccessiblenotlaterthan2015.Overall,AnPostisontargettomeetitscommitmentswithregardtoaccessundertheAct.Themajorityofpostofficesare,however,operatedonacontractbasisbypostmastersandpostmistressesappointedbyAnPostandtheCompanyisnotinapositiontoobligethemtoaltertheirpremises.TheCompanyhascontactedthem;informedthemoftherequirementsoftheDisabilityActandencouragedthemtoaddressanyaccessissuesthatmayexistontheirpremises.Allnewcontractsrequirethepostmasterorpostmistresscontractortoprovideaccessiblepremises.
AN POST WILL CONTINUE TOWARD RESPONSIBLE BUSINESS PRACTICE IN A CHALLENGING ECONOMIC ENVIRONMENT.
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An Post issued 40 commemorative stamps in 2011. In addition, a further eight stamps were introduced in the Irish Animals and Marine Life Definitive Series.
the stamp programme features the work of ireland’s finest artists and designers. highlights included stamp issues celebrating irish craft, ireland’s first hosting of the solheim cup women’s international golf competition and the 50th anniversary of the first rté television broadcast.
stamp issues and philatelic publications
2011markedtheintroductionofphaseIIoftheSeventhDefinitiveSeriescomprisingafurthereightstampsintheIrishAnimalsandMarineLifecollection.ThisisthesecondphaseoftheinnovativeStampsOnARoll(SOAR)productbywhichthevalueofeachstampisprintedatthetimeofpurchaseaccordingtothepostagerequired.AlsotwostampsfromphaseIshowingtheRedSquirrelandBottlenoseDolphinwereissuedasastampcoil.
AsetoffourstampsbasedonpaintingsbyIreland’sleadingequestrianartist,PeterCurling,celebratedTheIrishHorse.TheyshowfourhorsescommoninIreland;theThoroughbredHorse,theConnemaraPony,theColouredHorseandtheIrishDraughtHorse.
GreatinstitutionssuchasAmnestyInternational,theAmericanChamberofCommerce,IrelandandtheIrishAmateurBoxingAssociationwerecelebratedforspecialanniversarieswhichtookplaceduringtheyear.
ThecentenaryofthebirthofBrianO’Nolan“FlannO’Brien”wasmarkedwithastampfeaturingapaintingofthewriterbyhisbrother,artistMicheálÓNualláin.
Adiverseportfolioofassociatedcollateralwasalsoproduced,includingaYearPackandFirstDayCoverCollection.Onceagain,theIrishStampsYearBookwasproducedtothehigheststandardsofdesignintextandimagery,featuringallissuesfromtheannualprogrammeinbothastandardandluxuryedition.
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philatelic annual report 2011
2011
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G5546 An Post AR 2011 v17 INSIDE.indd 27 23/04/2012 14:08:31
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philatelic annual report 2011
2011
ÉIRE82c
WOM
EN’S RIGHTSCEARTA NA m
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2011
ÉIRE55c
WOM
EN’S RIGHTSCEARTA NA m
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50th Anniversary of the American Chamber of Commerce, Ireland
2011
1961–2011
comhlachas tráchtála meiriceánach in éirinnamerican chamber of commerce, ireland
2011
1961–2011
comhlachas tráchtála meiriceánach in éirinnamerican chamber of commerce, ireland
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index to the financial statements
32 report of the directors35 corporate governance42 statement of the directors on the accounting systems43 statement of directors’ responsibilities44 report of the independent auditor46 report of the independent auditor on the accounting systems47 statement of accounting policies51 consolidated profit and loss account52 consolidated statement of total recognised gains and losses53 consolidated balance sheet54 company balance sheet55 consolidated cash flow statement56 notes to the financial statements76 five year financial summary77 operational statistics
G5546 An Post AR 2011 v17 INSIDE.indd 31 23/04/2012 14:08:45
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1. The Group and its Principal Activities
TheCompanyoperatesthenationalpostalserviceandmoneytransmissionservicesandprovidesagencyservicesforGovernmentDepartments,theNationalTreasuryManagementAgency,AnPostNationalLotteryCompanyandotherbodies.
OneordinaryshareisheldbytheMinisterforPublicExpenditureandReformandtheremainderoftheissuedsharecapitalisheldbytheMinisterforCommunications,EnergyandNaturalResources.
Detailsoftheactivitiescarriedonbysubsidiary,associatedandjointventureundertakings,togetherwiththeinformationrequiredbySection158oftheCompaniesAct,1963,aregiveninnote25tothefinancialstatements.
2. Results
Detailsoftheresultsfortheyeararesetoutintheconsolidatedprofitandlossaccountonpage51andintherelatednotestothefinancialstatements.Thedirectorsdonotproposethepaymentofadividendfortheyear.
3. Business Review
Theoperatingprofitfortheyearof€2.2misasatisfactoryresultinviewofthecontinuedimpactoftheeconomicdownturnin2011.Whileoverallturnoverfromcontinuingoperationsismarginallyupon2010,theeffectofthedownturnisevidentinthedecreaseinturnoverinthemailsbusinesswhichfellfrom€552mto€535m.Therewasanincreaseof€18minotherserviceswhichreflectsthecontinuedsuccessandexpansionofsubsidiarycompaniesduring2011.LabourcostsinthecoreAnPostCompanyreducedby€15.4m,nonpayby€10mandpostmastercostsby€0.3m.Thepensionchargeincreasedby€4.9m,andtherewereone-offcostsofservicingtheelectionmailingsof€8.2m.ThedecreaseinoperatingcostswasprimarilydrivenbyreductionsinthenumberofFTEsandcontrolofnonpaycosts.TheGroupProfitaftertaxationandminorityinterestwas€0.3m.
Thepensiondeficithasincreasedfrom€368mat31December2010to€484mat31December2011reflectingthecontinueduncertaintyinfinancialmarketsandtheconsequentreductioninthevalueofthescheme’sassets.ThereisanincreaseinthenetliabilitiespositioninthebalancesheetfortheGroupto€165mat31December2011comparedtonetliabilitiesof€45mat31December2010.
report of the directors
the directors have pleasure in submitting their twenty eighth annual report together with the audited financial statements of the group for the year ended 31 december 2011, in fulfilment of their obligations under the companies acts, 1963 to 2009.
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KPI
performance performance in 2011 in 2010
operating profitOperatingprofitasapercentageofturnover 0.3% 0.7%Staffcostsasapercentageoftotaloperatingcosts 61.7% 62.0%Postmasters’costsasapercentageoftotaloperatingcosts 10.0% 10.0%Otheroperatingcostsasapercentageoftotaloperatingcosts 28.3% 28.0%Cashatbankandinhand €150.1m €198.1m
staff – average full time equivalents (fte)Company 10,037* 10,129Subsidiaries 612 481Group 10,649 10,610CompanyyearendFTErunrate 9,422 9,624
mail businessLetterscorerevenueindex(page77) (7.0%) (7.2%)Qualityofservice(national)–nextdaydeliveryofsinglepieceprioritymail 83%** 85%**
retail businessSocialwelfaretransactions 44.1m 43.5mBillPaytransactions 24.9m 25.2mTVlicencesales(thousands) 1,426k 1,432kInvestmentproducts–netfundinflow €1,084m €2,683mPostOfficeSavingsBank–netfundinflow €149m €429mPrizeBonds–netfundinflow €118m €258mBurglariesandrobberies–numberofincidents 67 73
customer serviceWrittencomplaints 27,839 26,373Telephoneenquiries 511,827 446,682
TheinformationrequiredbyRegulation37oftheEuropeanCommunities(Companies:GroupAccounts)Regulations,1992,isincludedintheinformationgivenonpages6to18.Inmonitoringperformance,thedirectorsandmanagementhaveregardtoarangeofkeyperformanceindicators(KPIs),includingthefollowing:
InaccordancewiththerequirementtoanalysethekeyrisksanduncertaintiesfacingthefuturedevelopmentoftheGroupandCompany,thefollowinghavebeenidentified:
• impactofthegeneraleconomicclimate;
• theneedtofullyimplementagreedchangeprogrammes;
• impactofelectronicsubstitution;
• inabilitytofundtheUniversalServiceObligation;
• achievingadequatepricesforservices;
• theneedtoachieveandmaintainqualityofservicetargets;
• potentiallossofsignificantagencyservices;
• failuretoresolveindustrialrelationsissuesthroughagreedprocesses.
report of the directors
* 2011wasexceptionalwithaGeneralandPresidentialelection.CoreFTEsintheyearwere300lowerthan2010having excludedtheelectionrequirements**FullyearfigureasperComRegmonitor
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Thedirectorshaveanalysedtheseandotherrisksandappropriateprogrammesareinplacetomanageandcontroltheserisks.TheCorporateGovernanceStatementonpages35to41,whichformspartoftheDirectors’Report,setsoutthepoliciesandapproachtorisksandtherelatedinternalcontrolproceduresandresponsibilities.
4. Directors, Secretary and their Interests
ThefollowingchangeshavetakenplaceinthecompositionoftheBoardsincethedateofthepreviousreportofthedirectors:
MsCiaraHurleyretiredon31March2011. MrBrianMcConnellretiredon31March2011. MrPaulHenrywasappointedon15September2011. MrJamesWrynnwasappointedon15September2011. MrJamesHylandretiredon10December2011. Thedirectorsandsecretarywhoheldofficeat31December2011hadnointerestsinthesharesin,ordebenturesof,theCompanyoranyGroupcompanyatthebeginningoftheyear(ordateofappointmentiflater)orattheendoftheyear(2010:Nil).
5. Employees
TheGroupisanequalopportunitiesemployer.Allapplicationsforemploymentaregivenfullandfairconsideration,dueregardbeinggiventotheaptitudeandabilityoftheindividualandtherequirementsofthepositionconcerned.Allemployeesaretreatedonequaltermsasregardstraining,careerdevelopmentandpromotion.AnPostconfirmsthatitsemploymentofpeoplewithdisabilitiesexceedsthetargetof3%setundertheDisabilitiesAct,2005.
AnPostiscommittedtoensuringthehighestsafetystandardsandsafepracticesforitsemployees,contractorsandmembersofthepublicinaccordancewiththeSafety,HealthandWelfareatWorkAct,2005.In2011,therewere36.6losttimeaccidentsper1,000employees.Thisrepresentsadecreaseof12%on2010.
AnPostiscommittedtoreducinglosttimeaccidentsandinthisregardisundertakingasafetyimprovementprogrammewhichincludedobtainingaccreditationtotheOHSAS18001:2007standardin2011.Inaddition,4,732employeesattendedspecificsafetytrainingcoursesin2011,withmanymoreattendingothercourseswheresafetywasincludedinthecontent.Thisincludescompletionofyeartwoofathreeyearprogrammetoprovideadvanceddrivertrainingtoafurther1,025driverswhouseourCompanyfleet.Consciousofthefactthatlegalobligationsaretheminimumacceptablestandard,AnPostisstrivingforexcellenceinthisareaandiscontinuingtoincreaseawarenessamongemployeesandcontractorsofthenecessityforthehighestsafetystandards.
6. Prompt Payment of Accounts
ThepolicyofAnPostistocomplywiththerequirementsofrelevantpromptpaymentofaccountslegislation.TheGroup’sstandardtermsofcredittaken,unlessotherwisespecifiedinspecificcontractualarrangements,are30days.Appropriateinternalfinancialcontrolsareinplace,includingclearlydefinedrolesandresponsibilitiesandmonthlyreportingandreviewofpaymentpractices.Theseproceduresprovidereasonablebutnotabsoluteassuranceagainstmaterialnon-compliancewiththeregulations.
7. Accounting Records
ThedirectorsbelievethattheyhavecompliedwiththerequirementsofSection202oftheCompaniesAct,1990withregardtobooksofaccountbyengagingaccountingpersonnelwithappropriateexpertiseandbyprovidingadequateresourcestothefinancefunction.ThebooksofaccountoftheCompanyaremaintainedattheCompany’spremisesattheGeneralPostOffice,O’ConnellStreet,Dublin1.
8. Auditors
InaccordancewithSection160(2)oftheCompaniesAct,1963,theauditor,KPMG,CharteredAccountants,willcontinueinoffice.
OnbehalfoftheBoard
John Fitzgerald,ChairmanDonal Connell,Director
22 March 2012
report of the directors
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WhiletheprovisionsoftheCodeareofdirectrelevanceonlytolistedcompanies,theBoarddoesfeelthattheirapplication,whereappropriate,assistsAnPostinitscompliancewithbestcorporategovernancepractice.
ThedirectorsareaccountabletotheshareholdersforgoodcorporategovernanceandthisreportaddresseshowtheCodeofPracticefortheGovernanceofStateBodiesandtherelevantmainandsupportingprinciplesoftheCodehavebeenappliedwithinAnPost.
The Board
TheGroupiscontrolledthroughitsBoardofdirectors.TheBoard’smainrolesaretooverseetheoperationoftheGroup,toprovideleadership,toapprovestrategicobjectivesandtoensurethatthenecessaryfinancialandotherresourcesaremadeavailabletoenablethoseobjectivestobemet.TheBoardmeetsonamonthlybasisandcertainmattersarespecificallyreservedtotheBoardforitsdecision.
ThespecificresponsibilitiesreservedtotheBoardinclude:settingGroupstrategyandapprovinganannualbudgetandmedium-termprojections;reviewingoperationalandfinancialperformance;approvingmajorcapitalexpenditure;reviewingtheGroup’ssystemsoffinancialcontrolandriskmanagement;ensuringthatappropriatemanagementdevelopmentandsuccessionplansareinplace;reviewingtheenvironmental,healthandsafetyperformanceoftheGroup;approvingtheappointmentoftheCompanySecretary;andmaintainingsatisfactorycommunicationwithshareholders.
TheBoardhasdelegatedthefollowingresponsibilitiestomanagement:thedevelopmentandrecommendationofstrategicplansforconsiderationbytheBoardthatreflectthelonger-termobjectivesandprioritiesestablishedbytheBoard;implementationofthestrategiesandpoliciesoftheGroupasdeterminedbytheBoard;monitoringoftheoperatingandfinancialresultsagainstplansandbudgets;prioritisingtheallocationoftechnicalandhumanresources;anddevelopingandimplementingriskmanagementsystems.
The Roles of the Chairman and the Chief Executive
TheChairmanleadstheBoardinthedeterminationofitsstrategyandintheachievementofitsobjectives.TheChairmanisresponsiblefororganisingthebusinessoftheBoard,ensuringitseffectivenessandsettingitsagenda.TheChairmanfacilitatestheeffectivecontributionofalldirectorsandconstructiverelationsbetweentheexecutivedirectorandtheotherdirectors,ensuresthatdirectorsreceiverelevant,accurateandtimelyinformationandmanageseffectivecommunicationwithshareholders.
TheChiefExecutivehasdirectchargeoftheGrouponadaytodaybasisandisaccountabletotheBoardforthefinancialandoperationalperformanceoftheGroup.
Senior Independent Director
TheBoardhasconsideredthequestionofappointingoneofitsmemberstobeaSeniorIndependentDirector,inadditiontotheChairman,butcontinuestobelievethatthisrecommendationofthe
corporate governance
maintaining high standards of corporate governance continues to be a priority for the directors of an post. in developing its corporate governance policy, the board has sought to give effect both to the code of practice for the governance of state bodies, issued by the department of finance, and to the relevant main and supporting principles of good governance outlined in the uk corporate governance code issued by the united kingdom’s financial reporting council (the code).
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CodeisnotapplicableinthelightofAnPost’slegalstructure.
Directors and Directors’ Independence
AlldirectorsareappointedtotheBoardbytheMinisterforCommunications,EnergyandNaturalResourcesandtheirconditionsofappointmentandfeesaresetoutinwriting.EmployeedirectorsareelectedinaccordancewiththeWorkerParticipation(StateEnterprises)Acts,1977to1993foratermoffouryears.ThepostmasterdirectoriselectedinaccordancewithSection81ofthePostalandTelecommunicationsServicesAct,1983foratermofthreeyears.Allotherdirectorsareappointedforafixedterm,usuallyfiveyears.
TheBoardiscurrentlycomprisedoffourteendirectorsviz:theChiefExecutive,fiveemployeedirectors,onepostmasterdirectorandsevennon-executivedirectors.Thenamesofthedirectorstogetherwiththeirbiographicaldetailsaresetoutonpages4and5.ThepositionsofChairmanandChiefExecutiveareheldbydifferentpeople.GivenitslegalstatusasaStateCompanyandtheresponsibilityofitsprincipalshareholderintheappointmentofdirectors,theBoardbelievesthatthecriterianormallyusedbytheBoardofalistedcompanyinconsideringtheindependenceofitsdirectorsdonotapplyinAnPost’scircumstances.TheBoard,consequently,hasnotevaluatedtheindependenceofitsdirectorsagainstthecriteriasetoutintheCode.
TheCoderequirestheChairmantoholdmeetingswiththenon-executivedirectorswithouttheexecutivedirectorbeingpresent.TheBoardhasformalproceduresinplaceinthisregard.
DirectorshavetherighttoensurethatanyunresolvedconcernstheymayhaveabouttherunningoftheGrouporaboutaparticularcourseofactionarerecordedintheBoardminutes.Iftheyhaveanysuchconcerns,theymay,onresignation,provideawrittenstatementtotheChairman,forcirculationtotheBoard.
ThedirectorsaregivenaccesstoindependentprofessionaladviceattheGroup’sexpensewheretheydeemitnecessarytodischargetheirresponsibilitiesasdirectors.
Professional development
Onappointment,allnewdirectorstakepartinaninductionprogrammewhentheyreceiveinformationabouttheGroup,theroleoftheBoardandthemattersreservedforitsdecision,thetermsofreferenceandmembershipoftheprincipalBoardandBoardCommittees,theGroup’scorporategovernancepracticesandprocedures,includingtheresponsibilitiesdelegatedtoGroupseniormanagement,andthelatestfinancialinformationabouttheGroup.Thiswilltypicallybesupplementedbymeetingswithkeyseniorexecutives.Throughouttheirperiodinoffice,thedirectorsarecontinuallyupdatedontheGroup’sbusiness,thecompetitiveandregulatoryenvironmentsinwhichitoperates,corporatesocialresponsibilitymattersandotherchangesaffectingtheGroupandthepostalindustryasawhole,bywrittenbriefingsandmeetingswithseniorexecutives.Directorsarealsoadvisedonappointmentoftheirlegalandotherdutiesandobligationsasadirector,bothinwritingandinface-to-facemeetingswiththeCompanySecretary.TheyarealsoupdatedonchangestothelegalandgovernancerequirementsoftheGroupanduponthemselvesasdirectors.
Performance evaluation
TheBoardhasadoptedandperformedaformalprocessfortheannualevaluationofitsownperformanceandthatofitsprincipalCommittees.Thisincludesperiodicexternalperformanceevaluation.TheBoardconsidersthattheintroductionofanyfurtherevaluationofindividualdirectorswouldbeinappropriategiventhemannerofappointmentofdirectors,theshareholdingstructureandexistingBoardprocedures.
The Company Secretary
TheCompanySecretaryisafulltimeemployeeofAnPost.TheCompanySecretaryisresponsibleforadvisingtheBoardthroughtheChairmanonallgovernancematters.AlldirectorshaveaccesstotheadviceandservicesoftheCompanySecretary.TheCompany’sArticlesofAssociationprovidethattheappointmentandremovaloftheCompanySecretaryisamatterforthefullBoard.
Information
RegularreportsandpapersarecirculatedtothedirectorsinatimelymannerinpreparationforBoardandCommitteemeetings.Thesepapersaresupplementedbyinformationspecificallyrequestedbythedirectorsfromtimetotime.
corporate governance
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ThedirectorsreceivemonthlymanagementaccountsandregularmanagementreportsandinformationwhichenablethemtoscrutinisetheGroup’sandmanagement’sperformanceagainstagreedobjectives.
Relations with shareholdersTheBoardthroughtheChairmanandmanagement,maintainanongoingdialoguewiththeCompany’sshareholdersonstrategicissues.TheChairmanandtheChiefExecutivegivefeedbacktotheBoardonissuesraisedwiththembytheshareholders.AlldirectorsnormallyattendtheAnnualGeneralMeetingandshareholdersareinvitedtoaskquestionsduringthemeetingandtomeetdirectorsaftertheformalproceedingshaveended.
Internal Control
Anongoingprocessexistsforidentifying,evaluatingandmanagingthesignificantrisksfacedbytheGroup.Thisprocess,whichisbasedontheGuidancefordirectors,issuedbytheInstituteofCharteredAccountantsinEnglandandWales(theTurnbullGuidance),isperiodicallyreviewedbythedirectorsandhasbeeninplacethroughouttheaccountingperiodanduptothedatethefinancialstatementswereapproved.
InaccordancewiththeguidanceoftheTurnbullcommittee,thedirectorsareresponsiblefortheGroup’ssystemofinternalcontrolandsetappropriatepoliciesoninternalcontrol,seekregularassurancethatenablesthemtosatisfythemselvesthatthesystemisfunctioningeffectivelyandtoensurethatthesystemofinternalcontroliseffectiveinmanagingrisks.Suchasystemisdesignedtomanageratherthaneliminatebusinessrisksandcanprovideonlyreasonableratherthanabsoluteassuranceagainstmaterialmisstatementorloss.ThekeyrisksaresetoutatSection3oftheReportoftheDirectors(page33).
ThedirectorshavecontinuedtoreviewtheeffectivenessoftheGroup’ssystemoffinancialandnon-financialcontrolsduring2011,includingoperationalandcompliancecontrols,riskmanagementandtheGroup’shighlevelinternalcontrolarrangements.Thesereviewshaveincludedanassessmentofinternalcontrolsbymanagement,managementassuranceofthemaintenanceofcontrols,reportsfromtheinternalauditorsandreportsfromtheexternalauditoronmattersidentifiedinthecourseofitsstatutoryauditwork.
TheGroupviewsthecarefulmanagementofriskasakeymanagementactivity.TheBoardhasadoptedaRiskManagementPolicyandaRiskManagementFrameworkandapprovedtheappointmentofaChiefRiskOfficer.TheresponsibilitiesoftheAuditandRiskCommitteeembracetheresponsibilitiesofaRiskCommittee.Managingbusinessrisktodeliveropportunitiesisakeyelementofallactivities.ThisisdoneusingasimpleandflexibleframeworkwhichprovidesaconsistentandsustainedwayofimplementingtheGroup’svalues.Thesebusinessrisks,whichmaybestrategic,operational,reputational,financialorenvironmental,shouldbeunderstoodandvisible.Thebusinesscontextdeterminesineachsituationthelevelofacceptableriskandcontrols.
Managementisresponsiblefortheidentificationandevaluationofsignificantrisksandforthedesignandimplementationofappropriateinternalcontrols.Theserisksareassessedonanongoingbasisandarederivedfromavarietyofexternalandinternalsources.ManagementreportsregularlytotheBoardonthekeyrisksinherentinthebusinessandonthewayinwhichtheserisksaremanaged.ManagementalsoreportstotheBoardonanysignificantchangesintheGroup’sbusinessandonanyrisksassociatedwithsuchchanges.Theprocessusedtoidentifyandmanagekeyrisksisanintegralpartoftheinternalcontrolenvironment.
Thekeyprocedureswhichthedirectorshaveestablishedwithaviewtoprovidingeffectiveinternalcontrolareasfollows:
• AclearfocusonbusinessobjectivesasdeterminedbytheBoardafterconsiderationofthestatutoryresponsibilitiesandriskprofileoftheGroup’sbusinesses.
• Adefinedorganisationalstructurewithclearlinesofresponsibility,delegationofauthorityandsegregationofdutiesdesignedtofosterabeneficialcontrolenvironment.
• AriskmanagementprocesswhichconsidersthestrategyanddevelopmentofthebusinessinthecontextoftheannualbudgetprocesswhenfinancialplansandperformancetargetsaresetandreviewedbytheBoardinlightoftheGroup’soverallobjectives.
• AreportingandcontrolsystemwhichensuresthatindividualbusinessesreporttotheBoardonanongoingbasisontheirprogressinachievingobjectives.Thesystemforreportingcoversbothoperationalandfinancialperformance,occursonatimelybasisandensuresthatbudgetaryvariancesareexaminedandaddressedpromptly.
corporate governance
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corporate governance
• Thepreparationandissueoffinancialreports,includingtheconsolidatedannualaccountsismanagedbytheGroupFinancedepartment.TheGroup’sfinancialreportingprocessiscontrolledusingdocumentedaccountingpoliciesandreportingformatsissuedbytheGroupFinancedepartmenttoallreportingentities(includingsubsidiaries)withintheGroupinadvanceofeachreportingperiodend.TheGroupFinancedepartmentsupportsallreportingentitieswithguidanceinthepreparationoffinancialinformation.ThisprocessissupportedbyanetworkoffinancemanagersthroughouttheGroup,whohaveresponsibilityandaccountabilitytoprovideinformationinkeepingwithagreedpolicies,includingthecompletionofreconciliationsoffinancialinformationtoprocessingsystems.Itsqualityisunderpinnedbyarrangementsforsegregationofdutiestofacilitateindependentchecksontheintegrityoffinancialdata.Thefinancialinformationforeachentityissubjecttoareviewatreportingentityandgrouplevelbyseniormanagement.TheannualaccountsarereviewedbytheBoardAuditandRiskCommitteeinadvanceofbeingpresentedtotheBoardfortheirreviewandapproval.
• AninternalauditfunctionwhichmonitorscompliancewithpoliciesandtheeffectivenessofinternalcontrolwithintheGroup’sbusinesses.TheworkingoftheinternalauditfunctionisfocusedontheareasofgreatestrisktotheGroup.
• TheBoardAuditandRiskCommittee,whichapprovesinternalandexternalauditplansanddealswithsignificantcontrolissuesraisedbyinternalandexternalauditors.
Attendance at meetings of the Board, the Remuneration Committee and the Audit and Risk Committee
TenBoardmeetingswereheldduringtheyearended31December2011andtheattendancerecordofeachdirectorissetoutinthefollowingtable
Directors’ Remuneration
TheremunerationoftheChiefExecutiveisdeterminedinaccordancewiththeguidelinesissuedbytheDepartmentofPublicExpenditureandReformfordeterminingtheremunerationofChiefExecutiveOfficersofCommercialStateBodiesandissubjecttotheapprovaloftheRemunerationCommitteeoftheBoardofAnPostandtheMinisterforCommunications,EnergyandNaturalResources.TheobjectiveistomaintaintheremunerationoftheChiefExecutiveatalevelwhichisattractivetotheindividualwhile,atthesametime,representingvalueformoneyfortheGroup.AproportionoftheChiefExecutive’sremunerationisperformancerelatedandtherefore,linkedtotheGroupandindividualobjectives.FeesforalldirectorsaredeterminedbytheMinisterforCommunications,EnergyandNaturalResourceswiththeapprovaloftheMinisterforPublicExpenditureandReform.
Thedisclosuresmadeinthesefinancialstatementsrelatingtodirectors’emolumentsandpensioninformationarethoserequiredundertheCodeofPracticefortheGovernanceofStateBodies.
name eligible to attend attended
JohnFitzgerald 10 10PatrickCompton 10 9JerryCondon 10 10DonalConnell 10 10AnneConnolly 10 10PaddyCostello 10 9ThomasDevlin 10 10PaulHenry 3 3CiaraHurley 2 2JamesHyland 10 10PeterOrmond 10 10BrianMcConnell 2 2GerryO’Toole 10 10JohnQuinlivan 10 8AlanSloane 10 10CatherineWoods 10 7JamesWrynn 3 3
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Remuneration Committee
FourmeetingsoftheRemunerationCommitteewereheldduringtheyearended31December2011andtheattendancerecordofeachdirector,eligibletoattend,issetoutinthefollowingtable:
TheRemunerationCommitteeiscurrentlycomprisedofthreenon-executivedirectorsandtheChiefExecutive.JohnFitzgeraldactsasChairmanoftheCommittee.TheChiefExecutiveabsentshimselffrommeetingswhenmattersrelatingtohisownremunerationarebeingconsidered.Whennecessary,non-Committeemembersareinvitedtoattend.TheCommittee’sprincipalresponsibilitiesare:
• todetermine,onbehalfoftheBoard,theremunerationandothertermsandconditionsofemploymentoftheChiefExecutive,subjecttocompliancewithGovernmentPolicyrelatingthereto;
• todetermine,onbehalfoftheBoard,thepaystructuresandtermsandconditionsofotherseniorpersonnel(asidentifiedbytheChairmanoftheBoard);
• tobeinformedofsignificantdevelopmentsinindustrialrelationsandtoreviewindustrialrelationspoliciestoensurethestrategyisconsistentwiththeachievementofthebusinessplansofAnPostand,onbehalfoftheBoard,totakedecisionsonsuchmatters;
• toact,onbehalfoftheBoard,andtakealldecisionsrelatedtopayandpayrelatedmatters,astheChairmanoftheBoardshalldetermine;and
• toact,onbehalfoftheBoard,andtakeallsignificantdecisionsonmatterssuchasremunerationpolicy,benefits,staffgrading,thirdpartyrecommendationsandrelatedissues.
Audit and Risk Committee
EightmeetingsoftheAuditandRiskCommitteewereheldduringtheyearended31December2011andtheattendancerecordofeachdirector,eligibletoattend,issetoutinthefollowingtable:
In2011theAuditandRiskCommitteewascomprisedofthreenon-executivedirectors.JamesHylandwasChairmanoftheCommitteeuntilhisretirementfromtheBoardinDecember2011.Whennecessary,non-Committeemembersareinvitedtoattend.Underitstermsofreference,theCommitteeistoassisttheBoardinfulfillingitsresponsibilitiesbyprovidinganindependentreviewoffinancialreporting,bysatisfyingitselfastotheeffectivenessoftheCompany’sinternalcontrolsandastothesufficiencyoftheexternalandinternalaudits.
TheCommitteeisresponsibleformonitoringtheeffectivenessoftheexternalauditprocessandmakingrecommendationstotheBoardinrelationtotheappointment,re-appointmentandremunerationoftheexternalauditor.ItisresponsibleforensuringthatanappropriaterelationshipbetweentheGroupandtheexternalauditorismaintained,includingreviewingnon-auditservicesandfees.Asaresultofregulatoryorsimilarrequirements,itisnecessarytoemploytheGroup’sexternalauditorforcertainauditrelatedandnon-auditservices.
corporate governance
name eligible to attend attended
JamesHyland 8 8BrianMcConnell 2 2CatherineWoods 8 7*AnneConnolly 4 4*Onemeetingwasheldatshortnotice
name eligible to attend attended
JohnFitzgerald 4 4DonalConnell 4 4JohnQuinlivan 4 4CatherineWoods 4 2
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corporate governance
Inordertomaintaintheindependenceoftheexternalauditor,theAuditandRiskCommitteehasdeterminedpoliciesastowhatauditrelatedandnon-auditservicescanbeprovidedbytheGroup’sexternalauditorsandtheapprovalprocessrelatedtotheseservices.Underthesepolicies,workofaconsultancynaturewillnotbeofferedtotheexternalauditorunlessthereareclearefficienciesandvalue-addedbenefitstotheGroupwhileensuringthattheobjectivityandindependenceoftheexternalauditorismaintained.TheAuditandRiskCommitteemonitorstheleveloffeespaidtotheexternalauditor.
TheCommitteereviewsannuallytheGroup’ssystemsofinternalcontrolandtheprocessesformonitoringandevaluatingtherisksfacingtheGroup.
TheCommitteealsoassistsand,whererelevant,makesrecommendationstotheBoardonthedischargingofitsresponsibilitiesinrelationtosecurity.TheCommitteemeetswithmanagement,aswellasprivatelywiththeexternalauditor.InFebruary2012,theBoardapprovedtheappointmentofMr.JamesWrynnasChairmanoftheCommitteesubjecttoapprovalbytheCentralBankofIrelandandincreasedthenumberofnon-executivedirectorsontheCommitteetofour.
In2011,theAuditandRiskCommitteedischargeditsresponsibilitiesby:
• reviewingtheGroup’sdraftfinancialstatementsfor2010priortoBoardapprovalandmeetingandreviewingwiththeexternalauditortheirreportsthereon;
• reviewingtheappropriatenessoftheGroup’saccountingpolicies;
• reviewingthepotentialimpactontheGroup’sfinancialstatementsofsignificantmattersarisingduringtheyear;
• reviewingtheresourcesofinternalaudit,approvingtheinternalauditplans,reviewinginternalauditreportsanddealingwithsignificantcontrolissuesraisedbytheinternalauditor;
• reviewingtheauditfeeandnon-auditfeespayabletotheGroup’sexternalauditor;
• reviewingtheexternalauditors’planfortheauditoftheGroup’sfinancialstatementsfor2011,confirmationsofauditorindependenceandtheproposedauditfee,andapprovingthetermsofengagementfortheauditonbehalfoftheBoard;
• reviewinganexternalreport,speciallycommissionedbymanagementduringtheyearinlightofanidentifiedincidentoflossataretailbranch,andmonitoringimplementationoftherecommendationsofthatreport;
• reviewingtheRiskManagementPolicyandtheRiskManagementFramework;
• reviewingthekeyriskstothebusinessandconsideringtheadequacyoftheGroup’ssystemofriskidentificationandassessment;
• reviewinganannualreportontheGroup’ssystemsofinternalcontrolanditseffectiveness,reportingtotheBoardontheresultsofthereviewandreceivingregularupdatesonkeyriskareasoffinancialcontrol;
• reviewingsecuritypoliciesandproceduresfortheprotectionofstaff,postmastersandcustomersandforsafeguardingassetsandtheimplementationofandcompliancewiththosepoliciesandprocedures.
TheGroupoperatesprocedurestoensurethatappropriatearrangementsareinplaceforemployeestobeabletoraise,inconfidence,mattersofpossibleimpropriety,withsuitablesubsequentfollow-upaction.Reportingchannelshavebeencreatedwherebyperceivedwrongdoingmaybereportedviapost,telephoneandemail,anonymouslyifpreferred.
Nomination Committee
AsalltheauthorityregardingtheappointmentofdirectorsisvestedintheMinisterforCommunications,EnergyandNaturalResources,withtheconsentoftheMinisterforPublicExpenditureandReform,thematterofconstitutingaNominationCommitteedoesnotrequireconsiderationbytheBoard.
Compliance Statement
Asnotedabove,indevelopingitscorporategovernancepolicy,theBoardhassoughttogiveeffectbothtotheCodeofPracticefortheGovernanceofStateBodies,issuedbytheDepartmentofFinance,andtotherelevantmainandsupportingprinciplesofgoodgovernanceoutlinedintheCodeissuedbytheUnitedKingdom’sFinancialReportingCouncil.
ThedirectorsconfirmthattheGrouphasbeenincompliancewiththeCodeofPracticefortheGovernanceofStateBodiesandtherelevantmainandsupportingprinciplesoftheCodethroughoutthefinancialyearunderreview,withtheexceptionofanumberofareasnotedabovewherevoluntarycompliancewithprovisionsoftheCodeisnot,giventhe
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corporate governance
mannerofappointmentofdirectors,thelegalandshareholdingstructureoftheCompanyandexistingBoardprocedures,consideredappropriate.
Going Concern
ThedirectorshavereviewedtheGroup’sbusinessplanandotherrelevantinformationandhaveareasonableexpectationthattheGroupwillcontinueinoperationalexistencefortheforeseeablefuture.Forthisreason,thedirectorscontinuetoadoptthegoingconcernbasisinpreparingthefinancialstatements.
OnbehalfoftheBoard
John Fitzgerald,ChairmanDonal Connell,Director
22 March 2012
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UndertheAct,theaccountingproceduresofAnPostarerequiredtobeconductedinaccordancewithdirectionslaiddownbyComRegandwithcertainprovisionsintheAct.On8December2006,ComRegissuedadirectiontoAnPostsettingouttheregulator’sdetailedrequirementsinrelationtotheaccountingsystemsofAnPost(theDirection).
ThedirectorsacknowledgetheirresponsibilityforcompliancewiththeaccountingprovisionsoftheActandthefollowingstatementdescribeshowAnPostappliedtherelevantprovisionsoftheRegulationsandtheDirectionfortheaccountingyearbeginningon1January2011.
Financial Records and Accounting SystemsThefinancialrecordsandaccountingsystemsmaintainedbyAnPostcontainsufficientdetailtoenablemanagementtoensurethattheycomplywiththeaccountingprovisionsoftheDirection.SeparateaccountsaremaintainedforeachoftheserviceswithintheUniversalService.
Separated Accounts
SegmentalprofitandlossaccountsandstatementsofnetassetsarebeingpreparedforsubmissiontoComRegfortheyearended31December2011.IncompliancewiththeDirection,acompetentbodyisreviewingtheseaccountsandwillissueanopinionontheircompliancewiththeDirection.
Management Accounting Manual
AdetailedaccountingmanualhasbeenpreparedshowingtherangeandscopeofdatatobecollectedforthepurposeofcomplyingwiththeDirectionandthebasisonwhichthedataistobeallocated/apportionedbetweenservices.ThiswassubmittedtoComRegin2011.
ThemanualreflectsthedetailedrevenuedeterminationandcostallocationandapportionmentprinciplesandrulessetoutintheDirection.
Statement of Compliance
Basedontheabovestepsandactions,thedirectorsbelievethatAnPosthascompliedwiththerelevantprovisionsoftheActandwiththeDirectionofComReginrelationtotheAccountingSystemsofAnPostfortheyearended31December2011.
OnbehalfoftheBoard
John Fitzgerald,ChairmanDonal Connell,Director
22 March 2012
statement of the directors on compliance with the regulator’s direction on the accounting systems of an post as required by the communications regulation (postal services) act 2011.
under the communications regulation (postal services) act 2011 the commission for communications regulation, (comreg), is designated as the national regulatory authority for the postal sector and an post is designated as a universal service provider.
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the directors are responsible for preparing the annual report and financial statements, in accordance with applicable law and regulations.
CompanylawrequiresthedirectorstoprepareGroupandparentCompanyfinancialstatementsforeachfinancialyear.UnderthatlawthedirectorshaveelectedtopreparetheGroupandparentCompanyfinancialstatementsinaccordancewithGenerallyAcceptedAccountingPracticeinIreland,comprisingapplicablelawandtheaccountingstandardsissuedbytheAccountingStandardsBoardandpromulgatedbytheInstituteofCharteredAccountantsinIreland.
TheGroupandparentCompanyfinancialstatementsarerequiredbylawtogiveatrueandfairviewofthestateofaffairsoftheGroupandtheparentCompanyandoftheprofitorlossoftheGroupforthatperiod.
InpreparingeachoftheGroupandparentCompanyfinancialstatements,thedirectorsarerequiredto:
• selectsuitableaccountingpoliciesandthenapplythemconsistently;
• makejudgementsandestimatesthatarereasonableandprudent;and
• preparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethattheGroupwillcontinueinbusiness.
ThedirectorsareresponsibleforkeepingproperbooksofaccountwhichdisclosewithreasonableaccuracyatanytimethefinancialpositionoftheGroupandCompanyandtoenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesActs,1963to2009.TheyarealsoresponsiblefortakingsuchstepsasarereasonablyopentothemtosafeguardtheassetsoftheGroupandCompanyandtopreventanddetectfraudandotherirregularities.
ThedirectorsarealsoresponsibleforpreparingaDirectors’ReportthatcomplieswiththerequirementsoftheCompaniesActs,1963to2009.
ThedirectorsareresponsibleforthemaintenanceandintegrityofthecorporateandfinancialinformationincludedontheCompany’swebsite.LegislationintheRepublicofIrelandgoverningthepreparationanddisseminationoffinancialstatementsmaydifferfromlegislationinotherjurisdictions.
OnbehalfoftheBoard
John Fitzgerald,ChairmanDonal Connell,Director
22 March 2012
statement of directors responsibilities
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ThisreportismadesolelytotheCompany’smembers,asabody,inaccordancewithSection193oftheCompaniesAct,1990.OurauditworkhasbeenundertakensothatwemightstatetotheCompany’smembersthosematterswearerequiredtostatetotheminanauditor’sreportandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthantheCompanyandtheCompany’smembersasabody,forourauditwork,forthisreport,orfortheopinionswehaveformed.
Respective Responsibilities of Directors and Auditor
Thedirectors’responsibilitiesforpreparingtheAnnualReportandthefinancialstatementsinaccordancewithapplicablelawandtheaccountingstandardsissuedbytheAccountingStandardsBoardandpromulgatedbytheInstituteofCharteredAccountantsinIreland(GenerallyAcceptedAccountingPracticeinIreland),aresetoutintheStatementofDirectors’Responsibilitiesonpage43.
OurresponsibilityistoauditthefinancialstatementsinaccordancewithrelevantlegalandregulatoryrequirementsandInternationalStandardsonAuditing(UKandIreland).
WereporttoyououropinionastowhetherthefinancialstatementsgiveatrueandfairviewinaccordancewithGenerallyAcceptedAccountingPracticeinIrelandandareproperlypreparedinaccordancewiththeCompaniesActs,1963to2009,andtheEuropeanCommunities(Companies:GroupAccounts)Regulations,1992.Wealsoreporttoyouwhetherinouropinion:properbooksofaccounthavebeenkeptbytheCompany;atthebalancesheetdate,thereexistsafinancialsituationrequiringtheconveningofanextraordinarygeneralmeetingofthecompany;andtheinformationgivenintheDirectors’Reportisconsistentwiththefinancialstatements.Inaddition,westatewhetherwehaveobtainedalltheinformationandexplanationsnecessaryforthepurposesofouraudit,andwhethertheCompany’sbalancesheetisinagreementwiththebooksofaccount.
Wealsoreporttoyouif,inouropinion,anyinformationspecifiedbylawregardingdirectors’remunerationandtransactionswiththeGroupisnotdisclosedand,wherepracticable,includesuchinformationinourreport.
Wereview,attherequestofthedirectors,whether(1)thevoluntaryCorporateGovernancestatementonpages35to41reflectstheGroup’scompliancewiththenineprovisionsofthe2010FRCUKCorporateGovernanceCodethattheListingRulesoftheIrishStockExchangespecifiesforreviewbyauditorsand(2)thestatementonthesystemofinternalcontrolonpages37and38reflectstheGroup’scompliancewiththeprovisionofTheCodeofBestPracticefortheGovernanceofStateBodiesthatisspecifiedforreviewbyauditorsandwereportifthosestatementsdonot.WearenotrequiredtoconsiderwhethertheBoard’sstatementsoninternalcontrolcoverallrisksandcontrols,orformanopinionontheeffectivenessoftheGroup’scorporategovernanceproceduresoritsriskandcontrolprocedures.
WereadtheotherinformationcontainedintheAnnualReportandconsiderwhetheritisconsistentwiththeauditedfinancialstatements.ThisotherinformationcomprisesonlytheDirectors’Report,the
we have audited the group and parent company financial statements (the ‘financial statements’) of an post for the year ended 31 december 2011 which comprise the consolidated profit and loss account, the consolidated and company balance sheets, the consolidated cash flow statement, the consolidated statement of total recognised gains and losses, the statement of accounting policies and the related notes. these financial statements have been prepared under the accounting policies therein.
report of the independent auditor to the members of an post
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report of the independent auditor to the members of an post
Chairperson’sStatement,theChiefExecutive’sReview,theFinancialReview,theCorporateGovernanceStatementandtheFiveYearFinancialSummary.Weconsidertheimplicationsforourreportifwebecomeawareofanyapparentmisstatementsormaterialinconsistencieswiththefinancialstatements.Ourresponsibilitiesdonotextendtoanyotherinformation.
Basis of Opinion
WeconductedourauditinaccordancewithInternationalStandardsonAuditing(UKandIreland)issuedbytheAuditingPracticesBoard.Anauditincludesexamination,onatestbasis,ofevidencerelevanttotheamountsanddisclosuresinthefinancialstatements.ItalsoincludesanassessmentofthesignificantestimatesandjudgementsmadebythedirectorsinthepreparationofthefinancialstatementsandofwhethertheaccountingpoliciesareappropriatetotheGroup’sandparentCompany’scircumstances,consistentlyappliedandadequatelydisclosed.
Weplannedandperformedourauditsoastoobtainalltheinformationandexplanationswhichweconsiderednecessaryinordertoprovideuswithsufficientevidencetogivereasonableassurancethatthefinancialstatementsarefreefrommaterialmisstatement,whethercausedbyfraudorotherirregularityorerror.Informingouropinionwealsoevaluatedtheoveralladequacyofthepresentationofinformationinthefinancialstatements.
Opinion
Inouropinion,thefinancialstatements:
• giveatrueandfairview,inaccordancewithGenerallyAcceptedAccountingPracticeinIreland,ofthestateofaffairsoftheGroupandtheCompanyat31December2011andoftheprofitoftheGroupfortheyearthenended;and
• havebeenproperlypreparedinaccordancewiththeCompaniesActs,1963to2009andtheEuropeanCommunities(Companies:GroupAccounts)Regulations,1992.
Other Matters
Wehaveobtainedalltheinformationandexplanationsweconsiderednecessaryforthepurposesofouraudit.Inouropinion,properbooksofaccounthavebeenkeptbytheCompanyandthebalancesheetoftheCompanyat31December2011isinagreementtherewith.
Inouropinion,theinformationgiveninthereportofthedirectorsonpages32to34isconsistentwiththefinancialstatements.
ThebalancesheetoftheCompany,asstatedonpage54,reportsanexcessofliabilitiesoverassetsand,inouropinion,onthatbasistheredidexistat31December2011afinancialsituationwhichundersection40(1)oftheCompanies(Amendment)Act,1983mayrequiretheconveningofanextraordinarygeneralmeetingoftheCompany.
Caroline Flynnforandbehalfof
CharteredAccountants,StatutoryAuditFirm1StokesPlaceSt.Stephen’sGreenDublin2
22 March 2012
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Respective Responsibilities of Directors and Auditor
ThedirectorsprepareanannualstatementofcompliancewiththeaccountingprovisionsoftheActandtheDirectionforwhichtheyareresponsible.Theobjectiveofourreviewistodrawattentiontonon-compliancewiththerequirementsoftheaccountingprovisionsoftheActandwiththeDirection.Ourreviewdoesnotconstituteanauditoftheseparatedaccounts.Aseparateauditreportwillbeissuedontheauditoftheregulatoryaccounts.
Basis of Opinion
WecarriedoutourreviewinaccordancewiththegeneralprinciplesandguidanceoftheAuditingPracticesBoard.
Opinion
BasedonenquiryofcertaindirectorsandofficersoftheCompanyandexaminationofrelevantdocuments,inouropinion,thedirectors’statementonpage42appropriatelyreflectstheCompany’scompliance,fortheyearended31December2011,withtheaccountingprovisionsoftheActandwiththeDirectionontheAccountingSystemsofAnPost,dated8December2006issuedbyComReg.
CharteredAccountants,StatutoryAuditFirm1StokesPlaceSt.Stephen’sGreenDublin2
22 March 2012
report of the independent auditor to an post on compliance with the regulator’s direction on the accounting systems of an post as required by the communications regulation (postal services) act 2011 (the act)
in addition to our audit of the financial statements, we have reviewed the directors’ statement on page 42 concerning the company’s compliance, for the year ended 31 december 2011, with the accounting provisions of the act and with the direction to an post setting out the regulator’s detailed requirements in relation to the accounting systems of an post (the direction), issued on 8 december 2006 by the postal services regulator, comreg, in relation to the accounting systems of an post.
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the following accounting policies have been applied consistently in dealing with items which are considered material in relation to the group’s financial statements.
1. Basis of Preparation
ThefinancialstatementsarepreparedunderthehistoricalcostconventionandinaccordancewithapplicablelawandIrishGenerallyAcceptedAccountingPracticewhichincludescompliancewiththefinancialreportingstandardsoftheAccountingStandardsBoardaspromulgatedinIrelandbyTheInstituteofCharteredAccountantsinIreland.
2. Basis of Consolidation
TheconsolidatedfinancialstatementsincludethefinancialstatementsoftheCompanyanditssubsidiaryundertakings(exceptAnPostNationalLotteryCompany)madeuptotheendofthefinancialyear.Theresultsofsubsidiaryundertakingsacquiredordisposedofduringtheyearareincludedintheconsolidatedprofitandlossaccountfromthedateofacquisitionoruptodateofdisposal.Upontheacquisitionofabusiness,fairvaluesareattributedtotheidentifiablenetassetsacquired.Goodwillarisingonacquisitionsisdealtwithassetoutbelow.IfthefinancialyearofasubsidiaryundertakingdoesnotcoincidewiththatoftheparentCompany,theGroupfinancialstatementsconsolidateinterimfinancialinformationpreparedbythesubsidiaryattheendoftheparent’sfinancialyear.
ThesoleactivityofAnPostNationalLotteryCompanyistheoperationoftheNationalLotteryunderlicencefromtheMinisterforPublicExpenditureandReforminaccordancewiththeprovisionsoftheNationalLotteryAct,1986andthesurplusgeneratedeachyearisentirelyattributabletotheNationalLotteryFundwhichismanagedandcontrolledbytheMinister.Accordingly,AnPostdoesnotparticipateinthesurplusgeneratedbyAnPostNationalLotteryCompanyandneitherisitentitledtoexerciseanyrightsovertheassetsofthatcompany.Onthisbasis,inaccordancewiththeprovisionsofFinancialReportingStandardNo.2‘AccountingforSubsidiaryUndertakings’andtheEuropeanCommunities(Companies:GroupAccounts)Regulations,1992,theconsolidatedfinancialstatementsdonotincorporatethefinancialstatementsofAnPostNationalLotteryCompany.SeparatefinancialstatementsofAnPostNationalLotteryCompanyaretobepublishedinApril2012.
Jointventureundertakings( jointventures)arethoseundertakingsinwhichtheGrouphasalongterminterestandoverwhichitexercisescontroljointlywithanotherparty.
Associatedundertakings(associates)arethoseundertakingsinwhichtheGrouphasaparticipatinginterestintheequitycapitalandoverwhichitisabletoexercisesignificantinfluence.
Jointventuresandassociatesareaccountedforusingthegrossequitymethodandequitymethodrespectively.TheGroup’sshareofprofitslesslossesofjointventuresandassociatesisincludedintheconsolidatedprofitandlossaccountanditsinterestsintheirnetassetsorliabilities,otherthangoodwill,areincludedasfixedassetinvestmentsintheconsolidatedbalancesheet.
Theamountsincludedintheconsolidatedfinancialstatementsinrespectofthepostacquisitionprofitsofjointventuresandassociatesaretakenfromtheirlatestauditedfinancialstatementsmadeuptothebalancesheetdate.
statement of accounting policies for the year ended 31 december 2011
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statement of accounting policies for the year ended 31 december 2011
InvestmentinjointventuresandassociatesareshownintheCompanybalancesheetasfinancialfixedassetsandarevaluedatcostlessprovisionsforimpairmentsinvalue.
3. Turnover
Turnoverisrecognisedasservicesareprovidedandconsistsofincomefrompostage,agencyservices,poundagefromremittanceservices,courierandlogisticservices,consultancyservices,financialservices,rentsandinterestincome.IncomefromagencyservicesisinrespectofservicesperformedforGovernmentDepartments,theNationalTreasuryManagementAgency,AnPostNationalLotteryCompanyandotherbodies.Amountsheldintheperformanceoftheseagencyservicesareincludedinamountsheldintrustincashatbankandathand.Postageincomeisrecognisedintheprofitandlossaccountassalesaremadewithanadjustmenttodeferredrevenueforstampssoldandunusedandbalancesinpostagemetermachinesunusedattheyearend.Otherincome,primarilyagencyincomeandserviceincome,isrecogniseduponprovisionoftheunderlyingservice.
4. Saving Services
TheCompanyoperates,onanagencybasisandforanagreedremuneration,thePostOfficeSavingsBankandothersavingsservicesfortheNationalTreasuryManagementAgency,whichactsonbehalfoftheMinisterforFinance.
ThefundsareremittedregularlytotheNationalTreasuryManagementAgency.TheassetsandliabilitiesofsuchsavingsservicesvestintheMinisterforFinanceand,accordingly,arenotincludedinthesefinancialstatements.
5. Grants
Revenuebasedgrantsarecreditedtotheprofitandlossaccounttooffsetthematchingexpenditure.
CapitalgrantsreceivedandreceivableunderEUassistedschemesarerecognisedwhenreceivedorwhentheirreceiptcanbeforeseenwithvirtualcertainty.
Capitalgrantsaretreatedasdeferredincomeandamortisedtotheprofitandlossaccountonabasisconsistentwiththedepreciationpolicyoftherelatedtangiblefixedassets.
6. Tangible Fixed Assets
Tangiblefixedassetsarestatedatcostlessaccumulateddepreciation.
Freeholdandlongleaseholdlandisnotdepreciated.Depreciationonothertangiblefixedassetsischargedtotheprofitandlossaccountonastraightlinebasissoastowriteoffthoseassets,adjustedforestimatedresidualvalue,overtheexpectedusefullifeofeachcategory.Theremainingusefullivesoftheassetsandtheirresidualvaluesarereviewedonaregularbasis.
Depreciationisprovidedonadditionswitheffectfromthefirstdayofthemonthfollowingcommissioningandondisposalsuptotheendofthemonthofretirement.
Theestimatedusefullivesareasfollows:
years
Freehold&longleaseholdbuildings 20-50InterestinGPO 50Motorvehicles 5Operating&computerequipment 3-10
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statement of accounting policies for the year ended 31 december 2011
7. Operating Leases
Operatingleaserentalsarechargedtotheprofitandlossaccountonastraightlinebasisovertheleaseterm.
8. Goodwill
Goodwillarisingonacquisitions,representingtheexcessofthepurchasepriceoverthefairvalueofthenetidentifiableassetsorliabilitiesacquired,iscapitalisedandamortisedtotheprofitandlossaccountonastraightlinebasisoveritsexpectedusefullifeofuptotwentyyears.Thecarryingvalueofgoodwillisreviewedannuallyandprovisionismadeforanyimpairmentinvalue.Ondisposalofabusiness,anygoodwillisincludedindeterminingtheprofitorlossonsaleofthebusiness.
9. Financial Fixed Assets
Financialfixedassetsareshownatcostlessprovisionsforimpairmentsinvalue.Incomefromfinancialfixedassets,togetherwithanyrelatedtaxcredit,isrecognisedintheprofitandlossaccountintheyearinwhichitisreceivable.
10. Taxation
Currenttax,includingIrishcorporationtaxandforeigntax(es),isprovidedontheGroup’staxableprofits,atamountsexpectedtobepaid(orrecovered)usingthetaxratesandlawsthathavebeenenactedorsubstantivelyenactedbythebalancesheetdate.
Deferredtaxisrecognisedinrespectofalltimingdifferencesthathaveoriginatedbutnotreversedatthebalancesheetdate.Provisionismadeattheratesexpectedtoapplywhenthetimingdifferencesreverse.TimingdifferencesaredifferencesbetweentheGroup’staxableprofitsanditsresultsasstatedinthefinancialstatementsthatarisefromtheinclusionofgainsandlossesintaxableprofitsinperiodsdifferentfromthoseinwhichtheyarerecognisedinthefinancialstatements.
Anetdeferredtaxassetisregardedasrecoverableandthereforerecognisedonlywhen,onthebasisofallavailableevidence,itcanberegardedasmorelikelythannotthattherewillbesuitabletaxableprofitsfromwhichthefuturereversaloftheunderlyingtimingdifferencescanbededucted.
Deferredtaxisrecognisedinrespectoftheretainedearningsofoverseassubsidiaries,jointventuresandassociatesonlytotheextentthat,atthebalancesheetdate,dividendshavebeenaccruedorreceivableorabindingagreementtodistributepastearningsinfuturehasbeenenteredintobythesubsidiary,jointventureorassociate.
11. Pensions
TheGroupprovidespensionstoitsemployeesunderdefinedbenefitsuperannuationschemesandadefinedcontributionscheme.Italsoprovidesretirementgratuitiesundernormalcircumstancestopostmastersengagedasagentsandtocertainnon-pensionableemployees.
Inrelationtothedefinedcontributionscheme,contributionsareaccruedandrecognisedinoperatingprofitorlossintheperiodinwhichtheyareearnedbytherelevantemployees.
Forthedefinedbenefitschemes,thedifferencebetweenthemarketvalueoftheschemes’assetsandtheactuariallyassessedpresentvalueoftheschemes’liabilities,calculatedusingtheprojectedunitcreditmethod,isdisclosedasanasset/liabilityonthebalancesheet,netofadeferredtaxliabilityorasset(totheextentthatitisrecoverable).
Theamountchargedtooperatingprofitistheactuariallydeterminedcostofpensionbenefitspromisedtoemployeesearnedduringtheyearplusanybenefitimprovementsgrantedtomembersduringtheyear.
Theexpectedreturnonthepensionschemes’assetsduringtheyearandtheincreaseintheschemes’liabilitiesduetotheunwindingofthediscountrateduringtheyearareshownasfinancingcostsintheprofitandlossaccount.
Anydifferencebetweentheexpectedreturnonassetsandthatactuallyachievedandanychangestotheliabilitiesduetochangesinassumptionsorbecauseactualexperienceduringtheyearwasdifferenttothatassumed,arerecognisedasactuarialgainsandlossesinthestatementoftotalrecognisedgainsandlosses.
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Inrelationtotheunfundedliabilityforretirementgratuities,theactuariallydeterminedpresentvalueoftheliabilityisrecordedinfullinthebalancesheetanditisincreasedforthecostofadditionalbenefitsearnedduringtheyearwhichischargedtooperatingprofit.Theunwindingofthediscountontheliabilityisshownasafinancingcostintheprofitandlossaccount.Changestotheliabilityasaresultofchangesinmeasurementassumptionsorbecauseactualexperienceisdifferenttothatassumedareconsideredtobeanactuarialgainorlossandareincludedinthestatementoftotalrecognisedgainsandlosses.
12. Foreign Currencies
Transactionsdenominatedinforeigncurrenciesaretranslatedintoeuroandrecordedattheratesofexchangerulingatthedatesofthetransactions.Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedintoeuroattheratesofexchangerulingatthebalancesheetdateoratforwardpurchasecontractrateswheresuchcontractsexist.Allsuchexchangedifferencesaredealtwithintheprofitandlossaccount.
Resultsofoverseassubsidiariesaretranslatedintoeuroattheaverageexchangeratefortheperiod.Theassetsandliabilitiesofoverseassubsidiariesaretranslatedintoeuroatratesofexchangerulingatthebalancesheetdate.Translationdifferencesarereportedasamovementonreserves.
statement of accounting policies for the year ended 31 december 2011
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notes 2011 2010 i’000 i’000
Turnover:Groupandshareofjointventure 806,714 811,563Lessshareofjointventure’sturnover - (6,443)group turnover – continuing operations 2 806,714 805,120
Operatingcosts 3 (804,498) (799,282)group operating profit – continuing operations 2,216 5,838
Exceptionalitems–continuingoperations –costsofrestructuring 4 - (20,000)
Shareofresultofjointventureinvestment - (6,590)Otherfinanceincome/(expense)net 18 1,550 (3,950)profit / (loss) on ordinary activities before taxation 5 3,766 (24,702)
Taxonprofit/(loss)onordinaryactivities 6 (2,134) 429profit / (loss) on ordinary activities after taxation 1,632 (24,273)
Minorityinterest 22 (1,285) (409)profit / (loss) for the financial year 7/20 347 (24,682)
OnbehalfoftheBoardJohn Fitzgerald,ChairmanDonal Connell,Director
consolidated profit and loss account for the year ended 31 december 2011
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notes 2011 2010 i’000 i’000
Profit/(loss)forthefinancialyearexcludingshareofresultsofjointventure 347 (18,092)Shareofjointventure’sresult - (6,590)Actuarial(loss)/gainonpostemploymentplans 18 (121,630) 27,310total recognised (losses) / gains (121,283) 2,628
consolidated statement of total recognised gains and losses for the year ended 31 december 2011
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notes 2011 2010 i’000 i’000
fixed assets Intangibleassets–goodwill 9 24,599 24,658Tangibleassets 10 266,530 254,665Financialassets 11 - - 291,129 279,323
current assets Debtors 12 112,235 98,437Cashatbankandinhand 13 150,064 198,078 262,299 296,515
creditors:Amountsfallingduewithinoneyear 14 (191,572) (200,590)
net current assets 70,727 95,925 total assets less current liabilities 361,856 375,248
creditors:Amountsfallingdueaftermorethanoneyear 16 (3,461) (4,563)
provisions for liabilities 17 (39,432) (46,820)
net assets excluding pension liability 318,963 323,865 pension liability 18 (483,594) (368,498)net liabilities including pension liability (164,631) (44,633)
capital and reserves Calledupsharecapital 19 68,239 68,239Capitalconversionreservefund 19 877 877Profitandlossaccount 20 (227,588) (106,305)shareholders’ deficit 21 (158,472) (37,189)
Minorityinterest 22 (6,159) (7,444) (164,631) (44,633)
OnbehalfoftheBoardJohn Fitzgerald,ChairmanDonal Connell,Director
consolidated balance sheet at 31 december 2011
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company balance sheet at 31 december 2011
notes 2011 2010 i’000 i’000
fixed assets Tangibleassets 10 270,986 259,376Financialassets 11 11,084 11,084 282,070 270,460
current assets Debtors 12 67,724 63,607Cashatbankandinhand 13 141,178 178,173 208,902 241,780
creditors:Amountsfallingduewithinoneyear 14 (164,595) (169,311)
net current assets 44,307 72,469 total assets less current liabilities 326,377 342,929
creditors:Amountsfallingdueaftermorethanoneyear 16 (3,461) (3,563)
provisions for liabilities 17 (39,432) (46,820)
net assets excluding pension liability 283,484 292,546 pension liability 18 (483,594) (368,498)net liabilities including pension liability (200,110) (75,952)
capital and reserves Calledupsharecapital 19 68,239 68,239Capitalconversionreservefund 19 877 877Profitandlossaccount 20 (269,226) (145,068)shareholders’ deficit 21 (200,110) (75,952)
OnbehalfoftheBoardJohn Fitzgerald,ChairmanDonal Connell,Director
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consolidated cash flow statement for the year ended 31 december 2011
reconciliation of net cash flow to movement in net funds
notes 2011 2010 i’000 i’000
net cash outflow from operating activities 23 (15,447) (11,470)taxation 23 2,796 (2,402)capital expenditure and financial investment 23 (31,778) (40,590)acquisitions 23 (3,310) (21,072)financing 23 (1,000) 2,000cash outflow before use of liquid resources (48,739) (73,534)management of liquid resources 23 50,195 9,043increase / (decrease) in cash in the year 1,456 (64,491)
notes 2011 2010 i’000 i’000
increase / (decrease) in cash in the year 24 1,456 (64,491)Cashflowsfromchangeinliquidresources 24 (50,195) (9,043)Changeinnetfundsresultingfromcashflows 24 (48,739) (73,534) net funds at beginning of year 24 196,342 269,876 net funds at end of year 24 147,603 196,342
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notes to the financial statements for the year ended 31 december 2011
1. Status of Company
TheCompanyisalimitedliabilitycompany,incorporatedundertheCompaniesActs,1963to2009.UnderthePostalandTelecommunicationsServicesAct,1983,theCompanyisentitledtoomittheword‘Limited’fromitsname.
2. Turnover
TurnoveraboveexcludestheGroup’sshareofJointVenture’sturnoverof€nil(2010:€6,443,000).Intheopinionofthedirectors,fullercompliancewiththedisclosurerequirementsofSSAP25‘SegmentalReporting’wouldbeprejudicialtotheGroup’sinterests.
3. Operating Costs
2011 2010 i’000 i’000
Theanalysisofturnoverisasfollows:republic of ireland Postage:Lettersandparcels 507,306 552,366Postage:Electionsandreferendum 27,996 -Postoffices:Agency,remittanceandrelatedservices 171,613 171,438Otherservices 41,598 36,197Interestincome 9,358 9,259 757,871 769,260 united kingdom Otherservices 48,843 35,860 806,714 805,120
2011 2010 i’000 i’000
staff costs Wagesandsalaries 418,735 422,795Postmasters’costs 74,432 74,646Socialwelfarecosts(note18) 36,648 36,279 529,815 533,720Otherpensioncosts(note18) 46,580 41,952 576,395 575,672other costs Distribution 72,396 66,612Facilities 25,998 26,630Operational 63,146 61,952Administration 39,737 43,171Depreciationandamortisationofgoodwill 26,826 25,245 228,103 223,610 804,498 799,282
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notes to the financial statements for the year ended 31 december 2011
4. Exceptional Items
2011 2010 i’000 i’000
Costsofrestructuring – (20,000)
2011 2010 i’000 i’000
Theprofit/(loss)onordinaryactivitiesbeforetaxationisstatedaftercharging: directors’ emoluments Fees 244 251Otheremoluments 402 407Pensioncontributions 77 77 expenses paid to directors Travel 18 15Subsistence 6 6Other 1 1 auditors’ remunerationAuditofthegroupfinancialstatements 299 299Otherassuranceservices 155 155Taxadviceservices 126 178Othernon-auditservices 110 241
Depreciation 24,085 22,925Amortisationofgoodwill 2,741 2,320 operating lease rentalsRentalofbuildings 8,357 8,290Other–equipmentandmotorvehicles 14,657 14,110 andaftercrediting: Capitalgrantsamortised 102 102Profit/(loss)onsaleoffixedassets 131 (14)
TheCompanycontinuestoimplementitsstrategicplanwhichincludesanintentiontoreducethenumberoffulltimeequivalentsworkingintheGroupby1,375overthethreeyearperiod2010to2012.Assetoutinnote17,theprovisionforbusinessrestructuringat31December2011includes€20,386,000(2010:€27,774,000)inrelationtobusinessrestructuringredundancycosts.Havingconsideredtheimpactofcontinuingvolumereductionsarisingfromtheeconomicrecession,marketliberalisationande-substitution,theanalysisofprobableexitsbasedondefinitiveexitplansandnegotiationssupportsthecurrentlevelofprovisioningandnofurtherchargehasbeenmadein2011.
5. Profit / (Loss) on Ordinary Activities before Taxation
Theamountsshownaboveasdirectors’emolumentsincludeonlytheamountspaidtothedirectorsintheexecutionoftheirdutiesasdirectorsandthesalaryoftheChiefExecutivewhoisalsoadirector.Otherthanthis,theydonotincludethesalariesoftheemployeeandpostmasterdirectors.
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5. Profit / (Loss) on Ordinary Activities before Taxation (c0nt.)
TheremunerationpackageofMrDonalConnell,ChiefExecutiveOfficer,whichisincludedintheamountsshownaboveasdirectors’emoluments,wasasfollows:
notes to the financial statements for the year ended 31 december 2011
2011 2010 i’000 i’000
Basicsalary 381 386Non-pensionableperformancerelatedpay - -Totalpay 381 386Otheremoluments:Taxablebenefits,includinguseofacompanycar 21 21Director’sfee 16 16Pensioncontributions 77 77 495 500
2011 2010 i’000 i’000
JohnFitzgerald(Chairman) 31 31PatrickCompton 16 16JerryCondon 16 16DonalConnell 16 16AnneConnolly 16 16PaddyCostello 16 16PatrickDavoren - 2ThomasDevlin 16 11LouiseEnglish - 6PaulHenry 4 -CiaraHurley 4 16JamesHyland 24 25BrianMcConnell 4 16GerryO’Toole 16 16PeterOrmond 13 -JohnQuinlivan 16 16AlanSloane 16 16CatherineWoods 16 16JamesWrynn 4 -Total 244 251
InaccordancewiththeGovernmentGuidelinesonRemunerationandOtherConditionsofChiefExecutives,theCompanyoperatesaperformancerelatedpayschemewhichprovidesforamaximumpossibleannualawardof35%ofbasicpay.Underthisscheme,upto25%isappliedtoannualobjectives(the25%shorttermscheme)andupto10%isappliedtomulti-annual(threeyear)objectives(the10%longtermscheme).TheChiefExecutivehasvoluntarilywaivedhisentitlementunderthe25%shorttermschemeinthecurrentyearandintheprevioustwoyears.Amountsearnedunderthe10%longtermschemearenotfinalisedanddonotbecomepayableuntiltheendofthecontractterm.However,itisestimatedthatanamountof€97,000hasbeenearnedbytheChiefExecutiveunderthe10%longtermschemesincethedateofhisappointment,14August,2006,upto31December2009.NodeterminationhasbeenmadeyetinrelationtoamountsearnedbytheChiefExecutivein2010or2011underthe10%longtermscheme.TheBoardarecognisantoftheMinister’spositioninregardtoperformancerelatedbonusesinCommercialSemi-StateBodies.
From1December2011,theChiefExecutivewaived15%ofhisbasicsalarygoingforward,totheMinisterforFinance.Thefeespaidtoeachdirectorwereasfollows:
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notes to the financial statements for the year ended 31 december 2011
2011 2010 i’000 i’000
current tax Ireland–Corporationtax 1,605 (918)Ireland–adjustmentwithrespectofprioryears (16) (22)UK–Corporationtax 545 511 2,134 (429)
ThecurrenttaxcreditislowerthanthestandardrateofcorporationtaxinIreland.Thedifferencesareexplainedbelow:
2011 2010 i’000 i’000
Lossaftertaxintheholdingcompany (2,528) (17,860)Profitaftertaxinsubsidiaryundertakings 4,160 177ShareofresultofJointVenture - (6,590)Minorityinterest (1,285) (409)Profit/(loss)forthefinancialyear 347 (24,682)
2011 2010 i’000 i’000
Profit/(loss)onordinaryactivitiesbeforetax 3,766 (24,702) Currenttaxof12.5%(2010:12.5%) 471 (3,088)Effects of: Expensesnotdeductible 367 609Depreciationinexcessofcapitalallowances 902 831ShareofJointVenturelossesnotdeductible - 824Incometaxedathigherrates 1,408 1,469Utilisationoftaxlosses - -Shorttermtimingdifferences (998) (1,052)Prioryearoverprovision (16) (22)Currenttaxcharge 2,134 (429)
6. Tax on Profit / (Loss) on Ordinary Activities
7. Profit / (Loss) for the Financial Year
Giventheuncertaintyovertheexistenceoffuturetaxableprofits,apotentialdeferredtaxassetof€65,162,000(2010:€49,991,000)hasnotbeenrecognisedintheconsolidatedbalancesheetat31December2011.Thisdeferredtaxassetnotrecognisedcomprisesadeferredtaxassetinrelationtothenetpensiondeficitrecognisedof€60,449,000(2010:€46,062,000),timingdifferencesonbusinessrestructuring,€2,381,000(2010:€2,381,000),taxlossesforwardnotutilised,€6,556,000(2010:€6,540,000),offsetbyothertimingdifferencesof€4,224,000(2010:€4,992,000).
AseparateprofitandlossaccountforAnPosthasnotbeenpreparedbecausetheconditionslaiddowninSection148(8)oftheCompaniesAct,1963havebeensatisfied.
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2011 2010
TheaverageFullTimeEquivalent(FTE)numberofpersonsworkingintheGroupduringtheyearwas: Operations 9,382 9,440Corporate 655 689TotalCompanyemployees(FTE) 10,037 10,129Subsidiaries 612 481TotalGroupemployees(FTE) 10,649 10,610
TheaveragenumberofemployeesworkingintheGroupduringtheyear,includingexecutivedirectors,was: Operations 8,859 8,943Corporate 694 727TotalCompanyemployees 9,553 9,670Casualemployees 1,160 1,300TotalCompanyemployees 10,713 10,970Subsidiaries 620 490TotalGroupemployees 11,333 11,460 Postmasters:Engagedasagents 1,103 1,128
2011 2010 i’000 i’000
Theaggregatepayrollcosts,excludingrestructuringcosts,wereasfollows: Wagesandsalaries 418,735 422,795Postmasters’costs 74,432 74,646Socialwelfarecosts 36,648 36,279 529,815 533,720Otherpensioncosts(note18) 46,580 41,952 576,395 575,672
8. Staff Numbers and Costs
notes to the financial statements for the year ended 31 december 2011
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total i’000
groupcost At31December2010 38,703Acquisitions(note25) 2,582Foreignexchangegain 100At31December2011 41,385
amortisation At31December2010 14,045Chargeforyear 2,741At31December2011 16,786 net book value At31December2011 24,599At31December2010 24,658
Thedirectorshaveconsideredthecarryingvalueofgoodwillat31December2011andhaveconcludedthatnoimpairmentarises.
9. Intangible Fixed Assets – Goodwill
notes to the financial statements for the year ended 31 december 2011
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freehold & long operating leasehold land interest motor & computer & buildings in gpo vehicles equipment total i’000 i’000 i’000 i’000 i’000
groupcost At31December2010 233,894 26,582 19,923 285,680 566,079Additions 8,542 3 39 27,417 36,001Disposals (19) - (3,113) (18) (3,150)Foreignexchangegain - - 1 114 115At31December2011 242,417 26,585 16,850 313,193 599,045 accumulated depreciation At31December2010 52,852 11,464 11,895 235,203 311,414Chargedduringyear 5,464 663 2,564 15,394 24,085Eliminatedondisposals (8) - (2,998) (13) (3,019)Foreignexchangegain - - - 35 35At31December2011 58,308 12,127 11,461 250,619 332,515
net book value At31December2011 184,109 14,458 5,389 62,574 266,530At31December2010 181,042 15,118 8,028 50,477 254,665
companycost At31December2010 236,183 26,582 19,701 276,256 558,722Additions 7,577 3 39 26,880 34,499Disposals (19) - (3,100) - (3,119)At31December2011 243,741 26,585 16,640 303,136 590,102 accumulated depreciation At31December2010 47,619 11,464 11,842 228,421 299,346Chargedduringyear 5,623 663 2,506 13,978 22,770Eliminatedondisposals (8) - (2,992) - (3,000)At31December2011 53,234 12,127 11,356 242,399 319,116 net book value At31December2011 190,507 14,458 5,284 60,737 270,986At31December2010 188,564 15,118 7,859 47,835 259,376
Group and Company
Thedepreciableelementoffreehold&longleaseholdland&buildingsamountsto:Group€200,940,000(2010:€188,448,000),Company€206,946,000(2010:€195,977,000).
10. Tangible Fixed Assets
notes to the financial statements for the year ended 31 december 2011
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group 2011 group 2010 company 2011 company 2010 i i i i
Sharesinsubsidiaryundertakings,atcost 102 102 11,083,733 11,083,671Interestinassociatedundertakings,atcost 163 163 163 163 265 265 11,083,896 11,083,834
Themovementsduringtheyearwereasfollows:
shares in subsidiary undertakings (note 25)Atbeginningofyear 102 102 11,083,671 10,651,016Additions - - 62 432,655Atendofyear 102 102 11,083,733 11,083,671
shares in associated undertakings (note 25)Atbeginningofyear 163 163 163 163Additions - - - -Atendofyear 163 163 163 163
12. Debtors
group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000
amounts falling due within one year Tradedebtors 75,965 65,172 35,171 28,439Amountsowedbysubsidiaryundertakingnotconsolidated(note28) 517 751 517 751Amountsowedbyothersubsidiaryundertakings - - 1,760 1,014Amountsowedbyassociatedundertaking(note28) 251 331 251 331Corporationtaxrepayable - 3,024 - 3,029Otherdebtors 5,195 3,268 4,320 1,617PrizeBondsheld 1,288 1,393 600 705Prepaymentsandaccruedincome 29,019 24,498 3,649 5,129 112,235 98,437 46,268 41,015amounts falling due after more than one year Amountsowedbysubsidiaryundertakings - - 21,456 22,592 112,235 98,437 67,724 63,607
11. Financial Fixed Assets
notes to the financial statements for the year ended 31 december 2011
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notes to the financial statements for the year ended 31 december 2011
group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000
Cashatbank 30,679 35,234 21,793 15,329Cashinhand 193,210 258,212 193,210 258,212 223,889 293,446 215,003 273,541Termdeposits 229,864 280,059 229,864 280,059Less:Amountsheldintrust (303,689) (375,427) (303,689) (375,427) 150,064 198,078 141,178 178,173
14. Creditors
group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000
amounts falling due within one year Tradecreditors 45,362 49,927 14,438 12,598Amountsowedtosubsidiaryundertakings - - 39,911 30,485Othercreditors 14,276 11,438 5,714 3,416Taxationandsocialwelfare(note15) 17,009 19,832 13,986 15,659Accruals 98,730 103,466 77,812 93,962Deferredincome–capitalgrants(note16) 102 102 102 102Termloan 1,000 1,000 - -Bankoverdraft 2,461 1,736 - -Deferredpostageincome 12,632 13,089 12,632 13,089 191,572 200,590 164,595 169,311
Thebankoverdraftisrepayableondemand.ThetermloanissecuredbywayofadebentureovertheassetsoftheGiftVoucherShop.Itisrepayablein2012.
15. Taxation and Social Welfare
group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000
Corporationtaxpayable 1,906 - 794 -IncometaxdeductedunderPAYE 6,044 7,428 5,464 7,020Payrelatedsocialinsurance 6,194 6,416 6,042 6,229Valueaddedtax 2,607 5,305 1,436 1,909Professionalserviceswithholdingtax 258 683 250 501 17,009 19,832 13,986 15,659
13. Cash at Bank and In Hand
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notes to the financial statements for the year ended 31 december 2011
16. Creditors
group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000
amounts falling due after more than one year Deferredincome–capitalgrants 3,461 3,563 3,461 3,563Termloan - 1,000 - - 3,461 4,563 3,461 3,563 Themovementsongrantswereasfollows: Atbeginningofyear 3,665 3,767 3,665 3,767Amortisedtoprofitandlossaccount (102) (102) (102) (102)Atendofyear 3,563 3,665 3,563 3,665Transferredtocreditors:amountsfalling duewithinoneyear (102) (102) (102) (102) 3,461 3,563 3,461 3,563
17. Provisions for Liabilities
2011 2010 i’000 i’000
group and company Provisionsforbusinessrestructuring 39,432 46,820
Themovementsduringtheyearwereasfollows:Atbeginningofyear 46,820 49,885Chargefortheyear(note4) - 20,000Utilisedduringtheyear (7,388) (23,065)Atendofyear 39,432 46,820
Theprovisionforbusinessrestructuringat31December2011includes€20,386,000(2010:€27,774,000)inrelationtobusinessrestructuringredundancycosts(relatedrestructuringisanticipatedtobecompletedby31December2013),and€19,046,000(2010:€19,046,000)inrelationtotheintroductionofanEmployeeShareOwnershipPlan(ESOP).
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group and company
Thepensionentitlementsofemployeesariseunderanumberofdefinedbenefitanddefinedcontributionpensionschemes,theassetsofwhicharevestedinindependenttrusteesappointedbytheCompanyforthesolebenefitofemployeesandtheirdependents.Annualcontributionsarebasedontheadviceofaprofessionallyqualifiedactuary.
Theamountschargedduringtheyeartooperatingcostswereasfollows:
2011 2010 i’000 i’000 Definedbenefitschemes–currentservicecost 44,600 39,800Ex-gratiaschemes–currentservicecost 1,000 1,000Definedcontributionscheme 980 1,152Recognisedintheprofitandlossaccount 46,580 41,952
Pastservicecostsof€5,410,000(2010:€14,762,000)aroseduringtheyear.Theseweredischargedthroughtheutilisationoftherestructuringprovision(note17)andhadnoimpactontheprofitandlossaccountfortheyearended31December,2011or2010.Contributionspayabletopensionschemesandincludedincreditorsat31December2011amountedto€1,759,000(2010:€nil)andwerepaidinJanuary2012.
Thepensioncostsofthedefinedbenefitschemesareassessedinaccordancewiththeadviceofanindependentprofessionallyqualifiedactuary.Themostrecentactuarialvaluationswerecarriedoutat1January2011usingtheattainedagemethodandatthatdateweresufficienttocover79%oftheaccruedliabilities.Theprincipalactuarialassumptionwasthat,overthelongterm,theannualrateofreturnoninvestmentswouldbe2.0%higherthantheannualincreaseinpensionableremuneration.Theactuarialvaluationof1January2011recommendedacontributionrateof14.4%ofpensionableremuneration,asaninterimcontributionrate,pendingfinalisationofanagreementbetweentheCompanyandthemembersoftheschemesonacourseofactiontocomplywiththeMinimumFundingStandard(MFS)asissuedbythePensionsBoard.Theactuarialvaluationsarenotavailableforpublicinspectionbuttheresultsofthevaluationshavebeenadvisedtothemembersoftheschemes.
ThevaluationsofthepensionschemesusedforthepurposeofFRS17accountingentriesanddisclosureshavebeenbasedonthemostrecentactuarialvaluationsasidentifiedaboveandupdatedbytheindependentactuaryto31December2011.Schemeassetsarestatedattheirmarketvalueatthebalancesheetdate.
ThefinancialassumptionsusedtocalculatetheretirementbenefitliabilitiesunderFRS17wereasfollows:
2011 201o 2009
Valuationmethod ProjectedUnit ProjectedUnit ProjectedUnitDiscountrate 5.25% 5.50% 5.75%Inflationrate 2.00% 2.00% 2.00%Increasetopensionsinpayment 2.60% 2.90% 3.25%Pensionablesalaryincreases 2.60% 2.90% 3.25%Thelongtermexpectedratesofreturnontheassets ofthepensionschemewere:Equities 8.25% 8.50% 9.00%Bonds 3.75% 4.00% 4.00%Other 4.25% 5.10% 6.00%
18. Pensions and Similar Obligations
notes to the financial statements for the year ended 31 december 2011
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notes to the financial statements for the year ended 31 december 2011
18. Pensions and Similar Obligations (cont.)
Theassumptionsrelatingtolongevityunderlyingthepensionliabilitiesatthebalancesheetdatearebasedonstandardactuarialmortalitytablesandincludeanallowanceforfutureimprovementsinlongevity.Theassumptionsareequivalenttoexpectinga65-yearoldtoliveforanumberofyearsasfollows:
2011 2011 201o 201o male female male female
life expectancy at 65CurrentPensioners–aged65 85.7 87.0 85.5 86.8FuturePensioners–aged40 88.6 89.5 88.5 89.4
Themarketvalueoftheassetsofthedefinedbenefitschemesat31December2011,2010and2009were:
2011 201o 2009 e’00o e’00o e’00o
Equities 925,700 1,068,800 916,100Bonds 681,100 650,500 625,100Other 153,172 123,445 112,400Fairvalueofpensionschemes’assets 1,759,972 1,842,745 1,653,600 Presentvalueoffundeddefinedbenefitobligations (2,230,700) (2,199,400) (2,045,000)Presentvalueofunfundeddefinedbenefitobligations (12,866) (11,843) (11,852)Presentvalueofdefinedbenefitobligations (2,243,566) (2,211,243) (2,056,852)Pensionliability (483,594) (368,498) (403,252)
movement in fair value of pension schemes’ assetsFairvalueofpensionschemes’assetsatbeginningofyear 1,842,745 1,653,600Expectedreturnonplanassets 122,400 113,400Actuarial(loss)/gain (185,500) 96,000Employercontributions 55,994 66,956Members’contributions 4,400 4,500Benefitspaid (80,067) (91,711)Fairvalueofpensionschemes’assetsatendofyear 1,759,972 1,842,745
movement in present value of defined benefit obligationsDefinedbenefitobligationsatbeginningofyear (2,211,243) (2,056,852)Currentservicecost (45,600) (40,800)Pastservicecost (5,410) (14,762)Interestcost (120,850) (117,350)Members’contributions (4,400) (4,500)Benefitspaid 80,067 91,711Actuarialgain/(loss) 63,870 (68,690)Definedbenefitobligationsatendofyear (2,243,566) (2,211,243)
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notes to the financial statements for the year ended 31 december 2011
18. Pensions and Similar Obligations (cont.)
2011 201o e’00o e’00o
other finance income / (expense)Interestonschemeliabilities (120,850) (117,350)Expectedreturnonschemes’assets 122,400 113,400 1,550 (3,950)
Theexpectedreturnonschemeassetsiscalculatedbasedonthevalueoftheschemes’assetsatthebeginningofthefinancialyear.Theactuarialgainsandlossesareanalysedasfollows:
2011 201o e’00o e’00o
amounts recognised in statement of total recognised gains and losses Differencebetweenexpectedandactualreturnonassets (185,500) 96,000Experiencegainsandlossesonschemesliabilities 63,870 (68,690)Actuarial(loss)/gainrecognised (121,630) 27,310
Theactualreturnonschemes’assetsin2011wasalossof€63m(2010:gainof€209m).Thecumulativeactuarialgainsandlossesrecognisedinthestatementoftotalrecognisedgainsandlossesat31December2011isalossof€265m.
Employercontributionsin2012excludingpotentialpastservicecostsareexpectedtobe€49m.
2011 2010 2009 2008 2007 i’000 i’000 i’000 i’000 i’000
history of actuarial gains and losses
Differencebetweenexpectedandactualreturnonassets (185,500) 96,000 125,700 (768,161) 188,294
Expressedasapercentageofschemes’assets (11%) 5% 8% (53%) 9%
Experiencegainsandlossesonschemes’liabilities 63,870 (68,690) 62,090 (8,400) -
Expressedasapercentageofschemes’liabilities 3% (3%) 3% - -
Totalactuarialgainsand(losses) (121,630) 27,310 187,790 (486,565) 63,141
Expressedasapercentageofschemes’liabilities (5%) 1% 9% (24%) 3%
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notes to the financial statements for the year ended 31 december 2011
19. Share Capital
2011 201o e’00o e’00o
group and companyAuthorised:80,000,000OrdinarySharesof€1.25each 100,000 100,000Allotted, called up and fully paid:54,590,946OrdinarySharesof€1.25each 68,239 68,239
On14January2003,pursuanttoSection26oftheEconomicandMonetaryUnionAct,1998,theCompany’sshareswererenomalisedfrom€1.269738to€1.25pershareandanamountof€877,000wastransferredtoacapitalconversionreservefund.
20. Profit and Loss Account
group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000
Atbeginningofyear (106,305) (108,933) (145,068) (148,018)Profit/(loss)forthefinancialyear 347 (24,682) (2,528) (17,860)Impairmentoffinancialasset - - - (6,500)Otherrecognised(losses)/gains (121,630) 27,310 (121,630) 27,310Atendofyear (227,588) (106,305) (269,226) (145,068)
21. Reconciliation of Shareholders’ Deficit
group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000
Atbeginningofyear (37,189) (39,817) (75,952) (78,902)Profit/(loss)forthefinancialyear 347 (24,682) (2,528) (17,860)Impairmentoffinancialasset - - - (6,500)Otherrecognised(losses)/gains (121,630) 27,310 (121,630) 27,310Atendofyear (158,472) (37,189) (200,110) (75,952)
22. Minority Interest
total i’000
groupAccumulatedlossesat31December2010 7,444Minorityinterestshareofprofit (1,285)Accumulatedlossesat31December2011 6,159
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notes to the financial statements for the year ended 31 december 2011
23. Gross Cash Flows
2011 201o e’00o e’00o
reconciliation of operating profit to net cash inflow from operating activitiesOperatingprofit 2,216 5,838Depreciationandamortisationofgoodwill 26,826 25,245(Profit)/lossonsaleoftangiblefixedassets (131) 14Paymentsinrelationtoprovisionforbusinessrestructuring (9,025) (23,065)Cashpensioncost (4,984) (11,394)Capitalgrantsamortised (102) (102)Increaseinoperatingdebtors (16,822) (35,206)(Decrease)/increaseinoperatingcreditors (13,425) 27,200Net cash (outflow) from operating activities (15,447) (11,470) taxationTaxrefunded/(paid) 2,796 (2,402) capital expenditure and financial investmentPurchaseoftangiblefixedassets (32,040) (40,678)Disposaloftangiblefixedassets 262 88 (31,778) (40,590) acquisitions and disposals Acquisitionofsubsidiaryundertakings(note25) (3,310) (14,572)Investmentinjointventure - (6,500) (3,310) (21,072) financingTermloan(repaid)/received (1,000) 2,000 management of liquid resources(notea) Decreaseintermdeposits (50,195) (9,043)
Notea:Liquidresourcescomprisetermdepositswithamaturitynoticeperiodofmorethanoneday.
24. Analysis of Net Funds
at beginning of year cash flows at end of year e’00o e’00o e’00o
Cashatbankandinhand 293,446 (69,557) 223,889Bankoverdraft (1,736) (725) (2,461)Amountsheldintrust (375,427) 71,738 (303,689) 1,456Termdeposits 280,059 (50,195) 229,864Total 196,342 (48,739) 147,603
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notes to the financial statements for the year ended 31 december 2011
25. Subsidiary and Associated Undertakings
name nature of business % holding registered office
subsidiary undertakings held directly by the company
AnPostNationalLottery Operationofthe 80% GeneralPostOfficeCompany(note28) NationalLottery O’ConnellStreet Dublin1
PostpointServicesLimited Mobiletopups 100% GeneralPostOffice O’ConnellStreet Dublin1
GVSGiftVoucherShopLimited Retailgiftvouchers 53.6% GeneralPostOffice O’ConnellStreet Dublin1
PrintPostLimited Highvolumeprinting 100% GeneralPostOffice O’ConnellStreet Dublin1
AnPostBillPostProcessing Billpaymentprocessing 100% GeneralPostOfficeServicesLimited O’ConnellStreet Dublin1
AnPostGeoDirectoryLimited Databaseservices 51% GeneralPostOffice O’ConnellStreet Dublin1
PrecisionMarketingInformation Provisionofmarketingdata,database 100% GeneralPostOfficeLimited servicesandbusinessdirectories O’ConnellStreet Dublin1
ArcadePropertyCompany Propertydevelopmentandletting 100% GeneralPostOfficeLimited O’ConnellStreet Dublin1
Prince’sStreetProperty Dormant 100% GeneralPostOfficeCompanyLimited O’ConnellStreet Dublin1
PostConsultInternational Computersoftwareservices 100% GeneralPostOfficeLimited O’ConnellStreet Dublin1
Post.TrustLimited Digitalcertificationandsecurity 100% GeneralPostOffice services O’ConnellStreet Dublin1
TranspostLimited Courieranddistribution 100% GeneralPostOffice O’ConnellStreet Dublin1
KompassIrelandPublishers Dormant 100% GeneralPostOfficeLimited O’ConnellStreet Dublin1
AnPost(NI)Limited Holdingcompany 100% StokesHouse CollegeSquareEast Belfast
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notes to the financial statements for the year ended 31 december 2011
25. Subsidiary and Associated Undertakings (cont.)
name nature of business % holding registered office
subsidiary undertakings held indirectly through a subsidiary undertaking
AirBusinessLimited Distributionandmagazine 100% 4,TheMerlinCentre subscriptionservices AcrewoodWay St.Albans Herts,UK
TheGiftVoucherShopLimited Retailgiftvouchers 53.6% 4,TheMerlinCentre AcrewoodWay St.Albans Herts,UK
Jordan&Co.InternationalLimited Distribution 100% 4,TheMerlinCentre AcrewoodWay St.Albans Herts,UK
OneDirect(Ireland)Limited InsuranceBroker 100% GeneralPostOffice O’ConnellStreet Dublin1
associated undertaking held directly by the company
ThePrizeBondCompanyLimited Administrationofthe 50% GeneralPostOffice(note28) PrizeBondScheme O’ConnellStreet Dublin1
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notes to the financial statements for the year ended 31 december 2011
25. Subsidiary and Associated Undertakings (cont.)
TheGroupacquired,throughitsUKsubsidiaryAirBusinessLimited,thenetassetsandbusinessofQuadrantSubscriptionServiceson31May2011.Theassetsacquired,allofwhichweretangiblefixedassets,amountedto€0.7mandtheconsiderationwaspaidforincashof€3.3mresultingingoodwillarisingontheacquisitionof€2.6m.Thedirectorsbelievethattherewasnomaterialdifferencebetweenthebookvaluesoftheassetsandliabilitiesacquiredandtheirfairvaluesatthedateofacquisition.Goodwillarisingonacquisitionisbeingwrittenoffoveraperiodof10years.
Theresultsoftheacquiredbusinesshavebeenincludedintheconsolidatedprofitandlossaccountfromthedateofacquisitionandamountedtoturnoverof€7.8m,operatingcostsof€7.6mandoperatingprofitsof€0.2m.
AirBusinessLimited,Jordan&Co.InternationalLimitedandTheGiftVoucherShopLimitedareincorporatedinandoperateinEngland&Wales.AnPost(NI)LimitedisincorporatedinandoperatesinNorthernIreland.
AllotherundertakingsareincorporatedinandoperateintheRepublicofIreland.Allshareholdingsconsistofordinarysharecapital.
AnPostNationalLotteryCompanycarriesonthebusinessofoperatingtheNationalLotteryunderlicencefromtheMinisterforPublicExpenditureandReforminaccordancewiththeprovisionsoftheNationalLotteryAct,1986.20%oftheissuedsharecapitalisheldbytheMinisterforPublicExpenditureandReform.
ThePrizeBondCompanyLimitedcarriesonthebusinessofadministeringthePrizeBondSchemeundercontractfromtheNationalTreasuryManagementAgency.ThefollowingsubsidiarieswillavailofthefilingexemptionavailableunderSection17oftheCompanies(Amendment)Act,1986,wherebytheywillannexthefinancialstatementsofAnPosttotheirannualreturns:
PostConsultInternationalLimited;PrintPostLimited;Post.TrustLimited;TranspostLimited;PrecisionMarketingInformationLimited;Prince’sStreetPropertyCompanyLimited;AnPostBillPostProcessingServicesLimited;KompassIrelandPublishersLimitedandPostpointServicesLimited.
26. Lease Commitments
Annualcommitmentsunderoperatingleaseswereasfollows:
2011 2010 land & equipment & land & equipment & buildings motor vehicles total buildings motor vehicles total i’000 i’000 i’000 i’000 i’000 i’000
group Expiringwithinoneyear 808 3,640 4,448 943 4,676 5,619Expiringafteroneyearandbeforefiveyears 3,691 8,698 12,389 3,749 7,787 11,536Expiringafterfiveyears 4,275 6 4,281 4,374 6 4,380 8,774 12,344 21,118 9,066 12,469 21,535
company Expiringwithinoneyear 293 3,606 3,899 583 4,664 5,247Expiringafteroneyearandbeforefiveyears 2,752 8,410 11,162 2,708 7,589 10,297Expiringafterfiveyears 3,335 - 3,335 3,799 - 3,799 6,380 12,016 18,396 7,090 12,253 19,343
Therewerenomaterialfinanceleasecommitmentseitherat31December2011or2010orwhichwereduetocommenceafterthatdate.
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notes to the financial statements for the year ended 31 december 2011
27. Capital CommitmentsFuturecapitalexpenditureapprovedbythedirectorsbutnotprovidedforinthefinancialstatementswasasfollows:
group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000
Contractedfor 18,500 28,823 18,500 28,823Authorisedbutnotcontractedfor 1,861 14,636 1,861 14,636 20,361 43,459 20,361 43,459
28. Related Party Disclosures and Controlling Party
Controlling Party
TheGroupwascontrolledthroughouttheyearbytheMinisterforCommunications,EnergyandNaturalResourceswhoholdstheentireissuedsharecapitalofAnPostexceptfromoneordinarysharewhichisheldbytheMinisterforPublicExpenditureandReform.
transactions with related undertakings
An Post National Lottery Company
TheGroupprovidesAnPostNationalLotteryCompany,anundertakingnotconsolidated,withmanagementanddeliveryservices.Suchservicesarecarriedoutonanarm’slengthbasisor,whererequired,inaccordancewiththetermsofthelicencegrantedbytheMinisterforPublicExpenditureandReformtooperatetheNationalLottery.TheCompanyalsoprovidesagencyservicestoAnPostNationalLotteryCompanywherebytheCompanymakessalesandpaysprizesonbehalfofAnPostNationalLotteryCompanyinaccordancewiththestandardtermsandconditionsandremunerationstructurecommontoallofAnPostNationalLotteryCompany’sagents.Groupturnoverfortheyearincludes€5,859,000(2010:€6,112,000)inrespectofservicesprovidedtoAnPostNationalLotteryCompany.Theseamountsareinclusiveofamanagementfeeof€2,665,000(2010:€2,809,000)payabletotheCompanyinaccordancewiththetermsofthelicencetooperatetheNationalLottery.
ThecostsofstaffworkinginAnPostNationalLotteryCompanyarerechargedfromAnPostatcostandamountedto€8,533,000fortheyearended31December2011(2010:€8,304,000).
TheamountowedbyAnPostNationalLotteryCompanytotheCompanywas€517,000at31December2011(2010:€751,000).
AnPosthasagreedtoguaranteetheperformancebyAnPostNationalLotteryCompanyofitsobligationsunderthelicencefortheholdingoftheNationalLotterygrantedbytheMinisterforPublicExpenditureandReform.AnPosthasprovidedtheguarantee,themaximumliabilityofwhichamountsto€10million,forthedurationofthelicence.
The Prize Bond Company Limited
UnderthetermsofacontractwithThePrizeBondCompanyLimited,theCompanycarriesoutcertainaspectsoftheadministrationofthePrizeBondScheme.FeesearnedbytheCompanyinrespectofsuchservicesamountedto€2,930,000fortheyearended31December2011(2010:€3,430,000).TheamountowedbyThePrizeBondCompanyLimitedtotheCompanywas€251,000at31December2011(2010:€331,000).At31December2011theGroupheld€1,288,000(2010:€1,393,000)ofPrizeBonds.
Loft Beck Limited (formerly Postbank Ireland Limited)
During2010,theshareholdersinPostbankIrelandLimited,BGLBNPParibasFortisandAnPostdecidednottocontinuethejointventurebeyondthecalendaryear2010andaccordinglythecompanyaccountsforAnPostto31December2010recognisedthisandreducedthecarryingvalueoftheinvestmentto€nil.LoftBeckLimited(formerlyPostbankIrelandLimited)isinvoluntaryliquidationfrom25March2011.Theliquidationprocesswilllikelylastforanumberofyears.AnPostreceivedapaymentfromtheliquidatorof€2,750,000representingsurplusfundsontheliquidation.Theliquidatorreceivedanindemnityentitlinghimtoreclaimthisshouldtheneedarise.
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28. Related Party Disclosures and Controlling Party (cont.)
transactions with government departments and other state bodies
TheGroupprovides,intheordinarycourseofbusiness,postage,agency,remittanceandcourierservicestovariousGovernmentdepartmentsandotherStatebodiesonanarmslengthbasis.TheGroupalsoconductsdaytodaybankingservicesandtreasurywithbankinginstitutionsbothownedandguaranteedbytheState.
29. Contingencies
Group and Company
Therewerenocontingentliabilitiesorguaranteesat31December2011or2010inrespectofwhichmateriallossesareexpectedotherthanasdisclosedelsewhereinthefinancialstatements.
30. Subsequent Events
Group and Company
On8February2012,ComRegservedlegalproceedingsonAnPostunderthetermsoftheEuropeanCommunities(PostalServices)RegulationsAct2002seekinganorderfromtheHighCourttoimposeafinancialpenaltyonAnPostforallegednoncompliancewiththequalityofservicestandards.TheCompanyisvigorouslydefendingtheactionandhasrecognisednoliabilityinthisregardasat31December2011.
31. Board Approval
ThefinancialstatementswereapprovedbytheBoardofDirectorson22March2012.
notes to the financial statements for the year ended 31 december 2011
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five year financial summary
Consolidated Profit and Loss Account
2011 2010 2009 2008 2007 i’000 i’000 i’000 i’000 i’000
Turnover 806,714 805,120 804,216 850,043 875,983Operatingcosts (804,498) (799,282) (798,475) (818,808) (846,857) operating profit 2,216 5,838 5,741 31,235 29,126 Assetdisposals - - - - 1,516Businessrestructuring - (20,000) - - -Shareofresultsofjointventure - (6,590) (10,750) (9,685) (12,475)Otherfinanceincome/(expense) 1,550 (3,950) (20,560) 18,340 31,250Profit/(loss)beforetaxation 3,766 (24,702) (25,569) 39,890 49,417
Consolidated Balance Sheet
2011 2010 2009 2008 2007 i’000 i’000 i’000 i’000 i’000
Fixedassets 291,129 279,323 242,704 211,465 206,682Netcurrentassets 70,727 95,925 166,423 235,998 235,556Otherliabilities (42,893) (51,383) (53,550) (63,705) (73,130)Netassetsexcludingpensionliability 318,963 323,865 355,577 383,758 369,108Pensionliability (483,594) (368,498) (403,252) (582,300) (114,300)Net(liabilities)/assetsincludingpensionliability (164,631) (44,633) (47,675) (198,542) 254,808Capitalandreserves (164,631) (44,633) (47,675) (198,542) 254,808
Ratios
2011 2010 2009 2008 2007
Operatingprofitaboveas% 0.27% 0.73% 0.71% 3.67% 3.32%ofturnover
Operatingprofitaboveas% 0.68% 1.68% 1.55% 8.30% 8.47%ofaverageshareholders’funds beforepensionliability
Staffandpostmasters’costsas% 71.65% 72.0% 73.76% 73.16% 70.96%ofoperatingcostsbeforeexceptionalitem
Currentassetsas% 136.0% 148.1% 190.50% 242.86% 235.43%ofcurrentliabilities
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operational statistics
2011 2010 2009 2008 2007
Letterscorerevenueindex 81.4 87.5 94.3 104.8 107.0(2005=100)(note1)
Note1:Thisindexreflectschangesinletterscorerevenueandexcludesrevenuefromelections,referenda,foreignadministrationsineachyearaswellastheimpactofchangestopublishedtariffs.
System Size
2011 2010 2009 2008 2007
No.ofdeliverypoints(millions) 2.235 2.231 2.214 2.184 2.131Postofficenetwork: Companypostoffices 57 57 57 61 74Sub-postoffices 1,099 1,107 1,179 1,187 1,212Postalagencies 175 185 177 178 172 1,331 1,349 1,413 1,426 1,458 No.ofmotorvehicles 2,778 2,778 2,782 2,941 2,967
savings services (note2) €m €m €m €m €mValueofFundsat31December 12,623 11,364 8,231 6,701 5,617 counters: business value Post Office Savings ServicesSavingsBankdeposits 1,122 1,242 905 1,306 814SavingsBankwithdrawals (973) (813) (802) (850) (1,063)SavingsCertificatesissued 822 1,354 1,215 749 467SavingsCertificatesrepaid (616) (597) (1,041) (660) (750)InstalmentSavingsissued 97 100 110 114 107InstalmentSavingsrepaid (113) (113) (102) (111) (117)SavingsBondsissued 1,401 2,137 1,466 813 574SavingsBondsrepaid (937) (706) (704) (589) (704)NationalSolidarityBondissued 294 349 - - -NationalSolidarityBondrepaid (31) (7) - - - Pensions, allowances and social welfare benefitsPaidduringtheyear 9,703 9,975 9,928 8,265 7,610
’000 ’000 ’000 ’000 ’000billpay volumes 24,930 25,220 25,170 24,490 24,786
tv licence sales 1,426 1,432 1,436 1,430 1,407
Note2:TheassetsandliabilitiesoftheSavingsServicesvestintheMinisterforFinanceand,accordingly,arenotincludedinthefinancialstatementsoftheCompany.
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