an post/media/documents/public/annual-reports/member... · an post annual report 2012 DOING MORE C O M P E T I N G C H A N G I N G C O N T R I B U T I N G Mison,i MMV aidlsod,iouro

an post an

nual report 2012

Contents

3 Mission,VisionandValues

4 BoardofDirectorsandCorporateInformation

6 Chairman(Designate)’sStatement

8 Management

10 ChiefExecutive’sReview

16 FinancialReview

18 UniversalService

21 Sustainability

25 StampIssuesandPhilatelicPublications

29 IndextotheFinancialStatements

2 AN POST ANNUAL REPORT 2012

an post annual report 2012

DOINGMORE

COMPETING

CHANGING CONTR

IBUT

ING

3AN POST ANNUAL REPORT 2012

our mission

To provide world class postal, distribution and financial services with unrivalled local community access and global connections.

our vision

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 values

Quality Customer ServicePutthecustomerfirstineverythingwedo,consistentlydeliveringworldclassservicequality.

Commercial SuccessAchievecommercialsuccess,earningprofitsthatcansustainanddevelopthebusiness.

Cost Competitiveness & EfficiencyRunacostcompetitive,efficientoperation.

Respect & Personal ResponsibilityRespecteachotherandtakepersonalresponsibility.

Respected Corporate CitizenCarefortheenvironmentandbeengagedinthecommunityasrespectedcorporatecitizens.

Innovation & ChangeContinuallyinnovate,adaptandimplementchangesuccessfully.


Board of direCtors and Corporate information

1. Christoph MuellerChairman DesignateAnnounced as Chairman 26 March 2013MrMuellerjoinedAerLingusasitsChiefExecutiveOfficer(CEO)inSeptember2009.HepreviouslyheldthepositionofExecutiveAviationDirectoratTUITravelplc.,aFTSE100company.MrMuellerpreviouslyheldseniorexecutivepositionsinanumberofcompaniesintheaviationindustryincludingDaimlerBenzAerospaceandLufthansaAG.HeservedastheChiefFinancialOfficerofDHLWorldwidefrom2002to2004andbecameamemberoftheExecutiveCommitteeofDeutschePostAGin2004aftertheacquisitionofDHLbyDeutschePostAG.HeisamemberoftheBoardofTourismIreland.HehasanMBAfromtheUniversityofCologneandhealsocompletedanAdvancedManagementProgramatHarvardBusinessSchool.

2. Noel Adamson Employee DirectorAppointed 1 November 2012MrAdamsonjoinedthePostOfficein1981asaPostmanintheCentralSortingOfficeinDublin’sSheriffStreet.HehasbeenemployedasaPostpersoninFairviewDeliveryServicesUnit3forthelast18years.ThroughouthisemploymenthehasbeenanactivememberoftheCommunicationsWorkers’Union.HeisthecurrentchairmanoftheStandingOrdersCommitteeandhealsoholdsthepositionsofAssistantSecretaryandHealth&SafetyOfficerwiththeDublinPostalDeliveryBranch.

3. Patrick ComptonEmployee Director - 1Appointed 1 November 2012; Sixth termMrComptonhasworkedinthepostalserviceforthepast40yearsandhiscurrentpositionisthatofPartnershipCo-ordinator,basedinRoscommon.HewasamemberoftheNationalExecutiveoftheCommunicationsWorkersUnionfor22yearsanditsPresidentin1986.HewasalsoadirectorofThePrizeBondCompanyLimitedformanyyears.HeisactiveincommunitydevelopmentinhislocalareaandheistheCountyRoscommonGAACoaching&GamesDevelopmentOfficer.

4. Donal Connell, C.ENg., f.I.E.I., b.E.Director - 2, 3 Appointed on 14 August 2006MrConnellwasappointedasChiefExecutiveon14August2006.HebeganhiscareerintheDepartmentofPostsandTelegraphsandhasheldseniormanagementpositionsinUnitrodeCorporation,3ComCorporationandMaxtorIrelandwherehewasGeneralManagerpriortojoiningAnPost.Heisanon-executiveDirectorofXilinxCorporation’sEuropeanBoardandheisChairmanofAnPostNationalLotteryCompany.

5. Thomas DevlinEmployee DirectorAppointed 1 November 2012; Third TermMrDevlinbeganhiscareerinthePostOfficein1976whenhejoinedtheDepartmentofPostsandTelegraphsasaJuniorPostmanworkingasamessengerintheMinister’sOffice.HeiscurrentlyemployedasaDeliveryServiceManagerinMalahideDeliveryServiceUnit,Co.Dublin.AnactivememberoftheCommunicationsWorkers’Union,heservedontheNationalExecutivefortwoyearsandwasChairmanoftheSDSDublinMotorDrivers’Branchfrom1996to2004.

6. Paul Henry A.C.A., M. Accounting, b.A. (bus & Econ)Director - 1Appointed 15 September 2011MrHenry,aCharteredAccountant,hasworkedasaSeniorInternalAuditManagerandSeniorFinancialAnalystwithDublinAirportAuthorityPLCsince2008.PriortothatheworkedwithPriceWaterhouseCoopers,DublinwithwhomhetrainedasaCharteredAccountant.

7. William MooneyEmployee DirectorAppointed 1 November 2012MrMooneyjoinedthePostOfficein1982asaJuniorPostman.HeiscurrentlyemployedasaPostOfficeClerkintheGPO.HeisamemberoftheNationalExecutiveoftheCommunicationsWorkers’UnionandhealsoholdsthepositionofSecretaryoftheDublinPostalClerksBranchCommittee.

8. Martina O’ConnellEmployee DirectorAppointed 1 November 2012MartinaO’ConnelljoinedAnPostin1993asanAuxiliaryPostPersonandisnowworkingasaPostalOperativeinCork’sSouthCityDeliveryOffice.AnactivememberoftheCommunicationsWorkers’UnionsinceshejoinedtheCompany,MartinahasbeenamemberoftheNationalExecutiveCouncilsince2002andservesonanumberofsubcommittees.

1.

2.

5.

6.

3.

4.

7.

8.


9. Peter Ormond b.A. (bus. Mgt.)DirectorAppointed 8 March 2011MrOrmondistheMarketingManagerwithMidIrelandTourismsinceMarch2010priortowhichhewastheCommunityServicesProgrammeManagerforKilcormacDevelopmentAssociation.Hisotherworkexperiencesareinauctioneering,insalesandmarketing,andinlogistics.HeisamemberofOffalyCountyCouncilandwasitsChairmanin2005/2006.HeisalsoamemberoftheEducationFinanceBoard.

10. John Quinlivan b.SC. (Mgt. & Law), M.SC. (SPL. PLg.), Dip. In Public Admin.Director - 3Appointed 24 June 2008; Second TermMrQuinlivanhashadalengthycareerinlocalgovernment,servinginseniorpositionsinninecounties,including15yearsasLouthCountyManager.HeservedforfiveyearsasamemberoftheNationalRoadsAuthorityandhealsoservedasamemberoftheLocalGovernmentManagementServicesBoard,theLocalGovernmentComputerServicesBoardandAnComhairle.

11. William Scally M.A. barrister-at-LawDirectorAppointed 11 December 2012MrScallyhashadalengthycareerinEconomicsandPublicPolicy.Upuntil2011heworkedonacooperativebasisasanindependentpublicpolicyandpublicaffairsconsultantintheCIPAframeworkwithawidevarietyofIrishbusinessesandrepresentativebodies.HewasleadauthorofFixingFinance,the2010InstituteofInternationalandEuropeanAffairspublication.MrScallyhaslecturedwidelyontheIrishGovernmentandpoliticalprocess.HeworkedinIrishSugarformanyyearsandasapublicpolicyandeconomicadvisortoseveralIrishGovernments.HealsoservedontheboardofForfás.

12. Lorraine Tormey Postmaster DirectorAppointed 1 January 2013MsTormeyhasworkedinthefamilypostofficebusinessinRathowen,CoWestmeathallherlifeandshewasappointedPostmistresstherein2001.SheisalsoPostmistressofAustinFriarStreetPostOfficeinMullingar.MsTormeyisSecretaryoftheWestmeathBranchoftheIrishPostmasters’Union(IPU);DirectorandCompanySecretaryofRathowenCommunityDevelopmentandsheisinvolvedinabroadvarietyoflocalbusinessandcommunitydevelopmentinitiatives.

13. James Wrynn bSC.bCOMM., MbA.Director - 1Appointed 15 September 2011MrWrynnisaformerSeniorLecturerinStrategicManagementinDITandHeadoftheDepartmentofAdministrativeStudiesinDIT’sFacultyofBusiness.HeservedontheBoardofESBformorethantenyearsandduringhistermofofficeservedasDeputyChairpersonfrom1995–2000.HealsochairedESBBoardCommitteesonInternationalInvestmentandStrategicResponsetoDeregulation.

11.

12.

9.

10.

13.

Secretary JackDempsey

Registered Office GeneralPostOfficeO’ConnellStreetDublin1

AuditorKPMG,CharteredAccountants

bankers BankofIreland

Solicitors Matheson

Registered Number98788

Key To board Committees 1.AuditAndRisk2.Personnel3.Remuneration


CHairman (designate)’s statement

The contribution of a high quality postal service to a modern economy is essential and accepted throughout the world. Declining traditional mail volume has caused many countries to examine the financial model behind the provision of the Universal Service Obligation. I am aware that An Post has continued to keep abreast of developments, whilst taking action to address the impact of this ongoing decline. In so doing, the group has changed its revenue mix with non-core mail activities increasing steadily year-on-year.

ItisrecognisedthatAnPosthasimproveditscustomerserviceinrecentyears.TheCompanycontinuestoenjoyaverygoodreputationforthequalityofitsinternationalmailservice.


AnPosthasmanyuniqueassets;ithasanunrivalledretailnetwork,amailcollectionanddeliverynetworkwithacountrywidereach,adiversesetofproductsandservices,astrongandtrustedbrandandacommittedandexperiencedworkforce.Despitetheevolutionofthedigitalbusinessenvironment,theseassetsremainrelevanttobothbusinessandpersonalcustomersalike.OneofthekeychallengesfacingtheCompanyistoensurethattheseareappliedinamannerwhichwillensureasustainablefuturefortheorganisation.

Iunderstandthatsignificantchangehastakenplaceoverthelastnumberofyearsandthatnecessarychangeprogrammesareongoing.Myownexperienceindicatesthatsuchchangewillcontinueasthebusinessalignsitselfwithdemandandvolumeinordertoremaincompetitiveandmeetchangingcustomerdemands.Improvedflexibility,efficiency,costeffectivenessandinnovationwillbekeyelementsintheCompany’sdrivetoprovidesuperiorcustomerserviceacrossallaspectsofthebusiness.

AnPosthasplayedapivotalroleintheIrisheconomyandsocietyformanyyears.ItisagreatprivilegeandresponsibilityformetojointheCompanyasChairman.

IlookforwardtoworkingwiththeBoard,ManagementandstaffofAnPosttopositiontheCompanyastheycontinuetodealwithdifficulteconomicandmarketchallengeswhilstexploitingnewcommercialopportunitiesforthecorebusinessandsubsidiarycompanies.

TheCompanywishestothankthosewhoretiredfromtheBoardduringtheyearnamely,JerryCondon,AnneConnolly,PaddyCostello,GerryO’TooleandAlanSloane.ThanksarealsoduetoJohnFitzgerald(formerChairman)andCatherineWoods,bothofwhomretiredinFebruary2013.Theircontributionsduringtheirtermsofofficeareverymuchappreciated.

Christoph Mueller, Chairman (Designate)

DoinG more

The group has changed its revenue mix with non-core mail activities increasing steadily year-on-year.


management

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.


1. Donal Connell, C.ENg., f.I.E.I., b.E.Chief ExecutiveMrConnellwasappointedasChiefExecutiveon14August2006.HebeganhiscareerintheDepartmentofPostsandTelegraphsandhasheldseniormanagementpositionsinUnitrodeCorporation,3ComCorporationandMaxtorIrelandwherehewasGeneralManagerpriortojoiningAnPost.Heisanon-executiveDirectorofXilinxCorporation’sEuropeanBoardandheisChairmanofAnPostNationalLotteryCompany.

2. John Daly, A.C.M.A., M.SC.(MgMT.)Retail Operations DirectorMrDalyjoinedAnPostinDecember1988havingworkedpreviouslyasaManagementAccountantinFÁS.DuringtheearlypartofhiscareerwithAnPost,heworkedintheFinanceDirectorateasaManagementAccountant.HethenheldvariousseniorfinanceandmanagementpositionswithintheRetaildivisionbeforebeingappointedtohiscurrentpositioninOctober2006.HeisChairmanofThePrizeBondCompanyLimited.

3. Jack Dempsey, b.COMM., M.b.A., M.P.A.Company SecretaryMrDempseyjoinedthePostOfficein1968asanExecutiveOfficerintheDepartmentofPostsandTelegraphs.Duringhiscareer,hehasgainedwideexperienceinallaspectsofpostaloperationsandcommercialactivities,bothnationalandinternational,occupyingavarietyofseniormanagementpositionsacrosstheCompany.HewasappointedasCompanySecretaryinMarch2011.

4. Peter gallagher, b.SC., M.b.A., M.INST.DDirector of Strategy and business ExcellenceMrGallagherjoinedAnPostinApril2007asHeadofStrategyandBusinessExcellence.PriortojoiningAnPost,hehadbeenaPartnerinPAConsultingGroup’sGlobalBusinessTransformationPracticewhereheledmajortransformationalandbusinessoperationalimprovementprogrammesforprivate&publicsectorclients.PreviousrolesincludeDirectorofStrategywithKPMGConsultingandBusinessOperationsManager(UK&Ireland)forDellComputerCorporation.

5. Pat Knight, M.SC.(MgMT.), f.C.I.P.D.Human Resources DirectorMrKnightjoinedAnPostinMarch2004asHumanResourcesDirector.Previously,hehadbeenGeneralManagerHumanResourcesatWaterfordCrystal,whichhejoinedin1986andwhereheheldseniorHRroles,bothinIrelandandtheUK.PreviousexperienceincludesworkasaPersonnelOfficerwithBordnaMónaplc.HeisaTrusteeoftheAnPostSuperannuationSchemesandadirectorofAirBusinessLimited.

6. brian McCormick, b.E.(MECH.), M.b.A.Services DirectorMrMcCormickjoinedAnPostinMay2002asStrategyDirectorandwasappointedtohiscurrentpositionofServicesDirectorinOctober2003.PriorexperienceincludesCRHplcandMerrionCorporateFinancewherehewasaDirector.HeisaTrusteeoftheAnPostSuperannuationSchemesandChairmanofOneDirect(Ireland)LimitedandAirBusinessLimited.

7. Liam O’SullivanMails Operations DirectorMrO’SullivanjoinedAnPostin1985.Duringhiscareer,hehasgainedbroadexperienceacrossthefullrangeoftheCompany’sbusiness.HehasheldvariousseniormanagerialandprojectmanagementpositionsintheCompany.HewasappointedasMailProcessingDirectorinJuly2004andalsoservedaperiodasDirectorofCollection&DeliveryChangeProgrammesandOperations.HetookuphiscurrentpositioninApril2009.HeisaDirectorofGeoDirectoryLimited.

8. Peter Quinn, b.COMM., f.C.A., M.b.A.Chief financial OfficerMrQuinnjoinedAnPostinAugust2004.PriortothisheheldseniorfinancialandstrategicpositionsinPJCarrollandCompanyplcandMonaghanMushroomsLimited.HeisaCharteredAccountantandtrainedinpracticewithKPMG.HeisadirectorofAnPostNationalLotteryCompany.

9. Liam SheehanSales and Marketing DirectorMrSheehanjoinedAnPostin2000asGeneralManagerSales&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 AffairsMrWhelanjoinedAnPostinJanuary2005.Havingspentmanyyearsintheaquacultureindustry,hewasresponsibleforpublicrelationsandbrandcommunicationsattheESB.HesubsequentlyheldthepositionofDirector,SalesandMarketingatTheFoodSafetyPromotionBoard.HewasappointedtohiscurrentpositioninOctober2006.


During 2012 the Company maintained its strategic focus, continuing to adapt internal structures, products, service offerings, work practices and workflows to the evolving business environment.

Ourstrategicinvestmentprogrammehaspositionedustocompeteatthehighestlevel,enablingustomeettheever-changingneedsofourcustomersnowandintothefuture.Equally,wecontinuetofocusonareaswhichcangeneratenewandenhancedrevenue.AnPostisnowamongtheworld’sbestpostalserviceprovidersintermsofservicequalityandweremaindedicatedtosustainingthispositiononanongoingbasis.

CHief eXeCUtiVe’s reVieW


WearemidwaythroughourambitiousChangeProgrammesandhavebuiltontheachievementsofpreviousyearsincluding:

• Areductioninannualisedoperatingcostsof€100m

• AcoreCompanyworkforcereductionof1,284fulltimeequivalents(FTE),whileincreasingmailsservicequalitytorecordlevels

• SubstantialgrowthintheturnoverofsubsidiarycompanieswhichincreasedtheircontributiontotheGroup

• Continuedstrongretailperformance

ThisapproachwillcontinueasAnPost,incommonwithotherglobalpostaloperators,dealswithdecliningmailvolumes,increasedelectronicsubstitutionandsignificantchangesinthebusinessenvironment.

financial performanceAGroupoperatinglossof€17.5mwasrecordedfortheyear(2012),againstaprioryearprofitof€2.2m.ThisisthefirsttradinglossincurredbytheGroupsince2003andisnotsustainableinthemediumterm.Thesinglelargestcontributingfactorhasbeentheunprecedenteddeclineintraditionalmaillargelydrivenbytheeconomiccrisis.TheCompanyhasexperiencedareductionof27%involumessincethepeakof2007.Thescaleofthedeclineissimilartothatseeninothercountries.

Mailsrevenuein2012amountedto€501m,1.1%lowerthan2011.TheCompanybenefittedfrompriceincreasesof€6.5mforUSOservicesweighingmorethan50gramsandcertainnon-USOproducts;a9%increaseinthevolumeofparcelsandpacketsandimprovedpricingoninternationalmailpaidthroughTerminalDues.Thevolumeoftraditionalmailfellby5.2%duringthecourseoftheyear;however,therateofdeclinewaslowerinthesecondhalfoftheyear.TheCompanyisbudgetingforafurther5%declineduring2013,whichwefeelisreasonablegivenrecenttrendsandtheongoingeconomicenvironment.

TheRetaildivisionperformedwellwithrevenueat€169mcomparedwith€171.6mthepreviousyear.ProductssuchasSterlingandDollarsalescontributed€4.4m,up13%on2011,compensatingforreducedincomefromtheNTMAcontract,whichcoverstheprovisionofStateSavingsproducts.

TheCompany’ssubsidiariesincreasedtheirrevenueto€111mfrom€80min2011reflectingsolidgrowthintheirrespectiveproductportfolios.EachisinastrongpositionwithintheirparticularmarketandtheybenefitfromtheirassociationwithAnPost.AsAvivaclosedtheirbranchnetwork,theadditionoftheirlocalbranchbusinesstoOneDirect,aswellasthecontinuedgrowthofTheGiftVoucherShoparepositiveindicatorsfortheyearahead.

Mails Quality of ServiceTheCompanyconsistentlyimprovedtheperformanceofnext-daydeliveryofsinglepiecedomesticmailwithsignificantimprovementoverthepreviousyear.Theseresultswereachievedagainstabackgroundoftheongoingre-engineeringofcollectionanddeliveryoperationsnationwideaswellasthemajorautomationengineeringprogrammeattheCompany’sMailsCentres.

QualityresultsforInternationalMailagainshowedastrongperformancewith97%ofmaildeliveredinIrelandwithinthreedaysofpostinginEuropeagainsttheEUPostalDirectiveTargetof85%andaEuropeanaverageof95.4%,and96.5%ofmaildeliveredinEuropewithinthreedaysofpostinginIreland.ThiscontinuestoplaceAnPostasoneoftheleadingperformersinEurope.

CHanGinG

Meeting the ever-changing needs of our customers

2012 Revenue€501M maiLs €169M retaiL operations €111M sUBsidiaries


Strategic approachOurstrategicapproachtothechangingbusinessenvironmentoverthelastfewyearshasincludedspecificfocuson:• Costreductioninpayandnon-pay• Mailspriceadjustment

• Diversifiedandincreasedrevenue• Retail

Thedeliveryofeachofthesepillarsisrequiredforourbusinessmodeltosucceed.

Duringtheperiodofthecurrentfiveyearplanwewillseeacontinueddeclineintraditionalmailvolumesandrevenue.Thecurrentphaseoflossesisregrettablebutwillbeaddressedwithinthefiveyearplanwhilemitigatingmeasures,includingnecessaryactiononmailspricing,takeeffect.TheCompanyhasalreadyachievedapermanent€100mreductioninannualisedpayandnon-paycostsandwillbuildonitstrackrecordofprogressinthisareaintheyearstocome.

Change ProgrammeIntheperiodsince2008,thestafffulltimeequivalent(FTE)numbersinthecoreCompanydeclinedby1,284andtheannualisedlabourcosthasbeenreducedby€53.4m.TheaveragestaffFTElevelin2012was396lowerthan2011.TheCompanywillcontinuetoimplementitsplannedstaffFTEreductionprogrammethisyearandintheyearstocome.Thecurrentplanrequiresastaffreductionof2,600FTEsduringtheperiod2009–2016.Thisequatestoanaverageannualreductionof325FTEs.Wearecurrentlyhalfwaythroughthisprogrammeandanaveragestaffreductionof321FTEsperannumhasbeenachieved.

Theprogrammehasresultedinextensivenon-paysavingsof€35.5min2012(i.e.22.5%lower)whencomparedto2008.Whilstweexperiencedinflationinsomecostheadingssuchasfuelandelectricityduringtheyear,thiswasoffsetbysavingsinprofessionalservicesandotherareas.

CapitalinvestmentinfurtherautomationwithintheMailsbusinesscontinuedduring2012withtheinstallationofnewprocessingequipmentatourPortlaoiseandDublinMailsProcessingCentres,aswellastheupgradeofequipmentatCorkandAthloneMailsProcessingCentres.Thisprojectisalreadydeliveringsignificantimprovementsinreadratesallowingmail,ofvariouscategories,tobesortedtothelevelofthepost-person’sdeliveryroute,therebycontributingtocostsavings,efficienciesandstaffFTEreductions.

TheapplicationofdiversetechnologysolutionscontinuestounderpintheCompany’sChangeprogrammeandbusinessstrategy.During2012,astateoftheartSAN(StorageAreaNetwork)wasdeployedtomeetincreasingdatastoragerequirements.Some4,500PostalOperativeswereequippedwithmobilescanningdevicesallowingthecaptureofcustomersignaturesatpointofdeliveryandenablingreal-timeuploadofvitalinformationtotheTrackandTracesystem.

WithintheRetailnetwork,investmentwasfocusedonnewproductinnovation,systemsimprovementandtheupgradingofpremises.AnPostwillcontinuetomaximisetheuseoftechnologyasanintegralpartofitsapproachtonewbusinesschallengesinaneverchanginganduncertainenvironment.

PensionsTheAnPostpensionschemedeficitimprovedto€285mat31December2012,downfrom€484m,mainlyduetoimprovedinvestmentperformance.ActivenegotiationsareinprogresswithourUnionsinordertomeettheMinimumFundingStandard.

Regulation and PriceTherewasnopriceadjustmentforpostalserviceswithinthescopeoftheuniversalpostalservicerelatingtopostalpacketsweighinglessthan50gramsduringtheperiodfromMarch2007toDecember2012.ApriceapplicationseekingreasonablepriceincreaseswassubmittedtoComReginFebruary2012.

On1March2013,ComRegapprovedanincreaseof5cinthestandarddomesticletterratefrom55cto60c.Withthisincrease,AnPostpricingcontinuestocompareveryfavourablywithpostalserviceprovidersintheEU,includingtheUK,France,GermanyandBelgium.

CHIEF EXECUTIVE’S REVIEW Continued

CompetinG

Reducing operational costs and investing in infrastructure

€53.4M redUCtion in LaBoUr Cost sinCe 2008 4,500 postaL operatiVes eQUipped WitH moBiLe sCanning deViCes


GiventheunprecedentedandpermanentdeclineinMailsvolumesandrevenueto-date,largelydrivenbytheeconomicdownturn,Mailspricesarenotcurrentlyatasustainablelevel.ThereforeregularpriceadjustmentsalongwithmajorcostreductionandrevenueenhancementarenecessaryandformakeypartoftheCompany’sbusinessplan.

TheCommunicationsRegulation(PostalServices)Act,2011providesfortheintroductionofaPriceCapMechanismforserviceswithinthescopeoftheUniversalServicewhereComRegisoftheopinionthatthereisnoeffectivecompetitioninthemarketforthesupplyofthepostalserviceconcerned.

ThePriceCapMechanismmeansanoveralllimitontheannualpercentagechangeinpricesbasedontheannualpercentagechangeintheConsumerPriceIndex(CPI)andincludesanadjustmenttoincentivisetheefficientprovisionoftherelevantservices.TheintroductionofanappropriatePriceCapMechanismisessentialtotheachievementoftheCompany’sobjectiveofsecuringregularandnecessarypriceadjustmentsintheyearstocome.

TherewereanumberofdevelopmentsinrelationtotheregulationofQualityofServiceduring2012.InFebruary,ComRegservedlegalproceedingsonAnPostunderthetermsoftheEuropeanCommunities(PostalServices)Regulations2002,seekinganorderfromtheHighCourtthatAnPostcomplywiththe94%nextdaydeliverytargetforsinglepiecemail.Italsosoughttoimposeafinancialpenaltyforallegednon-compliancewiththeQualityofServicestandard.

AnPostisvigorouslycontestingthisactionthroughtheHighCourtasalsoreportedinlastyear’sAnnualReport.Ourinternalmetricscontinuetoshowasignificantlyhigherlevelofperformance.AnPostbelievesthatthewayforwardisanewsingledomesticmonitorofperformance,agreedwithComReg,independentlyoperatedandaudited,whichwouldalsoprovidetheCompanywithtimelydiagnosticinformation.

Inlate2011,ComRegissuedAnPostwithadirectiontoprovidenext-daydeliveryofmailinrespecttotwoaddresses,bothofwhichwereforthesamepropertyandneitherofwhichwasavalidpostaladdress.AnPostsuccessfullybroughtJudicialReviewproceedingsofComReg’sDirectionand,inOctober2012,theHighCourt,agreeingwithAnPost,madeanorderquashingComReg’sDirectionandgrantedthereliefssoughtbyAnPost.ComRegsubsequentlyindicatedthatitintendstoappealtheHighCourtDecisiontotheSupremeCourt.

Amajorprogrammehasbeensuccessfullyimplementedduringthelastnumberofyearstoimproveservicequality.ThisisreflectedbythehighlevelofperformanceshownbytheindependentQualityofServicemonitoringofourinternationalmailstreams.TheCompanywillcontinuetofocusonachievingresultswhichplaceitamongtheworld’sbestperformers.

New revenueThegenerationofadditionalincomestreamsisalsoafundamentalpartofthestrategyoftheGroup.Thiswillcontinuetobeachievedbytheadditionofnewproductsandservicesinthemailsandretailbusinessesaswellasthesubsidiarycompanies,allofwhicharecloselyalignedwithAnPost’scoreactivity.TheCompanyhasallocatedcashinitsforecasttofacilitatetheappropriateinvestmenttoenablethesecompaniestoachievetheirplansandtakeadvantageofopportunitieswhichwillariseintheirsectors.AmbitiousstretchtargetshavebeensetandourperformancetodateisevidenceoftheabilityoftheGrouptosucceedinthiscontext.

TheCompanyisalsoproudofitsachievementsonbehalfoftheGovernmentinmanagingtheStateSavingsportfolio,theNationalLotteryCompanyandinservicingthecustomersoftheDepartmentofSocialProtection.TheseactivitiesservetoillustrateAnPost’ssuccessfultrackrecordacrossdiversesectors.TheincreaseinStateSavingsthroughthepostofficefromabookof€6billionin2007toalmost€17billiontodayhasbeenverysignificant.Inasimilarmannerthe€225mraisedin2012throughtheNationalLotteryforgoodcausesisalsoanimportantachievement.ItisworthnotingthattheNationalLotterycontinuestorankamongthebestperforminglotteriesintheworldasmeasuredbyLaFleur’sandAnPostlooksforwardtoparticipatingintheforthcomingNationalLotteryLicencebidprocess.

ContributinG

Partnering Government and commercial organisations

25.2 MillionBiLLpay transaCtions on BeHaLf of 216 CommerCiaL entities

€9,445 MillionVaLUe of state Benefits paid By an post on BeHaLf of tHe department of soCiaL proteCtion


Servicing government businessThe1983ActsetsoneoftheobjectsofAnPostas“ToprovidecounterservicesfortheCompany’sownandGovernmentbusinessandprovidedtheyarecompatiblewiththeseservicesandwiththeprincipalobjectssetout…forothersastheCompanyseesfit.”AnPostisactivelyparticipatinginthecurrentDepartmentofSocialProtection“Provisionofcashservices”tender.TheCompanyisconfidentthatitwillsubmitthestrongestofferandlooksforwardtoapositiveoutcomeforallconcerned.

AnPostiswellpositionedtoprovidemoreGovernmentservicesthroughitsnetwork.Werunthelargestfinancialservicesnetworkinthecountry,comprisingmorethan1,150outletsmainlyoperatedbyindependentretailersemployingover3,000peopleintheirlocalcommunities.Thisnetworkofferstheopportunitytoaccessthe1.7mcustomersusingthepostofficeonaweeklybasis.Itprovidesarangeoffinancialservicesandiscentraltotheday-to-dayfinancialplanningofmanyofourcitizens.Thepostofficeremainsoneofthemosttrustedinstitutionsinthecountry.

Assomebanksseektorationalisetheirbranchnetworkstheyhaverecognisedthatmanyoftheirretailtransactionscouldbedonemoreefficientlyandcosteffectivelywithinthepostofficenetwork.Thisarrangementallowsaccesstoavariablecostmodelfortransactionsandofferstheircustomersbankingservicesinourcommunitybasedretailnetwork,sixdaysaweek.Thenumberoftransactionscontinuestogrowonanannualbasisprovingthatthereisahighlevelofcustomerengagementwiththeseservices.In2012approximatelythreemilliontransactionswereprocessedinthiswayasweextendedourserviceprovisionforAIBinparticular,andalsoforDanskeBank.Inrecentyearstherehasbeenanincreaseinthenumberofservicesavailablethroughthelocalpostoffice.TheadventofOne4allGiftCards,postfone,andSterlingandDollarsaleshasbeenwelcomedbyourclientsandcustomersalike.TheseservicescontinuetoexperiencesolidgrowthdespiteIreland’songoingdifficultretailenvironment.

AsmanyGovernmentDepartmentscontinuetoencourageonlineretailtransactionstheyarealsofacedwithmuchhighercostsfortheremainingofflinetransactions.Asimilaropportunityisavailabletothesebodiestoutiliseourlocally-basednetwork,toimproveaccesstoGovernmentservicesanddeliversignificantcostsavingsbyavailingofthevariablecostmodelfortransactionsasdescribedabove.OnecaseinpointisthedevelopmentinmeetingtheGovernment’sintentiontoachievefinancialinclusionthroughtheprovisionofaBasicBankAccount.TheCompanyisconfidentthatitcanplayapivotalroleinGovernmentachievingthisbyutilisingthepostofficenetwork.

ThepostofficenetworkhasdeliveredanexcellentservicetotheDepartmentofSocialProtectionandtheirclientsfordecades.Inmanyruralandurbanareas,thepostofficeistheonlyoutletofferingarangeofaffordableandeasilyaccessiblefinancialservices.Theresultsofarecentpilotprojectsuggestthatfinancialinclusioninitiativeswillnotsucceedunlessdeliveredthroughtheretailnetworkofchoice–thepostoffice.

Itisworthnotingthatthroughoutthisperiodofadjustment,rationalisationandinvestment,theCompany’sreputationanditsstandingamongthepublic,asmeasuredbyMillwardBrown,hasimprovedsteadily.Allreputationparametershaveimprovedinastatisticallysignificantmanneryear-on-year.

Ireland’songoingeconomicsituationpresentsanextremelydifficultbusinessenvironment.AnPostwilladdresstheconsequentchallengeswithdeterminationduringthiscomingyearandthereafter.TheCompanywillcontinuetoadaptitsstructuresandresourcestofacethechangingbusinessreality.Thedevelopmentofinnovativeproductsandservicesisacentralpartofthebusinessstrategyasisthecontinuedprovisionofahighquality,value-for-money,relevantandcustomer-focussedservice.

Finally,IwishtothanktheMinisterforCommunications,EnergyandNaturalResources,PatRabbitteT.D.,andhisofficialsfortheirassistanceandsupportduring2012.

Donal Connell, Chief Executive27March2013

CHIEF EXECUTIVE’S REVIEW Continued

DoinG more

Running the largest financial services network in the country1,150outlets 1.7 Million CUstomers WeekLy 6open 6 days a Week


Successisbeingachievedbyanumberofbusinesseswhichcantakeadvantageoftheexpertiseandpresenceofthecorecompany.Thefollowingaretheprimarysuccessesinthesubsidiaryarena:

National Lottery CompanyAnPostisveryproudoftheachievementsofthisbusinessoverthe26yearsofitsexistence.ThemanagementandstaffhavedevelopedahighlysuccessfulCompanyandthefundsraisedhaveconsiderablyassistedbeneficiariesacrossthecountry.€225mwasdistributedtogoodcausesin2012.

TheGovernmentwillissueatenderfortheawardingofthenextLotteryLicenceinthecomingmonths.AnPostlooksforwardtoparticipatingintheforthcomingNationalLotteryLicencebidprocess.

Air BusinessThisMailssectorbusiness,basedintheUKhasseenconsiderablegrowthinthepasttwoyears.Turnoverin2012exceeded€75m.Thisbusinessconcentratesonfulfilment,subscriptionmanagementanddistribution,throughinternationalmailchannels,primarilyforlargeinternationalpublishingclients.CurrentcustomersincludesuchprestigioustitlesasTheEconomist,Informa’sLloydsList,theBritishMedicalJournal,CountryLife,Vogue,TheLancet,NewScientistandvariousotheracademicandeducationalpublications

The Gift Voucher ShopTheOne4allgiftcardisthegiftvoucherofchoiceinIreland.Innovationandproductdevelopmenthavekeptthistotheforefront.Inaddition,expansionintotheUKhasaddedtothesizeofthisbusiness.ThissubsidiarycontributedpositivelytotheoperatingresultattheGroupandisaverysignificantpartoftheCompany’sretailoperations.

One DirectOneDirecttookoverthepersonallines(motorandhome)insurancebusinessformerlyconductedbyAvivathroughitsownbranchnetwork.Thisrepresentsasignificantincreaseinbusiness.ItfacilitatesconsolidationofthedistributionchanneloperatedbyOneDirectfromitscallcentreinAthlonewiththephysicalpostofficenetwork.Thisaddedbusinesstogetherwithastrongperformanceinalllinesofinsurance,motor,homeandlifegivesadditionalstrengthtothebrandinthemarket.

PostpointThispaymentschannel,inadditiontothepostofficenetwork,offersourcustomersandproductsuppliersalikeaveryvaluableservice.Thereissomedeclineinthetraditionalmobiletop-upmarketandmarginshavebeenreducedforallpaymentcompaniesinthissector.Thischannelsawtransactionsamountingto€250minvalueduring2012.New,innovativeproductdevelopmentsandchangesintechnologyaremaintainingrelevanceandtheGroupiscommittedtodevelopmentinthissector.

SUbSIdIaRIES


group turnover for 2012 was €807.3m, marginally ahead of the previous year’s €806.7m.

TheGroupoperatinglossof€17.5mwasimpactedbyfurtherdeclineincoremailsvolumes,delaysinsecuringapprovalfromtheCommissionforCommunicationsRegulation(ComReg)fornecessarypriceadjustmentsandsomedelaysinimplementationofourcostreductionprogrammes.PostalOperatorsdealingwiththeparticularchallengesofthepostalmarketmustbeabletopriceproductsandservicesaccordingtomarketforces,andinthisregardAnPostlooksforwardtothesuccessfulintroductionofthenewComRegpricecapmechanismin2014.Theseresultsalsoreflectamostchallengingdomesticeconomy.

2012 €m

2011 €m

Turnover 807.3 806.7

Groupoperating(loss)/profit (17.5) 2.2

Netassets(excludingpensionliability) 297.3 319.0

Thefinancialyear2012endedwithaGroupOperatingLossof€17.5mcomparedtoaGroupOperatingProfitof€2.2mthepreviousyear.However,comparisonofthetwoyearsisskewedbytheexceptional€28mrevenuegeneratedbytheGeneralElectionandPresidentialElectionmailingsin2011.

RevenueOverallmailsrevenuein2012totalled€501m,1.1%lowerthan2011.Thevolumeoftraditionalmailreducedby5.2%inthecourseoftheyear,withtherateofdeclineslowingsignificantlyfrom6.8%inthefirsthalfoftheyearto3.6%inthesecondhalf.

Compensatingtosomedegreefortheabovementioneddeclineintraditionalmailvolumewasgrowthinparcelsandpacketvolumes,priceincreasesinsomenon-USOservicesandnewimprovedratespayabletotheCompanybyinternationalpostaladministrationsandmailoperatorsfordeliveringtheirmailinIreland.

Revenueintheretaildivisionheldupwellat€169mcomparedwith€171.6mthepreviousyear.ThevalueofStateSavingsreached€16.3billionbytheendofDecember2012,anincreaseof€2.2billionontheprioryear.Othernewretailincomestreamsshowedencouraginggrowthincludingcommission-freeSterlingandDollarsalesandadditionalagencyservicesforAIB,DanskeBankandotherfinancialservicesandutilityproviders.

SubsidiariesRevenuefromAnPostsubsidiarybusinessesincreasedto€111mfrom€80m,generatingaprofitbeforetaxandgoodwillof€8.5m.Thisreflectssolidgrowthintheprimarysubsidiarieswhichcontinuetoperformstronglyintheirrespectivemarketsandwhichbenefitgreatlyfromtheirassociationwiththepostofficenetwork.ThetakeoverbyOneDirectofAviva’slocalmotorandhomeinsurancebranchbusiness,astheyclosedtheirbranchnetworkintheAutumn,andthecontinuedgrowthofTheGiftVoucherShop(One4All)arepositiveindicatorsfortheyearahead.Profitmarginsremainstrongacrossthebusinesses.

finanCiaL reVieW


PricingOngoingpriceadjustmentscoupledwithongoingcostreductionandnewrevenuesareanessentialpartoftheCompany’sbusinessplan.TheCommunicationsRegulation(PostalServices)Act,2011providesfortheintroductionofaPriceCapMechanismforserviceswithinthescopeoftheUniversalServicewhereComRegisoftheopinionthatthereisnoeffectivecompetitioninthemarketforthesupplyofthepostalserviceconcerned.ThePriceCapMechanismmeansanoveralllimitontheannualpercentagechangeinpricesbasedontheannualpercentagechangeintheConsumerPriceIndex(CPI)andincludesanadjustmenttoincentivisetheefficientprovisionoftherelevantservices.TheintroductionofanappropriatePriceCapMechanismisessentialtotheachievementoftheCompany’sobjectiveofsecuringregularandnecessarypriceadjustmentsintheyearstocome.

CostsChangeprogrammeimplementationcontinuedapaceoverthecourseoftheyear.Intheperiodsince2008thecorecompanyhasachievedanFTEreductionof1,284andthecostoflabourhasreducedby€53.4m.Intheyear2012labourhoursequatedto9,641FTE’s.Thiswas396lowerthanin2011andreflectstheimpactofongoingchangeprogrammesonthecostbase.

Corenon-paycostswerereducedby€4min2012.Therehasbeeninflationinsomeareassuchasfuelandelectricitywhichisbeingoffsetbysavingsinthecostofprofessionalservicesandothercostcategories.Additionalcostswereincurredintheservicingofincrementalparcelandpackethandlingwhereweareincreasingourmarketshareofnationalandinternationalbusiness.

CashThecashresourcesoftheGroupat31December,2012were€112m(€150min2011).Duringtheyear€28mwasinvestedincapitalexpenditureand€17minvoluntaryservice/voluntaryearlyretirementschemes.Thecashimpactofthetradinglossof€17.5mismitigatedbythenon-cashdepreciationandamortisationchargesof€25m.

fixed AssetsCapitalexpenditurein2012amountedto€28m.Therewerenosignificantassetdisposalsduringtheyear.Furthercapitalspendofthesamemagnitudeisplannedfor2013,includingthecompletionofinvestmentinthelatestgenerationofmailsprocessingequipment.

Pension SchemesTheAnPostbalancesheetat31December2012includesapensiondeficitof€285m(€484min2011).Assumptionsthatareinlinewithindustrynormsareusedinthecalculationofchargesandthebalancesheetdeficit.Theseareprimarilyadiscountrateof4%,longrunpay/pensioninflationof1.5%andinvestmentreturnof7.5%forequities,3%forbondsand4%forotherassetclasses.

PensionSchemessuchasthedefinedbenefitschemeatAnPosthavetoaddresstherequirementsofthePensionsBoardforMinimumFundingStandards.AnPostexpectstobeinapositiontomakethechangesnecessarytotheschemesothatitcanattainthenecessaryminimumfundingstandard,aslaiddownbylegislation.

Outlook2012isthefirstyeartorecordanoperatinglosssince2003.Thisisnotsustainableinthemediumterm.Implementationoftheongoingchangeprogrammes,achievingpricere-alignmentandthegrowthofnewrevenuestreamsincoreandsubsidiarybusinessesarethekeydriversinachievingareturntoprofitability.


UniVersaL serViCe

The Communications Regulation (Postal Services) Act 2011 (‘the Act’) was enacted in August 2011.

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;and

(f) postalservices,freeofcharge,toblindandpartiallysightedpersons.

AsrequiredbySection16(9)oftheAct,inJuly2012,ComRegmaderegulationsspecifyingtheservicestobeprovidedbyAnPostrelatingtotheprovisionoftheUniversalPostalService.TheCommunicationsRegulation(UniversalPostalServices)Regulations,S.I.280of2012,whichsetsouttheseservices,isavailableonwww.irishstatutebook.ieorwww.comreg.ie.

Access to Universal ServicesAnPostprovidesaccesstoitsservicesthroughitsnetworkof57Companypostoffices,1,095postmaster-operatedpostofficesand166postalagents.Inaddition,some1,188retailpremisesarelicensedtosellpostagestamps,asactivelicensedagents.Tofacilitatephysicalaccesstotheservice,approximately5,000postboxesaredistributedwidelythroughouttheState.Thereare43designatedacceptancepointsforbulkmailservices.


TariffsThefollowingisasummaryofthepricesforstandardservicesweighingupto50gwhichwereapplicableduring2012.†

Ireland & NI Letters (up to C5)

Large Envelopes

Packets Parcels

StandardPost 55c54cifCeadúnas

ormeter

95c €2.20 €6.50

RegisteredPost* €5.25 €5.25 €5.25 €10.50

* Thefeepayableforthebasicregisteredservicecoverscompensationuptoamaximumof€320.Furthercompensationuptoalimitof€1,500isavailablefor€4anduptoalimitof€2,000for€5basedondeclaredvalueattimeofposting.

International Destinations

Letters (up to C5)

Large Envelopes

Packets Parcels

StandardPost 82c €1.50 €2.70 GB €18.25 RoW €22.00

RegisteredPost**

€5.17 €5.85 €7.05 GB €23.00 RoW €27.00

**Availabilityofservicedependentonpostaladministrationindestinationcountry.Compensationupto€320inGB;€150inEurope;€100forparcelsand€35forlettersoutsideEurope

†Witheffectfrom2April2013,AnPostchangeditstariffsforStandardPostwithintheUniversalService.Thetariffsforitemsweighingupto50gwereincreasedandthesetariffsnowapplytoitemsupto100gresultinginareductionintheprevioustariffforitemsweighingbetween51-100g.ThenewStandardPostratesforIrelandandNorthernIrelandforitemsweighingupto100gare60cforletters,€1.05forlargeenvelopesand€2.40forpackets.Discountsapplyifpaymentismadebymeter.Thetariffsforallotherdestinationsforitemsweighingupto100gare90cforletters,€1.65forlargeenvelopesand€3.00forpackets.InternationalStandardparcelpriceswerealsoincreased.

AfulllistofcurrentUSOtariffsisavailableintheGuidetoPostalRates(seewww.anpost.ie)

Quality of ServiceInternationalThequalityperformancestandardforthedeliveryofintra-Communitycross-bordermailwaslaiddowninthePostalDirectives(97/67/ECasamended)andisincludedinSchedule3oftheAct.Thequalitystandardforpostalitemsofthefasteststandardcategoryisasfollows:

D+3: 85% of items; D+5: 97% of items,whereDreferstothedayofposting.

DomesticTheActrequiresComRegtosetquality-of-servicestandardsfordomesticuniversalservicemailwhichmustbecompatiblewiththoseforintra-Communitycross-borderservices.ComReghavesetaquality-of-servicetargetfordomesticsinglepieceprioritymailasfollows:

D+1: 94% D+3: 99.5%, whereDreferstothedayofposting.


UnIVERSal SERVICE CONTINUED

Quality monitoringMonitoringofperformanceagainsttheinternationaltargetsiscarriedoutbyResearchInternationalonbehalfofInternationalPostCorporation(IPC).MonitoringofthedomesticqualityofserviceiscarriedoutbyIpsosMRBIonbehalfofComReg.Detailsofthemostrecentresultsareavailablefromourwebsitewww.anpost.ie.,withdomesticperformancealsoavailableonwww.askcomreg.ie.

InFebruary2012,ComRegservedlegalproceedingsonAnPostunderthetermsoftheEuropeanCommunities(PostalServices)Regulations2002,seekinganorderfromtheHighCourtthatAnPostcomplywiththe94%nextdaydeliverytargetforsinglepiecedomesticmailandseekingtoimposeafinancialpenaltyonAnPostforallegednoncompliancewiththequalityofservicestandard.AnPostisdefendingthisactionvigorously.

Customer ComplaintsAnPostisrequiredtomaintainrecordsofcustomercomplaintstakingintoaccounttherelevantEuropeanstandardIS:EN14012:2003.Thetableprovides,inrelationtomail,abreakdownofwrittencomplaintsreceivedfromcustomersduring2012.Thetotalcontinuestorepresentaminutefractionoftheentiremailtraffichandledduringtheyear.

Written complaints received from customers:

Itemslostorsubstantiallydelayed 18,287Itemsdamaged 980Itemsarrivinglate 351Mailcollectionordelivery:

Timeofdelivery 347Failuretomakedailydeliverytohomeorpremises 115Collectiontimes/Collectionfailures 2

Misdelivery 486Accesstocustomerserviceinformation -Underpaidmail 145Tariffsforsinglepiecemail/discountschemesandconditions -Changeofaddress(Redirections) 919Behaviourandcompetenceofpostalpersonnel 22Howcomplaintsaretreated -Other(notincludedinabove) 1,789

Total 23,443

Includedinthetotalfigurearecomplaintsaboutregistereditems,whichnumber5,563.

In2012,475,414telephonecallsweremadetoAnPostCustomerServices.Mostofthesewereroutineorgeneralenquiriesratherthancomplaints.

TheAnPostComplaintandDisputeResolutionProceduresaresetoutin‘GettingitSorted,’whichisavailableonourwebsite,inretailoutlets,andfromourCustomerServicesCentre.WealsohaveaCustomerCharter,containingspecificpledgestocustomersregardingourservices.

further InformationAdditionalinformationinrelationtoservicesprovidedbyAnPostisavailablebyphoningAnPostCustomerServicesonCallSave1850575859,[email protected],byvisitingwww.anpost.ie,orbycallingintoalocalpostoffice.


Sustainability at An Post is firmly based within ongoing business activity, aimed at mitigating our environmental impact, improving quality of life for our customers and enhancing our business offering.

EnvironmentFollowingafouryearimprovementprogramme,targetingourcarbonperformance,AnPosthasachievedsignificantcarbonreductionacrossourbuildingsandfleet.Giventherelativelylargebuildingstockandfleetsize,thesustainabilityprogrammeconstitutesimprovementandinnovationacrossarangeofopportunitiestomakegainsincarbonsavings.

OurmembershipoftheInternationalPostCorporation,EnergyManagementandMonitoringStandard(IPCEMMS),hasprovidedaneffectivereportingtemplatesince2009.

ThissystemofbenchmarkingperformanceamongmemberPostsallowsustodrivechangewithinthebusiness,evaluatingourCompanyacrossarangeofindicators.Ourparticipationandperformanceresultsarefullyauditedandpublishedannuallyasasectorwide,sustainabilityreport.

WithinIPCEMMS,wehaveprogressedtomidrankingintermsofbothourcarbonandenergyuse.Thisinturnplacesuswithinrangeofachievingthenationalpublicsectorenergyconsumptiontargetof33%reductionbeforetheyear2020.InthisregardwebeganannualreportingofourenergyconsumptiontotheDepartmentofCommunications,EnergyandNaturalResourcesin2012.

In2013weaimtoimproveourIPCEMMSrankingandmakeevenbetteruseofenergybydevelopinganenergymanagementsystemspecifictotheCompany’sneeds.

TheCompanybeganpreparatoryworktoimplementISO50001,EnergyManagementSystemduring2012.Weaimtoachieveaccreditationbyquarterthree,2013.Webelievewewillbethefirstpostaloperatortoachievethisstandard,whichprovidesuswithaframeworkto:

• Developpolicyformoreefficientenergyuse

• Fixtargetsandobjectivestomeetpolicy

• UsedatatobetterunderstandandmakedecisionsaboutourCompany’senergyuse

• Measuretheresults

• Reviewpolicyeffectiveness

• Makecontinuousimprovementsintheareaofenergymanagement

ItisenvisagedthatthescopeofISO50001willbeextendedtoincorporateourtransportfunctionin2014.

sUstainaBiLity

In 2013 we aim to improve our IPC EMMS ranking and make even better use of energy by developing an energy management system specific to the Company’s needs.


Energy UseThevastmajorityoftheCompany’senergyusageiscomprisedof:

• Heatingandlightingourfacilities

• Fuelconsumptionwithinourtransportfleet

In2012AnPostconsumed122.15GWhofenergythroughouttheCompany.Thebreakdownofwhichis:

• 22.5GWhofelectricity

• 20.7GWhoffossilfuelsforheating

• 79.15infossilfuelsforTransport.

Throughout2012wehavecontinuedworkingtowardstheCompany’sstrategictargetofa33%reductioninkWhrsand20%reductioninCO2byundertakingtheinitiativesandprogrammesidentifiedbelow.

• Investmentinbettercontrolofourlightingsystems,whichresultedinaconsiderablesavingof350MWhrs

• FurtherupgradestotheBuildingManagementSystemwereimplementedinordertoimprovecontrolofourenergyconsumptionintheGPO.TheBuildingManagementSystem(BMS)projectwasrolledouttoBaldoyleDeliveryServiceUnit(DSU)andChurchtownDSUsaving160MWhrs

• TheCompany’sheatingprojectwasrolledouttotenofficesresultingin200MWhrssavings

• AligningourEnergyManagementSystem(EnMS)withISO50001

• AnenergyinitiativefocusingonheatingwaspilotedinAthloneMailsCentrewithinitialgoalsachieved,energysavingsof400MWharetargetedbyend2013

• Incorporatingenergyefficiencyinitiativesintoallnewbuildingworks

Actions planned for 2013:AnPostiscommittedtoimprovingitsenergyandCO2reductionbyundertakingthefollowinginitiativesfor2013:

• AchievingCertificationtoISO50001.

• Investingfurtherinlightingupgradesthroughoutourpropertyportfolio.

• Therolloutoftheenergyimprovementprojects

• Heatinginitiativestargetedatourtop30energyusers

• TemperaturecontrolmeasuresintroducedtoallourMailsCentres

• Asystemofinternalheatingtimerstobeinstalledinthemajorityofouroffices

• Asystemofheatingcontrolsincorporatingexternal/ambienttemperaturesensorsamonghighenergyusers.

• SupportingourlocalofficestoimplementaCompany-widebenchmarkingsystemforenergyuse,toidentifyenergyimprovementopportunitiesineachofficeandtocontributetoouroverallenergyperformancetargets.

Eco-driving challengeCollectionandDeliverystafffromaroundthecountryparticipatedintheinauguralAnPostEcoDriverChallenge.Theobjectiveoftheeventistoencouragesustainablethinkingamongourdrivers,enhanceemployeeengagementanddemonstratethateco-drivingisgoodforboththeenvironmentandourbusiness.

Throughout 2012 we worked towards our strategic target of a 33% reduction in kWhrs and 20% reduction in CO2 use.

SUSTaInabIlITy CONTINUED


Eco-cleaning productsTheCompanyhascompletedonefullyearofusinganewrangeofenvironmentallyfriendlycleaningandwashroomconsumables,havingimplementedacohesivenationwidepurchasingpolicyforallAnPostproperties.Thebenefitsoftheproductrangeincludevastlyreducedpackaging,transportandwaste.TheproductisalsocertifiedwiththeEUeco-label,theEUflower.

WorkplaceDiversity AnPostisoneofelevenfoundingorganisationstohavesignedthefirstDiversityCharterIreland,markingourvoluntarycommitmenttoeffectivediversitymanagement,promotingequalityandpreventingdiscriminationonallnineequalitygroundswhichincludedisability.

AnPosthaslaunchedanewEqualityandDiversitysiteonourIntranetwhichpresentsanextensiveresourceofinformationrelatingtoEqualityandDiversityissuesandlegislation;Disability;Policydocuments;Gay/Lesbian/Bisexual/Transgendertopics;andWork-Life-BalanceinitiativeswithinAnPost.

TheaimofthissiteistopromoteanddevelopawarenessofEqualityandDiversityissuesandtohighlightrelatedtopicswhichcanimpactonouremployees.

Disability Equality eLearningAnPostcommencedtherolloutoftheNationalDisabilityAuthority’sDisabilityEqualityeLearningcourse,whichwasproducedwiththeparticipationofpublicservicesbodies(includingAnPost).

Basedonthesubjectofgoodcustomerservice,thecoursefocusesonchangingattitudesinordertoeliminatebarrierswhichrestrictaccesstoimportantfacilities,servicesandinformationforthosewithadisability.Thetrainingcoursehelpstodevelopheighteneddisabilityawareness–anawarenesswhichisencompassedinourcorevalues,“RespectandPersonalAccountability”and“RespectedCorporateCitizen”.

ThiscourseassistsAnPostinfulfillingitsobligationsinlinewithassociatedIrishlegislation(i.e.DisabilityAct2005;EqualityStatusAct2000,EqualityAct2004;andtheEmploymentEqualityActs1998to2011).

Community Welaunchedourrevisededucationprogrammein2012withthearrivalofanpostschoolbag.ietoprimaryandsecondaryschoolsnationwide.

anpostschoolbag.ieisanonlineeducationresourcededicatedtoinformingprimaryandsecondarylevelstudentsandteachersaboutthebreadthofAnPost’sinvolvementinIrisheconomic,environmentalandcommunitylife.

anpostschoolbag.ie is an online education resource dedicated to informing primary and secondary level students and teachers about the breadth of An Post’s involvement in Irish economic, environmental and community life.


SUSTaInabIlITy CONTINUED

Theanpostschoolbag.ieresourceistailoredtoschools’owntechnologicalcapability–whiteboardsandPCs.ContentfocusesonthefullrangeofAnPost’smailsandretailbusinessservices,whiledeliveringclassroomactivitiesdirectlylinkedtothecurriculum.ResourcesaredesignedtocreativelyhighlightAnPost’scommitmenttosustainabilityandcommunity.AllinformationisavailableinbothEnglishandIrish.

An Post CyclingAnPostistheleadingsupporterofIrishCycling,apresencewehavebuiltonoversixyearsofrealcommitmenttothesport.Wearemorethanasponsorofcycling-wehaveearnedtheroleofvaluedpartnerineachoftheeventswesupport.

Wehavepioneeredabusinessledapproachtomaximisingparticipationandaudienceforthesportateverylevel.

Weremainoptimisticthatoursupportwillencourageothercommercialsponsorstogetinvolvedwiththesport.Thiscommercialapproachtooursponsorshiphasbeenimportantforourbusinessandhasworkedwellforcycling.Wenowpositionourachievementsinthecontextoftheeconomicbenefitstothecountry,thereturnoninvestmentweachieveintermsofbrandawarenessandourcontributiontoIrishlifethroughthesportofcycling.

In2012,AnPostsupportedtheAnPostSeanKellyTeam,AnPostRás,AnPostCycleSeries,AnPostRásnamBan,theIrishCyclingShowandtheIrishParacyclingteamontheroadtotheLondon2012Games.

We now position our sponsorships within the context of their economic benefit to the country and return on investments.


stamp issUes and pHiLateLiC pUBLiCations

In 2012, An Post issued a total of 37 special and commemorative stamps covering such diverse topics as Significant Science Milestones – Dublin City of Science and boyle’s Law, barnardos Ireland, Olympic games – London 2012, and Europa – “Visit Ireland.”

Includedamongstthehighlightsofthe2012stampprogrammewerethefourpoignantstampsissuedtocommemoratetheCentenaryofthesinkingoftheTitanic;twoeerieillustrationsbyDavidRooneytomarktheCentenaryofthedeathofBramStoker,thecreatorofDracula;andasetofmemorablestampstocelebratethe50thInternationalEucharisticCongress–whichwasheldinIrelandforthefirsttimesince1932.

AseriesoffourstampswasdesignedbyGerGarlandtocelebrateContemporaryArts-Dance.Issuedasdiamondshapedstamps,andcontainedwithinaninnovativediamondshapedbooklet,thesetfeaturedarangeofmoderndancemovementsfrom:FabulousBeastDanceTheatre,DanceTheatreofIreland,IrishModernDanceTheatreandCoisCéimDanceTheatre.

Notedartist,VincentKillowrycreatedtwoatmosphericpaintingsfortheVolvoOceanRacestamps,whileFergusLyonspaintedtheimagesonwhichtheIrishMythsandLegendsstampsetwasbased.DesignedbySteveSimpson,theselegendarystampsdepicttheadventuresofTheChildrenofLir,DeirdreoftheSorrows,FionnMacCumhaillandSetanta.

DesignedbyZincDesignConsultants,the150thAnniversaryoftheDublinFireBrigadeuseddramaticphotographytocapturetheheroicactionsofmembersoftheBrigade,whorisktheirlivesonadailybasisasafrontlinepublicservice.

Inaddition,2012sawtheintroductionofphaseIIIoftheSeventhDefinitiveSeries-IrishAnimalsandMarineLife.PhaseIIIcontinuedtheroll-outofthisbeautifulseriesontherecentlyintroducedformat,StampsOnARoll(SOAR).SOARisnowavailableatallpostofficesandallowsthedenominationofthestamptobeprintedatthetimeofpurchase.

Adiverseportfolioofassociatedcollateralwasalsoproduced,includingPrestigeBooklets,miniaturesheets,aYearPackandFirstDayCoverCollection.Onceagain,theIrishStampsYearBookwasproducedinbothstandardandluxuryeditions.Asever,thisstrictlylimitededitionfeaturedallissuesfromtheannualprogramme,andwasproducedtothehigheststandardsofdesign,withstunningimageryandinformativetext.

InMay2012,anexhibitionofmorethan30originalSusanSexpaintingsfromtheIrishWildFlowerDefinitivestampserieswasheldintheNationalBotanicGardens,Dublin.AnPostassistedwiththeexhibition,temporarilyloaningoriginalartworkandproducingasixpageexhibitionbrochure.


STamp ISSUES and pHIlaTElIC pUblICaTIonS CONTINUED



an post an

nual report 2012

29

indeX

30 ReportoftheDirectors

33 CorporateGovernance

40 StatementoftheDirectorsontheAccountingSystems

41 StatementofDirectors’Responsibilities

42 ReportoftheIndependentAuditor

44 ReportoftheIndependentAuditoronthe AccountingSystems

45 StatementofAccountingPolicies

49 ConsolidatedProfitandLossAccount

50 ConsolidatedStatementofTotalRecognised GainsandLosses

51 ConsolidatedBalanceSheet

52 CompanyBalanceSheet

53 ConsolidatedCashFlowStatement

54 NotestotheFinancialStatements

76 FiveYearFinancialSummary

77 OperationalStatistics


1. The group and its Principal ActivitiesTheCompanyoperatesthenationalpostalserviceandmoneytransmissionservicesandprovidesagencyservicesforGovernmentDepartments,theNationalTreasuryManagementAgency,AnPostNationalLotteryCompanyandotherbodies.

OneordinaryshareisheldbytheMinisterforFinance(whichstandstransferredtotheMinisterforPublicExpenditureandReformundertheMinistersandSecretariesAct2011),andtheremainderoftheissuedsharecapitalisheldbytheMinisterforCommunications,EnergyandNaturalResources.

Detailsoftheactivitiescarriedonbysubsidiary,associatedandjointventureundertakings,togetherwiththeinformationrequiredbySection158oftheCompaniesAct,1963,aregiveninnote24tothefinancialstatements.

2. ResultsDetailsoftheresultsfortheyeararesetoutintheconsolidatedprofitandlossaccountonpage49andintherelatednotestothefinancialstatements.Thedirectorsdonotproposethepaymentofadividendfortheyear.

3. business ReviewTheGroupoperatinglossfortheyearis€17.5m.Comparisonwiththeprioryear,whentherewasanoperatingprofitof€2.2m,needstotakeintoaccountthesignificantoneoffmailsrevenueof€28marisingfromaGeneralandPresidentialelectionin2011.

Turnoverfromcontinuingoperationsat€807.3mismarginallyupon2011.Thedeclineintraditionalmailsvolumescontinued.Theyearsawincreasedrevenuefromsubsidiaries.Theprogrammeofcostreductioninthecorebusinesscontinuedduring2012.

TheGroupresultaftertaxwasalossof€39.4m,havingtakenintoaccountachargeof€19.8mafterpensionaccounting,aGroupcorporationtaxchargeof€0.1mandtheminorityshareofprofitsinsubsidiariesof€2.0m.

Thepensiondeficithasdecreasedfrom€483.6mat31December2011to€284.6mat31December2012reflectinggoodinvestmentreturnsduring2012andareassessmentofassumptionsinrelationtofuturepayandpensionincreases.

ThenetassetpositioninthebalancesheetfortheGroupis€12.7mat31December2012comparedtonetliabilitiesof€164.6mat31December2011.

TheinformationrequiredbyRegulation37oftheEuropeanCommunities(Companies:GroupAccounts)Regulations,1992,isincludedintheinformationgivenonpages6to17.

REpoRT oF THE dIRECToRS

The directors have pleasure in submitting their twenty ninth Annual Report together with the audited financial statements of the group for the year ended 31 December 2012, in fulfilment of their obligations under the Companies Acts, 1963 to 2012.

31

Inmonitoringperformance,thedirectorsandmanagementhaveregardtoarangeofkeyperformanceindicators(KPIs),includingthefollowing:

KPI

Performance in 2012

Performance in 2011

Operating ResultOperating(loss)/profitasapercentageofturnover (2.2%) 0.3%Staffcostsasapercentageoftotaloperatingcosts 59.9% 61.7%Postmasters’costsasapercentageoftotaloperatingcosts 9.7% 10.0%Otheroperatingcostsasapercentageoftotaloperatingcosts 30.4% 28.3%Cashatbankandinhand €112.1m €150.1m

Staff - Average full Time Equivalents (fTE)Company 9,641 10,037Subsidiaries 748 612Group 10,389 10,649

CompanyyearendFTErunrate 9,073 9,422

Mail businessLetterscorerevenueindex(page77) (5.2%) (7.0%)

Retail businessSocialwelfaretransactions 43.6m 44.1mBillPaytransactions 25.2m 24.9mTVLicencesales(thousands) 1,412k 1,426kInvestmentProducts-netfundinflow €1,771m €1,084mPostOfficeSavingsBank-netfundinflow €228m €149mPrizeBonds-netfundinflow €195m €118mBurglariesandRobberies-numberofincidents 53 67

Customer ServiceWrittencomplaints 23,443 27,814

Telephoneenquiries 475,414 511,827

InaccordancewiththerequirementtoanalysethekeyrisksanduncertaintiesfacingthefuturedevelopmentoftheGroupandCompany,thefollowinghavebeenidentified:

• impactofthegeneraleconomicclimate;

• theneedtofullyimplementagreedchangeprogrammes;

• impactofelectronicsubstitution;

• inabilitytofundtheUniversalServiceObligation;

• achievingadequatepricesforservices;

• theneedtoachieveandmaintainqualityofservicetargets;

• potentiallossofsignificantagencyservices;

• failuretoresolveindustrialrelationsissuesthroughagreedprocesses.

Thedirectorshaveanalysedtheseandotherrisksandappropriateprogrammesareinplacetomanageandcontroltheserisks.TheCorporateGovernanceStatementonpages33to39,whichformspartoftheDirectors’Report,setsoutthepoliciesandapproachtorisksandtherelatedinternalcontrolproceduresandresponsibilities.


REpoRT oF THE dIRECToRS CONTINUED

4. Directors, Secretary and their InterestsThefollowingchangeshavetakenplaceinthecompositionoftheBoardsincethedateofthepreviousreportofthedirectors:

MrJerryCondonretiredon31October2012.

MrPaddyCostelloretiredon31October2012.

MrGerryO’Tooleretiredon31October2012.

MsAnneConnollyretiredon22November2012.

MrAlanSloaneretiredon31December2012.

MsCatherineWoodsretiredon3February2013.

MrJohnFitzgeraldretiredon28February2013.

MrNoelAdamsonwasappointedon1November2012.

MrWilliamMooneywasappointedon1November2012.

MsMartinaO’Connellwasappointedon1November2012.

MrWilliamScallywasappointedon11December2012.

MsLorraineTormeywasappointedon1January2013.

MrChristophMuellerwasappointedChairmanDesignateon26March2013.

Thedirectorsandsecretarywhoheldofficeat31December2012hadnointerestsinthesharesin,ordebenturesof,theCompanyoranyGroupcompanyatthebeginningoftheyear(ordateofappointmentiflater)orattheendoftheyear(2011:Nil).

5. EmployeesTheGroupisanequalopportunitiesemployer.Allapplicationsforemploymentaregivenfullandfairconsideration,dueregardbeinggiventotheaptitudeandabilityoftheindividualandtherequirementsofthepositionconcerned.Allemployeesaretreatedonequaltermsasregardstraining,careerdevelopmentandpromotion.AnPostconfirmsthatitsemploymentofpeoplewithdisabilitiesexceedsthetargetof3%setundertheDisabilitiesAct,2005.

AnPostiscommittedtoensuringthehighestsafetystandardsandsafepracticesforitsemployees,contractorsandmembersofthepublicinaccordancewiththeSafety,HealthandWelfareatWorkAct,2005.In2012,therewere36.9losttimeaccidentsper1,000employees.Thisrepresentsaminimalincreaseof0.8%on2011.

AnPostiscommittedtoreducinglosttimeaccidentsandinthisregardisundertakingasafetyimprovementprogrammewhichincludedobtainingaccreditationtotheOHSAS18001:2007standardin2011.Inaddition,5,011employeesattendedspecificsafetytrainingcoursesin2012,withmanymoreattendingothercourseswheresafetywasincludedinthecontent.Thisincludestheprovisionofadvanceddrivertrainingfor877driverswhouseourCompanyfleet.Consciousofthefactthatlegalobligationsaretheminimumacceptablestandard,AnPostisstrivingforexcellenceinthisareaandiscontinuingtoincreaseawarenessamongemployeesandcontractorsofthenecessityforthehighestsafetystandards.

6. Prompt Payment of AccountsThepolicyofAnPostistocomplywiththerequirementsofrelevantpromptpaymentofaccountslegislation.TheGroup’sstandardtermsofcredittaken,unlessotherwisespecifiedinspecificcontractualarrangements,are30days.Appropriateinternalfinancialcontrolsareinplace,includingclearlydefinedrolesandresponsibilitiesandmonthlyreportingandreviewofpaymentpractices.Theseproceduresprovidereasonablebutnotabsoluteassuranceagainstmaterialnon-compliancewiththeregulations.

7. Treasury Risk ManagementTheGroup’streasuryoperationsaremanagedinaccordancewithpoliciesapprovedbytheBoard.TheGroup’sfinancialinstrumentsarelimitedtocash,termdepositsandbankloans/overdraftsandassuchtheGroup’soperationalexposuretofinancialrisksinthisregardarelimited.TheGroup’streasuryriskmanagementpolicyallowsforlimitedforeignexchangehedgepositionstobetakenbutdoesnotincludetheuseofderivatives.

8. Accounting RecordsThedirectorsbelievethattheyhavecompliedwiththerequirementsofSection202oftheCompaniesAct,1990withregardtobooksofaccountbyengagingaccountingpersonnelwithappropriateexpertiseandbyprovidingadequateresourcestothefinancefunction.ThebooksofaccountoftheCompanyaremaintainedattheCompany’spremisesattheGeneralPostOfficeO’ConnellStreet,Dublin1.

9. AuditorsInaccordancewithSection160(2)oftheCompaniesAct,1963,theauditor,KPMG,CharteredAccountants,willcontinueinoffice.

OnbehalfoftheBoard

James Wrynn, DirectorDonal Connell, Director27March2013

33

CoRpoRaTE goVERnanCE

ThedirectorsareaccountabletotheshareholdersforgoodcorporategovernanceandthisreportaddresseshowtheCodeofPracticefortheGovernanceofStateBodiesandtheprinciplesofgoodgovernancehavebeenappliedwithinAnPost.

The boardTheGroupiscontrolledthroughitsBoardofdirectors.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 ExecutiveTheChairmanleadstheBoardinthedeterminationofitsstrategyandintheachievementofitsobjectives.TheChairmanisresponsiblefororganisingthebusinessoftheBoard,ensuringitseffectivenessandsettingitsagenda.TheChairmanfacilitatestheeffectivecontributionofalldirectorsandconstructiverelationsbetweentheexecutivedirectorandtheotherdirectors,ensuresthatdirectorsreceiverelevant,accurateandtimelyinformationandmanageseffectivecommunicationwithshareholders.

TheChiefExecutivehasdirectchargeoftheGrouponadaytodaybasisandisaccountabletotheBoardforthefinancialandoperationalperformanceoftheGroup.

Directors and Directors’ IndependenceAlldirectorsareappointedtotheBoardbytheMinisterforCommunications,EnergyandNaturalResourcesandtheirconditionsofappointmentandfeesaresetoutinwriting.EmployeedirectorsareelectedinaccordancewiththeWorkerParticipation(StateEnterprises)Acts,1977to1993foratermoffouryears.ThepostmasterdirectoriselectedinaccordancewithSection81ofthePostalandTelecommunicationsServicesAct,1983foratermofthreeyears.Allotherdirectorsareappointedforafixedterm,usuallyfiveyears.

TheBoardiscurrentlycomprisedofthirteendirectorsviz:theChairman(designate),theChiefExecutive,fiveemployeedirectors,onepostmasterdirectorandfivenon-executivedirectors.Thenamesofthedirectorstogetherwiththeirbiographicaldetailsaresetoutonpages4and5.ThepositionsofChairmanandChiefExecutiveareheldbydifferentpeople.GivenitslegalstatusasaStateCompanyandtheresponsibilityofitsprincipalshareholderintheappointmentofdirectors,theBoardbelievesthatithasfulfilledalloftheobligationsthatarerequiredinrespectoftheappointmentofdirectors.

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 to the Code of Practice for the governance of State bodies, issued by the Department of finance and to apply the principles of good governance appropriate to the enterprise.


CoRpoRaTE goVERnanCE CONTINUED

TheBoardhasformalproceduresinplacewherebytheChairmanmeetswiththeBoardwithouttheexecutivedirectorbeingpresent.DirectorshavetherighttoensurethatanyunresolvedconcernstheymayhaveabouttherunningoftheGrouporaboutaparticularcourseofactionarerecordedintheBoardminutes.Iftheyhaveanysuchconcerns,theymay,onresignation,provideawrittenstatementtotheChairman,forcirculationtotheBoard.

ThedirectorsaregivenaccesstoindependentprofessionaladviceattheGroup’sexpensewheretheydeemitnecessarytodischargetheirresponsibilitiesasdirectors.

Professional DevelopmentOnappointment,allnewdirectorstakepartinaninductionprogrammewhentheyreceiveinformationabouttheGroup,theroleoftheBoardandthemattersreservedforitsdecision,thetermsofreferenceandmembershipoftheprincipalBoardandBoardCommittees,theGroup’scorporategovernancepracticesandprocedures,includingtheresponsibilitiesdelegatedtoGroupseniormanagement,andthelatestfinancialinformationabouttheGroup.Thiswilltypicallybesupplementedbymeetingswithkeyseniorexecutives.Throughouttheirperiodinoffice,thedirectorsarecontinuallyupdatedontheGroup’sbusiness,thecompetitiveandregulatoryenvironmentsinwhichitoperates,corporatesocialresponsibilitymattersandotherchangesaffectingtheGroupandthepostalindustryasawholeandbywrittenbriefingsandmeetingswithseniorexecutives.Directorsarealsoadvisedonappointmentoftheirlegalandotherdutiesandobligationsasadirector,bothinwritingandinface-to-facemeetingswiththeCompanySecretary.TheyarealsoupdatedonchangestothelegalandgovernancerequirementsoftheGroupanduponthemselvesasdirectors.

Performance EvaluationTheBoardhasadoptedandperformedaformalprocessfortheannualevaluationofitsownperformanceandthatofitsprincipalCommittees.Thisincludesperiodicexternalperformanceevaluation.TheBoardconsidersthattheintroductionofanyfurtherevaluationofindividualdirectorswouldbeinappropriategiventhemannerofappointmentofdirectors,theshareholdingstructureandexistingBoardprocedures.

The Company SecretaryTheCompanySecretaryisafulltimeemployeeofAnPost.TheCompanySecretaryisresponsibleforadvisingtheBoardthroughtheChairmanonallgovernancematters.AlldirectorshaveaccesstotheadviceandservicesoftheCompanySecretary.TheCompany’sArticlesofAssociationprovidethattheappointmentandremovaloftheCompanySecretaryisamatterforthefullBoard.

InformationRegularreportsandpapersarecirculatedtothedirectorsinatimelymannerinpreparationforBoardandCommitteemeetings.Thesepapersaresupplementedbyinformationspecificallyrequestedbythedirectorsfromtimetotime.

ThedirectorsreceivemonthlymanagementaccountsandregularmanagementreportsandinformationwhichenablethemtoscrutinisetheGroup’sandmanagement’sperformanceagainstagreedobjectives.

Relations with ShareholdersTheBoard,throughtheChairmanandmanagement,maintainanongoingdialoguewiththeCompany’sshareholdersonstrategicissues.TheChairmanandtheChiefExecutivegivefeedbacktotheBoardonissuesraisedwiththembytheshareholders.AlldirectorsnormallyattendtheAnnualGeneralMeetingandshareholdersareinvitedtoaskquestionsduringthemeetingandtomeetdirectorsaftertheformalproceedingshaveended.

Internal ControlAnongoingprocessexistsforidentifying,evaluatingandmanagingthesignificantrisksfacedbytheGroup.Thisprocessisperiodicallyreviewedbythedirectorsandhasbeeninplacethroughouttheaccountingperiodanduptothedatethefinancialstatementswereapproved.

ThedirectorsareresponsiblefortheGroup’ssystemofinternalcontrolandsetappropriatepoliciesoninternalcontrol,seekregularassurancethatenablesthemtosatisfythemselvesthatthesystemisfunctioningeffectivelyandensurethatthesystemofinternalcontroliseffectiveinmanagingrisksinthemannerwhichithasapproved.Suchasystemisdesignedtomanageratherthaneliminatebusinessrisksandcanprovideonlyreasonableratherthanabsoluteassuranceagainstmaterialmisstatementorloss.ThekeyrisksaresetoutatSection3oftheReportoftheDirectors(page31).

35

ThedirectorshavecontinuedtoreviewtheeffectivenessoftheGroup’ssystemoffinancialandnon-financialcontrolsduring2012,includingoperationalandcompliancecontrols,riskmanagementandtheGroup’shighlevelinternalcontrolarrangements.Thesereviewshaveincludedanassessmentofinternalcontrolsbymanagement,managementassuranceofthemaintenanceofcontrols,reportsfromtheinternalauditorsandreportsfromtheexternalauditoronmattersidentifiedinthecourseofitsstatutoryauditwork.

TheGroupviewsthecarefulmanagementofriskasakeymanagementactivity.TheBoardhasadoptedaRiskManagementPolicyandaRiskManagementFrameworkandappointedaChiefRiskOfficer.TheresponsibilitiesoftheAuditandRiskCommitteeembracetheresponsibilitiesofaRiskCommittee.Managingbusinessrisktodeliveropportunitiesisakeyelementofallactivities.ThisisdoneusingasimpleandflexibleframeworkwhichprovidesaconsistentandsustainedwayofimplementingtheGroup’svalues.Thesebusinessrisks,whichmaybestrategic,operational,reputational,financialorenvironmental,determineineachsituationthelevelofacceptableriskandcontrols.

Managementisresponsiblefortheidentificationandevaluationofsignificantrisksandforthedesignandimplementationofappropriateinternalcontrols.Theserisksareassessedonanongoingbasisandarederivedfromavarietyofexternalandinternalsources.ManagementreportsregularlytotheBoardonthekeyrisksinherentinthebusinessandonthewayinwhichtheserisksaremanaged.ManagementalsoreportstotheBoardonanysignificantchangesintheGroup’sbusinessandonanyrisksassociatedwithsuchchanges.Theprocessusedtoidentifyandmanagekeyrisksisanintegralpartoftheinternalcontrolenvironment.

Thekeyprocedureswhichthedirectorshaveestablishedwithaviewtoprovidingeffectiveinternalcontrolareasfollows:

• aclearfocusonbusinessobjectivesasdeterminedbytheBoardafterconsiderationofthestatutoryresponsibilitiesandriskprofileoftheGroup’sbusinesses.

• adefinedorganisationalstructurewithclearlinesofresponsibility,delegationofauthorityandsegregationofdutiesdesignedtofosterabeneficialcontrolenvironment.

• ariskmanagementprocesswhichconsidersthestrategyanddevelopmentofthebusinessinthecontextoftheannualbudgetprocesswhenfinancialplansandperformancetargetsaresetandreviewedbytheBoardinlightoftheGroup’soverallobjectives.

• areportingandcontrolsystemwhichensuresthatindividualbusinessesreporttotheBoardonanongoingbasisontheirprogressinachievingobjectives.Thesystemforreportingcoversbothoperationalandfinancialperformance,occursonatimelybasisandensuresthatbudgetaryvariancesareexaminedandaddressedpromptly.

• 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, the Audit and Risk Committee and the Personnel CommitteeTenBoardmeetingswereheldduringtheyearended31December2012andtheattendancerecordofeachdirectorissetoutinthefollowingtable:

Name Eligible to attend Attended

JohnFitzgerald 10 10

NoelAdamson 2 2

PatrickCompton 10 10

JerryCondon 8 7

DonalConnell 10 10

AnneConnolly 9 7

PaddyCostello 8 8

ThomasDevlin 10 9

PaulHenry 10 10

WilliamMooney 2 2

PeterOrmond 10 9

MartinaO’Connell 2 2

GerryO’Toole 8 8

JohnQuinlivan 10* 5

AlanSloane 10 10

CatherineWoods 10 7

JamesWrynn 10 9

*MrQuinlivanwasunabletoattendallmeetingsduetoillness

FivemeetingsoftheRemunerationCommitteewereheldduringtheyearended31December2012andtheattendancerecordofeachdirector,eligibletoattend,issetoutinthefollowingtable:


JohnFitzgerald 5 5

DonalConnell 5 5

JohnQuinlivan 5 2

CatherineWoods 5 4


37

EightmeetingsoftheAuditandRiskCommitteewereheldduringtheyearended31December2012andtheattendancerecordofeachdirector,eligibletoattend,issetoutinthefollowingtable:


JamesWrynn 8 8

AnneConnolly 7 6

PaulHenry 8 6

CatherineWoods 8 8

OnemeetingofthePersonnelCommitteewereheldduringtheyearended31December2012andtheattendancerecordofeachdirector,eligibletoattend,issetoutinthefollowingtable:


JohnFitzgerald 1 1

DonalConnell 1 1

AnneConnolly 1 1

JerryCondon 1 1

GerryO’Toole 1 1

Directors’ RemunerationTheremunerationoftheChiefExecutiveisdeterminedinaccordancewiththeguidelinesissuedbytheDepartmentofPublicExpenditureandReformfordeterminingtheremunerationofChiefExecutiveOfficersofCommercialStateBodiesandissubjecttotheapprovaloftheRemunerationCommitteeoftheBoardofAnPostandtheMinisterforCommunications,EnergyandNaturalResources.FeesforalldirectorsaredeterminedbytheMinisterforCommunications,EnergyandNaturalResourceswiththeapprovaloftheMinisterforPublicExpenditureandReform.

Thedisclosuresmadeinthesefinancialstatementsrelatingtodirectors’emolumentsandpensioninformationarethoserequiredundertheCodeofPracticefortheGovernanceofStateBodies.

Remuneration CommitteeTheRemunerationCommitteein2012comprisedofthreenon-executivedirectorsandtheChiefExecutive.JohnFitzgeraldactedasChairmanoftheCommitteeuntilhisretirementon28February2013.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.

• toreviewthecontinueddevelopmentandimplementationofahumanresourcesstrategyandfurtheranceofahumanresourcesplanningprocess.



Audit and Risk Committee In2012theAuditandRiskCommitteewascomprisedoffournon-executivedirectors.JamesWrynnisChairmanoftheCommittee.Whennecessary,non-Committeemembersareinvitedtoattend.Underitstermsofreference,theCommitteeistoassisttheBoardinfulfillingitsresponsibilitiesbyprovidinganindependentreviewoffinancialreporting,bysatisfyingitselfastotheeffectivenessoftheCompany’sinternalcontrolsandastothesufficiencyoftheexternalandinternalaudits.

TheCommitteeisresponsibleformonitoringtheeffectivenessoftheexternalauditprocessandmakingrecommendationstotheBoardinrelationtotheappointment,re-appointmentandremunerationoftheexternalauditor.ItisresponsibleforensuringthatanappropriaterelationshipbetweentheGroupandtheexternalauditorismaintained,includingreviewingnon-auditservicesandfees.Asaresultofregulatoryorsimilarrequirements,itisnecessarytoemploytheGroup’sexternalauditorforcertainauditrelatedandnon-auditservices.

Inordertomaintaintheindependenceoftheexternalauditor,theAuditandRiskCommitteehasdeterminedpoliciesastowhatauditrelatedandnon-auditservicescanbeprovidedbytheGroup’sexternalauditorsandtheapprovalprocessrelatedtotheseservices.Underthesepolicies,workofaconsultancynaturewillnotbeofferedtotheexternalauditorunlessthereareclearefficienciesandvalue-addedbenefitstotheGroupwhileensuringthattheobjectivityandindependenceoftheexternalauditorismaintained.TheAuditandRiskCommitteemonitorstheleveloffeespaidtotheexternalauditor.

TheCommitteereviewsannuallytheGroup’ssystemsofinternalcontrolandtheprocessesformonitoringandevaluatingtherisksfacingtheGroup.

TheCommitteealsoassistsand,whererelevant,makesrecommendationstotheBoardonthedischargingofitsresponsibilitiesinrelationtosecurity.TheCommitteemeetswithmanagement,aswellasprivatelywiththeexternalauditor.

In2012,theAuditandRiskCommitteedischargeditsresponsibilitiesby:

• reviewingtheGroup’sdraftfinancialstatementsfor2011priortoBoardapprovalandmeetingandreviewingwiththeexternalauditortheirreportsthereon;

• reviewingtheappropriatenessoftheGroup’saccountingpolicies;

• reviewingthepotentialimpactontheGroup’sfinancialstatementsofsignificantmattersarisingduringtheyear;

• reviewingtheresourcesofinternalaudit,approvingtheinternalauditplans,reviewinginternalauditreportsanddealingwithsignificantcontrolissuesraisedbytheinternalauditor;

• reviewingthetenderprocessfortheappointmentoftheexternalauditor;

• reviewingtheauditfeeandnon-auditfeespayabletotheGroup’sexternalauditor;

• reviewingtheexternalauditors’planfortheauditoftheGroup’sfinancialstatementsfor2012,confirmationsofauditorindependenceandtheproposedauditfee,andapprovingthetermsofengagementfortheauditonbehalfoftheBoard;

• monitoringimplementationoftherecommendationsofanexternalreportcommissionedbymanagementinlightofanidentifiedincidentoflossataretailbranchin2011;

• reviewingtheRiskManagementPolicyandtheRiskManagementFramework;

• reviewingthekeyriskstothebusinessandconsideringtheadequacyoftheGroup’ssystemofriskidentificationandassessment;

• reviewinganannualreportontheGroup’ssystemsofinternalcontrolanditseffectiveness,reportingtotheBoardontheresultsofthereviewandreceivingregularupdatesonkeyriskareasoffinancialcontrol;

• reviewingsecuritypoliciesandproceduresfortheprotectionofstaff,postmastersandcustomersandforsafeguardingassetsandtheimplementationofandcompliancewiththosepoliciesandprocedures.

39

TheGroupoperatesprocedurestoensurethatappropriatearrangementsareinplaceforemployeestobeabletoraise,inconfidence,mattersofpossibleimpropriety,withsuitablesubsequentfollow-upaction.Reportingchannelshavebeencreatedwherebyperceivedwrongdoingmaybereportedviapost,telephoneandemail,anonymouslyifpreferred.

Nomination CommitteeAsalltheauthorityregardingtheappointmentofdirectorsisvestedintheMinisterforCommunications,EnergyandNaturalResources,withtheconsentoftheMinisterforPublicExpenditureandReform,thematterofconstitutingaNominationCommitteedoesnotrequireconsiderationbytheBoard.

Compliance StatementAsnotedabove,indevelopingitscorporategovernancepolicy,theBoardhassoughttogiveeffecttotheCodeofPracticefortheGovernanceofStateBodies,issuedbytheDepartmentofFinance,andtomeetthestandardsofgoodgovernanceappropriatetotheenterprise.

ThedirectorsconfirmthattheGrouphasbeenincompliancewiththeCodeofPracticefortheGovernanceofStateBodiesthroughoutthefinancialyearunderreview.

going ConcernThedirectorshavereviewedtheGroup’sbusinessplanandotherrelevantinformationandhaveareasonableexpectationthattheGroupwillcontinueinoperationalexistencefortheforeseeablefuture.Forthisreason,thedirectorscontinuetoadoptthegoingconcernbasisinpreparingthefinancialstatements.

OnbehalfoftheBoard



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

UndertheAct,theaccountingproceduresofAnPostarerequiredtobeconductedinaccordancewithdirectionslaiddownbyComRegandwithcertainprovisionsintheAct.On8December2006,ComRegissuedadirectiontoAnPostsettingouttheregulator’sdetailedrequirementsinrelationtotheaccountingsystemsofAnPost(theDirection).

ThedirectorsacknowledgetheirresponsibilityforcompliancewiththeaccountingprovisionsoftheActandthefollowingstatementdescribeshowAnPostappliedtherelevantprovisionsoftheActandtheDirectionfortheaccountingyearbeginningon1January2012.

financial Records and Accounting SystemsThefinancialrecordsandaccountingsystemsmaintainedbyAnPostcontainsufficientdetailtoenablemanagementtoensurethattheycomplywiththeaccountingprovisionsoftheDirection.SeparateaccountsaremaintainedforeachoftheserviceswithintheUniversalService.

Separated AccountsSegmentalprofitandlossaccountsandstatementsofnetassetsarebeingpreparedforsubmissiontoComRegfortheyearended31December2012.IncompliancewiththeDirection,acompetentbodyisreviewingtheseaccountsandwillissueanopinionontheircompliancewiththeDirection.

Management Accounting ManualAdetailedaccountingmanualhasbeenpreparedshowingtherangeandscopeofdatatobecollectedforthepurposeofcomplyingwiththeDirectionandthebasisonwhichthedataistobeallocated/apportionedbetweenservices.ThiswassubmittedtoComRegin2012.

Themanualreflectsthedetailedrevenuedeterminationandcostallocation,apportionmentprinciplesandrulessetoutintheDirection.

Statement of ComplianceBasedontheabovestepsandactions,thedirectorsbelievethatAnPosthascompliedwiththerelevantprovisionsoftheActandwiththeDirectionofComReginrelationtotheAccountingSystemsofAnPostfortheyearended31December2012.

OnbehalfoftheBoard


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 the Universal Service Provider.


XSTaTEmEnT oF dIRECToRS’ RESponSIbIlITIES

CompanylawrequiresthedirectorstoprepareGroupandCompanyfinancialstatementsforeachfinancialyear.UnderthatlawthedirectorshaveelectedtopreparetheGroupandCompanyfinancialstatementsinaccordancewithGenerallyAcceptedAccountingPracticeinIreland,comprisingapplicablelawandtheaccountingstandardsissuedbytheFinancialReportingCouncilandpromulgatedbytheInstituteofCharteredAccountantsinIreland.

TheGroupandCompanyfinancialstatementsarerequiredbylawtogiveatrueandfairviewofthestateofaffairsoftheGroupandtheCompanyandoftheprofitorlossoftheGroupforthatperiod.

InpreparingeachoftheGroupandCompanyfinancialstatements,thedirectorsarerequiredto:

• selectsuitableaccountingpoliciesandthenapplythemconsistently;

• makejudgementsandestimatesthatarereasonableandprudent;and

• preparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethattheGroupwillcontinueinbusiness.

ThedirectorsareresponsibleforkeepingproperbooksofaccountwhichdisclosewithreasonableaccuracyatanytimethefinancialpositionoftheGroupandCompanyandtoenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesActs,1963to2012.TheyarealsoresponsiblefortakingsuchstepsasarereasonablyopentothemtosafeguardtheassetsoftheGroupandCompanyandtopreventanddetectfraudandotherirregularities.

ThedirectorsarealsoresponsibleforpreparingaDirectors’ReportthatcomplieswiththerequirementsoftheCompaniesActs,1963to2012.

ThedirectorsareresponsibleforthemaintenanceandintegrityofthecorporateandfinancialinformationincludedontheCompany’swebsite.LegislationintheRepublicofIrelandgoverningthepreparationanddisseminationoffinancialstatementsmaydifferfromlegislationinotherjurisdictions.

OnbehalfoftheBoard


The directors are responsible for preparing the Annual Report and financial statements, in accordance with applicable law and regulations.


ThefinancialreportingframeworkthathasbeenappliedintheirpreparationisIrishlawandaccountingstandardsissuedbytheFinancialReportingCouncilandpromulgatedbytheInstituteofCharteredAccountantsinIreland(GenerallyAcceptedAccountingPracticeinIreland).

ThisreportismadesolelytotheCompany’smembers,asabody,inaccordancewithsection193oftheCompaniesAct1990.OurauditworkhasbeenundertakensothatwemightstatetotheCompany’smembersthosematterswearerequiredtostatetotheminanauditor’sreportandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthantheCompanyandtheCompany’smembersasabody,forourauditwork,forthisreport,orfortheopinionswehaveformed.

Respective Responsibilities of Directors and AuditorAsexplainedmorefullyintheDirectors’ResponsibilitiesStatementsetoutonpage41thedirectorsareresponsibleforthepreparationofthefinancialstatementsgivingatrueandfairview.OurresponsibilityistoauditandexpressanopiniononthefinancialstatementsinaccordancewithIrishlawandInternationalStandardsonAuditing(UKandIreland).ThosestandardsrequireustocomplywiththeEthicalStandardsforAuditorsissuedbytheAuditingPracticesBoard.

Scope of the Audit of the financial StatementsAnauditinvolvesobtainingevidenceabouttheamountsanddisclosuresinthefinancialstatementssufficienttogivereasonableassurancethatthefinancialstatementsarefreefrommaterialmisstatement,whethercausedbyfraudorerror.Thisincludesanassessmentof:whethertheaccountingpoliciesareappropriatetotheGroupandCompanycircumstancesandhavebeenconsistentlyappliedandadequatelydisclosed;thereasonablenessofsignificantaccountingestimatesmadebythedirectors;andtheoverallpresentationofthefinancialstatements.Inaddition,wereadallthefinancialandnon-financialinformationintheannualreporttoidentifymaterialinconsistencieswiththeauditedfinancialstatements.Ifwebecomeawareofanyapparentmaterialmisstatementsorinconsistenciesweconsidertheimplicationsforourreport.

Opinion on financial StatementsInouropinion:• thefinancialstatementsgiveatrueandfairview,inaccordancewithGenerally

AcceptedAccountingPracticeinIreland,ofthestateoftheGroup’sandCompany’saffairsasat31December2012andoftheGroup’slossfortheyearthenended;and

• thefinancialstatementshavebeenproperlypreparedinaccordancewiththeCompaniesActs,1963to2012.

Matters on which we are required to report by the Companies Acts, 1963 to 2012Wehaveobtainedalltheinformationandexplanationswhichweconsidernecessaryforthepurposesofouraudit.

ThebalancesheetoftheCompanyisinagreementwiththebooksofaccountand,inouropinion,properbooksofaccounthavebeenkeptbytheCompany.

Inouropiniontheinformationgiveninthedirectors’reportisconsistentwiththefinancialstatements.

REpoRT oF THE IndEpEndEnT aUdIToR To THE mEmbERS oF an poST

We have audited the group and Company financial statements (‘‘financial statements’’) of An Post for the year ended 31 December 2012 which comprise the consolidated profit and loss account, the consolidated statement of total recognised gains and losses, the consolidated balance sheet, the company balance sheet, the consolidated cash flow statement, the statement of accounting policies and the related notes.

43

Thenetassetsofthecompany,asstatedinthebalancesheetaremorethanhalfoftheamountofitscalled-upsharecapitaland,inouropinion,onthatbasistheredidnotexistat31December2012afinancialsituationwhichunderSection40(1)oftheCompanies(Amendment)Act,1983wouldrequiretheconveningofanextraordinarygeneralmeetingofthecompany.

Matters on which we are required to report by exceptionWehavenothingtoreportinrespectofthefollowing:

UndertheCompaniesActs1963to2012wearerequiredtoreportif,inouropinionthedisclosuresofdirectors’remunerationandtransactionsspecifiedbylawarenotmade.

UndertheCodeofPracticefortheGovernanceofStateBodies(‘‘theCode’’)wearerequiredtoreportifthestatementregardingthesystemofinternalfinancialcontrolrequiredundertheCodeasincludedintheCorporateGovernanceStatementonpages33to39doesnotreflecttheGroup’scompliancewithparagraph13.1(iii)oftheCodeorifitisnotconsistentwiththeinformationofwhichweareawarefromourauditworkonthefinancialstatementsandwereportifitdoesnot.

Caroline flynn forandonbehalfof

CharteredAccountants,StatutoryAuditFirm1StokesPlaceSt.Stephen’sGreenDublin227March2013


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)

Respective Responsibilities of Directors and AuditorThedirectorsprepareanannualstatementofcompliancewiththeaccountingprovisionsoftheActandtheDirectionforwhichtheyareresponsible.Theobjectiveofourreviewistodrawattentiontonon-compliancewiththerequirementsoftheaccountingprovisionsoftheActandwiththeDirection.Ourreviewdoesnotconstituteanauditoftheseparatedaccounts.Aseparateauditreportwillbeissuedontheauditoftheregulatoryaccounts.

basis of OpinionWecarriedoutourreviewinaccordancewiththegeneralprinciplesandguidanceoftheAuditingPracticesBoard.

OpinionBasedonenquiryofcertaindirectorsandofficersoftheCompanyandexaminationofrelevantdocuments,inouropinion,thedirectors’statementonpage40appropriatelyreflectstheCompany’scompliance,fortheyearended31December2012,withtheaccountingprovisionsoftheActandwiththeDirectionontheAccountingSystemsofAnPost,dated8December2006issuedbyComReg.

CharteredAccountants,StatutoryAuditFirm1StokesPlaceStStephen’sGreenDublin2

27March2013

In addition to our audit of the financial statements, we have reviewed the directors’ statement on page 40 concerning the Company’s compliance, for the year ended 31 December 2012, 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.

45

1. basis of Preparation Thefinancialstatementsarepreparedunderthehistoricalcostconventionand

inaccordancewithapplicablelawandIrishGenerallyAcceptedAccountingPracticewhichincludescompliancewiththefinancialreportingstandardsoftheFinancialReportingCouncilaspromulgatedinIrelandbyTheInstituteofCharteredAccountantsinIreland.

2. basis of Consolidation Theconsolidatedfinancialstatementsincludethefinancialstatementsofthe

Companyanditssubsidiaryundertakings(exceptAnPostNationalLotteryCompany)madeuptotheendofthefinancialyear.Theresultsofsubsidiaryundertakingsacquiredordisposedofduringtheyearareincludedintheconsolidatedprofitandlossaccountfromthedateofacquisitionoruptodateofdisposal.Upontheacquisitionofabusiness,fairvaluesareattributedtotheidentifiablenetassetsacquired.Goodwillarisingonacquisitionsisdealtwithassetoutbelow.IfthefinancialyearofasubsidiaryundertakingdoesnotcoincidewiththatoftheparentCompany,theGroupfinancialstatementsconsolidateinterimfinancialinformationpreparedbythesubsidiaryattheendoftheparent’sfinancialyear.

ThesoleactivityofAnPostNationalLotteryCompanyistheoperationoftheNationalLotteryunderlicencefromtheMinisterforPublicExpenditureandReforminaccordancewiththeprovisionsoftheNationalLotteryAct,1986andthesurplusgeneratedeachyearisentirelyattributabletotheNationalLotteryFundwhichismanagedandcontrolledbytheMinister.Accordingly,AnPostdoesnotparticipateinthesurplusgeneratedbyAnPostNationalLotteryCompanyandneitherisitentitledtoexerciseanyrightsovertheassetsofthatcompany.Onthisbasis,inaccordancewiththeprovisionsofFinancialReportingStandardNo.2‘AccountingforSubsidiaryUndertakings’andtheEuropeanCommunities(Companies:GroupAccounts)Regulations,1992,theconsolidatedfinancialstatementsdonotincorporatethefinancialstatementsofAnPostNationalLotteryCompany.SeparatefinancialstatementsofAnPostNationalLotteryCompanyaretobepublishedinApril2013.

Associatedundertakings(associates)arethoseundertakingsinwhichtheGrouphasaparticipatinginterestintheequitycapitalandoverwhichitisabletoexercisesignificantinfluence.

Associatesareaccountedforusingtheequitymethodofaccounting.TheGroup’sshareofprofitslesslossesofassociatesisincludedintheconsolidatedprofitandlossaccountanditsinterestsintheirnetassetsorliabilities,otherthangoodwill,areincludedasfixedassetinvestmentsintheconsolidatedbalancesheet.

InvestmentinassociatesareshownintheCompanybalancesheetasfinancialfixedassetsandarevaluedatcostlessprovisionsforimpairmentsinvalue.

STaTEmEnT oF aCCoUnTIng polICIES FoR THE yEaR EndEd 31 dECEmbER 2012

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the group’s financial statements.



3. Turnover Turnoverisrecognisedasservicesareprovidedandconsistsofincomefrompostage,agencyservices,poundage

fromremittanceservices,courierandlogisticservices,consultancyservices,financialservices,rentsandinterestincome.IncomefromagencyservicesisinrespectofservicesperformedforGovernmentDepartments,theNationalTreasuryManagementAgency,AnPostNationalLotteryCompanyandotherbodies.Amountsheldintheperformanceoftheseagencyservicesareincludedinamountsheldintrustincashatbankandathand.

Postageincomeisrecognisedintheprofitandlossaccountassalesaremadewithanadjustmenttodeferredrevenueforstampssoldandunusedandbalancesinpostagemetermachinesunusedattheyearend.Otherincome,primarilyagencyincomeandserviceincome,isrecogniseduponprovisionoftheunderlyingservice.

4. Saving Services TheCompanyoperates,onanagencybasisandforanagreedremuneration,thePostOfficeSavingsBankandother

savingsservicesfortheNationalTreasuryManagementAgency,whichactsonbehalfoftheMinisterforFinance.

ThefundsareremittedregularlytotheNationalTreasuryManagementAgency.TheassetsandliabilitiesofsuchsavingsservicesvestintheMinisterforFinanceand,accordingly,arenotincludedinthesefinancialstatements.

5. grants Revenuebasedgrantsarecreditedtotheprofitandlossaccounttooffsetthematchingexpenditure.

CapitalgrantsreceivedandreceivableunderEUassistedschemesarerecognisedwhenreceivedorwhentheirreceiptcanbeforeseenwithvirtualcertainty.

Capitalgrantsaretreatedasdeferredincomeandamortisedtotheprofitandlossaccountonabasisconsistentwiththedepreciationpolicyoftherelatedtangiblefixedassets.

6. Tangible fixed Assets Tangiblefixedassetsarestatedatcostlessaccumulateddepreciationandanychargesforimpairment.

Freeholdandlongleaseholdlandisnotdepreciated.Depreciationonothertangiblefixedassetsischargedtotheprofitandlossaccountonastraightlinebasissoastowriteoffthoseassets,adjustedforestimatedresidualvalue,overtheexpectedusefullifeofeachcategory.Theremainingusefullivesoftheassetsandtheirresidualvaluesarereviewedonaregularbasis.

Depreciationisprovidedonadditionswitheffectfromthefirstdayofthemonthfollowingcommissioningandondisposalsuptotheendofthemonthofretirement.

Theestimatedusefullivesareasfollows:

Years

Freehold&longleaseholdbuildings 20–50orleasetermifshorter

InterestinGPO 50

Motorvehicles 5

Operating&computerequipment 3–10

7. Operating Leases Operatingleaserentalsarechargedtotheprofitandlossaccountonastraightlinebasisovertheleaseterm.

8. goodwill Goodwillarisingonacquisitions,representingtheexcessofthepurchasepriceoverthefairvalueofthenet

identifiableassetsorliabilitiesacquired,iscapitalisedandamortisedtotheprofitandlossaccountonastraightlinebasisoveritsexpectedusefullifeofuptotwentyyears.Thecarryingvalueofgoodwillisreviewedannuallyandprovisionismadeforanyimpairmentinvalue.Ondisposalofabusiness,anygoodwillisincludedindeterminingtheprofitorlossonsaleofthebusiness.


XSTaTEmEnT oF aCCoUnTIng polICIES FoR THE yEaR EndEd 31 dECEmbER 2012

9. financial fixed Assets Financialfixedassetsareshownatcostlessprovisionsforimpairmentsinvalue.Incomefromfinancialfixed

assets,togetherwithanyrelatedtaxcredit,isrecognisedintheprofitandlossaccountintheyearinwhichitisreceivable.

10. Taxation Currenttax,includingIrishcorporationtaxandforeigntax(es),isprovidedforontheGroup’staxableprofits,at

amountsexpectedtobepaid(orrecovered)usingthetaxratesandlawsthathavebeenenactedorsubstantivelyenactedbythebalancesheetdate.

Deferredtaxisrecognisedinrespectofalltimingdifferencesthathaveoriginatedbutnotreversedatthebalancesheetdate.Provisionismadeattheratesexpectedtoapplywhenthetimingdifferencesreverse.TimingdifferencesaredifferencesbetweentheGroup’staxableprofitsanditsresultsasstatedinthefinancialstatementsthatarisefromtheinclusionofgainsandlossesintaxableprofitsinperiodsdifferentfromthoseinwhichtheyarerecognisedinthefinancialstatements.

Anetdeferredtaxassetisregardedasrecoverableandthereforerecognisedonlywhen,onthebasisofallavailableevidence,itcanberegardedasmorelikelythannotthattherewillbesuitabletaxableprofitsfromwhichthefuturereversaloftheunderlyingtimingdifferencescanbededucted.

Deferredtaxisrecognisedinrespectoftheretainedearningsofoverseassubsidiariesandassociatesonlytotheextentthat,atthebalancesheetdate,dividendshavebeenaccruedorreceivableorabindingagreementtodistributepastearningsinfuturehasbeenenteredintobythesubsidiaryorassociate.

11. Pensions TheGroupprovidespensionstoitsemployeesunderdefinedbenefitsuperannuationschemesandadefined

contributionscheme.Italsoprovidesretirementgratuitiesundernormalcircumstancestopostmastersengagedasagentsandtocertainnon-pensionableemployees.

Inrelationtothedefinedcontributionscheme,contributionsareaccruedandrecognisedinoperatingprofitorlossintheperiodinwhichtheyareearnedbytherelevantemployees.

Forthedefinedbenefitschemes,thedifferencebetweenthemarketvalueoftheschemes’assetsandtheactuariallyassessedpresentvalueoftheschemes’liabilities,calculatedusingtheprojectedunitcreditmethod,isdisclosedasanasset/liabilityonthebalancesheet,netofadeferredtaxliabilityorasset(totheextentthatitisrecoverable).

Theamountchargedtooperatingprofitistheactuariallydeterminedcostofpensionbenefitspromisedtoemployeesearnedduringtheyearplusanybenefitimprovementsgrantedtomembersduringtheyear.

Theexpectedreturnonthepensionschemes’assetsduringtheyearandtheincreaseintheschemes’liabilitiesduetotheunwindingofthediscountrateduringtheyearareshownasfinancingcostsintheprofitandlossaccount.

Anydifferencebetweentheexpectedreturnonassetsandthatactuallyachievedandanychangestotheliabilitiesduetochangesinassumptionsorbecauseactualexperienceduringtheyearwasdifferenttothatassumed,arerecognisedasactuarialgainsandlossesinthestatementoftotalrecognisedgainsandlosses.

Inrelationtotheunfundedliabilityforretirementgratuities,theactuariallydeterminedpresentvalueoftheliabilityisrecordedinfullinthebalancesheetanditisincreasedforthecostofadditionalbenefitsearnedduringtheyearwhichischargedtooperatingprofit.Theunwindingofthediscountontheliabilityisshownasafinancingcostintheprofitandlossaccount.Changestotheliabilityasaresultofchangesinmeasurementassumptionsorbecauseactualexperienceisdifferenttothatassumedareconsideredtobeanactuarialgainorlossandareincludedinthestatementoftotalrecognisedgainsandlosses.



12. foreign Currencies Transactionsdenominatedinforeigncurrenciesaretranslatedintoeuroandrecordedattheratesofexchange

rulingatthedatesofthetransactions.Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedintoeuroattheratesofexchangerulingatthebalancesheetdateoratforwardpurchasecontractrateswheresuchcontractsexist.Allsuchexchangedifferencesaredealtwithintheprofitandlossaccount.

Resultsofoverseassubsidiariesaretranslatedintoeuroattheaverageexchangeratefortheperiod.Theassetsandliabilitiesofoverseassubsidiariesaretranslatedintoeuroatratesofexchangerulingatthebalancesheetdate.Translationdifferencesarereportedasamovementonreserves.


X

Notes 2012 €’000

2011 €’000

group turnover – continuing operations 2 807,295 806,714

Operatingcosts 3 (824,779) (804,498)

group operating (loss)/profit – continuing operations (17,484) 2,216

Otherfinance(expense)/incomenet 17 (19,750) 1,550

(Loss)/profit on ordinary activities before taxation 4 (37,234) 3,766

Taxon(loss)/profitonordinaryactivities 5 (129) (2,134)

(Loss)/profit on ordinary activities after taxation (37,363) 1,632

Minorityinterest 21 (2,014) (1,285)

(Loss)/profit for the financial year 6/19 (39,377) 347

OnbehalfoftheBoard

James Wrynn, DirectorDonal Connell, Director

ConSolIdaTEd pRoFIT and loSS aCCoUnT FoR THE yEaR EndEd 31 dECEmbER 2012


Notes 2012 €’000

2011 €’000

(Loss)/profitforthefinancialyear (39,377) 347

Actuarialgain/(loss)onpostemploymentplans 17 214,700 (121,630)

Total recognised gains/(losses) 175,323 (121,283)

ConSolIdaTEd STaTEmEnT oF ToTal RECognISEd gaInS and loSSES FoR THE yEaR EndEd 31 dECEmbER 2012

51

Notes 2012 €’000

2011 €’000

fixed Assets

Intangibleassets-goodwill 8 22,253 24,599

Tangibleassets 9 272,532 266,530

Financialassets 10 - -

294,785 291,129

Current Assets

Debtors 11 103,155 112,235

Cashatbankandinhand 12 112,105 150,064

215,260 262,299

Creditors:Amountsfallingduewithinoneyear 13 (186,007) (191,572)

Net Current Assets 29,253 70,727

Total Assets less Current Liabilities 324,038 361,856

Creditors: Amountsfallingdueaftermorethanoneyear 15 (4,360) (3,461)

Provisions for Liabilities 16 (22,352) (39,432)

Net Assets excluding Pension Liability 297,326 318,963

Pension Liability 17 (284,620) (483,594)

Net Assets/(Liabilities) including Pension Liability 12,706 (164,631)

Capital and Reserves

Calledupsharecapital 18 68,239 68,239

Capitalconversionreservefund 18 877 877

Profitandlossaccount 19 (52,265) (227,588)

Shareholders’ funds/(Deficit) 20 16,851 (158,472)

Minorityinterest 21 (4,145) (6,159)

12,706 (164,631)

OnbehalfoftheBoard


ConSolIdaTEd balanCE SHEET aT 31 dECEmbER 2012


Notes 2012 €’000

2011 €’000

fixed Assets

Tangibleassets 9 274,745 270,986

Financialassets 10 8,969 11,084

283,714 282,070

Current Assets

Debtors 11 54,051 67,724

Cashatbankandinhand 12 104,623 141,178

158,674 208,902

Creditors: Amountsfallingduewithinoneyear 13 (163,150) (164,595)

Net Current (Liabilities)/Assets (4,476) 44,307

Total Assets less Current Liabilities 279,238 326,377

Creditors:Amountsfallingdueaftermorethanoneyear 15 (3,360) (3,461)

Provisions for Liabilities 16 (22,352) (39,432)

Net Assets excluding Pension Liability 253,526 283,484

Pension Liability 17 (284,620) (483,594)

Net Liabilities including Pension Liability (31,094) (200,110)

Capital and Reserves

Calledupsharecapital 18 68,239 68,239

Capitalconversionreservefund 18 877 877

Profitandlossaccount 19 (100,210) (269,226)

Shareholders’ Deficit 20 (31,094) (200,110)

OnbehalfoftheBoard


Company balanCE SHEET aT 31 dECEmbER 2012

53

Notes 2012 2011€’000 €’000

Net cash outflow from operating activities 22 (5,757) (15,447)

Taxation 22 (1,729) 2,796

Capital expenditure and financial investment 22 (30,442) (31,778)

Acquisitions 22 - (3,310)

financing 22 - (1,000)

Cash outflow before use of liquid resources (37,928) (48,739)

Management of liquid resources 22 57,760 50,195

Increase in cash in the year 19,832 1,456

REConCIlIaTIon oF nET CaSH FloW To moVEmEnT In nET FUndS

Notes 2012 2011€’000 €’000

Increase in cash in the year 23 19,832 1,456

Cashflowsfromchangeinliquidresources 23 (57,760) (50,195)

Changeinnetfundsresultingfromcashflows 23 (37,928) (48,739)

Net funds at beginning of year 23 147,603 196,342

Net funds at end of year 23 109,675 147,603

ConSolIdaTEd CaSH FloW STaTEmEnT FoR THE yEaR EndEd 31 dECEmbER 2012


noTES To THE FInanCIal STaTEmEnTS FoR THE yEaR EndEd 31 dECEmbER 2012

1. Status of Company

TheCompanyisalimitedliabilitycompany,incorporatedundertheCompaniesActs,1963to2012.UnderthePostalandTelecommunicationsServicesAct,1983,theCompanyisentitledtoomittheword‘Limited’fromitsname.

2. Turnover

2012 €’000

2011 €’000

Theanalysisofturnoverisasfollows:

Republic of Ireland

Postage:Lettersandparcels 501,450 507,306

Postage:Electionsandreferendum 3,725 27,996

Postoffices:Agency,remittanceandrelatedservices 169,041 171,613

Otherservices 42,072 41,598

Interestincome 8,760 9,358

725,048 757,871

United Kingdom

Otherservices 82,247 48,843

807,295 806,714

Intheopinionofthedirectors,fullercompliancewiththedisclosurerequirementsofSSAP25‘SegmentalReporting’wouldbeprejudicialtotheGroup’sinterests.

3. Operating Costs

2012 €’000

2011 €’000

TheconsolidatedcostsfortheGroupwereasfollows:

Staff costs

Wagesandsalaries 416,369 418,735

Postmasters’costs 74,614 74,432

Socialwelfarecosts 36,270 36,648

527,253 529,815

Otherpensioncosts 46,663 46,580

573,916 576,395

Other costs

Distribution 95,360 72,396

Facilities 26,291 25,998

Operational 70,286 63,146

Administration 33,942 39,737

Depreciationandamortisationofgoodwill 24,984 26,826

250,863 228,103

824,779 804,498

55

4. (Loss)/profit on ordinary activities before taxation

2012 €’000

2011 €’000

The(loss)/profitonordinaryactivitiesbeforetaxationisstatedaftercharging:

Directors’ emoluments

Fees 237 244

Otheremoluments 345 402

Pensioncontributions 77 77

Expenses paid to Directors

Travel 8 18

Subsistence 3 6

Other 1 1

Auditor’s remuneration - group

Auditofthefinancialstatements 239 299

Otherassuranceservices 132 155

Taxadviceservices 207 145

Othernon-auditservices 89 110

Auditor’s remuneration – An Post company

Auditofthefinancialstatements 142 173

Otherassuranceservices 98 111

Taxadviceservices 178 145

Othernon-auditservices 89 110

Depreciation 22,547 24,085

Amortisationofgoodwill 2,437 2,741

Operating lease rentals:

Rentalofbuildings 8,913 8,357

Other-equipmentandmotorvehicles 13,964 14,657

andaftercrediting:

Capitalgrantsamortised 102 102

Profitonsaleoffixedassets 417 131

Theamountsshownaboveasdirectors’emolumentsincludeonlytheamountspaidtothedirectorsintheexecutionoftheirdutiesasdirectorsandthesalaryoftheChiefExecutivewhoisalsoadirector.Otherthanthis,theydonotincludethesalariesoftheemployeeandpostmasterdirectors.


Notes to the FiNaNcial statemeNts For the year eNded 31 december 2012 CONTiNUEd

4. (Loss)/profit on ordinary activities before taxation (continued)

TheremunerationpackageofMrDonalConnell,ChiefExecutiveOfficer,whichisincludedintheamountsshownasdirectors’emoluments,wasasfollows:

2012 €’000

2011 €’000

Basicsalary 328 381

Other emoluments:

Taxablebenefits,includinguseofacompanycar 17 21

Director’sfee 16 16

Pensioncontributions 77 77

438 495

Thefeespaidtoeachdirectorwereasfollows:

2012 €’000

2011 €’000

JohnFitzgerald 31 31

NoelAdamson 3 -

PatrickCompton 16 16

JerryCondon 13 16

DonalConnell 16 16

AnneConnolly 14 16

PaddyCostello 13 16

ThomasDevlin 16 16

PaulHenry 16 4

CiaraHurley - 4

JamesHyland - 24

BrianMcConnell - 4

WilliamMooney 3 -

MartinaO’Connell 3 -

GerryO’Toole 13 16

PeterOrmond 16 13

JohnQuinlivan 16 16

AlanSloane 16 16

CatherineWoods 16 16

JamesWrynn 16 4

Total 237 244


5. Tax on (Loss)/Profit on Ordinary Activities

2012 €’000

2011 €’000

Current tax

Ireland–Corporationtax (45) 1,605

Ireland–Adjustmentwithrespectofprioryears (385) (16)

UK–Corporationtax 559 545

129 2,134

ThecurrenttaxchargeishigherthanthestandardrateofcorporationtaxinIreland.Thedifferencesareexplainedbelow:

2012 €’000

2011 €’000

(Loss)/profitonordinaryactivitiesbeforetax (37,234) 3,766

Currenttaxof12.5%(2011:12.5%) (4,654) 471

Effectsof:

Expensesnotdeductible 617 367

Depreciationinexcessofcapitalallowances 225 902

Incomeandgainstaxedathigherrates 1,263 1,408

Taxlossesnotrecognised 3,623 -

Shorttermtimingdifferences (560) (998)

Prioryearoverprovision (385) (16)

Currenttaxcharge 129 2,134

The2012taxchargeof€129,000includesataxcreditof€552,000(2011:nil)inrespectofresearchanddevelopmentcreditclaims.



5. Tax on (Loss)/Profit on Ordinary Activities (continued)

Giventheuncertaintyovertheexistenceoffuturetaxableprofits,apotentialdeferredtaxassetof€42,221,000(2011:€65,162,000)hasnotbeenrecognised.Thisisbrokendownasfollows:

At beginning of year €’000

Movement €’000

At end of year €’000

Pension 60,449 (24,872) 35,577

Restructuring 2,381 (2,381) -

Losses 6,556 3,623 10,179

Other(includingfixedassets) (4,224) 689 (3,535)

Total 65,162 (22,941) 42,221

6. (Loss)/Profit for the financial Year

2012 €’000

2011 €’000

Lossaftertaxintheholdingcompany (45,684) (2,528)

Profitaftertaxinsubsidiaryundertakings 6,206 4,160

Minorityinterest (2,014) (1,285)

Impairmentoffinancialassetnotconsolidated 2,115 -

(Loss)/profitforthefinancialyear (39,377) 347

AseparateprofitandlossaccountforAnPosthasnotbeenpreparedbecausetheconditionslaiddowninSection148(8)oftheCompaniesAct,1963havebeensatisfied.


7. Staff Numbers and Costs

Theaveragefulltimeequivalent(FTE)numberofpersons,excludingpostmasters,workingintheGroupduringtheyearwas:

2012 2011

Operations 9,008 9,382

Corporate 633 655

TotalCompanyemployees(FTE) 9,641 10,037

Subsidiaries 748 612

TotalGroupemployees(FTE) 10,389 10,649

TheaveragenumberofemployeesworkingintheGroupduringtheyearwas:

2012 2011

Operations 8,725 8,859

Corporate 668 694

TotalCompanyemployees 9,393 9,553

Casualemployees 1,110 1,160

TotalCompanyemployees 10,503 10,713

Subsidiaries 750 620

TotalGroupemployees 11,253 11,333

Postmasters:Engagedasagents 1,097 1,103

Theaggregatepayrollcosts,excludingrestructuringcosts,wereasfollows:

2012 €’000

2011 €’000

Wagesandsalaries 416,369 418,735

Postmasters’costs 74,614 74,432

Socialwelfarecosts 36,270 36,648

527,253 529,815

Otherpensioncosts(note17) 46,663 46,580

573,916 576,395



8. Intangible fixed Assets - goodwill

Total €’000

group

Cost

At31December2011 41,385

Foreignexchangegain 91


Amortisation


Chargeforyear 2,437


Net book Value



Thedirectorshaveconsideredthecarryingvalueofgoodwillat31December2012andhaveconcludedthatnoimpairmentarises.


9. Tangible fixed Assets

freehold & long leasehold land

& buildings €’000

Interest in gPO €’000

Motor vehicles €’000

Operating & computer equipment

€’000Total

€’000

gROUP

Cost

At31December2011 242,417 26,585 16,850 313,193 599,045

Additions 7,520 - - 21,254 28,774

Disposals (346) - (3,735) (150) (4,231)

Foreignexchangemovement - - 2 138 140

At31December2012 249,591 26,585 13,117 334,435 623,728

Accumulated Depreciation

At31December2011 58,208 12,227 11,461 250,619 332,515

Chargedduringyear 5,577 665 2,396 13,909 22,547

Eliminatedondisposals (159) - (3,648) (150) (3,957)

Foreignexchangemovement - - (3) 94 91

At31December2012 63,626 12,892 10,206 264,472 351,196

Net book Value

At31December2012 185,965 13,693 2,911 69,963 272,532

At31December2011 184,209 14,358 5,389 62,574 266,530

COMPANY

Cost

At31December2011 244,741 26,585 16,640 302,136 590,102

Additions 7,508 - - 17,683 25,191

Disposals (346) - (3,683) (150) (4,179)

At31December2012 251,903 26,585 12,957 319,669 611,114

Accumulated Depreciation

At31December2011 53,134 12,227 11,356 242,399 319,116

Chargedduringyear 5,728 665 2,359 12,418 21,170

Eliminatedondisposals (159) - (3,608) (150) (3,917)

At31December2012 58,703 12,892 10,107 254,667 336,369

Net book Value

At31December2012 193,200 13,693 2,850 65,002 274,745

At31December2011 191,607 14,358 5,284 59,737 270,986

group and CompanyThedepreciableelementoffreehold&longleaseholdland&buildingsamountsto:Group€205,176,000(2011:€200,940,000),Company€212,247,000(2011:€206,946,000).



10. financial fixed Assets

group 2012

€

group 2011

€

Company 2012

€

Company 2011

€

Sharesinsubsidiaryundertakings,atcostlessimpairment 102 102 8,968,937 11,083,733

Interestinassociatedundertakings,atcost 163 163 163 163

265 265 8,969,100 11,083,896

Themovementsduringtheyearwereasfollows:

Shares in subsidiary undertakings (note 24)

Atbeginningofyear 102 102 11,083,733 11,083,671

Additions - - - 62

Impairmentinvalueofsubsidiaryundertaking - - (2,114,796) -

Atendofyear 102 102 8,968,937 11,083,733

Shares in associated undertakings (note 24)

Atbeginningofyear 163 163 163 163

Additions - - - -

Atendofyear 163 163 163 163


11. Debtors

group 2012

€’000

group 2011

€’000

Company 2012

€’000

Company 2011

€’000

Amounts falling due within one year

Tradedebtors 68,707 75,965 24,250 35,171

Amountsowedbysubsidiaryundertakingnotconsolidated(note27) 640 517 640 517

Amountsowedbyothersubsidiaryundertakings - - 3,644 1,760

Amountsowedbyassociatedundertaking(note27) 489 251 281 251

Otherdebtors 1,926 5,195 819 4,320

PrizeBondsheld 813 1,288 625 600

Prepaymentsandaccruedincome 30,580 29,019 2,974 3,649

103,155 112,235 33,233 46,268

Amounts falling due after more than one year

Amountsowedbysubsidiaryundertakings - - 20,818 21,456

103,155 112,235 54,051 67,724

12. Cash at bank and In Hand

group 2012

€’000

group 2011

€’000

Company 2012

€’000

Company 2011

€’000

Cashatbank 26,283 30,679 18,801 21,793

Cashinhand 231,634 193,210 231,634 193,210

257,917 223,889 250,435 215,003

Termdeposits 172,104 229,864 172,104 229,864

Less:Amountsheldintrust (317,916) (303,689) (317,916) (303,689)

112,105 150,064 104,623 141,178



13. Creditors: Amounts falling due within one year

group 2012

€’000

group 2011

€’000

Company 2012

€’000

Company 2011

€’000

Tradecreditors 50,920 45,362 17,769 14,438

Amountsowedtosubsidiaryundertakings - - 41,500 39,911

Othercreditors 14,387 14,276 4,389 5,714

Taxationandsocialwelfare(note14) 13,508 17,009 11,506 13,986

Accruals 86,635 97,200 71,252 77,812

Deferredincome-capitalgrants(note15) 101 102 101 102

Termloan - 1,000 - -

Bankoverdraft 2,430 2,461 - -

Deferredincome 18,026 14,162 16,633 12,632

186,007 191,572 163,150 164,595

Thebankoverdraftisrepayableondemand.

14. Taxation and Social Welfare

group 2012

€’000

group 2011

€’000

Company 2012

€’000

Company 2011

€’000

Corporationtaxpayable/(receivable) 306 1,906 (508) 794

IncometaxdeductedunderPAYE 5,342 6,044 4,680 5,464

Payrelatedsocialinsurance 5,670 6,194 5,534 6,042

Valueaddedtax 1,875 2,607 1,500 1,436

Professionalserviceswithholdingtax 315 258 300 250

13,508 17,009 11,506 13,986


15. Creditors: Amounts falling due after more than one year

group 2012

€’000

group 2011

€’000

Company 2012

€’000

Company 2011

€’000

Deferredincome-capitalgrants 3,360 3,461 3,360 3,461

Termloan 1,000 - - -

4,360 3,461 3,360 3,461

Themovementsongrantswereasfollows:

Atbeginningofyear 3,563 3,665 3,563 3,665

Amortisedtoprofitandlossaccount (102) (102) (102) (102)

Atendofyear 3,461 3,563 3,461 3,563

Transferredtocreditors:amountsfallingduewithinoneyear (101) (102) (101) (102)

3,360 3,461 3,360 3,461

ThetermloanissecuredbywayofadebentureovertheassetsofTheGiftVoucherShop.Itisrepayablein2014.

16. Provisions for Liabilities

2012 €’000

2011 €’000

group and Company

Provisionsforbusinessrestructuring 22,352 39,432

Themovementsduringtheyearwereasfollows:

Atbeginningofyear 39,432 46,820

Utilisedduringtheyear (17,080) (7,388)

Atendofyear 22,352 39,432

Itisanticipatedthattheprovisionforbusinessrestructuringwillbeutilisedby31December2015.



17. Pensions and Similar Obligations

group and CompanyThepensionentitlementsofemployeesariseunderanumberofdefinedbenefitanddefinedcontributionpensionschemes,theassetsofwhicharevestedinindependenttrusteesappointedbytheCompanyforthesolebenefitofemployeesandtheirdependents.Annualcontributionsarebasedontheadviceofaprofessionallyqualifiedactuary.

Theamountschargedduringtheyeartooperatingcostswereasfollows:

2012 €’000

2011 €’000

Definedbenefitschemes–currentservicecost 44,800 44,600

Ex-gratiaschemes–currentservicecost 1,000 1,000

Definedcontributionscheme 863 980

Recognisedintheprofitandlossaccount 46,663 46,580

Pastservicecostsof€8,088,000(2011:€5,410,000)aroseduringtheyear.Theseweredischargedthroughtheutilisationoftherestructuringprovision(note16)andhadnoimpactontheprofitandlossaccountfortheyearended31December2012or2011.Contributionspayabletopensionschemesandincludedincreditorsat31December2012amountedto€347,000(2011:€1,759,000)andwerepaidinJanuary2013.

Thepensioncostsofthedefinedbenefitschemesareassessedinaccordancewiththeadviceofanindependent,professionallyqualifiedactuary.Themostrecentactuarialvaluationswerecarriedoutat1January2011usingtheattainedagemethodandatthatdateweresufficienttocover79%oftheaccruedliabilities.Theprincipalactuarialassumptionwasthat,overthelongterm,theannualrateofreturnoninvestmentswouldbe2.0%higherthantheannualincreaseinpensionableremuneration.Theactuarialvaluationof1January2011recommendedacontributionrateof14.4%ofpensionableremuneration,asaninterimcontributionrate,pendingfinalisationofanagreementbetweentheCompanyandthemembersoftheschemesonacourseofactiontocomplywiththeMinimumFundingStandard(MFS)asissuedbythePensionsBoard.Theactuarialvaluationsarenotavailableforpublicinspectionbuttheresultsofthevaluationshavebeenadvisedtothemembersoftheschemes.

ThevaluationsofthepensionschemesusedforthepurposeofFRS17accountingentriesanddisclosureshavebeenbasedonthemostrecentactuarialvaluationsasidentifiedaboveandupdatedbytheindependentactuaryto31December2012.Schemeassetsarestatedattheirmarketvalueatthebalancesheetdate.DuringtheperiodtheGroup,withinputfromitsactuarialconsultants,refineditsestimateofthediscountrateusedforthepurposesofthecomputationofthedefinedbenefitliabilities.Therefinementincludedanextensionofthebonddataincludedinthepopulationfromwhichthediscountrateisderivedaswellasarefinementoftheapproachusedtoextrapolatetheavailablebonddataouttothedurationofthepensionschemeobligations.


17. Pensions and Similar Obligations (continued)

ThefinancialassumptionsusedtocalculatetheretirementbenefitliabilitiesunderFRS17wereasfollows:

2012 2011 2010

Valuationmethod ProjectedUnit ProjectedUnit ProjectedUnit

Discountrate 4.00% 5.25% 5.50%

Inflation-CPI 2.00% 2.00% 2.00%

Relevantwageinflation 1.50% 2.60% 2.90%

Increasetopensionsinpayment 1.50% 2.60% 2.90%

Pensionablesalaryincreases 1.50% 2.60% 2.90%

Thelongtermexpectedratesofreturnontheassetsofthepensionschemewere:

2012 2011 2010

Equities 7.50% 8.25% 8.50%

Bonds 3.00% 3.75% 4.00%

Other 4.00% 4.25% 5.10%

Theassumptionsrelatingtolongevityunderlyingthepensionliabilitiesatthebalancesheetdatearebasedonstandardactuarialmortalitytablesandincludeanallowanceforfutureimprovementsinlongevity.Theassumptionsareequivalenttoexpectinga65-yearoldtoliveforanumberofyearsasfollows:

2012 2012 2011 2011

Lifeexpectancyat65 Male Female Male Female

CurrentPensioners–aged65 85.8 87.1 85.7 87.0

FuturePensioners–aged40 88.7 89.6 88.6 89.5

Themarketvalueoftheassetsofthedefinedbenefitschemesat31December2012,2011and2010were:

2012 €’000

2011 €’000

2010 €’000

Equities 999,300 925,700 1,068,800

Bonds 824,700 681,100 650,500

Other 193,535 153,172 123,445

Fairvalueofpensionschemes’assets 2,017,535 1,759,972 1,842,745

Presentvalueoffundeddefinedbenefitobligations (2,288,100) (2,230,700) (2,199,400)

Presentvalueofunfundeddefinedbenefitobligations (14,055) (12,866) (11,843)

Presentvalueofdefinedbenefitobligations (2,302,155) (2,243,566) (2,211,243)

Pensionliability (284,620) (483,594) (368,498)




Movement in fair value of pension schemes’ assets

2012 €’000

2011 €’000

Fairvalueofpensionschemes’assetsatbeginningofyear 1,759,972 1,842,745

Expectedreturnonplanassets 97,300 122,400

Actuarialgain/(loss) 181,300 (185,500)

Employercontributions 57,912 55,994

Members’contributions 4,400 4,400

Benefitspaid (83,349) (80,067)

Fairvalueofpensionschemes’assetsatendofyear 2,017,535 1,759,972

Movement in present value of defined benefit obligations

2012 €’000

2011 €’000

Definedbenefitobligationsatbeginningofyear (2,243,566) (2,211,243)

Currentservicecost (45,800) (45,600)

Pastservicecost (8,088) (5,410)

Interestcost (117,050) (120,850)

Members’contributions (4,400) (4,400)

Benefitspaid 83,349 80,067

Actuarialgain 33,400 63,870

Definedbenefitobligationsatendofyear (2,302,155) (2,243,566)

Other finance Income/(Expense)

2012 €’000

2011 €’000

Interestonschemeliabilities (117,050) (120,850)

Expectedreturnonschemes’assets 97,300 122,400

(19,750) 1,550

Theexpectedreturnonschemeassetsiscalculatedbasedonthevalueoftheschemes’assetsatthebeginningofthefinancialyear.



Amounts recognised in statement of total recognised gains and losses

Theactuarialgainsandlossesareanalysedasfollows:

2012 €’000

2011 €’000

Differencebetweenexpectedandactualreturnonassets 181,300 (185,500)

Experiencegainsandlossesonschemesliabilities 33,400 63,870

Actuarial(loss)/gainrecognised 214,700 (121,630)

Theactualreturnonschemes’assetsin2012wasagainof€279million(2011:lossof€63million).Thecumulativeactuarialgainsandlossesrecognisedinthestatementoftotalrecognisedgainsandlossesat31December2012isalossof€50million(2011:lossof€265million).

Employercontributionsin2013excludingpotentialpastservicecostsareexpectedtobe€49m.

History of Actuarial gains and losses

2012 €’000

2011 €’000

2010 €’000

2009 €’000

2008 €’000

Differencebetweenexpectedandactualreturnonassets 181,300 (185,500) 96,000 125,700 (768,161)

Expressedasapercentageofschemes’assets 9% (11%) 5% 8% (53%)

Experiencegainsandlossesonschemes’liabilities 33,400 63,870 (68,690) 62,090 (8,400)

Expressedasapercentageofschemes’liabilities 1% 3% (3%) 3% -

Totalactualgainsand(losses) 214,700 (121,630) 27,310 187,790 (486,565)

Expressedasapercentageofschemes’liabilities 9% (5%) 1% 9% (24%)



18. Share Capital

group and Company

2012 €’000

2011 €’000

Authorised:

80,000,000OrdinarySharesof€1.25each 100,000 100,000

Allotted, 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.

19. Profit and Loss Account

group 2012

€’000

group 2011

€’000

Company 2012

€’000

Company 2011

€’000

Atbeginningofyear (227,588) (106,305) (269,226) (145,068)

(Loss)/profitforthefinancialyear (39,377) 347 (45,684) (2,528)

Otherrecognisedgains/(losses) 214,700 (121,630) 214,700 (121,630)

Atendofyear (52,265) (227,588) (100,210) (269,226)

20. Reconciliation of Shareholders’ funds/(Deficit)

group 2012

€’000

group 2011

€’000

Company 2012

€’000

Company 2011

€’000

Atbeginningofyear (158,472) (37,189) (200,110) (75,952)

(Loss)/profitforthefinancialyear (39,377) 347 (45,684) (2,528)

Otherrecognisedgains/(losses) 214,700 (121,630) 214,700 (121,630)

Atendofyear 16,851 (158,472) (31,094) (200,110)


21. Minority Interest

2012 €’000

2011 €’000

group Accumulatedlossesatstartofyear 6,159 7,444

Minorityinterestshareofprofit (2,014) (1,285)

Accumulatedlossesatendofyear 4,145 6,159

22. gross Cash flows

2012 €’000

2011 €’000

Reconciliation of operating (loss)/profit to net cash inflow from operating activities

Operating(loss)/profit (17,484) 2,216

Depreciationandamortisationofgoodwill 24,984 26,826

Profitonsaleoftangiblefixedassets (417) (131)

Paymentsinrelationtoprovisionforbusinessrestructuring (17,080) (9,025)

CashpaidinexcessofFRS17pensioncharge (4,024) (4,984)

Capitalgrantsamortised (102) (102)

Decrease/(increase)inoperatingdebtors 9,080 (16,822)

Decreaseinoperatingcreditors (714) (13,425)

Net cash (outflow) from operating activities (5,757) (15,447)

Taxation

Tax(paid)/refunded (1,729) 2,796

Capital expenditure and financial investment

Purchaseoftangiblefixedassets (31,133) (32,040)

Disposaloftangiblefixedassets 691 262

(30,442) (31,778)

Acquisitions and disposals

Acquisitionofsubsidiaryundertakings - (3,310)

financing

Termloan(repaid) - (1,000)

Management of liquid resources (note a)

Decreaseintermdeposits (57,760) (50,195)

Notea:Liquidresourcescomprisetermdepositswithamaturitynoticeperiodofmorethanoneday.



23. Analysis of Net funds

Atbeginningofyear€’000

Cashflows

€’000

Atendofyear€’000

Cashatbankandinhand 223,889 34,028 257,917

Bankoverdraft (2,461) 31 (2,430)

Amountsheldintrust (303,689) (14,227) (317,916)

19,832

Termdeposits 229,864 (57,760) 172,104

Total 147,603 (37,928) 109,675

24. Subsidiary and Associated Undertakings

Name Nature of business % Holding Registered Office

Subsidiary undertakings held directly by the Company

AnPostNationalLotteryCompany(note27)

OperationoftheNationalLottery 80% GeneralPostOfficeO’ConnellStreetDublin1

PostpointServicesLimited Mobiletopups 100% GeneralPostOfficeO’ConnellStreetDublin1

GVSGiftVoucherShopLimited Retailgiftvouchers 53.6% GeneralPostOfficeO’ConnellStreetDublin1

PrintPostLimited Highvolumeprinting 100% GeneralPostOfficeO’ConnellStreetDublin1

AnPostBillPostProcessingServicesLimited

Billpaymentprocessing 100% GeneralPostOfficeO’ConnellStreetDublin1

AnPostGeoDirectoryLimited Databaseservices 51% GeneralPostOfficeO’ConnellStreetDublin1

PrecisionMarketingInformationLimitedtradingasDataIreland

Provisionofmarketingdata,databaseservicesandbusinessdirectories

100% GeneralPostOfficeO’ConnellStreetDublin1

ArcadePropertyCompanyLimited Propertydevelopmentandletting 100% GeneralPostOfficeO’ConnellStreetDublin1

Prince’sStreetPropertyCompanyLimited

Dormant 100% GeneralPostOfficeO’ConnellStreetDublin1

PostConsultInternationalLimited Computersoftwareservices 100% GeneralPostOfficeO’ConnellStreetDublin1


24. Subsidiary and Associated Undertakings (continued)

Name Nature of business % Holding Registered Office

Subsidiary undertakings held directly by the Company (Continued)

Post.TrustLimited Digitalcertificationandsecurityservices


TranspostLimited Courieranddistribution 100% GeneralPostOfficeO’ConnellStreetDublin1

KompassIrelandPublishersLimited Dormant 100% GeneralPostOfficeO’ConnellStreetDublin1

AnPost(NI)Limited Holdingcompany 100% StokesHouseCollegeSquareEastBelfast

Subsidiary undertakings held indirectly through a subsidiary undertaking

AirBusinessLimited Distributionandmagazinesubscriptionservices

100% 4,TheMerlinCentreAcrewoodWaySt.AlbansHertsU.K.

TheGiftVoucherShopLimited RetailGiftVouchers 53.6% 4,TheMerlinCentreAcrewoodWaySt.AlbansHertsU.K.

Jordan&CoInternationalLimited Distribution 100% 4,TheMerlinCentreAcrewoodWaySt.AlbansHertsU.K.

OneDirect(Ireland)Limited InsuranceBroker 100% GeneralPostOfficeO’ConnellStreetDublin1

Associated undertaking held directly by the Company

ThePrizeBondCompanyLimited AdministrationofthePrizeBondScheme


AirBusinessLimited,Jordan&CoInternationalLimitedandTheGiftVoucherShopLimitedareincorporatedinandoperateinEngland&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.



25. Lease Commitments

Annualcommitmentsunderoperatingleaseswereasfollows:

2012 2011

Land & buildings

€’000

Equipment and motor

vehicles €’000

Total €’000

Land & buildings

€’000

Equipment and motor

vehicles €’000

Total €’000

group

Expiringwithinoneyear 1,336 2,539 3,875 808 3,640 4,448

Expiringafteroneyearandbeforefiveyears 3,409 8,279 11,688 3,691 8,698 12,389

Expiringafterfiveyears 4,296 1,433 5,729 4,275 6 4,281

9,041 12,251 21,292 8,774 12,344 21,118

Company

Expiringwithinoneyear 709 2,429 3,138 293 3,606 3,899

Expiringafteroneyearandbeforefiveyears 2,743 8,024 10,767 2,752 8,410 11,162

Expiringafterfiveyears 3,224 1,429 4,653 3,335 - 3,335

6,676 11,882 18,558 6,380 12,016 18,396

Therewerenomaterialfinanceleasecommitmentseitherat31December2012or2011orwhichwereduetocommenceafterthatdate.

26. Capital Commitments

Futurecapitalexpenditureapprovedbythedirectorsbutnotprovidedforinthefinancialstatementswasasfollows:

group 2012

€’000

group 2011

€’000

Company 2012

€’000

Company 2011

€’000

Contractedfor 12,550 18,500 12,550 18,500

Authorisedbutnotcontractedfor 1,947 1,861 1,947 1,861

14,497 20,361 14,497 20,361


27. Related Party Disclosures and Controlling Party

Controlling partyTheGroupwascontrolledthroughouttheyearbytheMinisterforCommunications,EnergyandNaturalResourceswhoholdstheentireissuedsharecapitalofAnPostexceptforoneordinarysharewhichisheldbytheMinisterforFinance(whichstandstransferredtotheMinisterforPublicExpenditureandReformundertheMinistersandSecretariesAct2011).

TRANSACTIONS WITH RELATED UNDERTAKINgS

An Post National Lottery CompanyTheGroupprovidesAnPostNationalLotteryCompany,anundertakingnotconsolidated,withmanagementanddeliveryservices.Suchservicesarecarriedoutonanarm’slengthbasisor,whererequired,inaccordancewiththetermsofthelicencegrantedbytheMinisterforPublicExpenditureandReformtooperatetheNationalLottery.TheCompanyalsoprovidesagencyservicestoAnPostNationalLotteryCompanywherebytheCompanymakessalesandpaysprizesonbehalfofAnPostNationalLotteryCompanyinaccordancewiththestandardtermsandconditionsandremunerationstructurecommontoallofAnPostNationalLotteryCompany’sagents.Groupturnoverfortheyearincludes€5,683,000(2011:€5,859,000)inrespectofservicesprovidedtoAnPostNationalLotteryCompany.Theseamountsareinclusiveofamanagementfeeof€2,586,000(2011:€2,665,000)payabletotheCompanyinaccordancewiththetermsofthelicencetooperatetheNationalLottery.

ThecostsofstaffworkinginAnPostNationalLotteryCompanyarerechargedfromAnPostatcostandamountedto€8,441,000fortheyearended31December2012(2011:€8,533,000).

TheamountowedbyAnPostNationalLotteryCompanytotheCompanywas€640,000at31December2012(2011:€517,000).

AnPosthasagreedtoguaranteetheperformancebyAnPostNationalLotteryCompanyofitsobligationsunderthelicencefortheholdingoftheNationalLotterygrantedbytheMinisterforPublicExpenditureandReform.AnPosthasprovidedtheguarantee,themaximumliabilityofwhichamountsto€10million,forthedurationofthelicence.

The Prize bond Company LimitedUnderthetermsofacontractwithThePrizeBondCompanyLimited,theCompanycarriesoutcertainaspectsoftheadministrationofthePrizeBondScheme.FeesearnedbytheCompanyinrespectofsuchservicesamountedto€3,112,000fortheyearended31December2012(2011:€2,930,000).TheamountowedbyThePrizeBondCompanyLimitedtotheCompanywas€489,000at31December2012(2011:€251,000).At31December2012theGroupheld€813,000(2011:€1,288,000)ofPrizeBonds.

Loft beck Limited (formerly Postbank Ireland Limited) LoftBeckLimited(formerlyPostbankIrelandLimited)isinvoluntaryliquidationfrom25March2011.Theliquidationprocesswilllikelylastforanumberofyears.AnPosthasreceivedpaymentsfromtheliquidatorof€1,000,000(2011:€2,750,000)representingsurplusfundsontheliquidation.Theliquidatorhasreceivedanindemnityfromshareholdersentitlinghimtoreclaimthisshouldtheneedarise.

Transactions with government departments and other state bodiesTheGroupprovides,intheordinarycourseofbusiness,postage,agency,remittanceandcourierservicestovariousGovernmentdepartmentsandotherStatebodiesonanarmslengthbasis.TheGroupalsoconductsdaytodaybankingservicesandtreasurywithbankinginstitutionsbothownedandguaranteedbytheState.

28. Contingencies

group and CompanyTherewerenocontingentliabilitiesorguaranteesat31December2012or2011inrespectofwhichmateriallossesareexpectedotherthanasdisclosedelsewhereinthefinancialstatements.

On8February2012,ComRegservedlegalproceedingsonAnPostunderthetermsoftheEuropeanCommunities(PostalServices)RegulationsAct2002seekinganorderfromtheHighCourttoimposeafinancialpenaltyonAnPostforallegednoncompliancewiththequalityofservicestandards.TheCompanyisvigorouslydefendingtheactionandhasrecognisednoliabilityinthisregardasat31December2012.

29. board Approval

ThefinancialstatementswereapprovedbytheBoardofDirectorson27March2013.


FIVE yEaR FInanCIal SUmmaRy

Consolidated Profit & Loss Account

2012

€’000 2011

€’000 2010

€’000 2009 €’000

2008 €’000

Turnover 807,295 806,714 805,120 804,216 850,043

Operatingcosts (824,779) (804,498) (799,282) (798,475) (818,808)

Operating (loss)/profit (17,484) 2,216 5,838 5,741 31,235

Assetdisposals - - - - -

Businessrestructuring - - (20,000) - -

Shareofresultsofjointventure - - (6,590) (10,750) (9,685)

Otherfinance(expense)/income (19,750) 1,550 (3,950) (20,560) 18,340

(Loss)/profitbeforetaxation (37,234) 3,766 (24,702) (25,569) 39,890

Consolidated balance Sheet

2012

€’000 2011

€’000 2010

€’000 2009 €’000

2008 €’000

Fixedassets 294,785 291,129 279,323 242,704 211,465

Netcurrentassets 29,253 70,727 95,925 166,423 235,998

Otherliabilities (26,712) (42,893) (51,383) (53,550) (63,705)

Netassetsexcludingpensionliability 297,326 318,963 323,865 355,577 383,758

Pensionliability (284,620) (483,594) (368,498) (403,252) (582,300)

Netassets/(liabilities)includingpensionliability 12,706 (164,631) (44,633) (47,675) (198,542)

Capitalandreserves 12,706 (164,631) (44,633) (47,675) (198,542)

Ratios

2012

€’000 2011

€’000 2010

€’000 2009 €’000

2008 €’000

Operating(loss)/profitaboveas%ofturnover (2.17%) 0.27% 0.73% 0.71% 3.67%

Operating(loss)/profitaboveas%ofaverageshareholders’fundsbeforepensionliability (5.67%) 0.68% 1.68% 1.55% 8.30%

Staffandpostmasters’costsas%ofoperatingcostsbeforeexceptionalitem 69.58% 71.65% 72.0% 73.76% 73.16%

Currentassetsas%ofcurrentliabilities 115.7% 136.0% 148.1% 190.50% 242.86%

77

OPERATIONAL STATISTICS

Mail

2012 2011 2010 2009 2008

Letterscorerevenueindex(2005=100)(note1) 77.2 81.4 87.5 94.3 104.8

Note1:Thisindexreflectschangesinletterscorerevenueandexcludesrevenuefromelections,referenda,foreignadministrationsineachyearaswellastheimpactofchangestopublishedtariffs.

System Size

2012 2011 2010 2009 2008

No.ofdeliverypoints(millions) 2.236 2.235 2.231 2.214 2.184

Postofficenetwork:

Companypostoffices 57 57 57 57 61

Sub-postoffices 1,095 1,099 1,107 1,179 1,187

Postalagencies 166 175 185 177 178

1,318 1,331 1,349 1,413 1,426

No.ofmotorvehicles 2,775 2,778 2,778 2,782 2,941

State Savings Services (note 2) €m €m €m €m €m

ValueofFundsat31December 16,276 14,071 12,692 9,303 7,504

Activity for year

SavingsBankdeposits 1,195 1,122 1,242 905 1,306

SavingsBankwithdrawals (967) (973) (813) (802) (850)

SavingsCertificatesissued 1,053 822 1,354 1,215 749

SavingsCertificatesrepaid (558) (616) (597) (1,041) (660)

InstalmentSavingsissued 97 97 100 110 114

InstalmentSavingsrepaid (116) (113) (113) (102) (111)

SavingsBondsissued 2,257 1,401 2,137 1,466 813

SavingsBondsrepaid (1,603) (937) (706) (704) (589)

NationalSolidarityBondissued 412 294 349 - -

NationalSolidarityBondrepaid (23) (31) (7) - -

Department of Social Protection €m €m €m €m €m

Welfarebenefitspaidduringtheyear 9,445 9,703 9,975 9,928 8,265

000’s 000’s 000’s 000’s 000’s

billPay Volumes 25,200 24,930 25,220 25,170 24,490

TV Licence Sales 1,412 1,426 1,432 1,436 1,430

Note2:TheassetsandliabilitiesoftheSavingsServicesvestintheMinisterforFinanceand,accordingly,arenotincludedinthefinancialstatementsoftheCompany.

an post an

nual report 2012

An PostGeneral Post OfficeO’Connell StreetDublin 1Ireland

Documents

an post/media/documents/public/annual-reports/member... · an post annual report 2012 DOING MORE C O M P E T I N G C H A N G I N G C O N T R I B U T I N G Mison,i MMV aidlsod,iouro