an post annual report 2011 Reports/An-Post-Annual... · an post annual report 2011 I S N G O H H...

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an post annual report 2011 RISING TO THE CHALLENGES OF A CHANGING MARKET an post annual report 2011

Transcript of an post annual report 2011 Reports/An-Post-Annual... · an post annual report 2011 I S N G O H H...

an post annual report 2011

RISI

NG TO

THE C

HALL

ENGE

S OF A

CHA

NGIN

G M

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an post an

nual report 2011

An PostGeneral Post OfficeO’Connell StreetDublin 1Ireland

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contents 2 mission, vision and values4 board of directors and corporate information6 chairman’s statement8 management10 chief executive’s review17 financial review19 universal service22 sustainability26 stamp issues and philatelic publications31 index to the financial statements

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

Working together as a united team, our ambition is to outperform the new competition we face, delivering a better quality service, more efficiently, to more customers by continuously adapting, innovating and implementing change.

our mission

our vision

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board of directors and corporate information

1. john fitzgerald f.c.c.a.Chairman - 2, 3Appointed 1 Mar. 2008Mr.Fitzgeraldhasspentmostofhiscareerworkinginlocalgovernment,servinginseveralseniorpositions,includingthatofDublinCityManagerfrom1996until2006.Currently,heisChairmanoftheGrangegormanDevelopmentAgencyandofthetwoRegenerationAgenciessetupinLimerickfollowinghisreporttoGovernmentonproblemsofsocialexclusioninthatcity.HeisalsoChairmanoftheNationalTransportAuthority.

2. patrick comptonEmployee DirectorAppointed 1 Nov. 2008; fifth termMr.Comptonhasworkedinthepostalserviceforthepast39yearsandhiscurrentpositionisthatofPartnershipCo-ordinator,basedinRoscommon.HewasamemberoftheNationalExecutiveoftheCommunicationsWorkersUnionfor22yearsanditsPresidentin1986.HewasalsoadirectorofThePrizeBondCompanyLimitedformanyyears.HeisactiveincommunitydevelopmentinhislocalareaandheistheCountyRoscommonGAACoaching&GamesDevelopmentOfficer.

3. jerry condonEmployee Director - 2 Appointed 1 Nov. 2008; fourth termMr.Condoncommencedworkin1971withtheDepartmentofPostsandTelegraphsandhasworkedasaPostOfficeClerkforhisentirecareer.HehasbeenanactivememberoftheCommunicationsWorkers’UnionthroughouthiscareerandheservedontheNationalExecutiveofthatunionfor13years.

4. donal connell, c.eng., f.i.e.i., b.e.Director -2, 3 Appointed on 14 Aug. 2006Mr.ConnellwasappointedasChiefExecutiveon14August2006.HebeganhiscareerintheDepartmentofPostsandTelegraphsandhasheldseniormanagementpositionsinUnitrodeCorporation,3ComCorporationandMaxtorIrelandwherehewasGeneralManagerpriortojoiningAnPost.Heisanon-executiveDirectorofXilinxCorporation’sEuropeanBoardandheisChairmanofAnPostNationalLotteryCompany.

5. anne connolly, b.a., m.b.a.Director - 1, 2Appointed on 23 Nov. 2007Ms.ConnollyistheDirectoroftheAgeingWellNetwork,anindependentleadershipnetworkofheadsoforganisationsacrosstheprivate,publicandvoluntarysectors.ShehadpreviouslyfoundedandrunAnneConnollyConsultingLimited,astrategicManagementconsultancycompany.Priortoformingthiscompany,sheworkedasStrategyManagerwithKingspanplcand,beforethat,atseniormanagementlevelinthepublicandnot-for-profitsectors.ShehaspreviouslybeenontheboardsofICCBankplcandAPSOandshewasChairpersonoftheFederationofSimonCommunitiesinIreland.

6. paddy costelloEmployee DirectorAppointed on 1 Nov. 2008Mr.CostellojoinedthePostOfficeasaJuniorPostpersonin1964.HebecameaPostpersonin1966andhehasbeenemployedintheFinglasDeliveryServiceUnit(DSU),Dublin11forthelast44years.Throughouthisemployment,hehasrepresentedmembersoftheCommunicationsWorkers’UnionatDSUsinDublin.HehasheldvariousbranchofficerpositionsandheiscurrentlyservingastheTreasureroftheDublinPostalDeliveryBranch.

7. thomas devlinEmployee DirectorAppointed 26 Mar. 2010; second termMr.DevlinbeganhiscareerinthePostOfficein1976whenhejoinedtheDepartmentofPostsandTelegraphsasaJuniorPostmanworkingasamessengerintheMinister’sOffice.HeiscurrentlyemployedasaDeliveryServiceManagerinMalahideDeliveryServiceUnit,Co.Dublin.AnactivememberoftheCommunicationsWorkers’Union,heservedontheNationalExecutivefortwoyearsandwasChairmanoftheSDSDrivers’Branchfrom1996to2004.

8. paul henrya.c.a., m. accounting, b.a. (bus & econ).Director - 1Appointed 15 Sep. 2011Mr.Henry,aCharteredAccountant,hasworkedasaSeniorAuditManagerGroupInternalAuditwithDublinAirportAuthorityPLCsince2008.PriortothatheworkedwithPriceWaterhouseCoopers,DublinwithwhomhetrainedasaCharteredAccountant.

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board of directors and corporate information

Secretary jack dempsey

Registered Office general post officeo’connell streetdublin 1

Auditorkpmg, chartered accountants

Bankers bank of ireland

Solicitors matheson ormsby prentice

Registered Number98788

Key to Board Committees 1. audit and risk 2. personnel 3. remuneration

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9. peter ormond b.a. (bus. mgt.)DirectorAppointed 8 Mar. 2011Mr.OrmondistheMarketingManagerwithMidIrelandTourismsinceMarch2010priortowhichhewastheCommunityServicesProgrammeManagerforKilcormacDevelopmentAssociation.Hisotherworkexperiencesareinauctioneering,insalesandmarketing,andinlogistics.HeisamemberofOffalyCountyCouncilandwasitsChairmanin2005/2006.HeisalsoamemberoftheEducationFinanceBoard.

10. gerry o’tooleEmployee Director - 2Appointed 1 Nov. 2008Mr.O’ToolestartedworkintheDepartmentofPostsandTelegraphsin1980asaJuniorPostmanandthefollowingyearhewasappointedasaPostperson.In1989,hewaspromotedtothepositionofClericalOfficerandworkedintheFinancialServicesareauntil1998whenhemovedtotheITUnit.HecurrentlyisaTechnicalSupportSpecialistinGTSNetworkSupport.Hehasservedonanumberofbranchcommitteesfordifferentunionsovertheyears.

11. john quinlivan b.sc. (mgt. & law), m.sc. (spl. plg.), dip. in public admin.Director - 3Appointed 24 Jun. 2008; second termMr.Quinlivanhashadalengthycareerinlocalgovernment,servinginseniorpositionsinninecounties,including15yearsasLouthCountyManager.HeservedforfiveyearsasamemberoftheNationalRoadsAuthorityandhealsoservedasamemberoftheLocalGovernmentManagementServicesBoard,theLocalGovernmentComputerServicesBoardandAnComhairle.

12. alan sloane, postmasterDirectorAppointed 1 Jan. 2010; fourth termMr.Sloanehasworkedinthefamilygroceryandpostofficebusinesssince1976.HewasappointedpostmasterofLochGownaPostOffice,Co.Cavanin1979.HeisalsoManagingDirectorofJ.A.S.Limited,asecuritycounterandfurnituremanufacturingbusiness,whichheestablishedin1985.

13. catherine woods b.a.(econ).Director - 1, 3Appointed 4 Feb. 2008Ms.WoodshasspentmostofhercareerinLondonwithJPMorgan.Shehasextensiveexperienceofmergersandacquisitionsandstockbrokinginthefinancialsector.HermandatesincludedtherecapitalisationofLloyds’ofLondonInsurancemarketandthere-privatisationofScandinavianbanks.SinceherreturntoIreland,shehasservedontheElectronicCommunicationsAppealsPanelfrom2004to2007,opiningonappealsagainstComRegdecisions.SheisaDirectorofAlliedIrishBanksplcandisontheAdjudicationPanelforappealregardingtheNationalBroadbandScheme.

14. james wrynn bsc.bcomm., mba.Director - 1Appointed 15 Sep. 2011Mr.WrynnisaformerSeniorLecturerinStrategicManagementinDITandHeadoftheDepartmentofAdministrativeStudiesinDIT’sFacultyofBusiness.HeservedontheBoardofESBformorethantenyearsandduringhistermofofficeservedasDeputyChairpersonfrom1995–2000.HealsochairedESBBoardCommitteesonInternationalInvestmentandStrategicResponsetoDeregulation.

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Against a backdrop of national and international economic turmoil, full market liberalisation and ongoing uncertainty in the financial markets, An Post consolidated several key strands of its transformation and business development strategies during 2011.

the company delivered further improvements in the key areas of cost containment, service quality, staff engagement and the development of new revenue streams. our market positioning as an innovative, high quality, value-for-money service provider is no longer an aspiration, it is a reality.

chairman’sstatement

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ChangeandTransformationprogrammesarenowpartofoureverydaybusiness.Theseinitiativeshaveenabledustoattaintheveryhighestinternationalindustrystandards,improvingourcustomerfocusandensuringthedeliveryofcustomisedlogisticsandfulfilmentsolutionstothemailsandretailmarkets.TheapproachtakenbytheCompanyhaseffectedalastingchangeintheinternalcultureandenabledAnPostanditsstafftoadaptquicklyandeffectivelytochangingmarketcircumstances.

AnPostisnowamoremodern,innovativeandcosteffectiveenterprisethaneverbefore.ItisthemosttrustedindigenousIrishcompanyandconsistentlyrecordsthehighestlevelofcustomersatisfactionfrombothbusinessandprivatecustomers.

TheCompanyhasfundeditsprogrammeoftransformationandinvestmentinequipment,technologyandinfrastructurefromitsownresourcesandwithoutrecoursetostatesubsidyorborrowingsofanykind.Ourstrategywhichalsoincludesinvestmentinalignedbusinessesremainsappropriate.

However,asmailvolumescontinuetodeclinesignificantlyacrosstheworld,itbecomesincreasinglyimportantforustocontinuetoreduceourcostbase.IhavenodoubtthatthiswillbedifficultbuttheconsequencesofanydelaywillbeseriousfortheCompany.In2012,ComReg,TheCommissionforCommunicationsRegulation,servedlegalproceedingsonAnPostforallegedfailuretoimprovemailsqualityofservicetomeetcertaintargets.WebelievethatsuchactionsareunwarrantedandignorethesignificantimprovementinqualityofservicemadebytheCompany.

ThisisatimewhenallourkeystakeholdersneedtoworktogethertoensuretheCompany’sfutureviabilitywhileensuringthatAnPostrealisesitsfullpotential.AstrongandstablemailsandretailinfrastructuretrustedbyIrishandinternationalcustomersisanessentialsupporttotheprocessofeconomicrecovery.

IwanttothankBrianMcConnell,CiaraHurleyandJimHylandwhoretiredfromtheBoardduringtheyear.Theircontributionsduringtheirtermsofofficeareverymuchappreciated.

IalsowanttothankMinisterforCommunications,EnergyandNaturalResources,PatRabbitteT.D.,andhisofficialsfortheirassistanceandsupportduring2011.

IhaveeveryconfidenceintheBoard,managementandstaffofAnPostastheycontinuetodealwithmarketchallengeswhilstexploitingnewcommercialopportunitiesforthecorebusinessandsubsidiarycompanies.

John FitzgeraldChairman

AN POST IS NOW A MORE MODERN, INNOVATIVE AND COST EFFECTIVE ENTERPRISE THAN EVER BEFORE.

chairman’s statement

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management

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management

1. donal connell, c.eng., f.i.e.i., b.e.Chief ExecutiveMr.ConnellwasappointedasChiefExecutiveon14August2006.HebeganhiscareerintheDepartmentofPostsandTelegraphsandhasheldseniormanagementpositionsinUnitrodeCorporation,3ComCorporationandMaxtorIrelandwherehewasGeneralManagerpriortojoiningAnPost.Heisanon-executiveDirectorofXilinxCorporation’sEuropeanBoardandheisChairmanofAnPostNationalLotteryCompany.

2. john daly, a.c.m.a., m.sc.(mgmt.)Retail Operations DirectorMr.DalyjoinedAnPostinDecember1988havingworkedpreviouslyasaManagementAccountantinFÁS.DuringtheearlypartofhiscareerwithAnPost,heworkedintheFinanceDirectorateasaManagementAccountant.HethenheldvariousseniorfinanceandmanagementpositionswithintheRetaildivisionbeforebeingappointedtohiscurrentpositioninOctober2006.HeisChairmanofThePrizeBondCompanyLimited.

3. jack dempsey, b.comm., m.b.a., m.p.a.Company SecretaryMr.DempseyjoinedthePostOfficein1968asanExecutiveOfficerintheDepartmentofPostsandTelegraphs.Duringhiscareer,hehasgainedwideexperienceinallaspectsofpostaloperationsandcommercialactivities,bothnationalandinternational,occupyingavarietyofseniormanagementpositionsacrosstheCompany.HewasappointedasCompanySecretaryinMarch2011.

4. peter gallagher, b.sc., m.b.a., m.inst.dDirector of Strategy and Business ExcellenceMr.GallagherjoinedAnPostinApril2007asHeadofStrategyandBusinessExcellence.PriortojoiningAnPost,hehadbeenaPartnerinPAConsultingGroup’sGlobalBusinessTransformationPracticewhereheledmajortransformationalandbusinessoperationalimprovementprogrammesforprivate&publicsectorclients.PreviousrolesincludeDirectorofStrategywithKPMGConsultingandBusinessOperationsManager(UK&Ireland)forDellComputerCorporation.

5. pat knight, m.sc.(mgmt.), f.c.i.p.d.Human Resources DirectorMr.KnightjoinedAnPostinMarch2004asHumanResourcesDirector.Previously,hehadbeenGeneralManagerHumanResourcesatWaterfordCrystal,whichhejoinedin1986andwhereheheldseniorHRroles,bothinIrelandandtheUK.PreviousexperienceincludesworkasaPersonnelOfficerwithBordnaMónaplc.HeisaTrusteeoftheAnPostSuperannuationSchemesandadirectorofAirBusinessLimited.

6. brian mccormick, b.e.(mech.), m.b.a.Services DirectorMr.McCormickjoinedAnPostinMay2002asStrategyDirectorandwasappointedtohiscurrentpositionofServicesDirectorinOctober2003.PriorexperienceincludesCRHplcandMerrionCorporateFinancewherehewasaDirector.HeisaTrusteeoftheAnPostSuperannuationSchemesandChairmanofOneDirect(Ireland)LimitedandAirBusinessLimited.

7. liam o’sullivanMails Operations DirectorMr.O’SullivanjoinedAnPostin1985.Duringhiscareer,hehasgainedbroadexperienceacrossthefullrangeoftheCompany’sbusiness.HehasheldvariousseniormanagerialandprojectmanagementpositionsintheCompany.HewasappointedasMailProcessingDirectorinJuly2004andalsoservedaperiodasDirectorofCollection&DeliveryChangeProgrammesandOperations.HetookuphiscurrentpositioninApril2009.

8. peter quinn, b.comm., f.c.a., m.b.a.Chief Financial OfficerMr.QuinnjoinedAnPostinAugust2004.PriortothisheheldseniorfinancialandstrategicpositionsinPJCarrollandCompanyplcandMonaghanMushroomsLimited.HeisaCharteredAccountantandtrainedinpracticewithKPMG.HeisadirectorofAnPostNationalLotteryCompany.

9. liam sheehanSales and Marketing DirectorMr.SheehanjoinedAnPostin2000asGeneralManagerSales&MarketingandhewasappointedasSales&MarketingDirectorinOctober2006.HehasextensiveexperienceintheIrishfastmovingconsumergoodssectorandinbrandcreation,channelmanagementandsalesstrategy.HepreviouslyheldseniorSales&MarketingpositionsinProcter&GambleandinGuinnessandhewasCommercialDirectorwithErinFoods.HeisadirectorofThePrizeBondCompanyLimited.HeisalsoChairmanofTheGiftVoucherShopLimited.

10. barney whelan, b.sc., m.b.a., f.p.r.i.i.Director of Communications and Corporate AffairsMr.WhelanjoinedAnPostinJanuary2005.Havingspentmanyyearsintheaquacultureindustry,hewasresponsibleforpublicrelationsandbrandcommunicationsattheESB.HesubsequentlyheldthepositionofDirector,SalesandMarketingatTheFoodSafetyPromotionBoard.HewasappointedtohiscurrentpositioninOctober2006.

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2011 was marked by positive achievements for An Post, despite the great challenges posed to the Company, and its customers, by the difficult economic environment.

falling mail volumes, increasing electronic substitution and new competition are now well established and continue to have an impact on our mails, retail and subsidiary businesses.

chief executive’s review

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Theprocessofadaptingthebusinesstothecommercialrealitiesofthemarketplacecontinuedapacethroughongoingchangeimplementation,innovation,strategicinvestmentandcostreductionprogrammes.

2011sawthefullliberalisationoftheIrishmailsmarket,openingittofullcompetitionaslaiddownbytheCommunicationsRegulation(PostalServices)Act2011,withAnPostasthedesignatedUniversalServiceProviderforaperiodof12years.

TheCompanycontinuedtoinvestinthoseareaswhicharecriticaltothebusinessandalsoinareaswhichhavethepotentialtogeneratenewrevenuestreams.Wemaintainedourstrategicfocus,improvingcompetitiveness,servicequalityandstimulatinginnovationthroughouttheorganisation.WecontinuedtoadapttheCompany’sstructuresandbusinessmodeltodealwiththechangingbusinessenvironment.Wearedeterminedtosupportourcustomersindevelopingandgrowingtheirbusinesses.

Wecontinuedourfocusonimprovingdomesticqualityofserviceandoncemoreexceededourtargetsfordeliveryofinternationalmail.

Operating Profit

TheCompanyachievedagroupoperatingprofitof€2.2min2011(downfrom€5.8min2010),averysolidoutcomegiventhechallengesoutlinedabove.ThisperformanceresultedinlargemeasurefromtheimplementationofChangeprogrammes.Savingsof€15.4minpaycostswereachievedthroughmoreefficientworkingarrangements,automationandaFull-timeEquivalent(FTE)averagereductionof300,bringingthetotalstaffFTEreductionsince2008toalmost1,100withinthecorebusiness.AnadditionalstaffFTEreductionof1,500willbecompleteby2016.During2011,non-paycostsavingstotalled€10m,a3.7percentreductiononthepreviousyear’sresult.Asimilarlevelofcostreductionwillbeachievedin2012tobringthetotalcostreductionto€100msince2008.

Strongparcel,retailandsubsidiaryperformancesalsocontributedsignificantlytotheachievementofGroupTurnoverof€806.7m,anincreaseonthepreviousyear(€805.1m).Giventhatcoremailvolumesfellbyafurther7percentinthesameperiod,thiswasastrongperformance.

Itisanticipatedthatmailvolumeswillcontinuetodeclineinternationally;respondingtothistrendremainsthebiggestchallengefacingtheCompanyintheyearahead.

Mails

Weareproudtoleadthewayinpostalqualityandinnovation.WehaveinvestedinthelatestprocessingequipmentandsoftwareforourMailsCentres.Wehavefundedtheseprojectsfromourownresourcesandtheywillenableustocapitaliseonemergingopportunitieswithinthelettersandparcelsmarketaswellasensuringtheprovisionofatopqualityserviceforallcustomers.

AnPost’sCertificateofExcellenceintheManagementandProcessingofInternationalLetterMail,firstawardedforathree-yearperiodbytheInternationalPostalCorporation(IPC)inearly2009,wasextendedforafurther18months.ThisfollowedrigorousevaluationbytheIPCofourAirmailunitatDublinAirportandtheDublinMailsCentre,throughwhichthemajorityofincomingforeignlettermailisinitiallyprocessed.During2011,wecontinuedtoexceedourperformancetargetsandachieved95.4percentnextdaydeliveryforincominginternationalmailand88.6percentforoutgoingmailreachingitsdestinationcountrynextday.Wehavemaintainedthisqualitylevelforsevensuccessiveyears.TheretentionofthisCertificateconfirmsAnPost’spositionasaqualityleaderintheEuropeanmailsmarket.

chief executive’s review

WE ARE DETERMINED TO SUPPORT OUR CUSTOMERS IN DEVELOPING AND GROWING THEIR BUSINESSES.

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Domesticqualityimprovementandcustomerserviceisatthecentreofourbusinesstransformationanddevelopmentstrategy.Wemaintainedourfocusonsustainingprogresswithinthecontextofongoingoperationalchangeandinvestmentinthemailsandretailinfrastructures.Thebuildingblocksforthenextstageofthequalityimprovementprocess,whichwillenabletheintroductionofadded-valueletterandparcelsservices,arenowinplace.Investmentduring2011innewtechnology,stafftraining,processimprovementandtheconsolidationofourDeliveryServiceUnitswillcontinuetobearfruitthisyearandintheyearstocome.

WeachievedISO9001accreditationforourfourautomatedMailsCentresinDublin,Cork,AthloneandPortlaoise,togetherwithour120large-scaleDeliveryServicesUnitsandournationalCustomerServicesunit,basedattheGPO,Dublin.AsthedesignatedUniversalServiceObligation(USO)provider,wearefullycommittedtoprovidingmailscollectionanddeliveryservicesfivedaysaweektomorethantwomillionaddressesforauniformprice–i.e.thesamepostagerateappliestoaletterpostedfromDublin1toDublin2asappliestoonepostedfromCorktoLetterkenny.TheUSOisavitalpieceofnationalinfrastructure,centraltothebusinessandcommunitylifeofthecountryandakeyfacilitatorofeconomicactivityincludingnewbusinessinnovation.

TheCompany’scommitmenttotheprovisionofthisservicewithoutrecoursetograntorsubsidy,underpinsthisongoingprogrammeofstrategicinvestment,costcontainmentandinnovation.However,thefundingoftheUSOisnowabusiness-criticalissue.LastyearAnPostdeliveredto100,000moredeliverypointsthanin2007–theyearinwhichthepriceofthebasicstampwaslastincreased.Inthatsamefiveyeartimeperiod,mailvolumesfellbyalmost25percent,andsignificantfurtherdeclineisexpectedin2012.

ThistrendhasresultedinaseriousandunsustainableshortfallinUSOfunding,jeopardisingboththefutureoftheserviceandtheviabilityofAnPost’swideroperation.TheunderlyinglossintheUSOin2011hasincreasedonthe€50mlossin2010.Inspiteofsignificantcostreduction,mailvolumedeclinemeansthatwithoutthenecessarypriceadjustments,thesituationwillcontinuetodeteriorate.OurEuropeancounterpartshaverecentlymadeatleastonepricechange,leavingIrelandasthesecondlowestbasictariffacrosstheEU15groupofcountries.ThiswasconfirmedrecentlywhenTheBusiness,InnovationandSkillsCommitteeoftheUKHouseofCommonsreleasedareportdatedMarch1ston‘StampPrices’.Atparagraph6itnotesthat“TheUKcurrentlyhasthefourthlowestfirstclassstamppriceamongEU-15(pre-expansionEU)states.OnlySpain(37p),Ireland(42p)andLuxembourg(45p)arecheaper”.Sincethen,RoyalMailhasannouncedsignificantpricerisesof30percentand39percentrespectivelyforitsfirstandsecondclassserviceseffectivefrom30April2012.ItisinthiscontextthatwehavesubmittedanapplicationtoComRegforapriceadjustmentacrossourUSOproductsandservices.

InFebruaryof2012,ComRegservedlegalproceedingsonAnPostunderthetermsoftheEuropeanCommunities(PostalServices)Regulations2002,seekinganorderfromtheHighCourtthatAnPostcomplywiththe94percentnextdaydeliverytargetforsinglepiecemailandseekingtoimposeafinancialpenaltyonAnPostforallegednon-compliancewiththequalityofservicestandard.

Giventheeffortswearemakinginrelationtothequalityofourservice,wearesurprisedthatComReghaschosenthiscourseafterseveralyearsofsteadyandsustainedimprovementinmailsquality.Thisperformanceisevidencedinourowndata;

chief executive’s review

WE ACHIEVED ISO9001 ACCREDITATION FOR OUR FOUR AUTOMATED MAILS CENTRES, 120 LARGE-SCALE DELIVERY SERVICES UNITS AND OUR NATIONAL CUSTOMER SERVICES UNIT.

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corroboratedbytheongoingqualityofservicemonitorrunindependentlybyPWC,whichhavebeensharedwithComReg,aswellastheindependentinternationalpostalindustrymonitorsmentionedabove.Wewillcontestthisactionvigorously.

Atthebeginningof2011,weissuednewworkwear-styleuniformsto4,500mailscollection&deliverystaff.Theyarenowequippedwithstate-of-the-arthandheldscanningtechnologytoconfirmcollectionanddeliverydetailwhichisavailabletothecustomerinreal-time.AnPostisthefirstpostaloperatorintheworldtoequipallitsmailsstaffwiththistechnology.

TheCompanyhassignalleditsintentiontoparticipateinthetenderforthePostcodeManagementLicencewhichistobeputtothemarketbytheDepartmentofCommunications,EnergyandNaturalResourcesduring2012.

Onlineandcatalogueshoppingdirectlyincreasedthevolumeofpacketandsmallparcelmail.AnPostwillcontinuetoinvestinthismarketsegmentbyprovidinginnovativesupportsandnewproductstostimulategrowthwhileanticipatingtheneedsofonlinesellersandshoppersalike.

Workingcloselywithcustomersofallsectorsandsizes,weconcentratedresourcesonhelpingbusinesstodomorebusiness.Weengagedwithstart-upcompaniesrequiringassistancetodriveonlinetraffic,salesandservice.Wedealtwithlong-establishedbusinessesgrowingtheirproductportfolioaswellaslargeIrishandinternationalbrandswithhighvolume,time-sensitivemail.Ourfocusisonunderstandingtheirneedssoastodeliverservice,reliabilityandadded-valuebyputtingouruniqueinfrastructureandexpertisetoworkfortheminIrelandandthroughourUKsubsidiary,AirBusiness.

Workshopswithmarketingexperts,master-classesandonlinedirectmarketingcasestudiesweremadeavailablefree-of-chargetobusinesscustomersduring2011.WefocussedparticularlyontheSMEsector,encouragingthesebusinessestocombinemailcampaignsanddigitalmarketingtechniquestodrivesalesgrowthandcustomerloyalty.AnPostjoinedforceswithGoogle,BlackKnightSolutionsandtheCounty&CityEnterpriseBoardsinthe‘Getting Irish Business Online’initiativewhichhelpsSMEstodevelopanoptimalonlinepresencetosupportsalesandexpandtheirbusiness.

Retail Services

TheretailarmofAnPostperformedverystronglyin2011.Asotherfinancialinstitutionscontinuetorationalisetheirnetworks,wecontinuetoexpandourproductandserviceofferings.Thesizeandconfigurationofourretailnetwork,aswellasthefootfallofapproximately1.7mcustomersperweek,holdsmanyattractionsforotherfinancialorganisationscurrentlyreviewingtheiroperations.

TherewasastrongnetinflowtoStateSavingsintheearlierpartoftheyear,andwhiletheysoftenedsomewhataroundmid-year,thistrendwasreversedduringtheautumn.Theyearendedwithanetinflowof€1.4billion.Thisfundnowstandsatover€14billion(thisamountcovers12percentofNationalDebtandequatesto14percentofhouseholdsavings).ThesemoniesrepresentverygoodvaluetotheStatewhencomparedwithyieldsontheinternationalmarkets.

Thepotentialtobroadenourrevenuebaseisevidencedbythesteadygrowthofrecentlyintroducedservices.postfone,ourmobilephoneservice,continuestobuilditscustomerbaseinahighlycompetitivemarketplace.WeformedastrategicalliancewithDHLtoprovideanewinternationalpremiumovernightcourierservice,combiningourrespectiveinfrastructuralandgloballogisticsexpertise.Duringitsfirstyearof

chief executive’s review

THE SIZE AND CONFIGURATION OF OUR RETAIL NETWORK, AS WELL AS THE FOOTFALL OF APPROXIMATELY 1.7M CUSTOMERS PER WEEK, HOLDS MANY ATTRACTIONS FOR OTHER FINANCIAL ORGANISATIONS CURRENTLY REVIEWING THEIR OPERATIONS.

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operationat329PostOfficesnationwidethenewSterlingandDollarsForeignExchangefacilitycaptured23percentofthismarket.Ourover-the-counterBillPayfacilityhandled25milliontransactionsin2011andprovidedanexcellentplatformtolaunchitsonlineextension,mybills.ie.Thisfreeonlinebillpaymentandbudgetingfacilityattractedmorethan50,000registereduserswithinjust19weeksofitsAugustlaunch.Itisacomplementaryadditiontooursuiteoffinancialservicesproducts.

Securityremainedatoppriorityduring2011.Whiletherewasanincreaseinarmedraidsandattemptedrobberies,adherencetosecurityprotocolsresultedinthevastmajoritybeingunsuccessful.AnGárdaSiochanahadconsiderablesuccessintheirsubsequentinvestigations.Unfortunately,asmallnumberofAnPoststaff,agentsandtheirfamilieswerethetargetof‘TigerKidnap’raids.Again,adherencetosecurityprotocols,trainingproceduresandclosecooperationwiththeGardaiarekeytocombatingthistypeofcriminalactivity.

Subsidiaries

Wehavecontinuedtobroadenourrevenuebasethroughoursubsidiarybusinesses.Asplannedwewill,overthecomingyears,reduceourdependenceonmail-generatedrevenue.Turnoverinsubsidiarycompaniesreached€84m,anincreaseof24percentintheyear.

UK-basedsubsidiary,AirBusiness,whichspecialisesininternationalperiodicalanddirectmaildistributionisnowoneoftheUK’sfastinggrowingandmostsuccessfulinternationalmailingcompanies.LastyearitacquiredQuadrantSubscriptionServices(QSS),aleadingsubscriptionmanagementandpublishingservicesfirm.ThroughAirBusinessweprovidecustomisedadded-valueinternationalservicesforagrowingnumberoflargeIrish-basedcustomers.

ThelicenceunderwhichtheAnPostNationalLotteryCompanyoperateshasbeenextendedtoJune2013.TheMinisterforPublicExpenditureandReform,BrendanHowlinT.D.announcedthathisDepartmentwillholdatenderprocesswhichwillincludethepaymentofseveralhundredmillioneurobythesuccessfulbidder.Thelicencewillbegrantedforanextendedperiodof20years.AnPostintendstoactivelyparticipateinthisprocess.

Reputation and Brand

AnPostwasrecognisedasthemostreputableindigenousIrishcompanyinthe2011RepTraksurveyconductedbytheinternationalReputationInstitute.WeareveryproudofourtrustedpositionattheheartofIrishbusinessandIrishcommunities,particularlyatatimewhenthestandingofsomanyorganisationshasbeentarnished.EveryemployeeandagentofAnPostisfullyawareoftheirroleinmaintainingandbuildingonourstandinginIrishsociety.Thisprinciplecontinuestoinformallbusinesstransactions,brandactivitiesandstaffengagementinitiatives.

Significantprogresswasmadeintheareasofemissionsreductionandwastemanagementasnewrecordingsystemsandcostmanagementfacilitieswereputinplace.

TherewasongoinginvestmentintheAnPostbrandincludinganewsuiteofsuccessful,high-impactadvertisingandpromotionalcampaigns,whichranacrossallmediachannels,topromotetheincreasingrangeofbusinessandpersonalservicesavailable.WemaintainedourcommitmenttotheprovisionofsupportsforimprovingAdultLiteracyandNumeracyacrossthecountry,intandemwithNALA,theNationalAdultLiteracyAgency.

chief executive’s review

WE WILL REDUCE OUR DEPENDENCE ON MAIL GENERATED REVENUE. TURNOVER IN SUBSIDIARY COMPANIES REACHED €84M IN 2011, AN INCREASE OF 24 PER CENT IN THE YEAR.

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15

TherewasincreasedcommunityinvolvementbypeopleofallagesandabilitiesintheAnPostCycleSeriesfeaturingfivecyclingeventsacrosstheseason.WetookovertitlesponsorshipoftheAnPostRás,Ireland’sonlyinternationallevelcyclingracewhichattractsprofessionalteamsfromallovertheglobe.ThissponsorshipcomplementsourinvolvementwithTheSeanKellyRacingTeamwhichactsasadevelopmentteamforyoungIrishriders.Theseeventsbringsignificantbenefitstothelocaleconomies,includingthetourisminterestsinvolved.

Looking to the future

AnPostmaintainsauniquepositionattheheartofIrishsocietyandwearecommittedtoplayingourpartintheState’seconomicrecovery.Wewilldosobyensuringreliability,valueformoneyandtheprovisionofanexpandingrangeofservicesfor,andonbehalfof,theIrishState,Irishbusinessandlocalcommunities.

IwouldliketothanktheBoardfortheirassistance,supportandguidanceduring2011andinparticular,IwouldliketothankourChairman,JohnFitzgerald,forhiscontributionandsupport.Iwouldalsoliketothankmymanagementteam,ourstaffandcontractorsforthededicatedandcommittedmannerinwhichtheycarriedouttheirduties.Inconclusion,Iwishtoexpressourgratitudetoallourbusinesspartnersforthetrustplacedinus.Theirconfidencespursustocontinuetoimproveourperformanceandtoensurethatweareareliableandinnovativepartnerinallaspectsoflogistics,communicationsandfinancialtransactions.

OngoingchangeandadaptationisaninevitablepartoftheIrishandinternationalpostal,financialservicesandcommunicationsindustries.Throughouttheworldpostaladministrationsarereportingasignificantdeclineinthevolumeofmailbeingprocessed.Itisobviousthatthepaceofchangemustnowbeacceleratedtodealwithrevenueslostduetomailvolumedecline.Wewilladdressthiswithdeterminationduringthecomingyearandthereafter.WewillcontinuetoaligntheCompany,itsstructuresandresourceswiththechangingbusinessrealitythatweface.Wewillensurethedevelopmentofinnovativeproductsandservices.Inshort,wewillcontinuetoprovideahighquality,valueformoney,relevantandcustomer-focussedservice.Ihaveeveryconfidence,andastrongbelief,inourabilitytodeliverthisateverylevel.

Donal ConnellChiefExecutive

chief executive’s review

ONGOING CHANGE AND ADAPTATION IS AN INEVITABLE PART OF THE IRISH AND INTERNATIONAL POSTAL, FINANCIAL SERVICES AND COMMUNICATIONS INDUSTRIES.

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financial highlights

€806.7m €805.1m €2.2m €5.8m

• staff costs

• postmasters’ costs

• distribution

• facilities

• operational

• administration

• depreciation & goodwill amortisation

turnover

operating profit em

analysis of operating costs

operating profit

2011 20112010 2010

0.3% 0.7%

operating profit as % of turnover

2011 2010

turnover em

876.0 850.0804.2 805.1 806.7

2007 2008 2009 2010 2011

2007 2008 2009 2010 2011

2.2

29.131.2

5.7 5.8

876.0 850.0804.2 805.1 806.7

2007 2008 2009 2010 2011

2007 2008 2009 2010 2011

2.2

29.131.2

5.7 5.8

• mails

• post offices

• other services

• interest income

analysis of turnover

61.7

%

10.0%

9.0%3.2%

7.8%

4.9%

3.4%

66.3%

1.2% 11.2%

21.3%

61.7

%

10.0%

9.0%3.2%

7.8%

4.9%

3.4%

66.3%

1.2% 11.2%

21.3%

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17

Group turnover for the year was €806.7m. A Group operating profit of €2.2m was generated. Achieving these results in a challenging domestic economy is very credible.

financial review

Turnoverfor2011was€806.7m.Thisisslightlyaheadoftheprioryearandisaconsiderablesuccess.Mailincomecontributed€535.3m(3percentdownontheprioryear)andisthesinglelargestsourceofrevenuefortheGroup.

Mailrevenueissubjecttoanumberofinfluences.Volumesarereducingduetotheperformanceofthedomesticeconomy,e-substitutionandareductioninhousecompletions.

Therehashowever,beenanincreaseinvolumesdrivenbyinternetfulfilmentandDirectMailServices.2011alsosawone-offmailingstofacilitatethegeneralandpresidentialelectionprocess.

Revenueintheretailnetworkwasinlinewiththeprioryearat€171.6m.ThevalueofStateSavingsreached€14.1billionbytheendofDecember2011,anincreaseof€1.4billionontheprioryear.OthernewretailincomestreamsshowedencouraginggrowthincludingForeignExchangeforbothDollarsandSterling;andtheadditionofagencyservicesforAIB,NIBandotherfinanceandutilityproviders.

Turnoverinsubsidiarycompaniesreached€84m,anincreaseof24percentintheyear.AddingtotherevenuestreamsisverymuchinlinewithGroupStrategy.

TheoperatingprofitearnedfrombusinessventuressuchasPostPoint,TheGiftVoucherShop,OneDirectInsurance,allofwhichbenefitsignificantlyfromtheirassociationwiththeAnPostbrandandnetwork,formsanincreasinglyimportantcornerstoneofthefinancialplanfortheGroup.

2011 2010 em em

Turnover 806.7 805.1Groupoperatingprofit 2.2 5.8Profit/(loss)forthefinancialyear 0.3 (24.7)Netassets(excludingpensionliability) 319.0 323.9

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18

financial review

Operating Costs

Inlinewithpostaloperationsinotherjurisdictions,thereductioninoperatingcostsisanimportantstrategicobjective.

OperatingCostswithinthecoreAnPostCompanywerereducedby€25.4m.Thelastthreeyearshasseenareductionof€78mfromtheannualoperatingcostbase.2011representsafurtheryearofprogressinthisregard.Overallcostsof€804.5mwereupontheprioryearby€5.2m,astheGroupincreaseditssubsidiaryactivityandfacilitatedtwonationalelectionprocesses.

Typicallylabourrepresents70percentofthecostbaseinpostaladministrations.ThereductionofFullTimeEquivalents(FTE)isthereforeacentralelementofourcostreductionprogramme.TheaveragenumberofstaffFTEsreducedbyafurther300FTEsduring2011.

Pension Schemes

TheGrouppensionschemeaccountedforunderFRS17showsanaccountingdeficitof€483.6m.Theassetbaseis€1.76billion.

Incommonwiththemajorityofdefinedbenefitpensionschemes,theAnPostdeferredbenefitschemeisrequiredtomeettheMinimumFundingStandardsrequiredbythePensionsBoard.DiscussionsareadvancedwithstakeholderstoformulateanagreedplantoaddresstherequirementsoftheMinimumFundingStandards.

Fixed Assets

Capitalexpenditurein2011amountedto€36m.Therewerenosignificantassetdisposalsduringtheyear.Thereareplansforfurthercapitalspendingofthesamemagnitudein2012includingcompletinginvestmentinthenextgenerationofmailsortingequipment.

Therewasaninvestmentof€3.3minaUKbasedbusiness,QuadrantSubscriptionServices,whichspecialisesinservicingpublishinghouses.ThisadditionalactivitywillbemanagedintheGroup’ssuccessfulUKbasedAirBusinesssubsidiary.Itrepresentsfurtherexpansioninvalue-addedmailrelatedactivity.

Balance Sheet and Cash Resources

TheGroupbalancesheetshowsfixedassetsof€291m,cashbalancesof€150mandanetassetpositionbeforepensionliabilityof€319m.TheGroupoperatesatreasurystrategytoensuretheavailabilityoffundsfortradingwhileoptimisingthereturnoncashresourcesunderaBoardapprovedpolicy.

Economic Outlook

Thecoreactivityofprovidingthenationalpostalserviceislikelytocontinuetofaceachallengingeconomicclimate.Thiscombinedwithastructuraldeclineinpartsofthepostalindustryworldwide,makesforachallengingbusinessenvironment.

However,diversifyingrevenuestreams,continuedcostreductionsandimprovedefficienciesandqualityofservice,areequippingtheCompanytodealwiththisbusinessenvironment.TheGrouplooksforwardtomaintainingastrongpositionin2012andbeyond.

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

universalservice

Requirements of the USO (Universal Service Obligation)

UnderSection17oftheAct,AnPostisdesignatedasauniversalpostalserviceproviderforaperiodof12years.

UnderSection16oftheAct,UniversalPostalServicemeansthatoneveryworkingday,exceptincircumstancesorgeographicalconditionsdeemedexceptionalbyComReg,thereisatleast:

(i) oneclearance,and

(ii)onedeliverytothehomeorpremisesofeverypersonintheStateor,asComRegconsidersappropriate,undersuchconditionsasitmaydeterminefromtimetotime,toappropriateinstallations.

Universalserviceshallincludethefollowingminimumfacilities:

(a)theclearance,sorting,transportanddistributionofpostalpacketsupto2kgs;

(b)theclearance,sorting,transportanddistributionofpostalparcelstoaweightlimittobespecifiedbyorderofComReg(orintheabsenceofthis20kgs);

(c) thesorting,transportationanddistributionofparcelsfromotherMemberStatesupto20kgsinweight;

(d) servicesforregistereditems;

(e)servicesforinsureditemswithintheStateandtoandfromallcountrieswhich,assignatoriestotheConventionoftheUniversalPostalUnion,declaretheirwillingnesstoadmitsuchitemswhetherreciprocallyorinonedirectiononly;

(f) postalservices,freeofcharge,toblindandpartiallysightedpersons.

Access to Universal Services

AnPostprovidesaccesstoitsservicesthroughitsnetworkof57Companypostoffices,1,099postmaster-operatedpostofficesand175postalagents.Inaddition,some2,234retailpremisesarelicensedtosellpostagestamps,asactivelicensedagents.Tofacilitatephysicalaccesstotheservice,approximately5,000postboxesaredistributedwidelythroughouttheState.Thereare43designatedacceptancepointsforbulkmailservices.

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universal service

Tariffs

Thefollowingisasummaryofthecurrentpricesforstandardservicesweighingupto50gms†.

Quality of Service

international

Thequalityperformancestandardforthedeliveryofintra-Communitycross-bordermailwassetbytheEuropeanCommissionandwastransposedintoIrishlawunderSection32andSchedule3oftheAct.Thequalitystandardforpostalitemsofthefasteststandardcategoryisasfollows:

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

domestic

TheActrequiresComRegtosetaquality-of-servicestandardfortheuniversalserviceandthestandardsetfordomesticmailmustbecompatiblewiththoseforintra-Communitycross-borderservices.ComReghavesetaquality-of-servicetargetfordomesticsinglepieceprioritymailasfollows:

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

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

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

† Witheffectfrom1May2012,AnPostischangingtariffswithintheUniversalServiceforitemsweighingover50gms.Theratesabovewhichapplytoitemsweighingupto50gmsremainunchanged.

AfulllistofUSOtariffsisavailableintheGuidetoPostalRates(seewww.anpost.ie).

ireland & ni letters large envelopes packets parcels (up to c5)

StandardPost<100g 55c 95c €2.20 €6.50 54cifCeadúnas ormeter

RegisteredPost* €5.25 €5.25 €5.25 €10.50

international letters large envelopes packets parcels destinations (up to c5)

StandardPost 82c €1.50 €2.70 GB€18.25 Europe€22.00 ROW€22.00

RegisteredPost** €5.17 €5.85 €7.05 GB€23.00 Europe€27.00 ROW€27.00

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universal service

quality monitoring

MonitoringofperformanceagainsttheinternationaltargetsiscarriedoutbyResearchInternationalonbehalfofInternationalPostCorporation(IPC).MonitoringofthedomesticqualityofserviceiscarriedoutbyIpsosMRBIonbehalfofComReg.Detailsofthemostrecentresultsareavailablefromourwebsitewww.anpost.ie,withdomesticperformancealsoavailableonComReg’swebsitewww.askcomreg.ie.

Customer Complaints

AnPostisrequiredtomaintainrecordsofcustomercomplaintstakingintoaccounttherelevantEuropeanstandardIS:EN14012:2003.Thetableprovides,inrelationtomail,abreakdownofwrittencomplaintsreceivedfromcustomersduring2011.Thetotalcontinuestorepresentaminutefractionoftheentiremailtraffichandledduringtheyear.

Includedinthetotalfigurearecomplaintsaboutregistereditems,whichnumber7,949.

In2011,511,827telephonecallsweremadetoAnPostCustomerServices.Mostofthesewereroutineorgeneralenquiriesratherthancomplaints.Duringthisyear,DeliveryServicesUnittelephonelineswerecentralisedintotheCustomerServicesCentreensuringamorestandardisedandco-ordinatedservicetoourcustomers.

TheAnPostComplaintandDisputeResolutionProceduresaresetoutin‘Getting it Sorted’,whichisavailableonourwebsite,inretailoutlets,andfromourCustomerServicesCentre.WealsohaveaCustomerCharter,containingspecificpledgestocustomersregardingourservices.

Further Information

AdditionalinformationinrelationtoservicesprovidedbyAnPostisavailablebyphoningAnPostCustomerServicesonCallSave1850575859,[email protected],byvisitingwww.anpost.ie,orbycallingintoalocalpostoffice.

written complaints received from customers

Itemslostorsubstantiallydelayed 20,350

Itemsdamaged 887

Itemsarrivinglate 1,059

Mailcollectionordelivery:

Timeofdelivery 413

Failuretomakedailydeliverytohomeorpremises 270

Collectiontimes/Collectionfailures 1

Misdelivery 454

Accesstocustomerserviceinformation 4

Underpaidmail 25

Tariffsforsinglepiecemail/discountschemesandconditions 0

Changeofaddress(Redirections) 1,271

Behaviourandcompetenceofpostalpersonnel 23

Howcomplaintsaretreated 0

Other(notincludedinabove) 3,082

total 27,839

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22

We continue to focus on making Sustainability a reality within our business strategy. We continue to manage this approach as one of a small number of strategic projects within the Company. Considerable resources were invested in the professional development of our management and staff. Our staff engagement programmes are now very well established and have contributed to performance improvement.

during 2011 we worked with the international post corporation (ipc) to benchmark an post’s operations with other postal services across the world. this process has guided the improvements we have made in our approach to sustainability.

sustainabilityat an post

Workplace

TheCompanyprovidesawelldevelopedandintegratedapproachtoworkingconditionsforourstaffofover10,000FullTimeEquivalentemployees(FTE’s).

Wehavewellestablishedpolicies,practicesandproceduresintheareasofoccupationalhealthandsafety,staffwell-beingaswellastraininganddevelopmentincluding:

• AdocumentedandcommunicatedSafetyStatement

• TheOHSAS18001/2007managementsystemstandard

• Atrainingpolicyentitled“BuildingOrganisationalCapability”

• AStaffEducationandSupportScheme

• Best-in-classpolicyandpracticeinrelationtoDiversityandEqualityincludingco-operativeworkingwiththeDisabilityAuthority.

TheCentralPartnershipForumprovidesaregularopportunitytomeetwithstaffrepresentativesandtocommunicatewithstaffregardlessoftheirroleorlocation.

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23

YourVoiceMattersAnEmployeeSurveywasconductedtogainanunderstandingofthecurrentexperienceofstaffatAnPostaswellastheirawarenessoftheCompany’sstrategicdirection.TowersWatsonwasengagedbyAnPosttoconductthisprojectandtoanalyseandreportontheresults.TheresultshavebeencommunicatedwidelyandasetoffollowupactionsagreedwithspecificprojectsledbymembersoftheExecutive.

LivingtheValuesLivingtheValueswasacompany-wideprogrammeofstaffworkshopstoensurethatstaffatalllevelsareawareofandunderstandtheCompany’sMission,VisionandValues.Thisprogrammealsoprovidedanopportunitytodiscussourvaluesandtakeactiontoensurewebehaveinaccordancewiththem,astheyapplyintheworkplace.

Theprogrammeranfromsummer2009–autumn2011topromotecomprehensivediscussion,encouragingstafftounderstandfullytheimportanceofprovidingongoingserviceexcellencetoourcustomers.

Marketplace

AnPostisoperatingtoaveryhighstandardinrelationtomailscollectionanddelivery.ThisreflectstheCompany’sfocusonqualityofservice,withpoliciesandproceduresinplace,includingtheISO9001QualityManagementSystemwhichismanagedbyourQualityTeam.

OurQualityManagementSystemincludes:

• Targetsinplaceforcontinuousimprovement

• An‘end-to-end’viewofthecustomerexperienceenshrinedinourCustomerCharter

• Adefinedcomplaintsprocedure

• ContinuousmonitoringofserviceperformanceandcustomerqueuingtimethroughMysteryShoppingsurveys

• Customersupportssuchasprovisionforhard-of-hearingcustomers.

Environment

In2011AnPostmadesignificantprogressintheareasofEnergy,TransportandWasteManagement.

Environmentaldataiscollected,collatedandmanagedcentrallyinrespectoftheCompany’scarbonperformance.ThisdataisalsoinputtedtotheIPCEnvironmentalManagementandMonitoringSystem(EMMS).

Since2008theCompanyhasassessedthecarbonimpactofitsoperationsonanannualbasis.WebenchmarkourperformanceeachyearwithIPCandimplementanannualactionplanforcontinuousimprovement.During2011ourpublicbuildingstockover1,000squaremeterswasaudited,enablingustoexhibitaDisplayEnergyCertificate(DEC).TheDECprovidestheCompanywithanaccurateaccountofourenergyconsumptionandmaintenanceandmanagementpractices.WealsoimplementedaWasteManagementSystemwhichprioritiseswasteavoidance,reduction,re-useandrecycling.Wealsoworkwithoursuppliertransportcompaniestopromoteenvironmentallyfriendlypracticessuchastrainingstaffineco-drivingtoreducefuelconsumptionaswellasrouteoptimisation.

sustainability at an post

SINCE 2008 THE COMPANY HAS ASSESSED THE CARBON IMPACT OF ITS OPERATIONS ON AN ANNUAL BASIS.

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24

sustainability at an post

Overview of Energy Usage in 2011

ThemainuseofEnergyinAnPostisfortheheatingandlightingofourofficesandthefuelforthetransportfleet.In2011,AnPostconsumed134.55GWhofenergy,consistingof:

• 18.8GWhofelectricity

• 35.8GWhoffossilfuelsforheatandlight

• 79.95GWhoffossilfuelsfortransport

Therehasbeenasubstantialreductionof5.5GWhinAnPost’sEnergyusageinthelastyear.Weestimatethat3GWhofthisreductioncanbeattributedtothemildwinterincomparisonto2010.

Actions Undertaken in 2011

During2011AnPostundertookarangeofinitiativestoimproveourenergyperformance,including:

• Continuedinvestmentinimprovedlightingcontrolsinanumberofkeyoffices,whichresultedin800MWhofannualsavings.

• TheBuildingManagementSystem(BMS)intheCorkandAthloneMailsCentreswasupgradedinordertoimprovecontrolofourenergyconsumptionandthisresultedin124MWhofannualsavings.

• TheBMSintheGPOwasupgradedtoincludeadditionaltemperaturesensorsandanewcontrolpanelwhichresultedin51MWhannualsavings

• Improvedstaffcommunicationandawarenessresultedinsavingsof1,525MWhannually

• FuelconsumptiontestingwascompletedfortheHGVFleet

• 1,000driverscompletedanAssessment&Trainingcourse

Actions Planned for 2012

In2012theCompanywillfurtherimproveitsenergyperformancebyundertakingthefollowinginitiatives:

• AchievingcertificationtotheISO50001standardwhichwillsave1,750MWhannually

• Investinginalightingupgradeatafurthernineofficeswhichwillsave500MWhannually

• Reviewingtheenergyusageinourretailofficesanddevelopinganenergyimprovementprogrammefor2012/13whichwillsave50MWhannually

Wewillcontinuetodevelopenergyefficiencyinitiativeswherebuildingworksaretakingplaceincludingrainwaterharvesting,solarenergy,amotionandavailablelightdetectionlightingsystemandmonitoringofimprovementcontrolstrategiesforheating.WehavecommencedastructuredtrialofelectricvehiclesinDublin,CorkandGalwayandwewillpresentafurther1,000driversforAssessmentTraining.

Community

AnPosthasastrongtrackrecordofcommunityengagementthroughourMailsandRetailstaffinteractionwithcustomers.ThishasasignificantpositiveimpactonourBrandandtheperceptionofourroleinIrishsocietyamongbothourcustomersandemployees.Ourcommunityprogrammeincludes:

• AnAssociationwiththeNationalAdultLiteracyAgency(NALA)andourfacilitationoftheLogOn,Learninitiative.Theimpactofthisactivityhasbeenmeasuredeachyearsince2008withover13,500peoplebenefitingfromourLiteracyawarenesscampaignandover30,000olderpeopleandstudentsparticipatinginLogOn,Learn.

THERE HAS BEEN A SUBSTANTIAL REDUCTION OF 5.5GWH IN AN POST’S ENERGY WAGE. IN 2012 THE COMPANY WILL FURTHER IMPROVE ITS ENERGY PERFORMANCE.

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25

sustainability at an post

• SupportforIrishCyclingateverylevelfromeliteathletestograss-roots,mass-participationevents.AnPostistheleadingsponsorofIrishcyclingincludingyoungIrishridersracinginternationallywiththeAnPostSeanKellyTeam,theAnPostRás,Ireland’spremiereUCIcycleraceandtheAnPostCycleSeries,withover13,500leisurecyclistsparticipatingin2011.WealsosupporttheIrishParacyclingTeamintheirpreparationforthe2012LondonGamesandAnPostRásnamBan,Ireland’spremierewomen’sstagecyclingrace.

The Future

AnPostcontinuestomakesignificantprogressinoperatingasaresponsiblebusinessinachallengingenvironment.Wehavepoliciesinplaceacrossthemajorityofsustainabilitymeasures,allofwhichinfluencepracticewithintheCompany.

Disability Act

TheDisabilityAct,2005placesadutyonpublicorganisationstoensurethattheirpublicbuildingsandservicesare,asfarasispracticable,accessibletopeoplewithdisabilities.Inparticular,thoseareasofbuildingstowhichthepublichasaccessaretobemadeaccessiblenotlaterthan2015.Overall,AnPostisontargettomeetitscommitmentswithregardtoaccessundertheAct.Themajorityofpostofficesare,however,operatedonacontractbasisbypostmastersandpostmistressesappointedbyAnPostandtheCompanyisnotinapositiontoobligethemtoaltertheirpremises.TheCompanyhascontactedthem;informedthemoftherequirementsoftheDisabilityActandencouragedthemtoaddressanyaccessissuesthatmayexistontheirpremises.Allnewcontractsrequirethepostmasterorpostmistresscontractortoprovideaccessiblepremises.

AN POST WILL CONTINUE TOWARD RESPONSIBLE BUSINESS PRACTICE IN A CHALLENGING ECONOMIC ENVIRONMENT.

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26

An Post issued 40 commemorative stamps in 2011. In addition, a further eight stamps were introduced in the Irish Animals and Marine Life Definitive Series.

the stamp programme features the work of ireland’s finest artists and designers. highlights included stamp issues celebrating irish craft, ireland’s first hosting of the solheim cup women’s international golf competition and the 50th anniversary of the first rté television broadcast.

stamp issues and philatelic publications

2011markedtheintroductionofphaseIIoftheSeventhDefinitiveSeriescomprisingafurthereightstampsintheIrishAnimalsandMarineLifecollection.ThisisthesecondphaseoftheinnovativeStampsOnARoll(SOAR)productbywhichthevalueofeachstampisprintedatthetimeofpurchaseaccordingtothepostagerequired.AlsotwostampsfromphaseIshowingtheRedSquirrelandBottlenoseDolphinwereissuedasastampcoil.

AsetoffourstampsbasedonpaintingsbyIreland’sleadingequestrianartist,PeterCurling,celebratedTheIrishHorse.TheyshowfourhorsescommoninIreland;theThoroughbredHorse,theConnemaraPony,theColouredHorseandtheIrishDraughtHorse.

GreatinstitutionssuchasAmnestyInternational,theAmericanChamberofCommerce,IrelandandtheIrishAmateurBoxingAssociationwerecelebratedforspecialanniversarieswhichtookplaceduringtheyear.

ThecentenaryofthebirthofBrianO’Nolan“FlannO’Brien”wasmarkedwithastampfeaturingapaintingofthewriterbyhisbrother,artistMicheálÓNualláin.

Adiverseportfolioofassociatedcollateralwasalsoproduced,includingaYearPackandFirstDayCoverCollection.Onceagain,theIrishStampsYearBookwasproducedtothehigheststandardsofdesignintextandimagery,featuringallissuesfromtheannualprogrammeinbothastandardandluxuryedition.

G5546 An Post AR 2011 v17 INSIDE.indd 26 23/04/2012 14:08:29

27

philatelic annual report 2011

2011

Éire 82c

2011

55cÉire

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G5546 An Post AR 2011 v17 INSIDE.indd 27 23/04/2012 14:08:31

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philatelic annual report 2011

G5546 An Post AR 2011 v17 INSIDE.indd 28 23/04/2012 14:08:37

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philatelic annual report 2011

2011

ÉIRE82c

WOM

EN’S RIGHTSCEARTA NA m

BAN

2011

ÉIRE55c

WOM

EN’S RIGHTSCEARTA NA m

BAN

50th Anniversary of the American Chamber of Commerce, Ireland

2011

1961–2011

comhlachas tráchtála meiriceánach in éirinnamerican chamber of commerce, ireland

2011

1961–2011

comhlachas tráchtála meiriceánach in éirinnamerican chamber of commerce, ireland

G5546 An Post AR 2011 v17 INSIDE.indd 29 23/04/2012 14:08:45

30

G5546 An Post AR 2011 v17 INSIDE.indd 30 23/04/2012 14:08:45

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index to the financial statements

32 report of the directors35 corporate governance42 statement of the directors on the accounting systems43 statement of directors’ responsibilities44 report of the independent auditor46 report of the independent auditor on the accounting systems47 statement of accounting policies51 consolidated profit and loss account52 consolidated statement of total recognised gains and losses53 consolidated balance sheet54 company balance sheet55 consolidated cash flow statement56 notes to the financial statements76 five year financial summary77 operational statistics

G5546 An Post AR 2011 v17 INSIDE.indd 31 23/04/2012 14:08:45

32

1. The Group and its Principal Activities

TheCompanyoperatesthenationalpostalserviceandmoneytransmissionservicesandprovidesagencyservicesforGovernmentDepartments,theNationalTreasuryManagementAgency,AnPostNationalLotteryCompanyandotherbodies.

OneordinaryshareisheldbytheMinisterforPublicExpenditureandReformandtheremainderoftheissuedsharecapitalisheldbytheMinisterforCommunications,EnergyandNaturalResources.

Detailsoftheactivitiescarriedonbysubsidiary,associatedandjointventureundertakings,togetherwiththeinformationrequiredbySection158oftheCompaniesAct,1963,aregiveninnote25tothefinancialstatements.

2. Results

Detailsoftheresultsfortheyeararesetoutintheconsolidatedprofitandlossaccountonpage51andintherelatednotestothefinancialstatements.Thedirectorsdonotproposethepaymentofadividendfortheyear.

3. Business Review

Theoperatingprofitfortheyearof€2.2misasatisfactoryresultinviewofthecontinuedimpactoftheeconomicdownturnin2011.Whileoverallturnoverfromcontinuingoperationsismarginallyupon2010,theeffectofthedownturnisevidentinthedecreaseinturnoverinthemailsbusinesswhichfellfrom€552mto€535m.Therewasanincreaseof€18minotherserviceswhichreflectsthecontinuedsuccessandexpansionofsubsidiarycompaniesduring2011.LabourcostsinthecoreAnPostCompanyreducedby€15.4m,nonpayby€10mandpostmastercostsby€0.3m.Thepensionchargeincreasedby€4.9m,andtherewereone-offcostsofservicingtheelectionmailingsof€8.2m.ThedecreaseinoperatingcostswasprimarilydrivenbyreductionsinthenumberofFTEsandcontrolofnonpaycosts.TheGroupProfitaftertaxationandminorityinterestwas€0.3m.

Thepensiondeficithasincreasedfrom€368mat31December2010to€484mat31December2011reflectingthecontinueduncertaintyinfinancialmarketsandtheconsequentreductioninthevalueofthescheme’sassets.ThereisanincreaseinthenetliabilitiespositioninthebalancesheetfortheGroupto€165mat31December2011comparedtonetliabilitiesof€45mat31December2010.

report of the directors

the directors have pleasure in submitting their twenty eighth annual report together with the audited financial statements of the group for the year ended 31 december 2011, in fulfilment of their obligations under the companies acts, 1963 to 2009.

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KPI

performance performance in 2011 in 2010

operating profitOperatingprofitasapercentageofturnover 0.3% 0.7%Staffcostsasapercentageoftotaloperatingcosts 61.7% 62.0%Postmasters’costsasapercentageoftotaloperatingcosts 10.0% 10.0%Otheroperatingcostsasapercentageoftotaloperatingcosts 28.3% 28.0%Cashatbankandinhand €150.1m €198.1m

staff – average full time equivalents (fte)Company 10,037* 10,129Subsidiaries 612 481Group 10,649 10,610CompanyyearendFTErunrate 9,422 9,624

mail businessLetterscorerevenueindex(page77) (7.0%) (7.2%)Qualityofservice(national)–nextdaydeliveryofsinglepieceprioritymail 83%** 85%**

retail businessSocialwelfaretransactions 44.1m 43.5mBillPaytransactions 24.9m 25.2mTVlicencesales(thousands) 1,426k 1,432kInvestmentproducts–netfundinflow €1,084m €2,683mPostOfficeSavingsBank–netfundinflow €149m €429mPrizeBonds–netfundinflow €118m €258mBurglariesandrobberies–numberofincidents 67 73

customer serviceWrittencomplaints 27,839 26,373Telephoneenquiries 511,827 446,682

TheinformationrequiredbyRegulation37oftheEuropeanCommunities(Companies:GroupAccounts)Regulations,1992,isincludedintheinformationgivenonpages6to18.Inmonitoringperformance,thedirectorsandmanagementhaveregardtoarangeofkeyperformanceindicators(KPIs),includingthefollowing:

InaccordancewiththerequirementtoanalysethekeyrisksanduncertaintiesfacingthefuturedevelopmentoftheGroupandCompany,thefollowinghavebeenidentified:

• impactofthegeneraleconomicclimate;

• theneedtofullyimplementagreedchangeprogrammes;

• impactofelectronicsubstitution;

• inabilitytofundtheUniversalServiceObligation;

• achievingadequatepricesforservices;

• theneedtoachieveandmaintainqualityofservicetargets;

• potentiallossofsignificantagencyservices;

• failuretoresolveindustrialrelationsissuesthroughagreedprocesses.

report of the directors

* 2011wasexceptionalwithaGeneralandPresidentialelection.CoreFTEsintheyearwere300lowerthan2010having excludedtheelectionrequirements**FullyearfigureasperComRegmonitor

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Thedirectorshaveanalysedtheseandotherrisksandappropriateprogrammesareinplacetomanageandcontroltheserisks.TheCorporateGovernanceStatementonpages35to41,whichformspartoftheDirectors’Report,setsoutthepoliciesandapproachtorisksandtherelatedinternalcontrolproceduresandresponsibilities.

4. Directors, Secretary and their Interests

ThefollowingchangeshavetakenplaceinthecompositionoftheBoardsincethedateofthepreviousreportofthedirectors:

MsCiaraHurleyretiredon31March2011. MrBrianMcConnellretiredon31March2011. MrPaulHenrywasappointedon15September2011. MrJamesWrynnwasappointedon15September2011. MrJamesHylandretiredon10December2011. Thedirectorsandsecretarywhoheldofficeat31December2011hadnointerestsinthesharesin,ordebenturesof,theCompanyoranyGroupcompanyatthebeginningoftheyear(ordateofappointmentiflater)orattheendoftheyear(2010:Nil).

5. Employees

TheGroupisanequalopportunitiesemployer.Allapplicationsforemploymentaregivenfullandfairconsideration,dueregardbeinggiventotheaptitudeandabilityoftheindividualandtherequirementsofthepositionconcerned.Allemployeesaretreatedonequaltermsasregardstraining,careerdevelopmentandpromotion.AnPostconfirmsthatitsemploymentofpeoplewithdisabilitiesexceedsthetargetof3%setundertheDisabilitiesAct,2005.

AnPostiscommittedtoensuringthehighestsafetystandardsandsafepracticesforitsemployees,contractorsandmembersofthepublicinaccordancewiththeSafety,HealthandWelfareatWorkAct,2005.In2011,therewere36.6losttimeaccidentsper1,000employees.Thisrepresentsadecreaseof12%on2010.

AnPostiscommittedtoreducinglosttimeaccidentsandinthisregardisundertakingasafetyimprovementprogrammewhichincludedobtainingaccreditationtotheOHSAS18001:2007standardin2011.Inaddition,4,732employeesattendedspecificsafetytrainingcoursesin2011,withmanymoreattendingothercourseswheresafetywasincludedinthecontent.Thisincludescompletionofyeartwoofathreeyearprogrammetoprovideadvanceddrivertrainingtoafurther1,025driverswhouseourCompanyfleet.Consciousofthefactthatlegalobligationsaretheminimumacceptablestandard,AnPostisstrivingforexcellenceinthisareaandiscontinuingtoincreaseawarenessamongemployeesandcontractorsofthenecessityforthehighestsafetystandards.

6. Prompt Payment of Accounts

ThepolicyofAnPostistocomplywiththerequirementsofrelevantpromptpaymentofaccountslegislation.TheGroup’sstandardtermsofcredittaken,unlessotherwisespecifiedinspecificcontractualarrangements,are30days.Appropriateinternalfinancialcontrolsareinplace,includingclearlydefinedrolesandresponsibilitiesandmonthlyreportingandreviewofpaymentpractices.Theseproceduresprovidereasonablebutnotabsoluteassuranceagainstmaterialnon-compliancewiththeregulations.

7. Accounting Records

ThedirectorsbelievethattheyhavecompliedwiththerequirementsofSection202oftheCompaniesAct,1990withregardtobooksofaccountbyengagingaccountingpersonnelwithappropriateexpertiseandbyprovidingadequateresourcestothefinancefunction.ThebooksofaccountoftheCompanyaremaintainedattheCompany’spremisesattheGeneralPostOffice,O’ConnellStreet,Dublin1.

8. Auditors

InaccordancewithSection160(2)oftheCompaniesAct,1963,theauditor,KPMG,CharteredAccountants,willcontinueinoffice.

OnbehalfoftheBoard

John Fitzgerald,ChairmanDonal Connell,Director

22 March 2012

report of the directors

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WhiletheprovisionsoftheCodeareofdirectrelevanceonlytolistedcompanies,theBoarddoesfeelthattheirapplication,whereappropriate,assistsAnPostinitscompliancewithbestcorporategovernancepractice.

ThedirectorsareaccountabletotheshareholdersforgoodcorporategovernanceandthisreportaddresseshowtheCodeofPracticefortheGovernanceofStateBodiesandtherelevantmainandsupportingprinciplesoftheCodehavebeenappliedwithinAnPost.

The Board

TheGroupiscontrolledthroughitsBoardofdirectors.TheBoard’smainrolesaretooverseetheoperationoftheGroup,toprovideleadership,toapprovestrategicobjectivesandtoensurethatthenecessaryfinancialandotherresourcesaremadeavailabletoenablethoseobjectivestobemet.TheBoardmeetsonamonthlybasisandcertainmattersarespecificallyreservedtotheBoardforitsdecision.

ThespecificresponsibilitiesreservedtotheBoardinclude:settingGroupstrategyandapprovinganannualbudgetandmedium-termprojections;reviewingoperationalandfinancialperformance;approvingmajorcapitalexpenditure;reviewingtheGroup’ssystemsoffinancialcontrolandriskmanagement;ensuringthatappropriatemanagementdevelopmentandsuccessionplansareinplace;reviewingtheenvironmental,healthandsafetyperformanceoftheGroup;approvingtheappointmentoftheCompanySecretary;andmaintainingsatisfactorycommunicationwithshareholders.

TheBoardhasdelegatedthefollowingresponsibilitiestomanagement:thedevelopmentandrecommendationofstrategicplansforconsiderationbytheBoardthatreflectthelonger-termobjectivesandprioritiesestablishedbytheBoard;implementationofthestrategiesandpoliciesoftheGroupasdeterminedbytheBoard;monitoringoftheoperatingandfinancialresultsagainstplansandbudgets;prioritisingtheallocationoftechnicalandhumanresources;anddevelopingandimplementingriskmanagementsystems.

The Roles of the Chairman and the Chief Executive

TheChairmanleadstheBoardinthedeterminationofitsstrategyandintheachievementofitsobjectives.TheChairmanisresponsiblefororganisingthebusinessoftheBoard,ensuringitseffectivenessandsettingitsagenda.TheChairmanfacilitatestheeffectivecontributionofalldirectorsandconstructiverelationsbetweentheexecutivedirectorandtheotherdirectors,ensuresthatdirectorsreceiverelevant,accurateandtimelyinformationandmanageseffectivecommunicationwithshareholders.

TheChiefExecutivehasdirectchargeoftheGrouponadaytodaybasisandisaccountabletotheBoardforthefinancialandoperationalperformanceoftheGroup.

Senior Independent Director

TheBoardhasconsideredthequestionofappointingoneofitsmemberstobeaSeniorIndependentDirector,inadditiontotheChairman,butcontinuestobelievethatthisrecommendationofthe

corporate governance

maintaining high standards of corporate governance continues to be a priority for the directors of an post. in developing its corporate governance policy, the board has sought to give effect both to the code of practice for the governance of state bodies, issued by the department of finance, and to the relevant main and supporting principles of good governance outlined in the uk corporate governance code issued by the united kingdom’s financial reporting council (the code).

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CodeisnotapplicableinthelightofAnPost’slegalstructure.

Directors and Directors’ Independence

AlldirectorsareappointedtotheBoardbytheMinisterforCommunications,EnergyandNaturalResourcesandtheirconditionsofappointmentandfeesaresetoutinwriting.EmployeedirectorsareelectedinaccordancewiththeWorkerParticipation(StateEnterprises)Acts,1977to1993foratermoffouryears.ThepostmasterdirectoriselectedinaccordancewithSection81ofthePostalandTelecommunicationsServicesAct,1983foratermofthreeyears.Allotherdirectorsareappointedforafixedterm,usuallyfiveyears.

TheBoardiscurrentlycomprisedoffourteendirectorsviz:theChiefExecutive,fiveemployeedirectors,onepostmasterdirectorandsevennon-executivedirectors.Thenamesofthedirectorstogetherwiththeirbiographicaldetailsaresetoutonpages4and5.ThepositionsofChairmanandChiefExecutiveareheldbydifferentpeople.GivenitslegalstatusasaStateCompanyandtheresponsibilityofitsprincipalshareholderintheappointmentofdirectors,theBoardbelievesthatthecriterianormallyusedbytheBoardofalistedcompanyinconsideringtheindependenceofitsdirectorsdonotapplyinAnPost’scircumstances.TheBoard,consequently,hasnotevaluatedtheindependenceofitsdirectorsagainstthecriteriasetoutintheCode.

TheCoderequirestheChairmantoholdmeetingswiththenon-executivedirectorswithouttheexecutivedirectorbeingpresent.TheBoardhasformalproceduresinplaceinthisregard.

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

ThedirectorsaregivenaccesstoindependentprofessionaladviceattheGroup’sexpensewheretheydeemitnecessarytodischargetheirresponsibilitiesasdirectors.

Professional development

Onappointment,allnewdirectorstakepartinaninductionprogrammewhentheyreceiveinformationabouttheGroup,theroleoftheBoardandthemattersreservedforitsdecision,thetermsofreferenceandmembershipoftheprincipalBoardandBoardCommittees,theGroup’scorporategovernancepracticesandprocedures,includingtheresponsibilitiesdelegatedtoGroupseniormanagement,andthelatestfinancialinformationabouttheGroup.Thiswilltypicallybesupplementedbymeetingswithkeyseniorexecutives.Throughouttheirperiodinoffice,thedirectorsarecontinuallyupdatedontheGroup’sbusiness,thecompetitiveandregulatoryenvironmentsinwhichitoperates,corporatesocialresponsibilitymattersandotherchangesaffectingtheGroupandthepostalindustryasawhole,bywrittenbriefingsandmeetingswithseniorexecutives.Directorsarealsoadvisedonappointmentoftheirlegalandotherdutiesandobligationsasadirector,bothinwritingandinface-to-facemeetingswiththeCompanySecretary.TheyarealsoupdatedonchangestothelegalandgovernancerequirementsoftheGroupanduponthemselvesasdirectors.

Performance evaluation

TheBoardhasadoptedandperformedaformalprocessfortheannualevaluationofitsownperformanceandthatofitsprincipalCommittees.Thisincludesperiodicexternalperformanceevaluation.TheBoardconsidersthattheintroductionofanyfurtherevaluationofindividualdirectorswouldbeinappropriategiventhemannerofappointmentofdirectors,theshareholdingstructureandexistingBoardprocedures.

The Company Secretary

TheCompanySecretaryisafulltimeemployeeofAnPost.TheCompanySecretaryisresponsibleforadvisingtheBoardthroughtheChairmanonallgovernancematters.AlldirectorshaveaccesstotheadviceandservicesoftheCompanySecretary.TheCompany’sArticlesofAssociationprovidethattheappointmentandremovaloftheCompanySecretaryisamatterforthefullBoard.

Information

RegularreportsandpapersarecirculatedtothedirectorsinatimelymannerinpreparationforBoardandCommitteemeetings.Thesepapersaresupplementedbyinformationspecificallyrequestedbythedirectorsfromtimetotime.

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ThedirectorsreceivemonthlymanagementaccountsandregularmanagementreportsandinformationwhichenablethemtoscrutinisetheGroup’sandmanagement’sperformanceagainstagreedobjectives.

Relations with shareholdersTheBoardthroughtheChairmanandmanagement,maintainanongoingdialoguewiththeCompany’sshareholdersonstrategicissues.TheChairmanandtheChiefExecutivegivefeedbacktotheBoardonissuesraisedwiththembytheshareholders.AlldirectorsnormallyattendtheAnnualGeneralMeetingandshareholdersareinvitedtoaskquestionsduringthemeetingandtomeetdirectorsaftertheformalproceedingshaveended.

Internal Control

Anongoingprocessexistsforidentifying,evaluatingandmanagingthesignificantrisksfacedbytheGroup.Thisprocess,whichisbasedontheGuidancefordirectors,issuedbytheInstituteofCharteredAccountantsinEnglandandWales(theTurnbullGuidance),isperiodicallyreviewedbythedirectorsandhasbeeninplacethroughouttheaccountingperiodanduptothedatethefinancialstatementswereapproved.

InaccordancewiththeguidanceoftheTurnbullcommittee,thedirectorsareresponsiblefortheGroup’ssystemofinternalcontrolandsetappropriatepoliciesoninternalcontrol,seekregularassurancethatenablesthemtosatisfythemselvesthatthesystemisfunctioningeffectivelyandtoensurethatthesystemofinternalcontroliseffectiveinmanagingrisks.Suchasystemisdesignedtomanageratherthaneliminatebusinessrisksandcanprovideonlyreasonableratherthanabsoluteassuranceagainstmaterialmisstatementorloss.ThekeyrisksaresetoutatSection3oftheReportoftheDirectors(page33).

ThedirectorshavecontinuedtoreviewtheeffectivenessoftheGroup’ssystemoffinancialandnon-financialcontrolsduring2011,includingoperationalandcompliancecontrols,riskmanagementandtheGroup’shighlevelinternalcontrolarrangements.Thesereviewshaveincludedanassessmentofinternalcontrolsbymanagement,managementassuranceofthemaintenanceofcontrols,reportsfromtheinternalauditorsandreportsfromtheexternalauditoronmattersidentifiedinthecourseofitsstatutoryauditwork.

TheGroupviewsthecarefulmanagementofriskasakeymanagementactivity.TheBoardhasadoptedaRiskManagementPolicyandaRiskManagementFrameworkandapprovedtheappointmentofaChiefRiskOfficer.TheresponsibilitiesoftheAuditandRiskCommitteeembracetheresponsibilitiesofaRiskCommittee.Managingbusinessrisktodeliveropportunitiesisakeyelementofallactivities.ThisisdoneusingasimpleandflexibleframeworkwhichprovidesaconsistentandsustainedwayofimplementingtheGroup’svalues.Thesebusinessrisks,whichmaybestrategic,operational,reputational,financialorenvironmental,shouldbeunderstoodandvisible.Thebusinesscontextdeterminesineachsituationthelevelofacceptableriskandcontrols.

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

Thekeyprocedureswhichthedirectorshaveestablishedwithaviewtoprovidingeffectiveinternalcontrolareasfollows:

• AclearfocusonbusinessobjectivesasdeterminedbytheBoardafterconsiderationofthestatutoryresponsibilitiesandriskprofileoftheGroup’sbusinesses.

• Adefinedorganisationalstructurewithclearlinesofresponsibility,delegationofauthorityandsegregationofdutiesdesignedtofosterabeneficialcontrolenvironment.

• AriskmanagementprocesswhichconsidersthestrategyanddevelopmentofthebusinessinthecontextoftheannualbudgetprocesswhenfinancialplansandperformancetargetsaresetandreviewedbytheBoardinlightoftheGroup’soverallobjectives.

• AreportingandcontrolsystemwhichensuresthatindividualbusinessesreporttotheBoardonanongoingbasisontheirprogressinachievingobjectives.Thesystemforreportingcoversbothoperationalandfinancialperformance,occursonatimelybasisandensuresthatbudgetaryvariancesareexaminedandaddressedpromptly.

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• Thepreparationandissueoffinancialreports,includingtheconsolidatedannualaccountsismanagedbytheGroupFinancedepartment.TheGroup’sfinancialreportingprocessiscontrolledusingdocumentedaccountingpoliciesandreportingformatsissuedbytheGroupFinancedepartmenttoallreportingentities(includingsubsidiaries)withintheGroupinadvanceofeachreportingperiodend.TheGroupFinancedepartmentsupportsallreportingentitieswithguidanceinthepreparationoffinancialinformation.ThisprocessissupportedbyanetworkoffinancemanagersthroughouttheGroup,whohaveresponsibilityandaccountabilitytoprovideinformationinkeepingwithagreedpolicies,includingthecompletionofreconciliationsoffinancialinformationtoprocessingsystems.Itsqualityisunderpinnedbyarrangementsforsegregationofdutiestofacilitateindependentchecksontheintegrityoffinancialdata.Thefinancialinformationforeachentityissubjecttoareviewatreportingentityandgrouplevelbyseniormanagement.TheannualaccountsarereviewedbytheBoardAuditandRiskCommitteeinadvanceofbeingpresentedtotheBoardfortheirreviewandapproval.

• AninternalauditfunctionwhichmonitorscompliancewithpoliciesandtheeffectivenessofinternalcontrolwithintheGroup’sbusinesses.TheworkingoftheinternalauditfunctionisfocusedontheareasofgreatestrisktotheGroup.

• TheBoardAuditandRiskCommittee,whichapprovesinternalandexternalauditplansanddealswithsignificantcontrolissuesraisedbyinternalandexternalauditors.

Attendance at meetings of the Board, the Remuneration Committee and the Audit and Risk Committee

TenBoardmeetingswereheldduringtheyearended31December2011andtheattendancerecordofeachdirectorissetoutinthefollowingtable

Directors’ Remuneration

TheremunerationoftheChiefExecutiveisdeterminedinaccordancewiththeguidelinesissuedbytheDepartmentofPublicExpenditureandReformfordeterminingtheremunerationofChiefExecutiveOfficersofCommercialStateBodiesandissubjecttotheapprovaloftheRemunerationCommitteeoftheBoardofAnPostandtheMinisterforCommunications,EnergyandNaturalResources.TheobjectiveistomaintaintheremunerationoftheChiefExecutiveatalevelwhichisattractivetotheindividualwhile,atthesametime,representingvalueformoneyfortheGroup.AproportionoftheChiefExecutive’sremunerationisperformancerelatedandtherefore,linkedtotheGroupandindividualobjectives.FeesforalldirectorsaredeterminedbytheMinisterforCommunications,EnergyandNaturalResourceswiththeapprovaloftheMinisterforPublicExpenditureandReform.

Thedisclosuresmadeinthesefinancialstatementsrelatingtodirectors’emolumentsandpensioninformationarethoserequiredundertheCodeofPracticefortheGovernanceofStateBodies.

name eligible to attend attended

JohnFitzgerald 10 10PatrickCompton 10 9JerryCondon 10 10DonalConnell 10 10AnneConnolly 10 10PaddyCostello 10 9ThomasDevlin 10 10PaulHenry 3 3CiaraHurley 2 2JamesHyland 10 10PeterOrmond 10 10BrianMcConnell 2 2GerryO’Toole 10 10JohnQuinlivan 10 8AlanSloane 10 10CatherineWoods 10 7JamesWrynn 3 3

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Remuneration Committee

FourmeetingsoftheRemunerationCommitteewereheldduringtheyearended31December2011andtheattendancerecordofeachdirector,eligibletoattend,issetoutinthefollowingtable:

TheRemunerationCommitteeiscurrentlycomprisedofthreenon-executivedirectorsandtheChiefExecutive.JohnFitzgeraldactsasChairmanoftheCommittee.TheChiefExecutiveabsentshimselffrommeetingswhenmattersrelatingtohisownremunerationarebeingconsidered.Whennecessary,non-Committeemembersareinvitedtoattend.TheCommittee’sprincipalresponsibilitiesare:

• todetermine,onbehalfoftheBoard,theremunerationandothertermsandconditionsofemploymentoftheChiefExecutive,subjecttocompliancewithGovernmentPolicyrelatingthereto;

• todetermine,onbehalfoftheBoard,thepaystructuresandtermsandconditionsofotherseniorpersonnel(asidentifiedbytheChairmanoftheBoard);

• tobeinformedofsignificantdevelopmentsinindustrialrelationsandtoreviewindustrialrelationspoliciestoensurethestrategyisconsistentwiththeachievementofthebusinessplansofAnPostand,onbehalfoftheBoard,totakedecisionsonsuchmatters;

• toact,onbehalfoftheBoard,andtakealldecisionsrelatedtopayandpayrelatedmatters,astheChairmanoftheBoardshalldetermine;and

• toact,onbehalfoftheBoard,andtakeallsignificantdecisionsonmatterssuchasremunerationpolicy,benefits,staffgrading,thirdpartyrecommendationsandrelatedissues.

Audit and Risk Committee

EightmeetingsoftheAuditandRiskCommitteewereheldduringtheyearended31December2011andtheattendancerecordofeachdirector,eligibletoattend,issetoutinthefollowingtable:

In2011theAuditandRiskCommitteewascomprisedofthreenon-executivedirectors.JamesHylandwasChairmanoftheCommitteeuntilhisretirementfromtheBoardinDecember2011.Whennecessary,non-Committeemembersareinvitedtoattend.Underitstermsofreference,theCommitteeistoassisttheBoardinfulfillingitsresponsibilitiesbyprovidinganindependentreviewoffinancialreporting,bysatisfyingitselfastotheeffectivenessoftheCompany’sinternalcontrolsandastothesufficiencyoftheexternalandinternalaudits.

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

corporate governance

name eligible to attend attended

JamesHyland 8 8BrianMcConnell 2 2CatherineWoods 8 7*AnneConnolly 4 4*Onemeetingwasheldatshortnotice

name eligible to attend attended

JohnFitzgerald 4 4DonalConnell 4 4JohnQuinlivan 4 4CatherineWoods 4 2

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corporate governance

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

TheCommitteereviewsannuallytheGroup’ssystemsofinternalcontrolandtheprocessesformonitoringandevaluatingtherisksfacingtheGroup.

TheCommitteealsoassistsand,whererelevant,makesrecommendationstotheBoardonthedischargingofitsresponsibilitiesinrelationtosecurity.TheCommitteemeetswithmanagement,aswellasprivatelywiththeexternalauditor.InFebruary2012,theBoardapprovedtheappointmentofMr.JamesWrynnasChairmanoftheCommitteesubjecttoapprovalbytheCentralBankofIrelandandincreasedthenumberofnon-executivedirectorsontheCommitteetofour.

In2011,theAuditandRiskCommitteedischargeditsresponsibilitiesby:

• reviewingtheGroup’sdraftfinancialstatementsfor2010priortoBoardapprovalandmeetingandreviewingwiththeexternalauditortheirreportsthereon;

• reviewingtheappropriatenessoftheGroup’saccountingpolicies;

• reviewingthepotentialimpactontheGroup’sfinancialstatementsofsignificantmattersarisingduringtheyear;

• reviewingtheresourcesofinternalaudit,approvingtheinternalauditplans,reviewinginternalauditreportsanddealingwithsignificantcontrolissuesraisedbytheinternalauditor;

• reviewingtheauditfeeandnon-auditfeespayabletotheGroup’sexternalauditor;

• reviewingtheexternalauditors’planfortheauditoftheGroup’sfinancialstatementsfor2011,confirmationsofauditorindependenceandtheproposedauditfee,andapprovingthetermsofengagementfortheauditonbehalfoftheBoard;

• reviewinganexternalreport,speciallycommissionedbymanagementduringtheyearinlightofanidentifiedincidentoflossataretailbranch,andmonitoringimplementationoftherecommendationsofthatreport;

• reviewingtheRiskManagementPolicyandtheRiskManagementFramework;

• reviewingthekeyriskstothebusinessandconsideringtheadequacyoftheGroup’ssystemofriskidentificationandassessment;

• reviewinganannualreportontheGroup’ssystemsofinternalcontrolanditseffectiveness,reportingtotheBoardontheresultsofthereviewandreceivingregularupdatesonkeyriskareasoffinancialcontrol;

• reviewingsecuritypoliciesandproceduresfortheprotectionofstaff,postmastersandcustomersandforsafeguardingassetsandtheimplementationofandcompliancewiththosepoliciesandprocedures.

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

Nomination Committee

AsalltheauthorityregardingtheappointmentofdirectorsisvestedintheMinisterforCommunications,EnergyandNaturalResources,withtheconsentoftheMinisterforPublicExpenditureandReform,thematterofconstitutingaNominationCommitteedoesnotrequireconsiderationbytheBoard.

Compliance Statement

Asnotedabove,indevelopingitscorporategovernancepolicy,theBoardhassoughttogiveeffectbothtotheCodeofPracticefortheGovernanceofStateBodies,issuedbytheDepartmentofFinance,andtotherelevantmainandsupportingprinciplesofgoodgovernanceoutlinedintheCodeissuedbytheUnitedKingdom’sFinancialReportingCouncil.

ThedirectorsconfirmthattheGrouphasbeenincompliancewiththeCodeofPracticefortheGovernanceofStateBodiesandtherelevantmainandsupportingprinciplesoftheCodethroughoutthefinancialyearunderreview,withtheexceptionofanumberofareasnotedabovewherevoluntarycompliancewithprovisionsoftheCodeisnot,giventhe

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corporate governance

mannerofappointmentofdirectors,thelegalandshareholdingstructureoftheCompanyandexistingBoardprocedures,consideredappropriate.

Going Concern

ThedirectorshavereviewedtheGroup’sbusinessplanandotherrelevantinformationandhaveareasonableexpectationthattheGroupwillcontinueinoperationalexistencefortheforeseeablefuture.Forthisreason,thedirectorscontinuetoadoptthegoingconcernbasisinpreparingthefinancialstatements.

OnbehalfoftheBoard

John Fitzgerald,ChairmanDonal Connell,Director

22 March 2012

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

ThedirectorsacknowledgetheirresponsibilityforcompliancewiththeaccountingprovisionsoftheActandthefollowingstatementdescribeshowAnPostappliedtherelevantprovisionsoftheRegulationsandtheDirectionfortheaccountingyearbeginningon1January2011.

Financial Records and Accounting SystemsThefinancialrecordsandaccountingsystemsmaintainedbyAnPostcontainsufficientdetailtoenablemanagementtoensurethattheycomplywiththeaccountingprovisionsoftheDirection.SeparateaccountsaremaintainedforeachoftheserviceswithintheUniversalService.

Separated Accounts

SegmentalprofitandlossaccountsandstatementsofnetassetsarebeingpreparedforsubmissiontoComRegfortheyearended31December2011.IncompliancewiththeDirection,acompetentbodyisreviewingtheseaccountsandwillissueanopinionontheircompliancewiththeDirection.

Management Accounting Manual

AdetailedaccountingmanualhasbeenpreparedshowingtherangeandscopeofdatatobecollectedforthepurposeofcomplyingwiththeDirectionandthebasisonwhichthedataistobeallocated/apportionedbetweenservices.ThiswassubmittedtoComRegin2011.

ThemanualreflectsthedetailedrevenuedeterminationandcostallocationandapportionmentprinciplesandrulessetoutintheDirection.

Statement of Compliance

Basedontheabovestepsandactions,thedirectorsbelievethatAnPosthascompliedwiththerelevantprovisionsoftheActandwiththeDirectionofComReginrelationtotheAccountingSystemsofAnPostfortheyearended31December2011.

OnbehalfoftheBoard

John Fitzgerald,ChairmanDonal Connell,Director

22 March 2012

statement of the directors on compliance with the regulator’s direction on the accounting systems of an post as required by the communications regulation (postal services) act 2011.

under the communications regulation (postal services) act 2011 the commission for communications regulation, (comreg), is designated as the national regulatory authority for the postal sector and an post is designated as a universal service provider.

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the directors are responsible for preparing the annual report and financial statements, in accordance with applicable law and regulations.

CompanylawrequiresthedirectorstoprepareGroupandparentCompanyfinancialstatementsforeachfinancialyear.UnderthatlawthedirectorshaveelectedtopreparetheGroupandparentCompanyfinancialstatementsinaccordancewithGenerallyAcceptedAccountingPracticeinIreland,comprisingapplicablelawandtheaccountingstandardsissuedbytheAccountingStandardsBoardandpromulgatedbytheInstituteofCharteredAccountantsinIreland.

TheGroupandparentCompanyfinancialstatementsarerequiredbylawtogiveatrueandfairviewofthestateofaffairsoftheGroupandtheparentCompanyandoftheprofitorlossoftheGroupforthatperiod.

InpreparingeachoftheGroupandparentCompanyfinancialstatements,thedirectorsarerequiredto:

• selectsuitableaccountingpoliciesandthenapplythemconsistently;

• makejudgementsandestimatesthatarereasonableandprudent;and

• preparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethattheGroupwillcontinueinbusiness.

ThedirectorsareresponsibleforkeepingproperbooksofaccountwhichdisclosewithreasonableaccuracyatanytimethefinancialpositionoftheGroupandCompanyandtoenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesActs,1963to2009.TheyarealsoresponsiblefortakingsuchstepsasarereasonablyopentothemtosafeguardtheassetsoftheGroupandCompanyandtopreventanddetectfraudandotherirregularities.

ThedirectorsarealsoresponsibleforpreparingaDirectors’ReportthatcomplieswiththerequirementsoftheCompaniesActs,1963to2009.

ThedirectorsareresponsibleforthemaintenanceandintegrityofthecorporateandfinancialinformationincludedontheCompany’swebsite.LegislationintheRepublicofIrelandgoverningthepreparationanddisseminationoffinancialstatementsmaydifferfromlegislationinotherjurisdictions.

OnbehalfoftheBoard

John Fitzgerald,ChairmanDonal Connell,Director

22 March 2012

statement of directors responsibilities

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ThisreportismadesolelytotheCompany’smembers,asabody,inaccordancewithSection193oftheCompaniesAct,1990.OurauditworkhasbeenundertakensothatwemightstatetotheCompany’smembersthosematterswearerequiredtostatetotheminanauditor’sreportandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthantheCompanyandtheCompany’smembersasabody,forourauditwork,forthisreport,orfortheopinionswehaveformed.

Respective Responsibilities of Directors and Auditor

Thedirectors’responsibilitiesforpreparingtheAnnualReportandthefinancialstatementsinaccordancewithapplicablelawandtheaccountingstandardsissuedbytheAccountingStandardsBoardandpromulgatedbytheInstituteofCharteredAccountantsinIreland(GenerallyAcceptedAccountingPracticeinIreland),aresetoutintheStatementofDirectors’Responsibilitiesonpage43.

OurresponsibilityistoauditthefinancialstatementsinaccordancewithrelevantlegalandregulatoryrequirementsandInternationalStandardsonAuditing(UKandIreland).

WereporttoyououropinionastowhetherthefinancialstatementsgiveatrueandfairviewinaccordancewithGenerallyAcceptedAccountingPracticeinIrelandandareproperlypreparedinaccordancewiththeCompaniesActs,1963to2009,andtheEuropeanCommunities(Companies:GroupAccounts)Regulations,1992.Wealsoreporttoyouwhetherinouropinion:properbooksofaccounthavebeenkeptbytheCompany;atthebalancesheetdate,thereexistsafinancialsituationrequiringtheconveningofanextraordinarygeneralmeetingofthecompany;andtheinformationgivenintheDirectors’Reportisconsistentwiththefinancialstatements.Inaddition,westatewhetherwehaveobtainedalltheinformationandexplanationsnecessaryforthepurposesofouraudit,andwhethertheCompany’sbalancesheetisinagreementwiththebooksofaccount.

Wealsoreporttoyouif,inouropinion,anyinformationspecifiedbylawregardingdirectors’remunerationandtransactionswiththeGroupisnotdisclosedand,wherepracticable,includesuchinformationinourreport.

Wereview,attherequestofthedirectors,whether(1)thevoluntaryCorporateGovernancestatementonpages35to41reflectstheGroup’scompliancewiththenineprovisionsofthe2010FRCUKCorporateGovernanceCodethattheListingRulesoftheIrishStockExchangespecifiesforreviewbyauditorsand(2)thestatementonthesystemofinternalcontrolonpages37and38reflectstheGroup’scompliancewiththeprovisionofTheCodeofBestPracticefortheGovernanceofStateBodiesthatisspecifiedforreviewbyauditorsandwereportifthosestatementsdonot.WearenotrequiredtoconsiderwhethertheBoard’sstatementsoninternalcontrolcoverallrisksandcontrols,orformanopinionontheeffectivenessoftheGroup’scorporategovernanceproceduresoritsriskandcontrolprocedures.

WereadtheotherinformationcontainedintheAnnualReportandconsiderwhetheritisconsistentwiththeauditedfinancialstatements.ThisotherinformationcomprisesonlytheDirectors’Report,the

we have audited the group and parent company financial statements (the ‘financial statements’) of an post for the year ended 31 december 2011 which comprise the consolidated profit and loss account, the consolidated and company balance sheets, the consolidated cash flow statement, the consolidated statement of total recognised gains and losses, the statement of accounting policies and the related notes. these financial statements have been prepared under the accounting policies therein.

report of the independent auditor to the members of an post

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report of the independent auditor to the members of an post

Chairperson’sStatement,theChiefExecutive’sReview,theFinancialReview,theCorporateGovernanceStatementandtheFiveYearFinancialSummary.Weconsidertheimplicationsforourreportifwebecomeawareofanyapparentmisstatementsormaterialinconsistencieswiththefinancialstatements.Ourresponsibilitiesdonotextendtoanyotherinformation.

Basis of Opinion

WeconductedourauditinaccordancewithInternationalStandardsonAuditing(UKandIreland)issuedbytheAuditingPracticesBoard.Anauditincludesexamination,onatestbasis,ofevidencerelevanttotheamountsanddisclosuresinthefinancialstatements.ItalsoincludesanassessmentofthesignificantestimatesandjudgementsmadebythedirectorsinthepreparationofthefinancialstatementsandofwhethertheaccountingpoliciesareappropriatetotheGroup’sandparentCompany’scircumstances,consistentlyappliedandadequatelydisclosed.

Weplannedandperformedourauditsoastoobtainalltheinformationandexplanationswhichweconsiderednecessaryinordertoprovideuswithsufficientevidencetogivereasonableassurancethatthefinancialstatementsarefreefrommaterialmisstatement,whethercausedbyfraudorotherirregularityorerror.Informingouropinionwealsoevaluatedtheoveralladequacyofthepresentationofinformationinthefinancialstatements.

Opinion

Inouropinion,thefinancialstatements:

• giveatrueandfairview,inaccordancewithGenerallyAcceptedAccountingPracticeinIreland,ofthestateofaffairsoftheGroupandtheCompanyat31December2011andoftheprofitoftheGroupfortheyearthenended;and

• havebeenproperlypreparedinaccordancewiththeCompaniesActs,1963to2009andtheEuropeanCommunities(Companies:GroupAccounts)Regulations,1992.

Other Matters

Wehaveobtainedalltheinformationandexplanationsweconsiderednecessaryforthepurposesofouraudit.Inouropinion,properbooksofaccounthavebeenkeptbytheCompanyandthebalancesheetoftheCompanyat31December2011isinagreementtherewith.

Inouropinion,theinformationgiveninthereportofthedirectorsonpages32to34isconsistentwiththefinancialstatements.

ThebalancesheetoftheCompany,asstatedonpage54,reportsanexcessofliabilitiesoverassetsand,inouropinion,onthatbasistheredidexistat31December2011afinancialsituationwhichundersection40(1)oftheCompanies(Amendment)Act,1983mayrequiretheconveningofanextraordinarygeneralmeetingoftheCompany.

Caroline Flynnforandbehalfof

CharteredAccountants,StatutoryAuditFirm1StokesPlaceSt.Stephen’sGreenDublin2

22 March 2012

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Respective Responsibilities of Directors and Auditor

ThedirectorsprepareanannualstatementofcompliancewiththeaccountingprovisionsoftheActandtheDirectionforwhichtheyareresponsible.Theobjectiveofourreviewistodrawattentiontonon-compliancewiththerequirementsoftheaccountingprovisionsoftheActandwiththeDirection.Ourreviewdoesnotconstituteanauditoftheseparatedaccounts.Aseparateauditreportwillbeissuedontheauditoftheregulatoryaccounts.

Basis of Opinion

WecarriedoutourreviewinaccordancewiththegeneralprinciplesandguidanceoftheAuditingPracticesBoard.

Opinion

BasedonenquiryofcertaindirectorsandofficersoftheCompanyandexaminationofrelevantdocuments,inouropinion,thedirectors’statementonpage42appropriatelyreflectstheCompany’scompliance,fortheyearended31December2011,withtheaccountingprovisionsoftheActandwiththeDirectionontheAccountingSystemsofAnPost,dated8December2006issuedbyComReg.

CharteredAccountants,StatutoryAuditFirm1StokesPlaceSt.Stephen’sGreenDublin2

22 March 2012

report of the independent auditor to an post on compliance with the regulator’s direction on the accounting systems of an post as required by the communications regulation (postal services) act 2011 (the act)

in addition to our audit of the financial statements, we have reviewed the directors’ statement on page 42 concerning the company’s compliance, for the year ended 31 december 2011, with the accounting provisions of the act and with the direction to an post setting out the regulator’s detailed requirements in relation to the accounting systems of an post (the direction), issued on 8 december 2006 by the postal services regulator, comreg, in relation to the accounting systems of an post.

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

1. Basis of Preparation

ThefinancialstatementsarepreparedunderthehistoricalcostconventionandinaccordancewithapplicablelawandIrishGenerallyAcceptedAccountingPracticewhichincludescompliancewiththefinancialreportingstandardsoftheAccountingStandardsBoardaspromulgatedinIrelandbyTheInstituteofCharteredAccountantsinIreland.

2. Basis of Consolidation

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

ThesoleactivityofAnPostNationalLotteryCompanyistheoperationoftheNationalLotteryunderlicencefromtheMinisterforPublicExpenditureandReforminaccordancewiththeprovisionsoftheNationalLotteryAct,1986andthesurplusgeneratedeachyearisentirelyattributabletotheNationalLotteryFundwhichismanagedandcontrolledbytheMinister.Accordingly,AnPostdoesnotparticipateinthesurplusgeneratedbyAnPostNationalLotteryCompanyandneitherisitentitledtoexerciseanyrightsovertheassetsofthatcompany.Onthisbasis,inaccordancewiththeprovisionsofFinancialReportingStandardNo.2‘AccountingforSubsidiaryUndertakings’andtheEuropeanCommunities(Companies:GroupAccounts)Regulations,1992,theconsolidatedfinancialstatementsdonotincorporatethefinancialstatementsofAnPostNationalLotteryCompany.SeparatefinancialstatementsofAnPostNationalLotteryCompanyaretobepublishedinApril2012.

Jointventureundertakings( jointventures)arethoseundertakingsinwhichtheGrouphasalongterminterestandoverwhichitexercisescontroljointlywithanotherparty.

Associatedundertakings(associates)arethoseundertakingsinwhichtheGrouphasaparticipatinginterestintheequitycapitalandoverwhichitisabletoexercisesignificantinfluence.

Jointventuresandassociatesareaccountedforusingthegrossequitymethodandequitymethodrespectively.TheGroup’sshareofprofitslesslossesofjointventuresandassociatesisincludedintheconsolidatedprofitandlossaccountanditsinterestsintheirnetassetsorliabilities,otherthangoodwill,areincludedasfixedassetinvestmentsintheconsolidatedbalancesheet.

Theamountsincludedintheconsolidatedfinancialstatementsinrespectofthepostacquisitionprofitsofjointventuresandassociatesaretakenfromtheirlatestauditedfinancialstatementsmadeuptothebalancesheetdate.

statement of accounting policies for the year ended 31 december 2011

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statement of accounting policies for the year ended 31 december 2011

InvestmentinjointventuresandassociatesareshownintheCompanybalancesheetasfinancialfixedassetsandarevaluedatcostlessprovisionsforimpairmentsinvalue.

3. Turnover

Turnoverisrecognisedasservicesareprovidedandconsistsofincomefrompostage,agencyservices,poundagefromremittanceservices,courierandlogisticservices,consultancyservices,financialservices,rentsandinterestincome.IncomefromagencyservicesisinrespectofservicesperformedforGovernmentDepartments,theNationalTreasuryManagementAgency,AnPostNationalLotteryCompanyandotherbodies.Amountsheldintheperformanceoftheseagencyservicesareincludedinamountsheldintrustincashatbankandathand.Postageincomeisrecognisedintheprofitandlossaccountassalesaremadewithanadjustmenttodeferredrevenueforstampssoldandunusedandbalancesinpostagemetermachinesunusedattheyearend.Otherincome,primarilyagencyincomeandserviceincome,isrecogniseduponprovisionoftheunderlyingservice.

4. Saving Services

TheCompanyoperates,onanagencybasisandforanagreedremuneration,thePostOfficeSavingsBankandothersavingsservicesfortheNationalTreasuryManagementAgency,whichactsonbehalfoftheMinisterforFinance.

ThefundsareremittedregularlytotheNationalTreasuryManagementAgency.TheassetsandliabilitiesofsuchsavingsservicesvestintheMinisterforFinanceand,accordingly,arenotincludedinthesefinancialstatements.

5. Grants

Revenuebasedgrantsarecreditedtotheprofitandlossaccounttooffsetthematchingexpenditure.

CapitalgrantsreceivedandreceivableunderEUassistedschemesarerecognisedwhenreceivedorwhentheirreceiptcanbeforeseenwithvirtualcertainty.

Capitalgrantsaretreatedasdeferredincomeandamortisedtotheprofitandlossaccountonabasisconsistentwiththedepreciationpolicyoftherelatedtangiblefixedassets.

6. Tangible Fixed Assets

Tangiblefixedassetsarestatedatcostlessaccumulateddepreciation.

Freeholdandlongleaseholdlandisnotdepreciated.Depreciationonothertangiblefixedassetsischargedtotheprofitandlossaccountonastraightlinebasissoastowriteoffthoseassets,adjustedforestimatedresidualvalue,overtheexpectedusefullifeofeachcategory.Theremainingusefullivesoftheassetsandtheirresidualvaluesarereviewedonaregularbasis.

Depreciationisprovidedonadditionswitheffectfromthefirstdayofthemonthfollowingcommissioningandondisposalsuptotheendofthemonthofretirement.

Theestimatedusefullivesareasfollows:

years

Freehold&longleaseholdbuildings 20-50InterestinGPO 50Motorvehicles 5Operating&computerequipment 3-10

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statement of accounting policies for the year ended 31 december 2011

7. Operating Leases

Operatingleaserentalsarechargedtotheprofitandlossaccountonastraightlinebasisovertheleaseterm.

8. Goodwill

Goodwillarisingonacquisitions,representingtheexcessofthepurchasepriceoverthefairvalueofthenetidentifiableassetsorliabilitiesacquired,iscapitalisedandamortisedtotheprofitandlossaccountonastraightlinebasisoveritsexpectedusefullifeofuptotwentyyears.Thecarryingvalueofgoodwillisreviewedannuallyandprovisionismadeforanyimpairmentinvalue.Ondisposalofabusiness,anygoodwillisincludedindeterminingtheprofitorlossonsaleofthebusiness.

9. Financial Fixed Assets

Financialfixedassetsareshownatcostlessprovisionsforimpairmentsinvalue.Incomefromfinancialfixedassets,togetherwithanyrelatedtaxcredit,isrecognisedintheprofitandlossaccountintheyearinwhichitisreceivable.

10. Taxation

Currenttax,includingIrishcorporationtaxandforeigntax(es),isprovidedontheGroup’staxableprofits,atamountsexpectedtobepaid(orrecovered)usingthetaxratesandlawsthathavebeenenactedorsubstantivelyenactedbythebalancesheetdate.

Deferredtaxisrecognisedinrespectofalltimingdifferencesthathaveoriginatedbutnotreversedatthebalancesheetdate.Provisionismadeattheratesexpectedtoapplywhenthetimingdifferencesreverse.TimingdifferencesaredifferencesbetweentheGroup’staxableprofitsanditsresultsasstatedinthefinancialstatementsthatarisefromtheinclusionofgainsandlossesintaxableprofitsinperiodsdifferentfromthoseinwhichtheyarerecognisedinthefinancialstatements.

Anetdeferredtaxassetisregardedasrecoverableandthereforerecognisedonlywhen,onthebasisofallavailableevidence,itcanberegardedasmorelikelythannotthattherewillbesuitabletaxableprofitsfromwhichthefuturereversaloftheunderlyingtimingdifferencescanbededucted.

Deferredtaxisrecognisedinrespectoftheretainedearningsofoverseassubsidiaries,jointventuresandassociatesonlytotheextentthat,atthebalancesheetdate,dividendshavebeenaccruedorreceivableorabindingagreementtodistributepastearningsinfuturehasbeenenteredintobythesubsidiary,jointventureorassociate.

11. Pensions

TheGroupprovidespensionstoitsemployeesunderdefinedbenefitsuperannuationschemesandadefinedcontributionscheme.Italsoprovidesretirementgratuitiesundernormalcircumstancestopostmastersengagedasagentsandtocertainnon-pensionableemployees.

Inrelationtothedefinedcontributionscheme,contributionsareaccruedandrecognisedinoperatingprofitorlossintheperiodinwhichtheyareearnedbytherelevantemployees.

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

Theamountchargedtooperatingprofitistheactuariallydeterminedcostofpensionbenefitspromisedtoemployeesearnedduringtheyearplusanybenefitimprovementsgrantedtomembersduringtheyear.

Theexpectedreturnonthepensionschemes’assetsduringtheyearandtheincreaseintheschemes’liabilitiesduetotheunwindingofthediscountrateduringtheyearareshownasfinancingcostsintheprofitandlossaccount.

Anydifferencebetweentheexpectedreturnonassetsandthatactuallyachievedandanychangestotheliabilitiesduetochangesinassumptionsorbecauseactualexperienceduringtheyearwasdifferenttothatassumed,arerecognisedasactuarialgainsandlossesinthestatementoftotalrecognisedgainsandlosses.

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Inrelationtotheunfundedliabilityforretirementgratuities,theactuariallydeterminedpresentvalueoftheliabilityisrecordedinfullinthebalancesheetanditisincreasedforthecostofadditionalbenefitsearnedduringtheyearwhichischargedtooperatingprofit.Theunwindingofthediscountontheliabilityisshownasafinancingcostintheprofitandlossaccount.Changestotheliabilityasaresultofchangesinmeasurementassumptionsorbecauseactualexperienceisdifferenttothatassumedareconsideredtobeanactuarialgainorlossandareincludedinthestatementoftotalrecognisedgainsandlosses.

12. Foreign Currencies

Transactionsdenominatedinforeigncurrenciesaretranslatedintoeuroandrecordedattheratesofexchangerulingatthedatesofthetransactions.Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedintoeuroattheratesofexchangerulingatthebalancesheetdateoratforwardpurchasecontractrateswheresuchcontractsexist.Allsuchexchangedifferencesaredealtwithintheprofitandlossaccount.

Resultsofoverseassubsidiariesaretranslatedintoeuroattheaverageexchangeratefortheperiod.Theassetsandliabilitiesofoverseassubsidiariesaretranslatedintoeuroatratesofexchangerulingatthebalancesheetdate.Translationdifferencesarereportedasamovementonreserves.

statement of accounting policies for the year ended 31 december 2011

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notes 2011 2010 i’000 i’000

Turnover:Groupandshareofjointventure 806,714 811,563Lessshareofjointventure’sturnover - (6,443)group turnover – continuing operations 2 806,714 805,120

Operatingcosts 3 (804,498) (799,282)group operating profit – continuing operations 2,216 5,838

Exceptionalitems–continuingoperations –costsofrestructuring 4 - (20,000)

Shareofresultofjointventureinvestment - (6,590)Otherfinanceincome/(expense)net 18 1,550 (3,950)profit / (loss) on ordinary activities before taxation 5 3,766 (24,702)

Taxonprofit/(loss)onordinaryactivities 6 (2,134) 429profit / (loss) on ordinary activities after taxation 1,632 (24,273)

Minorityinterest 22 (1,285) (409)profit / (loss) for the financial year 7/20 347 (24,682)

OnbehalfoftheBoardJohn Fitzgerald,ChairmanDonal Connell,Director

consolidated profit and loss account for the year ended 31 december 2011

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notes 2011 2010 i’000 i’000

Profit/(loss)forthefinancialyearexcludingshareofresultsofjointventure 347 (18,092)Shareofjointventure’sresult - (6,590)Actuarial(loss)/gainonpostemploymentplans 18 (121,630) 27,310total recognised (losses) / gains (121,283) 2,628

consolidated statement of total recognised gains and losses for the year ended 31 december 2011

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notes 2011 2010 i’000 i’000

fixed assets Intangibleassets–goodwill 9 24,599 24,658Tangibleassets 10 266,530 254,665Financialassets 11 - - 291,129 279,323

current assets Debtors 12 112,235 98,437Cashatbankandinhand 13 150,064 198,078 262,299 296,515

creditors:Amountsfallingduewithinoneyear 14 (191,572) (200,590)

net current assets 70,727 95,925 total assets less current liabilities 361,856 375,248

creditors:Amountsfallingdueaftermorethanoneyear 16 (3,461) (4,563)

provisions for liabilities 17 (39,432) (46,820)

net assets excluding pension liability 318,963 323,865 pension liability 18 (483,594) (368,498)net liabilities including pension liability (164,631) (44,633)

capital and reserves Calledupsharecapital 19 68,239 68,239Capitalconversionreservefund 19 877 877Profitandlossaccount 20 (227,588) (106,305)shareholders’ deficit 21 (158,472) (37,189)

Minorityinterest 22 (6,159) (7,444) (164,631) (44,633)

OnbehalfoftheBoardJohn Fitzgerald,ChairmanDonal Connell,Director

consolidated balance sheet at 31 december 2011

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company balance sheet at 31 december 2011

notes 2011 2010 i’000 i’000

fixed assets Tangibleassets 10 270,986 259,376Financialassets 11 11,084 11,084 282,070 270,460

current assets Debtors 12 67,724 63,607Cashatbankandinhand 13 141,178 178,173 208,902 241,780

creditors:Amountsfallingduewithinoneyear 14 (164,595) (169,311)

net current assets 44,307 72,469 total assets less current liabilities 326,377 342,929

creditors:Amountsfallingdueaftermorethanoneyear 16 (3,461) (3,563)

provisions for liabilities 17 (39,432) (46,820)

net assets excluding pension liability 283,484 292,546 pension liability 18 (483,594) (368,498)net liabilities including pension liability (200,110) (75,952)

capital and reserves Calledupsharecapital 19 68,239 68,239Capitalconversionreservefund 19 877 877Profitandlossaccount 20 (269,226) (145,068)shareholders’ deficit 21 (200,110) (75,952)

OnbehalfoftheBoardJohn Fitzgerald,ChairmanDonal Connell,Director

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consolidated cash flow statement for the year ended 31 december 2011

reconciliation of net cash flow to movement in net funds

notes 2011 2010 i’000 i’000

net cash outflow from operating activities 23 (15,447) (11,470)taxation 23 2,796 (2,402)capital expenditure and financial investment 23 (31,778) (40,590)acquisitions 23 (3,310) (21,072)financing 23 (1,000) 2,000cash outflow before use of liquid resources (48,739) (73,534)management of liquid resources 23 50,195 9,043increase / (decrease) in cash in the year 1,456 (64,491)

notes 2011 2010 i’000 i’000

increase / (decrease) in cash in the year 24 1,456 (64,491)Cashflowsfromchangeinliquidresources 24 (50,195) (9,043)Changeinnetfundsresultingfromcashflows 24 (48,739) (73,534) net funds at beginning of year 24 196,342 269,876 net funds at end of year 24 147,603 196,342

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notes to the financial statements for the year ended 31 december 2011

1. Status of Company

TheCompanyisalimitedliabilitycompany,incorporatedundertheCompaniesActs,1963to2009.UnderthePostalandTelecommunicationsServicesAct,1983,theCompanyisentitledtoomittheword‘Limited’fromitsname.

2. Turnover

TurnoveraboveexcludestheGroup’sshareofJointVenture’sturnoverof€nil(2010:€6,443,000).Intheopinionofthedirectors,fullercompliancewiththedisclosurerequirementsofSSAP25‘SegmentalReporting’wouldbeprejudicialtotheGroup’sinterests.

3. Operating Costs

2011 2010 i’000 i’000

Theanalysisofturnoverisasfollows:republic of ireland Postage:Lettersandparcels 507,306 552,366Postage:Electionsandreferendum 27,996 -Postoffices:Agency,remittanceandrelatedservices 171,613 171,438Otherservices 41,598 36,197Interestincome 9,358 9,259 757,871 769,260 united kingdom Otherservices 48,843 35,860 806,714 805,120

2011 2010 i’000 i’000

staff costs Wagesandsalaries 418,735 422,795Postmasters’costs 74,432 74,646Socialwelfarecosts(note18) 36,648 36,279 529,815 533,720Otherpensioncosts(note18) 46,580 41,952 576,395 575,672other costs Distribution 72,396 66,612Facilities 25,998 26,630Operational 63,146 61,952Administration 39,737 43,171Depreciationandamortisationofgoodwill 26,826 25,245 228,103 223,610 804,498 799,282

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notes to the financial statements for the year ended 31 december 2011

4. Exceptional Items

2011 2010 i’000 i’000

Costsofrestructuring – (20,000)

2011 2010 i’000 i’000

Theprofit/(loss)onordinaryactivitiesbeforetaxationisstatedaftercharging: directors’ emoluments Fees 244 251Otheremoluments 402 407Pensioncontributions 77 77 expenses paid to directors Travel 18 15Subsistence 6 6Other 1 1 auditors’ remunerationAuditofthegroupfinancialstatements 299 299Otherassuranceservices 155 155Taxadviceservices 126 178Othernon-auditservices 110 241

Depreciation 24,085 22,925Amortisationofgoodwill 2,741 2,320 operating lease rentalsRentalofbuildings 8,357 8,290Other–equipmentandmotorvehicles 14,657 14,110 andaftercrediting: Capitalgrantsamortised 102 102Profit/(loss)onsaleoffixedassets 131 (14)

TheCompanycontinuestoimplementitsstrategicplanwhichincludesanintentiontoreducethenumberoffulltimeequivalentsworkingintheGroupby1,375overthethreeyearperiod2010to2012.Assetoutinnote17,theprovisionforbusinessrestructuringat31December2011includes€20,386,000(2010:€27,774,000)inrelationtobusinessrestructuringredundancycosts.Havingconsideredtheimpactofcontinuingvolumereductionsarisingfromtheeconomicrecession,marketliberalisationande-substitution,theanalysisofprobableexitsbasedondefinitiveexitplansandnegotiationssupportsthecurrentlevelofprovisioningandnofurtherchargehasbeenmadein2011.

5. Profit / (Loss) on Ordinary Activities before Taxation

Theamountsshownaboveasdirectors’emolumentsincludeonlytheamountspaidtothedirectorsintheexecutionoftheirdutiesasdirectorsandthesalaryoftheChiefExecutivewhoisalsoadirector.Otherthanthis,theydonotincludethesalariesoftheemployeeandpostmasterdirectors.

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5. Profit / (Loss) on Ordinary Activities before Taxation (c0nt.)

TheremunerationpackageofMrDonalConnell,ChiefExecutiveOfficer,whichisincludedintheamountsshownaboveasdirectors’emoluments,wasasfollows:

notes to the financial statements for the year ended 31 december 2011

2011 2010 i’000 i’000

Basicsalary 381 386Non-pensionableperformancerelatedpay - -Totalpay 381 386Otheremoluments:Taxablebenefits,includinguseofacompanycar 21 21Director’sfee 16 16Pensioncontributions 77 77 495 500

2011 2010 i’000 i’000

JohnFitzgerald(Chairman) 31 31PatrickCompton 16 16JerryCondon 16 16DonalConnell 16 16AnneConnolly 16 16PaddyCostello 16 16PatrickDavoren - 2ThomasDevlin 16 11LouiseEnglish - 6PaulHenry 4 -CiaraHurley 4 16JamesHyland 24 25BrianMcConnell 4 16GerryO’Toole 16 16PeterOrmond 13 -JohnQuinlivan 16 16AlanSloane 16 16CatherineWoods 16 16JamesWrynn 4 -Total 244 251

InaccordancewiththeGovernmentGuidelinesonRemunerationandOtherConditionsofChiefExecutives,theCompanyoperatesaperformancerelatedpayschemewhichprovidesforamaximumpossibleannualawardof35%ofbasicpay.Underthisscheme,upto25%isappliedtoannualobjectives(the25%shorttermscheme)andupto10%isappliedtomulti-annual(threeyear)objectives(the10%longtermscheme).TheChiefExecutivehasvoluntarilywaivedhisentitlementunderthe25%shorttermschemeinthecurrentyearandintheprevioustwoyears.Amountsearnedunderthe10%longtermschemearenotfinalisedanddonotbecomepayableuntiltheendofthecontractterm.However,itisestimatedthatanamountof€97,000hasbeenearnedbytheChiefExecutiveunderthe10%longtermschemesincethedateofhisappointment,14August,2006,upto31December2009.NodeterminationhasbeenmadeyetinrelationtoamountsearnedbytheChiefExecutivein2010or2011underthe10%longtermscheme.TheBoardarecognisantoftheMinister’spositioninregardtoperformancerelatedbonusesinCommercialSemi-StateBodies.

From1December2011,theChiefExecutivewaived15%ofhisbasicsalarygoingforward,totheMinisterforFinance.Thefeespaidtoeachdirectorwereasfollows:

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notes to the financial statements for the year ended 31 december 2011

2011 2010 i’000 i’000

current tax Ireland–Corporationtax 1,605 (918)Ireland–adjustmentwithrespectofprioryears (16) (22)UK–Corporationtax 545 511 2,134 (429)

ThecurrenttaxcreditislowerthanthestandardrateofcorporationtaxinIreland.Thedifferencesareexplainedbelow:

2011 2010 i’000 i’000

Lossaftertaxintheholdingcompany (2,528) (17,860)Profitaftertaxinsubsidiaryundertakings 4,160 177ShareofresultofJointVenture - (6,590)Minorityinterest (1,285) (409)Profit/(loss)forthefinancialyear 347 (24,682)

2011 2010 i’000 i’000

Profit/(loss)onordinaryactivitiesbeforetax 3,766 (24,702) Currenttaxof12.5%(2010:12.5%) 471 (3,088)Effects of: Expensesnotdeductible 367 609Depreciationinexcessofcapitalallowances 902 831ShareofJointVenturelossesnotdeductible - 824Incometaxedathigherrates 1,408 1,469Utilisationoftaxlosses - -Shorttermtimingdifferences (998) (1,052)Prioryearoverprovision (16) (22)Currenttaxcharge 2,134 (429)

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

7. Profit / (Loss) for the Financial Year

Giventheuncertaintyovertheexistenceoffuturetaxableprofits,apotentialdeferredtaxassetof€65,162,000(2010:€49,991,000)hasnotbeenrecognisedintheconsolidatedbalancesheetat31December2011.Thisdeferredtaxassetnotrecognisedcomprisesadeferredtaxassetinrelationtothenetpensiondeficitrecognisedof€60,449,000(2010:€46,062,000),timingdifferencesonbusinessrestructuring,€2,381,000(2010:€2,381,000),taxlossesforwardnotutilised,€6,556,000(2010:€6,540,000),offsetbyothertimingdifferencesof€4,224,000(2010:€4,992,000).

AseparateprofitandlossaccountforAnPosthasnotbeenpreparedbecausetheconditionslaiddowninSection148(8)oftheCompaniesAct,1963havebeensatisfied.

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2011 2010

TheaverageFullTimeEquivalent(FTE)numberofpersonsworkingintheGroupduringtheyearwas: Operations 9,382 9,440Corporate 655 689TotalCompanyemployees(FTE) 10,037 10,129Subsidiaries 612 481TotalGroupemployees(FTE) 10,649 10,610

TheaveragenumberofemployeesworkingintheGroupduringtheyear,includingexecutivedirectors,was: Operations 8,859 8,943Corporate 694 727TotalCompanyemployees 9,553 9,670Casualemployees 1,160 1,300TotalCompanyemployees 10,713 10,970Subsidiaries 620 490TotalGroupemployees 11,333 11,460 Postmasters:Engagedasagents 1,103 1,128

2011 2010 i’000 i’000

Theaggregatepayrollcosts,excludingrestructuringcosts,wereasfollows: Wagesandsalaries 418,735 422,795Postmasters’costs 74,432 74,646Socialwelfarecosts 36,648 36,279 529,815 533,720Otherpensioncosts(note18) 46,580 41,952 576,395 575,672

8. Staff Numbers and Costs

notes to the financial statements for the year ended 31 december 2011

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total i’000

groupcost At31December2010 38,703Acquisitions(note25) 2,582Foreignexchangegain 100At31December2011 41,385

amortisation At31December2010 14,045Chargeforyear 2,741At31December2011 16,786 net book value At31December2011 24,599At31December2010 24,658

Thedirectorshaveconsideredthecarryingvalueofgoodwillat31December2011andhaveconcludedthatnoimpairmentarises.

9. Intangible Fixed Assets – Goodwill

notes to the financial statements for the year ended 31 december 2011

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freehold & long operating leasehold land interest motor & computer & buildings in gpo vehicles equipment total i’000 i’000 i’000 i’000 i’000

groupcost At31December2010 233,894 26,582 19,923 285,680 566,079Additions 8,542 3 39 27,417 36,001Disposals (19) - (3,113) (18) (3,150)Foreignexchangegain - - 1 114 115At31December2011 242,417 26,585 16,850 313,193 599,045 accumulated depreciation At31December2010 52,852 11,464 11,895 235,203 311,414Chargedduringyear 5,464 663 2,564 15,394 24,085Eliminatedondisposals (8) - (2,998) (13) (3,019)Foreignexchangegain - - - 35 35At31December2011 58,308 12,127 11,461 250,619 332,515

net book value At31December2011 184,109 14,458 5,389 62,574 266,530At31December2010 181,042 15,118 8,028 50,477 254,665

companycost At31December2010 236,183 26,582 19,701 276,256 558,722Additions 7,577 3 39 26,880 34,499Disposals (19) - (3,100) - (3,119)At31December2011 243,741 26,585 16,640 303,136 590,102 accumulated depreciation At31December2010 47,619 11,464 11,842 228,421 299,346Chargedduringyear 5,623 663 2,506 13,978 22,770Eliminatedondisposals (8) - (2,992) - (3,000)At31December2011 53,234 12,127 11,356 242,399 319,116 net book value At31December2011 190,507 14,458 5,284 60,737 270,986At31December2010 188,564 15,118 7,859 47,835 259,376

Group and Company

Thedepreciableelementoffreehold&longleaseholdland&buildingsamountsto:Group€200,940,000(2010:€188,448,000),Company€206,946,000(2010:€195,977,000).

10. Tangible Fixed Assets

notes to the financial statements for the year ended 31 december 2011

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group 2011 group 2010 company 2011 company 2010 i i i i

Sharesinsubsidiaryundertakings,atcost 102 102 11,083,733 11,083,671Interestinassociatedundertakings,atcost 163 163 163 163 265 265 11,083,896 11,083,834

Themovementsduringtheyearwereasfollows:

shares in subsidiary undertakings (note 25)Atbeginningofyear 102 102 11,083,671 10,651,016Additions - - 62 432,655Atendofyear 102 102 11,083,733 11,083,671

shares in associated undertakings (note 25)Atbeginningofyear 163 163 163 163Additions - - - -Atendofyear 163 163 163 163

12. Debtors

group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000

amounts falling due within one year Tradedebtors 75,965 65,172 35,171 28,439Amountsowedbysubsidiaryundertakingnotconsolidated(note28) 517 751 517 751Amountsowedbyothersubsidiaryundertakings - - 1,760 1,014Amountsowedbyassociatedundertaking(note28) 251 331 251 331Corporationtaxrepayable - 3,024 - 3,029Otherdebtors 5,195 3,268 4,320 1,617PrizeBondsheld 1,288 1,393 600 705Prepaymentsandaccruedincome 29,019 24,498 3,649 5,129 112,235 98,437 46,268 41,015amounts falling due after more than one year Amountsowedbysubsidiaryundertakings - - 21,456 22,592 112,235 98,437 67,724 63,607

11. Financial Fixed Assets

notes to the financial statements for the year ended 31 december 2011

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notes to the financial statements for the year ended 31 december 2011

group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000

Cashatbank 30,679 35,234 21,793 15,329Cashinhand 193,210 258,212 193,210 258,212 223,889 293,446 215,003 273,541Termdeposits 229,864 280,059 229,864 280,059Less:Amountsheldintrust (303,689) (375,427) (303,689) (375,427) 150,064 198,078 141,178 178,173

14. Creditors

group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000

amounts falling due within one year Tradecreditors 45,362 49,927 14,438 12,598Amountsowedtosubsidiaryundertakings - - 39,911 30,485Othercreditors 14,276 11,438 5,714 3,416Taxationandsocialwelfare(note15) 17,009 19,832 13,986 15,659Accruals 98,730 103,466 77,812 93,962Deferredincome–capitalgrants(note16) 102 102 102 102Termloan 1,000 1,000 - -Bankoverdraft 2,461 1,736 - -Deferredpostageincome 12,632 13,089 12,632 13,089 191,572 200,590 164,595 169,311

Thebankoverdraftisrepayableondemand.ThetermloanissecuredbywayofadebentureovertheassetsoftheGiftVoucherShop.Itisrepayablein2012.

15. Taxation and Social Welfare

group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000

Corporationtaxpayable 1,906 - 794 -IncometaxdeductedunderPAYE 6,044 7,428 5,464 7,020Payrelatedsocialinsurance 6,194 6,416 6,042 6,229Valueaddedtax 2,607 5,305 1,436 1,909Professionalserviceswithholdingtax 258 683 250 501 17,009 19,832 13,986 15,659

13. Cash at Bank and In Hand

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notes to the financial statements for the year ended 31 december 2011

16. Creditors

group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000

amounts falling due after more than one year Deferredincome–capitalgrants 3,461 3,563 3,461 3,563Termloan - 1,000 - - 3,461 4,563 3,461 3,563 Themovementsongrantswereasfollows: Atbeginningofyear 3,665 3,767 3,665 3,767Amortisedtoprofitandlossaccount (102) (102) (102) (102)Atendofyear 3,563 3,665 3,563 3,665Transferredtocreditors:amountsfalling duewithinoneyear (102) (102) (102) (102) 3,461 3,563 3,461 3,563

17. Provisions for Liabilities

2011 2010 i’000 i’000

group and company Provisionsforbusinessrestructuring 39,432 46,820

Themovementsduringtheyearwereasfollows:Atbeginningofyear 46,820 49,885Chargefortheyear(note4) - 20,000Utilisedduringtheyear (7,388) (23,065)Atendofyear 39,432 46,820

Theprovisionforbusinessrestructuringat31December2011includes€20,386,000(2010:€27,774,000)inrelationtobusinessrestructuringredundancycosts(relatedrestructuringisanticipatedtobecompletedby31December2013),and€19,046,000(2010:€19,046,000)inrelationtotheintroductionofanEmployeeShareOwnershipPlan(ESOP).

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group and company

Thepensionentitlementsofemployeesariseunderanumberofdefinedbenefitanddefinedcontributionpensionschemes,theassetsofwhicharevestedinindependenttrusteesappointedbytheCompanyforthesolebenefitofemployeesandtheirdependents.Annualcontributionsarebasedontheadviceofaprofessionallyqualifiedactuary.

Theamountschargedduringtheyeartooperatingcostswereasfollows:

2011 2010 i’000 i’000 Definedbenefitschemes–currentservicecost 44,600 39,800Ex-gratiaschemes–currentservicecost 1,000 1,000Definedcontributionscheme 980 1,152Recognisedintheprofitandlossaccount 46,580 41,952

Pastservicecostsof€5,410,000(2010:€14,762,000)aroseduringtheyear.Theseweredischargedthroughtheutilisationoftherestructuringprovision(note17)andhadnoimpactontheprofitandlossaccountfortheyearended31December,2011or2010.Contributionspayabletopensionschemesandincludedincreditorsat31December2011amountedto€1,759,000(2010:€nil)andwerepaidinJanuary2012.

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

ThevaluationsofthepensionschemesusedforthepurposeofFRS17accountingentriesanddisclosureshavebeenbasedonthemostrecentactuarialvaluationsasidentifiedaboveandupdatedbytheindependentactuaryto31December2011.Schemeassetsarestatedattheirmarketvalueatthebalancesheetdate.

ThefinancialassumptionsusedtocalculatetheretirementbenefitliabilitiesunderFRS17wereasfollows:

2011 201o 2009

Valuationmethod ProjectedUnit ProjectedUnit ProjectedUnitDiscountrate 5.25% 5.50% 5.75%Inflationrate 2.00% 2.00% 2.00%Increasetopensionsinpayment 2.60% 2.90% 3.25%Pensionablesalaryincreases 2.60% 2.90% 3.25%Thelongtermexpectedratesofreturnontheassets ofthepensionschemewere:Equities 8.25% 8.50% 9.00%Bonds 3.75% 4.00% 4.00%Other 4.25% 5.10% 6.00%

18. Pensions and Similar Obligations

notes to the financial statements for the year ended 31 december 2011

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notes to the financial statements for the year ended 31 december 2011

18. Pensions and Similar Obligations (cont.)

Theassumptionsrelatingtolongevityunderlyingthepensionliabilitiesatthebalancesheetdatearebasedonstandardactuarialmortalitytablesandincludeanallowanceforfutureimprovementsinlongevity.Theassumptionsareequivalenttoexpectinga65-yearoldtoliveforanumberofyearsasfollows:

2011 2011 201o 201o male female male female

life expectancy at 65CurrentPensioners–aged65 85.7 87.0 85.5 86.8FuturePensioners–aged40 88.6 89.5 88.5 89.4

Themarketvalueoftheassetsofthedefinedbenefitschemesat31December2011,2010and2009were:

2011 201o 2009 e’00o e’00o e’00o

Equities 925,700 1,068,800 916,100Bonds 681,100 650,500 625,100Other 153,172 123,445 112,400Fairvalueofpensionschemes’assets 1,759,972 1,842,745 1,653,600 Presentvalueoffundeddefinedbenefitobligations (2,230,700) (2,199,400) (2,045,000)Presentvalueofunfundeddefinedbenefitobligations (12,866) (11,843) (11,852)Presentvalueofdefinedbenefitobligations (2,243,566) (2,211,243) (2,056,852)Pensionliability (483,594) (368,498) (403,252)

movement in fair value of pension schemes’ assetsFairvalueofpensionschemes’assetsatbeginningofyear 1,842,745 1,653,600Expectedreturnonplanassets 122,400 113,400Actuarial(loss)/gain (185,500) 96,000Employercontributions 55,994 66,956Members’contributions 4,400 4,500Benefitspaid (80,067) (91,711)Fairvalueofpensionschemes’assetsatendofyear 1,759,972 1,842,745

movement in present value of defined benefit obligationsDefinedbenefitobligationsatbeginningofyear (2,211,243) (2,056,852)Currentservicecost (45,600) (40,800)Pastservicecost (5,410) (14,762)Interestcost (120,850) (117,350)Members’contributions (4,400) (4,500)Benefitspaid 80,067 91,711Actuarialgain/(loss) 63,870 (68,690)Definedbenefitobligationsatendofyear (2,243,566) (2,211,243)

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notes to the financial statements for the year ended 31 december 2011

18. Pensions and Similar Obligations (cont.)

2011 201o e’00o e’00o

other finance income / (expense)Interestonschemeliabilities (120,850) (117,350)Expectedreturnonschemes’assets 122,400 113,400 1,550 (3,950)

Theexpectedreturnonschemeassetsiscalculatedbasedonthevalueoftheschemes’assetsatthebeginningofthefinancialyear.Theactuarialgainsandlossesareanalysedasfollows:

2011 201o e’00o e’00o

amounts recognised in statement of total recognised gains and losses Differencebetweenexpectedandactualreturnonassets (185,500) 96,000Experiencegainsandlossesonschemesliabilities 63,870 (68,690)Actuarial(loss)/gainrecognised (121,630) 27,310

Theactualreturnonschemes’assetsin2011wasalossof€63m(2010:gainof€209m).Thecumulativeactuarialgainsandlossesrecognisedinthestatementoftotalrecognisedgainsandlossesat31December2011isalossof€265m.

Employercontributionsin2012excludingpotentialpastservicecostsareexpectedtobe€49m.

2011 2010 2009 2008 2007 i’000 i’000 i’000 i’000 i’000

history of actuarial gains and losses

Differencebetweenexpectedandactualreturnonassets (185,500) 96,000 125,700 (768,161) 188,294

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

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

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

Totalactuarialgainsand(losses) (121,630) 27,310 187,790 (486,565) 63,141

Expressedasapercentageofschemes’liabilities (5%) 1% 9% (24%) 3%

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notes to the financial statements for the year ended 31 december 2011

19. Share Capital

2011 201o e’00o e’00o

group and companyAuthorised:80,000,000OrdinarySharesof€1.25each 100,000 100,000Allotted, called up and fully paid:54,590,946OrdinarySharesof€1.25each 68,239 68,239

On14January2003,pursuanttoSection26oftheEconomicandMonetaryUnionAct,1998,theCompany’sshareswererenomalisedfrom€1.269738to€1.25pershareandanamountof€877,000wastransferredtoacapitalconversionreservefund.

20. Profit and Loss Account

group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000

Atbeginningofyear (106,305) (108,933) (145,068) (148,018)Profit/(loss)forthefinancialyear 347 (24,682) (2,528) (17,860)Impairmentoffinancialasset - - - (6,500)Otherrecognised(losses)/gains (121,630) 27,310 (121,630) 27,310Atendofyear (227,588) (106,305) (269,226) (145,068)

21. Reconciliation of Shareholders’ Deficit

group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000

Atbeginningofyear (37,189) (39,817) (75,952) (78,902)Profit/(loss)forthefinancialyear 347 (24,682) (2,528) (17,860)Impairmentoffinancialasset - - - (6,500)Otherrecognised(losses)/gains (121,630) 27,310 (121,630) 27,310Atendofyear (158,472) (37,189) (200,110) (75,952)

22. Minority Interest

total i’000

groupAccumulatedlossesat31December2010 7,444Minorityinterestshareofprofit (1,285)Accumulatedlossesat31December2011 6,159

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23. Gross Cash Flows

2011 201o e’00o e’00o

reconciliation of operating profit to net cash inflow from operating activitiesOperatingprofit 2,216 5,838Depreciationandamortisationofgoodwill 26,826 25,245(Profit)/lossonsaleoftangiblefixedassets (131) 14Paymentsinrelationtoprovisionforbusinessrestructuring (9,025) (23,065)Cashpensioncost (4,984) (11,394)Capitalgrantsamortised (102) (102)Increaseinoperatingdebtors (16,822) (35,206)(Decrease)/increaseinoperatingcreditors (13,425) 27,200Net cash (outflow) from operating activities (15,447) (11,470) taxationTaxrefunded/(paid) 2,796 (2,402) capital expenditure and financial investmentPurchaseoftangiblefixedassets (32,040) (40,678)Disposaloftangiblefixedassets 262 88 (31,778) (40,590) acquisitions and disposals Acquisitionofsubsidiaryundertakings(note25) (3,310) (14,572)Investmentinjointventure - (6,500) (3,310) (21,072) financingTermloan(repaid)/received (1,000) 2,000 management of liquid resources(notea) Decreaseintermdeposits (50,195) (9,043)

Notea:Liquidresourcescomprisetermdepositswithamaturitynoticeperiodofmorethanoneday.

24. Analysis of Net Funds

at beginning of year cash flows at end of year e’00o e’00o e’00o

Cashatbankandinhand 293,446 (69,557) 223,889Bankoverdraft (1,736) (725) (2,461)Amountsheldintrust (375,427) 71,738 (303,689) 1,456Termdeposits 280,059 (50,195) 229,864Total 196,342 (48,739) 147,603

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notes to the financial statements for the year ended 31 december 2011

25. Subsidiary and Associated Undertakings

name nature of business % holding registered office

subsidiary undertakings held directly by the company

AnPostNationalLottery Operationofthe 80% GeneralPostOfficeCompany(note28) NationalLottery O’ConnellStreet Dublin1

PostpointServicesLimited Mobiletopups 100% GeneralPostOffice O’ConnellStreet Dublin1

GVSGiftVoucherShopLimited Retailgiftvouchers 53.6% GeneralPostOffice O’ConnellStreet Dublin1

PrintPostLimited Highvolumeprinting 100% GeneralPostOffice O’ConnellStreet Dublin1

AnPostBillPostProcessing Billpaymentprocessing 100% GeneralPostOfficeServicesLimited O’ConnellStreet Dublin1

AnPostGeoDirectoryLimited Databaseservices 51% GeneralPostOffice O’ConnellStreet Dublin1

PrecisionMarketingInformation Provisionofmarketingdata,database 100% GeneralPostOfficeLimited servicesandbusinessdirectories O’ConnellStreet Dublin1

ArcadePropertyCompany Propertydevelopmentandletting 100% GeneralPostOfficeLimited O’ConnellStreet Dublin1

Prince’sStreetProperty Dormant 100% GeneralPostOfficeCompanyLimited O’ConnellStreet Dublin1

PostConsultInternational Computersoftwareservices 100% GeneralPostOfficeLimited O’ConnellStreet Dublin1

Post.TrustLimited Digitalcertificationandsecurity 100% GeneralPostOffice services O’ConnellStreet Dublin1

TranspostLimited Courieranddistribution 100% GeneralPostOffice O’ConnellStreet Dublin1

KompassIrelandPublishers Dormant 100% GeneralPostOfficeLimited O’ConnellStreet Dublin1

AnPost(NI)Limited Holdingcompany 100% StokesHouse CollegeSquareEast Belfast

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notes to the financial statements for the year ended 31 december 2011

25. Subsidiary and Associated Undertakings (cont.)

name nature of business % holding registered office

subsidiary undertakings held indirectly through a subsidiary undertaking

AirBusinessLimited Distributionandmagazine 100% 4,TheMerlinCentre subscriptionservices AcrewoodWay St.Albans Herts,UK

TheGiftVoucherShopLimited Retailgiftvouchers 53.6% 4,TheMerlinCentre AcrewoodWay St.Albans Herts,UK

Jordan&Co.InternationalLimited Distribution 100% 4,TheMerlinCentre AcrewoodWay St.Albans Herts,UK

OneDirect(Ireland)Limited InsuranceBroker 100% GeneralPostOffice O’ConnellStreet Dublin1

associated undertaking held directly by the company

ThePrizeBondCompanyLimited Administrationofthe 50% GeneralPostOffice(note28) PrizeBondScheme O’ConnellStreet Dublin1

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25. Subsidiary and Associated Undertakings (cont.)

TheGroupacquired,throughitsUKsubsidiaryAirBusinessLimited,thenetassetsandbusinessofQuadrantSubscriptionServiceson31May2011.Theassetsacquired,allofwhichweretangiblefixedassets,amountedto€0.7mandtheconsiderationwaspaidforincashof€3.3mresultingingoodwillarisingontheacquisitionof€2.6m.Thedirectorsbelievethattherewasnomaterialdifferencebetweenthebookvaluesoftheassetsandliabilitiesacquiredandtheirfairvaluesatthedateofacquisition.Goodwillarisingonacquisitionisbeingwrittenoffoveraperiodof10years.

Theresultsoftheacquiredbusinesshavebeenincludedintheconsolidatedprofitandlossaccountfromthedateofacquisitionandamountedtoturnoverof€7.8m,operatingcostsof€7.6mandoperatingprofitsof€0.2m.

AirBusinessLimited,Jordan&Co.InternationalLimitedandTheGiftVoucherShopLimitedareincorporatedinandoperateinEngland&Wales.AnPost(NI)LimitedisincorporatedinandoperatesinNorthernIreland.

AllotherundertakingsareincorporatedinandoperateintheRepublicofIreland.Allshareholdingsconsistofordinarysharecapital.

AnPostNationalLotteryCompanycarriesonthebusinessofoperatingtheNationalLotteryunderlicencefromtheMinisterforPublicExpenditureandReforminaccordancewiththeprovisionsoftheNationalLotteryAct,1986.20%oftheissuedsharecapitalisheldbytheMinisterforPublicExpenditureandReform.

ThePrizeBondCompanyLimitedcarriesonthebusinessofadministeringthePrizeBondSchemeundercontractfromtheNationalTreasuryManagementAgency.ThefollowingsubsidiarieswillavailofthefilingexemptionavailableunderSection17oftheCompanies(Amendment)Act,1986,wherebytheywillannexthefinancialstatementsofAnPosttotheirannualreturns:

PostConsultInternationalLimited;PrintPostLimited;Post.TrustLimited;TranspostLimited;PrecisionMarketingInformationLimited;Prince’sStreetPropertyCompanyLimited;AnPostBillPostProcessingServicesLimited;KompassIrelandPublishersLimitedandPostpointServicesLimited.

26. Lease Commitments

Annualcommitmentsunderoperatingleaseswereasfollows:

2011 2010 land & equipment & land & equipment & buildings motor vehicles total buildings motor vehicles total i’000 i’000 i’000 i’000 i’000 i’000

group Expiringwithinoneyear 808 3,640 4,448 943 4,676 5,619Expiringafteroneyearandbeforefiveyears 3,691 8,698 12,389 3,749 7,787 11,536Expiringafterfiveyears 4,275 6 4,281 4,374 6 4,380 8,774 12,344 21,118 9,066 12,469 21,535

company Expiringwithinoneyear 293 3,606 3,899 583 4,664 5,247Expiringafteroneyearandbeforefiveyears 2,752 8,410 11,162 2,708 7,589 10,297Expiringafterfiveyears 3,335 - 3,335 3,799 - 3,799 6,380 12,016 18,396 7,090 12,253 19,343

Therewerenomaterialfinanceleasecommitmentseitherat31December2011or2010orwhichwereduetocommenceafterthatdate.

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notes to the financial statements for the year ended 31 december 2011

27. Capital CommitmentsFuturecapitalexpenditureapprovedbythedirectorsbutnotprovidedforinthefinancialstatementswasasfollows:

group 2011 group 2010 company 2011 company 2010 i’000 i’000 i’000 i’000

Contractedfor 18,500 28,823 18,500 28,823Authorisedbutnotcontractedfor 1,861 14,636 1,861 14,636 20,361 43,459 20,361 43,459

28. Related Party Disclosures and Controlling Party

Controlling Party

TheGroupwascontrolledthroughouttheyearbytheMinisterforCommunications,EnergyandNaturalResourceswhoholdstheentireissuedsharecapitalofAnPostexceptfromoneordinarysharewhichisheldbytheMinisterforPublicExpenditureandReform.

transactions with related undertakings

An Post National Lottery Company

TheGroupprovidesAnPostNationalLotteryCompany,anundertakingnotconsolidated,withmanagementanddeliveryservices.Suchservicesarecarriedoutonanarm’slengthbasisor,whererequired,inaccordancewiththetermsofthelicencegrantedbytheMinisterforPublicExpenditureandReformtooperatetheNationalLottery.TheCompanyalsoprovidesagencyservicestoAnPostNationalLotteryCompanywherebytheCompanymakessalesandpaysprizesonbehalfofAnPostNationalLotteryCompanyinaccordancewiththestandardtermsandconditionsandremunerationstructurecommontoallofAnPostNationalLotteryCompany’sagents.Groupturnoverfortheyearincludes€5,859,000(2010:€6,112,000)inrespectofservicesprovidedtoAnPostNationalLotteryCompany.Theseamountsareinclusiveofamanagementfeeof€2,665,000(2010:€2,809,000)payabletotheCompanyinaccordancewiththetermsofthelicencetooperatetheNationalLottery.

ThecostsofstaffworkinginAnPostNationalLotteryCompanyarerechargedfromAnPostatcostandamountedto€8,533,000fortheyearended31December2011(2010:€8,304,000).

TheamountowedbyAnPostNationalLotteryCompanytotheCompanywas€517,000at31December2011(2010:€751,000).

AnPosthasagreedtoguaranteetheperformancebyAnPostNationalLotteryCompanyofitsobligationsunderthelicencefortheholdingoftheNationalLotterygrantedbytheMinisterforPublicExpenditureandReform.AnPosthasprovidedtheguarantee,themaximumliabilityofwhichamountsto€10million,forthedurationofthelicence.

The Prize Bond Company Limited

UnderthetermsofacontractwithThePrizeBondCompanyLimited,theCompanycarriesoutcertainaspectsoftheadministrationofthePrizeBondScheme.FeesearnedbytheCompanyinrespectofsuchservicesamountedto€2,930,000fortheyearended31December2011(2010:€3,430,000).TheamountowedbyThePrizeBondCompanyLimitedtotheCompanywas€251,000at31December2011(2010:€331,000).At31December2011theGroupheld€1,288,000(2010:€1,393,000)ofPrizeBonds.

Loft Beck Limited (formerly Postbank Ireland Limited)

During2010,theshareholdersinPostbankIrelandLimited,BGLBNPParibasFortisandAnPostdecidednottocontinuethejointventurebeyondthecalendaryear2010andaccordinglythecompanyaccountsforAnPostto31December2010recognisedthisandreducedthecarryingvalueoftheinvestmentto€nil.LoftBeckLimited(formerlyPostbankIrelandLimited)isinvoluntaryliquidationfrom25March2011.Theliquidationprocesswilllikelylastforanumberofyears.AnPostreceivedapaymentfromtheliquidatorof€2,750,000representingsurplusfundsontheliquidation.Theliquidatorreceivedanindemnityentitlinghimtoreclaimthisshouldtheneedarise.

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28. Related Party Disclosures and Controlling Party (cont.)

transactions with government departments and other state bodies

TheGroupprovides,intheordinarycourseofbusiness,postage,agency,remittanceandcourierservicestovariousGovernmentdepartmentsandotherStatebodiesonanarmslengthbasis.TheGroupalsoconductsdaytodaybankingservicesandtreasurywithbankinginstitutionsbothownedandguaranteedbytheState.

29. Contingencies

Group and Company

Therewerenocontingentliabilitiesorguaranteesat31December2011or2010inrespectofwhichmateriallossesareexpectedotherthanasdisclosedelsewhereinthefinancialstatements.

30. Subsequent Events

Group and Company

On8February2012,ComRegservedlegalproceedingsonAnPostunderthetermsoftheEuropeanCommunities(PostalServices)RegulationsAct2002seekinganorderfromtheHighCourttoimposeafinancialpenaltyonAnPostforallegednoncompliancewiththequalityofservicestandards.TheCompanyisvigorouslydefendingtheactionandhasrecognisednoliabilityinthisregardasat31December2011.

31. Board Approval

ThefinancialstatementswereapprovedbytheBoardofDirectorson22March2012.

notes to the financial statements for the year ended 31 december 2011

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five year financial summary

Consolidated Profit and Loss Account

2011 2010 2009 2008 2007 i’000 i’000 i’000 i’000 i’000

Turnover 806,714 805,120 804,216 850,043 875,983Operatingcosts (804,498) (799,282) (798,475) (818,808) (846,857) operating profit 2,216 5,838 5,741 31,235 29,126 Assetdisposals - - - - 1,516Businessrestructuring - (20,000) - - -Shareofresultsofjointventure - (6,590) (10,750) (9,685) (12,475)Otherfinanceincome/(expense) 1,550 (3,950) (20,560) 18,340 31,250Profit/(loss)beforetaxation 3,766 (24,702) (25,569) 39,890 49,417

Consolidated Balance Sheet

2011 2010 2009 2008 2007 i’000 i’000 i’000 i’000 i’000

Fixedassets 291,129 279,323 242,704 211,465 206,682Netcurrentassets 70,727 95,925 166,423 235,998 235,556Otherliabilities (42,893) (51,383) (53,550) (63,705) (73,130)Netassetsexcludingpensionliability 318,963 323,865 355,577 383,758 369,108Pensionliability (483,594) (368,498) (403,252) (582,300) (114,300)Net(liabilities)/assetsincludingpensionliability (164,631) (44,633) (47,675) (198,542) 254,808Capitalandreserves (164,631) (44,633) (47,675) (198,542) 254,808

Ratios

2011 2010 2009 2008 2007

Operatingprofitaboveas% 0.27% 0.73% 0.71% 3.67% 3.32%ofturnover

Operatingprofitaboveas% 0.68% 1.68% 1.55% 8.30% 8.47%ofaverageshareholders’funds beforepensionliability

Staffandpostmasters’costsas% 71.65% 72.0% 73.76% 73.16% 70.96%ofoperatingcostsbeforeexceptionalitem

Currentassetsas% 136.0% 148.1% 190.50% 242.86% 235.43%ofcurrentliabilities

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operational statistics

Mail

2011 2010 2009 2008 2007

Letterscorerevenueindex 81.4 87.5 94.3 104.8 107.0(2005=100)(note1)

Note1:Thisindexreflectschangesinletterscorerevenueandexcludesrevenuefromelections,referenda,foreignadministrationsineachyearaswellastheimpactofchangestopublishedtariffs.

System Size

2011 2010 2009 2008 2007

No.ofdeliverypoints(millions) 2.235 2.231 2.214 2.184 2.131Postofficenetwork: Companypostoffices 57 57 57 61 74Sub-postoffices 1,099 1,107 1,179 1,187 1,212Postalagencies 175 185 177 178 172 1,331 1,349 1,413 1,426 1,458 No.ofmotorvehicles 2,778 2,778 2,782 2,941 2,967

savings services (note2) €m €m €m €m €mValueofFundsat31December 12,623 11,364 8,231 6,701 5,617 counters: business value Post Office Savings ServicesSavingsBankdeposits 1,122 1,242 905 1,306 814SavingsBankwithdrawals (973) (813) (802) (850) (1,063)SavingsCertificatesissued 822 1,354 1,215 749 467SavingsCertificatesrepaid (616) (597) (1,041) (660) (750)InstalmentSavingsissued 97 100 110 114 107InstalmentSavingsrepaid (113) (113) (102) (111) (117)SavingsBondsissued 1,401 2,137 1,466 813 574SavingsBondsrepaid (937) (706) (704) (589) (704)NationalSolidarityBondissued 294 349 - - -NationalSolidarityBondrepaid (31) (7) - - - Pensions, allowances and social welfare benefitsPaidduringtheyear 9,703 9,975 9,928 8,265 7,610

’000 ’000 ’000 ’000 ’000billpay volumes 24,930 25,220 25,170 24,490 24,786

tv licence sales 1,426 1,432 1,436 1,430 1,407

Note2:TheassetsandliabilitiesoftheSavingsServicesvestintheMinisterforFinanceand,accordingly,arenotincludedinthefinancialstatementsoftheCompany.

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an post annual report 2011

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nual report 2011

An PostGeneral Post OfficeO’Connell StreetDublin 1Ireland

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