The directors have pleasure in submitting their twenty fifth Annual Report together with the audited financial statements of the Group for the year ended 31 December, 2008, in fulfillment of their obligations under the Companies Acts, 1963 to 2006.

1.The Group And Its Principal Activities

The Company operates the national postal service and money transmission services and provides agency services for Government Departments, the National Treasury Management Agency, An Post National Lottery Company, Postbank Ireland Limited and other bodies. The Company is also a joint venture partner in Postbank Ireland Limited.

One ordinary share is held by the Minister for Finance and the remainder of the issued share capital is held by the Minister for Communications, Energy and Natural Resources.

Details of the activities carried on by subsidiary, associated and joint venture undertakings, together with the information required by Section 158 of the Companies Act, 1963, are given in note 24 to the financial statements.

2. Results

Details of the results for the year are set out in the consolidated profit and loss account and in the related notes to the financial statements. The directors do not propose the payment of a dividend for the year.

3. Business Review

The operating profit for the year is €31.2m reflecting an operating margin of 3.7% and an improvement on the result of €29.1m (3.3%) achieved in 2007. Turnover declined during 2008 to €850.0m due to the disposal of subsidiaries in 2007 together with the challenge to mail volumes from the changed economic circumstances in the economy and this trend is continuing into the current year. The Group profit after tax was €33.2m. The decline in financial markets has impacted the value of the pension scheme assets and has resulted in actuarial losses on post employment plans of €486.6m. This has also resulted in a net liabilities position for the Group of €198.5m at 31 December 2008 compared to net assets of €254.8m at 31 December 2007. These figures include a pension liability of €582.3m (2007: €114.3m), see note 18 for further details.

The information required by Regulation 37 of the European Communities (Companies: Group Accounts) Regulations, 1992. In monitoring performance, the directors and management have regard to a range of key performance indicators (KPIs), including the following:

KPI

* Full year figures as per ComReg Monitor.
** Includes SSIA outflows of €330m in 2007.

In accordance with the requirement to analyse the key risks and uncertainties facing the future development of the Group and Company, the following have been identified:

• the general economic climate;
• the need to fully implement agreed change programmes;
• competitive threats to mails revenue;
• achieving adequate prices for services;
• the need to achieve and maintain quality of service targets;
• potential loss of significant agency services;
• the arrangements for downstream access to mails services;
• failure to resolve industrial relations issues through agreed processes; and
• the success of Postbank Ireland Limited.

The directors have analysed these and other risks and appropriate programmes are in place to manage and control these risks. The Corporate Governance statement on pages 33 to 39 sets out the policies and approach to risks and the related internal control procedures and responsibilities.

4. Directors, Secretary And Their Interests

The following changes have taken place in the composition of the Board since the date of the
previous report of the directors:
 Mr. John Quinlivan, retired 8 May, 2008, re-appointed 24 June, 2008.
* Mr. Patrick Compton, retired 31 October, 2008, re-appointed 1 November, 2008.
* Mr. Jerry Condon retired 31 October, 2008, re-appointed 1 November, 2008.
* Mr. Patrick Davoren retired 31 October, 2008, re-appointed 1 November, 2008.
 Mr. Thomas Devlin, retired 31 October, 2008.
 Mr. Terry Kelleher, retired 31 October, 2008.
* Mr. Paddy Costello, appointed 1 November, 2008.
* Mr. Gerry O’Toole, appointed 1 November, 2008.
 Mr. James Hyland retired 10 December, 2008, re-appointed 11 December, 2008.

* appointed to the Board in accordance with the Worker Participation (State Enterprises) Acts, 1977 to 1993. 

The directors and secretary who held office at 31 December, 2008 had no interests in the shares in, or debentures of, the Company or any Group company at the beginning of the year (or date of appointment if later) or at the end of the year (2007: Nil).

5. Employees

The Group is an equal opportunities employer. All applications for employment are given full and fair consideration, due regard being given to the aptitude and ability of the individual and the requirements of the position concerned. All persons are treated on equal terms as regards training, career development and promotion. An Post conducted a disability survey of all employees during the year and confirms its employment of people with disabilities exceeds the target of 3% set under the Disabilities Act, 2005.

The Group is committed to the highest standards of safety and health practices in order to meet the requirements and future regulations of the Safety, Health and Welfare at Work Act, 2005. Health and Safety management co-ordinate the policies outlined in the Group’s Safety Statement, which is designed to ensure a safe place and system of work for all Group employees.

6. Prompt Payment Of Accounts

The policy of An Post is to comply with the requirements of relevant prompt payment of accounts legislation. The Group’s standard terms of credit taken, unless otherwise specified in specific contractual arrangements, are 30 days. Appropriate internal financial controls are in place, including clearly defined roles and responsibilities and monthly reporting and review of payment practices. These procedures provide reasonable but not absolute assurance against material non-compliance with the regulations.

7. Accounting Records

The directors believe that they have complied with the requirements of Section 202 of the Companies Act, 1990 with regard to books of account by engaging accounting personnel with appropriate expertise and by providing adequate resources to the finance function. The books of account of the Company are located at the Company’s premises at the General Post Office, O’Connell Street, Dublin 1.

8. Auditors

In accordance with Section 160(2) of the Companies Act, 1963, the auditor, KPMG, Chartered Accountants, will continue in office.

On behalf of the Board

John Fitzgerald  Chairman
Donal Connell Director
19 March, 2009