1. Status Of Company

The Company is a limited liability company, incorporated under the Companies Acts, 1963 to 2009. Under the Postal and Telecommunications Services Act, 1983, the Company is entitled to omit the word ‘Limited’ from its name.

2. Turnover

Turnover above excludes the Group’s share of Joint Venture’s turnover of €nil (2010: €6,443,000). In the opinion of the directors, fuller compliance with the disclosure requirements of SSAP 25 ‘Segmental Reporting’ would be prejudicial to the Group’s interests.

3. Operating Costs

4. Exceptional Items

The Company continues to implement its strategic plan which includes an intention to reduce the number of full time equivalents working in the Group by 1,375 over the three year period 2010 to 2012. As set out in note 17, the provision for business restructuring at 31 December 2011 includes €20,386,000 (2010: €27,774,000) in relation to business restructuring redundancy costs. Having considered the impact of continuing volume reductions arising from the economic recession, market liberalisation and e-substitution, the analysis of probable exits based on definitive exit plans and negotiations supports the current level of provisioning and no further charge has been made in 2011.

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

The amounts shown above as directors' emoluments include only the amounts paid to the directors in the execution of their duties as directors and the salary of the Chief Executive who is also a director. Other than this, they do not include the salaries of the employee and postmaster directors.

In accordance with the Government Guidelines on Remuneration and Other Conditions of Chief Executives, the Company operates a performance related pay scheme which provides for a maximum possible annual award of 35% of basic pay. Under this scheme, up to 25% is applied to annual objectives the 25% short term scheme) and up to 10% is appliedto multi-annual (three year) objectives (the 10% long term scheme). The Chief Executive has voluntarily waived hisentitlement under the 25% short term scheme in the current year and in the previous two years. Amounts earned underthe 10% long term scheme are not finalised and do not become payable until the end of the contract term. However, it isestimated that an amount of €97,000 has been earned by the Chief Executive under the 10% long term scheme since the date of his appointment, 14 August, 2006, up to 31 December 2009. No determination has been made yet in relation toamounts earned by the Chief Executive in 2010 or 2011 under the 10% long term scheme. The Board are cognisant of the Minister’s position in regard to performance related bonuses in Commercial Semi-State Bodies.

From 1 December 2011, the Chief Executive waived 15% of his basic salary going forward, to the Minister for Finance.The fees paid to each director were as follows:

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

The current tax credit is lower than the standard rate of corporation tax in Ireland.
The differences are explained below:

Given the uncertainty over the existence of future taxable profits, a potential deferred tax asset of €65,162,000 (2010: €49,991,000) has not been recognised in the consolidated balance sheet at 31 December 2011. This deferred tax asset not recognised comprises a deferred tax asset in relation to the net pension deficit recognised of €60,449,000 (2010: €46,062,000), timing differences on business restructuring, €2,381,000 (2010: €2,381,000), tax losses forward not utilised, €6,556,000 (2010: €6,540,000), offset by other timing differences of €4,224,000 (2010: €4,992,000).

7. Profit / (Loss) for the Financial Year

A separate profit and loss account for An Post has not been prepared because the conditions laid down in Section 148(8) of the Companies Act, 1963 have been satisfied.

8. Staff Numbers and Costs

9. Intangible Fixed Assets – Goodwill

The directors have considered the carrying value of goodwill at 31 December 2011 and have concluded that no impairment arises.

10. Tangible Fixed Assets

Group and Company

The depreciable element of freehold & long leasehold land & buildings amounts to:
Group €200,940,000 (2010: €188,448,000), Company €206,946,000 (2010: €195,977,000).

11. Financial Fixed Assets

12. Debtors

13. Cash at Bank and In Hand

14. Creditors

The bank overdraft is repayable on demand. The term loan is secured by way of a debenture over the assets of the Gift Voucher Shop. It is repayable in 2012.

15. Taxation and Social Welfare

16. Creditors

17. Provisions for Liabilities

The provision for business restructuring at 31 December 2011 includes €20,386,000 (2010: €27,774,000) in relation to business restructuring redundancy costs (related restructuring is anticipated to be completed by 31 December 2013),and €19,046,000 (2010: €19,046,000) in relation to the introduction of an Employee Share Ownership Plan (ESOP).

18. Pensions and Similar Obligations

Group and Company

The pension entitlements of employees arise under a number of defined benefit and defined contribution pension schemes, the assets of which are vested in independent trustees appointed by the Company for the sole benefit of employees and their dependents. Annual contributions are based on the advice of a professionally qualified actuary.

The amounts charged during the year to operating costs were as follows:

Past service costs of €5,410,000 (2010: €14,762,000) arose during the year. These were discharged through the utilisation of the restructuring provision (note 17) and had no impact on the profit and loss account for the year ended 31 December, 2011 or 2010. Contributions payable to pension schemes and included in creditors at 31 December 2011 amounted to €1,759,000 (2010: €nil) and were paid in January 2012.

The pension costs of the defined benefit schemes are assessed in accordance with the advice of an independent professionally qualified actuary. The most recent actuarial valuations were carried out at 1 January 2011 using the attained age method and at that date were sufficient to cover 79% of the accrued liabilities. The principal actuarial assumption was that, over the long term, the annual rate of return on investments would be 2.0% higher than the annual increase in pensionable remuneration. The actuarial valuation of 1 January 2011 recommended a contribution rate of 14.4% of pensionable remuneration, as an interim contribution rate, pending finalisation of an agreement between the Company and the members of the schemes on a course of action to comply with the Minimum Funding Standard (MFS) as issued by the Pensions Board. The actuarial valuations are not available for public inspection but the results of the valuations have been advised to the members of the schemes.

The valuations of the pension schemes used for the purpose of FRS 17 accounting entries and disclosures have been based on the most recent actuarial valuations as identified above and updated by the independent actuary to 31 December 2011. Scheme assets are stated at their market value at the balance sheet date.

The financial assumptions used to calculate the retirement benefit liabilities under FRS 17 were as follows:

18. Pensions and Similar Obligations (cont.)

The assumptions relating to longevity underlying the pension liabilities at the balance sheet date are based on standard actuarial mortality tables and include an allowance for future improvements in longevity. The assumptions are equivalent to expecting a 65-year old to live for a number of years as follows:

The market value of the assets of the defined benefitschemes at 31 December 2011 2010 and 2009 were:

18. Pensions and Similar Obligations (cont.)

The expected return on scheme assets is calculated based on the value of the schemes' assets at the beginning of the financial year. The actuarial gains and losses are analysed as follows:

Loft Beck Limited (formerly Postbank Ireland Limited)

During 2010, the shareholders in Postbank Ireland Limited, BGL BNP Paribas Fortis and An Post decided not to continue the joint venture beyond the calendar year 2010 and accordingly the company accounts for An Post to 31 December 2010 recognised this and reduced the carrying value of the investment to €nil. Loft Beck Limited (formerly Postbank Ireland Limited) is in voluntary liquidation from 25 March 2011. The liquidation process will likely last for a number of years. An Post received a payment from the liquidator of €2,750,000 representing surplus funds on the liquidation. The liquidator received an indemnity entitling him to reclaim this should the need arise.