Royal Mail Holdings plc - Royal Mail Group

Independent Auditors' Report to the members of Royal Mail Holdings plc. 46 ..... fastest growing financial services provider in a highly competitive market.
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Royal Mail Holdings plc

Report and Accounts Year Ended 25 March 2007

Royal Mail Holdings plc

Royal Mail Group is unique in reaching everyone in the UK through its mails, Post Office® and parcels businesses – which directly employ nearly 185,000 people in the UK. Every working day Royal Mail processes and delivers almost 83 million items to 27 million addresses for prices that are amongst the lowest in Europe; each week we serve over 24 million customers through our network of 14,219 Post Office® branches and each year our domestic and European parcels businesses – General Logistics Systems and Parcelforce Worldwide – handle some 360 million parcels.

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Royal Mail Holdings plc

Contents

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Chairman and Chief Executive’s Statement Annual Review 2006-07 Operating and Financial Review Royal Mail Holdings plc Board Directors’ Report Corporate Governance Internal control Directors’ Remuneration Report Statement of Directors’ responsibilities in relation to the Group financial statements Independent Auditors’ Report to the members of Royal Mail Holdings plc Group income statement for the years ended 25 March 2007 and 26 March 2006 Group statement of recognised income and expense for the years ended 25 March 2007 and 26 March 2006 Group balance sheet at 25 March 2007 and 26 March 2006 Group cash flow statement for the years ended 25 March 2007 and 26 March 2006 Notes to the Group accounts 1. Authorisation of financial statements and statement of compliance with IFRSs 2. Accounting policies 3. Segment information 4. People information 5. Operating costs 6. Auditors’ remuneration 7. Operating exceptional items 8. Net finance income 9. Income tax 10. Property, plant and equipment 11. Goodwill 12. Intangible assets 13. Business combinations 14. Investments in joint ventures and associates 15. Non-current assets held for sale 16. Inventories 17. Current trade and other receivables 18. Cash and cash equivalents 19. Financial liabilities 20. Provisions for liabilities and charges 21. Current trade and other payables 22. Non-current other payables 23. Financial risk management objectives and policies 24. Financial instruments 25. Employee benefits – pensions 26. Share capital 27. Total equity 28. Commitments 29. Related party transactions 30. Events after the balance sheet date Group five-year summary (unaudited) Parent Company accounts Statement of Directors’ responsibilities in relation to the parent Company financial statements Independent Auditors’ report to the members of the Company, Royal Mail Holdings plc Parent Company balance sheet Notes to the parent Company accounts Forward Looking Statements Corporate Information

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Royal Mail Holdings plc Chairman and Chief Executive’s Statement The Group delivered record quality of service to our customers in 2006-07 and secured a vital commercial funding package for the modernisation of the Company, while profits fell as a result of a significant increase in pension costs. Looking to the future, if we are to continue on our journey to become the world’s best and most trusted postal service we must now take action to meet the challenges of securing a viable pension scheme for our people, dealing with the impact of both substantially increased competition and falling mail volumes, and building a long term sustainable Post Office® network. Modernising our letters business remains central to our strategy as we are competing in an open competitive market where, despite all the improvements we have made, we are still 40% less efficient than our rivals – because they have already invested in the technology that provides more efficient operations. For Royal Mail this has been a critical period during which we have worked to create the platform from which we can achieve success in the competitive market