Select Committee on Public Accounts Tenth Report


TENTH REPORT


The Committee of Public Accounts has agreed to the following Report:—

THE ACQUISITION OF GERMAN PARCEL

INTRODUCTION AND SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS

1. The Post Office,[1] with the approval of Ministers, aims to transform itself into a leading international business capable of supplying customers with a full range of global distribution services. In support of this aim in January 1999 the Post Office acquired German Parcel, the third largest private parcel business in Germany, for some £289 million.[2] Although the Post Office had already entered into two small overseas joint ventures this was its first major diversification into overseas markets.[3] By March 2001 the Post Office had invested £500 million on overseas acquisitions and owned some 20 international companies based in Europe and North America, some with links to the Far East.[4]

2. The acquisition was undertaken in agreement with the Department of Trade and Industry (the Department) who have a responsibility for overseeing acquisitions by the Post Office above a certain value. In addition, because the Post Office was partly funding its acquisition of German Parcel through overseas debt, this transaction required the approval of both the Department and the Treasury.[5]

3. On the basis of a Report by the Comptroller and Auditor General[6] our predecessor Committee took evidence from the Department and the Post Office on the Department's oversight of the acquisition of German Parcel and on the value for money of the transaction. Three main points emerge from this examination:

  • The Department did not put themselves in a position to exercise sufficiently active oversight of the Post Office's proposals. In particular the Department did not appoint an adviser on the acquisition until three weeks before Ministerial approval of the deal was needed. The policy to give the Post Office greater commercial freedom does not qualify the responsibilities of the Department's Accounting Officer to advise on matters of prudent and economical administration, efficiency and effectiveness. The Department should exercise their oversight responsibilities more actively in future to safeguard the taxpayer's interest. They have recognised the need to strengthen their capability in this area by appointing a standing multi-disciplinary team of advisers.

  • Accepting that the Post Office will now be operating as a corporation within the private sector, exercising a high degree of commercial freedom, the Department should encourage that enterprising culture but should at the same time exercise rigorous financial oversight. The Department should ideally have had agreed overall financial targets for the Post Office's business, taking into account the proposed acquisition strategy, before they agreed to the acquisition of German Parcel. They should for the future set clear financial targets and milestones for both an acquisition and the overall business in advance of an acquisition and monitor them rigorously.


  • The Department's assessment is that the acquisition is showing a small positive net present value and broadly producing the expected benefits. The Post Office does not intend, however, to report publicly on the outcome. The Department should at least secure the Post Office's agreement to report publicly whether revenues from major acquisitions are on track to exceed their overall costs.

4. Our detailed conclusions and recommendations are:

      (i)  The Department should ask their advisers to review major investment opportunities at an early stage, like an active private sector shareholder, to determine whether an acquisition would be likely to enhance shareholder value; whether the revenues arising from the acquisition would exceed the costs on realistic assumptions; and to assess how well risks are being managed (paragraph 24).

      (ii)  The Boards of companies quoted on the London Stock Exchange are required, where a potential transaction is of a size or nature to have a material impact on the business, to provide shareholders with assurance on the implications of the transaction for shareholders as a whole. The Board is best placed to understand the full implications of a transaction and to identify any divergence between management and shareholders' interests. The Department as shareholder would benefit from obtaining similar specific assurance from the whole Board, and its advisers (paragraph 25).

      (iii)  The Post Office said that it would have no problem in giving the Department any information necessary to make it clear that the Board had fulfilled its role properly, including assurance on the Board's detailed knowledge, approval and accountability for an acquisition together with opinions from external advisors. The Department should act on this undertaking for future transactions (paragraph 26).

      (iv)  We welcome the decision that when the Post Office concludes a deal it should disclose information on the transaction as if the Post Office was a quoted company in the private sector (paragraph 27).

      (v)  The Department and the Post Office calculate that the acquisition is showing a small positive net present value and judge that the benefits of the acquisition are coming through. But the Department's financial test, that the effect of the transaction should be financially neutral without taking into account any strategic benefits, was an undemanding target for an investment of £289 million. A slight increase in the discount rate used from 8.25 per cent to 9 per cent resulted in the Department's analysis showing the acquisition as loss making. The analysis carried out to assess whether the acquisition would meet even this undemanding target was, therefore, finely balanced (paragraph 42).

      (vi)  The Post Office believed that it had benefited from the management, expertise and experience that it had acquired, for example, through the purpose built software used by German Parcel for parcel tracking and obtaining control of the General Parcel network. There must, nevertheless, be a risk of losses since the Post Office's existing parcels business is loss making and the market is very competitive. If there are losses the consumer, and ultimately the taxpayer, might have to cover them (paragraph 43).

      (vii)  Parliament should therefore receive regular information on how far such a major acquisition is meeting expectations. The Department should seek a commitment from the Post Office to include in its published reports information on whether or not major acquisitions are value enhancing, and in particular whether future revenues from the business acquired are likely to exceed the costs involved. At least one of the Post Office's competitors publishes such information (paragraph 44).

      (viii)  The greater transparency and increased commercial discipline intended by the decision to charge commercial rates of interest on Post Office borrowing for acquisitions may have been diluted by the two year delay in setting a rate. We recognise that this case was a new situation for the Department and the Treasury but in future we would expect rates to be set more promptly (paragraph 45).

THE DEPARTMENT OF TRADE AND INDUSTRY'S OVERSIGHT

The Department's approach to the oversight of the acquisition

5. There have been changes to the regulation of the Post Office[7] but it remains the dominant postal service provider in the United Kingdom, with the sole authorisation to handle letters and parcels costing less than £1 (unless weighing over 350 grammes) having regard to its public service obligations - universal service at a uniform, affordable rate. It operates in competition for all other mail. Liberalisation and deregulation of markets, privatisation of national postal services overseas, and technological advances mean the Post Office faces increased competition, particularly for services to large business customers. These customers represented about a quarter of the Post Office's turnover at the time of the acquisition. There has been a trend for European postal operators to acquire other companies and enter into international strategic alliances to be able to offer such customers a seamless service for letters and parcels, based on high quality networks.[8]

6. The Post Office considers that consolidation of the industry will result in market domination by a few global players and that it needs to become a global distribution business to avoid losing market share, which in its view would affect its ability to sustain its public service obligations and to fund necessary investment. A programme of acquisitions is a key element in the Post Office's strategy, which has been approved by Ministers, to transform itself into a leading international business. German Parcel, the third largest private parcel delivery network in Germany with a dominant stake in General Parcel, a European-wide delivery network, was the Post Office's first acquisition of a size that required the Department's oversight.[9]

7. The key events relating to the Department's oversight of the purchase of German Parcel are set out in Figure 1.

Figure 1: Chronology of key events relating to the purchase of German Parcel

DateEvent
August 1998The Post Office informed the Department of its aim to purchase a parcel distribution company
2 OctoberThe Post Office informed the Department and the Treasury that German Parcel was the target acquisition
16 NovemberPresentation to the Department and requested deadline for approval targeted as 15 December
24 NovemberSelection and initial briefing of adviser to the Department
19 DecemberMinisterial agreement to the purchase and offer to shareholders
31 DecemberSigning of the deal
11 January 1999Secretary of State for Trade and Industry announces the acquisition

Source: Figure 10 of the C&AG's Report The Acquisition of German Parcel (HC 858, Session 1999-2000)

8. In reply to questions about their oversight of the acquisition of German Parcel, the Department said that they decided to carry out a high level review of the Post Office's case for the acquisition. There was a strong desire by the Government at the time not to second guess the Post Office's management nor to crawl over every detail of a commercial proposition put to the Department. The Department decided to rely on the detailed work of the Post Office and its advisers in the preparation of the business case for the acquisition and for managing the day to day transaction processes, as they considered the Post Office was better placed to undertake the research required.[10]

9. The Department said that they attached importance to assuring themselves that the Post Office was being advised by competent professional advisers. The Post Office had employed: PricewaterhouseCoopers as corporate finance advisers; Ernst & Young, who are its auditors, to provide advice on accounting issues; and Clifford Chance to provide legal advice. The Department took a conscious decision not to duplicate the range of expertise mobilised and cost incurred (some £10 million) by the Post Office. They employed an individual adviser with relevant experience in the Department's Industrial Development Advisory Board and in the private sector.[11]

10. Although the Post Office informed the Department in August 1998 that it aimed to purchase a parcel distribution company in Germany the Department only appointed their adviser on 24 November 1998.[12] Thus the adviser then had only three weeks to carry out his scrutiny before Ministerial approval of the deal was needed. Asked why they had not appointed an adviser earlier, the Department said that in August 1998 they had believed that the value of the transaction would be below the limit for scrutiny by the Department. German Parcel was made up of a central company and 25 franchises. Initially the Post Office had been thinking of a limited acquisition of the central company. In reply to further questions, the Department agreed that, with hindsight, it would have been better if they had moved more quickly.[13]

11. The Department said that as a result of the work of their adviser they had been able to assess how adequately key issues had been dealt with. They said that the adviser had helped the Department's team dealing with the acquisition to ask the right questions, particularly in relation to risk. Assistance was given on questions such as the likelihood of profits, the risks involved and how the risks would be managed. This resulted in contract provisions to minimise the risks including warranties and guarantees and had allowed the Department to conclude that the proposal to acquire German Parcel was carefully considered and commercially robust.[14]

12. In the light of their experience in this acquisition the Department subsequently appointed Deloitte & Touche to lead and co-ordinate a multidisciplinary team to help them assess future transactions and comment, as and when required, on the Post Office's proposed strategy and on other issues arising from any further major acquisition proposals. The Department admitted that they would have preferred to have had that kind of advice at the time of the acquisition of German Parcel. They also said, however, that they were not sure whether they could have done much to reduce the degree of risk to which they were exposed even if this had been possible.[15]

13. The Department's scrutiny covered a range of potential risks including the risk of disruption to the business through change of ownership, the risk of losing key employees, the risk of big unexpected capital requirements and the risk of the cost base being understated or profits overstated. In their view the limited problems which had emerged were already provided for adequately in the purchase agreement.[16] They said they had been concerned to reduce the amount of risk in the transaction to the greatest degree possible and they went about the appraisal in a professional way.[17]

14. The Department said that they would have liked to have had longer to assess the deal but in a commercial world that was a luxury and the Post Office had told them that, if the deal was delayed, it would lose the opportunity. The acquisition had picked up speed in the later stages but it was not a rushed job and their team had covered the ground. The Post Office said that it tried hard to do all the necessary work. If it had not been able to convince the Department and the Board that the acquisition was sensible it would not have gone ahead.[18]

15. Asked if there were any circumstances in which the Department would have contemplated not letting the deal go through, the Department said that consistency with the strategy approved by Ministers was important. They would have thought very hard about whether the deal should go ahead if it had cost more than a price envelope, derived from an understanding of the future cash flows of the business. A different conclusion on the risks identified and the possible remedies would also have been relevant.[19]

16. One of the particular responsibilities of the Department's Accounting Officer was to see that appropriate advice was given to Ministers on all considerations relating to the acquisition. The Department were asked whether they had accepted what the Post Office proposed too uncritically instead of applying more rigorous scrutiny. The Department referred to the greater commercial freedom being given to the Post Office at the time and emphasised that they had asked a series of probing questions and caused the Post Office to make some changes to the case it had put forward.[20]

The balance of commercial freedom and financial oversight

17. Many private sector companies combine a high degree of commercial, operational and strategic freedom for their subsidiaries with a very high level of financial control. A rigorous financial assessment of significant acquisitions is also required of companies quoted on the London Stock Exchange. In these cases the Board assesses the expected impact of the proposed acquisition on earnings per share for the combined business, which it then makes known to shareholders.[21]

18. The Department set three principal financial targets for the Post Office in 1998-99. The first target was to pay £310 million cash to the Government from its overall business profits. There were also targets for the return on capital employed for Royal Mail (the business handling the collection and delivery of letters) and for Parcelforce (its loss-making United Kingdom based parcels handling business). Overall financial targets for the business taking into account the new business strategy were set in September 1999, nine months after the acquisition of German Parcel.[22]

19. The Department accepted that a high degree of commercial freedom combined with rigorous financial oversight was the appropriate balance of responsibility between the Post Office and the Department. Working with the Treasury they aimed to carry out a rigorous scrutiny of performance. Asked about the absence of financial targets for the whole business at the time of the acquisition, the Department said that their review of the proposed acquisition went hand in hand with discussions on the new strategy.[23] They had agreed that the Post Office could go ahead with the acquisition provided that the financial appraisal showed that it would not lose money, after taking into account purchase costs. They considered this to be a rigorous approach because it did not take into account the expected beneficial effect of the acquisition on the Post Office's business as a whole, but confined the appraisal to the financial position of the business that was being acquired.[24]

Board Assurance and Disclosure

20. The Chief Executive of the Post Office wrote to the Department reporting the unanimous approval of the acquisition of German Parcel by the whole Board. The Department also saw the documents the Board received, but said that they were not very detailed.[25]

21. The Comptroller & Auditor General's Report recommended that the whole Board of Directors of sponsored bodies should be required to provide assurance on their detailed knowledge, approval and accountability for an acquisition, in line with private sector practice. Companies quoted on the London Stock Exchange are required, depending on the materiality of a transaction for the business to send shareholders a declaration which includes their responsibility for the completeness of the information sent to shareholders and a voting recommendation. The voting recommendation sets out that the acquisition is, in the opinion of the Directors, in the best interests of the shareholders as a whole. Our predecessors asked whether the Post Office agreed with this approach and, if so, why it had not provided the Department with such assurance including opinions from external advisers. The Post Office said that it accepted Stock Exchange best practice and that it would do anything needed to make clear that the Board had fulfilled its role properly.[26]

22. On the completeness of the information available to the Board, the Post Office said that the Department had only seen the final paper on which the Board took its decision. There had been earlier papers and individual briefings for non-executive Directors, who had prior experience of acquisitions, on a face to face basis. The external advisors had told the Post Office that, in total, the information provided to the Board was in line with private sector practice, though the Post Office conceded that its advisers could be expected to say that.[27]

23. Companies quoted on the London Stock Exchange are also required to disclose to shareholders, depending on the materiality of the acquisition, information on the price paid, the profits attributable to the net assets being bought, and the expected effect of the transaction on the profit and loss account and balance sheet of the purchaser.[28] Our predecessors asked why in this deal the taxpayer was not given what would be considered essential for any shareholder. The Department, as the shareholder and representative of the taxpayer, considered they had full information, but acknowledged that this was not given to the market and Parliament.[29] The Department said that they had accepted the Comptroller and Auditor General's recommendation that when the Post Office concluded a deal it should disclose information on the transaction as if the Post Office were a quoted company in the private sector.[30]

Conclusions

24. The Department should ask their advisers to review major investment opportunities at an early stage, like an active private sector shareholder, to determine whether an acquisition would be likely to enhance shareholder value; whether the revenues arising from the acquisition would exceed the costs on realistic assumptions; and to assess how well risks are being managed.

25. The Boards of companies quoted on the London Stock Exchange are required, where a potential transaction is of a size or nature to have a material impact on the business, to provide shareholders with assurance on the implications of the transaction for shareholders as a whole. The Board is best placed to understand the full implications of a transaction and to identify any divergence between management and shareholders' interests. The Department as shareholder would benefit from obtaining similar specific assurance from the whole Board, and its advisers.

26. The Post Office said that it would have no problem in giving the Department any information necessary to make it clear that the Board had fulfilled its role properly, including assurance on the Board's detailed knowledge, approval and accountability for an acquisition together with opinions from external advisors. The Department should act on this undertaking for future transactions.

27. We welcome the decision that when the Post Office concludes a deal it should disclose information on the transaction as if the Post Office was a quoted company in the private sector.

VALUE FOR MONEY

The Department's value for money test

28. The Department wanted to be satisfied that, after taking account of investment costs, German Parcel as a stand-alone business should not have an adverse impact on the Post Office's financial position. They expected that there would ultimately be financial benefits from synergies with the Post Office's businesses in the United Kingdom and overseas. The Post Office had quantified some of these benefits - estimating, for example, that the acquisition could protect income that would otherwise be lost in its Parcelforce business, in excess of Parcelforce's £25 million losses in 1998-99.[31]

29. There was nevertheless uncertainty over whether, on a stand-alone basis, the acquisition would be worth less than the purchase price. The Post Office's financial projections of the value of the business showed a wide range, with both profitable and loss making outcomes. They accepted that the range of £109 million was considerable on a £289 million deal and, by applying various probabilities to risks, covered very poor and very favourable results.[32]

30. The financial impact of the acquisition on the Post Office was broadly neutral when evaluated at a discount rate of between eight and eight and a quarter per cent. On the basis of a discount rate of nine per cent the acquisition showed a negative present value representing a strategic premium of between 10 per cent to 20 per cent in the view of the Post Office. On whether the criterion that the acquisition should not have an adverse impact on the Post Office's financial position was a sufficient test for the deal, the Department considered that the judgement on value for money could only be made on the basis of the strategy over a number of years. Their appraisal had been rigorous because it had been confined to the German Parcel business, with proper appraisal of risks, instead of taking uncertain strategic benefits into account.[33]

The Post Office's ability to manage German Parcel

31. The Post Office's UK based parcel distribution company, Parcelforce, provides a parcels service to domestic and overseas customers. It handles some 140 million parcels a year, with a turnover of £474 million in 1998-99 and a loss before tax of £25 million in that year and £61 million in 1999-2000. Asked about the Post Office's ability to manage German Parcel, particularly given these significant losses, the Department said that they had taken into account the losses being made by Parcelforce, and that German Parcel was not a directly comparable activity because it specialised in city-based business to business deliveries. German Parcel had strong local management who had been kept in place to run the business.[34]

32. The Department acknowledged that losses on a worst case scenario would, in the last resort, have to be funded by the taxpayer because the Post Office was a public sector owned business.[35] It had always been the case that when the Post Office was profitable, a loss-making activity might have been financed from those profits. The Post Office said that it had no track record of calling on Government for financial support.[36]

Benefits arising from the acquisition

33. The acquisition cost included £235 million for "goodwill" which the Post Office is writing off in its accounts over a 20 year period.[37] Asked whether this payment had been justified by subsequent performance, the Department said that the acquisition was continuing to show a small positive net present value. Together with subsequent acquisitions of other companies it had given the Post Office the capability of generating considerable growth. This had been a key element of the strategy of building a network throughout Europe .[38]

34. Questioned further about the benefits of the acquisition, the Post Office said that it offered a number of advantages, notably access to the German market and the fast growing cross-border market that would extend the range of Parcelforce services across Europe. Since the purchase of German Parcel, the Post Office had taken control of the General Parcel network and negotiated for Parcelforce to replace United Carriers as the United Kingdom partner. The Post Office said that it is now in a position to compete very effectively with its main European competitors.[39]

35. Asked whether the UK postal system had benefited from the acquisition, the Post Office said it had learned from German Parcel's expertise and experience, in particular in running a parcels service in a modern central sorting centre. It had also learned from German Parcel's experience in running a parcel tracking service using purpose built software, in which the Post Office was now investing.[40]

Financing of the acquisition

36. The Department had proposed that the Post Office should finance up to £238 million of the acquisition cost from public sector borrowing but that, unusually for the public sector, the borrowing should be at a commercial rate of interest. The objectives of this arrangement included providing greater transparency to assure competitors that the Post Office was not acting in an anti-competitive way and to ensure that the Post Office's commercial freedom was also accompanied by further commercial disciplines.[41] Our predecessors asked about the delay in setting the commercial rate of interest which was only agreed two years after the transaction had been concluded. The Department said that making the arrangements to charge commercial rates of interest retrospectively had taken longer than it should have done. The main reason for delay had been the novelty of the procedure because the Treasury had wanted to consult all the parties who drew on the National Loans Fund.[42]

37. The Post Office said that it would have preferred the freedom to borrow commercially in the market, rather than borrowing from the National Loans Fund at a commercial rate, because this would have put to rest any competitors' suspicions of a subsidy. The Post Office was very keen to show that it had not been using past profits to invest in new companies and that the investment had come from borrowing charged at a proper commercial rate.[43]

Evaluation and monitoring arrangements

38. A private sector competitor of the Post Office in European parcels markets evaluates and monitors the performance of its acquisitions using a notional interest charge based on the company's weighted average cost of capital. This helps it determine whether or not an acquisition is value enhancing, that is whether future revenues from the business acquired are likely to exceed the costs involved. The result—whether an acquisition is likely to be value enhancing—is published in its annual report and accounts. The Department expect the Post Office to evaluate and monitor acquisitions in this way.[44]

39. Asked about the Department's continuing monitoring of the acquisition, the Department explained that, together with the Treasury, they were carrying out a rigorous scrutiny of the Post Office's financial performance. They had quarterly meetings modelled on the shareholders' meetings which large companies have with City institutions and quarterly meetings with the Post Office's Chief Executive and the Treasury to examine the Post Office's results. The Post Office provided information for these meetings in accordance with suggestions from the Department's advisers. In addition every six months the Department check the performance of each acquisition against the performance expected when the transactions were approved.[45]

40. On the basis of appraisals made since the acquisition, the Department considers that the payment of £235 million in goodwill, within a total £289 million acquisition, has been justified by subsequent performance. The Department recognised that if losses arise the consumer, and ultimately the taxpayer, might have to cover them.[46]

41. The annual report and accounts of the Post Office, as now constituted as a public limited company, are required to be laid before Parliament by the Department. Asked whether information on the performance of major acquisitions such as German Parcel would be contained in the Post Office's next set of accounts, the Department said that the accounts would follow the normal accounts reporting standards and thus were unlikely to go into that kind of detail. The Post Office added that giving such detail would be a problem and probably not what its competitors were doing.[47]

Conclusions

42. The Department and the Post Office calculate that the acquisition is showing a small positive net present value and judge that the benefits of the acquisition are coming through. But the Department's financial test, that the effect of the transaction should be financially neutral without taking into account any strategic benefits, was an undemanding target for an investment of £289 million. A slight increase in the discount rate used from 8.25 per cent to 9 per cent resulted in the Department's analysis showing the acquisition as loss making. The analysis carried out to assess whether the acquisition would meet even this undemanding target was, therefore, finely balanced.

43. The Post Office believed that it had benefited from the management, expertise and experience that it had acquired, for example, through the purpose built software used by German Parcel for parcel tracking and obtaining control of the General Parcel network. There must, nevertheless, be a risk of losses since the Post Office's existing parcels business is loss making and the market is very competitive. If there are losses the consumer, and ultimately the taxpayer, might have to cover them.

44. Parliament should therefore receive regular information on how far such a major acquisition is meeting expectations. The Department should seek a commitment from the Post Office to include in its published reports information on whether or not major acquisitions are value enhancing, and in particular whether future revenues from the business acquired are likely to exceed the costs involved. At least one of the Post Office's competitors publishes such information.

45. The greater transparency and increased commercial discipline intended by the decision to charge commercial rates of interest on Post Office borrowing for acquisitions may have been diluted by the two year delay in setting a rate. We recognise that this case was a new situation for the Department and the Treasury but in future we would expect rates to be set more promptly.


1  The Post Office became a public limited company and renamed itself Consignia plc on 26 March 2001 Back

2  C&AG's Report 'The Acquisition of German Parcel' (HC 858, Session 1999-2000), para 3. The final cost paid in   three instalments may vary because of movements in exchange rates. Back

3  ibid, paras 3 and 2.7 Back

4  Post Office Press Notice 26 March 2001(not printed) Back

5  C&AG's Report, paras 5 and 1.6 Back

6  ibid Back

7  The Postal Services Act 2000 created the Postal Services Commission ("PostComm"), the independent regulator of postal services Back

8  PostComm Press Notice 26 March 2001 (not printed); C&AG's Report, para 1.3 Back

9  C&AG's Report, paras 2-5, 10 and 1.17 Back

10  Qs 14, 20-21, 91 Back

11  C&AG's Report, paras 2.8-2.9; Qs 20, 61 Back

12  Figure 1 Back

13  Qs 84-91 Back

14  Qs 14, 20, 48  Back

15  C&AG's Report, para 13; Qs 48, 59-60 Back

16  Qs 50-51 Back

17  Q59 Back

18  Qs 20, 59, 72 Back

19  Qs 28-30, 62-63 Back

20  'The Responsibilities of an Accounting Officer' HM Treasury April 2000, para 14; Qs 48, 61 Back

21  Q95; C&AG's Report, para 3.17 Back

22  C&AG's Report, paras 2.14 and 2.21 Back

23  Qs 2, 95 Back

24  C&AG's Report, para 7; Qs 11-12 Back

25  Qs 5-6 Back

26  C&AG's Report, paras 18 i), 3.3-3.4; Qs 5, 9 Back

27  Q6 Back

28  C&AG's Report, para 18 iii) Back

29  Q64 Back

30  Q7 Back

31  C&AG's Report, para 2.15 Back

32  ibid, paras 12, 2.14, 2.18; Q59 Back

33  ibid, paras 2.14 and 2.17; Qs 11-14, 38, 70 Back

34  ibid, para 1.16; The Post Office Annual Report 1999-2000; Qs 10, 67 Back

35  Q23 Back

36  Q58 Back

37  C&AG's Report, Figure 1, note 2 Back

38  Qs 18, 50 Back

39  Qs 47, 68 Back

40  Qs 47, 68 Back

41  C&AG's Report, para 14; Qs 36-37 Back

42  Qs 92-94 Back

43  Qs 36-7, 44, 55-7 Back

44  C&AG's Report, para 2.23 Back

45  Q95 Back

46  Qs 23, 50 Back

47  Qs 7-10 Back


 
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